Military funding spurs clean-tech innovation

Solazyme's algae-derived Naval distillate fuel demonstrated in a ship.

Kai Ryssdal: Time now for your Marketplace random technology quiz. It's kind of easy, actually. What do GPS, the Internet and radar all in common?

Yes, they are indeed innovations that were first developed by the American military. The next wave could be something a lot of people are betting on green technologies that the Pentagon can take them from laboratory to battlefield and then on to large-scale, money making, commercial use.

From the Marketplace Sustainability Desk, Scott Tong has the final installment of his series on the military and energy technology.


Zach Lyman: So I've got your protective cover here...

Scott Tong: Entrepreneur Zach Lyman in D.C. has a hybrid gizmo, a generator that makes electricity from solar, or wind, or fuel. His big breakthrough: getting a seal of approval. No, not "Good Housekeeping." Try the Marines.

Lyman: In almost every setting it gives us bragging rights.

As in, my renewable toy went to Afghanistan. And now the Army is buying a bunch more.

Lyman: People who are skeptical you know, yeah, that's kind of a niche technology. It's not a niche technology any more. Look at the Marines start to use it. In the minds of an investor, that's an incredibly trustworthy endorsement.

The military is trying out a host of technologies to cut fossil fuel use and to limit fuel convoy casualties. And along the way, it's pulling green energy from lab to civilian market. Today the Pentagon spends about $2 billion a year on clean tech. But that could get to $26 billion by 2030.

Take new fuels. Navy Secretary Ray Mabus plans a green strike group powered wholly by nuclear and biofuels.

Ray Mabus: By 2020 we'll have a market of 8 million barrels of alternative fuels. That's a pretty substantial market. As you begin to scale that up, price almost automatically comes down.

Scaling up is when lots of start-ups run out of investor money. They call it the financial valley of death. But some companies can proclaim: I will fear no evil, for the Pentagon art with me.

Biofuels maker Solazyme sold the DoD 20,000 gallons of fuel made from algae -- the first batch sold for $424 a gallon. That helped it build facilities to go commercial.

Co-founder Harrison Dillon.

Harrison Dillon: It's one thing to do something that's small scale in a laboratory, even repeatedly in a laboratory. We've been doing this in a commercial scale fermentation facility continuously for over a year.

His company, by the way, has one of those fairy tale beginnings.

Dillon: In 2003, Jonathan Wolfson and I started Solazyme in a Palo Alto garage.

This year it went public. Wherever it goes from here, the point is that military funding can give high-risk ideas a chance.

Consultant Suzanne Hunt is with the Carbon War Room.

Suzanne Hunt: Someone has to pay for those expensive test batches. It's very similar to what the military did with cell phones and computer chips. They were the ones that bought the big, clunky, super expensive first model.

And they may play a big cultural role in the new energy economy. Hunt says just as the military was an early institution to desegregate -- soldiers, sailors, Marines and airmen are now early adopters of renewables.

Hunt: They bring that knowledge and that experience back to their communities. And they tend not to be the same communities as one often things of -- Silicon Valley, Manhattan -- whatever people think of with clean tech.

As for alternative fuels, the military has a lot riding on it. The Air Force, Navy and Marines all hope to cut their fossil fuel use in half. But, is the technology ready? Is now the right time to bet on it?

Jim Bartis: We're pretty far from understanding at all whether algae will ever be a commercially viable fuel.

That's energy analyst Jim Bartis at the Rand Corporation think-tank. He wrote a recent paper that drew big-time controversy. It wonders if leading biofuels contenders can actually produce cheaply and at scale -- any time soon.

Bartis: There is a bit of naivete in parts of the community with regard to the challenge of getting these advanced energy systems going. I mean for at least 30 years, photovoltaic technology was five years away.

That is the nature of innovation; lots of cool ideas fail. But that doesn't stop the Pentagon from spreading out its bets -- on things like hybrid-electric warships, solar panel tents and power chargers, rechargeable radios, LED lights. And each time the military holds a conference to talk about it, the entrepreneurs come -- smelling opportunity.

Contractor and retired Col. Dan Nolan says these are not your typical, manly defense contractors. They're energy geeks.

Dan Nolan: These are kinder and gentler. You get people that are a little more thoughtful. That is a difference that you see here that you don't see at your normal warhead conference.

They're start-ups, crossing the innovation valley of death, and looking to the Pentagon as their shepherd.

In Washington, I'm Scott Tong for Marketplace.


Check out the other stories in the Military and Energy series, read blog posts featuring all the characters in the stories, and listen to extended audio clips.

About the author

Scott Tong is a correspondent for Marketplace’s sustainability desk, with a focus on energy, environment, resources, climate, supply chain and the global economy.

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