DoD Biofuels: Managing the Risks
Just yesterday, the Department of Agriculture and the U.S. Navy announced the joint “Farm to Fleet” program that will provide commercially competitive biofuels to the Defense Department (DoD). This initiative is in addition to DoD’s previous effort to commercialize drop-in biofuels under the Defense Production Act of 1950. Under the new program, DoD will purchase bulk volumes of competitively priced biofuel for marine and aircraft use. Energy security is DoD’s chief motivation, but it also indicates an interest in minimizing the social and environmental risks inherent to biofuels. Adopting the right risk mitigation screens can help DoD secure diverse sources of fuel while avoid environmental and political complications that have already disrupted other fuel policies.
At this time, NRDC is still learning about the new program. But the initial information suggests that DoD will embed several important protections into the effort. For instance, it is not interested in feedstocks that compete with food. This condition helps avoid land clearing and elevated food and feed prices. Additionally, DoD will require qualified fuels to comply with Section 526 of the Energy Independence and Security Act of 2007. Section 526 fosters carbon reductions by requiring federally procured alternative fuels to have equal or lower greenhouse gas emissions than conventional petroleum fuels.
DoD has good reason to address these risks. The environmental impacts of bad biofuels are well known. When grown in the right ways, biofuels can contribute to carbon reduction and climate stabilization. Yet the wrong types of biofuel can actually increase carbon emissions, harm biodiversity, degrade water quality and impact food and feed prices. It’s also becoming clear that these translate into political risks. Presently, the federal Renewable Fuel Standard is the best example. Overreliance on corn has drawn sharp opposition from incumbent feedstock users including dairy farmers, livestock producers, food manufacturers, food retailers, and food security groups. Along with some environmental organizations, these interests have greatly disrupted the policy by encouraging congressional intervention.
While DoD is not interested in food based fuels, the political risks extend to any feedstock with an established base of existing users. That's because producing strategically meaningful volumes of biofuel will require substantial amounts of yet unidentified feedstocks. Diverting too many resources- edible or not, away from existing users could draw political opposition to the program, similar to the RFS. It could also inflict environmental harm as lands are cleared in response to tightening feedstock supplies. These challenges are complex but surmountable. For instance, DoD can integrate environmental risk assessment into its competitive procurement decisions. While cost and technology feasibility should remain key considerations, sustainability and other factors could be weighed during candidate selection. These factors might include water requirements, biodiversity impacts, feedstock abundance and existing feedstock demand. Recently, the Defense Logistics Agency commissioned a study that arrived at a similar conclusion.
Getting biofuels right is extremely complicated, but DoD’s posture suggests that it is up to the task. While DoD has security centric reasons for biofuel development, it also recognizes a role for caution. It can achieve its goals best by introducing the right screens into the procurment process. This would help it achieve meaningful supplies of competitively priced biofuels without driving unintended effects that could undermine environmental or political viability.