It’s been a little more than six months since two prominent Senate Armed Services Committee Republicans took aim at efforts underway within the Department of Defense (DoD) to develop a national biofuels market. During the Committee’s May, 24th mark-up of this year’s defense authorization bill, Sen. Jim Inhofe (R-OK) and the panel’s Ranking Member, John McCain (R-AZ), pushed through separate amendments that would have ended the Department’s pursuit of advanced renewable fuels.
The bill reported out of Committee included Inhofe’s amendment that prohibits the Pentagon from buying alternative fuels if their up-front cost is higher than that of traditional fossil fuels. Language added by McCain and backed by Inhofe banned the DoD from building or retooling refineries to produce biofuels. But in the last two weeks, talks on the energy issue intensified, sparked by a letter to Senate leadership signed by 38 members. The topic of biofuels emerged as a key sticking point, Senate aides said.
The November, 16th letter led by Sen. Mark Udall (D-CO) and joined by 35 other Democrats, Independent Joe Lieberman (CT) and Republican Susan Collins (ME) called the Inhofe and McCain provisions “harmful and counterproductive” and expressed strong support for “the ability of military leaders to develop and employ alternative fuels.”
The letter argued that an increase in domestic sources of fossil fuels has had no impact on the growing cost of fuel caused by global market volatility – costs exacerbated within the DoD because the Department uses more than 355,000 barrels of fuel every day. According to estimates, a one-dollar increase in the price drives the DoD’s fuel burden up $130 million. Last year, spikes in the global price of fuel pushed the DoD’s tab to $19 billion, over $3 billion more than initially budgeted. The Department has requested $14 billion for next year, a topline they may be hard pressed to hold if trends over the last three years continue.
In the letter, the 38 Senators say that “replacing even a fraction of the fuel consumed by DoD with domestic alternative fuels has the potential to advance U.S. national security, improve strategic flexibility and insulate the defense budget against future spikes in the cost of fossil fuels.”
Inhofe, who has long opposed the DoD’s biofuels program, disagrees, calling the effort an “experiment in green energy at the expense of our ability to defend America and our [military] readiness.” Inhofe’s language passed in Committee by a narrow 13-12 vote. Making his case for the restriction, Inhofe has argued that the biofuels program is a case of mistaken budgetary priorities at a time when the Department is being called upon to reduce its spending by $487 billion over the next decade.
McCain took a similar tack defending his amendment, saying the biofuels program, which is led by the Navy and backed by the departments of Energy and Agriculture, was “a terrible misplacement of priorities.” McCain’s amendment also passed in committee by a 13-12 margin.
In the months since the SASC marked-up the chamber’s version of the NDAA, Udall has been building a coalition of Members to challenge the two sections inserted by Inhofe and McCain, leading to a showdown on the Senate floor this week.
The first amendment, offered by Udall on Wednesday, struck down the Inhofe provision by a vote of 62-37. “It should tell us something that in an era of reduced Defense Department budgets, our senior leaders remain fully committed to this effort,” Udall said during debate on the amendment. He compared the Navy-led biofuels initiative to the service’s work pioneering nuclear power for ships and called the Inhofe language “poorly drafted and damaging to our security.”
Eleven Republicans, including Collins, agreed with Udall, joining 49 of the body’s 51 Democrats and the Senate’s two Independents in passing the amendment. Two Democrats – Sen. Joe Manchin (D-WV) and Sen. Jim Webb (D-VA) – and 35 Republicans opposed the measure.
A second amendment, targeting McCain’s provision, was offered on Thursday by Sen. Kay Hagan (D-NC) and also passed, though by a narrower 54-41 majority. “Developing a commercially viable biofuels industry could help [DoD] diversify its fuel sources and reduce the risk of energy volatility,” Hagan said on the Senate floor, adding that the biofuels initiative would “help protect our military from the costs associated with price spikes in oil.” Collins, who abstained during votes on both the Inhofe and McCain amendments in Committee, backed Hagan’s measure as well, joined by fellow Republicans Chuck Grassley (IA), Mike Johanns (NE) and Dick Lugar (IN).
The Hagan amendment clears DoD to invest in the construction of biofuel refineries, a project DoD could undertake through authorities in Title III of the Defense Production Act (DPA). Under the DPA, DoD is given broad latitude to pursue new research initiatives it deems critical and to control portions of the civilian economy considered necessary for national defense. During the Korean War, the DPA was used to boost the domestic aluminum and titanium industries. More recently, the authority has helped secure beryllium for missiles and satellites, develop vacuum tubes for space-based communications and advance ceramics used for vehicle and body armor.
This week’s passage of the Udall and Hagan amendments is being hailed as a major victory for the Navy-led biofuels program, but several obstacles to the Navy-led initiative remain, including language similar to Inhofe’s that was inserted in the House version of the Defense Authorization bill by Texas Republican Mike Conaway. Like Inhofe, Conaway says that spending on biofuels is “squandering precious dollars”, but the Senate will have the momentum going into Conference talks between House and Senate Armed Services Committee leaders on the bill that could begin as early as next week. The House version of the NDAA does not contain limitations on refineries.
Despite the remaining hurdles, Udall’s tone is optimistic. “Today’s strong bipartisan vote affirms that we should allow our military leaders to continue to develop and use advanced alternative fuels in order to bring down costs and improve mission capabilities.” He called the vote “an opportunity… to help our military and help our country.”