Questions and answers regarding the RAND report: Alternative Fuels for Military Applications
Q: How did this study come about?
A: It was called for by the Duncan Hunter National Defense Authorization Act of 2009. The Defense Logistics Agency, on behalf of the Secretary of Defense, selected the RAND National Defense Research Institute to conduct the study.
Q: Did you conclude that biofuels are a bad idea?
A: RAND was not asked to evaluate alternative fuels in general, but rather the military utility of alternative fuels. Our report found that from an environmental and economic perspective, the military would do better to focus on energy efficiency. Generally speaking, though, it is important that the U.S. continue to investigate and develop alternative fuels that are economically competitive and environmentally superior to conventional petroleum.
Q: The Navy seems convinced that the biofuels industry can deliver fuels at the price and quantity (8 million barrels per year) necessary by 2020. What is RAND's view?
A: Our report does not suggest that the Navy will be unable to meet its goal of using 8 million barrels per year of biofuels. The report does raise questions as to the benefit of the effort and the costs that will be incurred to meet that goal.
We don't know whether these fuels will be cost competitive with conventional fuels in 2020. First, we don't know what the world oil price will be at that time; and second, we don't know what it will cost to produce these biofuels. If they are not competitive, the Navy may have to pay a hefty premium. Even if these biofuels are less costly to produce, they will be sold at the going price for their conventional counterparts. So the report identified no cost savings for the U.S. military from the use of biofuels.
Another challenge is that the environmental benefits are highly uncertain. This is especially the case for fuels derived from seed oils, such as camelina, which is the focus of much of the current testing activities in the Department of Defense. There is scant evidence that the production and use of camelina, or any other seed-derived fuel, results in greenhouse gas emissions below those of conventional fuels.
Finally, the report concluded that pursuing fuels from seed oils would yield no appreciable national benefit. Seed oil production requires a large amount of land. Producing just 1 percent of U.S. fuel use would require that 10 percent of the nation's cultivated land be switched from food production to fuel production.
Certain companies believe algae-derived fuels are just a few years from commercial introduction. The study team carefully analyzed the technical challenges associated with producing jet and diesel fuels from algae using photosynthetic approaches as well as fermentation of cellulosic biomass. Our finding, which only applies to military fuels and not chemicals or other high-value products, is that there are major technical challenges that must be addressed before an economically competitive and environmentally sound fuel production process will be in place and capable of producing significant amounts of fuel. Moreover, experience in emerging technology development suggests caution. For example, since the mid-1970s, people have been saying that photovoltaics are just five years away from being able to generate electricity at costs comparable to conventional sources of electric power. Likewise, while it is correct to say the Department of Defense helped propel the development of the Internet, bear in mind the lag time it took from the birth of DARPAnet in the 1960s to widespread development and use of the Internet in the 1990s.
Q: To what extent did RAND engage with the Navy's leadership on this study?
A: When the research for this study was undertaken in 2009 we spoke with the highest ranking naval official then responsible for the Navy's energy activities. We spoke with senior officials at the Office of Naval Research (ONR), and team leaders at Naval Air Systems Command who are responsible for the testing and certification of these fuels. We also supplemented the study team with a consultant who had recently retired as head of the Navy's energy program.
Q: What about companies and organizations engaged in biofuels or biofuel development?
A: We spoke with several, including Abundant Biofuels Corp., Flambeau River Biofuels, My Dream Fuel LLC, ExxonMobil, the Soap and Detergent Association, Great Plains Oil & Exploration, Sustainable Oils, Syntroleum Corporation, the U.S. Department of Energy, the National Renewable Energy Research Laboratory, Rentech, General Electric, and Science Applications International Corporation. We also interviewed officials in two state agriculture departments in states where seed-oil crops are being grown for fuel applications.
Q: What about algae as a potential new energy source?
A: Our study suggests algae has outstanding prospects as a source of biofuels. It has the potential to reduce greenhouse gas emissions and be produced at high volumes in an environmentally sound manner. Our analysis—and that of others—indicates that it will be some years (at least a decade) before this technology will be producing significant amounts (i.e., a few hundred thousand barrels per day) of commercially competitive fuel.
Q: While there may be no direct tactical military benefit to these technologies, what about energy security—shouldn't the U.S. be doing everything possible to develop domestic, non-oil-based sources?
A: We shouldn't be doing everything possible—we should be doing what makes economic and environmental sense. That does include prudent investments in near- and far-term research and development.
Q: Why is the report critical of producing fuels at forward operating bases in theaters like Afghanistan?
Forward-based alternative fuel production requires a local source of carbon, like biomass. Military units would need to be assigned the task of protecting the supply chain for this local source of carbon and assuring that deliveries are free of threats. Forward-based units would also be required to set up and operate small plants capable of producing fuels that meet military specifications. The logistical and operational challenges of assigning military units these two tasks greatly exceed the problem of supplying fuel (conventional or alternative) produced outside the forward zone and transported to fighting forces via convoys or tanker aircraft and ships. Such forward-based production units would introduce new dangers into the lives of forward-based U.S. servicemen and women.
Q: As for the Fischer-Tropsch process, it almost sounds like you're calling for more coal mining. Are you?
A: We don't call for that. The environmental impact of mining coal depends on how mining is regulated and how those regulations are enforced, which was outside the scope of the study. We analyzed the effects on carbon emissions of each of the alternative fuels processes.
What should be noted about the Fischer-Tropsch process is that it is a here-and-now technology. For alternative fuel production levels up to a half million barrels per day, the greenhouse gas emissions produced during the Fischer-Tropsch process can be captured and used in commercial enhanced oil recovery methods. This application would yield an additional two barrels of conventional oil per barrel of alternative fuels. When using this approach for carbon capture and sequestration, the study finds that Fischer-Tropsch fuels derived from a mixture of coal and biomass could have lifecycle greenhouse gas emissions that are less than half of those of petroleum-derived fuels.
To obtain low greenhouse gas emissions at production levels much above a half million barrels per day requires the successful development of additional approaches for the geological sequestration of carbon dioxide.
Q: How did you go about assessing the commercial efforts?
A: Our analysis of the readiness of the industry to invest in alternative fuels is based on a review of news reports, company websites, press releases, and interviews with senior executives in the biofuels industry doing this work. We also conducted a thorough review of academic and scientific analysis by others, including two recent studies (one by Nexant and another published in Science Magazine) that address the development status of algae-derived fuels.