” The Department of Defense (DOD) paid $150 per gallon for alternative jet fuel made from algae, more than 64 times the current market price for standard carbon-based fuels, according to a report released on Wednesday.
The Government Accountability Office (GAO) noted in its report that a Pentagon official reported paying “about $150 per gallon for 1,500 gallons of alternative jet fuel derived from algal oil.”
GAO’s report examined the financial challenges facing increased purchases and use of alternative jet fuels by federal agencies. “Currently, the price for alternative jet fuels exceeds that of conventional jet fuel,” the report noted.
The price for conventional jet fuel is currently $2.88 per gallon. GAO’s report reveals that federal agencies have paid significantly higher prices in an effort to promote biofuels in commercial and military aviation.”
To who’s benefit might it be for the Feds to “promote” biofuels use ? Any guesses on who might own/have stock in these companies ?
For those interested in further reading on the big players in the biofuels industry this article may be of interest , as might the GAO report itself (PDF here) which will avail one of the huge effort being undertaken to send billions of tax dollars into the
hands pockets of private investors by way of mandated biofuels purchases from many Federal agencies … all under the guidance of that most upright of government entities , the EPA .
Below we present the viewer with the introduction to the aforementioned GAO report that makes plain just how large is the concerted effort now underway to require federal agencies to purchase ever-increasing percentages of their fleet fuels at prices way beyond market value from select manufacturers …
” The federal government supports the development and use of alternative jet fuels through both broad and targeted initiatives. Broad national strategies promote the development of a variety of alternative fuels—including alternative jet fuel—to help achieve national goals, such as securing energy independence, fostering economic development, and reducing greenhouse gas emissions. In addition, the renewable fuel program—established by law in 2005 to encourage greater use of renewable fuels and administered by the Environmental Protection Agency (EPA)—requires that U.S. transportation fuels contain certain amounts of renewable fuels annually, increasing from 9-billion gallons in 2008 to 36-billion gallons in 2022. The other four federal agencies that GAO reviewed—Department of Transportation‘s (DOT) Federal Aviation Administration (FAA), Department of Agriculture (USDA), Department of Energy (DOE), and Department of Defense (DOD)—directly support alternative jet fuels through targeted goals, initiatives, and interagency and industry coordination efforts. For example, FAA set a goal for the U.S. aviation industry to use 1-billion gallons of alternative jet fuels annually by 2018. The four agencies also sponsor research that specifically targets alternative jet-fuel development or provide direct support for its future commercial production, or both. For example, FAA and DOD support research to determine the technical feasibility of using new alternative jet fuels on aircraft and in existing infrastructure. Also, USDA, DOE, and DOD have coordinated their activities to support the future construction or retrofit of multiple domestic commercial- or pre-commercial-scale production facilities to produce alternative fuels, including alternative jet fuels. Specifically, in May and June 2013, four private fuel producers received awards totaling $20.5 million in federal funds, with private industry paying at least 50 percent of the cost.
Achieving price competitiveness for alternative jet fuels is the overarching challenge to developing a viable market. No alternative jet fuels are currently commercially available at prices competitive with conventional jet fuels. The 23 stakeholders that GAO interviewed most frequently cited high development costs and the uncertainty of federal regulations and policies as primary reasons why alternative jet fuels are not priced competitively and believe that federal activities are needed to help advance the alternative jet-fuels industry. For example, according to 10 stakeholders, fuel producers face difficulties in obtaining private investment to help construct commercial-scale fuel production facilities, in part because of concerns about the supply and high cost of feedstock (the source used to produce the fuel, such as crops) and high capital costs.
Also, 13 stakeholders stated that continued uncertainty about the future of current federal policies—particularly the renewable fuel program—generally causes potential investors to discount the value of federal subsidies, discounting that, in turn, limits the support these policies may provide the industry. Stakeholders identified a variety of federal actions to advance alternative jet-fuels development, including continuing current federal research efforts, providing greater regulatory and policy certainty, and giving more direct financial support. However, even if the cost to produce alternative jet fuels is reduced, market factors may still determine the long-term success of the industry. The main market factors identified by stakeholders were (1) comparative value of competing end products, (2) feedstock prices, and (3) the costs of conventional jet fuels.”
It’s also worth remembering that every gallon of biofuel produced increases the cost of our food from the grocery store . Read more