After months of debate and sustained campaigns from trade organizations, environmentalists and veterans groups, next year's defense bill emerged from conference last night without a House-passed provision repealing a 2007 ban on government purchase of dirty fuels.

The issue -- whether the U.S. government should be forbidden from purchasing fuels with a higher lifetime greenhouse gas footprint than traditional petroleum -- has come up in a number of spending bills this year. But it has struck an especially strong chord as it relates to the Defense Department, the government's largest purchaser of fuel.

"From our point of view, this is a real win for advanced biofuels and helping DOD shield itself from future price shocks, and helping to make the nation more secure," said Phyllis Cuttino, director of the Pew Environmental Group's clean energy program. Her group and others supporting the ban say it is a key driver in the military's work on alternative fuels and an important signal to investors.

But those who urge repeal of the ban say it places a burden on the military, whose job is to fight and win wars, not improve the environment.

"Our nation's military should not be burdened with wasting its time studying fuel emissions when there is a simple fix -- and that is not restricting their fuel choices based on extreme environmental views, policies and regulations like Section 526," Rep. Bill Flores (R-Texas) said in a statement after introducing a provision repealing the ban in the defense appropriations bill in July (E&ENews PM, July 8). "Placing limits on federal agencies, particularly the Defense Department's, fuel choices is an unacceptable precedent to set in regards to America's energy policy and independence."

In a letter to the House and Senate Armed Services committee leaders last week, eight Democratic senators argued that the issue was one of national security, not just the environment.

"The Department of Defense is the world's biggest energy consumer, using 300,000 barrels of oil every day," they wrote. "Given our reliance on foreign sources of oil, this is a formidable security challenge for our country."

The House is expected to take up the legislation tomorrow, with Senate action expected later in the week, but it is not clear whether the White House will make good on a veto threat issued over provisions related to the detention of suspected terrorists.

The bill also includes Senate language requiring sanctions on financial institutions that do business with the Central Bank of Iran. The White House had sought to weaken the provision over concern that it could drive up the price of oil.

The sanctions would apply to foreign central banks for transactions that involve the sale or purchase of petroleum products. They only come into effect if the president, in six months, determines that there is enough alternative supply and if the country with jurisdiction over the institution has not significantly reduced its purchase of Iranian oil. It also allows the president to waive the sanctions based on national security.