ABO Responds to USDA/DOE/Navy Biofuels Investment Promise 1ABO Responds to USDA/DOE/Navy Biofuels Investment Promise
September 8, 2011
he Algal Biomass Organization has voiced its opinion of the US government’s recently announced $510 million biofuels investment commitment over the next three years. Following is their statement: Late last month, three federal departments came together to launch an ambitious effort to commercialize next generation biofuels. The USDA, DOE and Navy announced an historic commitment to directly invest up to $510 million to retrofit and/or build facilities capable of producing drop-in replacement fuels. Funds from the private sector will be matched one-to-one, bringing the total potential available capital to more than $1 billion.
This announcement is a significant boon to our industry and comes at a time where several of our member companies are moving from lab to pilot, and from pilot to commercial production of algae-based drop-in fuels.
We’ve always praised the US military for its leadership in procuring and testing biofuels—their support has shown that domestic, sustainable fuels can perform at the highest levels of use. But until now, direct investment in companies or projects was not an option.
These three departments have rightly determined that it’s not going to be enough to just be a customer. They understand that the capital costs of facility construction are too high, and not the right model for venture capital, and the technologies still so new as to preclude traditional bank financing.
Let’s be clear – this is not a feel-good publicity stunt. This is an investment in the long-term national security and economic health of our country. As Navy Secretary Ray Mabus said: “America’s long-term national security depends on a commercially viable domestic biofuels market that will benefit taxpayers while simultaneously giving Sailors and Marines tactical and strategic advantages.”
What was most inspiring to me, however, was one aspect of the partnership that went under reported—where the funds were sourced. It turns out that no new authorizations are required (no surprise, given the current climate surrounding our national debt) because the funds have been pulled from elsewhere in the budget.
That means, for the first time in what seems like a long time, that advanced biofuels took precedence for limited funds. From the Obama administration to the departments of the Navy, Agriculture and Energy, the importance of accelerating commercialization of advanced biofuels is now a national priority.
It’s now up to our industry to take advantage of this opportunity and show what we can do.
Executive Director, Algal Biomass Organization