Navy, Agriculture Departments to Purchase Biofuels For Fleets

The departments of Agriculture and the Navy announced plans Monday to buy 450,000 gallons of non-food biofuels -- at a cost of $16 per gallon -- in what will be the largest federal purchase of biofuels in U.S. history.

The purchase is being authorized by an executive order under the Obama administration's "we can't wait" campaign.

Administration officials gave no indication why they're not going through Congress, instead using a program that was established to promote rapid job growth by bypassing congressional debate.

Two companies will participate in the program -- Louisiana-based Dynamic Fuels, a joint venture of Tyson foods and Syntroleum Corp, which makes biofuel from used cooking oil; and California based Solazyme, which makes fuel from algae.

Administration officials say the aim is to promote the use of biofuels, to reduce dependence on unstable sources of foreign oil and reduce budget shocks from oil price hikes.

The fuel will power planes and the surface ships of the "Great Green Fleet Carrier Strike Force" in summer 2012 exercises off Hawaii. The carrier itself is nuclear-powered.

Navy Secretary Ray Mabus said the Navy's led the way in power innovation -- from sail to coal, coal to diesel, diesel to nuclear, and now to biofuel. Aircraft and ships will use a 50-50 blend of biofuel and conventional fuel.

The demonstration project is aimed at commercial aviation as well as the Defense Department. Commercial aviation uses 12 billion to 13 billion gallons of fuel a year and officials say biofuel blends or substitutes would be more easily distributed through 30 to 40 airports than trying to distribute it through auto gas stations to offset gasoline use by drivers.