Managing Biofuels Portfolio Risk – The Role of Financial and Risk Analysis
The Department of Navy (DON), Department of Energy, and United States Department of Agriculture are together pursuing an ambitious program to support military requirements for viable and cost effective biofuels and to accelerate the growth of a national biofuels industry to address strategic energy security concerns. These three departments are stakeholders in a major program utilizing Defense Production Act (DPA) Title III authority to invest up to $510M in the nascent US biofuels industry. The investment, further leveraged by a one-for-one funding match by the private sector, could create a total portfolio in excess of $1B. The magnitude of this industry-shifting investment has attracted significant attention from the biofuels industry, investment community, law and policy makers and the US public.