By AUDREY McAVOY
HONOLULU (AP) -- Hawaii's last sugar plantation could start producing jet fuel for the Navy.
Federal agencies on Wednesday announced they would spend millions of dollars to study producing advanced biofuels from sugarcane grown at Hawaiian Commercial & Sugar's fields on Maui.
The Office of Naval Research is budgeting $2 million annually for the project through 2015, with a focus on producing diesel and jet fuel from sugar.
The Department of Energy is spending $2 million a year to have the University of Hawaii study energy crop development and energy conversion technologies.
HC&S General Manager Chris Benjamin says his company will be a "working laboratory" to test the potential of biofuel production.
"This federal funding represents a vote of confidence in Hawaii and in the future of HC&S," Benjamin said in a news release. "It is a significant step toward our goal of transforming HC&S into a large-scale energy farm, playing a key role in securing Hawaii's energy future."
The company, a unit of Alexander & Baldwin Inc., said its vast fields, access to water, farming infrastructure and labor force make it an ideal candidate to produce biofuels on a large scale.
HC&S has long diverted water from East Maui streams to irrigate its fields in arid Central Maui. But this practice is currently facing challenges.
Taro farmers have petitioned the state's Commission on Water Resource Management to restore more flow to the streams, and prevent HC&S from diverting its usual volumes of water. The case is pending before the water commission.
Sen. Daniel Inouye, D-Hawaii, who met Wednesday with HC&S and U.S. Department of Agriculture officials about the project, said the research could benefit biofuel development efforts not just in Hawaii but also across the country.
"The sugar industry's infrastructure in Hawaii ... will be put to good use producing a variety of biofuels," said Inouye in a statement issued by the department.
Copyright 2010 The Associated Press.