2:30 P.M., EST 
MODERATOR: All right. Gentlemen and lady, let's start. Would you like to have a seat up here?
ASSISTANT SECRETARY ANDERSON: Great, thanks.
MODERATOR: As you know from the bio that we had sent to you earlier, Mr. Bill Anderson, Assistant Secretary of the Air Force for Installations, Environment and Logistics is going to discuss the Air Force's alternative energy initiatives and focus on how these factors affect our environment, economy, and natural security.
Assistant Secretary Anderson, please.
ASSISTANT SECRETARY ANDERSON: Well, thank you for the introduction and gentlemen, good afternoon. Thanks for being here to spend some time talking about the Air Force energy program.
What I'm going to talk about this afternoon may seem to you all to be a little bit unique for a military organization. I'm not going to be talking about - or a government organization - I'm not going to be talking about energy policy. I'm not going to be talking about new, cutting-edge - well, some new technologies, but not military technologies as such.
What the Air Force decided to do in this day and age of incredibly, rapidly increasing demand for energy around the world, due in large part to some phenomenal growth in the world and because of shrinking energy supplies, talk to you a little bit about the Air Force's approach as a customer. And we are a big energy user. We're the largest user of energy in the United States Federal Government because of the missions we do; not only the missions that support the Air Force, but the missions that we do to support the other military services in the United States, our coalition and allied partners, and of course, the humanitarian missions that we do around the world.
We use a lot of fuel and energy. We use 10 percent of the domestic jet fuel in the United States, so we're a huge customer in the jet fuel market, and we're also a billion-dollar-a-year consumer of installation energy. What I mean is electricity, steam, heat to run bricks-and-mortar buildings and Air Force bases around the world. So we felt that because of our size as a consumer of jet fuel and as a consumer of electricity, that we can use our market presence to be a market initiator of new technologies to try to push the debate forward on new energy, new energy sources, and on conservation that will help the world deal with this increasing growth and increasing demand for energy as we move forward.
So essentially what I want - and maybe what I'll do is allow you all to ask questions and I'll kind of try to hit all the high points that I have as we move forward. Rather than me trying to push the debate or discussion one way or the other, I'll allow you all to ask questions and then hopefully, we can hit all the high points as we move forward in the afternoon here. So let me kind of stop for a second and see if there's any questions at this point and if not, I'll kind of delve into one or two issues if that's the way to kind of get things started. But I'll allow you all to start with questions now, if you'd like.
MODERATOR: Okay. Secretary, if I can too - please, when you ask your questions, please, if you would, state your name and your media affiliation, please. Thank you.
Yes, sir.
QUESTION: My name is Hiroshi Nakamae, and I work with Japanese Nikkei newspaper. I just - when I heard of this event, I immediately wonder if you're talking about other military bodies like Army's or Marine - Marines and what - Marine Corps with - I'm sure you will be talking about Air Force, so --
ASSISTANT SECRETARY ANDERSON: Right.
QUESTION: And probably I will be interested in more - the - if - how much other, like, Army and Marines are spending, how much energies they are spending as well. So if you got some information on that, I would appreciate it if you would include that information in there.
ASSISTANT SECRETARY ANDERSON: Well, actually, I don't necessarily have any direct information on the other U.S. military services in terms of the amount of energy that they're using. Obviously, my area of responsibility is just the Air Force. But I can say to you that each of the U.S. military organizations -- the Army, Air Force, Marines, Navy - are all working various aspects of energy and conservation and new energy sources. Now of course, the energy issues that an Army would have, which is ground vehicles predominantly, is different than the Navy, which you're talking sea vessels and nuclear-powered Navy and what-have-you and of course, the Air Force, which is predominantly liquid aviation fuels.
So we're all looking at different things and trying to coordinate our efforts so that we can do the most to push technology and idea generation forward. The other thing that we're trying to do and have already garnered some pretty significant success is that the energy market, of course, is global; demand from one part of the world or another impacts supplies across the world because we're drawing on the same supplies. And because of the way that the various militaries work together, whether it be the U.S. Air Force and the Japanese air contingent working together or whether it be in NATO or the coalition partners in Iraq or Afghanistan, we've got aviation assets from various different countries and various different parts of the world working together, using the same fuels, having to receive their fuel supplies from the same sources.
So as we look for alternate energy sources, we have to be mindful of our coalition partners, our allies, and make sure that these fuel specifications that we are looking at are appropriate for our partners. And we've already begun international outreach. A couple of months ago, I was fortunate enough to travel to the U.K. and to France to work with the Royal Air Force and the French Air Force to begin an international program of outreach and not only with the military services. We started with the French Air Force and the Royal Air Force. Clearly, as you kind of suggested, of course, they've got an army and a navy and a marines as well, but our desire is to create a dialogue among various nations of where the military can work on new energy sources, on conservation, and also to start working the environmental part of this equation because from our perspective, you can't talk about new energy if you're not also talking about the environmental impacts of the use of energy.
You know, we're all talking about CO2 as green - you know, as the major contributor to greenhouse gases and global warming and of course, we see that as a significant part of the debate on new energy sources. But it's not only CO2 that is a concern environmentally. It is the one constituent that folks are most concerned about, but there are many constituents of concern that we believe that the global community needs to be concerned about: particulates and sulfur dioxides and NOX and metals and you name it. From our perspective, we need to be talking about all of those. And as we look at new alternative sources of energy, we talk about making them cleaner and greener along the full spectrum of environmental constituents, of contaminants, not just CO2.
And being - having the opportunity to work with our partners, especially in Europe where the sensitivity just to CO2 and global warming seems to be ahead of some of the other parts of the world - and good for them, I think that's a good thing, we believe that's a good thing - that we begin to understand their sensitivities and factor that into the broader debate of how we find new energy sources, how we extract them or harvest them if they are renewables - bio-based renewables -- how we refine them and how we burn them to make sure that we are concerned about the product lifecycle, environmental impacts of these various types of fuel sources.
So I'm sorry I can't answer your question directly on the other services within the U.S., but the one thing I can tell you is there's growing interest among various military organizations around the world that we can make an impact on this global debate, on energy, and environmental stewardship. And I'm really excited about how we - our early success in working with the Brits and the French and I was - especially for your interests, the Japanese military has already - also contacted us to say they want to be part of the debate as well, so we're very excited about the fact that this is gaining some traction and people are - from around the world are understanding that - how significant the military could - not only because of the amount of fuel that we burn, but because the military has - military organizations around the world have some really good scientists and technologists working for them. And those scientists and technologists can help us with this very important global, commercial, and international national defense issue.
Yes, sir.
QUESTION: My name is Olli Herrala and I come from Helsinki, Finland, Finnish Business Daily.
ASSISTANT SECRETARY ANDERSON: How are you?
QUESTION: I'm doing good.
ASSISTANT SECRETARY ANDERSON: Good, good.
QUESTION: So how is it that - do you have any cooperation with the -- with neutral countries like Finland or Sweden or countries like that? Have you had any discussion with countries like --
ASSISTANT SECRETARY ANDERSON: Not yet directly, but that doesn't mean that certainly, we wouldn't. What we're talking about here is - as I kind of said at the outset, nothing that my organization is doing in energy has anything at all directly to do with any kind of military secrets or military technology. What we're talking about here is commercial technologies to address a global - a growing global problem both on the energy front and the environmental front. There are - there is no silver bullet to solving this problem from our perspective. We've got to figure out how to use fossil fuels and extract all the fossil fuel that's available to bridge between now and the post-carbon economy which will - I don't know when - I'm not a scientist, I'm a history major. But I don't know when exactly that post-carbon economy will set.
But we've got to be able to use renewables, we've got to be able to use nuclear, we've got to be able to use the fossil fuels that are available to us and we've got to do it always mindful of our commitment to the environment. And that's not a United States issue, that's not a NATO issue, that's not a neutral country issue. It's Asian, it's America's, it's European, and it doesn't matter in our minds who gets part - who is part of the debate. This is something that the world has to solve together. And good ideas can come from everywhere and as we continue to move forward, we're going to try to keep our arms wide open to be inclusive because that's the right way to solve a global problem, is global cooperation.
Yes, sir.
QUESTION: (from Jean-Louis Turlin, Le Figaro) Sorry I missed the beginning and I don't know if the question is relevant, but I understand that it's not only about energy conservation and protecting the environment that - that we're talking about. It's also a national defense or national security issue. So I wanted to know how this new approach evolved, whether - you know, the armed forces, was it first a question of, you know, thinking about being self-sufficient in terms of energy because this is a national security issue? Or - you know, and to what extent is the - sort of, the environmental aspect of it an added-on consideration?
ASSISTANT SECRETARY ANDERSON: Well, I think there's a couple of key drivers. One - and let's be honest; at the end of the day, the world revolves on money and the cost of energy over the last four years or so or even before that has had a significant impact on budgets, whether it's your household budget or whether it's the budget of the United States Air Force or any other military organization around the world.
As a reference point for you, in 2003, compared to 2007, the Air Force burned 10 percent less in gallons or liters of fuel between 2003 and 2007. Part of that was because the pace of operations in 2003, because of the deployments out to Iraq did drive our tempo a little bit higher. But also in that four-year period, we brought in new technologies, new engine technologies, new airframes that were more efficient. But even though we reduced our overall jet fuel consumption by 10 percent in quantity between 2003 and 2007, the cost to acquire that fuel doubled. And where does that money come from? It comes from other programs. It's like - again, in your household budget, if one expense goes up, you're going to have to take that money from somewhere else to make sure that everything balances. So we had to make some hard choices to pay our fuel bill.
So new sources and expanded sources of energy, especially in a market where demand is rising faster than new supplies are being discovered, finding new sources of energy are going to help with cost and of course, that's an important factor. And of course, you did correctly mention national security for - there isn't a single - from what I understand and in the readings that I've done, there is not a single country in the world that is energy independent, even the countries that have huge energy supplies. And it's in the best interest of any country to be as independent as they possibly can on basic materials that they need to - for the financial betterment - development of their particular country.
You know, France is an example; very efficiently, over a number of years, has built a nuclear industry that generates 80 percent of the grid power -- clean, efficient, economical, no accidents, great management of waste. And of course, that's the way that France has gone towards energy independence. It's not totally energy independent, but pushing in that way. Japan, of course, has got a great nuclear industry. The United States has backed away over the last 30 years and we've probably found that probably wasn't the right answer. But as all countries are kind of looking for ways to be more self-sufficient, which seems to be healthy, it's exactly the same thing that we're trying to do here.
So it's national security, obviously. It's ability to control your own destiny, obviously. It's transfer of payments. If you've got home-grown fuel supplies, it makes local jobs, any country - same thing. So there's a myriad of different reasons to look for local energy supplies for any country and the United States is no different. Was environment the absolute key driver to what we're doing here? Obviously not. It was the cost to national security. But it's the U.S. Air Force's belief that you can look for alternate energy supplies and do good for the environment at the same time. As you develop new technologies, you can put the research into issues like greenhouse gases and find ways to reduce or potentially eliminate greenhouse gases from traditional fossil fuels.
And essentially, the Air Force program, as you've probably read in the introductory material, the Air Force jet fuel program is looking at using coal to make liquefied fuel. And coal has had a tradition of being a - considered a dirty fuel. Our position is it doesn't have to be a dirty fuel. It can be extracted cleanly. It can go through a process of refining into a liquefied or a gaseous material, a synthetic natural gas or synthetic liquid fuel.
And you can extract all the contaminants out of it, many of which have commercial value in the marketplace. Sulfur and metals and what have you, have value in the marketplace. And we believe even the C02 which can be extracted and contained in a liquefication process of coal to jet fuel or any liquefied fuel. You can capture the C02 and commercially reuse that C02 so that it does - it's not a waste, that it can actually be a commercially viable product which reduces C02 emissions into the atmosphere. It doesn't increase them. And why not? It's the right thing to do. And any new technology in our minds ought to have the best environmental footprint that it possibly can have.
And the Air Force, when we first started our in-depth testing and certification of synthetic fuel, we said back in January 2006 when we really started this process in earnest that we - the Air Force would not buy any alternative fuel in commercial quantities that is - doesn't have a greener footprint than what we have currently available today for jet aviation, which is petroleum based jet fuel. So we told the market early that that's what we expect to receive. And that's our commitment. Is it the primary driver? No. But does it have to be an important part of the process? Absolutely. So all of these have to come together, as we look at these new fuels.
Yes, sir.
QUESTION: My name is Chen Guang Bian (China's Science & Technology Daily), and as I know, there are a lot of Air Force bases located in foreign countries and that they can supply easily locally to meet our need. My question is why the Air Force still seek to rely on domestic resources?
ASSISTANT SECRETARY ANDERSON: Well, we're not actually relying totally on domestic sources. Our goal is to have domestic source fuel for our - at least at a minimum our domestic operations. Our challenge is - it's a two-fold challenge of what we're trying to accomplish here. Number one is to certify our entire fleet to fly on synthetic fuel and it doesn't necessarily have to be domestically sourced, but synthetic fuel to certify with that technology our entire fleet by 2011. We are partnering with the commercial aviation industry. As they are certifying their fleet at the same time, we work together to share information to move the process quicker.
I mentioned the international outreach because, you're right, U.S. military aviation assets, Air Force, Navy, army, are at bases around the world. So the international outreach component of this is important. But we're trying to do a couple of things. Number one, certify - well, we'll certify the fleet and then the second part of it is by 2016, we want to be in a position to purchase 50 percent of our continental U.S. - that's the 48 states, the continuous 48 states - fuel demand from domestic sources. So it's domestic feedstock produced in domestic facilities and then delivered to our domestic bases. So the feedstock, the refining capacity and the use is all close.
But the other interesting thing about this is if you look at the way the global marketplace is moving in the synthetic fuel, the United States is not the only country that's looking at this. And a matter of fact, there are countries ahead of the United States in terms of building and operating these plants. South Africa has been making synthetic fuel since the ‘70s. China is in the process of designing and building plants, as we speak, to make synthetic fuel. Qatar, Malaysia, Indonesia. I mean, there's a long list. And I'm not even capturing them all and I apologize. But there's almost - there's more than a dozen countries that are already in earnest building these facilities.
So as you - you know, you kind of suggested their U.S. military operations outside the U.S. will get local fuel. Even if we never build a synthetic fuel plant in the United States, it's important to certify the U.S. - and we will, of course - but it's important to certify the United States Air Force fleet - the United States Military fleet on synthetic fuel because as we fly around the world and receive local supplies, it's not going to be too far in the future that local supply of jet fuel may well be synthetics. So we have to be able to fly them. And we have to be able to work with our coalition allied partners because we share fuel supplies to be able to operate on whatever the fuel is within that particular country. And that leads to making sure that all of these fuels are compatible. So if one day you stop in one country and receive synthetic fuel, the next day you stop in another country and receive petroleum-based jet fuel. The fuels have to be equivalent because you can't tweak an engine over here to take this fuel and then come over here and then tweak the engine again to take another fuel. You have to essentially have a drop-in compatibility among these fuels, no matter what it is you're using, whether it's coal to liquids, natural gas to liquids which is probably going to be the approach of choice in the Middle East, biomass jet fuel, which is not perfected yet, but will be, or petroleum. All of them have to work the same way to be able to operate around the world. Whether you're a military organization or, more importantly, the commercial aviation industry, which you know, could leave from Shanghai and end up in New York and have different types of fuels in each place and they've got to - you've got to have the confidence so they can go into the engines and run properly and there's the proper safety margins and performance characteristics. So this is a major global effort to make this kind of all fit together.
Yes, sir.
QUESTION: Olli Herralla from Helsinki. I'm asking you about this biomass team. How close are we having them process that so that they can produce jet fuel out of biomass, different types of it?
ASSISTANT SECRETARY ANDERSON: It's not eminent. And let me explain to you why. Jet fuel is a very potent type of liquid fuel. If you compare, for example, ethanol to motor gas and motor gasoline is more potent than ethanol and you've got diesels and what have you. If you work up the spectrum of liquid fuels, jet fuel is one of the most potent. In other words, they have this Btu per kilogram ratio is among the highest of the carbon-burning fuels that you get for - that are provided for air breathing engines.
Biofuels at this point, although they are a nice alternative for ground vehicles, and to grow the biofuels, where they're ethanols or soy based or what have you or cellulosic based are very adequate for ground-based vehicles. They just don't have the power to give you the lift and range that's necessary for aviation assets. There is research ongoing. You may have heard about the challenge that Richard Branson has put out to the aviation community, that he wants to fly one of his Virgin Atlantic - I think he's going to use a 747, if I heard (inaudible) - a Virgin Atlantic aircraft on a biofuel - in the first quarter of this year sometime. So it's probably within the next month or so he's going to fly. But it'll be a small percentage of the whole. And we think that's a great challenge to throw out there in the marketplace, just like the challenge the Air Force, the U.S. Air Force is doing on the coal-to liquid side. The fact that Sir Richard is throwing out this challenge on biofuels is going to move the research forward.
Will we have a biojet fuel that's 100 percent drop-in in an airplane this year? I think the chances are virtually nil. But does that mean that five or ten years in the future, that there won't be a bio alternative? Why not? I mean - you know, if you spur the technology forward by a customer challenging the marketplace to create a new fuel, that's great stuff. We see the coal-to-liquids alternative ready today and all we need to do is certify it and create demands so that the supply side will respond. Bio is a little bit farther down the road.
In our vision, the Air Force's vision, we believe that the ultimate solution is probably a mixed feedstock of predominantly coal, at least for the U.S. and -- countries like the United States, China, India and Europe, where there are tremendous reserves of coal. The right answer appears to be a mixed feedstock, where coal is the predominant feedstock, but why not have a significant component of biomass where you can use the C02 that comes off of the coal production to feed back into the bio system to make the bio material grow faster and have a better energy content to it. So in essence, you have this closed loop system of creating C02 which grows biomass and the biomass goes into the process of creating this liquefied fuel, so that you're actually using all of the C02 to go into the fuel that you burn, which will reduce the carbon footprint dramatically. So I think the research that's being done in bio will feed into the work that we're doing on the coal-to-liquids and gas-to-liquid side. And hopefully as we move down the road, we're going to find greener and greener ways to make predominantly fossil fuel material a much greener and more environmentally friendly fuel moving forward.
Yes, sir.
QUESTION: Getting back to the cost factor, going greener does not necessarily mean going cheaper?
ASSISTANT SECRETARY ANDERSON: Absolutely. And it - you know, it depends. Let me give you an example. And it's not on the liquid fuel side, but on the installation and electrical side. About a year and a half ago, Air Force decided that it wanted to do a major solar project -- photovoltaic solar project. That project at Nellis Air Force Base in - outside of Las Vegas in Nevada, where we installed 14.2 megawatts of solar power. And 14.2 megawatts is the largest solar array in the Americas. There's only solar ray, I understand, that'll be larger today is being - is being constructed in Spain. So it's a major solar project. But in the grand scheme of things, it's relatively small. But that project utilizing state incentives, working very closely with the investment community and the owner of the technology, the developer. We were able to put together a deal where the Air Force was the host for this project. Private industry financed it. Private industry developed the technology. Private industry built it. Private industry will run it. The state was involved in providing some incentives. And as a result of doing that and working very closely with all of these partners, we actually put together a project where, using solar power is going to save the U.S. taxpayer a million dollars a year in energy costs on a renewable green project.
Now, will that happen in every project? Of course not. But the technology is developing rapidly and we're going to try and use Air Force bases to host some of these newer technologies, to help kind of shake them out and provide opportunities to bring new technologies to the marketplace. But every project that we're doing has to commercially stand on its own. So some will, of course, be very successful and others we'll find early in the process can't make it and they'll fall by the wayside. But our position is if you don't try, if you don't go out to the market and try to build relationships with private industry and do global outreach, that we're not going to move the needle in terms of new technology. So, we'll be successful on some. We won't be successful on others. But you've got to go out and do something, and that's what we're trying to do is go out there and kind of spur the marketplace a little bit.
MODERATOR: Any further questions?
QUESTION: When you say you're working with countries like UK, France, there're private companies involved in that project as well?
ASSISTANT SECRETARY ANDERSON: Yes, there are. Yes, there. You know, essentially, again as I said at the beginning of my comments, this particular approach that the Air Force is taking is not a traditional government or military approach to things. This is not done under special statutes. It's not driven by any particular policy decisions at the federal -- the U.S. federal level. We're not taking big amounts of Air Force money and subsidizing these projects. We're trying to look at the Air Force like any major company, a Toyota or a Microsoft or somebody who is a major customer, and saying as a major customer, we as a customer are looking for X. And in this case we're looking for alternative fuels that are greener. And as a customer, setting an expectation that we hope that the commercial world will respond to. So anything that we're doing, whether it's wholly within the United States or in our outreach with the UK and with France, and as we say, with all of the interest we're getting from other countries that want to join this process -- I'm really excited about that, that other militaries see the value that we can all add to this debate, both on the energy side and the environmental side.
But we're using our buying power, the amount of material that we buy, to tell the supply side of the marketplace that we want a shift in what we are looking to acquire. And in this case, alternative fuels, whether they be maximizing the value of traditional fossil, or renewables as we talked about before, and it's not ready for jet fuel yet but certainly for motor fuels, ground motor fuels or installation renewables. And I talked a lot about solar, but the Air Force is also working wind. And the Air Force has even been tasked by our federal -- our Congress to take a look at whether the Air Force would be a suitable host for small nuclear facilities, to again move that ahead like the French have been so successful in working, and the Japanese, in moving nuclear, where the Air Force could be a catalyst for new nuclear technology in the U.S. But all of those are going to be commercial projects, privately financed through the investment markets. So in every single case, whether it's locally domestic or in its international outreach, we're going to be relying on industrial partners to bring the technology, the financing and the operation of these facilities to our bases.
Yes, sir.
QUESTION: Are there any technology available in the market to liquefy biomass? And compare with traditional fuel to use biomass fuel is more economical or less.
ASSISTANT SECRETARY ANDERSON: Well, there -- I mean, people are using biomass fuel now liquefied but in the ground motor fuel area. As I was trying to explain earlier, and I'm not an engineer or a technology guy, so my explanation may not be perfect. But because of the potency of jet fuel, there is currently not a commercial source of biojet fuel. We're hopeful that within in a number of years there certainly will be, and there's a lot of very good research being done around the world from what I understand to look for a bio-alternative. It's not available today, which is why we're looking -- we're starting with coal and natural gas because we know those feedstocks work and work very effectively. But I guess we'll have to see where the market goes. We're hopeful that at least some percentage of biomass will be able to be mixed with these fossil-based feedstocks relatively quickly.
And a number of good reasons: First of all, it's another source of energy which we have to exploit. But second, biomass has a potential to provide a lower smaller carbon footprint for the fuel, which is something that we all ought to be concerned about. So we'll see where the research goes, but it's not ready today. But we're all pretty excited about the fact that it could be something that we'd see five, ten years down the road, and something we ought to expend research minds and research dollars on today to find a solution for the future.
QUESTION: How many people are there in the U.S. Air Force doing research like this?
ASSISTANT SECRETARY ANDERSON: Well, it's -- there are very few that are doing only this research. And as I said, we're looking here at commercial alternatives so we're relying on the industrial base to provide the technology here. And there are tried and true technologies in liquefying coal or liquefying natural gas. There are tried and true technologies in solar and nuclear which will get better over time.
The Air Force has had a tradition -- the U.S. Air Force over many, many years of doing some great basic research and I have no doubt that will continue. But this is really looking to the private industry, academia, what have you, to provide the new technologies and we're actually trying to act as a customer here not as the provider or the supplier or the technology base in general. We're looking at private industry to do the work here for us and we'll buy the fuel, the material, when it's available to us at market price.
MODERATOR: Any further questions? The Assistant Secretary has maybe a little more time, I believe.
QUESTION: Could you elaborate a little bit more how do you get to make sure that everybody -- every party's involved in the project? Like how do you, first of all, collect money from investors and how do you talk to those private companies and how do you share those fuels from those projects?
ASSISTANT SECRETARY ANDERSON: It's a slow process. Again, the Air Force is trying to take the position as a major customer in both jet fuel and in electric -- grid electric to spur the market forward. Essentially, what we're trying to do is we're communicating with the marketplace as to where we see a potential future for new energy technologies. We as a customer are taking the steps that are necessary to be able to purchase these emerging technologies by certifying them and being prepared to purchase them, store them, pump them, operate them in our assets, and then it's really a matter of going out to the market and explaining to them what our plans are. And it's not much different then what we're doing here today -- making people understand that we'd be a willing buyer if these fuels were commercially available, if they are economically equivalent in price to what other products are available out there in the marketplace, making sure the expectation is clear about our commitment to environmental stewardship relating to these new technologies and then you hope that the markets will follow.
And, for example, in liquefying coal, as I mentioned earlier, the fact that more than a dozen of these facilities are already under construction around the world or at the very end of their planning process, suggests to me that this is a technology that the world has suggested is economically viable and ready to go. There are several private companies looking at building these plants and have plans going to permitting in the U.S., so clearly that's an indication that the U.S. market also believes that this is a viable commercially economical -- at current oil prices -- technology. And with the growing global demand it's a little hard to perceive that oil prices will go down dramatically. They'll probably continue to go up, so it makes it even more economically viable.
But all we can really do is get out there and show that we are a customer and we're ready to purchase the product. It really has to be that the investment banking community, whether we're getting financing for U.S. plants from U.S. sources or whether foreign money is being used to build plants in the U.S. or U.S. money's being used to finance plants in India or China or Malaysia or whatever, it really doesn't matter. Is it a good bet to the financial markets? Are there developers and operators out there that when they run the analysis say that this is a commercially viable alternative. If it isn't, then plants wouldn't be built. But I'm taking an indication that people are building these things to show me that the folks who actually have to do this and make a profit and pay salaries and pay their shareholders and pay down the debt on these facilities are willing to take that risk and the private equities markets are willing to provide debt inequity for these projects; that, in fact, they are viable. That they believe the market is there. And if the Air Force and our partners around the world are somehow spurring that market and showing that there's true interest from customers, and if that's helping the market move then our activities have been successful. It's accomplishing what we hoped would come from our activities.
Yes, sir.
QUESTION: And to follow up on this, when you're talking about spurring the marketplace, I wonder if in return the market is trying to get the U.S. armed forces to commit specifically to a certain quantity of products --
ASSISTANT SECRETARY ANDERSON: Mm-hmm.
QUESTION: -- that, you know, would be produced especially for your needs --
ASSISTANT SECRETARY ANDERSON: Right.
QUESTION: -- and according to your specifications. Are they trying to get you to make any commitments?
ASSISTANT SECRETARY ANDERSON: Sure, and any good private enterprise would try to do that. The U.S. military, and I'm not -- I apologize, I'm not terribly familiar with the logistics and contracting requirements of other armed forces, but we are limited by law on the flexibility that we have. But that being said, we already have told the marketplace -- when I was speaking earlier about this two level of commitment to certify our fleet to fly on synthetic fuel, and then going after the marketplace and saying that we would buy half of our continental United States requirement in a synthetic fuel blend by 2016, that equates to about 400 million gallons of fuel demand by the Air Force per year. And as I mentioned to you earlier, the U.S. Air Force is 10 percent of the domestic jet fuel market in the United States, so if you kind of do the math and if you're assuming that the commercial industry will continue to work with us lockstep moving forward, which they had been so far, that means the potential domestic demand for synthetic fuel, just in the United States, is about 4 billion gallons a year and then, of course, you add in the whole rest of the world.
That doesn't mean we've signed on a dotted line that says we will buy this amount from this particular company. But it does show our interest in purchasing and I would imagine that that would be very interesting. I mean, I can't speak for the private industry, of course, but I think that would -- if I were back in private industry, as most of my career was, that would make me very interested in taking a look at whether this made sense for my portfolio in a particular business. So I would assume it would have an impact on the market. But has the - I mean, I guess to get to the crux of your question, has the United States Air Force signed a commitment to buy a certain number of gallons and contractually committed to it? At this point, no.
MODERATOR: Okay, well, thank you, Assistant Secretary Anderson, for coming in and addressing us today. And thank you all for your questions as well, very timely and relevant.
ASSISTANT SECRETARY ANDERSON: Thanks for your interest, folks. They were great questions. Thank you.
