Cost of Green

From Zero Hedge:

Why should we worry about 5c or 10c on a gallon of fuel down the local gas station when the US Navy (in all her glory) is willing to pay a staggering $26-a-gallon for 'green' synthetic biofuel(made we assume from the very same unicorn tears and leprechaun nipples that funded the ESM). AsReuters reports, the 'Great Green Fleet' will be the first carrier strike group powered largely by alternative fuels; as the Pentagon hopes it can prove the Navy looks just as impressive burning fuel squeezed from seeds, algae, and chicken fat (we did not make this up). The story gets better as it appears back in 2009, the Navy paid Solazyme (whose strategic advisors included TJ Gaulthier who served on Obama's White House Transition team) $8.5mm for 20,055 gallons on algae-based biofuel - a snip at just $424-a-gallon.

In its defense, the Navy Secretary said, ""Of course it costs more.  It's a new technology. If we didn't pay a little bit more for new technologies, we'd still be using typewriters instead of computers."  Of course, the switch from typewriters to computers proceeded without government mandates (or taxes, as they are called now) and in fact was led by the private sector -- the government trailed in this transition.  Further, people paid the extra money for a computer because they found real value in it (document storage, easy editing, font flexibility).  What real value is the Navy getting for the extra $22 a gallon?  How much better will this task force perform?  The answer, of course, is zero.


  1. None:

    The way to swing this is to point out the profit margin per gallon of bio fuel going to the evil corporations.

  2. Agammamon:

    You know what's weird about this? The Navy is a very fragmented organization - it won't allow the use of biofuels in small craft because those fuels tend to be mildly corrosive and impose higher repair costs because of it, yet we'll allow its use in multi-hundred million dollar ships.

    And that comment about computers is funny - the navy didn't lead the way in the shift from typewriters to computers - *I* had had several PC's at home before they were widely available on the ship.

  3. Jim Collins:

    I seem to remember our squadron's ready room on the ship getting a Zeinith Z-100 computer in 1985. It sat there untouched for several weeks because the Navy didn't buy any software for it.

  4. Not Sure:

    But... green! Doesn't that count for *something*? Oohhh- waitaminute... look over there! Trains!

  5. NL_:

    Computers weren't necessarily more expensive if you consider productivity and efficiency gains. Greater up front outlay in dollars isn't the only possible metric.

  6. Greg Worrel:

    What he forgot to mention is that it is not his money. What does he care? Friedman's take on the relative carelessness of spending other people's money comes to mind.

  7. Peter:

    Any chance that the algae based fuels were so expensive because it was for technology that would collect algae from the water as the ship was under way so that it would never have to return to port to refuel? No? Then where can I buy a gas station that the navy uses?

  8. OneEyedMan:

    Computers were invented for military purposes so while word processors were a private development the typewriter to computer transition isn't an ideal example. It seems closer to an example of how the military encourages technological development.

  9. Ted Rado:

    It can easily be shown that biofuels are nonsense because the area where they can be grown is limited (the Earth's surface) and the energy to produce them is almost as much (in many cases more) than the fuel value of the product. It is all a scam manufactured by the greenies and bought into by the pols. The pols subsidize these industries, and the business people are happy to laugh all the way to the bank.

    A few calcs re corn ethanol will show that the whole thing is a joke. As the Navy so well demonstrates, if you pay enough, you can produce fuel out of almost anything. The new philosopher's stone: make gold into lead!

  10. IGotBupkis, Faecies Evenio Mr. Holder?:

    More critically, every company that's sunk money into algae as fuel, as well as all other non-corn based method of making ethanol, has pretty much gone TU or suspended efforts. There's not a single solitary company -- out of dozens, if not hundreds, who have successfully gotten even close to breakeven on the process at any kind of industrial scale.

    Algae based synfuels are, rather clearly, the unicorn fart fuel of the government.

  11. IGotBupkis, Faecies Evenio Mr. Holder?:

    >>> the business people are happy to laugh all the way to the bank.

    I either want less corruption, or more chances to participate.
    -- Ashleigh Brilliant --

  12. Steve D:

    Using plants for fuel drives up the price of food for all of us.

  13. John:

    Agammamon: "And that comment about computers is funny – the navy didn’t lead the way in the shift from typewriters to computers – *I* had had several PC’s at home before they were widely available on the ship."

    I brought an IBM PC ("souped up" with a 10MB hard drive) onboard a Spruance class destroyer in 1983, and had more compute power than the ancient core memory beasts that powered the ship's tactical data computers. Man, that was weird.

  14. JC:

    Lessee, the light fuel surrogate (for gasoline &c) is whiskey, and the heavy/bunker fuel is french fry grease...
    An offensive against the Kennedy/Moore bloc?
    (Just trying to find an upside, here)

  15. Bill:

    Actually the answer is not zero but a negative number as all of these bio fuels have a lower energy density of refined petroleum or LNG. So we are paying more and hobbling our fleet.

  16. marco73:

    I remember when the Navy's mission was to defend against outside aggression, like Russian nuclear subs.
    Now it appears that the Green Fleet is just a Potemkin village for greenies.
    If the Russian subs hadn't all rusted away, I'll bet they'd take one look at that fleet and start laughing in their borscht.

  17. Craig Loehle:

    The first time a stealth fighter chokes on biofuel and crashes, there goes a billion. But it is all about symbolism, who can prove they are greener, like hipsters having a hipper than thou contest.

  18. caseyboy:

    To Steve D's point. I heard this morning that the cost of a bushel of corn will go over $7 today. The heat and drought are limiting the harvest and the price will soar.

    Did I say heat and drought??? Oh no, global warming must be true. Thank goodness we are willing to pay $26 per gallon for bio-fuels so we can reverse the warming. Save the children and polar bears. Can we get Gore a 2nd Nobel?

  19. mark2:

    @OneeyedMan, yes computers were technically created in the WWII period to calculate artillary tables, so they would not have to be done by hand.

    The microprocessor was invented by Intel, whose first use was in various NASA project (contrary to popular belief, there is a lot of push in military/NASA purchases, it isn't just military vision)

    However, the personal computers created from these microprocessors were completely a civilian home hobbyist development and had very little to do with Government or military at all. In fact I think the military was very slow to catch the personal computer wave.

    Military/Government is somewhat decent at coming up with grand giant behemoth projects, and not necessarily decent with the small stuff.

    And something folks don't realize - these things would have been invented anyway. Colleges were already creating computers on their own in WWII for instance. They would have just come in a different time frame - it is quite possible over the 70 years of computers, that if the research money which is famously wasted in Government were in the private sector, we would have had "facebook" much earlier than we would have with all the government monkeying in technology.

  20. Gil:

    Why care whether food is going to get more expensive? Is it going to be THAT more expensive? More expensive food would help fattie Westerners to make better choices. Besides why not point out that meat-eating makes plant food more expensive?

  21. Goober:


    Because it is getting more expensive for no net benefit on the other side. Meat eating makes plant food more expensive, but we get meat in exchange. A good trade, in my opinion. Biofuel makes food more expensive, and in exchange, we get to not use a cheap, imminenelty available fuel source with more energy density and that doesn't rape our croplands of their fertility in a time of changing climate when we probably ought to be taking very good care of them just in case.

    As far as the fat westerners thing, I doubt very much that making carrots and celery more expensive is going to help us lose any weight - but thanks for playing.

  22. caseyboy:

    Right on Goober.

    Fat America? How can that be when we more people on food stamps then ever before. And we are told that American children are going to bed hungry? Don't get me wrong, we waste a lot of food in this country and if it were more expensive perhaps we would sheppard it better. But I don't like arbitrary regulations trying to drive markets.

  23. A Friend:

    What they're spending may be crazy, but most ships aren't nuclear, and a source of import independent fuel is a good idea. Of course, since 1912 the Navy had a whole oil field in California held in reserve to fuel the fleet domestically, but Clinton sold it.

  24. MJ:

    Now it appears that the Green Fleet is just a Potemkin village for greenies.

    But it's a floating Potemkin village!

  25. DoctorT:

    Any chemist or biochemist with more than five functioning neurons could tell you that green flora are not efficient fuel sources.

    Problem 1: Photosynthetic plants are less efficient than most solar energy cells. Sure, plants use free solar energy, but only the tiny portion that is the right wavelength for interacting with chlorophyll.

    Problem 2: Few photosynthetic plants make large quantities of energy-dense fuels such as waxes or long-chain lipids.

    Problem 3: The energy needed to harvest the plants, separate the raw "fuels" from everything else, process the raw fuels into usable fuel, and dispose of the waste products typically exceeds the energy obtainable from the final fuel product.

    Problem 4: The resultant usable fuel typically is less efficient than diesel, kerosene, or gasoline and generates more air pollutants.

    But green is great, right?

  26. Agammamon:

    "Any chance that the algae based fuels were so expensive because it was for technology that would collect algae from the water as the ship was under way so that it would never have to return to port to refuel?"

    And the Navy has had technology in place so that warships already do not need to return to port to refuel or replenish stores and ammo. Warships can potentially stay underway for over a year without hitting port - though the crew would probably be trying to kill each other after a few months:)

  27. Agammamon:

    "I brought an IBM PC (“souped up” with a 10MB hard drive) onboard a Spruance class destroyer in 1983, and had more compute power than the ancient core memory beasts that powered the ship’s tactical data computers. Man, that was weird."

    I've still got an HP calculator that I bought in 1994 - its got more computing power than the computer used to control the gas turbine on the Perry frigate I served on a couple of years after.

  28. Agammamon:

    "Besides why not point out that meat-eating makes plant food more expensive?"

    Because that's not really true. Most of the plant matter that our meat producing animals eat isn't edible by humans anyway - try to get nutrition from a bale of hay - or its recycled animal matter.

  29. Sam L.:

    I suspect the Navy did not want to buy this, but was ordered to buy it.

  30. drB:


    As a chemist I agree 100%. Other than sugarcane in Brazil one needs to input about the same amount of energy into biofuels as one gets out of them. Energy-independence with biofuels is complete bullshit. Also, govt paying for biofuels will not bring any progress and this is very different from many other cases where govt actually spurred invention that no private entity was funding at the time (computers, fracking technology, internets...). For energy independence there already exist a technology - it is called "nuclear energy".

    A few amusing links:

  31. Bart Hall (Kansas, USA):

    An old Navy friend of mine (USNA '46) got separated from his oilers during a typhoon back in about '47 or '48. He pulled into Shanghai and bunkered straight off the rapeseed oil presses. In fact, diesel engines were originally intended to run on vegetable oil, so there's nothing "new" about this technology at all. We must therefore conclude that the "Green Fleet" is but another example of the corrupt cronyism which has come to characterize the current administration.

    Meanwhile, back at the ranch ... the Air Force had been developping a synthetic jet fuel (from coal) in order to de-couple the USAF from petroleum supply issues in the event of a major conflict. The Air Force usually moves all its own fuel from the States to wherever it is needed. That syn-fuel project (using technology first proven in 1926 and perfected over a generation ago) was cancelled in late January, 2009. I doubt the timing was only a coincidence.

  32. Patrick:

    This is an interesting topic. Back in the late 40's and 50's, the Government had a couple of syn-fuel plants running above a "pilot stage", and the reports on fuel quality were above those for standard fractionation of oil. The plants were "destroyed" and the records were "sealed". They had copied much of what the Germans had developed as they were severely limited by shortages in oil. I know that they were using a type of coal, and liquifying it in the presence of catalysts at pressure. Reports of the process were that it was of significant economic value if the "easy oil" came up short. It would seem to me that if we could squelch the oil lobby, that the "coal" sector could easily make an inroad to cheaper fuels (carbon based), and that would be the next safe rung on the ladder while chasing a syn-fuel based upon a much more capital intensive process.