Sunday, April 10, 2011

Pentagon's Energy Projects Should Be Reexamined

In my opinion there are two types of environmentalists – those who consider green as the color of the money, and those who want to make the world a better place to live. The people in the former group are fake environmentalists and the people in the latter category are the real environmentalists. Similar grouping can be applied for the green industry.

J. Randy Forbes (R-Va) authored an excellent article in The Hill on 23 March 2011. He underlines that decisions on DoD energy efforts should be made based on energy security and reducing costs, not simply for the sake of “being green.” “Congress must practice prudence in terms of funding energy projects and holding the DoD’s feet to the fire on cost-benefit. Adhering to simple defense criteria would help: first, there must be demonstrable savings showing a strong return on investment over a reasonable amount of time; second, the project must contribute to increased national security, especially in terms of the direct safety of our troops and sustainability of missions. Unfortunately, many current “green” energy projects at the DoD are missing the mark both in terms of security and savings.”

He gives the almost 1 million dollar Navy Project for Solar and Lighting at Naval Station Norfolk, Virginia as an example. With a payback period of 447 years, the savings to investment ratio of this project is $0.03. He says that it is not responsible spending and it is certainly not improving national security. He concludes that “We cannot afford to wait for the DoD Inspector General to identify all the wasteful projects that offer no opportunity, in the next 400 years, to see any real security or financial return.”

A New York Times article on 5 April 2011 mentioned the failed technologies to save energy used by the US military in Iraq and Afghanistan. The Army’s well publicized spray foam insulated tents  in an effort to slash energy needs and trap costly air conditioning inside as well as a waste-to-energy project (the Tactical Garbage to Energy Refinery) designed to convert waste into either synthetic gas or ethanol. Both projects ran up against myriad obstacles and were stalled.

Unfortunately, operational energy still stands outside the realm of federal laws and mandates that require DOD to reduce energy used in installations. I believe that small reductions in operational energy (in volumetric terms) would largely exceed all the savings from installations.

One of the reasons for the green energy push by the DOD is the belief that green energy would create more jobs. I don’t share this view. Are the jobs created in excess of jobs destroyed in the other sectors of the economy? The green gadgets are pressed on DOD because of their alleged economic, security and environmental benefits. Why there is no thorough analysis of clean energy’s junk economics before spending millions of tax payers money for the projects that end up collecting dust?

In all DOD acquisitions the contracting parties should be reminded the words of Air Force Chief of Staff Gen. Norton Schwartz on 9 February 2011 at the National Defense Industrial Association Symposium: Asked by an audience member for his advice to companies looking to support Pentagon projects during these austere budget times, Schwartz said: "Deliver what you promise. Period. Dot. Don't blow smoke up my ass. There is no time for it. There is not money for it. There is no patience for it."

Similarly, any industry unprofitable without sustained large government subsidies should not be pushed for decades.

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At 12:59 AM, Anonymous Anonymous said...

He should review the performance and output for that project. The payback period was mis-calculated based on approximately $1m cost and $27-30K per year in positive savings (after expenses).
Someone divided $1m by $27k and came up with 447 years.
Please check your math prior to disparaging the US Navy.

At 10:05 AM, Blogger sohbet karbuz said...

I hadn't seen or paid attention to the original numbers. If Senator Forbes made a math error, the implication is grave and he should apologize.

I personaly apologize for quoting a figure without checking it.


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