{"id":1616,"date":"2017-02-02T06:24:11","date_gmt":"2017-02-02T06:24:11","guid":{"rendered":"http:\/\/mathwise.net\/?p=1616"},"modified":"2017-02-02T06:24:11","modified_gmt":"2017-02-02T06:24:11","slug":"the-u-s-militarys-great-green-gamble-spurs-biofuel","status":"publish","type":"post","link":"http:\/\/mathwise.net\/?p=1616","title":{"rendered":"The U.S. Military’s Great Green Gamble Spurs Biofuel"},"content":{"rendered":"
<\/div>\n<\/a>

The U.S. Military’s Great Green Gamble Spurs Biofuel Startups<\/h1>\n
\n
\n
\"\"<\/a><\/p>\n

Photos by Chris Leschinsky for Forbes<\/p>\n<\/div>\n

Eighty miles west of El Paso<\/a>, Tex., in a sunburned stretch of the New Mexico desert, Predator drones and blimps patrol the nearby border and immigration-agency SUVs speed through the desolate terrain, the occasional coyote loping across the scrub. Oddly, given that I\u2019m more than 600 miles from the Pacific, there\u2019s a distinct salty ocean tang wafting on the breeze. But that\u2019s not the sea I\u2019m smelling: The odor is emanating from algae growing in 30 acres of huge oblong ponds at Sapphire Energy\u2019s Green Crude Farm.<\/p>\n

Funded with $85 million from Bill Gates<\/a> and other investors \u2013 plus $104 million in government cash and loan guarantees \u2013 the world\u2019s only commercial outdoor algal biorefinery went online this summer and will eventually expand to 300 acres. The plan: extract 1.5 million gallons of green crude oil a year from patented pond scum fed a diet of carbon dioxide and sunlight.<\/p>\n

Even before San Diego<\/a>-based Sapphire broke ground on the demonstration plant last year, the U.S. Navy\u2019s green energy warrior, Vice Admiral Philip Cullom, descended on the desert site to grill Sapphire execs on their technology and its potential to fuel battleships and jet fighters. \u201cNo question, the military has focused the company and given us a great challenge to meet,\u201d says Sapphire executive Tim Zenk, standing on the catwalk of a tank where a mechanical arm is harvesting thick green goo pumped in from the algae ponds.<\/p>\n

Scum ponds in the desert? The very idea conjures memories of the federal government\u2019s decidedly mixed record at promoting alt-energy projects: Solyndra, FutureGen, A123\u2032s electric-car batteries, synfuels in the 1980s, jojoba in the 1970s. Add to that all the many military boondoggles \u2013 Star Wars missile defense, for one \u2013 born of best intentions and bloated budgets.<\/p>\n

Sapphire has yet to earn a dime from the Pentagon; the company\u2019s government funding comes from the Departments of Energy and Agriculture. But since the days when the startup\u2019s scientists were still tinkering in the lab, they\u2019ve been sending their biofuel for evaluation to the Defense Department, the deepest-pocketed client of them all. \u201cThere\u2019s no other entity that has the capacity, the planning, the commitment and the policy drivers to make technologies real and create a market,\u201d says Zenk.<\/p>\n

The U.S. military, the nation\u2019s single largest oil consumer, wants to wean itself from petroleum, and is deploying its immense buying power and authority to commercialize nascent technologies deemed to be in the national interest.<\/p>\n

The Navy, which aims to get half of its energy from renewable sources by 2020, has been buying biofuels in small but expensive quantities, as in four times the cost of conventional fuels.\u00a0Earlier this year the Pentagon invoked the Defense Production Act to solicit proposals to build at least one integrated biorefinery with $210 million in government funding.\u00a0The biofuel buy has outraged some congressional Republicans, who are attempting to bar the military from purchasing any fuel that costs more than petroleum.<\/p>\n

It will be years before we know if the military\u2019s biofuels bet is a multibillion-dollar folly \u2013 or if the armed forces have planted the seeds of another global industry, as it did with nuclear power, semiconductors and the Internet. This much is certain: The Pentagon\u2019s largesse is already spurring the entrepreneurial zeal of startups like Sapphire that seek potential riches in shaping green technology to meet military needs.<\/p>\n

For a first-hand look at that opportunity I find myself onboard a Navy C-2A Greyhound in July approaching the USS Nimitz some 45 miles off Oahu. I\u2019m strapped into a backward-facing seat wearing a survival vest and a \u201ccranial\u201d \u2013 Navy-speak for a helmet equipped with sound-deadening headphones and goggles. The roar of the transport\u2019s twin props ratchets up and an airman in the last row of the dimly lit cabin starts pumping his arm wildly. \u201cGo! Go! Go!\u201d That\u2019s the signal to brace for landing. As the Greyhound drops toward the 1,100-foot deck of the aircraft carrier, the pilot throttles up to 150 miles an hour. We shoot across the tarmac until a hook embedded in the plane\u2019s fuselage catches a cable, whiplashing us to a dead stop.<\/p>\n

It was a short but historic flight from Honolulu<\/a>, the first biofueled Navy transport to land on an aircraft carrier. We flew on algae and used cooking oil mixed in a 50-50 blend with standard petroleum aviation juice. Some 450,000 gallons of that biofuel, produced by Silicon Valley\u2019s Solazyme and Dynamic Fuels, is also powering the 71 aircraft on deck \u2013 the F\/A-18 fighter jets screaming across the blue skies above us, the E-2C Hawkeyes patrolling the surrounding airspace and the Seahawk helicopters ferrying Secretary of the Navy Ray Mabus and top Navy brass between two biofueled destroyers and a guided missile cruiser steaming alongside the nuclear-powered Nimitz.<\/p>\n

\"\"<\/a><\/p>\n

Algae being harvested at Sapphire Energy’s Green Crude Farm in New Mexico.<\/p>\n<\/div>\n

This is the Great Green Fleet, the first Navy strike force powered by biofuels and a two-day demonstration of Mabus\u2019 determination to permanently float an energy-independent flotilla by 2016. \u201cWe\u2019re moving forward and we\u2019re not going to let up,\u201d says Vice Admiral Cullom, the deputy chief of naval operations for fleet readiness and logistics.<\/p>\n

It\u2019s not just about biofuels. The Marines are tapping solar and other technologies to make battlefield bases in Afghanistan energy independent and more impervious to enemy disruptions of supply lines that have extracted a high price in blood and treasure. And the Army in August opened bids to buy $7 billion in renewable energy to make its domestic bases less vulnerable to power grid disruptions.<\/p>\n

Algae is one of the great green hopes for creating a biofuels industry that can reach the scale necessary to bring down costs and compete against fossil fuels. Whether grown in bioreactors or in desert ponds, algal oil mostly sidesteps the food and land conflicts that potentially can limit other biofuels. It\u2019s largely about bioengineering, hence Solyazme\u2019s headquarters in the biotechnology corridor of South San Francisco<\/a>.<\/p>\n

Founded in 2003 by Jonathan Wolfson, a financial entrepreneur, and genetic microbiologist Harrison Dillon, Solayzme began talking to the Department of Defense in 2007. \u201cAt the point when you\u2019re still in test tubes and shake flasks, you\u2019re thinking to yourself, \u2018Ok, we need catalysts to continue to advance this technology,\u2019 \u201d says Wolfson, sitting in a conference room that features a large framed photo of a Navy ship that steamed down the West Coast burning Solyazme\u2019s algal oil. \u201cAs a technology-driven company we needed discipline to become a production company. And there\u2019s no organization that I can think of that can drive more discipline into an organization than the DOD.\u201d<\/p>\n

Solazyme\u00a0grows heterotrophic algae in bioreactors. The algae consume sugar and excrete crude oil. After Solazyme began supplying the military with small quantities of algae biofuels for evaluation, the DOD awarded the company its first significant contract in 2010. The next year a United Airlines 737 flew the first commercial biofueled flight on Solayzme\u2019s Solajet fuel. A contract with Volkswagen followed.\u00a0\u201dThe fact that we could even make that United flight was a direct result of the work we had been doing with the Navy,\u201d says Wolfson.<\/p>\n

The military work also prompted discoveries of new strains of algae, which explains why next to its research labs Solazyme built a kitchen to bake up batches of chocolate chip cookies, honey mustard dipping sauce and crackers. While testing strains, Solazyme scientists found one that produces what tastes remarkably like olive oil but is healthier and could replace eggs and butter in a smorgasbord of foods. \u201cYour mouth recognizes it as fat, but it has a remarkable reduction in calories and eliminates saturated fats,\u201d says Genet Garamendi, Solayzme\u2019s vice president of corporate communications, biting into an algae-infused cookie that beat Mrs. Fields\u2019 hands down in an impromptu taste test.<\/p>\n

Solazyme struck a deal to commercialize its Betty Crocker crude with Roquette, the French food conglomerate. Other Solazyme strains are being produced for cosmetics and the company signed an agreement with Unilver to use its algae oil in consumer products. In May, Dow Chemical said it would tap a strain of Solazyme algal oil for use in electrical transformer insulating fluids.<\/p>\n

The commercial aviation industry is eager to become a major buyer of biofuels as a\u00a0hedge against oil price spikes that can wipe out years of profit. But cash-strapped airlines are counting on the military to get production rolling. \u201cThere\u2019s not a single commercial-scale facility up and running today and we\u2019re all keen to see what happens to price and supply when you have commercial quantities in production,\u201d says Jimmy Samartzis, United Airlines managing director of global environmental affairs and sustainability, referring to the Defense Department\u2019s move to bankroll biorefineries.<\/p>\n

United buys more 4 billion gallons fuel a year and Samartzis and other airline executives, who have worked with the Navy on biofuel standards, are on aboard the Nimitz. \u201cWhen we talk to funders and investors, we consistently hear that getting that first plant will be absolutely critical and subsequent plants will be easier to fund and get off the ground,\u201d he says.<\/p>\n

Also on deck is Michael McAdams, president of the Advanced Biofuels Association, a Washington trade group. He says at least a dozen of his 45 member companies are expected to put in bids with the military to build the biorefineries. \u201cThat\u2019s an incredible statement to the marketplace,\u201d McAdams says as a biofueled fighter jet screams by.<\/p>\n

Whether the biofuels industry can scale up to provide the 8 million barrels the Navy needs annually at a price Uncle Sam can afford is the big unknown. Areport<\/a> prepared by the Rand Corp. for the Secretary of Defense last year bluntly concluded that the military would not be able to secure sufficient supplies of biofuels at a competitive price.<\/p>\n

\u201cBecause of limited production potential, fuels derived from animal fats, waste oils, and seed oils will never have a significant role in the larger domestic commercial marketplace,\u201d the report stated. \u201cAlgae-derived fuels might, but technology development challenges suggest that algae-derived fuels will not constitute an important fraction of the commercial fuel market until well beyond the next decade.\u201d<\/p>\n

\"\"<\/a><\/p>\n

Navy Secretary Ray Mabus inspects the Great Green Fleet. Photo courtesy of the U.S. Navy.<\/p>\n<\/div>\n

Such skepticism hasn\u2019t deterred an emerging green military-industrial complex. At forums organized by the American Council on Renewable Energy<\/a> in Washington, the group\u2019s chief executive, retired Navy Vice Admiral Dennis McGinn, connects his military comrades with green tech entrepreneurs, financiers and old-line defense contractors. \u201cWe want to promote a much better understanding about the government requirements,\u201d says McGinn, \u201cand a much greater understanding by the government of what the options are out there, not just technology but financial options to try to mobilize private capital to accelerate and expand the pace of renewable energy adoption by the military.\u201d<\/p>\n

That\u2019s where Sierra Energy chief executive Michael Hart met Col. Bob Charette, Jr., director of the Marines expeditionary energy office and the force behind efforts to install green technologies on battlefield bases\u00a0The startup, based in Davis, Calif., is developing technology to transform a blast furnace into a machine that can vaporize garbage and produce either diesel fuel or electricity. It\u2019s a decidedly low-tech-looking metal cylinder connected to a conveyer belt that feeds the contraption a diet of discarded bottles, plastic, metal and other detritus. Oxygen and steam injected into the cylinder\u2019s base gasifies the trash, leaving a gas that can be refined into diesel. The possibility of using such technology on remote battlefield bases caught the Marines\u2019 attention and changed Sierra\u2019s business plan.<\/p>\n

\u201cThe Marine Corps said, \u2018Make it modular so it can be delivered in the field,\u2019 and they wanted us to produce liquid fuels, so that\u2019s what we did,\u201d says Hart, pointing to a prototype being tested at the decommissioned McClellan Air Force base outside Sacramento. Hart is betting that if he meets the Marines\u2019 needs he can capture a potentially lucrative military market \u2013 and sell to cities seeking to generate renewable energy while slashing landfill bills.<\/p>\n

\u201cThe DOD is serious as a heart attack,\u201d he says.<\/p>\n

In a wood-paneled office aboard the Nimitz, Vice Admiral Cullom points out that when the Navy decided to build nuclear-powered ships like this one, the technology was too expensive to be commercially viable. Yet the nuclear fleet projected American power to the far corners of the globe and laid the groundwork for a domestic nuclear power industry.<\/p>\n

The Navy can do the same with biofuels, he argues. \u201cWe owe it to the American taxpayer to have a decent payback period, to have a good ROI,\u201d says Cullom, a veteran commander who holds a Harvard MBA. \u201cBut our ROI is different in many ways. We also look at the long-range vision of where are we going to be. We can\u2019t keep going on a path like this. We have got to have that path be a very different trajectory for 2020 or 2030.\u201d<\/p>\n

Sapphire hasn\u2019t priced its algal oil yet, but the company expects it to be competitive with petroleum by 2018 if it can produce a minimum of 5,000 barrels a day, according to Zenk. To get there, the startup needs to develop higher-yield algae strains, cut production costs and attract capital. A lot of capital.<\/p>\n

\u201cI don\u2019t want to oversell to you \u2013 there are a lot of challenges ahead of us,\u201d says Zenk. \u201cBut every energy transition has been led by our government and primarily it\u2019s been military-driven, and the same is true this time.\u201d<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The U.S. Military’s Great Green Gamble Spurs Biofuel Startups Photos by Chris Leschinsky for Forbes Eighty miles west of El Paso, Tex., in a sunburned stretch of the New Mexico desert, Predator drones and blimps patrol the nearby border and immigration-agency SUVs speed through the desolate terrain, the occasional coyote loping across the scrub. Oddly, … Continue reading The U.S. Military’s Great Green Gamble Spurs Biofuel<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1616","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/mathwise.net\/index.php?rest_route=\/wp\/v2\/posts\/1616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/mathwise.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/mathwise.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/mathwise.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/mathwise.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1616"}],"version-history":[{"count":1,"href":"http:\/\/mathwise.net\/index.php?rest_route=\/wp\/v2\/posts\/1616\/revisions"}],"predecessor-version":[{"id":1617,"href":"http:\/\/mathwise.net\/index.php?rest_route=\/wp\/v2\/posts\/1616\/revisions\/1617"}],"wp:attachment":[{"href":"http:\/\/mathwise.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/mathwise.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1616"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/mathwise.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}