Report Finds Military Biofuel Programs Have Important Economic Impact

Plans in Congress to end military biofuel programs could derail $10 billion in economic activity; creation of more than 14,000 jobs, E2 study finds

Published on: Nov 16, 2012

The military's plans to expand its use of biofuel in planes, ships and other vehicles would generate about $10 billion in economic activity and create more than 14,000 jobs by 2020, according to a report commissioned by biofuels advocacy group Environmental Entrepreneurs.

The group says such an expansion would jump-start the biofuel market, in turn, speeding adoption of biofuel by commercial airlines, vehicle fleets and other users.

Led by the Navy and Air Force, the Department of Defense plans to obtain as much as 50% of its fuel from advanced biofuels by 2020, and DoD's top leaders note that reducing the military's use of oil is could benefit national security and troop safety, and could avoid fuel price spikes, E2 says.

Plans in Congress to end military biofuel programs could derail $10 billion in economic activity; creation of more than 14,000 jobs, E2 study finds
Plans in Congress to end military biofuel programs could derail $10 billion in economic activity; creation of more than 14,000 jobs, E2 study finds

But, the group adds, under the proposed National Defense Authorization Act, the military would be prohibited from expanding its use of biofuel.

"The military often leads major economic transitions in our country – think about aviation, communications or the Internet," said Nicole Lederer, co-founder of E2. "Yet right now in Washington, some shortsighted lawmakers are poised to block a potentially major transformation of our national energy supply - and also hold back the significant economic growth and job gains that would come with it," she said.

E2 commissioned High Road Strategies, an industrial, economic and energy consulting firm, to conduct the study, which is based on biofuel goals previously announced by DoD. According to the report:

-Between $9.6 billion and $19.8 billion of economic activity could be generated by 2020 if the DoD is allowed to meet its previously announced biofuel goals.

-Between 14,000-17,000 new jobs could be created by 2020. If measured on a job-year basis, the total number of jobs created would be more than double that amount.

-Of these jobs, more than 3,000 will be agricultural jobs from biomass production, and about 1,200 will be in biorefinery operation. An additional 10,000 jobs will be created from biorefinery construction.

-These economic and job impacts will be broadly distributed geographically, with the greatest benefits to states that create the strongest incentives for biorefineries.

-In order to meet the military's cost and volume targets, advanced biofuel companies are leveraging $3.4 billion of private capital invested since 2007 to build new commercial facilities.

-Military demand is helping to shape the early market and scale the advanced biofuel industry, which could help the commercial aviation industry and other industries to meet their hopes and plans to expand their use of biofuel.

Vice Adm. Dennis McGinn (US Navy-RET), president of the American Council on Renewable Energy, said his group recognizes the important national security and energy security benefits of military biofuel use, and the report shows that.

"This report from E2 also highlights the tremendous economic potential of the defense biofuels program. It has already attracted private capital for technological innovation and commercial-scale biorefinery construction, thereby creating geographically-diverse jobs," McGinn said. "Most importantly, this initiative accelerates America's move to a more diverse and secure energy portfolio."

For the complete report, visit www.e2.org.