DEPARTMENT OF THE NAVY

OFFICE OF THE SECRETARY 1000 NAVY PENTAGON WASHINGTON, DC 20350-1000 IN REPLY REFER TO:

July 13, 2012

The Honorable Mark Udall Committee on Armed Services United States Senate Washington, DC 20510 Dear Senator Udall:
Thank you for the opportunity to brief senators and staff members on the Navy's energy program, the purpose and necessity of initiatives such as the development of alternative propulsion technologies, and the use the Defense Production Act (DPA) to spur production of non-petroleum fuels. The Navy's energy program is focused on enhancing our combat capability and readiness through increased energy efficiency and improving energy security. Energy security requires assured access to a reliable, secure, and affordable supply of energy for Navy missions, today and in the future. While the Navy does not intend to purchase alternative liquid fuels for operational use until they are price competitive with petroleum-based fuels, the Navy needs flexibility to continue the testing and certification of all potential alternative pathways to ensure the Navy has an 'off-ramp' from conventional fuel sources. As such, the Navy opposes sections 313 and 2823 of S. 3254, the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013 as reported by the Senate Committee on Armed Services. Section 313 is overly broad and has the potential to restrict investments that would address tactical and operational needs for our Navy. It would make price the sole factor in determining whether the Department of Defense may produce or purchase an alternative fuel, without any consideration of military capability, mission, or circumstances. Additionally, Section 313 would allow the Navy only to acquire alternative fuel for testing only relating to 50150 blends of alternative and petroleum-based fuel. As fuel technologies advance, the Navy may wish to test and certify multiple types of alternative fuel, including some that might be one hundred percent alternative fuel, not a blend. Section 2823 would limit the DoD's ability to contribute to the development of a domestic capability to produce cost-competitive advanced drop-in biofuels at commercial scale, which is important to our long-term national security. By restricting the ability of DoD to utilize DPA funds to invest in the domestic infrastructure necessary to create a viable domestic biofuels market, this provision prevents the Navy from implementing plans to diversify fuel sources and protect the budget from the risk of drastic spikes in petroleum prices. Sincerely,

PHILIP HART CULLOM Vice Admiral, U.S. Navy

cc: The Honorable Carl Levin Chairman The Honorable John McCain Ranking Member