Introduction
Facts
Comment

Introduction

On January 20 2015 the President Obama delivered his sixth State of the Union address. During his address, he remarked: "Over the past six years, we've done more than ever before to combat climate change, from the way we produce energy, to the way we use it." One renewable energy initiative that supports the president's claim is a joint initiative by the US Navy, Energy and Agriculture Departments, through which three contracts have been awarded to date for the construction and commission of biofuel refineries. Such initiatives satisfy the United States' need to be an environmental leader while addressing national security concerns.

Facts

The contracted refineries are to produce 'drop-in' biofuels, which are 50:50 combinations of bio-ingredients with traditional fossil fuels, to meet the transportation needs of the military and private sector. According to press releases issued by the departments, the projects are expected to begin production in 2016, producing 100 million gallons of military-grade fuel in 2016 and 2017. Contracts were awarded to three US energy companies focused on alternative energy:

  • The first will build and operate a refinery on the Gulf Coast with a capacity of 82 million gallons per year using waste to produce military-grade diesel and jet fuel.
  • The second will be based in the Southwest United States, converting municipal solid waste to approximately 10 million gallons of renewable diesel and jet diesel fuel per year.
  • The third will be constructed in the Pacific Northwest and will use forest biomass and wood waste to produce renewable fuels for the military. This facility is expected to produce 12 million gallons per year.

The three contracts were awarded under the Defence Production Act, which was enacted in 1950 with the goal of ensuring the availability of industrial resources to meet the national security needs of the United States. The Defence Production Act awards priority to national security contracts and provides the basis for governmental review of foreign investment in US companies. The authority of the act informs the president's Climate Action Plan.

The Climate Action Plan seeks the deployment of cleaner fuels through greater partnerships between the private and public sectors. The plan specifically tasks the departments with engaging the private sector to develop cost-competitive biofuels for use by the military quickly. The provisions of the Defence Production Act ensure that such biofuel production will take place in the United States, potentially creating jobs and fostering economic growth. Secretary of Agriculture Tom Vilsack has asserted that such advanced biofuel expansion should lead to the creation of good jobs throughout the country. The domestic nature of these initiatives aligns with the White House's aim to replace imported crude oil with secure, renewable fuels produced in the United States.

The Climate Action Plan promotes energy security and government departments are responding to its call to action. The Department of Agriculture has supported advanced biofuel refineries, particularly on a commercial scale. The Department of Energy has a designated bio-energy technology office and is focusing on commercial-scale initiatives. The security of domestically produced biofuels is likely to be a significant motivator for the military. The US Navy has tested and certified its entire fleet to operate on these renewable biofuels. Beyond certification, the Navy conducted a two-day carrier strike during which all aircraft and conventional ships operated on drop-in biofuel. This integration of biofuel by the Navy connects the environmental initiative with ensuring national security.

The integration of biofuel and national security may have positive implications for US military capabilities. Navy Secretary Ray Mabus stated that the awarded contracts "will help expand the operational capability of [the US] Navy and Marine Corps around the world".

Modern military decisions are taking into consideration what resources are available and how to use those resources efficiently in protecting the nation. President Obama highlighted the role of energy security in his address:

"At this moment – with a growing economy, shrinking deficits, bustling industry, and booming energy production – we have risen from recession freer to write our own future than any other nation on Earth. It's now up to us to choose who we want to be over the next fifteen years, and for decades to come."

Comment

As the United States continues to evolve its national security initiatives in light of international developments, greater security is achieved through reliance on biofuels and domestic renewable energy programmes. As governments put greater weight on environmental considerations, and with the foreign control of traditional fuel sources posing a potential threat to national security, it is likely that defence departments across the world may rely more heavily on biofuels in the future.

For further information on this topic please contact Michael P Irvin or Anne Marie Carson at Fulbright & Jaworski LLP by telephone (+1 713 651 5151) or email (mirvin@fulbright.com). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com.

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