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All I Want for Christmas is Jobs and National Security

November 25, 2012
The U.S. military is making strides toward reducing its dependence on foreign oil by increasing its use of renewable energy such as advanced biofuels. The Air Force wants to use alternative aviation fuels for 50 percent of its domestic aviation needs by 2016, and the Navy plans to use alternative energy sources to meet 50 percent of its energy needs by 2020.

Why is this so important to the military and our country? For every $0.25 rise in the price of jet fuel, the Department of Defense (DoD) must come up with an extra $1 billion each year, which is diverted from training, maintenance, and other mission-essential programs. The Pentagon spent $17.3 billion on petroleum in 2011, a 26 percent increase from the previous year with practically no change in the volume purchased. In fiscal year 2012 alone, the $30 increase in prices of oil resulted in more than $3 billion in additional, unplanned costs to DoD. Our economic and national security is at stake and it is vital to reduce our dependence on foreign oil.

The economic impact the military biofuels program could have is huge. A new study commissioned by Environmental Entrepreneurs (E2) reveals that the military’s plan for biofuels use would generate at least $10 billion in economic activity and create more than 14,000 jobs by 2020. The economic and job impacts will be broadly distributed across the country, with states that create strong incentives for biorefineries receiving the greatest benefits.

Military use can also drive private sector use and investment, as it has done for other budding technologies such as GPS and the Internet. It sets an important signal for the market and can help biofuels become more cost competitive, thus increasing production. Spurring the private industry leads to even more job creation and economic impact. An earlier study by bio-era in 2009 using the same economic analysis model shows direct job creation from advanced biofuels production could reach 190,000 by 2022, and total job creation could reach 807,000 by 2022 in the United States.

The study also shows investments in advanced biofuels processing plants alone would reach $12.2 billion by 2022, and direct economic output from the advanced biofuels industry, including capital investment, research and development, technology royalties, processing operations, feedstock production and biofuels distribution, is estimated to rise to $37 billion by 2022.

The military’s shift to alternative energy sources is a necessary strategic move, given the worldwide shifts in energy production. The 2012 World Energy Outlook looks at how global energy markets will evolve by 2035 and shows that while fossil fuels will remain the principal sources of energy worldwide, renewables will see rapid growth driven by incentives, falling costs and rising fossil fuel prices. The report also shows OECD energy demand in 2035, while only 3 percent higher than in 2010, experiences a major shift as fuel substitution sees the collective share of oil and coal drop 15 points down to 42 percent.

Continuing the military biofuels program and policy stability are essential to continued private investment and growth of the advanced biofuels industry. New biorefineries are under construction in nearly every state across the country. The industry is poised to provide a bright future for both our economic and national security.