Compared to what the U.S. Navy uses in a year, it’s just a drop in the barrel. But 450,000 gal. of biofuel designated to power a carrier strike group for an exercise next summer is the government’s bulkiest buy to date of what’s known as “drop-in” biofuel.

Navy Secretary Ray Mabus and Agriculture Secretary Tom Vilsack announced the landmark $12 million deal Dec. 5. The service is buying a blend of used cooking oil and algae-based biofuel made by Dynamic Fuels — a joint venture of Tyson Foods of Arkansas and Syntroleum Corp. of Louisiana — and Solazyme, a California-based company.

The fuel itself cost the government about $26 per gal., Mabus says.

But if that is blended with petroleum, the cost of fuel for the “Great Green Strike Group” to participate in the Rim of the Pacific demonstration in June and July will be about $15 per gal. — half of what the Navy paid a year ago, he adds.

The exercise is another step in the Navy’s goal of reducing its dependence on oil from overseas. The service wants to deploy a carrier strike group using 50% biofuels by 2016, the secretary says.

“The thing the Navy brings is a market,” Mabus says. “We have a big appetite for fuel and a big market for biofuels.”