December 12, 2011
While Barack Obama delays the Keystone XL oil pipeline that would facilitate access to the estimated 1.7 trillion barrels of oil in North America, the U.S. Navy has purchased 450,000 gallons of biofuel at $15 a gallon on a biofuel-gasoline blend — supposedly justified by the proposition that dependence on oil is a national security threat.
That’s 4 times the price of standard marine fuel, JP-5, which has been going for under $4 a gallon. And surprise, surprise (tongue deeply in cheek) … a member of Obama’s presidential transition team, T. J. Glauthier, is a “strategic advisor” at Solazyme, the California company that is selling a portion of the biofuel to the Navy. Glauthier worked on the energy-sector portion of the 2009 stimulus bill.
And adding insult to injury (against the American taxpayer), the Navy sale isn’t Solazyme’s first trip to the public trough, of course. The company got a$21.8 million grant from the 2009 stimulus package.
Meanwhile, as the Navy is forced by the Obama administration to pay 4 times the going price to Obama cronies under the guise of Obama’s green agenda for standard marine fuel, the Defense Department is facing huge budget cuts.
As J.E. Dyer points out over at Hot Air, if governments stopped subsidizing biofuels, their artificial “profitability” would disappear overnight. Price-wise, they can’t compete with fossil fuels. Subsidizing them while they can’t compete is not a method with any record of success for encouraging price efficiency. What it does instead is create languishing public dependencies (with the American taxpayer footing the bill) and tremendous opportunities for cronyism, as demonstrated in the Solyndra scandal (and now in the case of Solazyme).
Dyer goes on to reference an article by the Institute for Energy Researchand notes that the US has enormous reserves of both conventional and unconventional oil and natural gas resources. Opening them up for exploitation would, among other things, ensure that the US armed forces could buy cheaper fuel — cheaper than today’s prices — produced in the USA. At a time when federal debt is spiraling and the Defense Department is facing budget cuts that are guaranteed to gut the fighting forces and render them ineffective, it seems to border on insane to eschew a ready, significantly cheaper alternative and require the armed services to quadruple what they pay for fuel as a proof of concept — apparently with the idea that the forces should buy more of the 4-times-as-expensive fuel.