Energy security requires diversity: an argument for the Defense Production Act Title III Biofuel Initiative

Abstract

The U.S. military has historically taken a role in technological advancements, hoping to create mature industries which are cost-competitive after an initial period of federal financial support. After 40 years of national security strategy in which the military was called upon to react to our nation's overreliance on politically unstable sources of conventional fuel, the time has come to create a domestic alternative fuels market which will enhance American energy independence and security. The United States Navy has taken the lead in this charge by proposing the Defense Production Act (DPA) Title III Biofuel Initiative to assist the development of a sustainable commercial biofuels industry which will help the nation achieve energy security by providing diversity of energy supply which will reduce the power the oil market has over the nation as a whole. Section II of this paper discusses the nation's demand for petroleum, how it has impacted national security strategy, and examines the political, economic and military costs of reliance on oil. Section III reviews the historical uses of the DPA in which the federal government has provided financial support to industries critical to the national defense. Section IV introduces the DPA Title III Advanced Drop-in Biofueld Production Project, which is discussed in terms of political and technological viability. The commercial aviation industry's pursuit of biofuels is discussed and the benefits of long-term contracting and hedging are explored. It concludes witih the recommendation to allow the biofuel initiative to work to create a domestic advanced biofuel industry before the next oil crisis occurs.