Saturday, June 05, 2010

The DOD Energy Security Act of 2010

U.S. Congreswoman Gabrielle Giffords (Rep) announced on 12 May 2010 the introduction of landmark legislation, the Department of Defense Energy Security Act, to dramatically overhaul the type and quantity of fuel used by the Department of Defense. The bill has four broad goals: Reduce the reliance on oil in the battlefield; Task the Department to plan holistically for their energy use; Decrease electricity consumption at facilities around the world; and Increase the self-reliance of bases by increasing the development of on-site renewable electricity. (see also the Bill Diagram).

The Department of Defense Energy Security Act of 2010 (DoDESA) addresses DoD energy supply and use. DoDESA decreases consumption by facilities and by tactical and non-tactical vehicles (by Increasing the procurement of electric, hybrid, and high efficiency non-tactical vehicles; Integrating hybrid drive into tactical vehicles; Accelerating the production of biofuels for aviation that do not require new fuel infrastructure) and increases the use of renewable electricity sources to relieve the Department’s reliance on external electrical sources.

Additionally, DoDESA sets overarching policies to implement sustainable acquisition practices, sets new DoD Energy Performance Goals, and requires DoD to develop an Energy Performance Plan and an implementation assessment for accomplishing their goal of deriving 25% of their electricity from renewable sources by 2025.

Her proposals are general very good. Especially the ones related to contractors. But in some areas the ambition, however appropriate, is out of reality.

What is not sound to me is the deadline for conversion. Under § 2922c-1 (Conversion of Department of Defense nontactical motor vehicle fleet to motor vehicles using electric or hybrid propulsion systems) it is added that “Not later than September 30, 2015, the Secretary of each military department and the head of each defense agency shall convert the fleet of non-tactical motor vehicles of the department or defense agency that is powered by petroleum-derived fuel to motor vehicles using—(1) electric propulsion; (2) hybrid propulsion; or (3) an alternative propulsion system with at least a 30 percent net increase in energy efficiency per vehicle over the conventional propulsion system.”

This is simply impossible. Perhaps she didn’t look carefully the number of fleet vehicle inventory. How do you convert 194,700 vehicles in the next 5 years to run on alternative fuel? See page 75 of Federal Fleet Vehicle report FY2009.

Why so much focus on electric drive and why to ignore compressed natural gas? Similarly, testing and certification plan to develop and put into operational use of biofuel derived from materials that do not compete with foodstocks for use as aviation fuel by September 30, 2016 is not realistic at all. In fact, the Bill should include a sentence something like “transporting a person with at least 10 times heavier car is insane.”

Another mission impossible in that Bill is the wording under SEC.12 IMPLEMENTATION. It reads “(b) APPLICABILITY.—This Act and the amendments made by this Act shall apply with respect to the activities, personnel, resources, and facilities of the Department of Defense that are located within the United States as well as those facilities, regardless of whether permanent or temporary, that are located outside the United States.” The problem is the last 7 words. This Bill in its current form cannot be applied to DOD facilities (at least to the ones in Afghanistan and Iraq) outside the US.

Another weak point of the Bill is that it does not stress the importance of energy management, supervision and oversight. Indeed these words do not even appear in the text. Oversight, especially energy related contracts and contractors as well as fuel management are extremely important issues.

For instance, in Semiannual Report to the Congress (April 1. 2009-September 30, 2009) by Department of Defense Inspector General it is stated that “The DoD IG has recognized fuels as an area subject to theft and abuse in DoD operations. Recently, some of the most significant fuel losses in Southwest Asia were caused by theft either before the tankers reached U.S. military bases or once on base…..The DoD IG identified fuel theft in Iraq and Afghanistan, which resulted in six convictions and identified over $40 million in stolen fuel. One DoD IG investigation determined that three DoD contractors in Afghanistan accepted bribes from truck drivers in return for falsified documents confirming delivery of fuel.”

The DoD Inspector General is examining a series of contracts to the International Oil Trading Company for the delivery of fuel through Jordan to U.S. troops in Iraq. According to Defense Energy Support Center Factbook FY2009, that company was awarded 1.179 BILLION DOLLARS worth contract in 2009. The same company was given another billion dollars in previous years. Who is the owner that company? Harry Sargeant, the finance chairman of the Republican Party of Florida. Maybe he didn’t do anything wrong. My question is: why does the DESC have to use middleman for buying fuel? If Congreswoman Gabrielle Giffords wants her Bill really to be novelty, she should try to change how DoD makes business.

By the way, does anyone know why Defense Energy Support Center did take out the most useful part of the Factbook (Highlights/Accomplishments in the fiscal year)? That section always appeared at the end of each Factbook until 2009.

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9 Comments:

At 8:30 AM, Anonymous Charles Rudd said...

Another weak point of the Bill is that it does not stress the importance of energy management, supervision and oversight. Indeed these words do not even appear in the text. Oversight, especially energy related contracts and contractors as well as fuel management are extremely important issues.

For instance, in Semiannual Report to the Congress (April 1. 2009-September 30, 2009) by Department of Defense Inspector General it is stated that “The DoD IG has recognized fuels as an area subject to theft and abuse in DoD operations. Recently, some of the most significant fuel losses in Southwest Asia were caused by theft either before the tankers reached U.S. military bases or once on base…..The DoD IG identified fuel theft in Iraq and Afghanistan, which resulted in six convictions and identified over $40 million in stolen fuel. One DoD IG investigation determined that three DoD contractors in Afghanistan accepted bribes from truck drivers in return for falsified documents confirming delivery of fuel.”

You highlighted a serious weakness or oversight in the energy legislation. The problems that have been reported on related to Baghram and Manas Airbases have not been solved nor has there been any changes in purchasing or logistic systems to minimize or eliminate such problems. In my opinion, there is a serious lock of coordination between logistic/fuel security departments and those who are responsible for contracting. Why are the off base storage facilities not under military control? Why does contracting officers insist on FOB Destination terms and conditions when they know the contractors must rely on local government and private entities to carryout those delivery or tax aspects of the contract? DESC/DLA lack of understanding or indifference to local realities are some of the major stimulants of corruption, theft, mishandling, and creation of monopolies which impact security of fuel supply.

Charles Rudd

 
At 9:38 AM, Anonymous Charles Rudd said...

Why so much focus on electric drive and why to ignore compressed natural gas?

I think this recommendation is the most practical especially for Iraq and Afghanistan who both have substantial reserves of natural gas. I would envision a project which would start with drilling wells if necessary, process the natural gas, compress the gas, transport the compressed gas to fuel depots and use on converted gasoline driven vehicles. This would be a more secure source of fuel, no imports needed other than the needed equipment and technology for extracting the gas and processing it. It would serve two major primary functions. One, the use of local resources and second it would stimulate the development of local capacity to exploit and utilize local resources. Secondary benefits such as cleaner environment, lower cost of conversion of existing transport vehicles, and reduction of logistical costs would give additional justification to explore this possible solution. In a very short time trucks, buses, and autos in Iraq and Afghanistan could be using natural gas as a fuel source.

Charles Rudd

 
At 10:35 AM, Blogger sohbet karbuz said...

Dear Charles,
you are absolutely right. I thank you for your insightful comments.
In my opinion business means taking risks. In most DOD contracts it is the US government that takes the risks and contractors are given guaranteed business. That is why oversigth and supervision are extremely important.

Concerning the use of CNG, first Iraq should develop its gas resources. Only then such a switch would make sense. In Afghanistan, however, there is no indigenous gas production. However, this is not an excuse. See Pakistan and India. CNG is widely used in transport. Same success could be easily repicated in Afghanistan. In Iraq it would take more time to convince population why to use CNGrather than oil.
thanks again.
sohbet

 
At 11:49 AM, Anonymous Charles Rudd said...

Sohbet
Re CNG. I was suggesting a DESC/DLA cooperation with USAID or some other USA agency to rehab one of the existing gas fields, install processing and compression facilities and supply CNG to DOD. Northern Afghanistan is relatively more quiet than the Pustan south and that is were the gas reserves and old wells are located.

http://www.mbendi.com/indy/oilg/as/af/p0005.htm

At its peak in the late 1970s, Afghanistan supplied 70%-90% of its natural gas output to the Soviet Union's natural gas grid via a link through Uzbekistan. In 1992, Afghan President Najibullah indicated that a new natural gas sales agreement with Russia was in progress. However, several former Soviet republics raised price and distribution issues and negotiations stalled. The last Soviet technical advisors left Afghanistan in 1988. After a brief hiatus, oil production at the Angot field was restarted in the early 1990s by local militias.

Between the 1960s and mid-1980s, the Soviets had identified more than 15 oil and gas fields in northern Afghanistan. Only three gas fields - Khwaja Gogerdak, Djarquduk, and Yatimtaq - were developed in the area surrounding Sheberghan, which is located about 120 kilometers west of Mazar-i-Sharif. Afghan natural gas production reached 275 million cubic feet per day (Mmcf/d) in the mid-1970s. The Djarquduk field was brought online during that period and boosted Afghan natural gas output to a peak of 385 Mmcf/d by 1978.

The Soviets had estimated Afghanistan's proven and probable natural gas reserves at up to 5 trillion cubic feet (Tcf) in the 1970s. Afghan natural gas production reached 275 million cubic feet per day (Mmcf/d) in the mid-1970s.

Northern Afghanistan has proved, probable and possible natural gas reserves of about 5 trillion cubic feet (Tcf). This area, which is a southward extension of the highly prolific, natural gas-prone Amu Darya Basin, has the potential to hold a sizable undiscovered gas resource base, especially in sedimentary layers deeper than what were developed during the Soviet era. Afghanistan’s crude oil potential is more modest, with perhaps up to 100 million barrels of medium-gravity recoverable from Angot and other fields that are undeveloped.

Charles

 
At 11:58 AM, Anonymous Charles Rudd said...

Sohbet

U.S. Congreswoman Gabrielle Giffords (Rep) She does not accept email messages from anyone outside her district. Since I am an USA citizen resident in Uzbekistan I am unable to communicate with anyone in Congress. Any suggestions on how to get material to committee staffers?

Charles

 
At 12:34 PM, Blogger sohbet karbuz said...

Charles

I have no idea how to get in touch with the US Congress people. I am not a US citizen.

Concerning Afghanistan, back in 2006, the USGS made an assessment for undiscoevered hydrocarbons potential in the country. http://pubs.usgs.gov/fs/2006/3031/pdf/FS-3031.pdf But the challenge is who will do the job and how.

I am not sure whether tactical military vehicles can run on CNG. As far as I know the focus was always on non-tactical vehicles. It is interesting to check whether DOD does anything on the use of CNG in tactical vehicles.
sohbet

 
At 9:07 AM, Anonymous Charles Rudd said...

Sohbet

Seems there is no current DOD interest in use of CNG in tactical vehicles. This Blog by Senator James Inofe has an item indicating interest in use of CNG in non-deployable vehicles. I still think it would be a good investment in Afghanistan's future if development of CNG facilities were started with the USA Government being the first customer of the CNG to be used on vehicles which are powered by a combination of CNG and gasoline.

http://inhofe.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=e0f98cef-802a-23ad-498d-8e96a057b6ca

Domestically Produced Alternative Fuels or Technologies by Vehicles of the Department of Defense including Compressed Natural Gas (CNG): Requires the Secretary of Defense to submit a study to Congress evaluating the use of alternative fuels to include natural gas by the DoD in non-deployable vehicles, a description of the procurement of alternative fuels and alternative fueled vehicles by DoD, assessment of possible costs accrued by increasing CNG AFV usage, and factors which may increase the use of CNG where appropriate such as; regional availability, economic factors, infrastructure, and cooperation with OEMs.

 
At 7:09 PM, Anonymous Anonymous said...

Gentlemen,

I am wondering why any policy that speaks to "overhauling the type and quantity of fuel used by the DoD" does not address reducing our forces in general? That, to me, would seem logical.

 
At 6:33 PM, Blogger sohbet karbuz said...

very good suggestion indeed.
DoD could start doing it first by closing down several overseas bases.

 

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