Sunday, October 02, 2011

Does Secretay Mabus Do the Right Thing

                                                           with Wrong Reasons?

The Secretary of the Navy Ray Mabus has recently become very repetitive in his speeches regarding the Navy’s energy efforts and underlying reasons.

Take for example two of his recent remarks at National Clean Energy Summit on 30 August 2011 and at Washington Energy Summit on 28 September 2011.

He emphasizes each time that fuel is right at the top of the list of the vulnerabilities that the American military has. And for that he argues that “By using alternative energy, by changing the way we use and produce energy, we’re going to continue to be the most formidable expeditionary fighting force the world has ever known.” We have witnessed so far many examples of it, like the use of biofules in aircraft, launch of the first hybrid ship etc.

For Mabus, the Navy is doing it because it has to do it to be a more effective fighting force. Why? He lists compelling strategic, tactical and national security reasons to switch the way the Navy use and produce fuel.

Where the military buys its fuel from is a strategic reason. He always argues that “too much of the energy supplies for the American military come from either potentially or actually volatile places on Earth. Now, we would never allow these countries to build our ships or our aircraft or our ground vehicles, but we give them a vote on whether those ground vehicles operate, those ships sail or whether those planes fly because we get our fuel from them.” Or in other wording: “We buy our energy from people who may not be our friends. We would never let the countries that we buy energy from build our ships or our aircraft or our ground vehicles, but we give them a say on whether those ships sail, whether those aircraft fly, whether those ground vehicles operate because we buy their energy.”

This makes the military vulnerable to price shock and supply shock, argues Mabus. I understand the first part, but not the second. The US military will always whenever and wherever it needs it. At what price is another issue. Does it really matter? The US Congress has approved a total of $1.283 trillion for incremental war costs since the 9/11 attacks. According to one estimate the US has spent over $10 trillion since 2001 for national defense.  A few extra billions for energy would not make much difference.

Mabus also makes a big mistake by repeating this phrase: “We buy our energy from people who may not be our friends.” He never says which countries he is referring to but OPEC members are usual suspect. The US exports to OPEC member countries in 2010 was $50 billion. This makes only 4% of total US exports but look at the number again, it is not small. (The US imports from OPEC members was $147 bn in 2010). Also, look at the US military sales by country. Should they stop trading with the US or stop getting arms from the US? In short, you don’t or cannot always make business with your friends.

Main tactical reason is the logistic burden of getting fuel to forward operating bases. Gasoline and water are the two things the US military import the most into Afghanistan. Here Mabus always gives the difficulty of getting a gallon of gasoline to a Marine front-line unit in Helmand province in Afghanistan as an example: You have to take that gallon of gasoline across one ocean – either the Atlantic or the Pacific. Then you’ve got to put it on trucks and take it over land to Afghanistan, either north through Pakistan or south through the Northern Distribution Network by convoy, and then either across the Hindu Kush mountain range or across the Amu Darya River. Then once in Afghanistan you’ve got to get it all the way to that Forward Operating Base.

One needs to ask the following question: Is every drop of oil consumed by the US military in Afghanistan brought from the US? When you read or hear what Mabus says it sounds as if everything is brought all the way from the US to Afghanistan. If that is the case, which is not by the way, then one would have to ask for the logic behind it.

Of course this costs money and lives. “For every 50 convoys of gasoline we bring in, we lose a Marine, killed or wounded. That is too high a price to pay for fuel,” says Mabus. One needs to ask Secretary Mabus which year he is referring to. He should also be asked about the role of contractors today and in the past.

I see that he doesn’t use the nonsense $400 a gallon which is frequently quoted by the media as the cost of delivering fuel to FOB anymore. This is good.

Of course, the US military needs to be more efficient in the way it uses fuels. But more efficiencies may not necessarily mean fewer trucks on the road, fewer Marines at risk, as Mabus repeats all the time.

Although avoiding oil price spikes is one of the reasons why the Navy is developing alternative fuels, Mabus says “the only reason I am making this such a priority for the Navy and the Marine Corps is it makes us a better military force. It makes us better warfighters.” This is a dubious claim which I will not elaborate here.

Mabus argues that the military “can use a domestic, renewable feedstock that’s stable, has price stability” in the longer term. He lists three requirements for such sort of fuel: It has to be drop-in[1]; it’s got to be made in America; it should not take food out of production. All sound reasonable. The problem is how to give a push to industry to produce such fuel at competitive prices. For this, Mabus hides behind the Defense Production Act, which says if there is an industry that is vital to national defense that does not exist today in this country, then the DOD can help start that industry, working with the private sector, private finance, private industry on at least a 1-to-1 financial basis, to start up that industry. And “that’s what we’re doing with biofuels.”

Here one again needs to ask the following: How long should the tax payers subsidize the biofuel industry to finally get a competitively prices biofuel?

Mabus says that “In fact over the next five years everything we're doing in energy is going to pay for itself. So that payback is very quick. On the bio-fuels, they are more expensive right now but the more we buy the more that cost comes down. And, for example, last year because just on test amounts that we were buying the price was cut in half, we expect the price to be cut in half again this year on bio-fuels. (….) if we establish the market, the price is going to begin to come down.” He claims that "The Navy can be the market.”
It is good that the US Navy doesn’t push for first generation biofuels. But when it comes to non-tactical vehicles biofuels are frontrunner. There the US military has to think twice. Lester Brown noted that "The grain required to fill a 25-gallon SUV gas tank with ethanol will feed one person for a year." This nonsense of producing biofuels from corn must stop.
Even the second or third generation biofuels may not be the answer for the US military. Rand Corporation concluded that “if the U.S. military increases its use of alternative fuels, there will be no direct benefit to the nation's armed forces.”   In addition, Rear Admiral Robert James (retired) concludes that: “We should do everything we can to limit the exposure created by moving fuel through combat zones. But let's get real about the solutions. The job of the military is defending the nation.”
In short, Mabus might be doing the right thing but he should have better facts. Otherwise he sounds as if he is trying to do the right thing with wrong reasons.
PS. Mabus should also be more convincing with some of his claims: For instance, he says “Since World War II, the United States Navy has been the ultimate guarantor of freedom of the seas.  We have guaranteed equal access for the entire world.” One should ask who gave the US military such a job. Mabus also states that “today more than 90% of all the trade for the world goes by the sea.” What he indeed refers is the volume of world trade. In terms of value, the figure he gives reduced to 74%.

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