Baucus, Tester reintroduce "Freedom Fuels" bill to boost Montana jobs

Senators’ Legislation Aims to Reduce Dependence on Foreign Oil, Boost Demand for Montana-made Alternative Fuels

(Washington, DC) – Montana's U.S. Senators Max Baucus and Jon Tester reintroduced legislation today aimed at boosting Montana jobs and reducing dependence on foreign fuels.

The American Security and Freedom Fuels Act of 2011 would:

  • Grant the Department of Defense the authority to contract for fuel produced in the United States for up to 10 years. (Currently, the Defense Department can only contract with energy suppliers only up to five years.)
  • The longer-term contracts for American-made fuels are expected to boost demand for alternative fuels derived from home grown crops, such as camelina, and reduce the military’s and country’s dependence on foreign oil.
  • Industry experts argue that long term contracts could jump-start new investments in new energy projects across the United States, including new clean coal to liquid refineries or bio-fuel plants.

“We’re working hard to come up with fresh ideas to create new job opportunities in Montana while doing the right thing when it comes to energy independence. This legislation helps secure a stable demand for Montana-made camelina and coal to liquids fuels that will secure good-paying jobs,” said Baucus. “This is just one more way we can highlight Montana’s strengths to boost our economy while working toward reducing our need to rely on foreign energy sources.”

“We have incredible opportunity to fuel our military and create Montana jobs in the process, and this bill will help pave the way forward,” said Tester, a third generation grain farmer.  “The Freedom Fuels Act will open a lot of doors for us and for our kids and grandkids through smart energy development, and it will help Montana agriculture take off.” 

Crow Tribal Chairman Cedric Black Eagle says the legislation provides a much needed boost to job creation efforts. 

“The Crow Tribe and our industry partners, through the Many Stars Project, are uniquely situated to assist the United States in realizing the intent and vision behind the American Security and Freedom Fuels Act of 2011.  I am greatly encouraged by the possibility of long-term contracts for synfuels and biofuels, both of which are significant components of the Many Stars Project,” said Chairman Black Eagle. “This bill will encourage investment in projects like Many Stars and will promote energy independence, will create good, well-paying jobs, and will enhance our national security.    I can't overstate the benefit that the Freedom Fuels Act would provide to our project, to the Crow Tribe, and to all Montanans.  I look forward to continuing to work with Senators Baucus and Tester on ways we can unite to create new job opportunities."

The Pentagon's largest energy user, the Air Force, has established a goal of purchasing half of its domestically consumed aviation fuel from alternative sources by the end of 2016 and currently plans to certify all aircraft for alternative fuel use by early 2011.

To meet its goals, the Air Force has invested $13 million in testing and certification for aviation bio-fuels, and has contracted with Sustainable Oils – which recently opened a location in Bozeman, MT – for 100,000 gallons of camelina-based bio-fuels. Likewise, the Navy has invested roughly $3 million in testing and certification for aviation bio-fuels and signed a contract with Sustainable Oils for the delivery of 40,000 gallons of camelina-based jet fuel.

“The ability of the Department of Defense to contract over a longer horizon will allow the development of a sustainable renewable energy business that benefits American farmers providing fuel to the US military,” said Scott Johnson, President of Bozeman-based Sustainable Oils, Inc. “To date just in the demonstration flights we’ve delivered more than three-hundred thousand gallons of jet fuel so the Navy and the Army can demonstrate and qualify their airframes for the use of US grown camellia based jet fuel. Through that process, since 2009, more than $3.5 million in new revenue in rural America have been generated for American farmers. To make this business sustainable, the government has to enter into long term contracts, which gives incentives for investors to build refineries, crushers, for farmers to know there is a long term outlet for their product.”

The Freedom Fuels legislation will also bolster Navy’s F-18 Green Hornet program which is powered by jet fuel made from Montana-grown camelina.

By allowing the Defense Department to broker contracts like these for a longer period of time, the Baucus-Tester bill will increase demand for Montana camelina now, and provide Montana camelina famers with a sustainable long-term demand for their crop. Baucus and Tester also hope the legislation will lead to an expansion of Montana's renewable energy infrastructure. Camelina, which is best grown in a dry climate, is well suited for Montana.

The Defense Department requested the contract authority granted under the Baucus-Tester bill and has suggested the authority will save money over the long-term by allowing the Department to negotiate cheaper contracts. The Air Transport Association has also expressed support for this policy in a letter to the Armed Services Committee in May 2010.