Navy to spend $500M for alternative energy

Tuesday - 8/23/2011, 9:39am EDT

Jared Serbu, reporter, Federal News Radio

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By Jared Serbu
Reporter
Federal News Radio

The Department of the Navy is about to take another step aimed at reducing its reliance on foreign sources of energy. The Navy and Marines want the private sector to help them come up with replacements for petroleum-based fuels.

The Navy is about to issue a Request for Proposals for developing alternative energy sources that can replace diesel, jet fuel and other crude-oil derivatives.

The Navy's proposal — for some $500 million — opens the door to a number of options, but the department said every proposal will have to meet some fundamental requirements.

Navy Secretary Ray Mabus told Federal News Radio the RFP will ask industry providers "how much money they will put up and what sorts of technologies they would use the money towards."

Mabus said the Navy's requirements include that the alternative-energy solution be nationwide, geographically dispersed, that it doesn't take money away from land or food production and that it be a "drop-in fuel," Mabus said.

"We are neutral as to what that fuel is," he added. "And when we put the RFP out, we are going to be dependent on industry coming back and the money would be spent partnered with industry to either build new refineries or biofuels or to retrofit existing refineries."

The latest RFP follows one the Navy issued earlier this summer through the Defense Logistics Agency for 450,000 gallons of biofuels — which Mabus said could be the largest biofuel buy in the U.S. The bio-fuels will be used for testing purposes.

(Jack Moore contributed to this report)