Feds plan biofuels expansion to power Navy

Obama administration officials say the Navy is on its way to rescue America’s biofuels industry.

The federal agriculture, energy and Navy departments Tuesday announced they will spend up to $510 million in the next three years to build new or rebuild existing facilities to make fuel from what now is considered plant waste, such as corn stalks, grass, wood chips and corn cobs.

The announcement could be good news to Minnesota, but just how the program is implemented remains to be determined.

“The details are going to be interesting to me,” said Christina Connelly, bioenergy manager of the Minnesota Agriculture Department.

The plan is vague, but there may be little crossover between fuels made in Minnesota for cars and trucks and those the federal government may want for military aircraft, ships and vehicles.

“There is no reason the market for ethanol should be diluted by plants for, say, jet fuel,” Connelly said.

It is not clear if the federal plan would keep most biofuel plants in America’s farm belt or if they would be built closer to Navy bases, which mostly are on the coasts.

Navy Secretary Ray Mabus told reporters that he envisions production plants being distributed across the country.

The theory behind the federal involvement is once the Navy’s biofuel use ramps up, plants will be in place and prices low enough that the fuel will enter the civilian supply line, too.

Once that happens, Energy Secretary Steven Chu said, rural America would supply much of the country’s energy instead of spending $1 billion a day to import oil, like happens now.

President Barack Obama set a goal of reducing oil imports a third by 2025.

“There is an opportunity here for rural America that we have not seen in some time,” Agriculture Secretary Tom Vilsack said, continuing several days of Obama administration promotion of its rural policy.

During his Cannon Falls, Minn., visit on Monday, Obama hinted at Tuesday’s announcement in response to a question.

“A lot of folks here are familiar with corn-based ethanol, but the fact of the matter is the technology is moving where we need to start taking advantage of a whole range of biofuels, using refuse, using stuff that we don’t use for food to create energy,” Obama said. “And we are seeing incredible progress on that front, but it’s key to make sure that we continue to make the research and that we also use the incredible purchasing power of the federal government to encourage it.”

Even if Minnesota plants do not produce Navy fuel, technology developed for the plants could be used in the Midwest.

Connelly said Minnesota’s ethanol and biodiesel production plants owners could apply for a retrofitting to produce the more advanced fuels, even if they are far from Navy bases.

“I would hope they will look at any application that comes in,” she said, but she could not predict if any Minnesota plants would be interested.

“You never know what a plant is thinking next,” she added. “There are a number that have done some very innovative things.”

Corn is used to make most American ethanol. Ethanol usually is blended with normal gasoline as a vehicle fuel.

Soybean oil is turned into a fuel that is blended with diesel.

The next generation of ethanol, known as cellulosic ethanol, will come from non-food parts of plants. While there are pilot plants producing the fuel, it has not become a major commercial operation. The federal plan is to change that.

Vilsack said that the $510 million federal infusion into the industry would be matched with private business spending to make the next generation of biofuels feasible.

“This is a commitment to a new energy future,” said Vilsack, who has Iowa governor oversaw a state with more ethanol plants than any other.

Mabus said the Navy has no higher priority than finding an energy source like biofuels that can be produced at home. He has a goal of providing half of the Navy’s energy needs from biofuels by 2020.

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