A California company has been hired to provide 450,000 gallons of advanced biofuels to the U.S. Navy – the “single largest purchase of biofuel in government history,” according to the Navy – at $15 per gallon, or about four times the market price of conventional jet fuel.

The Institute for Energy Research unearthed the purchase in a recent post on its website:

Last week, the Navy signed a contract with two biofuel companies to purchase 450,000 gallons of advanced biofuels at $12 million to assist in President Obama’s goal to establish a domestic biofuels industry and to advance it in ways that do not require Congressional approval. Of course, given the Navy’s mission, they claim to be pursuing biofuels to ensure adequate fuel in the future without relying on crude from the Middle East or other overseas sources that may be a threat to our national security. While this purchase is only a drop in the bucket compared to the Navy’s annual usage of more than 670 million gallons, their goal is to fuel a normal Navy mission with a 50-percent blend of biofuels and gasoline by 2016.

The company selling the fuel to the Navy is called Solazyme. The company’s corporate board includes “strategic advisor” T.J. Glauthier, who “advises companies dealing with the complex competitive and regulatory challenges in the energy sector today.”

Glauthier was the Deputy Secretary and Chief Operations Officer of the Department of Energy from 1999 to 2001, meaning he has experience dealing with energy issues on both sides of the regulatory equation.

Also of note: Glauthier served (pro bono) on President Obama’s White House Transition Team, where he specifically worked on the energy provisions of the stimulus package, according to Solazyme’s website. Solazyme itself landed a $21.8 million stimulus grant to build a biofuel refinery.

Now the company looks to have scored big once again. But the benefits extend beyond the immediate profit to be made from the sale. As Wired Magazine noted, “the often-struggling biofuels industry will be a lot closer to proving its viability” with Solazyme’s massive Navy contract.

“Our use of fossil fuels is a very real threat to our national security,” the Navy insisted in defending the purchase, apparently in reference to the supposed limits on fossil fuel availability. But as IER noted, the United States sits on enough oil and natural gas to power the country for hundreds of years – if only the federal government would permit expanded exploration and development.

The administration seems to be looking for ways to push alternative fuels without congressional action, and the military is the logical place to start.

Archduke Russell John wrote:Can they even produce 450,000 gallons. I read an article recently that said the total national production of biofuel was less then 100,000 gallons (60,000 is the number that is sticking in my head)

freeman2 wrote:I ran across an article on innovation that is pertinent to this topic and some might find it interesting

http://www.columbialawreview.org/assets ... Gilson.pdf

rickyp wrote:You left out the best part of the Chevy Volt story, Steve: the average Volt buyer has an income of $170,000. So the billions the Obama administration has spent on this monstrosity subsidize the buying whims of some very affluent people. When do we get to Occupy General Motors?

You should probably wait a little while before judging the Volt. The production capacity is still only 125 Volts a day and its still in the early adapter stage of the product cycle. .

The Leaf is further along, and although it was disrupted by the tsunami is Nissan selling everything produced.

Both cars are in the stage where the limited production can be bought at a high price by early adapters with particular wants and needs . Kind of like the first $3000 plasma televisions... If you amortized the investment in R&D over the first few thousand Plasma screens sold at $3000 it would look like a loser too. Not so much now.

As they work out the kinks and imrove the battery life there is every reason to beleive they'll grow the market.. The early investment, amortized over 10 yers of an eventually sucessful product launch won't seem like much.

On July 25 Nissan will begin taking orders from consumers with existing reservations in Alabama, Florida, Georgia, Illinois, Maryland, Mississippi, North Carolina, South Carolina, Virginia and Washington, D.C.
After these prioritized orders are taken, on Aug. 4, Nissan will open new reservations and orders to the general public – both in these new markets, as well as places where the LEAF has already been on sale (Arizona, California, Hawaii, Oregon, Tennessee, Texas, and Washington).
Expected delivery of the first 2012 Nissan LEAFs will begin in the fall.
As for those 2013 domestically made traction motors mentioned, these will be made in the company’s Decherd, Tenn. assembly plant, Nissan said yesterday.
The move is expected to create 90 new jobs with assembly line capacity of 150,000 motors annually.

So, following your analogy, the government invested how much into plasma TV technology?

rickyp wrote:Electric powered cars are following a fairly classical product introduction for highly engineered products. You start with limited production capacity selling at high prices ...
As the engineering improvements take hold, and production capacity is ramped up prices come down and the market expands. Until an "optimum level " of price is established that is profitable and starts to pay back the intial investment ...

and the Leaf is further ahead of the Volt ...

On July 25 Nissan will begin taking orders from consumers with existing reservations in Alabama, Florida, Georgia, Illinois, Maryland, Mississippi, North Carolina, South Carolina, Virginia and Washington, D.C.
After these prioritized orders are taken, on Aug. 4, Nissan will open new reservations and orders to the general public – both in these new markets, as well as places where the LEAF has already been on sale (Arizona, California, Hawaii, Oregon, Tennessee, Texas, and Washington).
Expected delivery of the first 2012 Nissan LEAFs will begin in the fall.
As for those 2013 domestically made traction motors mentioned, these will be made in the company’s Decherd, Tenn. assembly plant, Nissan said yesterday.
The move is expected to create 90 new jobs with assembly line capacity of 150,000 motors annually.

,
source: http://www.hybridcars.com/news/nissan-p ... 30468.html

So, following your analogy, the government invested how much into plasma TV technology?

You do know that other countries produce all of the displays sold in the US? That the US had the entire industry "stolen" from them by neo-mercantilists in the 80's?
And that Taiwan, South Korea and China provided those industries with very significant subsidies in order to assist their domestic companies in working through th early stages of the product development cycle. And that these governments are being rewarded handsomely for their subsidies with taxes, employment, and very high exports?
...

I wonder how much of the "classical product introduction for highly engineered products" cost cycle to which you allude to is based on figuring out how to manufacture products in lower cost places such as China. If we want to keep the jobs in the US, we may find that there is not as much room to lower costs. If we want to lower costs, we may have to accept that cheap electric cars are made in other places.

rickyp wrote:Electric powered cars are following a fairly classical product introduction for highly engineered products. You start with limited production capacity selling at high prices to the most committed sliver of the market. Price theory says that the demand/price curve is shaped like a bell. A small percentage will pay an awful lot for your product, and as the price decreases you get to that sweet spot in the middle where the price to demand ratio is ideal, However, in order to take a highly engineered product to that level you first want to operate a small quantity of product in the real world for a time and monitor the performance of the product, improving the engineering as faults are reported. (As the first models into the market are delivered the service requests are generally handled directly by members of the design engineering team...)

In 1828, Hungarian, Ányos Jedlik invented a small-scale model car powered by an electric motor that he designed. Between 1832 and 1839 (the exact year is uncertain), Robert Anderson of Scotland invented a crude electric-powered carriage. In 1835, another small-scale electric car was designed by Professor Stratingh of Groningen, Holland, and built by his assistant Christopher Becker. In 1835, Thomas Davenport, a blacksmith from Brandon, Vermont, built a small-scale electric car. Davenport was also the inventor of the first of the first American-built DC electric motor.

Better Batteries
More practical and more successful electric road vehicles were invented by both Thomas Davenport and Scotsmen Robert Davidson around 1842. Both inventors were the first to use the newly invented but non-rechargeable electric cells or batteries. Frenchmen Gaston Plante invented a better storage battery in 1865 and his fellow countrymen Camille Faure further improved the storage battery in 1881. Better capacity storage batteries were needed for electric vehicles to become practical.

So, following your analogy, the government invested how much into plasma TV technology?

You do know that other countries produce all of the displays sold in the US? That the US had the entire industry "stolen" from them by neo-mercantilists in the 80's?

And that Taiwan, South Korea and China provided those industries with very significant subsidies in order to assist their domestic companies in working through th early stages of the product development cycle. And that these governments are being rewarded handsomely for their subsidies with taxes, employment, and very high exports?

So, following your analogy, the government invested how much into plasma TV technology?

You do know that other countries produce all of the displays sold in the US? That the US had the entire industry "stolen" from them by neo-mercantilists in the 80's

hat does that have to do with anything? Are you suggesting if the US government doesn't waste money on a losing proposition (the Volt) another country will step in and lose money instead

rickyp wrote:steve

So, following your analogy, the government invested how much into plasma TV technology?

ricky

You do know that other countries produce all of the displays sold in the US? That the US had the entire industry "stolen" from them by neo-mercantilists in the 80's

?
steve
W

hat does that have to do with anything? Are you suggesting if the US government doesn't waste money on a losing proposition (the Volt) another country will step in and lose money instead

Well, you're the one who insinuated that there was no government subsidy of the development of plasma and other flat screen displays. There was. Just that the governments that subsidized them were the ones where the manufacturing industry actually exists...

And yes, I think the case can be made that the US auto industry may need help in developing a competitive electric car competitor. The case for that is both the Leaf and the successful hybrids (Prius).

Historically US auto makers have been poor at long range planning and commitment to new product development.. Its among the reasons the industry got into trouble in the first place, giving up share to Japanese companies who all had 10 year development plans and updated them every year. .

If the US company was alone in its pursuit of electric cars, perhaps you'd have a chance of being right about the future of the electric car. However since Nissan has an even bigger committment, and because the commitment to hybrids is wide spread , I think there is a feeling amongst the auto industry that the market will be very important.

Nissan expects to sell 150,000 Leafs next year.

I think it is probably too soon to declare the Leaf a success.