Firms invited to submit biofuels proposals
By THOMAS CONTENT | Milwaukee Journal Sentinel | Published: July 3, 2012
A biofuels initiative that aims to reduce the military's reliance on imported petroleum is moving ahead, with companies including Madison, Wisc.-based Virent Inc. invited to submit proposals in a $30 million initiative announced Monday.
The announcement is another step in a program launched last year by the U.S. Navy along with the Energy and Agriculture departments that aims to help build up the supply of advanced biofuels - those that don't rely on sugars from plants that are eaten, like corn-based ethanol.
The program calls for the Agriculture Department to help buy down the cost of the fuel, and for the Navy to be a customer of the renewable jet fuel that would be produced in biorefineries that make drop-in biofuels. They are given that name because they can be "dropped in" to the gasoline and petroleum fueling infrastructure without the need for special engines or alternative fueling stations.
Biofuels technology firm Virent Inc. has expressed interest in the program. Virent operates a small biorefinery in Madison that deploys technology that originated from work in chemistry labs at the University of Wisconsin-Madison. Company Chief Executive Lee Edwards last year said it plays into Virent's "strong suit."
Companies that participate in the first phase will be selected this fall, and from that pool a second round of expanded funding will be announced later, Secretary of the Navy Ray Mabus said during a conference call with reporters.
Private industry will be required to match the $30 million investment, made under the federal Defense Production Act, Mabus said.
In the program's first phase, companies will be asked to submit a business plan for a commercial-scale biorefinery that would identify potential project sites.
Vendors invited to the second phase would be required to submit additional information for the construction or retrofit of a biorefinery.
The agencies also announced that they will allocate $20 million toward pilot-scale and demonstration projects that tap nonfood crops as biofuels sources.
The Air Force said it will select five companies in the first phase, with plans to award $70 million each to the three companies that advance to the second phase and provide matching private-sector funding.
Funding for that phase is part of the proposed 2013 budget that's the subject of criticism by congressional Republicans.
Citing the cost of biofuels and federal budget challenges, several congressional committees have taken votes that seek to scale back the Obama administration's initiative toward advanced biofuels for the military.
Critics include Arizona Sen. John McCain, who has termed it a case of "misplaced priorities" and said the Pentagon shouldn't be in the business of funding and sponsoring new energy technologies.
But the administration's program is continuing to roll out through funding already approved by Congress in the fiscal 2012 budget, said Agriculture Secretary Tom Vilsack.
"Energy security has to be at the top of our agenda," Mabus said. "That has to be there because right now we give countries that produce oil too much of an input on whether our ships sail, our aircraft flies or our services' vehicles operate."
Virent and its competitors have hailed the program as one that would help them finance commercial-scale biorefineries to produce renewable fuels or chemicals. Virent's process to convert sugars into other products includes work to help Coca-Cola make bottles from plastics derived from plants.