Wednesday, May 09, 2007

Much Ado for Nothing: Transforming the Way DoD Looks at Energy

A new study titled “Transforming the Way DoD Looks at Energy: An Approach to Establishing an Energy Strategy” was made public on May 8, 2007. See EnergyBulletin for related news about the report.

The study is prepared by LMI Government Consulting for the Department of Defense. The aim, LMI says, to develop an approach to establishing a DoD energy strategy.

Written by seven people, this 138 pages long study is overall somewhere between bad and ugly. However, it has very few good features.

The need for DoD to implement an energy strategy is not new. Development of innovative new concepts ranging from propulsion to alternative fuels which could reduce military’s energy dependence has been on the table for a long time. What has not yet been clarified is the meaning of DOD’s energy dependence. The LMI study does not give anything new on that front. “Reduced consumption of fuel – especially foreign fuel” kind of logic is totally misleading.

Dependence on foreign fuel “limits our flexibility in dealing with producer nations who oppose or hinder our goals for greater prosperity and liberty,” the study argues. So, if this dependence were broken all the problems would be solved? Of course No! That’s why maybe the study recommends “DoD should begin now to shape the force for an uncertain energy future.” This brings us to another misleading issue of the study -- energy. Energy is a general term and includes other forms of energy beside oil. The study concentrates mainly on oil and does not ignore electricity. Ignored are natural gas and coal, which are seen only as feedstock to produce synthetic oil.

If natural gas is not worth it to discuss why then the US Army called for a study entitled “The Impact on the Army from the Changes in the World Supply and Demand Situation for Natural Gas over the Next 25 Years.” See EnergyBulletin for details. I discussed on my blog why Army’s worry is exaggerated. In any case natural gas is more than feedstock.

Now let me go into specific parts of the LMI study.

1. What stuck me most is how the report is written. I mean what is the point to give a reference where it is absolutely not needed, but not give where it is an absolute necessity. Moreover, such a study should have made use of at least some of the very valuable and insightful articles appeared in military journals.

2. I liked the following paragraph in the study:

“The United States bears many costs associated with the stability of the global oil market and infrastructure. The cost of securing Persian Gulf sources alone comes to $44.4 billion annually. DoD receives little support from other consuming nations to perform this mission although they share in the benefits due to the global nature of the oil market.”

Statistics always get attention of the people. But it is always useful to give the most recent estimates, which is not the case in many parts of the study. $44.4 billion figure belongs to Milton R. Copulos, President of the National Defense Council Foundation. It was his estimation in 2003. In January 2007 he increased his old estimate of “the fixed costs of defending Persian Gulf oil amounted to $49.1 billion annually” to “$137.8 billion.”

3. The authors should have read the correction version of the EIA’s AEO, because they say on page 2-1 that “Consistent with the worldwide trends in energy demands, it is projected that by 2025, the U.S. will have to import some 68 percent of its oil.” Does the AER 2007 p. 97 says so?

4. The good news in the study is that it recognizes the importance of data: “….requires an understanding of the DoD energy consumption profile (how and where is energy being consumed)…DoD has a complicated energy consumption profile that is difficult to ascertain from the data available. In many cases, detailed energy supply data are available (what is delivered to the theater or the battlefield), but not detailed consumption data for actual military operations (how the petroleum was actually used, e.g., tactical vehicles, logistics, and generators).” That’s absolutely true if you are looking for time series. But it is not an excuse for such a study. In any case there exist much more data than used in LMI study. Even my humble Excel sheets contain at least 1000 times more data points than LMI study. And I do it as a hobby!

The bad news is that the LMI study does not understand data well. They supposedly use “data from the Annual Report to Congress (FY06) issued by DoD.” DOD issues each Fiscal Year an Annual Report to the President and to the Congress. In that report energy consumption figures are given in detail. The latest available report (on internet) is for fiscal year 2005. In fact the LMI study used Annual Energy Management Report (AEMR) which is provided to the President for Fiscal Year 2006.

But AEMR does NOT include fleet vehicles. What are fleet vehicles? They are passenger cars, vans, busses, SUVs etc. Department of Energy adds DOD’s fleet vehicles energy consumption into AEMR vehicle consumption figures and the final statistics are provided in Annual Report to Congress on Federal Government Energy Management and Conservation Programs.

Therefore, all the fancy energy saving estimates for mobility operations given in Appendix G of the LMI study excludes fleet vehicle energy consumption. In other words, it excludes over 2 million barrels, even if it is only 2 percent of total vehicle consumption.

5. Concerning energy consumption in facilities the LMI report claims that the reduction in energy use due conservation. This is the same mistake (deliberate or not) done by everyone. Conservation however was not the main reason. The main reasons were the closure of some bases and more importantly privatization of facilities, which automatically moved utility bills from direct to indirect costs.

6. What stuck me most in LMI study is US military oil consumption in Afghanistan and Iraq. LMI study quotes an article of Max Boot in LA times in July 2006 saying “about 2.4 million gallons of fuel every day in Iraq and Afghanistan.”

The data, provided by the U.S. Central Command, LMI study says, “show that DoD is using approximately 57,000 barrels a day, at a cost of about $3 million per day. This equates to about 16 gallons per soldier per day. This is significantly more than the 2005 consumption rate of 9 gallons per soldier. These numbers make it clear that energy consumption for military operations has increased dramatically in the last 15 years. In Desert Storm, consumption was 4 gallons per soldier per soldier, and in World War II, consumption was only 1 gallon per day per soldier.”

Here I have a few remarks to make.

First, 2.4 million gallons makes 57,000 barrels, so what is the point of giving the same thing in two different units.

Second, did USCENTCOM gave the LMI such a data? Or somehow all are using my estimates in June 2006?

Third, what is the source of 16 or 9 gallons per soldier per day. It is not possible to come up with such an estimate. I would understand if it were 16 times more fuel. But it says 16 times more fuel PER SOLDIER.

Anyway, now compare that figure with what Carlton Meyer, a former Marine officer who runs G2mil Quarterly, a Web site on military issues, said "The U.S. Army burned 12 times more fuel per soldier in Iraq than it did in France in 1944 -- nine gallons of fuel per soldier per day in 2004." It is Robert Bryce (In May 2005 issue of The Atlantic Monthly) who came up with 1 gallon per day per soldier estimate but it was for the Third Army (of General Patton).

My estimate, which was quoted in a Wall Street Journal article: “the military uses fuel at twice the rate it did in the first Persian Gulf War and four times the rate it did in the Second World War.”

7. Here is a touchy point from the study: “While estimates vary on the availability of recoverable oil at near current prices (potentially 25 to 50 years), the long period to develop alternate sources of fuel and changes in energy infrastructure and the long capital asset replacement cycle for DoD make it imperative that the development and implementation of a comprehensive energy strategy be a matter of urgency.”

Now compare that paragraph with the following one, especially the first line.

“To effectively plan for the future in a world with increasingly scarce low-cost fossil fuel energy resources, DoD must leverage technology to facilitate improvements in fuel energy efficiency. Demand reduction measures, combined with alternative sources of energy, including alternative fuels, offer many possibilities for reducing DoD’s dependence on traditional energy sources and the associated logistics support requirements.”

So, according to them Peak Oil is imminent or not? And based on those two paragraphs how should we interpret their conclusion?

“DoD should begin now to posture the force for success in an environment of increasing energy uncertainty.”

8. Now let us have a look at energy change options analyzed in the LMI study:

Supply oriented technology options to replace fossil fuels: Synthetic fuels, biofuels, hydrogen, nuclear, geothermal.

Demand oriented technology options to reduce fuel consumption: engines, material design, hybrid drive, unmanned vehicles, aerodynamic design, macro-electric architecture, information technology and management, low power computing.

Cross cutting technologies to replace local supply and reduce logistics demand: generators, fuel cells, solar, wind, ocean energy, conversion of waste to energy

None of these are new to DOD and does not add anything to DOD’s knowledge.

9. One important value of the LMI report is its summary of DOD energy organization, process and initiatives as well as legislations and executive orders, policy guidance and instructions on implementations.

10. DoD should begin now to posture the force for success in an environment of increasing energy uncertainty.

Conclusion: I really have not understood why DOD asked for such a study that did not bring anything new. By the way, was LMI paid for the study?

see the previos post for my early comments (New Pentagon Study on Oil )

Tags: Military Energy Consumption, Alternative Fuels, Military Oil Consumption, Department of Defense,



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