By Suzanne Roig
HONOLULU (Reuters) - The Navy's "Great Green Fleet," a group of warships and fighter jets burning an expensive blend of biofuels and petroleum, is performing as planned, Defense Department officials said on Thursday, as the Senate prepared for a fight over the program's cost.
Dozens of F/A-18 Super Hornets and other aircraft powered by conventional jet fuel mixed with recycled cooking grease and algae oil screamed off the flight deck of the aircraft carrier USS Nimitz on Wednesday during international military exercises in the central Pacific.
Two destroyers and a guided-missile cruiser plied the ocean using a similar fuel mixture. The fuel demonstration started on Wednesday and continued on Thursday.
Congressional critics, led by Republican Senator John McCain, have argued biofuel is far too expensive for the military to help develop when defense budgets face massive cuts.
But Navy Secretary Ray Mabus said the demonstration proved that the green-fuels blend, while about four times more costly per gallon than conventional fuels, was safe and effective in combat situations.
"Those aircraft are flying the way they always do. The ships steamed the way they always do. There was no difference with the fuel," he told sailors and reporters assembled in an aircraft hangar aboard the Nimitz, the carrier group's flagship. The Nimitz itself runs on nuclear power.
While some have criticized the demonstration as unnecessary and the $12 million cost of the fuel as excessive, Mabus told reporters on Thursday that the event, which was witnessed by airline and air industry leaders, was worth it.
"Absolutely it was worthwhile to show that biofuels can compete and can be used in every single thing that we do in the Navy," he said. "Everything before now has been a test. This shows that we can use biofuels and other alternative energies in an operational manner."
The so-called Great Green Fleet is a key element of a Pentagon initiative to use the buying power of the U.S. military - the world's largest single oil consumer - to help foster a competitive biofuels industry.
Agriculture Secretary Tom Vilsack, whose department along with the Energy Department is helping fund some of the project, said on Thursday the next step is developing an industry that can produce it at an affordable cost.
Vilsack said the agencies were working with private industry on pilot projects "so that we can demonstrate not only that it works in planes and ships but that we can produce it at an affordable cost."
ULTIMATELY LOWER COSTS
Mabus and other supporters of the program say curbing the military's reliance on fossil fuels and making alternative energy more commercially viable would ultimately lower costs while bolstering national security.
But critics have painted the green fuels initiative as a waste of funds while the federal budget is severely strained and energy companies are finding large quantities of oil and natural gas in the United States.
Congressional Republicans have denounced the military's green energy push as another attempt by the Obama administration to promote alternative fuels even when they make little economic sense, as in the case of the government-funded solar panel maker Solyndra, which went bankrupt last year.
The Senate is girding for a battle over legislation backed primarily by Republicans to bar further military spending on biofuels that are more expensive than petroleum products.
The green-fuel operations of the Nimitz's strike group were conducted as part of this year's 22-nation Rim of the Pacific training exercises, the largest annual multinational warfare maneuvers on the high seas.
The war games, staged 100 nautical miles north of Hawaii, began last Friday and will run for six weeks.
The 450,000 gallons of biofuel the Navy purchased at $26 a gallon for the occasion and blended in equal parts with petroleum-based fuels to fill up three warships and 71 aircraft was just enough to last two to three days, Navy officials said.
OPPONENTS BALK AT BIOFUELS COST
A year-old Defense Department report predicted the military will spend $2 billion more annually if it pursues its biofuels goals. And a more recent study by the RAND Corporation think tank said renewable fuels for U.S. military vessels and jets are likely to remain far more expensive than petroleum products, absent a technological breakthrough.
But the Navy said estimates that it will spend more using biofuels are flawed. The projections assume petroleum prices will not be higher by the end of the decade, which is unlikely, and that the Navy will buy biofuels at a significant premium to petroleum.
The Navy has said it will not buy biofuels for operational use until the price is competitive with petroleum.
"The Navy is pursuing cost-competitive alternative fuels and greater fuel efficiency because unpredictable and increasingly volatile oil prices could have a direct impact on readiness," a Navy spokeswoman said. "That volatility resulted in more than $500 million additional fuel bill to the Navy in FY12."
McCain and other opponents of the program have seized on the fact that the Navy paid more than $26 a gallon for the biofuels it purchased for this week's Green Fleet demonstration, compared with less than $4 a gallon for convention fuel.
The Navy has noted that the 50-50 mix of biofuel and petroleum-based fuels, formulated as a "drop-in" blend requiring no modification to aircraft or ship engines, cost a combined $15 a gallon. Most of the biofuel half of the mixture, about 90 percent, was rendered from cooking oil waste. The other 10 percent was refined from algae.
(Additional reporting by David Alexander in Washington; Writing by Steve Gorman; Editing by Andrew Heavens, Xavier Briand and Vicki Allen)