Secretary Mabus mentioned that biofuel has a higher octane rating than petroleum-based fuel. He did not mention the specific composition of fuel the Navy was using in its Great Green Fleet so I don't know whether he meant E85 or some other blend. I like that the name of this technology demonstration invokes the Great White Fleet's demonstration of US power projection during its rise as a world power. He also mentioned an experimental underwater autonomous vehicle that can make its own fuel from ocean water and sea floor biomass, giving it the ability to stay at sea indefinitely. These two projects together may greatly reduce the need for US Navy ships to receive underway replenishment (UNREP). The freedom of maneuver this will grant a naval force is phenomenal because ships can spend more time on station and can avoid port visits that increase security vulnerabilities.
The cost of biofuel has been a minor political football in Washington, DC. The USDA's Economic Research Service publishes regular updates on the market for biofuels. The USDOE EERE Alternative Fuels Data Center compares biofuel prices to more conventional fuels. Ethanol is clearly more price competitive than biodiesel but the federal government subsidizes its production. Independent studies from the International Institute for Sustainable Development’s (IISD) Global Subsidies Initiative (GSI) of biofuel subsidies in several countries show that they are expensive ways to reduce greenhouse gas emissions. Production costs can fall with scalability if demand increases. US government agencies, as they have done throughout American history, are providing demand in the interest of national security. The Defense Production Act is the government's legal means of requiring the private sector to produce goods that meet the nation's security needs even if no market exists. An interagency committee (DPAC) runs study groups that publish capability assessments, and the DPA Title III portal publishes contracting opportunities.
Secretary Mabus mentioned a security premium that oil traders include when submitting orders for oil contracts. This premium plays havoc with the Navy's budget by forcing it to divert O&M funds to unbudgeted fuel costs. The premium's volatility increases with instability anywhere among oil-producing regions, even when minor producers (like Syria, which sells very little oil to the West) experience instability. Resources For the Future (RFF) published a study in 2010 indicating how increased US domestic oil production dampens the price shocks from instability, but overall reductions in oil consumption do more to enhance security than source substitution. That study built on work the authors did for Stanford University's Energy Modeling Forum in 2009 when they examined a method for estimating the US oil price premium. This research is an argument in favor of more biofuel production, which comes with its own premium as I noted above.
More audiences outside the US need to hear what Secretary Mabus said about how US hegemony enables freedom of navigation through the world's sea lanes and around crucial choke points. The US State Department outlines the US freedom of navigation (FON) program but does not mention the US's refusal to sign the United Nations Convention on the Law of the Sea (UNCLOS), which degrades our ability to defend US commercial claims at sea. The USDOE EIA's World Oil Transit Choke Points show where the US Navy's presence does the most good for the world economy. Petroleum shipping would be far more hazardous without the Navy on duty. Shipping oil across the English Channel during World War II was hazardous due to German Luftwaffe attacks. The Allies had to build Operation Pluto's cross-channel pipeline to keep oil flowing to US and British forces on the continent. Undersea pipelines are practical in some areas, such as the Langeled pipeline from Norway to Great Britain, but they face economic and technical limits over long distances.
It was interesting to hear the Secretary mention vessel mission planning as a fuel cost reduction method. Prevailing currents deserve consideration for programmed routes of known length and duration, and commercial shipping lines are correct to pay their captains some incentive bonus to save fuel costs by using old-school knowledge of currents and wind. This is good for the Navy in peacetime when tour routes are known but wartime cruises will be mission-dictated. Commercial shippers also sometimes mount a large hard sail on a ship's bow so prevailing winds can reduce steaming costs. That won't work on a modern Navy ship as it would interfere with systems for guidance and fire control. Even the best ideas have limits.
The renewable energy push has begun to permeate all of DOD. DLA Energy addresses multiple energy needs for its DOD customers but I did not see them listed as participants in the Defense Energy Summit for 2013 or the Defense Energy Technology Challenge for 2013. I know from personal experience that DLA has tasked analysts to assess the national security impact of resource shortfalls. I hope DLA is part of the US government's renewable energy effort, but hope is not a method.
World shipping needs the US Navy, and the Navy needs energy. More renewable energy means more freedom of maneuver for the Navy. More demand from government purchase requirements leads to more industry capacity and more opportunities for green businesses. Contractors seeking government opportunities in smart grids, microgrids, and net-zero facilities should review the EPA's green regulation initiatives and the SBA's green business guide. There's money to be made in selling to Uncle Sam.