During a massive U.S. Navy demonstration in July, dubbed the Great Green Fleet, the military flew 71 aircraft powered by biofuels. The next generation biofuels came from camelina, algae and waste oils like cooking grease and chicken fat. These biofuels can be used in regular ships and jets without modifying the engines because they are hydrocarbons with an identical molecular structure to fossil fuels.
The Secretary of the Navy Ray Mabus pledged that, by 2020, the Navy would reduce its dependence on fossil fuels by half. As part of that effort, over the next few years, the Navy will invest $170 million in private-sector companies that are building advanced biofuel refineries and will receive equity in return. The Department of Energy and the Department of Agriculture are contributing another $170 million each.
This will also help advance a Congressional bill called the Federal Renewable Standard, passed in 2005, which requires the country to use 21 billion gallons of advanced biofuels by 2020. Two billion were produced this year.
The investing Departments are hoping to repeat the successes of prior venture-capital like approaches to building new technologies such as microchips, radar and GPS. In those instances, prices eventually came down enough for those products to take off in the private sector. As the Navy had a fuel bill of $4.7 billion last year, the biofuel industry may be poised for a meteoric rise.