United States Investing $510 Million in Biofuels

Biofuel could be an alternative for replacing fossil fuels.That belief grows roots as the US Energy and Agriculture departments and the Navy plan to invest as much as $510 million over a period of three years in order to develop biofuels for commercial and military transportation. They will fund development for the US facilities in order to be able to produce fuels that will be compatible with existing infrastructure.

It is expected that the program will be able to accelerate the development of replacements for fossil fuels. The collaboration was thought in a way that the Agriculture Department will be able to evaluate source crops while the Navy will provide a vast market.

"What we're doing is providing resources for the construction of these commercial-sized operations, assistance with feedstock, and then also a ready, willing and able customer ready to purchase the product," Agriculture Secretary Tom Vilsack, was quoted as saying by Detroit Free Press.

Stacey Hudson an analyst for Raymond James & Associates explained that publicly traded biofuel companies with well-defined commercialization plans may qualify for some of the government investment. "The visibility provided by these companies, as well as their relatively strong cash positions following recent IPOs, may make them attractive partners.The ability to contribute private money seems like it will be a key factor in the competitive allocation. Companies that have already been in talks with the military may have an advantage," said Stacey Hudson, as related by the aforementioned source. A notable fact is that the Navy has set a goal in January 2010 of using alternative fuels for half of its needs by 2020.