(Note: This event was fed in progress from the source.)
MR. ANDERSON: (In progress) -- sure that we could move aggressively forward in this arena.
As the federal government's largest user of energy, it made sense that the Air Force would step up and take a leading role in driving the energy debate in the United States. Our starting point has been aviation fuel, and you may ask why. It's pretty simple. Over 80 percent of the entire Air Force energy buy is in liquid aviation fuel. That represents about a little less than $6 billion a year of taxpayer money that goes into feeding our fleet with fuel. And even though since 2003 we have shown modest declines in our demand for energy -- or demand for jet fuel, we've burned actually less fuel last year, of course, than we did in 2003, because of the price increase, our costs have just about doubled in that time period. So there's incredible pressure on price, and one of the things that are driving us to move forward here.
The goal that we have is to test, certify and fly the entire Air Force fleet on a synthetic fuel blend by early 2011, and then be prepared to acquire 50 percent of our CONUS, the Continental United States, fuel requirement via domestically produced synthetic fuel blend by the year 2016. And why did we pick that date? Because based on the estimates that we're getting from the marketplace, that appears to be about the time that a robust commercial synthetic fuel market may be in a significant growth stage within the country.
The first aircraft that we certified was the B-52, formerly signing off on that certification back in August of this year. The second aircraft in the shoot is the C-17, and certification of that aircraft is well under way. And that's one of the major milestones that I wanted to announce today, that on Monday, next Monday, the 17th, C-17 will make the first transcontinental flight on a synthetic fuel blend. It'll depart from McChord Air Force Base in Washington State early on Monday morning. We'll land at McGuire Air Force Base in New Jersey, and after a formal ceremony that the secretary of the Air Force will attend, a group of individuals will board that plane and fly on to Andrews Air Force Base just down the road here. We expect that the C-17 will be fully certified some time early in 2008.
Our next step is beginning testing on augmented or afterburner engines. The extensive ground testing on afterburner engines has already begun. It has begun on the GE-101 engine, which is the machine that powers the B-1 bomber. Those activities are being conducted currently at Arnold Air Force Base in Tennessee. We are on track so that all parts of the schedule -- we'll get every engine and every air frame in the Air Force through certification process by early 2011.
Our synthetic fuel program that we're doing here in the Air Force is part of a collaborative effort. It's not just the Air Force -- the United States Air Force working this issue. We're deeply involved with the Commercial Aviation Alternative Fuels Initiative, or CAAFI -- C-A-A-F-I -- which includes airlines, the FAA and engine manufacturers. So as we're working the military engines and airframes, they're working to certify the commercial fleets, and we're sharing lessons learned back and forth so we can accelerate the process. There are engines that are both commercial and military derivatives, and by working together, we can certify both fleets a lot faster than if we just go at it alone.
We've also begun a campaign of international outreach on energy, both with our sister air forces around the world and with global aviation operators and equipment manufacturers, and I'll give you a little bit more on that in just a minute. But the Air Force doesn't intend to be a one-trick pony as relates to energy.
Though the lion's share of our energy consumption is in aviation fuel, as I mentioned a moment ago, we are also a billion-dollar per year purchaser of installation energy -- heat, light, air conditioning, et cetera. And just like with aviation fuel, we believe that the Air Force should use its sizable market presence to push for new sources of environmentally friendly energy, while at the same time driving aggressive conservation measures.
The second milestone that we're going to mark this coming Monday, the 17th, gets in -- gets at these new sources of installation energy. We'll be at Nellis Air Force Base just outside of Las Vegas, where we'll reach full operating capability on the largest photovoltaic solar ray in the Americas at 14.2 megawatts. The Nellis array represents the first deployment of our business model that we intend to replicate in order to support the construction of new energy technology on Air Force bases.
The Air Force intends to act as a host, and we will likely be a customer of these energy projects, but the Air Force is not in the business of owning, constructing or operating energy systems. So, like at the Nellis, with the Nellis array, the commercial world will finance, own, construct and operate these systems. And we've already moved out aggressively to build on the successes of the Nellis array. Shortly, we will have three requests for proposal out on the street, one each for bases in California, Arizona and New Mexico, and we'd like -- we expect that those will be for major renewable projects, larger than the project that we put in at Nellis.
And then early next year, we'll be conducting an industry day, inviting the private sector to join us as we -- to provide us proposals that will allow the Air Force to partner with Montana Governor Schweitzer for the construction of a coal-to-liquids manufacturing facility as Malmstrom Air Force Base in Montana. And in the spring, following a review of current technologies and the current state of the industry, we're going to move forward on a request that we've received from several members of Congress to determine if an Air Force base could act as a suitable location for a small-package nuclear facility.
Our focus is to use our market position as a major consumer of energy to spark innovation and drive demand for environmentally appropriate energy sources to address the growing global demand. And we know we can't do it alone. That's why we've partnered with the Department of Energy, the Federal Aviation Administration, academia, aero-engine manufacturers and those who have the latest in energy technology to push this forward.
Last month we began our international outreach effort, visiting our colleagues in the Royal and French Air Forces as well as industry leaders in energy industries in those countries. We expect to expand those efforts, to share ideas and to accelerate progress on energy independence.
As we move forward on energy, the Air Force remains mindful of our commitment that we've had for many, many years to environmental stewardship. That commitment has led the Air Force into the process of managing 8 million acres of open lands, much of those containing critical habitat for threatened and endangered species. As an example, we oversee 72 threatened and endangered species at 41 of our Air Force installations. And we've taken that commitment and we're going to spill it over into our energy efforts.
Now, those of you familiar with our synfuel program know that the most promising feedstock based on current available technology and supply is coal. And you may ask yourself how can we be committed to the environment and promote a technology that would increase the production of coal. But put simply, if you look at the projections for global growth for the foreseeable future out 30, 40 years, that growth in demand is expected to dramatically outstrip the growth of renewable energy sources and the positive benefits that are going to come from conservation efforts.
So what does that mean? It means that this world needs to find ways to burn fossil fuels, including the huge reserves of coal, in an environmentally friendly way, and that's what we intend to continue to support with our efforts.
And we're bullish on the development of technologies that will capture CO2 and then create effective commercial reuses for that carbon dioxide. And we've already notified our potential suppliers that the Air Force will only buy commercial quantities of this synthetic fuel if it proves to provide a better environmental footprint than what is currently available to us in the marketplace. And that of course is petroleum-based JP-8 jet fuel.
Well, I tried to do a quick overview here of what we're doing, but I'd rather spend the time answering your specific questions. I've monopolized the time to this point so I'll stand down for a moment and would be glad to respond to your questions. And we'll take it where you all want to take this session. Questions, anybody?
Q Sir, can you talk a little bit more about the nuclear facility that you're considering, who was interested in it in Congress and what exactly it would look like, what it would be for really?
MR. ANDERSON: Let me first start by saying we are in the very infancy stages of considering this request. We received two written requests since early this summer, one from Senator Domenici and one from Senator Craig, both individuals senior members of the Energy Committee, both who have shown interest in nuclear technology. The question that was put to us was to consider whether an Air Force base could be an appropriate host for a nuclear facility.
And at this point, the answer really is, we don't know. But we have gone out and spent considerable amount of time with Department of Energy, the folks who are experts in this area. We are not, of course, and we've also talked to the leading developers, technology leaders in the nuclear industry.
Most of them, by the way at this point, are foreign. The United States has not kept up in nuclear technology since Three Mile Island. Other countries have continued to work the equation. And what we're looking at is similar to the other installations that we would be considering, whether it be solar or wind or conventional fossil fuel, waste-to-energy, whatever. We're looking for, to be able to host new kind of groundbreaking technologies, to move the market forward.
So kind of the newest thing on the block, if you will, is something called a small-packaged nuclear facility. They're about the 10th of the size of these big boiling-water reactors, what have you, that you're used to seeing. This new technology is not licensed by the NRC yet.
So we are going to continue to look into this. We've already -- part of our time in France -- we met with their largest nuclear producer, technology and equipment producer, got some ideas from them. At this point, we feel comfortable telling the two senators that it is an idea that's worth additional consideration.
So our intention is in the March-to-April time frame to bring those who would finance these things, the folks who would build them, and most importantly, the folks who would operate them -- because we would not operate these things -- together to have a good discussion and to continue to push this forward.
At this point, it's worth continuing to look at. And clearly nuclear needs to be in the debate, the global debate, on energy in the future. And we just need to understand if the Air Force has a place in that debate, and if we do, how we would go forward and address that.
So we are very early -- we've barely left the starting blocks as related to this one. So this one's way out there.
Our intention is to learn as much as we can see where, if anywhere, we -- the Air Force would fit.
Q You mentioned environmental projects at bases in California, Arizona and New Mexico, and you mentioned them in the same breath with the project at Nellis. Based on the location of those, based on the fact those states are very sunny, does that mean we should expect other photovoltaic projects at those bases, or could it be something different?
MR. ANDERSON: Well, I had the same reaction as you did. We didn't -- we are not going to -- I'm sorry, because the RPs have not actually hit the street yet. But when they do, we are not going to specify that it must be a solar project or it must be a wind project. We're not even going to specify that it needs to be a renewable project.
Our guess is, as you had suggested, because it is a sunny part of the world -- and by the way, California can be pretty windy too. So we've kind of left it open.
What we're trying to do with these projects is to solicit from the private sector, the folks who are developing the new technologies, the folks who are going to be financing and building these things -- give them access to information about the physical infrastructure, the environment around these bases, and allow them to come to us with their best ideas, because we not the technology leaders -- I mean, the people who have the technology knowledge base, if you will. It is private industry that's been working these things. So we're going to leave it open to them to suggest what they're going to bring forward.
My guess is, you're right; it's going to be probably a solar project. My vision -- and I'm really kind of trying stretch or push the envelope here -- I would like to see a project come forward that ties a solar or wind generation capacity with some kind of storage capacity, so that we can test out the ability to generate power 24/7, 365, from a solar or wind source, which, when they stand on their own, of course, they can't do that, because the sun always doesn't shine, and the wind doesn't always blow. So you need a storage capacity, and you need a -- machines that will take that -- whatever the storage medium is and convert that into electricity. I would love to see something of that nature come to us, and that seems to be the next logical step after a massive solar ray. Then how do you make that solar ray operate 24/7? I'd love to see the Air Force be able to be involved in experimenting in that area.
So I'm upbeat that something like that will come our way, and -- but we'll have to see, because the industry knows best.
Q (Off mike) -- on which bases? (Off mike.)
MR. ANDERSON: (To staff.) Do you know offhand, Don?
STAFF: (Off mike) -- Air Force Base; Kirtland -- Arizona; Kirtland Air Force Base, New Mexico; and Edwards Air Force Base, California.
MR. ANDERSON: Sorry.
Thank you, Don.
Q How much more is the Air Force looking into renewable energy sources? I know that you've photovoltaic array at Nellis, and then you've got a -- I suppose you have wind power at Ascension Island and a few other places like that, and also geothermal. How much more alternative energy projects are on the books or are in the plans right now?
MR. ANDERSON: Well, I think the short answer is, we will put on the books as much as we can absorb. And as I mentioned to you before, with these major projects -- I mean, of course we have smaller projects with solar that -- or what have you, renewable-type projects that address A building or a small set of buildings on various bases around the world, and they've been going on for a long, long time.
When we talk about these home run swings, they are very difficult projects to put together. They need a lot of coordination between industry, the financial world and the Air Force.
We are learning as we're going on how to do these projects. We will absorb as many as the industry brings to us. These first couple of RFPs that we'll be sending out in the next six months or so will really tell us what the appetite of the industry is.
But as I mentioned to your earlier, our intention is to not to use as nickel of taxpayer money for these, other than for our own deal teams, to go out there and put these projects together.
The industry has got to bring projects forward that make economic sense to the industry, to finance and operate. We will buy the power. Maybe it's more advantageous for them to sell the power to the community. In our minds, it doesn't matter or way or the other. It still pushes us towards energy independence.
So they're going to have to bring projects forward where they have a financial backer, where they know the technology they want to install, they bring forward the person who's going to operate it for us.
We will lease them the land and we'll consider being a customer of the output. So they've got to -- they've got to stand on their own two feet, so we've got to see what the industry brings forward.
What I have been told over and over again is the money is out there for renewable projects. They're looking for host sites to put them on, and we can certainly act as a host site. We've got plenty of underutilized land within the Air Force. It's necessary to have as buffer for our mission, but it can also act as -- it could have a second mission, if you will, on that land. So we can be a host and we can be a customer. If the market is telling -- if the market actually lays out the way that things have been told to me, the money should be out there to do these projects. So we will wait and see. As fast as they come to us and if we have the capacity to absorb them, we will be out there considering them.
This is an important thing to do not only for the economics of it -- the one thing I didn't mention about Nellis project is not only is this 100 percent renewable, it will actually save the American taxpayers a million dollars a year in electricity costs. It was that good a project when you factor in the financing, the tax breaks and what have you that are associated with it. Normally, renewable energy is more expensive. In this case, it's less expensive for the taxpayer. So we've got to see how good these deals are and if they stand on their own two feet. We're going to absorb them as fast as we possibly can.
Q I'd like to follow up on that. If you're not necessarily asking for renewable projects as such, what are the criterion for deciding what qualifies? Alternative, innovative, what (are ?) they?
MR. ANDERSON: Well, I think -- I think at this point, we're still trying to stay as open-minded as we possibly can. There is so much going on in the energy industry today and the technology is moving so quickly that -- as a baseline, as I mentioned earlier, we are looking for projects that provide a greener footprint than what is currently out there or that we're currently utilizing. So that's a first stake in the ground.
We do desire to push the industry forward, so -- and there can be groundbreaking technology in nuclear, fossil, renewable, what have you, and it is our desire to try to move the market forward in terms of technology and innovation. But again, we are so -- we are so early in this process that we really haven't gotten a good read on what the market is going to bring to us. We're going to look at every project that's put in front of with interest. Some of them are going to make a lot of sense and, quite frankly, some of them will make no sense. But it's a little hard to say what that is until we've actually got them in hand and we can review them and review the business case, review the economics and the impact on the base and the community.
And all of those factors have to go into our selection of a go and no-go, or, in the case where we're going to get multiple bids -- and we certainly expect that in many of these projects -- which provides the best benefit for the Air Force, for the community, and for the -- for moving the technology forward.
So I think the answer is more to come as this stuff starts coming out of the weeds.
As I said to you earlier, Wall Street is telling us they need people out there asking for the projects, and once that happens the ideas are going to start to flow. So that's what we're trying to do, is open our doors and say come on in and talk to us, and hopefully that will ferret out some great ideas.
Q And on the coal to liquid fuels program, now you've spoken of the need for fuels to be -- to have, you know, an environmental footprint, at least as clean if not cleaner than the standard jet fuel.
MR. ANDERSON: Right.
Q But in terms of the viability of the market, you mentioned the 2016 date as, you know, approximately when you think there might be a viable market. I mean, do you think that's realistic given the current developments in the CTL market?
MR. ANDERSON: All we can do is listen to what the scientists are telling us and watch what the interest has been. In the two years since the Air Force -- almost two years now since the Air Force has begun its coal to liquids program and made it very clear that when we get to commercial quantities of purchase, that we are going to require a fuel that is greener. And by the way, when I'm saying that, there's a continuum of "greener." Now a decade from now, 2016, it may be marginally greener. Our vision is that the technology will continue to grow to expand to get better, that we can move closer and closer to a carbon neutral or a zero- carbon footprint fuel, but you're certainly not going to start out there. And as you've suggested, we're certainly not there today.
But even in the two years that the Air Force has been involved in this program and watching where people are spending their research dollars, there's a tremendous amount of research being done in carbon capture and what is referred to as sequestration. The Air Force uses the term "reuse," because some of sequestration is essentially it in the ground and capping it in the ground, which is probably a short- term solution which is probably not a long-term solution.
Our vision, our communication to the world is that we believe there's commercial reuse for CO2. A number of projects are going on by private universities, DOE, et cetera, looking at how to capture carbon and injecting it into plant eco systems like algae to fuel, a lot of research being done in that area right now. And there will be some puts and starts and some great ideas that go far and some that'll kind of crash and burn, but that's moving ahead smartly. There's research being done in carbon cracking that essentially takes carbon dioxide and breaks it apart, and essentially you end up with water, oxygen and carbon. And carbon's not a bad structural material; carbon fiber is used in everything from aviation to Tour de France bicycles. So there will be demand for carbon as a base material.
So there's a lot of research going on. Our point -- our position is: If you're not out there challenging the market, it's not going to move, and if a major customer is demanding this, that the supplier market reacts to what customers want.
So we intend to use our size in the marketplace to try to drive this forward, not in policy but in straight -- we buy stuff and this is what we're going to buy.
Q Do you foresee the biofuels element of synthetic fuels becoming more important in years to come?
MR. ANDERSON: Absolutely. Absolutely. What we see happening as the most viable solution that we see today -- and as you probably know, there are others in the marketplace that are looking at straight bio, biojet fuel. Richard Branson has been working with GE and Boeing to fly a Virgin Atlantic 747 on a biojet fuel sometime in the first quarter of 2008. We understand that that will be a small blend -- a small-percentage blend of biodiesel into his jets. But good on him. I mean, he's out there also stretching the market and challenging the market for new ideas.
As we see it, the most logical green fuel alternative seems to be a mixed feedstock, with coal or natural gas as probably the major component of the feedstock, but a significant percentage of a bio- blend in that feedstock, where the bio material can actually use the off-take of CO2 to make the bio material grow faster; put the bio material into the gasifiers that are making the Fischer-Tropsch or coal-to-liquids, gas-to-liquids fuel, and that mixed feedstock, depending on the percentage, should have a dramatic impact on the carbon footprint of the synthetic fuel.
As you all may know, synthetic fuel has a much better environmental footprint in virtually every component other than CO2. In CO2 it is a worse -- it's a significantly worse solution in terms of the CO2 output. But in terms of sulfurs and NOx and particulate, coal-to-liquids or Fischer-Tropsch technology synthetic fuels actually provide a much better environmental footprint in those other constituents. We've got to get our hands, obviously, around the CO2 issue, but that is not the only constituent of concern in the environment. We've got to keep our eye on all of them, in our mind, and a starting point is that the synthetic fuel actually has a better footprint in those other areas, too. So we got to lick the CO2, but it does have some great -- some great accoutrements associated with the other issues.
Q How soon do you think synthetic blend fuel will power aircraft flown in a live operational mission?
MR. ANDERSON: In terms of military -- you're talking about military aircraft?
MR. ANDERSON: My guess is it will probably be mid-next century. Now, there are a number of synthetic fuel plants being built around the world -- in China, India, Indonesia, Malaysia, Qatar -- and some of those countries may well be sources of supply for aviation fuel for the United States Air Force and, by the way, for our coalition and allies -- coalition partners and allies in relatively short order. And when I mean relatively short order, early next decade. So the fact that we've got this fleet certified by 2011 will allow us to tank up on this stuff if it comes from countries outside the United States. And I think the chances of that happening are relatively significant before the market will grow in this country. But we're thinking mid- next decade. That's why we picked the 2016 date to be ready to buy large quantities of this, because we think it's going to take that long for industry interest, financing, permitting and what have you.
The other thing that's very important in our -- I talked about our international collaboration, is as we exercise and do the mission with our allied and coalition partners, coalition aircraft tank off on Air Force tankers, so it's important that as we certify the U.S. Air Force fleet, that we make sure that our coalition partners' fleets that sip off of Air Force tankers also are certified. That's why we're working with the NATO standard -- fuel standard to make sure that that certifies along with the U.S. Air Force standard so that we will have no mission impact and we can -- the interoperability is obviously a very important component of what we're doing, not only within our Navy and Army, Marine aircraft but the RAF, the French, the Australians, et cetera, et cetera.
So we're working that issue as well at the same time.
Q (Off mike) -- large quantities of the fuel, not only could the U.S. Air Force fleet be flying on it, but also coalition partners would essentially be flying on it as well.
MR. ANDERSON: That's right.
Q (Off mike) -- each of our type of aircraft is going to conform -- is going to ensure that the aircraft conforms to the NATO standard, which means -- (off mike) --
MR. ANDERSON: Right, but we've got to work with our coalition partners to make sure that the, that their aircraft can also fly on our fuel. Now, many of them use U.S.-manufactured aircraft, but others use French engines, British engines, what have you. And those industry partners are involved, to one degree or another, in this research as well.
And one of the things that we began exploring, as we were on our visit to Europe in November, was to make sure we connected with those aero engine manufacturers, with our coalition, or at least two of our coalition partners so far. And we're going to continue to do that, to make sure we understand where they are in this process, how we can work together to make sure that as this -- this all has to come together at the same time, or we run into operability problems.
Q Have you thought about, considered which bases might be good -- I can't remember if you mentioned -- for the nuclear facility, if you were to have one? Have you gotten to that stage? Or --
MR. ANDERSON: We're really just beginning to scratch the surface. Land mass is important. The more rural the base is probably makes it a better candidate. And certainly we have to make sure that the community around the base is interested, is willing to accept this type of technology in their communities.
There may still be some reluctance to nuclear in certain parts of the country, although I think it seems to be resonating now more, because it is a very, very clean technology. And as you, for example, go over to France, where 80 percent of their electric grid is powered through nuclear safely, economically, with broad acceptance of the French population, that clearly it is a viable technology. But obviously we've got to make sure that the communities are accepting of it, and it will probably take some time for people to come around.
So we'll have to find a community that's willing to go with us here early. We won't begin understanding that until probably late spring, early summer, when we can really dig in enough to understand how this all shakes out. There's a tremendous amount of work to do to get us to a position where we can actually talk about sites and size of reactor and the company we would choose to build the equipment.
Or we may go through this process and say it just won't work on an Air Force base. We're still not far enough along to say, yes, this is a technology we're going to do. We're just far enough to know that it's something that shows some significant viability, and it's something that we ought to take a real, hard look at. So that's kind of as far as we've gotten at this point.
Q Well, what do you think the prospects are for getting long- term contracts for buying the synfuel, the coal-to-liquids fuel, 25- year contracts or whatever the Air Force favors? How do you see the outlook right now?
MR. ANDERSON: Well, I think -- it's gotten some considerable debate over on Capitol Hill. Obviously, it is 100 percent in the hands of elected officials; that's not something that we can make a decision on. Currently, the contracting authority is five years. And I think it -- the fact that folks around the world are building these plants without long-term contracting, that there are people in the United States that are seriously considering building these plants with the current contracting authority. I certainly don't want to speak for the industry, and don't take it that I am because that's way out of my skillset. Obviously, I think it's something that industry would see -- the financing community would see as making it a much more viable -- potentially viable industry with reducing the risk of investing, but things seem to be moving forward without it.
So it doesn't mean that it's not a good idea. The Air Force has stated that because of what we've heard in the marketplace, and it certainly seems like an idea that should get serious consideration, it would probably make it easier for the industry to grow so that we could actually execute on this vision. But again, that's up to Congress to decide if that's an appropriate use of legislative authority. So we'll leave to them and, obviously, if they ask us, we'll give them our honest opinion based on our best knowledge of the marketplace.
Q When do you expect the Malmstrom facility to be IOC? Or is that not even in the cards yet? Are you just looking to the feasibility of that?
MR. ANDERSON: Right. Let me take you through it. And you're right -- we're not far enough along to know if the Malmstrom facility is viable yet. We have had two meetings in Montana already. One was just a quick introductory meeting with the community to let them know that we were asked to look at this.
The second visit, which was a couple of months ago, we spent one day at -- with the governor and his staff understanding his vision. And Governor Schweitzer -- and by the way, the entire Montana CODEL -- understand a couple of things. Number one, Montana has the largest reserves of coal in the United States, but are only seventh in production of coal. So clearly there is upside. Governor Schweitzer is very committed. He and I -- I mean, he pulled me aside and made sure we understood that he is committed to environmentally appropriate mining and production of coal assets. He is as hard over on the environmental component of the use of coal as we are, but he also believes that we have got to use this resource. The world doesn't have a choice. And so we've gotten through that.
We then spent the next day with the community and community leaders in Great Falls, laid out a plan that suggests an industry day at the end of January. At that industry day, we will have the community there, but we'll have the folks who own the technology, the folks who would be interested in building and operating a plant, the financial markets, state representatives, community representatives, environmental groups, et cetera, and we're going to spend a couple of days talking it through.
Looking at the land available, we have about 700 acres available, which is more than enough to build a decent size, full production capacity facility. We're relatively close to minemouth? in Montana, although it would take rail transportation of the coal from the mines to the base. We've got good rail service. We've got storage capacity at the base for liquid fuel, and we've got pipelines that have -- traditionally have brought fuel into a flying mission into minemouth?, which is no longer there, which can transport the fuel out to whatever depot -- fuel depot we'd need it. So the infrastructure's good.
But after we've had a chance to hear from industry, we will put together an RFP, which would probably be on the street my guess is some time late March, early April, and our desire is to have solid, concrete proposals back to us by early summer. At that point, we'd have a better idea of IOC because, again, you've got to go through a permitting process, which is relatively formidable. These are plants that cost in the billions of dollars. They're not -- it's not pocket change, so the financing aspect of it is pretty significant.
So it will take my guess is probably four years from accepting a proposal to actually get the plant up and fully operational. That's based on the current speed of getting these plants up and running.
Q (Off mike) -- being able to produce?
MR. ANDERSON: What we've heard -- and it would be up, obviously, to the organization, the private entity that actually builds and runs the thing. But we've heard that somewhere in the 20,000-barrel a day size seems about right for that facility and for the amount of coal you can move in and out, and that is a decent size, full production- size coal-to-liquids facility.
They range anywhere from 10(,000) to 15,000 barrels a day up into the 50s or 60,000, but the average plants that are being built around the world seem to be somewhere in the 20(,000) to 30,000-barrel-a-day range. So it is a normal-size plant for that type of technology.
Anybody else? Yes, sir?
Q Not to get too philosophical, but is this more about, you know, stimulating the private sector's willingness to provide alternative fuels or more about providing a direct benefit to the Air Force?
MR. ANDERSON: Both, because we can't have the direct benefit to the Air Force unless the private industry is stimulated. We're only half of the equation. You got supply and demand, right? We're the demand side. We're not going to build plants; we're not going to invest in plants; that's not what the Air Force mission is. The Air Force mission is to fly and fight.
We believe that we need domestic sources of aviation fuel to assure the American taxpayer long term that we can fight tonight and fight tomorrow. And that requires that a domestic synthetic or alternative aviation fuel market grow in this country. So it's more than philosophical, it is pragmatic. We don't get from here to there without a domestic market being developed.
Now, as I mentioned to you before, these synthetic fuel plants are being built all around the world. So we still have to certify this fleet, because we could land at any of our coalition partner locations sometime in the next decade and the fuel that's there is a synfuel blend, so we'd have to be able to fly it anyway. But in order to meet the strategic objectives and provide the sovereign options to the president, which is our job, we believe we need a sizable domestic synthetic or alternative aviation fuel market that uses U.S. feedstock, whether it's coal, natural gas, biomass, whatever it is, produced in U.S. plants, transported in U.S. pipelines to U.S. Air Force bases, so that we can project global power for defense of this country and our global interests.
Q Just to follow up on that quick, you had mentioned before a goal -- I'm not sure -- in 2016 to have half of this fuel come from domestic sources? Or was that -- I may be --
MR. ANDERSON: Right. The 2016 goal is -- we're addressing CONUS, the lower 48 states, in terms of our 2016 goal. And that 2016 goal is to have 50 percent of the fuel that we burn in -- or we dispense in CONUS to be from a synthetic fuel blend.
And our intention, as I mentioned to you before, is that is a domestically sourced synthetic fuel.
Now, it is a blend. We're currently testing at a 50-50 blend of synthetic fuel and petroleum-based JP-8 for technology issues. Synthetic fuel is very, very pure. It's actually so pure that it's a solvent. There is -- there are contaminants in petroleum-based synthetic fuel -- or -- I'm sorry -- petroleum-based jet fuel that actually acts as lubricity, lubricants, within the engines. If you lose that lubricity, you end up with performance problems and breakdown and failure. So we've been testing the 50-50 blend to make sure the lubricity maintains where it needs to be.
How that kind of shakes down is, of the 2.6 billion gallons of fuel that we use globally currently, 1.6 billion gallons is dispensed in the United States. Half of that is 800 million gallons of fuel in total. In a 50-50 blend, that would mean we have to buy 400 million gallons of domestically produced synthetic fuel in 2006 -- or 2016 -- I'm sorry -- to meet the Air Force overall objective. And that is a sizable amount of fuel.
Q And that's an estimate of what you would want to buy in 2016?
MR. ANDERSON: Right.
MR. ANDERSON: It's just a goal. Would we be capable of taking more? I think the short answer is absolutely. Once you get to the point -- it's not just about certifying the engines, but on the airplanes themselves, the tanks, the piping, the pumps, what have you, the fuel delivery system has to be certified to use the synthetic fuel.
And then once you get to dispensing it in large quantities on the base -- I mean, now that we're buying research quantities of fuel, it comes in in totes, in little tanks, so we don't have to worry about the fuel delivery system. But the big tanks you see on the Air Force bases, the piping, the pumps, the hydrants, the trucks -- we have to make sure that every piece of the delivery system, from the pipeline coming in all the way till it gets into the jet, is certified. And once we kind of get that done, it will be -- all of our bases will be able to take the fuel. We just figured setting that 50 percent goal was a nice thing to strive for. If the market expands quicker than we expect, there is -- I see no reason why we couldn't ramp up, speed up our certification process and move more aggressively than that.
But the market isn't moving fast enough yet for us to move any quicker. You know, it takes two to tango here, and if we're standing -- you know, standing at the altar by ourselves, if you will, there's no marriage, you know. So there's no reason to move faster than the industry's moving at this point.
Q That also includes Guard and Reserve bases within the --
MR. ANDERSON: Absolutely. Absolutely. And that's the other reason why we need to be concerned about the commercial aviation fleet. Many of our Guard bases, as you know, are commercial airports. So having everybody -- every aviation asset around the world certified to use this -- it certainly makes it a lot easier logistically for the fuel.
And the aviation market is probably easier to certify on a global scale than automobiles or rail cars or rail or what have you, because there are very few global aero engine manufacturers -- Rolls, GE, Pratt -- and that's -- that pretty much sums it up on the -- of our coalition partners and allies. It's a lot easier to certify a fleet globally, because you're using the same engines and airframes around the world.
So we hope that helps us a bit.
Q Any why not biofuels as the -- you go for 2016? Why is it the coal then fuel?
MR. ANDERSON: Bio's not ready yet. That's not to say that it won't be ready yet.
The critical factor for us is Btus per kilogram, the power you get out of a gallon, if you will, of fuel. Like it or not, petroleum is a very potent fuel; when it's converted to jet fuel, it is very potent. Currently, the only feedstock sources that provide the Btu equivalent per kilogram of petroleum-based jet fuel is either coal or natural gas-derived Fischer-Tropsch jet fuel. That's not to say that -- and we're actually -- we believe that the market will -- the research market, the commercial market will come forward with a biofuel that will be an equivalent of jet fuel some time in the future. It's not here yet. My understanding is you can actually create it in a lab, but in terms of creating commercial quantities, that's off into the future.
The Fischer-Tropsch base synthetic fuel based on coal and natural gas is a proven technology. It provides equal performance characteristics to petroleum-based jet fuel. The technology will come for bio, and as I mentioned earlier, we kind of see the vision, if you will, of mixed feedstock fuel that's not that far off in the future, that helps us with the environmental footprint, that begins moving us along the continuum to moving more and more towards bio.
But there's also the supply problem. People are still scratching their heads, where are we going to get the biomass to make the quantities of fuels and energy that are going to be necessary to power the world? It would be very nice to be able to say tomorrow we're going to run the world on bio material. There's just not the bio material available at this point to do that. So it's going to be a while that we are going to have to --this is world is going to be relying on fossil fuels, and knowing that and understanding the global concerns about CO2 emissions, we ought to get about figuring out how to deal with CO2 emissions from fuels that we know are going to burn in the global marketplace for a long, long time. We got to find a solution to the current set of options that we have available to us today, as we look for those new options into the future.
Q Do you worry that the constraints on the Air Force might increase in terms of regulatory requirements to reduce carbon emissions, you know, more?
MR. ANDERSON: Well, we assume that it will be inevitable based on the debate that's going on around the world. But from our perspective, we're not -- other people do policy on energy. We're looking at -- we're taking a market-based approach here.
If the market gets out there and works to find better alternatives, whether the regulatory scheme comes or not, we'll be ready for it.
And as you know, the CO2 emissions are not -- do not have a regulatory constraint in the United States today. It may well come. But whether it does or not, if we have the technology to do the right thing, we ought to just go about doing it. And that's where we believe we are, that the technology is within sight. And if you can take the private sector and use the private marketplace to drive innovation, then why not? There's no reason to wait for regulation if the marketplace can do it better and faster.
Q When do you think the Air Force will get to a zero-carbon footprint?
MR. ANDERSON: It will be at least -- the last time -- as I talked about this, I was talking specifically about the jet fuel. It's got to be at least a decade out there. There's no way to get there today. There is no way to get there tomorrow. It will take at least a decade to have the technology to do it, and then you've got to remember that there is going to be conversion time, because there are production facilities today that do not have the ability to produce a fuel that could get us anywhere near a zero-carbon footprint. And those production facilities are not going to disappear overnight; they will continue to flush out.
What we're talking about is, could we be in a decade or so to a technology that you could put this mixed feedstock together, capture all the carbon, put it into an effective reuse where you could see your way to get there? Sure. A lot of work has to happen between now and then. Will it be a decade? Will it be 15 years? Will it be 20 years? I don't know. But the one thing I do know is if we don't start now, it will take longer to get there than if we start now.
So that's what we are driving. Let's -- as Governor Schweitzer said at a committee hearing here in Washington a few months ago, let's do something, anything. And that's our intention, to get out there and start moving this debate forward, because it will always take longer if you wait till tomorrow than if you start today. That's kind of the bottom line, if you will. So.
I'm not really good at looking in a crystal ball and telling you what's going to happen 10 years from now. I think most people, if they're honest, don't know what's going to happen two years from now, so -- but the technology is developing, and if the marketplace demands it, the technology will move quicker. That's about all I can tell you.
Okay. Anybody else? Thanks a lot, folks. I appreciate your time and your interest.
Some real important things happening on Monday. I know there is opportunity for press to join us at Nellis for the ribbon cutting, the full operational capability. I know some people have expressed some interest in actually taking the flight from McCord to McGuire and then from McGuire here, for members of the press. And we're certainly willing to accept requests to do that. I don't know how much capacity we have left on that airplane, but we'd certainly be willing to do that.
There will be a big media event at McGuire midday on Monday. And the press is more than welcome to join us there.
So thanks for the time and attention. We're going to keep pushing this effort forward, because it's one of these things we've just got to do. Thanks, folks.
(C) COPYRIGHT 2007, FEDERAL NEWS SERVICE, INC., 1000 VERMONT AVE. NW; 5TH FLOOR; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED.
UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION.
FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES.
FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL JACK GRAEME AT 202-347-1400.