The Oil Drum

About $6 billion for 100,000 barrel production capacity? $6 billion is what the government of China spent last year on all renewable energy investments.

"Energy is a national security issue," said Michael A. Aimone, the Air Force assistant deputy chief of staff for logistics.

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Ground experiments are scheduled to begin in coming weeks at Wright-Patterson Air Force Base in Ohio, followed by test flights at Edwards Air Force Base in California.

Although the Air Force is leading the project, it is working with the Automotive Tank Command of the Army, in Detroit, and the Naval Fuels Laboratory, at Patuxent River, Md.

The research and tests on synthetic fuel would ultimately produce a common fuel for the entire military, Air Force officials said.

The initial contract for unconventional fuel for the tests will be signed with Syntroleum Corporation of Tulsa, Okla., which has provided synthetic fuel for testing by the Departments of Energy, Transportation and Defense since 1998.

John B. Holmes Jr., Syntroleum's president and chief executive officer, said his firm would sell the Air Force its synthetic fuel for testing "at our cost, and we may be losing a little bit."

Neither Mr. Holmes nor the Air Force would provide cost estimates for the experimental fuel deal in advance of signing a final contract, expected in coming days.

Air Force officials have acknowledged, however, that the cost per gallon of the test fuel will be expensive.

Syntroleum can produce 42 gallons of synthetic fuel from 10,000 cubic feet of natural gas. The raw materials cost about $70.

If the military moves ahead with using the synthetic fuels, the Syntroleum technology could be used by factories elsewhere to produce the same 42 gallons of fuel from just $10 worth of coal, Mr. Holmes said. Military Plans Tests in Search for an Alternative to Oil-Based Fuel