The request was issued by the Defense Logistic Agency's Defense Energy Support Center (DESC), which oversees the Pentagon's fuel purchases, to test the military's interest in a technology known as "Fischer-Tropsch," which converts coal or natural gas into liquid fuel. The notice is intended to prompt information submissions on potential uses and will not lead to an immediately binding contract, a DESC source says.

But the request could have a major impact on the alternative fuels market if the military decides to move forward following the tests because the Pentagon is the single largest buyer of jet fuel in the country.

DOD “seeks to . . . obtain information regarding possible suppliers of synthetic fuel for aviation purposes that meets the Fischer-Tropsch draft synthetic fuel specification for delivery to various Air Force and Navy installations for . . . testing and subsequent use,” according to a May 30 notice posted on the DESC Web site. The Pentagon is “interested in long-term prospects for the manufacture and supply of aviation synthetic fuels in increasing quantities, with an emphasis on domestic industrial capability and feed stocks,” according to the notice.

Under the possible purchase, the Air Force and Navy would each receive 100 million gallons of alternative fuels for testing on ships, airplanes and other operational units, according to a DESC source. Those fuels would likely be blended with existing DOD fuel types, such as the Air Force's JP-8 and the Navy's F-76, in a 50/50 mixture or similar ratio, according to the source. “There won't be enough alternative fuels to do a 100 percent [alternative] blend for at least a decade,” the source says, “but even reducing petroleum 50 percent in this country is huge. What DESC is saying is we don't want [carbon dioxide] greenhouse gases emitted into the atmosphere.”

The source says each of the military services wants to maintain its current single-fuel policy, under which all vehicles are run with as similar a fuel type as possible. DOD officials want to use 50/50 blends “widely” for the service tests at first, with an eye to potentially retooling the ratio for optimum efficiency later on, the source says.

But engineering difficulties may complicate the effort, given that the Navy wants to phase out its use of F-76 fuel. The DESC source says the service will test the new fuel blend on shipboard propulsion systems in an effort to replace F-76 because, among other reasons, it wants to comply with European marine fuel quality regulations from which it is currently exempt. “We're trying to comply with [the regulations] because even if we're exempt, we don't want to be in violation,” the source says.

There may also be problems finding a supplier, or even a combination of suppliers, that can satisfy the request for alternative fuels, according to the DESC official.

“No domestic infrastructure can [currently] handle that much” demand, the official said, adding that the purchase would likely be from a combination of coal-based Fischer-Tropsch fuel and fuel derived from tar sands and oil shale, which have been eyed by government and industry planners as potential sources of synthetic petroleum. There currently is no widespread market in the United States for such petroleum alternatives, although the source says “hopefully this will be an impetus for private industry to use synthetic fuels as well.

"Because the private sector doesn't have the research and development budget we do, they're waiting to see how our projects go so they can adopt whatever we develop," the official continued.

An official at Sasol Chevron, a joint venture between California-based Chevron Corp. and South Africa's Sasol Limited, which already uses Fischer-Tropsch extensively, says “it is too early to know what our response will be” to the request. But the official notes that “it's the start of a dialog."

"Now people in the private sector can start talking about how to provide this and when. It makes sense to get their infrastructure going now and [later] have a seamless transition into [long-term] domestic sources when we get them," the Sasol Chevron official said.

In an effort to spur further growth of such a market, Senate Energy and Natural Resources Committee member Craig Thomas (R-WY) on May 5 introduced the so-called "Energy PRICE Act," S.2755, which includes a provision that would allow DOD to enter into fuel purchasing contracts for up to 25 years, an increase over the current five-year limit.

A Thomas spokesman says DOD will be “a major Fischer-Tropsch customer” in the future and “they can't now contract out long enough for plants to be commercially viable.” The bill, which incorporates several provisions that were debated but not included in the Energy Policy Act of 2005, is meant to “give confidence to people who are putting up the plants. It's nice to give investors confidence that they have a strong market, and DOD helps their case,” the spokesman says.

The bill has not been scheduled for hearings, and the spokesman says it may be referred to the Senate Finance Committee because of several tax-related elements. -- Adam Sarvana

Adam Sarvana is associate editor of Defense Environment Alert. This article first appeared on InsideGreenBusiness.com.