This is a bold strategy, but it is far from unprecedented or irresponsible. Mitigating economies of scale is something the Department of Defense has consistently done well. The Defense Production Act (DPA) of 1950 affords the President “a set of unique economic authorities to incentivize the creation, expansion or preservation of domestic manufacturing capabilities for technologies, components and materials needed to meet national defense requirements.” In 2005, the definition of “national defense requirements” was extended “to include not only military production and construction but also energy production or construction.” 2
The DPA has been used to overcome such economies of scale as “silicon carbide, indium phosphide, and gallium arsenide wafers for electronics, microwave power tubes, radiation hardened microelectronics, superconducting wire and metal matrix composites.” 3 More famously, the act helped provide funding for the Navy’s controversial nuclear-propulsion efforts, among countless other projects.
Secretary Mabus has conceded that biofuels are hardly a panacea. The efficacy of various types of the product is a debate that will mark the future of naval energy policy. Yet for a nation that intends to be both economically and militarily viable for the foreseeable future, these fuels are a critical piece of the energy puzzle.
Critics of current biofuel prices forget that the Navy—and the Department of Defense as a whole—has been mitigating economies of scale for more than 50 years with enormously positive results. Constructive debate on how best to power our ships and airplanes is essential, but refusing to act on viable new sources because their up-front costs are greater than the status quo ignores precedent. The U.S. Navy helped lead the world from sail to coal to oil to nuclear power. Now it is once again at the helm of an energy shift. We are in a unique position to dictate our energy destiny this century, taking the lead in a changing world as it grapples with increased energy demands. Resourcefulness—not inaction—is key.
2. “Defense Production Act,” Defense Production Act Committee, www.acq.osd.mil/mibp/dpac.html .
3. Rich Mirsky, “Trekking Through That Valley of Death: The Defense Production Act,” Innovation 3, no. 3 (June–July 2005).
Mr. Kleeb, as chief executive officer of the company Energy Pioneer, works with utilities, contractors, and banks to bring cost-effective and sustainable energy sources to households. He lived for 19 years on a military base overseas.