20080704 biofuel station 18
A man fills his tank at a biofuel station in Germany. The German government recently canceled plans to double the amount of ethanol to 10% in gasoline sold nationwide. - 


Kai Ryssdal: The Pentagon's has been trying to wean itself off petroleum for years now, experimenting with biofuels as a way to save money and lives, since fuel convoys have become tempting targets. But a report from the think tank RAND says nice dream -- it's not perhaps so realistic.

From the Marketplace Sustainability Desk, Eve Troeh reports.

Eve Troeh: The RAND corporation says the military is spending too much time and money on biofuel research, especially for technologies that it says are nowhere near ready. Jim Bartis led the RAND study.

Jim Bartis: You know there's no doubt the stuff is technically possible. The question is can you do it for any reasonable price?

He points to a Navy program that run ships on a fuel that comes from algae.

Bartis: They had to pay $424 a gallon.

He says biofuel research might be more efficient, and get to the mass market faster, if left entirely to the Department of Energy.

But Nathanael Greene at the Natural Resources Defense Council says the military prides itself on pushing energy innovation beyond current market interests.

Nathanael Greene: Their interests are more than just front line security. They're really part of protecting our national interest and that definitely means moving away from petroleum.

The Navy has been particularly outspoken about the value of its biofuels program. It says RAND's estimates of the cost and viability of certain technologies are not in line with its own research.

Joel Makower is executive editor of GreenBiz.com. He says many biofuel producers have organized their research and development to suit the military's efforts. If Congress does cut defense spending on biofuels, would it mean some companies disappear?

Joel Makower: Probably not, but it'll definitely slow down, not just the development of the company, but the development of the technology.

He says it's not just the military's money, but its highest standards' stamp of approval that could move biofuels more quickly into the mainstream.

I'm Eve Troeh for Marketplace.

Follow Eve Troeh at @evetroeh