The RAND Corporation released a report on its assessment of the viability and value of military alternative fuel initiatives. Among other findings, the report calls into question the use of alternative fuels by the U.S. Department of Defense, stating that “alternative fuels offer the armed services no direct military benefit”. In particular, the report finds that biofuels from hydroprocessed renewable oils, using feedstocks such as oilseeds and algae, cannot achieve sufficient scale or cost competitiveness to provide a military benefit in the near term. As such, the report recommends that the DoD cut its support for biofuel testing, certification, and procurement programs until these markets mature. However, the RAND Report delivered a promising view of coal-and gas-derived synthetic fuels and their potential to power the armed services.

The Algal Biomass Organization (ABO) has vehemently challenged the findings of the report. Mary Rosenthal, Executive Director of the ABO, stated that researchers at RAND did not reach out to any of the leading algae companies and believes that algae commercialization is far closer than RAND suggests, with “more than 100 companies, academic institutions and national laboratories working to develop the algae-to-fuels industry” and that “the positioning of the entire U.S. algae industry as a ‘research topic’ is patently false”.

For more on the ABO response to the RAND Report click here.

Verno’s analysis is that in one sense the RAND report’s findings are reasonable; that domestically-produced oilseeds and algae are unlikely to supply large fractions of the nation’s or military’s fuel consumption over the next decade. However these findings do not justify their recommendations, given the alternative fuel mission of the Department of Defense, which is to drive technology development and market opportunities that, although currently uneconomic, will make the U.S. and its military more energy secure.

Both the U.S. and British navies drove the switch from coal to fuel oil, despite the economics at the time, and the U.S. military drove the construction of – and was the primary customer of – what became the modern petrochemical complex during and after World War II. The U.S. military has a long tradition of stimulating technology and industrial development, including in areas such as semiconductors and the internet, which have generated tremendous economic and security benefits to the United States. In this context, we believe the military’s active support of the emerging advanced biofuel industry is consistent with its mandate, and a worthy goal in promoting the security of the U.S. military and the nation more broadly.