U.S. Senator John McCain (R-AZ) today sent the following letter to Navy Secretary Ray Mabus regarding biofuels:
July 27, 2012
The Honorable Ray Mabus
Secretary of the Navy
2000 Navy Pentagon
Washington, DC 20350
Dear Secretary Mabus:
I am responding to your letter to Chairman Levin dated July 9, 2012 regarding legislative provisions in the committee's version of the FY13 National Defense Authorization Act related to the acquisition and refining of biofuels. Your misrepresentation of the provisions threatens the credibility of the senior Navy leaders you have ordered to advocate on behalf of a speculative program that does not address the core needs of the Navy or the Marine Corps.
Despite your assertions, the committee supports investments by the Department of Defense in technologies and equipment that will save lives, cut costs, reduce fuel convoys, decrease fuel demand at our forward operating bases, and offer our warfighters greater endurance in austere conditions. The committee specifically authorized funding for continued research, testing and evaluation of new technologies, including certification of alternative fuels, in order to expand the range of fuel options for the Navy. The committee believes these are the correct priorities for our military personnel in a tough fiscal environment.
Your decision to buy 450,000 gallons of biofuels at over $26 per gallon for a "demonstration" using operations and maintenance funds provided by Congress to equip and train military personnel and operate and repair facilities was not authorized and is a terrible misplacement of priorities. That wasteful purchase, and the Navy's commitment of $170 million to develop a commercial biofuels refinery, will result in a real cost to the readiness and safety of our Sailors and Marines. Neither of these activities were authorized by Congress and the use of the Defense Production Act without a comprehensive market survey or a compelling operational requirement represents an alarming departure from the traditional use of this authority.
To set the record straight, section 313 of the committee bill prohibits you from further sacrificing readiness or other critical needs for the sake of politically driven demonstrations and codifies the Navy's position to purchase alternative fuels for operational use only at prices competitive with traditional fossil fuels. Section 2823 requires Congressional authorization for a Defense official to enter into a contract for the development of commercial refineries. Neither provision restricts the Department's ability to continue to pursue cost-competitive options in response to the price volatility of petroleum-based fuels.
A report in the U-T San Diego dated July 19, 2012 about the Navy's recent biofuels demonstration during RIMPAC 2012, stated that "[t]he Navy has been busy with the paint." Apparently, ships and airplanes were painted green, and "special green Nimitz baseball hats were made and they sat on the commanding officer's desk, ready to be given out as souvenirs." If this report is true, I do not believe this is a prudent use of Defense funds at a time when the Department of Defense is dealing with $487 billion in budget cuts and the country is perched on the edge of a fiscal cliff of unprecedented proportion.
Mr. Secretary, I am well aware that a Department of Defense report concluded in 2011 that the Navy's renewable fuel goals, even with market stability, will impose up to $1.8 billion in additional estimated annual fuel costs by 2020. The report also concluded that the potential of adverse effects by creating a new DoD commodity class could outweigh the potential benefits. I note that the Army and the Air Force are committed to research and testing with limited resources to widen the availability of certified alternative fuels. But, senior Air Force leadership has specifically rejected any investments in the development of a new biofuel commodity, noting, "[t]hat's not a place for the government to be."
The committee's provisions are intended to prevent future improper expenditures of this nature, and instead to focus the resources of the Navy on energy-related initiatives that offer the greatest return on investment for the safety and security of our military personnel in the near term. The Department of the Navy is faced with the threat of additional across-the-board budget cuts in January 2013 that will have a devastating impact on shipbuilding, the size of the fleet, sealift, readiness, the repair of our shipyards, and the end strength of the Navy and Marine Corps for years to come. You are the Secretary of the Navy, not the Secretary of Energy. I strongly encourage you to marshal the time and resources of your team to avert serious threats to the core missions and capabilities of the Department of the Navy, instead of spending defense dollars to advocate for your view of our national energy priorities.