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The U.S. Departments of Navy, Energy, and Agriculture have awarded contracts to three companies to construct and commission biorefineries capable of producing 'drop-in' biofuels to meet the transportation needs of the military and private sector.

Made through the Department of Defense's (DOD) Defense Protection Act (DPA) of 1950, the awards "support the Administration's goals to boost and diversify the domestic fuel supply base, make American warfighters less beholden to volatile oil markets, and strengthen national security," a statement released by the Departments of Navy, Energy, and Agriculture said.

"The contracts being announced today will help expand the operational capability of our Navy and Marine Corps around the world," said Secretary of the Navy Ray Mabus. "In today’s complex fiscal environment, we are balancing our mission with our resources and we must be innovative and forward-thinking. Programs like these help keep our operational capabilities on the cutting edge. This is how sailors and marines defend our great nation."

"This is a tremendous announcement for America's national security and our economy," said Agriculture Secretary Vilsack. "Any time our military can use more American grown fuels instead of relying on foreign sources it makes our armed forces more energy secure. And the expansion of our advanced biofuel sector means the creation of good jobs across the country, especially in many of our rural communities."

"Advanced biomass-based transportation fuels have the potential to provide a reliable and cost-effective alternative to traditional fuel sources," said Deputy Energy Secretary Daniel Poneman. "By advancing technologies that reduce our carbon emissions, this multi-agency partnership is demonstrating that by protecting our energy and environmental security, we will enhance our national security as well."

In total, these projects are expected to produce more than 100 million gallons of military grade fuel beginning in 2016 and 2017 at a price forecast to be "competitive with their petroleum counterparts".

"The drop-in alternative fuels can be blended at a 50/50 ratio with traditional fossil fuels. This blend was successfully demonstrated during the Rim of the Pacific (RIMPAC) demonstration in 2012 for ships and planes, showing firsthand that this fuel can be utilized in Navy’s warfighting platforms with no degradation to performance or mission. As these fuels become more available, the Department of the Navy will make advanced drop-in biofuel a regular part of its bulk fuel procurement, ushering in the "new normal" of Naval supremacy," the statement said.

The companies receiving federal investments for the construction and commissioning of biorefineries have been named as:

- Emerald Biofuels: To build an 82 million-gallon-per-year refinery on the Gulf Coast using waste fats to create military grade fuel.

- Fulcrum BioEnergy: To build a 10 million-gallon-per-year refinery in McCarran, Nevada using municipal solid waste as its feedstock and the Fischer-Tropsch process to create fuel. On September 4, USDA announced a $105 million Biorefinery Assistance Program loan guarantee to Fulcrum BioEnergy for the construction of this facility.

- Red Rock Biofuels: To build a 12 million-gallon-per-year refinery in Lakeview, Ore. using woody biomass, or the by-products of forest management, as its feedstock and the Fischer-Tropsch process to create a refined product.

"This effort brought by the U.S. Departments of Agriculture, Energy, and Navy, along with partners in the private sector, will expand military fuel sources, improving the reliability of our overall fuel supply, adding resilience against supply disruptions, and giving the military more fuel options to maintain its readiness and defend the national security interests of the United State," the statement added.