Sohbet Karbuz

Obama and Keystone

2012-01-29T18:21:00.000+02:00

In his January 2012 State of the Union Address President Obama called for (again) investments in clean energy. He announced that the DoD, the world’s largest consumer of energy, “will make one of the largest commitments to clean energy in history -– with the Navy purchasing enough capacity to power a quarter of a million homes a year.” He was referring to recently established 1-megawatt solar array on Buckley Air Force Base, Colorado. Note that the Department of the Navy's energy security goals include to produce or consume one gigawatt of new, renewable energy on its naval installations.

Obama talked about “A future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded.”

He touched upon a few interesting things like: “American-made energy”, “public research dollars, over the course of 30 years, helped develop the technologies to extract natural gas out of shale rock,” “we’ve subsidized oil companies for a century. “

The next day he talked at at Buckley Air Force Base. (see Remarks on American Energy, on January 26, 2012, at Buckley Air Force Base, Aurora, Colorado)

Obama mentioned again a blueprint for an economy “built on American energy, fueled on homegrown and alternative energy sources that make us more secure and less dependent on foreign oil, which obviously is not just good for our prosperity but also for our security.”

And of course, he talked about energy. Here are in my opinion some important points:

“For all our lives, America has been talking about decreasing our dependence on foreign oil…

The Navy is going to purchase enough clean energy capacity to power a quarter of a million homes a year. And it won’t cost taxpayers a dime….

The less we depend on foreign oil, the more secure we become as a nation….Reducing our dependence on oil is going to strengthen our national security….It will make energy cheaper for our businesses and for our families. “

I don’t know whether Obama had a chance to look at the U.S. Energy Information Administration’s Annual Energy Outlook which was release shortly before his address to the nation.

For instance, Energy Information Administration reported that the U.S. is in the midst of a dramatic turnaround. It says that continued development of tight oil in the onshore U.S. and exploration and production in the U.S. Gulf of Mexico will push domestic crude oil production from 5.5 million barrels a day in 2010 to 6.7 million barrels a day in 2020; then production will fall off to 6.1 million barrels a day and stay there through 2035. U.S. oil demand will rise a bit over the period, by almost 1 million barrels per day, from 19.2 million barrels per day in 2010 to 20.1 million barrels per day in 2035. Because of moderate demand, increased oil production, net oil imports will decline from 49 percent in 2010 to 36 percent in 2035.

Obama’s these and previous speeches, and the EIA’s report bring a crucial questions to my mind. If the US wants to reduce oil imports from the countries “unfriendly” to the US why Obama administration rejects imports from friendly countries?

Obama’s administration rejected the cross-border permit for the TransCanada Corp.’s proposed Keystone XL oil pipeline from Canada, saying that a deadline imposed by Congress (February 21) does not give it time to properly determine if the proposed project is in the national interest in its current state. Keystone XL, a 1,600-mile pipeline that would carry some 830,000 barrels of bitumen from the oil sands of Alberta, Canada, to US Midcontinent and Gulf Coast refineries. Proposed pipeline has been studied exhaustively for more than 3 years (since 2008). (see Reuters timeline).

Congratulations to Republicans and environmental organizations and others who oppose the pipeline which would carry “dirty” oil by placing politics over policy. According to TransCanada pipeline would create 13,000 US jobs in construction and 7,000 in manufacturing. It would surely reduce oil imports from the countries “unfriendly” to the US. If this is not an enormous mistake and lack of leadership I don’t know what it is.

During his campaign, President Obama liked to quote Dr. Martin Luther King and talk about ``the fierce urgency of now.'' Obama’s Yes We Can speech ends with “where we are met with cynicism and doubt and fear and those who tell us that we can't, we will respond with that timeless creed that sums up the spirit of the American people in three simple words -- yes, we can.” Today we understand what he really meant - Yes We CanNOT.

Going Green and Fake Environmentalists

2012-01-19T22:01:00.000+02:00

January-February 2012 issue of Loglines, Defense Logistics Agency magazine, has an important focus: Going Green.

I picked up several issues mentioned in the articles appeared in that issue. My focus is to show the fine line between energy efficiency and energy conservation. Parts in bold are my remarks.

“Wright-Patterson Air Force Base, Ohio, recently became the first installation to order solar trash compactors. These smart trash cans gradually compact garbage as they become full, then send a signal to installation support services when they’re ready to be emptied”. Yes, “You’re not wasting time and money going on a route to empty trash cans that aren’t even full”. If this is not wasting money, I don’t know what it really is.

“While some customers equate buying green with higher prices, buying green products is actually cheaper in many cases. … in instances where an item does cost more, that doesn’t mean you don’t have to buy green. You’ve got to use logic. …If the item costs twice as much more, maybe you’ve got an out. But if it only costs you 50 cents more to buy green, it doesn’t.” I personally do not recall any green alternative that is cheaper than non-green products. This doesn’t mean that to produce them is more expensive. Maybe they are cheaper to produce in some cases. But even in those cases, they are sold more expensive so as to make more profit.

“Natural lighting, heat-radiant floors powered by wood-burning stoves, solar panels – these features and more will make Defense Logistics Agency Distribution Europe’s new logistics distribution center at Germersheim Army Depot, Germany, one of the Defense Department’s “greenest” facilities on the continent….. Wood-pellet burning stoves will provide heat for the warehouse areas. The stoves burn pellets made from sawdust and heat water that will be pumped through tubes in the warehouse floor, allowing heat to rise and warm work areas more efficiently.”

….Right now, if you go into our warehouses in the wintertime, the cold is coming from the floors through your feet into your body….The heat is coming from above, but it’s rising. We’re creating a much better work environment for our employees, because the heat is on the ground, which keeps their feet warm. It’s coming from below and heating their body as it rises in a much more efficient manner than blowers could do.” Sounds cool! But what is the occupancy rate of the warehouse. Would that be really impossible to carry out the task if there were no heating at all?

“Team members at DLA Installation Support at Fort Belvoir, Va., are replacing toilets and faucets throughout the agency’s headquarters with low-flow water fixtures….All toilets and faucets are being replaced. The toilets’ flow is going from 3.5 gallons per flush to 1.28 gallons per flush, and the faucets’ flow is going from 2.2 gallons per minute to .5 gallon per minute.” Bravo! Do they show the same sensitivity for electric hand dryers?

“Last year, a South American country used the Defense Logistics Agency’s Foreign Military Sales Program to purchase an old, rusted-out fire truck and turn it into something useable….The 1947 fire truck was just a big piece of rust and never looked like it would drive again, said Linda Kimberlin, DLA Logistics Operations logistics management specialist. The next picture they show me, it’s beautiful: It’s painted beautiful red, with new ladders, wheels and tires on it. She said it looked spectacular, and now that country has a fully operational fire truck thanks to FMS.” Good example. The question is why the DOD doesn’t do the same, because it is rich or because it doesn’t care?

“on Christmas Day thanks to the efforts of Defense Logistics Agency Troop Support workers more than 270 dining facilities in Afghanistan and Iraq received their food deliveries for the special Christmas holiday fare. Deliveries to Iraq and Afghanistan included 49,200 pounds of ham, 119,600 pounds of turkey, 12,300 pounds of stuffing, 97,375 pounds of beef, 42,860 pounds of sweet potatoes, 24,000 pounds of shrimp, 34,240 pies and 19,800 pounds of cranberry sauce, along with 7,350 gallons of egg nog, and other holiday treats.” They surely deserve it. This is not the point. BUT as a big energy efficient green fun, the DOD should also tell how and from where those food were delivered. And of course, how much money is spent for the delivery, i.e., transport cost.

“DLA Installation Support in Richmond, Va., is minimizing the drain on energy dollars from these temperature fluctuations by installing ground source heat pumps. Though the initial installation will cost twice as much money, the energy savings will [pay back] the additional cost in less than 10 years with fewer parts to wear out. the life expectancy of the ground-source heat pumps’ mechanical parts is 25 years. Traditional air-source heat pumps are expected to last 10 or 15 years.” Clever! The mistake in this logic is that you are stuck with a technology that will probably be absolute 25 years later or much more efficient ones will become available before their lifetime.

True that “When it comes to alternative, environmentally friendly fuels, the Defense Logistics Agency has a history of being on the cutting edge.” But the DOD goes too far. It should continue to research, develop, and innovate but to create an industrial base should not be its job.

A recent article on toward workable energy solutions more or less says the same thing. When spending money on energy efficient solutions or “green” energy the DOD should think twice and ask itself the following question: Is it really necessary?

Today it is not any more that easy to distinguish fake environmentalists from true environmentalists. For many, green means the color of the greenback. Just look at the supermarkets in France. They don’t give out anymore free plastic bags to put the things you purchased. You have to pay for it. First, because, those plastic bags they sell are supposedly ‘green’. Second, by doing so the supermarkets supposedly help the environment. But the irony is that when you come home, you throw away a lot of plastics and paper used for labelling and packaging of the products you purchased.

Today in nearly every hotel room you see signs like “please don’t change your bed sheets every day”, “please re-use the towels”, “please use less water”, “please switch off air conditioning if the room is not occupied”, “please turn off the lights when leaving the room” etc. Outside the room you most probably witness the most inefficient and wasteful use of resources in the hotel. This is fake environmentalism. My advice to hotel managers of such hotels is to put only one sign with “please, help us make more profit” on it.

The lesson for the DOD is that the Department must put energy conservation to the front. First, use less energy. Then, use it more efficiently. And apply this order everywhere. This is not same as using more efficient devices that helps you use less energy. This is the fine line the DOD doesn’t get.

Pentagon's Love with Helios and Anemoi

2011-12-30T01:19:00.000+02:00

In an Opinion Article (An unfair fight for renewable energies) appeared in Washington Post on 5 October 2011, former governor of California Arnold Schwarzenegger argues that “More energy from the sun hits Earth in one hour than all the energy consumed on our planet in an entire year.” Apparently this statement doesn’t seem absurd to him.

But he adds that “It is absurd that our federal government spends tens of billions of dollars annually subsidizing the oil industry, which pulls diminishing resources from underground, while the industry focused above ground on wind, solar and other renewable energies is derided in Washington…. We need a level field on which the United States allows renewable energies to develop by the same rules as oil.” No, Mr former governor, all subsidies should be eliminated in a free market economy.

What really absurd is his following argument: “When the oil, gas and nuclear industries were forming, federal support for those energies totaled as much as 1 percent of federal spending. Subsidies available to the renewables industry today are just one-tenth of 1 percent.” This twisted logic reminds me of the DoD budget talks. Remember, the Pentagon officials have been saying that the DOD budget represents only 4% of the US Gross Domestic Product. Right, only $700 billion dollars.

By the way, Helios and Anemoi are the Greek Gods of the sun and wind.

I am quite surprised to see solar energy being promoted as a miraculous solution. For instance, I suppose you heard already that Project SolarStrong is worth more than $1 billion under which developer SolarCity will install, own, and operate rooftop solar systems on up to 160,000 privatized military residences on as many as 124 military bases across 33 states. The project would double the current number of residential rooftop solar systems in the U.S. It calls for installing a total of 371 megawatts of solar PV systems on military housing. U.S. Energy Secretary Steven Chu announced the offer of a conditional commitment for a partial guarantee of a $344 million loan to help secure financing for the project. Unfortunately, in no such news you read anything about the backup system.

Moreover, supporters of a “green” military often claim that it will lead to the creation of jobs and reduced expenditure on imported fossil fuels. In other words, they misplace hopes that “green” energy will produce “green” jobs.

This is said to justify the massive state handouts to renewable energies. Subsidies, grants, tax exemptions, feed-in tariffs with state guaranteed prices, and other aids such as renewable fuel mandates have nothing to do with the free market.

Andrew Barr says “In reality, renewable fuel mandates are little more than subsidies to a select group of companies (with governmental connections like SunRun, Solazyme and Solyndra) that are often long on promises but short on results.”

For two more recent critics see the latest DoD Inspector General’s report which mentions that The Department of the Navy Spent Recovery Act Funds on Photovoltaic Projects that Were Not Cost-Effective, Geothermal Energy Development Project at Naval Air Station Fallon, Nevada, Did Not Meet Recovery Act Requirements.

Kevin Rosner recently published an excellent article (Post Mortem on Germany's Nuclear Melt-Down). Below I repeat two good examples from Kevin.

According to a 2009 study since the year 2000 renewable subsidies have created less than 50,200 jobs in Spain. The average subsidy per worker added in these three sources of renewable energies [mini-hydro, wind, and solar] is more than half a million Euros (€571,138), ranging from €542,825 per worker added in or by the mini-hydro sector and two-thirds of a million Euros per worker added in or by the photovoltaic sector, to well over €1 million per worker added in or by the wind industry.

The UK’s experience with wind-power in December 2010 is another example. In December the UK’s 3,153 turbines produced a mere 0.2 % of the needed power during a time of bitter cold. Operating at peak efficiency the turbines should have been able to provide almost 10% of the needed power, but unreliable wind had the turbines functioning at less than 2.5 percent of their capacity. Germans might want to consider this experience as potentially part of their own Nein Danke nuclear future.

In sum, Pentagon energy officials must learn that solar and wind systems cannot provide reliable, base-load electricity. These systems have to be supported by the backup baseload, provided by fossil fuels or nuclear. So much with the zero net installations! Pentagon officials must also keep in mind that we waste much of the electricity we generate because we do not have the sufficient technology to store all the electricity generated. This is why we need more R&D and innovation for energy storage solutions. In the absence of a storage solution, installations will continue to rely on civilian grid (unless power is generated by small nuclear plants inside the installations). I hope before the New Year starts all senior DOD energy officials will find some time to read more on basics of energy. My reading will be on gardening.

A happy, healthy and peaceful new year!

DOD's Green Chaos

2011-12-22T01:03:00.000+02:00

A US congressional “super committee” has been assigned to develop a plan to reduce the federal deficit by more than $1.2 trillion over the next 10 years. This amount is more or less equals to the war expenses in Afghanistan and Iraq in the past 10 years.

Today, the US Department of Defense (DOD) is under “devastating” budget cuts but it continues to play the proud role of leader in the country’s green energy transition. Some of the main goals of this vision are reducing dependence on imports, increasing dependence on clean energy technologies, improving energy efficiency and conserving energy through culture change. This transition is deemed necessary and urgent by the DOD senior management.

We have heard many times by DOD officials that there are also many energy related threats to national security. Climate change, high priced and unsure supplies of imported oil coming from “unfriendly” nations, dependence on civilian electricity infrastructure, brining fuel to forwards operating bases are only a few but much publicized examples.

All these understandable intentions backed with unjustified arguments have been disturbing me for a while. Let’s take the argument of being dependent on oil imports from “unfriendly” countries.

If you go to the Energy Information Administration website, you will read the following: “Some may be surprised to learn that 49% of U.S. crude oil and petroleum products imports came from the Western Hemisphere (North, South, and Central America, and the Caribbean including U.S. territories) during 2010. About 18% of our imports of crude oil and petroleum products come from the Persian Gulf countries of Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia, and United Arab Emirates. Top Sources of Net Crude Oil and Petroleum Product Imports: Canada (25%), Saudi Arabia (12%), Nigeria (11%), Venezuela (10%), Mexico (9%).” I interpret the term “unfriendly” countries as OPEC countries in general and the countries in the Persian Gulf in particular.

The fact is that the US imports less and less crude oil from the Persian Gulf. Now let us have a look at the Annual Energy Outlook 2011 of the Energy Information Administration (released in April 2011). Table A11 (Liquid fuels supply and disposition) tells us that EIA expects US crude oil imports to decline from 9 million barrels per day in 2009 to 8.24 mb/d in 2030. If you include petroleum products the numbers will change but the picture will remain the same. Share of net oil imports (crude oil + petroleum products) in total oil supply will decline (from 52% in 2009 to 42% in 2035). (see data here).

The share of crude oil imports from the Persian Gulf in total crude imports is expected to decline from 24% in 2008 to 18% by 2035 (or from 2.34 million barrels per day in 2008 to 1.45 million barrels per day in 2035, see the table below). Even if the US imported very small volumes of crude oil from the Persian Gulf, it would remain sensitive to the impact of any halt in supplies from that region would have on oil prices. So, the DOD officials should not mix the level of oil imports with price setting in world oil markets.

I wonder how the DOD senior management would answer the following question: Does this justify the massive US military presence in the Gulf in the future? So, the arguments like protecting the flow of oil from the Persian Gulf is not a convincing reason anymore. Here is the logic the Pentagon tries to impose on people’s small brains: We have to protect the flow of oil from the Persian Gulf because it is vital to the US national security. Therefore the US military has to be there. On the other hand, the US has to reduce its reliance on oil imports from the region. This is one of the reasons why pushing for biofuels is important.

Ethanol has been used as fuel in the U.S. since at least 1908 and has been subsidized since 1978. A century later we are still told that biofuels has a bright future and will be costs competitive. Well, let me tell you one thing. People may be naïve but not necessarily stupid.

Pentagon's quest to "unleash us from the tether of fuel" is transparent nonsense under the current reality. Pushing for “green” energy to make the world safer because climate change poses a “serious threat” to America's national security (towards the end of this century) is another bogus argument. If we want to make the world safer we should show this same vision down the throat of the billions of the world’s poor who today risk death because of starvation and disease. Of course, the DOD has the authority to make its own energy choices but not at the expense of tax-payers.

DOD’s energy costs in 2010 were over $15 billion. Almost $12 billion of it was for oil. According to my rough estimates the DOD’s energy expenses in 2011 will exceed $18 billion, around $15 billion of which for oil. Yes, this is a large sum. Well, instead of trying to find ways to reduce its oil expenses the DOD buys more expensive biofuels, and then it complains that increasing oil costs will have negative impact on its capabilities.

Let me remind you what the current Secretary of Defense Leon E. Panetta wrote in Monterey County Herald on May 7, 2006: “It is not government but consumers that hold the key to smart energy policy in the future. What all of the presidential pledges of the past failed to do, the price of gas may just accomplish. It may not be pleasant to confront the prospect of $5.00 or higher a gallon gasoline but if that high price can ultimately create a demand for less oil and more alternative fuels like ethanol, then perhaps this high price may not just be a curse but a blessing.” Today, Mr Panetta is the Secretary of Defense. He should remember his words when the DoD services ask for extra funds to cover their oil costs.

The DOD should be responsible for the energy policy decisions it takes and accountable for the resulting consequences. The DOD’s current energy goals and policies are too expensive, too ambitious. They lack realism and coherence. The negative results of DOD’s unsustainable and chaotic green energy policy will soon show its face which will lead to the downsizing or abandonment of several plans.

Let me be clear. I am not against renewable energy sources. I am only against the blind push for them, for the sake of pretending “green”.

If the Pentagon is serious about its energy problem, it should first know how much energy it uses (paid for and unpaid for), where and how. I would like to ask a simple question to DoD senior energy officials: How do you explain the discrepancy concerning the DOD’s annual energy consumption documented in the EIA’s Annual Energy Review and DoD’s Federal Energy Management Report (for any given year)?

Moreover, the vague terms like operational energy and installation energy do not mean anything. For years I have been repeating the same question: How much energy does the DOD consume in continental US and how much outside continental US? My point is that the Pentagon must first get the facts right.

Worries about DOD's Green Biofuels

2011-12-16T18:52:00.000+02:00

On 1 September 2009, DLA Energy , which oversees procurement of biofuel for the Navy, awarded to San Francisco-based company Solazyme a contract worth $223,500 for delivering 1,500 gallons of algae derived jet fuel (Hydrotreated Renewable HRJ-5) for testing and certification by the US Navy. This makes $149 per gallon.

The DLA Energy, in early 2010 awarded a $2.7 million contract to Sustainable Oils of Seattle and Bozeman, Mont. for 40,000 gallons of the camelina-based fuel. This makes $67.5 per gallon.

The media was quite after these awards.

Secretary of the Navy Ray Mabus and U.S. Department of Agriculture Secretary Tom Vilsack announced on 5 December 2011 the Defense Logistics Agency signed a contract to purchase 450,000 gallons of advanced drop-in biofuel. The contract is the largest government purchase of biofuel in history, and provides $12 million to suppliers Dynamic Fuels LLC (a joint venture of Tyson Foods, Inc. and Syntroleum Corporation) and Solazyme. Solazyme’s biofuel is algae-based, while Dynamic’s is made from used cooking oil and non-food-grade animal fats. (this makes $26.6 per gallon).

I don’t understand why now there is big news coverage and fuzz about the government grants to unprofitable “green” projects in general and Navy’s biofuel deal in particular.

Some call it even Jet-Fuel Gate arising from “green” fanaticism. I guess this has a lot to do with (again so called) SolyndraGate (the $535 million Obama stimulus loan guarantee to solar panel maker Solyndra on the eve of its Chapter 11 bankruptcy).

An interesting article by J.E. Dyer at Hot Air provides extensive details of Solazyme: T.J. Glauthier “strategic advisor” at Solazyme, worked on the energy part of Obama’s trillion-dollar stimulus bill. Then Solazyme gets a $21.8 million grant from the stimulus bill and uses this money to open the largest biofuel plant in North America, located in Louisiana. And now the company (together with Dynamic Fuels LLC) is given $12 million contract to provide biofuels to US Navy.

Investors Business Daily put a harsh editorial on the subject adding that “You can save the Earth and make money too! Provided you have the right political connections to get your hands into taxpayer wallets, of course."

All these make many people skeptical about the DOD’s green biofuels hysteria.

Wired.com ran a story on 5 December 2011 with a catchy title: Navy’s Big Biofuel Bet: 450,000 Gallons at 8 Times the Price of Oil. (by the way, it was not 8 times the price of oil, $26.6 per gallon compared to $3.95 per gallon) The article itself may be not original but the comments indeed underline many of the pros and cons of military use of biofuels. These comments show that people want to see other things beyond the costs.

Here are some of them:

“Why would we want to build infrastructure to produce a product that is less energy dense, is more expensive to produce, and is not in supply worldwide. “

“It's not the Pentagon's job to choose what the next fuel source should be. There is plenty of value in R&D, but R&D doesn't require the operational fleet to buy Bio Fuels in bulk at substantial price premium to better fuels for no purpose. Why do we need an entire strike group running on bio fuel, other than entertainment? What's the purpose? It's more expensive, will require more frequent refueling, and increase maintenance costs.”

Many things have been said against new fuel for ships: - Coal (....but the wind works just great and is cheaper). - Oil (...but coal works just great and is cheaper). - Nuclear (....but diesel works just great and is cheaper).

BUT “Bio isn't any better than JP-5, in fact, it isn't as good. It doesn't perform as well per pound. Nuclear doesn't need to refuel as much. Oil is much easier to move and handle than coal, and powered ships steam faster than wind. Each of those steps had a value delivered. What is the performance value improvement of bio fuel over JP-5. What is the reason to justify the 10x cost differential?”

“the National Security strategies from the last 30-50 years and see that the Gulf area is listed as an "vital national interest" - and it wasn't because of the fishing.”

“If they really wanted to get us off foreign oil then they would turn to hydrogen as the "New Fuel".

Time has come to make a reality check for some of the claims advanced by the green fuels industry and the US military officials. My skepticism to the DOD biofuels endeavor would change only if I could see hard facts on these points, not empty talks and promises.

Capt Michael Cole, Deputy Chief, Lab Division AFPA/PTPLA had an interesting analogy in his presentation on 9 May 2011. He says “If it looks like a duck, quacks like a duck and walks like a duck, it's a duck.” SO, he says, “If it looks like ‘on spec’ fuel, smells like jet fuel and burns like jet fuel, it’s jet fuel.” Well, not necessarily.

In order to be considered a viable alternative, any JP-8 challenger must closely approximate or be better in all the criteria I list below.
·         First, it must meet current petroleum based JP-8 and F-76 energy density standards.
·         Second, it must be drop-in fuel (that no modifications to the engines are required to burn the fuel.)
·         Third, it must meet military demand in terms transportability and stability (making use of the existing delivery infrastructure and storage capacity)
·         Fourth, it must be cost competitive
·         Fifth, it must be produced in large quantities preferably in the US.
·         Sixth, it must allow the aircraft to continue to operate with commercially available fuel supplies.

Take the first item, energy density, which in my opinion is the most important.

An ideal alternative fuel would minimize both mass and volume for a given energy content since this will have major impact on the vehicle range. Pound for pound, wood as a fuel contained more energy than the human muscle-based carbohydrate economy it displaced; coal contained twice again as much; oil raises the ante twice again and nuclear sources many times more. In this context, biofuels are less dense. Less energy density at a higher cost doesn't sound like the roadmap to success for the reality. (Aviation Biofuels: Real or Green Fantasy?) If we want to pick up a winner to replace oil then the replacement should be better or equivalent in energy density and cost to crude oil based fuels.

Energy content can be expressed either gravimetrically (energy per unit mass of fuel) or volumetrically (energy per unit volume of fuel). Energy content is assessed by comparing the energy of the fuel per unit volume, but must also be assessed by comparing the energy per unit weight. In order to meet JP-8 fuel density standards, an alternative fuel must meet both criteria.

Let me give you one example. Ethanol for instance only delivers three-quarters as much energy per gallon of petroleum derived gasoline, meaning significantly lower miles per gallon, necessitating more frequent fill-ups. Navy Secretary Mabus tells in every occasion that US naval vessels are most at risk during refueling, as the USS Cole was when it was attacked in 2000 in the Yemeni port of Aden. He should demonstrate and prove that Navy alternative fuels will require less refueling.

I would like to make a suggestion to media reporters and DOD officials. Please don’t focus solely on the cost aspect of the biofuels. That is only one part of the story. Better focus on whether the DOD is doing the right/wrong thing for right/wrong reasons.

US Navy’s Green Fuel Reality and Fantasy

2011-12-11T21:15:00.000+02:00

On 17 November 2011, in preparation for the Navy's largest demonstration of shipboard alternative fuel use, NAVSUP Fleet Logistics Center San Diego tested 20,000 gallons of a 50-50 blend of algal oil (produced by Solazyme) and petroleum F-76 at SDTS, a decommissioned Spruance-class destroyer formerly known as Paul F. Foster (EDD 964).

Later on, the US Navy successfully concluded its final alternative fuel demonstration for 2011 with the December 7-9, 2011 operational tests of the 50/50 algae-derived, hydro-processed algal oil and petroleum F-76 blend in a landing craft air cushion (LCAC) amphibious transport vehicle. LCAC 91 received approximately 5,000 gallons of the 50/50 algal blend. The tests also marked the fastest speed achieved to date by a US Navy surface ship using alternative fuel blends, as LCAC 91 reached 50 knots. The fastest speed demonstrated on the 50/50 algal blend in previous tests was 44.5 knots by the Riverine Command Boat (experimental) (RCB-X).

Source: US Navy

Let me remind you that as part of his energy security goals, outlined in March 2011 in the "Blueprint for a Secure Energy Future," President Obama directed the Departments of Agriculture, Energy and Navy to work together to advance a domestic industry capable of producing drop-in biofuel substitutes for diesel and jet fuel. Responding to that challenge, in August 2011, the Secretaries of Agriculture, Energy and Navy announced a partnership to invest up to $510 million during the next three years (in partnership with the private sector) to produce advanced drop-in biofuel to power military and commercial transportation.

While that investment awaits Congressional action, by using the existing authority Secretary of the Navy Ray Mabus and U.S. Department of Agriculture Secretary Tom Vilsack announced on 5 December 2011 the Defense Logistics Agency signed a contract to purchase 450,000 gallons of advanced drop-in biofuel. The contract is the largest government purchase of biofuel in history, and provides $12 million to suppliers Dynamic Fuels LLC (a joint venture of Tyson Foods, Inc. and Syntroleum Corporation) and Solazyme. Solazyme’s biofuel is algae-based, while Dynamic’s is made from used cooking oil and non-food-grade animal fats. (this makes $26.6 per gallon).

The fuels will be mixed (50-50 blend) with petroleum-based diesel and aviation fuel to power a Navy carrier group (ships and aircraft) taking part in the Rim of the Pacific exercise, the world’s largest international maritime exercise, scheduled to take place off Hawaii in the summer of 2012 (Navy to Demonstrate Biofuel Use During Exercise). This will be Navy's demonstration of a Green Strike Group.

Andy Rojeski, a management committee member for Dynamic Fuels is reported as saying that "We believe the federal government's commitment to procure more energy from renewable sources will help make our high performance, environmentally friendly fuel more cost competitive…." Excuse me! DLA Energy’s FY 2012 Standard Prices (Effective 1 Oct 2011) shows standard price for conventional F76 $3.94 and JP-8 $3.95 per gallon. Is $26.6 cost competitive? We know that some commercial airlines (KLM, Finnair etc) use renewable jet fuel produced by Dynamic Fuels in some of their scheduled flight. I really wonder how much they pay for the fuel.

The Navy’s annual fuel consumption is more than 1.26 billion gallons. So, the purchase of 0.00045 billion gallon is not a significant amount to justify the claim of the Secretary Mabus: “We think that this represents a major step in energy independence for the United States in making the United States Navy a better war-fighting operation.”

I hear more and more claims from the US officials that biofuel use lessens America’s dependence on foreign oil and fossil fuels and increases the nation’s ability to compete in the global energy market.

An opinion letter appeared on the Oil and Gas Journal starts with the following sentence: The administration's latest energy boondoggle is a $510 million cellulose biofuel program to produce fuel for the Department of Defense in the name of national security.” (I didn’t know what boondoggle means. Apparently the term is used for projects that waste time and money.)

In 1819, Henri Braconnot, a French chemist, first discovered how to unlock the sugars from cellulose by treating biomass with sulfuric acid, a process used today. Nearly 200 years later we still try to make it happen at affordable price by throwing millions of dollar subsidies for premature production plants. Let me be clear, I am not against the biofuels industry but in my opinion the DOD’s biased, unjustified and inappropriate approach to biofuels is incorrect.

Time has come to make a reality check for some of the claims advanced by the green fuels industry and the US military officials. For such a reality check let us have a look what kind of properties these biofuels should have.

· First, they must meet current JP-8 and F-76 energy density standards

· Second, they must be drop-in fuel (that no modifications to the engines are required to burn the fuel.)

· Third, they must meet military demand in terms transportability and stability

· Fourth, they must be cost competitive

· Fifth, they must be produced in large quantities preferably in the US.

Number two and partly five is so far satisfied. In my opinion, the most important item in the above given list is Number one. That is to say, any good alternative fuel must minimize both mass and volume for a given energy content. Have you seen a comparison of volumetric and gravimetric energy contents of the alternative fuels (that are tested and purchased by the US military) with the conventional JP-8 and F-76? I haven’t seen yet. Unless I see that their energy density standards are close or better than the conventional petroleum I will remain a skeptical. (I will elaborate this issue in a later post).

CNA Report on Reducing US Oil Dependence

2011-12-04T18:46:00.000+02:00

CNA issued a report in October 2011 (released in November 2011) entitled Ensuring America’s Freedom of Movement: A National Security Imperative to Reduce U.S. Oil Dependence which is signed by 13 retired three and four-star generals and admirals in it.

The report focuses on the national security implications associated with shifting the U.S. transportation sector to alternative fuels. CNAs previous reports on similar subjects analyses the connections between energy, the economy, climate change and security.

1.      National Security and the Threat of Climate Change (see my comments Climate Change National Security Fuzz)
2.      Powering America’s Defense
3.      Powering America’s Economy

Why so many top stars are so much interested in energy? Well, they believe that all roads lead to energy. They say “America must fundamentally reconsider its national approach to energy. Those of us expressing concern about America’s diplomatic hands being tied, in part by our need to retain access to global oil supplies, ended up seeing that this would stop only when we changed our approach to energy.” They believe that overreliance on oil in the transportation sector is the Achilles heel of the US national security and hence reducing reliance on oil will make the US safer.

They suggest immediate and aggressive action to move transportation sector away from oil and toward alternative, domestically produced sources of energy. They add that the consequences of inaction, or even delayed action, are grave.

Here are their findings:

1. America’s dependence on oil constitutes a significant national security threat: Overreliance on oil is a national vulnerability which also reduces the US foreign policy options. Therefore the US must have alternatives to oil for its transportation, by increasing domestic production, and simultaneously reducing overall demand for oil.

2. A 30 percent reduction in use of petroleum would significantly improve the US national security. This can be done through greater efficiency (increasing the government’s fuel economy standards and by individual actions). This would lessen dramatically the impact of an oil supply shock to the US economy and to household incomes. Here they stress that “We can make dramatic reductions in our use of oil—and shame on us if we don’t.”

3. Many promising alternatives to oil as a transport fuel—some available today, others on the horizon- if managed properly, can lower overall national security risks.

Their recommendations are:

1. government must take action to promote the use of a more diverse mix of transportation fuels and to drive wider public acceptance of these alternatives.

2. develop a comprehensive energy roadmap or strategic plan to enable consistent and strategic energy policies and investments.

3. take swift and aggressive action to reduce our use of oil to reduce oil sue and increase the use of alternative fuels and vehicles

4. The Department of Defense should continue to be a leader in advancing alternative transportation fuels while balancing mission effectiveness and overall efficiency. DOD must be provided the necessary resources so innovation and experimentation with alternative fuels is not traded for military capability and capacity. DOD should be provided with the necessary authority to establish long-term alternative fuel contracts as a way to assure markets and lower the alternative fuel price.

All these are good intentions even if they are because of the right or wrong reasons.

One of the wrong reasons is the way the authors see or interpret the world oil market and its functioning.

“We are held hostage to price fixing by a cartel that includes actors who would do our nation harm, and we are too often called upon to risk the lives of our sons and daughters to protect fragile oil supplies from this very cartel.” (p.xiv)

“OPEC can increase production and drive down gas prices, erasing market incentives for developing alternative fuels.” (p.xiv)

“price of gasoline at the pump can too easily be manipulated by suppliers” (p. iv)

“Insulating ourselves from the impact of oil price swings….” (p.4)

“even with a 30 percent reduction in U.S. transportation oil use and oil imports, oil producing countries will still have growing markets for their oil, though the price of that oil may be less than it would be otherwise.” (p.7)

None of those claims make any sense. I was thinking about writing a few paragraphs on how the world oil markets functions and how oil prices are set. But I see that a reasonably good answer to those wrong arguments comes again from the report itself: “oil is a global commodity, priced on the global market. No matter how much more we produce here in the U.S., we can’t control the price of oil.” (p.24)

There are also arguments in the report that are simply not possible to believe:

“If ethanol comes to satisfy a more significant share of the U.S. fuel market, leading producers like Brazil would become closer strategic partners. We can envision scenarios, for example, in which U.S. strategic ties to Saudi Arabia and other oil producers in the Middle East loosen..” (p.7)

“You could wake up tomorrow morning and hear that the Iranians sense an attack on their nuclear power plants. And so they preemptively take steps to shut off the flow of oil in the Gulf. The U.S. would likely view this as a threat to our economy, and we would take action. And there we are, drawn into it.” (Gen. Convay, p. xviii)

“it is clear that by reducing U.S. demand for oil, and thereby reducing U.S. economic vulnerability to supply and price shocks, the United States would increase its options in military presence, operations, and costs in that region.” (p.5) [something wrong with this sentence!]

In fact, even if the US reduced its oil import dependency substantially (or even if it did not import from the Persian Gulf) I cannot see a slight possibility in the reduction of the US presence in the Gulf.

One of the areas I am confused in the report is its treatment of alternative fuels. On the one hand it says that “The free market is vital to innovation and economic strength, but we must take steps to ensure that market incentives favor fuels and vehicles that enhance our national security. If these policies are broad and operate across the American economy, they will not result in government picking winners and losers among fuel types; they will, however, ensure that Americans are winners.” On the other hand it supports full government push.

Similarly on the one hand it indicates that some alternative fuels could be better to pursue now because of their advantaged, on the other hand it sounds as if it takes position in wrong choices (corn ethanol is clearly a wrong choice).

For instance it says rightly that propane is less dense than gasoline, so propane tanks must be filled more frequently than those in gasoline-powered engines in order to achieve the same range. But somehow they fail to mention that almost all drop-in biofuels have the same problem.

This means that the authors are kind of biased. Look at how they treat synthetic fuels derived from coal and gas: “While F-T is considered a mature and established technology, the production facilities are expensive to build, operate, and maintain.” But they argue that natural gas could be used as feedstock and can be competitive. Why then pass it in one sentence and not elaborate. A drop-in biofuels obsessed DOD must not discriminate any viable, sound, proven candidate. As Gen. Kern says (on p.24) everything should be on the table. Pushing some good alternatives to the edge of the table is a grave error.

Having said that I should also remark that sometimes the report is making bold and correct arguments: “we should not allow the few who may object to the prospect of energy being drawn from unconventional areas—the “not in my backyard” crowd—to stand in the way of national security and the reduction of our dependence on oil. From an energy standpoint, there will need to be shared sacrifices in ensuring our national security.” (p.10) [well said, bravo]

In short, the CNA report tackles the correct problems with right or wrong reasons, and (as usual) it is well written. What bothers me is the inconsistencies within the report. Some of those internal inconsistencies are minor but some others raise more question then answers.

Sometimes the reader thinks that the US has the resources but not the means of production and sometimes vice versa. The US can reduce its dependence on oil but this does not imply that it would make the oil prices cheaper or the US would be less involved in the Middle East. I personally do not believe that biofuels will be cost competitive in the current decade without subsidies, which are an indirect tax levied to consumers. How long should the tax-payers continue to subsidize fuels that are chosen by the government?

LMI Study on DoD Use of Renewable Fuels

2011-11-20T19:59:00.000+02:00

A new report entitled “Opportunities for DoD Use of Alternative and Renewable Fuels: FY10 NDAA Section 334 Congressional Study” conducted by LMI was released recently.

This LMI study is different in quality from another LMI study (in 2007) entitled “Transforming the Way DoD Looks at Energy: An Approach to Establishing an Energy Strategy,” which I described as Much Ado for Nothing. The 2011 report is much better, but not as much one would expect from a $419,592 price tag.

The report assesses renewable fuel supply (anticipated feedstock availability, production capacity and production) and demand (projected fuel quantities based on the military Services’ requirements and plans) through 2020.

Here are its major findings:

Increased DoD renewable fuel use helps advance U.S. strategic energy security interests, achieve the Services’ goals, and gain some limited military utility (such as lower freeze points, cleaner combustion).

At present, these fuels command a price premium, but it is anticipated to decline significantly as the market develops. Despite that, the Services’ renewable fuel goals could still impose $2.2 billion in additional estimated annual fuel costs by 2020.

The Services’ 2020 goals for renewable jet fuel alone far exceed even the high-end projected domestic supply.

DoD would require more than 40 percent of the total projected U.S. drop-in renewable fuel supply (regardless of fuel type) in 2020, just to meet the military Services’ stated demand for 745 million gallons.

Camelina appears to be a promising renewable feedstock for producing hydrotreated renewable jet (HRJ) fuel, but annual production capacity for camelina-based HRJ is projected at only 68–98 million gallons by 2020.

Third generation renewable fuels production systems, such as photosynthetic algae, are unlikely to supply significant quantities of feedstock oil by 2020.

The additional costs and potential adverse effects of creating a new DoD commodity class outweigh the potential benefits.

Many of these fuels are expensive to produce, and how rapidly their costs will drop over time is unclear. Drop-in renewable fuels are expected to cost more than their petroleum counterparts: the estimated price premium will be between $1.43 and $5.24 per gallon in 2015. Given the Services’ goals, mid-range estimates suggest that DoD’s drop-in renewable fuel use would represent an additional annual fuel cost of $865 million by 2015 and $2.2 billion by 2020, which represents a 10– 15 percent increase over just conventional petroleum fuels.

Without a medium-term guaranteed demand and price floors for renewable fuels, many renewable fuel products lose their cost competitiveness (even with incentives) because of the short 5-year period that investors need to recover their capital investment costs.

In conclusion, increased DoD renewable fuel use contributes to U.S. national security interests, achieves Service energy security goals, and offers some limited military utility. However, the projected supply of drop-in renewable fuels will not be sufficient to meet anticipated DoD demand for renewable jet fuel products. Also, price premiums for drop-in renewable fuels and the budgetary implications associated with meeting renewable fuel goals may be considerable. Further action by DoD and Congress could help to promote renewable jet fuel production and address the price premiums necessary for the Services to achieve their renewable fuel goals.

Almost all these conclusions are supported with convincing (although some production cost data are outdated) calculations. What is missing is a thorough comparison, a chart or table, with conventional fuel.

What the report also does not say or question is the fact that the DOD will never ever be short of fuel supply. SO, all these fuel supply security arguments are void. You will have the same problems with nonpetroleum alternative liquid fuels as well. If the aim is to reduce the amount of imported oil, then the US should simply open Outer Continental Shelf to exploration. OR better produce liquid fuels from shale gas. If the aim is to generate income for renewable energy industry then the DOD is right. It should continue spending millions of tax payers’ dollars.

The exaggerated focus of DOD on biofuels as if it is a remedy is nonsense. Subsidising them is even bigger nonsense. Here is what I suggest. Give the companies a guarantee to buy large amount of biofuels at the price of conventional petroleum based fuel per gallon in the next 10 years, whatever the conventional fuel price may be in the future. If they can produce cheaper, they can pocket all the difference as profit. Let them take some risk. Guaranteed business over many years with large profits is a common practice in countries where corruption is widespread.

IMF and Oil Prices

2011-10-29T19:54:00.000+03:00

International Monetary Fund released its most recent World Economic Outlook in September 2011. The economic growth forecasts in this outlook, like any other of its past outlooks, are used by all prominent institutions as a crucial input for making oil demand forecasts. For instance, in early October, the IMF’s downward revision of GDP forecasts was interpreted by traders as a sign of a slowdown in oil demand growth.

IMF uses its own interpretation of oil prices for making its economic growth forecasts. Note that throughout its World Economic Outlook with oil price the IMF means “simple average of spot prices of U.K. Brent, Dubai Fateh, and West Texas Intermediate (or WTI) crude oil.”

Historically, WTI has traded at a premium of a few dollars, because it is a lighter and sweeter variety of crude oil. Starting from 28 October 2011 this has changed. For more than once year now Brent has been trading at a premium to WTI. The Brent-WTI spread blow-out from a few dollars to nearly $30 in early September. Of course this development has brought the WTI price as an international price benchmark under scrutiny. The IEA, for instance, switched to Brent price in its monthly Oil Market Reports. Now, more and more people mean Brent price when they talk about world oil price.

The IMF says in its WEO that “Historically, WTI has traded at a premium, because it is a lighter and sweeter variety of crude oil. If this anomaly continues, use of the WTI price as a price benchmark will increasingly come under scrutiny.” It also says that current futures prices imply that markets expect WTI to be priced at a discount to Brent through 2016.

If this is the case what is the point for the IMF to continue using an “average” oil price. Using an average price would make sense if the price series that were averaged followed more of less the same path. This is not anymore the case. So, is it meaningful to average the three benchmark crude prices?

By using this “average” oil price the IMF makes a number of assertions that are simply not backed up by the facts. Chapter 1 of WEO makes a blunt remark with saying that “During the second quarter of 2011, oil prices briefly rose more than 25 percent above the levels that prevailed in January 2011. It is hard to determine the extent to which prices were driven up by stronger demand or by lower supply.”

Note that the IMF undermines the role of speculators. IMF further states that “global macroeconomic factors explain a large and broadly stable share of commodity price fluctuations. If noise trading (and destabilizing speculation more generally) had become more important, commodity price volatility should have increased.” How can you justify it if you plot average petroleum spot price (an equally weighted average of WTI, Dated Brent, and Dubai Fateh) against Net Long Noncommercial Positions in Crude Oil in NYMEX? How do you see it if you use an average oil price? More importantly, does it make sense?

The race between WTI and Brent (actually between NYMEX and ICE) for being a representative global crude oil benchmark price continues. Non commercials are more and more attracted to the Brent market's stronger calendar spread structure as well as stronger price momentum. Does this race today make sense? As I mentioned above, many institutions including the IEA switched to Brent as world oil price benchmark. This is despite the fact that WTI production may be increasing while Brent has peaked and is dwindling. When the new pipeline between the US and Canada is completed, more oil will be flowing to Cushing, the WTI contract's point of delivery. The pipeline connection problem to supply Midwest refineries will most probably be solved in the future. In the mean time, Will we see then a switch back to WTI price?

Isn’t this a market distortion? How long will we remain silent to casino capitalism for having a very strong influence on the price of a commodity that affect every one of us. How long will we play the three monkeys that financialization of oil markets has had nothing to do with the oil price movements in the past few years? (And yes, in this post I am biased).

DOD Energy Use Underreported

2011-10-14T17:11:00.000+03:00

DOD’s Annual Energy Management Reports were used to give an overall picture of DOD energy consumption by mode and source. They contained tables on energy use in installations, tactical and non-tactical vehicles. These tables involved information about the costs, site delivered energy consumption by energy type in original units as well as in the Btu equivalent. Besides an estimated source energy equivalent in Btu terms was also give. There was also an estimate of CO2 emissions.

Now things have changed. DoD energy management has become fragmented. We have now two heads, one responsible from facilities energy, and the other from operational energy. This is why the latest DOD Annual Energy Management Report (AEMR) focuses only on facilities energy, even though the title remained the same.

On the cover page of the report it states that “Preparation of this study/report cost the Department of Defense a total of approximately $633,321 for the 2011 Fiscal Year.” This is a huge sum of money in which you cannot see an overall picture of how much energy the DOD used by fuel type and how much CO2 emissions it released by consuming that energy.

DOD officials should make sure that whichever figure they mention in public speeches and reports indeed refer to site delivered and purchased energy only. Or they must mention that the statistics they give are part of the total DOD energy use.

If you care about energy statistics you need to focus on the tables in Appendix B. There you will find some data, albeit less detailed than those in previous years’ reports.

Here are my overall remarks, critics and questions about the DoD energy statistics reported in Appendix B, which is used by every single senior DOD official. Therefore I address them particularly to William Lynn (Deputy Secretary of Defense) and Sharon Burke (Assistant Secretary of Defense for Operational Energy Plans and Programs) as well as to the people who prepared the DOD AEMR2010.

1. In the table for “Goal Subject Buildings” given in Appendix B: Why the sum of annual cost and consumption by energy type do not add up to total? Total delivered Btu is reported as 210,691 but the sum of individual components equal to 210,095. Similarly, the sum of total cost gives $3,507,487, and not $3,551,476. As a result, overall total cost and site delivered Btu are incorrect.

2. Why are energy consumption in original units, corresponding estimated source BTU, and yes, also estimated CO2 emissions not given anymore?

3. I understand that AEMR only considers site delivered energy that is purchased. What happened to on site generated electricity? Isn’t it consumed? Or DOD doesn’t produce any electricity on its sites?

4. Similarly, the DOD doesn’t report any nuclear electricity and heat consumption. I assume it doesn’t report because it is not site delivered and also not purchased. But I do not understand why the DoD neglects electricity consumption in its 11 aircraft carriers and 71 submarines. But how can we ignore the energy produced by its 103 nuclear reactor?

5. Why does the DOD insist on underreporting its total energy consumption? According to my very rough estimates including nuclear electricity would increased the DoD’s site delivered energy consumption by almost 10% and source Btu by about 20%. If done like that, the share of electricity in DoD’s energy consumption would increase from merely 12% to 33%. And share of oil would decrease from 77% to 58%.

6. This would be bad for political image I guess. The DoD push for biofuels would be damaged. A senior official would of course be less convincing had s/he said that oil accounts a bit higher than half of DoD energy consumption, rather three-quarters.

7. In all the previous AEMRs the original unit of category “other” in the “non-fleet vehicles and other equipment” table was reported in terms of Btu. Now it is reported as Btu. Does that mean that DoD does not use anything else than liquids fuels in its non-fleet vehicles (i.e., tactical vehicles)?

8. Does the DoD consume any in-kind power of fuel (i.e., not paid for), especially overseas? If yes, where is this fuel accounted for in AEMR?

9. Where does the DoD count the amount of fuel used by generators? Under tactical vehicles?

10. Does the DoD take into account the amount of electricity used in privatized or contracted buildings in its energy consumption?

I would be grateful if the DOD could enlighten me on these point.

DoD Energy Use in 2010

2011-10-08T16:43:00.000+03:00

DoD spent $15.2 billion on energy in (Fiscal Year) 2010. Seventy four percent of this (or $11.2 billion) can be attributed to operations while the remaining 24% (or $3.7 billion) to the Department’s permanent installations and 2% (or $0.3 billion) to non-tactical vehicles.

When we look at the total energy consumption we have a similar picture. In 2010, DoD consumed 872 trillion Btu of site delivered, purchased energy. Seventy three percent of this was operational energy and the rest was facilities energy.

Note that 872 trillion Btu corresponds to site delivered energy. In energy balance terminology it refers to final energy consumption. So, if you want to compare this amount with a country’s energy consumption you better use the estimated source energy, which by the way more or less corresponds to primary energy supply, and which by way is not given in the DoD’s annual energy management report.

According to my calculations the DoD’s primary energy consumption is slightly above 1100 trillion Btu. This is roughly the amount of energy consumed in Nigeria, a country with a population of 150 million.

Two types of energy are dominant in DoD’s energy mix - oil, with a share of 77% , and electricity, with a share of 12%.

In 2010, DoD spent almost $12 billion for the 374,000 barrels of oil it consumed on average each day. In comparison, Nigeria consumed almost 280,000 barrels per day and Greece 371,000 barrels per day in 2010.

In 2010, DoD consumed 30 billion kWh of electricity. This is equivalent to the electricity consumption Algeria, a country with a population of 35 million. Nigeria consumed almost 20 billion kWh.

This should be not surprising because:
(1) The DOD’s worldwide infrastructure includes over 539,000 facilities (300,638 buildings and the rest structures) located at more than 5,000 sites around the world, on more than 113,000 km² (bigger than the land area of Louisiana).
(2) The DOD operates approximately 15,800 aircraft, over 300 non-nuclear ships, some 195,000 non-tactical fleet vehicles, over 300,000 tactical ground vehicles (wheeled and tracked), in addition to over 120,000 generators. And all these machines consume oil, lots of it.

No wonder, the DoD is the largest single end use energy consumer in the world.

And yet, the DoD’s energy consumption is underestimated at least due to two reasons:
· First, DoD’s annual energy management reporting system considers only purchased energy. Therefore, if DoD doesn’t pay anything (in kind fuel and power) then it is not counted.
· Second, the DoD does not take into account of nuclear energy in its energy accounting. So, nuclear energy consumed in 11 nuclear aircraft carriers and over 70 nuclear submarines are unaccounted for.

This is my message for William Lynn (Deputy Secretary of Defense) and Sharon Burke (Assistant Secretary of Defense for Operational Energy Plans and Programs).

Without having a comprehensive data there is no way to do any meaningful energy analysis. Mrs Burke rightly mentioned on several occasions that the DOD lacks sufficient data on and analysis of operational energy use to manage consumption effectively. The DOD needs better statistics on how much energy is being consumed, where, and for what purposes.

DoD’s energy accounting in its Annual Energy Management Report needs to be revisited. This will be the subject of my next post.

Does Secretay Mabus Do the Right Thing

2011-10-02T21:39:00.001+03:00

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%.

From Barracks to the Battlefield

2011-09-24T01:41:00.000+03:00

A look at the new Pew Charitable Trusts report

As one of the largest energy consumers in the world, the US military has the ability to help shape America’s energy future. This is the argument put forward in the new Pew Charitable Trusts report “From Barracks to the Battlefield: Clean Energy Innovation and America’s Armed Forces” released on 21 September 2011. This report is a follow up of a previous PEW report called Reenergizing America’s Defense, released in April 2010.

If you question what clean energy got to do with armed forces, then you must read this report. If you consider yourself an expert on this field, like me, you too must read it. You will find some comprehensive and original things.

The report starts with usual cliché: The DOD’s priorities for energy efficiency and renewable energy sources have been driven by recent experience in Iraq and Afghanistan, where fuel shipments account for 80 percent of all supply convoys. It lists DoD’s major energy challenges: risks associated with transporting liquid fuels to and on the battlefield; growing oil price volatility; the impact of fuel dependence on operational effectiveness; the fragility of energy supplies for forces that must have assured power 24 hours a day; and energy laws and mandates the department must comply with.

The report details how innovation combined with development and deployment of clean energy technologies in the following three key areas can help DoD respond to these energy challenges:

· more efficient airplanes, ground vehicles, and ship;

· advanced biofuels with potential for fulfilling military requirements; and

· energy efficiency, renewable and storage at DOD bases,

DOD’s past efforts, ongoing projects and future plans referring to each of these challenges are documented in fairly compact and up-to-dated format. However, it is a pity that past efforts of the Air Force are cut very short (no mention of test flight on synthetic fuels derived from coal and gas). It is true that the Navy is front runner today and makes more PR than the other services, a more balanced reporting would have been better.

When one considers that the military fostered the Internet, GPS, computer software and many other important innovations, it becomes clear why the report claims that DOD’s efforts can also do a similar achievement in the field of energy. However, what makes it important is its focus on innovation, something usually ignored by the US military officials, despite the fact that DOD investments in advanced clean energy technologies are tripled to $1.2 billion in the past four years. This amount is expected to double by 2015 and may even reach $10 bn a year by 2030.

Although it is not stated clearly the conclusion of the report is or should be like this: To meet the challenges we face in the 21st century, we must reduce our dependence on any type of energy by changing the way we produce it and by transforming the way we use it less through efficiency and technology development.

The PEW report has two defects that are not obvious to a general reader, but are important for me:

1. Why do the energy use and (particularly) cost figures presented by DOD services at the end of the report not add up to the figures given in the DOD FY2010 Annual Energy Management Report (AEMR)?

2. PEW report repeats the mistake concerning energy consumption and costs made in the DOD FY2010 Annual Energy Management Report. I cannot blame the authors for that. Note that energy consumption and costs figures by energy type for Goal Subject Buildings presented in Appendix B of AEMR do not add up. Therefore overall DOD energy consumption and costs figures are slightly over-reported.

The following images from the report is important:

The DOD Energy Consumption in FY2010

2011-08-31T20:07:00.000+03:00

Finally, Office of the Deputy Under Secretary of Defense (Installations and Environment) finally released the DOD’s Annual Energy Management Report for Fiscal Year 2010.

This report focuses on energy used by military installations and non-tactical vehicles. For ease of discussion, this report refers to both as “facilities energy.” In a footnote you will find out that this report does not address operational energy. This is the first shock you will get on the first page.

What does the report say About DoD Energy Consumption?

“DoD accounts for approximately 80 percent of all Federal energy consumption and spent about $15.2 billion on energy in FY2010. Seventy four percent of total DoD consumption can be attributed to operations while the remaining 26 percent was consumed by the Department’s facilities (Figure 1.1). Operational energy is used for military deployments, direct support of military deployments, and training in support of readiness for military deployment. Facilities energy comprises all other energy used at DoD’s permanent installations and by its non-tactical vehicles. Well over 90 percent of total energy is used by the Military Departments, with about 6 percent used by other DoD Agencies.

Figure 1.1. DOD Energy Use in FY2010

In FY2010, DoD spent $4.01 billion on facilities energy, with $0.25 billion used for fuel for 160,000 non-tactical vehicles. About $3.76 billion was spent on energy for the Department’s 507 permanent installations, which comprise more than 300,000 buildings and 200,000 other structures. These installations occupy approximately 28 million acres of land in the United States and overseas and include over 2.2 billion square feet of facilities space.

In addition to its high cost, DoD’s use of facilities energy is important for at least two other reasons. First, facilities energy has a significant environmental impact, contributing a disproportionate share (about 40 percent) of the Department’s total greenhouse gas emissions. Second, DoD is heavily dependent on the commercial electricity grid for its facilities energy. The fragility of this grid leaves DoD vulnerable to service disruptions and places continuity of critical missions at serious and growing risk.”

That’s it.

“The Department is addressing its energy management challenges through its facilities energy strategy. Under our strategy, the DoD seeks to reduce energy demand through energy efficiency and conservation, increase energy supplied by renewable and alternative sources, support technology innovation to develop management systems and clean energy technologies and improve energy security to reduce the risks posed by disruption of the electric grid.”

“In FY2010, however, the Department fell short of its goals for energy intensity, renewable energy use, and petroleum consumed by non-tactical vehicles, but exceeded its goal for reducing the use of potable water,” (see page 4) despite “DoD is investing in emerging technologies that hold the promise to reduce and manage energy demand, increase the supply of renewable energy, enhance energy security, and improve energy efficiency in buildings.”

But you will have a lot of details about facilities energy use. “Reducing facilities energy demand, enhancing energy security, facilitating innovative energy research and development, and increasing the use of renewable energy sources are important priorities for the Department of Defense,“ says the report. A bit exaggerated claim if you have an idea about the full picture of DOD wide energy use, costs and CO2 emissions.

“DoD’s facilities energy costs totaled approximately $4.0 billion in FY2010.”

“Facilities energy accounts for 26 percent of DoD energy use, but 40 percent of greenhouse gases.”

Facilities Energy Consumption
“DoD consumed about 211,000 billion British thermal units (BBTU) of energy during FY2010 in facilities subject to the energy intensity goal. As shown in Figure 2.1, DoD facilities energy consumption has been increasing since FY2007.”

Figure 2.1 DoD Facilities Energy Consumption Trends FY2006-2010

Figure 2.3 DoD Site-Delivered Energy By Type FY2010

“ approximately 80 percent of the energy consumed by DoD facilities in FY2010 came from electricity and natural gas. DoD also used small percentages of fuel oil, coal, purchased steam and liquefied petroleum gas (LPG), propane, and other fuels in its facilities.”

Non-Tactical Fleet Vehicles Petroleum Use

EISA 2007 requires Federal agencies to achieve a 20 percent reduction in non-tactical vehicle (NTV) petroleum consumption by FY2015 compared to a FY2005 baseline. E.O. 13514 extends the reduction goal to 30 percent by FY2020. In FY2010, DoD NTVs consumed the equivalent of 80.3 million gallons of Gallon of Gasoline Equivalent (GGE), which includes gasoline, diesel, and the diesel portion of biodiesel blends (80% of a B20 blend). The mix of petroleum fuel types has remained relatively stable over the past three years.

DoD Renewable Energy Production Baseline and Potential for Growth

While DoD generated 9,950 BBTUs eligible for the 10 U.S.C. § 2911(e) calculation, approximately 5,800 BBTUs (bottom right of Table 3.1) was from on-site generation. The other 4,150 BBTUs are the sum of renewable energy and REC purchases.

If DoD is to reach the estimated 17,000 BBTUs of renewable energy to meet the 10 U.S.C. § 2911(e) goal with on-site production alone (keeping RECs and off-site purchases steady) on-site renewable production must increase by about 7,000 BBTUs. This is equivalent to approximately 1,200 MW of solar, which would cover 9,400 acres (or 67 Nellis AFB solar fields). Alternatively, 7,000 BBTUs could be met with 260 MW of new geothermal generation (equivalent to two China Lake projects).

Table 3.1 DoD Renewable Energy Production FY2010

Figure 3.4 DoD Estimate Of Renewable Energy Production Potential

“DoD conducted a preliminary assessment of renewable energy potential at its installations using FY2009 data (…) the Military Departments, along with DLA and DeCA identified over 33,000 BBTUs of renewable energy project potential”

“Using FY2009 data, the analysis indicated that only 113 DoD installations (about 20 percent) had on-site energy production levels of 50 percent or more of their energy consumption. Of these, only five installations had significant renewable contribution to their on-site production (from 17 percent to 86 percent). This analysis indicates that DoD has minimal renewable production when compared to consumption on installations across DoD and that there is a large gap in the convergence of net zero and renewable energy goals.”

My Remarks

The report gives really a lot of details, by DOD services, by project etc.

On the cover page it states that “Preparation of this study/report cost the Department of Defense a total of approximately $633,321 for the 2011 Fiscal Year.” This is a huge sum of money in which you cannot see an overall picture of how much energy the DOD used by energy source and how much CO2 emissions it released by consuming that energy. And of cost, you cannot see cost details. However, in Appendix B, you will find some data, less detailed than in previous years’ reports.

But in those tables you will not see anymore, consumption in original units, corresponding estimated source BTU, and yes, also estimated CO2 emissions. Why is that? CO2 emissions are not important any more?

Why sometimes totals do not add up?

Will the DOD come up with a similar report on Operational energy? If not, what is the use of that report?

Why the DOD insists on keeping fragmented energy management.

However, I did my homework, below is the figure I produce by using the data provided in AEMR and my own estimations, particularly on CO2 emissions. Enjoy.

Alternative Energy and Propulsion Power for Military

2011-08-28T00:55:00.000+03:00

Much has been written on the dependency of the US military on oil. However, most of the writings focus on the supply side of the issue and emphasize the role of technology primarily on alternative fuel production. A US Army research paper by Colonel Fields is rather different. That is why this post is about his paper.

Col. Fields argues that “A country equal or near equal in economic and military power but considerably less depend on fossil-fuel-based technologies would pose a major threat to our nation.” In the context of Peak Oil, which he seems to be subscribed to, this argument makes sense. But the role he gives to the military in this particular issue is rather too much: “Our nation would benefit enormously if the US military were provided the resources needed to solve this fossil-fuel dependence problem. No one entity has a bigger reason for solving the foreign energy dependence problem than our military.”

Inefficient nature of combat platforms, i.e. platform inefficiency, puts a big burden on operational effectiveness. Much quoted phrase about the need to move and protect fuel detracts from combat effectiveness by adding to sustainment costs and diverting and endangering in-theater force capability.

More efficient platforms would not only enhance range, persistence, and endurance but also would reduce the burden of owning, employing, operating, and protecting the people and equipment needed to move and protect fuel from the point of commercial purchase to the point of use. In other words, more efficient platforms increase warfighting capability.

This can be demonstrated with an example on the Army’s peacetime and wartime fuel consumption patterns, which differ considerably. During peacetime, fuel consumption by Army aircraft makes up almost 50% of its total. However during wartime, generators become the largest single fuel consumers on the battlefield. Note that JP-8 is used by the military in everything from tanks and aircraft to generators.

That is why Defense Advanced Research Projects Agency (DARPA) had focus on creating JP-8 by other means. Initial biofuels research was focused on converting agricultural crop oils (canola, jatropha, soy, palm oils, and others) to a JP-8 surrogate. Currently the most promising research has expanded to cellulosic and algal feedstocks to produce a second generation biofuels that is noncompetitive with food sources. Because, they have great promise and because agricultural crop oil-based biofuels, or the first generation, have showed dissimilar composition and could not be approved for use in tactical vehicles.

Col. Fields goes here to the hearth of the issue: When considering alternative fuels, it is very important to understand that the primary consideration must be gravimetric (energy per unit mass) and volumetric (energy per unit volume) energy densities. The bad news is that other than uranium, the liquid hydrocarbons offer the most attractive combination of volumetric and gravimetric energy densities.

Why biofuels and not hydrogen? It is true that the first hydrogen-power-based engine was conceived in 1820 but aggressive technological progress was condensed in the past decade or more. Why no more progressive push on hybrids for military applications, especially for medium-duty trucks? For instance, hydraulic hybrid (the diesel or gasoline engine and the hydraulic components) technology captures and uses a large percentage of the energy normally lost in vehicle braking. It can quickly and efficiently store and release great amounts of energy due to a higher power density. Besides, it is significantly better than hybrid electric systems.

How about energy storage (especially battery energy storage) technology? Fortunately, there is recently a big push for this area. This technology still remains the single greatest obstacle to achieving the enabling technologies necessary to advance fuel cell, hybrid electric, and pure electric mobility systems. The ideal energy storage technology currently does not exist. The ever growing electric power needs of modern combat systems have been driving the need for electrical storage capacity for some time. The Army has engaged in designing high-power, high-energy-density lithium-ion batteries for use in hybrid electric vehicle propulsion systems. This energy storage research area is being considered for other critical applications including auxiliary power units and to support emerging new operational requirements for tactical platforms.

Why nuclear energy is not explored for its potential for military application other than Navy ships? In 1950s, the Army had fully operational nuclear power plants—the first in the US. Ford Motor Company had developed a concept automobile called the Nucleon in 1958. By the early 1960s, there were a few portable plants built and even a nuclear power plant on a couple of ships. In 1970s no significant steps were taken to implement any nuclear initiative. Had nuclear concept been given the proper support, the currently discussed technical matters might have been overcome by now.

Why technologies to improve platform energy efficiency in existing fossil fuel-powered propulsion based systems are been treated as a step-son?

Col Fields lists three technologies with the potential to fundamentally alter DoD capabilities and enable new concepts of operations. These offer the potential of double-digit percentage improvements in energy efficiency over current technologies, and to propel our domestic industrial base to new levels of performance.

The three technologies are:

 blended wing body (for fixed-wing, heavy-lift aircraft, such as tankers, bombers and transport aircraft), offers the possibility of two times the gain in range and payload and of five to ten times the gain in system level fuel efficiency over traditional fixed-wing aircraft.

 variable speed tilt rotor (for vertical lift aircraft), holds hold promise of far greater range, speed and operational flexibility with substantially reduced fuel consumption over traditional military helicopters. It would increase payload and range five times over current military helicopters, achieve twice the speed, and consume five times less fuel.

 Badenoch “blast-bucket” design concept (for light-armor ground vehicles, to replace the HMMWV). The armored vehicle design technology is highly IED resistant, weighs three times less than a current comparable up-armored vehicle, and consumes five times less fuel.

These technologies are viewed as having the greatest potential for military application, achieve much cost saving over the life cycle of tactical ground and aircraft systems, and notably reduce or eliminate dependence on foreign petroleum sources.

In sum, Col. Fields lists the following technologies worth pursuing now:

· Alternative fuels/energy, specifically, hydrogen fuels used in hydrogen-powered internal combustion engines (ICE) and second generation biojet/biofuels.

·         Fuel cells
·         Electric and Hydraulic Hybrid Power Propulsion
·         Electrical Energy Storage
·         Technologies to improve platform energy efficiency

I congratulate Colonel Fields for pointing out the real issues and going beyond the rhetoric. If I were him I wound end the paper with a much clear message: No doubt that energy technology is a critical element of military superiority. But it is energy end-use technologies that should be the primary focus, not the energy production technologies.

Navy Gives Another Push for Biofuels

2011-08-17T05:26:00.000+03:00

On 16 August 2011, the US President Obama announced that the Departments of Agriculture, Energy and Navy will invest up to $510 million during the next three years in partnership with the private sector to scale up the industry for next-generation biofuels by producing advanced drop-in aviation and marine biofuels to power military and commercial transportation. Back in June 2011, the secretaries of the three Departments mentioned above had signed a memorandum of understanding for that.

President Obama and the Department secretaries proclaimed once again that biofuels are an important part of reducing America’s dependence on foreign oil and it will pave the way to energy independence. As usual, no mention about the costs to tax payers due to generous subsidies.

Nevertheless, again as usual, Navy Secretary Ray Mabus reiterated his claim that “America’s long-term national security depends upon a commercially viable domestic biofuels market that will benefit taxpayers while simultaneously giving Sailors and Marines tactical and strategic advantages....Today’s announcement not only leverages our home grown fuel sources to support our national security, but it also helps advance the biofuels market, which ultimately brings down the cost of biofuels for everyone.” He is even quoted as saying that "I can think of nothing more vital to national security than to diversify our forms of energy". However, he never says when the costs will get down. The US government points out clearly that it will continue to use the weight of the military to commercialize (drop-in) biofuels.

The plan is to build commercial-scale pioneer biofuel refineries in different locations for a diverse feedstock supply. To participate in the program, commercial companies will have to invest at least as much as the government (at least a one to one match). Funding for the program will be split equally among the three agencies. The Navy will act as a customer for production and define technical requirements for aircraft and vessels.

In any case, this announcement will make the biofuel industry very happy. The remarks made by Michael McAdams, president of the Advanced Biofuels Association (ABFA) make this clear: “No waiting for the day when costly changes are made on car assembly lines or gas stations… The Administration's investment in commercializing advanced biofuels is a matter of national security. … our nation's defense is at the mercy of the market just as much as we are when we pull up to the gas station."

Already, in June 2011, Secretary of Energy Steven Chu had announced up to $36 million to fund six small-scale projects in California, Michigan, North Carolina, Texas, and Wisconsin, that will advance the technology improvements and process integration needed to produce drop-in advanced biofuels and other valuable bio-based chemicals. Also, in December 2009, Secretary Chu and Agriculture Secretary Tom Vilsack had announced the selection of 19 integrated biorefinery projects to receive up to $564 million from the American Recovery and Reinvestment Act to accelerate the construction and operation of pilot, demonstration, and commercial scale facilities.

While this biofuel hype continues in Washington DC UK company Altona Energy believes it can supply vehicle ready diesel at $53 a barrel ($1.25 per gallon), with a coal to liquids plant, incorporating carbon capture for underground carbon storage, with financial support from China ( Diesel from CTL with carbon capture at a cost of $53 / barrel). And yet, Coal to Liquids are no more mentioned in the US, a country rich in coal.

The Army Energy Initiatives Office Task Force

2011-08-12T22:05:00.000+03:00

On 10 August 2011, Secretary of the Army John M. McHugh announced the establishment of the Energy Initiatives Office, or EIO, Task Force as part of the Office of the Assistant Secretary of the Army for Installations, Energy and Environment. The EIO Task Force, expected to be fully operational by September 15, will serve as the central managing office for the development of large-scale Army renewable energy projects.

"The Energy Initiatives Office Task Force will help the Army build resilience through renewable energy while streamlining our business practices so developers can invest in and build an economically viable, large-scale renewable energy infrastructure," said McHugh. (see, U.S. Army establishes Energy Initiatives Office Task Force for large-scale renewable energy projects by ASA (IE & E) Public Affairs)

Energy Initiatives Office Task Force Information Paper (PDF) states that he Army must reduce operational and installation energy demand because enhancing energy security is operationally necessary, financially prudent, and mission critical. Activities within the EIO Task Force will include analysis of the renewable energy market, project economics, technology, and resource availability to develop large-scale renewable energy solutions. The EIO Task Force will work within the Army to streamline existing acquisition processes and leverage industry for the execution of large-scale renewable and alternative energy projects on Army installations. It will provide resources focused on working with the private sector to execute these projects.

Other important parts of the Paper are as follows:

“The Army Power and Energy efforts are divided into three focus areas: Soldier Power, Vehicle Power, and Basing Power. The EIO Task Force will utilize the Army’s Renewable Energy Execution Plan to address Basing Power needs, resulting in the implementation of large-scale renewable energy infrastructure on Army installations.

The Army’s EIO Task Force is focused on on-site, large-scale renewable energy generation that can mitigate mission risk stemming from service disruptions due to a reliance on an aging and vulnerable electric grid. This also provides a hedge against rising and volatile energy prices, and serves as a potential source of revenue for other energy and efficiency efforts.”

During a press conference Katherine Hammack -- assistant secretary of the Army for Installations, Energy and Environment – is reported as saying that the new task force “is focused entirely on (the continental United States) and large-scale renewable, almost utility-scale renewable projects, on CONUS, that would offset all or part of the energy needs of a permanent installation….When we are looking at projects, we are looking at about the 10-megawatt size, plus or minus a little bit. Or it could be larger. We are looking at large-scale renewable energy projects, on Army installations." Secretary of the Army John McHugh said the Army has about 126 renewable energy projects ongoing, including one at Fort Irwin, Calif., where a solar-energy project will cover a land mass "about the size of the island of Manhattan." (New task force to focus on renewable energy, August 11, 2011)

In an August 10, 2011 letter to Defense Secretary Leon Panetta, Congressman Maurice Hinchey (D-NY), led members of the congressional Defense Energy Security Caucus (or DESC, launched in July 2011, http://desc.hinchey.house.gov/ ) in urging Defense Secretary to continue to research and use of renewable sources of energy and spare any related programs from upcoming budget cuts. (see, Hinchey Leads Congressional Defense Energy Security Caucus in Urging Defense Secretary Panetta to Spare Renewable Energy Solutions from Potential Budget Cuts, 11 August 2011).

The letter states that " For several years, we have advocated for the need to address critical vulnerabilities to our national security based on our military's dependence on both fossil fuels and the national electrical grid.

Recognizing the critical importance of mission energy requirements, we urge you to prioritize the Department's energy policies and budgets. Investments in smart energy plans will not only show returns in security and mission success but they will contribute to future cost savings and have a unique opportunity to help foster innovative and diverse energy and clean technologies to strengthen our economy. Reducing our energy consumption is one of the easiest ways we can reduce cost to the DoD and we ask that you both challenge and demand that the Services and every Soldier, Sailor, Airman, and Marine accept this responsibility.”

The DESC intends to be a forum through which the Department of Defense, the Armed Forces, energy industry, and members of Congress can exchange ideas and give defense energy security policy an additional platform that will contribute to mission success, protect lives, save money, and safeguard the environment.

Hinchey has led the effort in Congress to require the military to increase its use of renewable sources of energy. Earlier this year, President Obama signed into law a provision authored by Hinchey, which requires that any solar energy panels purchased by the Department of Defense through subcontracts are made in the U.S. Hinchey's measure dealt with the Buy American Act, which requires products purchased directly by the federal government to contain at least 50 percent of American content.

Meanwhile, DefenseNews reported that (U.S. Lawmakers: Save Energy Efforts From Budget Ax, 11 August 2011) on Aug. 10, the congressional caucus hosted Rear Adm. Neil Morisetti, the United Kingdom's climate and energy security envoy. Although industry is somewhat skeptical of the military's commitment to renewable energy initiatives, especially as budgets fall Morisetti reportedly said that "But we don't have a choice…Energy is no longer a critical enabler, but a critical vulnerability, too."

All these developments mentioned above sound good. Army wants to keep up with the Air Force and Navy in this new Green Rush. All military services want to reduce dependence on fossil fuel. But the fragmented nature of energy policy making and coordination continues. Look at the main reasons to give impetus for renewable energy technologies, reliance on an aging and vulnerable electric grid as well as increasing costs. Then look at what is being done or planned to be done.

Let’s be realistic, and not over exaggerate the role and importance of renewable energy for the armed forces today and tomorrow.

I am not saying that retired Admiral R. James is completely right. (see his much debated article titled “Of Mustard Fuel and Marines”, appeared on WSJ.com on 2 August 2011). But I tend to agree with his conclusion: “Force protection should be the supreme goal of military strategy. 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.”

Naval Facilities Engineering Command (NAVFAC) Far East Public Works Department (PWD) celebrated on 4 August 2011 the installation of a new 76.6 kilowatt photovoltaic system at the Commander, Fleet Activities Sasebo (CFAS) Navy Exchange (NEX), Japan. We read many articles like that. What these articles never tell is the unit production cost in comparison with the unit cost from the commercial grid. Now, don’t tell me that commercial grid is too fragile and insecure, and that solar and wind are the solutions. If that were the case, then small nuclear plants are a much better remedy. Why don’t we see any discussion about them?

The recent EIA report Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010 (released in August 2011, full report) shows that subsidies for Biofuels amounted to $6.644 bn, the most federal assistance within the renewables sector. Is it normal to subsidize a fuel (over $25 bn since 2002) which is a clear looser? This insane policy of subsiding fuel ethanol must stop. And DoD should not be part of this insane policy.

Thoughts on DOD’s Operational Energy Strategy

2011-08-01T23:43:00.000+03:00

The US soldiers run on water, batteries and fuel. The latter two are becoming more and more pain that the first one which is why armed forces require a reliable and assured supply of operational energy.

As indicated in the Fiscal Year 2012 Operational Energy Budget Certification Report released by the Assistant Secretary of Defense for Operational Energy Plans and Programs in January 2011, “growing operational energy demands are having an impact on military effectiveness, raising the risks and costs for U.S. forces. On the battlefield, large fuel supply lines are challenging to route, vulnerable to attack, and consume significant combat and monetary resources. At home, installations supporting military operations draw significant amounts of power from the civilian electricity grid, which is vulnerable to a range of disruptions. In the longer term, growing global demand for oil and the concentration of supplies will mean continued price volatility, potential supply disruptions, and geostrategic consequences.”

Facts point to similar pains. In 2010, the DOD spent $15 billion on energy. It consumed nearly 5 billion gallons of fuel in military operations, costing $13.2 billion. Air delivery of fuel to Afghanistan is 10 times as expensive as ground delivery. By the end of 2010 some 40 million gallons of fuel per month was delivered into Afghanistan.

The challenge is to adjust to worsening fiscal and budgetary circumstances due to high and volatile energy price and at the same time sustain military effectiveness.

On 14 June 2001 the Department of Defense (DoD) has published a document Energy for the Warfighter: Operational Energy Strategy, by the newly established Office of the Assistant Secretary of Defense for Operational Energy Plans and Programs. In a DOD News Briefing, Deputy Secretary Lynn and Assistant Secretary Burke presented the main points of the DOD Operational Energy Strategy.

The DOD’s energy portfolio includes the energy used at military installations in the United States and overseas as well as the energy used by military forces in execution of their day-to-day missions, or operational energy. This strategy focuses on the latter, the energy used to move, train and sustain weapons, forces and equipment for military operations.
The goal of the “Operational Energy Strategy” (OES) is to ensure that the armed forces will have the energy resources they require to meet 21st century challenges. This strategy will guide the DOD in how to better use energy resources to support the Department’s goals and the Nation’s energy security goals while lowering risks to warfighters and saving money for American taxpayers.

OES outlines three principal ways to improve DoD energy policy and energy security for the warfighter: reduce, diversify and plan for the future.

• More fight, less fuel: Reduce the demand for energy in military operations by taking steps to improve the efficiency energy use, both through technological innovation and nonmaterial changes.

• More options, less risk: Expand and secure the supply of energy to military operations, i.e, diversifying energy sources and giving deployed forces a range of supply options.

• More capability, less cost: Build energy security into the future force, by incorporating operational energy security into all stages of strategic planning on “force structure, posture and strategy” and force development.

Some of the key messages of Deputy Secretary of Defense William Lynn are:

As conflicts become longer in duration and more expeditionary in nature, the amount of fuel it takes to keep forces in the field has become a significant vulnerability. The less of it we need, the more operationally resilient we will be.

DOD needs to address energy needs as a broad military challenge. With the changing nature of war, our current energy technology is not optimized for the battlefield of today or tomorrow.

By reducing demand, expanding and securing supply, and integrating energy security into our future force, we will not only increase our military effectiveness, but we will lower our costs.

Some of the key messages of Assistant Secretary of Defense for Operational Energy Plans and Programs Sharon Burke are:

Our fixed installations will be resilient to power outages, regardless of the reason or the duration. Petroleum will no longer be such a burden on our budget and our strategic choices.

This strategy is a true strategy in that it tells the department, here’s the direction we’re going, here are the strategic goals and the ways you’re going to get there. The implementation plan will have some more specific timelines and some more specific policy targets to meet.

My thoughts

First of all, the term “strategy” should be taken out of the title of the document simply because what is inside is not a strategy. What the document does in its current form is to lay out the problems and needs. However, any strategy should discuss at minimum the ends, ways and means. This is mostly lacking. I guess because the people who prepared it are not well acquainted with the meaning of strategy.

The “strategy” addresses energy needs as a broad, military challenge and calls for reducing demand, improving efficiency and lowering costs. This is in fact a problem definition, not a roadmap.

True that an energy analysis can help DOD planners better understand the energy footprint of deployed forces and the human and financial costs of moving fuel into a theater of war. But without having sufficient data there is no way to do that. Mrs Burke correctly and rightly mentioned on several occasions that the DOD lacks sufficient data on and analysis of operational energy use to manage consumption effectively. The DOD Services need better statistics on how much energy is being consumed, where, and for what purposes in order to tackle the problem and then improve operational energy security. In my opinion, the DOD must first know how much energy it consumes in the continental US and overseas. They it should try to break it down to installations and operations.

In releasing the strategy, Lynn and Burke said the plan will reduce costs, and also improve military capabilities. Lynn said “Every dollar spent on energy use is a dollar not spent on other warfighting priorities.” But he should be reminded that the same is true for every dollar wasted. If “This strategy is good for the taxpayers and the warfighters,” as Lynn proclaimed then he should have given a DOD wide tangible action instead of showing a few micro examples.

The DOD is said to be an early investor and adopter. I can understand this. But should the DOD play a seminal role in stimulating the clean energy revolution? Under current fiscal difficulties why should the DOD installations be treated as an ideal test bed for next-generation energy technologies?

Promote research, development, testing, evaluation, and fielding of alternative energy sources that can be generated locally or regionally near deployments is a key motto at the DOD. The Services have already taken steps to certify aircraft, ships, tactical vehicles, and support equipment to use alternative liquid fuels. What is the result as of today? Still certifying and testing. This is the problem with the DoD, trying to do all at once with no clear priority.

It is quite logical that where possible the installations should make use of alternative and renewable energy technologies. These are good examples already in operation. But pushing them blindly just because civilian infrastructure may fail is a wrong thing to do. If some installations need permanent and assured supply of electricity then such installations should use small nuclear power plants, not solar or wind.

Before going ahead with spaghetti policies, the DOD should harmonize, unify and coordinate already fragmented energy policies across the services. Each branch of the military has established energy visions that may or may not compatible, compatible, or synchronized. This new strategy will not be much useful for removing the duplications and priorities. Note that operational energy is only one part of the problem.

In my opinion, the DOD must first know how much energy it consumes in the continental US and overseas. They it should try to break it down to installations and operations.

DoD Energy Developments in June-July 2011

2011-07-31T19:48:00.000+03:00

On 8 June 2011, the international standards certifying body ASTM International announced its approval of the use of hydrotreated renewable jet Jet A-1 fuel in commercial aviation.

On 18 June 2011, a biofuel powered business jet Gulfstream G-450 has for the first time flew over the Atlantic Sea (departed from NJ in the US and landed at the Paris Le Bourget Airport, the site of the Paris Air Show). The aircraft used the 50:50 blend of camelina derived petroleum based jet fuel (produced by Honeywell) powering one of the aircraft’s Rolls-Royce engines.
On 20 June 2011, Solazyme announced that the US Navy demonstrated algal-derived jet fuel in an MH-60S Seahawk helicopter test flight in a 50:50 blend of Solajet HRJ-5 with petroleum derived jet fuel. This marked the first military aircraft to fly on an algal based jet fuel in history. The fuel was provided by Solazyme, Inc based in San Francisco.

In a 7 June 2011 memorandum addressed to the service members and civilians of U.S. Forces Afghanistan Gen. David H. Petraeus, the commander of U.S. and coalition forces in Afghanistan, wrote “By reducing demand for fuel, we will improve operational capability, reduce risk to our forces and, ultimately, strengthen our security.” “A force that makes better use of fuel will have increased agility, improved resilience against disruption, and more capacity for engaging Afghan partners, particularly at the tactical edge,” he wrote.

A week later (on 14 June 2011) Gen. Petraeus called on his commanders and troops to reduce their energy consumption in Afghanistan. He noted that an energy-efficient force is a more agile and resilient force.

On the same day Petraeus was making his remarks (14 June 2001) the Department of Defense (DoD) has published a document Energy for the Warfighter: Operational Energy Strategy, by the newly established Office of the Assistant Secretary of Defense for Operational Energy Plans and Programs (ASD(OEPP)). In a DOD News Briefing, Deputy Secretary Lynn and Assistant Secretary Burke presented the main points of the DOD Operational Energy Strategy. (my next post will be on this strategy).

On 7 July 2011, Rear Admiral Phil Cullom, Director of the Chief of Naval Operations Energy and Environmental Readiness Division and architect of Task Force Energy, released a video podcast in which he discusses the nation's fight for independence from foreign oil.

Cullom concludes the podcast with "The more we reduce our energy consumption, the more we perfect alternative and sustainable energy sources, and the more we protect our environment, the sooner we will be an energy secure nation".

On 15 July 2011, Lufthansa became the first airline in the world to incorporate biofuel blend into its operations for commercial flights. This has demonstrated the difference between private sector and government. Remember that the US Air Force had first tested the use of alternative fuels on 19 September 2006 when a B-52 Stratofortress flew on a synthetic fuel, made from a 50-50 blend of traditional crude oil-based fuel and a Fischer-Tropsch fuel derived from natural gas.

On 19 July 2011, during his keynote speech at the Army and Air Force Energy Forum, Deputy Defense Secretary William J. Lynn III stated that advances in energy technology that increase warfighter capability not only help the Defense Department protect the nation, but also boost the competitiveness of American industry, and raise the nation’s overall energy efficiency.

On 20 July 2011, the DOD Bloggers Roundtable focused on the strategic importance and future direction of Army and Air Force energy. Special guests Deputy Assistant Secretary of Air Force for Energy, Dr. Kevin Geiss and the Deputy Assistant Secretary of Army Energy & Sustainability, Mr. Richard Kidd discussed the first ever US Army/Air Force Energy Forum. (Listen it here)

In Memory of Father

2011-06-21T00:30:00.000+03:00

MY BELOVED FATHER HAS PASSED AWAY 2 WEEKS AGO. I AM IN DEEP SORROW.

THIS BLOG WILL BE SILENT FOR A WHILE.

My father (on the left) somewhere in South Korea in the 1950s.

I found this picture (among many others) in my father's files. It was taken by my father. Somewhere in South Korea, date and people in the picture are unknown to me.

Sohbet Karbuz

Congress Should Go Ahead with Coal-to-Liquids

2011-06-05T20:31:00.000+03:00

On January 30, 2008, Oversight Committee Chairman Henry Waxman and Ranking Member Tom Davis requested information from Secretary Robert Gates on how the Department of Defense will comply with The Energy Independence and Security Act of 2007 (became law on December 19, 2007) barring the government from purchasing alternative fuels for vehicles and planes, such as fuels from a coal-to-liquids process or tar sands, if those fuels have higher greenhouse gas emissions than conventional fuels.

Section 526 of that law provides:
No Federal agency shall enter into a contract for procurement of an alternative or synthetic fuel, including a fuel produced from nonconventional petroleum sources, for any mobility-related use, other than for research or testing, unless the contract specifies that the lifecycle greenhouse gas emissions associated with the production and combustion of the fuel supplied under the contract must, on an ongoing basis, be less than or equal to such emissions from the equivalent conventional fuel produced from conventional petroleum sources.

I haven't seen the reply to that letter.

In February 2008 I questioned How will DOD Comply with the New Law. I asked the following: We know that Air Force continues certifying the B-52s, C-17s and soon B-1s to run on synthetic fuel. Does that mean that USAF has to drop the plan and forget millions of dollars spent until now?

This question made sense because:

A report from NAP (Liquid Transportation Fuels from Coal and Biomass: Technological Status, Costs, and Environmental Impacts) in 2009 argued that transforming the US transportation fuel system from domination by petroleum based fuels to supply by various domestic sources will take several decades. Two abundant domestic resources with potential for producing liquid fuels are biomass and coal. Although abundant supplies of biomass and coal can be produced, each resource has its own set of limitations and challenges. Unlike liquid fuels from biomass, liquid fuels from coal cannot, even with the use of carbon capture and storage, offer any greenhouse gas benefit relative to gasoline. However, liquid fuels from coal are probably less expensive than those from biomass unless the costs of greenhouse gas emissions are included.

Given the abundant domestic sources of coal, the Air Force would actually prefered CTL technology from a national security standpoint. However, environmentalists have opposed it as an insufficient alternative, claiming it generates cumulative greenhouse gas emissions greater than traditional petroleum fuels. Using these arguments, environmental groups convinced Congress to include a clause (Section 526) in the 2007 Energy Bill that essentially outlaws government use of fuel derived from CTL technology.

Legally, in other words, the Air Force can experiment with CTL but cannot buy it for operations. The certification process already under way for the GTL fuel will continue apace, but the current uncertainty of future oil and gas prices will slow down a full-on embrace of any single alternative synthetic blend. At this point, the military is exploring its options, but not committing to a particular path. The future of the U.S. energy mix is in flux.

Having a CTL plant at Malmstrom Air Force Base (Mont.) was a part of USAF’s broader strategy to wean the service off foreign sources of energy by utilizing a synthetic blend of aviation fuel that can be derived in part from coal, of which the US has great abundance. The Air Force called off its quest to establish a coal-to-liquid fuel conversion plant at Malmstrom. In January 2009 the service said it has determined after a thorough examination that the proposals it received for the CTL plant “are not viable.” Accordingly, it said it “will no longer pursue” the development of a plant that would be built and run by a private operator at the Montana base. The Air Force cited “possible conflicts” with the mission of the base’s 341st Missile Wing, which operates one-third of the nation’s Minuteman III ICBMs.

A 2007 report from the National Energy Technology Laboratory (NETL) concluded that a $5 billion investment in a commercial-scale coal-to-liquid facility located near coal deposits would pay itself off with oil priced at just $61 a barrel, including the cost of equipment to capture and compress carbon dioxide for injection into a pipeline. The estimate does not include the cost of burying the carbon dioxide or transporting the fuel to its markets. At least two synthetic-fuel production facilities were planned in the US, by Rentech and Baard Energy, intended to capture carbon dioxide that is released during the synthesis process and use it in enhanced oil recovery by injecting it into nearby oil fields. http://www.spectrum.ieee.org/print/6694. But nothing happened.

Things may change now.
H.R.1540 -- National Defense Authorization Act for Fiscal Year 2012 passed House on 26 May 2011.

See, SEC. 844. EXEMPTION OF DEPARTMENT OF DEFENSE FROM ALTERNATIVE FUEL PROCUREMENT REQUIREMENT of the Bill. It says:

Section 526 of the Energy Independence and Security Act of 2007 (Public Law 110-140; 42 U.S.C. 17142) is amended by adding at the end the following: `This section shall not apply to the Department of Defense.'.

If the US in general and the US military forces in particular really want to reduce their dependence on imported fuel this amendment is a good was forward.

But not many people think like that.

For instance, in their piece appeared in The Hill on 27 May 2011, retired Lt. General Norman R. Seip and co-founder of Environmental Entrepreneurs, Nicole Lederer, stress that

“Removing Section 526 would be a step backward for U.S. security and clean energy innovation (….) repealing Section 526 will sidetrack the process already underway at the Pentagon and simultaneously shatter any semblance of certainty in the commercial marketplace. Repeal would discourage innovation and force the military in to a deepening dependence on dirty fossil fuels with a giant price tag in lives and treasure. The military knows there are better options, and so does Congress. They should preserve Section 526.”

No Sir! This blind green mania and discrimination of alternative technologies based on dubious groundings must stop. Congress should go ahead with the change.

Nuclear Power vs Oil for Navy Surface Ships

2011-06-04T17:49:00.000+03:00

Congressional Budget Office release a report entitled “The Cost-Effectiveness of Nuclear Power for Navy Surface Ships” in May 2011.

All of the US Navy's aircraft carriers and submarines are powered by nuclear reactors; its other surface combatants are powered by engines that use conventional petroleum-based fuels. In recent years the US Congress has shown interest in powering some of the Navy’s future destroyers and amphibious warships with nuclear rather than petroleum based fuel.

The argument now spreading out that the Navy could save money on fuel in the future by purchasing additional nuclear-powered ships rather than conventionally powered ships. Those savings in fuel costs, however, would be offset by the additional up-front costs required for the procurement of nuclear-powered ships.

To assess the relative costs of using nuclear versus conventional propulsion for ships other than carriers and submarines, the Congressional Budget Office (CBO) developed a hypothetical future fleet, based on the Navy's shipbuilding plan, of new destroyers and amphibious warfare ships that are candidates for nuclear propulsion systems. Specifically, CBO chose for its analysis the Navy's planned new version of the DDG-51 destroyer and its replacement, the DDG(X); the LH(X) amphibious assault ship; and the LSD(X) amphibious dock landing ship. CBO then estimated the life-cycle costs for each ship in that fleet—that is, the costs over the ship's entire 40-year service life, beginning with its acquisition and progressing through the annual expenditures over 40 years for its fuel, personnel, and other operations and support and, finally, its disposal.

CBO compared lifecycle costs under two alternative versions of the fleet: Each version comprised the same number of ships of each class but differed in whether the ships were powered by conventional systems that used petroleum-based fuels or by nuclear reactors.

Estimates of the relative costs of using nuclear power versus conventional fuels for ships depend in large part on the projected path of oil prices, which determine how much the Navy must pay for fuel in the future. The initial costs for building and fueling a nuclear-powered ship are greater than those for building a conventionally powered ship. However, once the Navy has acquired a nuclear ship, it incurs no further costs for fuel. If oil prices rose substantially in the future, the estimated savings in fuel costs from using nuclear power over a ship's lifetime could offset the higher initial costs to procure the ship.

In its January 2011 macroeconomic projections, CBO estimated that oil prices would average $86 per barrel in 2011 and over the next decade would grow at an average rate of about 1 percentage point per year above the rate of general inflation, reaching $95 per barrel (in 2011 dollars) by 2021. After 2021, CBO assumes, the price will continue to grow at a rate of 1 percentage point above inflation, reaching $114 per barrel (in 2011 dollars) by 2040. If oil prices followed that trajectory, total life-cycle costs for a nuclear fleet would be 19 percent higher than those for a conventional fleet, in CBO's estimation.

To determine how sensitive those findings are to the trajectory of oil prices, CBO also examined a case in which oil prices start from a value of $86 per barrel in 2011 and then rise at a rate higher than the real (inflation-adjusted) growth of 1 percent in CBO's baseline trajectory. That analysis suggested that a fleet of nuclear-powered destroyers would become cost-effective if the real annual rate of growth of oil prices exceeded 3.4 percent—which implies oil prices of $223 or more per barrel (in 2011 dollars) in 2040.

The amount of energy used by new surface ships—particularly those, such as destroyers, that require large amounts of energy for purposes other than propulsion—could also be substantially higher or lower than projected. Employing an approach similar to that used to assess sensitivity to oil prices, CBO estimated that providing destroyers with nuclear reactors would become cost-effective only if energy use more than doubled for the entire fleet of destroyers.

The use of nuclear power has potential advantages besides savings on the cost of fuel. For example, the Navy would be less vulnerable to disruptions in the supply of oil: The alternative nuclear fleet would use about 5 million barrels of oil less per year, reducing the Navy's current annual consumption of petroleum-based fuels for aircraft and ships by about 15 percent. The use of nuclear power also has some potential disadvantages, including the concerns about proliferating nuclear material that would arise if the Navy had more ships with highly enriched uranium deployed overseas. CBO, however, did not attempt to quantify those other advantages and disadvantages.

The CBO analysis sounds good enough but not complete because of two reasons.

First, in my opinion an oil price of $223 in 2040 is rather conservative. Many analysts probably will not share my view but this is what I believe. The CBO oil price forecasts is close to the Energy Information Administration’s high case oil price forecast as indicated in its Annual Energy Outlook released in April 2011 (see figure 13).

Second, using direct cost of oil does not make much sense in such an analysis. It would have been more appropriate to use Fully Burdened Cost of Fuel (oil). After all, it is the FBCF that matters, not the average price of imported oil to US refineries used in the CBO analysis.

Thunderbirds fly on biofuel blend

2011-05-29T17:13:00.000+03:00

The U.S. Air Force's Air Demonstration Squadron, the Thunderbirds, marked the DoD's latest green initiative as they burned bio-fuel at the Joint Services Open House on 20-21 May 2011. More than 3,000 gallons of bio-fuel was mixed with 3,000 gallons of JP-8 for use by the Thunderbirds for the 2011 Joint Service Open House.

The fuel was provided by Sustainable Oils, LLC, one of DLA Energy’s alternative fuel suppliers. Their product was blended with petroleum-derived fuel to obtain a 50/50 blend. The camelina was grown and harvested in Montana, and refined into renewable jet using technology from UOP LLC, a Honeywell company. Sustainable Oils has provided nearly 500,000 gallons of camelina-based HRJ to multiple branches of the US military for its certification programs, making it the most heavily tested alternative fuel feedstock.

UOP LLC had announced on 20 May 2011 that Honeywell Green Jet Fuel™ made from Camelina would power two Air Force F-16 aircraft as part of a Thunderbirds demonstration at Joint Base Andrews in Maryland. (Honeywell Green Jet Fuel™ Powers U.S. Air Force Thunderbirds Demonstration)

Camelina Sativa plant requires very little water or nitrogen and doesn’t compete with food crops. It is often used in rotation with wheat crops to help regenerate soil and thrives in un-irrigated fields where other crops won’t grow.   Its eeds yield high quantities of oil (35-38% of the seeds is oil) which are exceptionally rich in Omega-3 fatty acids.

Honeywell UOP produced 400,000 gallons of Green Jet Fuel for alternative fuels testing and certification. The final fuel delivery under this program took place in early May 2011. The Air Force held its first demonstration flight with Honeywell Green Jet Fuel in an A-10 Thunderbolt II in March 2010. It expects to achieve fleet-wide certification by 2013.

Honeywell UOP was the prime contractor or subcontractor on DLA-E contracts to produce almost 600,000 gallons of renewable jet fuel for the U.S. Navy and Air Force in October 2009. Working with feedstock partners Sustainable Oils, Solazyme and Cargill, Honeywell UOP process technology was used to produce 190,000 gallons of fuel for the Navy and 400,000 gallons for the Air Force from animal fats, algae and camelina.

According to the Undersecretary of the Air Force Erin Conaton “Right now, biomass fuel is about 10 times the cost of JP-8, the current military aviation jet fuel in use.”

Questioning the certification process

In accordance with the Secretary of the US Air Force's Assured Fuels Initiative, all Air Force aircraft was supposed to be tested and certified to fly on a domestically-produced synthetic fuel blend by early 2011. This was the PR used by the Department of the Airforce since 2007.

In the following years this message was modified from early 2011 to fiscal 2011. “The entire fleet is scheduled to be certified by fiscal 2011, but not every airframe will need to undergo the same sets of rigorous tests.”

Then the goal became “to test and certify all USAF aircraft against the 50/50 synthetic fuel blend by 2011.”

Now we are told that “fleetwide certification is on track for completion in 2013.”

Air Force should clarify this issue. What is the time frame to test or certify what? Do we now have a distinction between synthetic fuel blend and biofuel fuel blend? If yes, what do USAF officials mean with alternative fuels as far as certification program is concerned?

(The Air Force has, to date, tested and certified biofuel as a 50-percent blend with regular jet fuel in the A-10 Thunderbolt II, the F-15 Eagle, the C-17 Globemaster III, and the F-22 Raptor.)

Some Ray Mabus Misperceptions on Energy

2011-05-15T23:23:00.000+03:00

On 10 May 2011, Ray Mabus, Secretary of the Navy, presented all the misperceptions about the US military energy consumption in one speech (see Remarks by the Honorable Ray Mabus, U.S. Green Building Council Federal Summit).

I will discuss here some of his misperceptions or misconceptions and compare them with the underlying reality.

Misperception #1: The Navy energy goals are “all about our energy security and moving toward complete energy independence. Our military and our country rely too much on fossil fuel. That dependency degrades our national security; it also harms the environment and has a negative effect on our economy.”

Reality: Today no reasonable person claims anymore that energy independence can or should be a target, simply because we are living an interdependent world. I know no country that puts energy independence as a national energy policy. The target is to lessen the dependency.

Misperception #2: “too much of our oil comes from either potentially or actually volatile places on Earth. We don’t have to do anymore than read the headlines about that. We would never allow the countries that we buy petroleum products from to build our ships or our aircraft or our ground vehicles. But we give them a say as to whether those ships sail or those airplanes fly or those ground vehicles operate. We give them a say because they provide fuel for it.”

Reality: Indeed this speech Mabus used a rather vague terms to describe where the oil comes from. Mabus said in March 2011 “We cannot allow volatile regions of the world to control the price and affect the supply of the fuel we use.” President Obama and Secretary Gates had defined those countries as “from foreign nations that are not allies.”

Energy Information Administration argues that “Our dependence on foreign petroleum is expected to decline in the next two decades.” One-third of all the imported oil comes from Canada and Mexico. He should look at the oil import statistics and define which countries he is targeting. Then one should compare this with the countries in the US arms sales, and foreign military sales, arms transfer and other assistance programs.

Besides that one should also pay attention that the US does not import any energy from for instance North Korea, Afghanistan, Iran and yet they are considered as higher treat to US national security than the countries the US imports oil from. So, even being energy independent does not guarantee at all less treat to national security.

Misperception #3: “The number one thing we import into Afghanistan – number one – is gasoline. And getting a gallon of gas to a Marine front line unit in Helmand Province is hard and it’s expensive in a lot of different ways…. For every 50 convoys, we lose a Marine, killed or wounded. ….. we have to get our folks back to doing what they were sent to Afghanistan to do, which is not to guard convoys, but to fight, to engage, to rebuild.”

Reality: I don’t agree with that. Bottled water put marines more at risk than fuel. Read this very informative story in the May 2011 issue of National Defense magazine. Col. T.C. Moore (team leader for the Marine Corps energy assessment team) says “Hauling water makes up 51 percent of the logistical burden”. His team calculated that a gallon of water at the tactical edge in Afghanistan costs the military $4.78, compared to the assured delivery price of $1.42 per gallon. “The Marine Corps should be focusing on finding solutions at the tactical edge,” said Moore, including using indigenous sources of water wherever possible and making investments in more water-efficient technologies at forward operating bases. See here or the original AEPI Report titled Sustain the Mission Project: Casualty Factors for Fuel and Water Resupply Convoys in September 2009. So, don’t blame the fuel alone. Blame more the inability and incapability of the Pentagon for bottled water use.

Misperception #4: “we have sent equipment into Afghanistan with our Marines to power their small electronics by roll-up, solar blankets that they put in their packs. It not only saves us from bringing gasoline in, it saves them from hauling pound after pound after pound of batteries when they go out on foot patrol.”

Reality: As mentioned in a National Defense article: “Freeing troops from the tyranny of batteries has taken on more urgency in recent years as the overall weight of a soldier’s gear has ballooned upwards of 130 pounds. Curbing the demand for batteries is one piece of a larger effort by the Army and Marine Corps to bring down the weight from 130 to less than 50 pounds.” The real problem is not the batteries alone. Each electronic gadget requires specific chargers and batteries that are made by different companies so soldiers end up with a rat’s nest of wires and connectors.

Finding solutions for battery load and recharge is good but again, one needs to blame the Pentagon for acquiring gadgets that require different chargers, different batteries.

At the end, the Pentagon is paying the price for most of its wrong decisions, which have been mostly short-sighted. Now, fixing it costs a whole lot of money. It’s been 10 years now in Afghanistan and still the country has no refinery. If the US had constructed a refinery there, would there be that many fuel convoy attacks or theft? What Taliban could have made crude oil anyway?

In sum, the Pentagon should blame itself first for some of its pains it is facing today.

Army Operational Energy Challenges

2011-05-09T00:06:00.002+03:00

May 2011 issue of the Army Magazine has two important articles. This post is a summary of their important points:

The Army's Operational Energy Challenge By LTG Michael Vane and COL Paul Roege,

Even as Army pursues alternative energy technologies, fossil fuels will likely remain dominant.

Power and energy grow ever more important to military capabilities; they enable every system that supports soldier and unit performance, from mobility and weapons systems to surveillance and communications, as well as heating and cooling.

Over the past century, modern militaries migrated to petroleum-based energy for its ease of handling and worldwide availability. Bow alternatives in order to ensure availability, mitigate price risk and fulfill environmental responsibility must be considered.

The Army needs to find alternative energy sources, both for installation and operational energy. This is critically essential, not only to mitigate volatility in energy costs, but simply to promote resilience to disruption of our mission. It is important, however, to consider implementation factors such as cost, simplicity and compatibility within the operational context. The idea is that we can transform energy savings into greater combat efficiency by conserving resources to purchase needed capabilities for our soldiers and enhancing force protection.

Operational energy is the energy and associated systems, information, and processes required to train, move, and sustain forces and systems for military operations. It is an important enabler for operations.

The Army recently drafted an initial capabilities document that outlines energy-related capability requirements. Common goals that pervade the analysis include: improve operational energy management; improve awareness of energy issues that affect operations; increase power-source density and commonality; decrease the size and weight of systems; increase power generation and distribution efficiency and capacity; decrease energy demand; and foster energy innovation.

The Army has taken its operational energy deficiencies and grouped these into three “grand challenges”: establish the ability to manage energy/water resources, dramatically reduce energy/water demand, and finally build resilience and flexibility to maintain operational effectiveness under changing situations.

To tackle these three operational energy challenges, the Army identified a number of enabling strategies. These measures enhance endurance, reduce the need for logistic fuel, provide resilience and may mitigate tactical signature.

What the Army is doing?

There is a growing list of Army initiatives directed toward improving operational energy capabilities and performance. For instance, since January 2009, Army acquisition programs have been required to consider the fully burdened cost of fuel in cost calculations. An Army Science Board team is developing recommendations on strengthening the sustainability and resilience of the future force. “smart grid” technology is identified as one of the most promising solutions we could deploy to improve operational performance while reducing energy consumption.

The Army has undertaken many materiel initiatives directly associated with the three grand challenges. To establish the ability to manage energy/water resources, the Army has developed the following programs.

Fuel Manager Defense, an automated fuel accountability and tracking system
Hi-Power project, a standardized smart grid capability for tactical command posts and similar multigenerator
Rechargeable conformal batteries and soldier power networking devices

The Army is reducing demand. For that purpose it deployed improved temporary structures that incorporate insulation to reduce heating, ventilation and air conditioning energy consumption. It is updating the Army Facilities Components System, which prescribes standard Army camp designs from tent-based (initial), temporary and semi permanent structures. Tactical diesel generators (5-, 10-, 15-, 30- and 60-kilowatt sets) are one of the focus areas.

To build resilience and flexibility to maintain operational effectiveness under changing situations, the Army is pursuing the following alternative energy solutions.

• Rucksack Enhanced Portable Power System, a lightweight, portable power system capable of recharging batteries or acting as a continuous power source.
• Flexible Photovoltaics in Shelter Integrated and Soldier Portable Applications, power small soldier loads or recharge military batteries in the field via complementary high-efficiency battery chargers.
• Solar Hybrid—a system capable of providing up to 10 kilowatts of power continuously while reducing generator running time by 20 percent.
• Power Upgrade—an extended solar-power solution to operate a wireless surveillance system for combat outpost force protection.
• Reusing Existing Natural Energy Wind and Solar—a combination solar/wind/energy storage system to provide high levels of power in the field for reducing fuel logistics and soldier load.
• Tank Automotive Research, Development and Engineering Center has an ongoing program to evaluate the operation of Army systems on alternative/synthetic hydrocarbon fuels.

What is the expected net result of these initiatives?

Efficiencies in operational energy can lead to substantial increases in effectiveness for the warfighter. Energy savings translate not just to less fuel used, but to more boots on the ground available for other tasks, more resources available for the mission and more mobile, resilient forces.

The Army must “operationalize” energy. We need a fundamentally “lean” approach, which demands an understanding of operational requirements and systems and how energy supports them. The Army must establish capabilities and procedures to manage power and energy utilization as an integral aspect of its operations.

Moreover, we need to identify those critical performance measures that correspond to operational challenges beyond the historical focus on cost and environmental impacts. Military requirements demand that we consider additional criteria such as power and energy densities, logistics, ease of integration into military applications, safety, security, reliability, availability, flexibility and adaptability.

******

Shaping Sustainment for Tomorrow, By LTG Mitchell H. Stevenson

In 2009, $2.7 billion out of a $4.1 billion Army energy budget was consumed in operations.

Heavy fuel use can create a greater reliance on contractor support. The fully burdened cost of fuel in Iraq can be as high as $30 per gallon, and in Afghanistan it can be even higher.

The Army has a strategy and specific plans to succeed, from exploring alternatives to petroleum-based fuel, to decreasing the size and weight of systems, to making vehicles and buildings more fuel efficient. A number of advanced technologies have already been deployed, including lightweight, high-energy soldier power sources and off-the shelf products that improve energy efficiency at forward operating sites.

More progress is under way. For instance, accelerating replacement of tactical quiet generators with advanced medium mobile power source generators, rucksack enhanced portable power system, a lightweight system that employs a 62-watt solar panel to recharge batteries or act as a continuous power source.

Another promising battery-charging technology is the thermoelectric generator (TEG) power source. This lightweight, modular system will burn small amounts of JP-8 or other fuels to create heat, which is then converted into usable charging usable electricity. TEG is being developed to support battery operations in the most austere operating environments; the goal is to generate more power than most current manportable solutions and significantly lighten the soldier’s load.

Smart and Green Energy for Base Camps, encompasses the full spectrum of military bases at the tactical, operational and theater levels. The focus is on reducing energy consumption in base camps with readily available technology. The initiative includes using energy-efficient shelters and environmental control units; microgrids and intelligent energy-management capabilities; solar dish concentrators; solar thermal water heaters and cryogenic coolers; shower-water reuse systems.

White House Forum on Energy Security

2011-05-01T19:36:00.000+03:00

White House Forum on Energy Security took place on April 26, 2011.

Deputy Defense Secretary William Lynn and Deputy Energy Secretary Daniel Poneman discussed the national security implications of America's oil dependency at a White House forum on energy security. The event was hosted by the Energy Department. Featured participants were former CIA Director John Deutch, former Rep. Jane Harman (D-CA), who now heads the Woodrow Wilson International Center for Scholars and John Podesta, President of the Center for American Progress and former Chief of Staff for President Clinton.

If quality is bad then Watch it at C-SPAN

A DOD News Article Lynn: Defense-Energy Team Leads National Effort by Lisa Daniel gives a short summary.

Deputy Defense Secretary William J. Lynn III said the Defense Department is a world leader in energy consumption, noting that it accounts for 80 percent of U.S. federal energy use and consumes more energy than is used by two-thirds of all the nations on Earth. With annual energy bills reaching into the tens of billions of dollars, conservation could produce significant savings.

He further added that “By taking technologies from labs to the battlefield, the Department of Energy can enroll its scientific ingenuity in the service of our nation’s most important national mission: national security…. By serving as a sophisticated first user and early customer for innovative energy technologies…. the military can jump-start their broader commercial adoption, just as we have done with jet engines, high-performance computing and the Internet”

He underlined that energy dependence has grown in the military, burdening budgets, logistics and individual service members. More than 70 percent of convoys in Afghanistan are used to transport fuel or water and are easy targets for insurgents’ roadside bombs. More than 3,000 U.S. troops and contractors have been killed or wounded protecting them. (Interestingly nobody mentions that more gallons of water is transported than fuel. More specifically 4 gallon water versus 1 gallon of fuel)

He also mentioned the success stories: The Marine Corps last fall deployed to Afghanistan’s Helmand province with flexible solar panels developed at the Soldier Systems Center in Natick, Mass., which allowed the Marines to run two patrol bases completely on solar power and cut diesel fuel consumption at a third base by more than 90 percent. At Twentynine Palms Marine Corps Base, Calif., Marines are demonstrating new microgrid technology, a system of self-generated electricity and intelligent controls that can be operated independently of the commercial power grid that military bases rely on. (BUT he didn’t mentioned the failure stories, such as waste-to power, foam spray)

Deputy Energy Secretary Daniel B. Poneman told that: “Coupled with the scale of the Defense Department’s operations and its potential to act as a test bed for innovative technologies, this partnership is a crucial vehicle to strengthen our national security and to build a clean energy economy for America.”

Note that the DOD and the DOE are working on projects in three areas: advancing mobility and strike capabilities, increasing energy reliability and efficiency on DoD fixed and forward operating bases, and advancing institutional cooperation between the departments, including stationing Energy advisers at the combatant commands.

The U.S. Defense Department must change the way it uses energy on the battlefield as conflicts become longer and more expeditionary. But how can you do that knowing the fact that as conflicts become longer in duration and more expeditionary in nature, the amount of fuel it takes to keep forces in the field increases tremendously. It is easy to say that the US military must change how it manages energy on the battlefield and reduce demand at all levels.

I agree with Lynn that DoD needs to address energy as a military planning challenge, and that current US military energy technology is not optimized for the battlefield of today and tomorrow.

A gentlemen from the audience made a very good remark on savings versus security puzzle the DOD faces. Funding for many DOD projects come from public source. Much of that money goes to the projects that don’t exist now. What is the point of spending taxpayer money for the projects that don’t get implemented. He mentioned that Net zero bases are done with no public funding. They totally rely on private sector. Military is prohibited from building installations for power. DOD is focused on saving not on security. Reliability comes with long term contracts which are prohibited.

The forum disappointingly did not tackle operational energy. Most of the things discussed were on installation energy and how to make use of renewable and alternative energy sources. But focus moved from the US military to the US as a nation.

However, two important facts were pronounced but were not elaborated. That USA is a mass unattended driver country. And that there are more vehicles in the US than the people with driving licenses.

Challenges remain unanswered: DOD consumes more energy than two-thirds of all the nations on the earth. DOD needs to employ (operational) energy as a military challenge.

DLA Energy Factbooks

2011-04-25T21:50:00.000+03:00

The Defense Energy Support Center (now called DLA Energy) of the US Department of Defense has finally released its Fact Book for Fiscal Year 2010.

As is the case in any DOD publication DLA Energy FactBook does not give a comprehensive picture. But it is still a useful source of information.

The most useful part of the Factbook is the page showing DLA energy statement of sales. Not all types of energy though but at least it shows an important aggregate – petroleum, natural gas and aerospace energy- by DOD services.

The chart I made below shows the evolution of this aggregate by DOD services over time. It shows that petroleum sales to the DOD increased from around $4 billion in the late 1990s to almost $8 bn in 2005. Sales doubled to $16 bn in 2008 before retreating to $14 bn in 2010.

Note that in 2010 petroleum, natural gas and aerospace energy sales to the DOD was $14.5 billion. Of this amount some $240 million was natural gas and $22 million was aerospace energy. So, petroleum sales were over $14 bn.

More than half of the petroleum, natural gas and aerospace energy sales were to the Air Force (53%), which is followed by Navy (26%) and Army (21%). Marines and other DOD services make up the rest.

When electricity and other energy carriers are included, my estimate is that total energy use by the DOD in 2010 should be above $16.5 billion. We will see when the DOD’s FEMR comes out next month (I guess).

Now back to the Factbook. I do not understand why it becomes less and less informative. One of the best issues was for FY2008. Since then it is getting less and less informative.

More specifically, the following key subjects do not appear any more in the Factbook.

• Top Ten Petroleum Suppliers (U.S. Dollars in Millions)

• Top Ten Installation Energy Suppliers (U.S. Dollars in Millions)

• Summary of Renewable Power Purchases MWh, $ value

• Year in Review Defense Energy Support Center - Highlights/Accomplishments

The last item above was the most important part of the Factbook.

If this trend continues in the next years, I recommend DLA Energy to change the name of its report from “FactBook” to something else.

Energy and the UK Ministry of Defence

2011-04-23T02:15:00.000+03:00

The US Department of Defense (DOD) and the UK Ministry of Defence (MOD) need to learn from each other on how to tackle energy and CO2 emission issues. In my opinion, their main difference is the following: The DOD is obsessed with energy and the MOD is fixated on CO2. However, both need to do a lot more on collecting, managing and presenting the data. (even though the MOD is ahead of the DOD when it comes to identifying where and how is the fuel used (see here)

The UK MOD is more organized all its services follow more structured guidelines and policies. Below are some key points concerning the UK MOD and energy-climate change issues.

The UK Defence Infrastructure Organisation (DIO) manages the military estate (installations), including accommodation for Service personnel and their families, on behalf of the MOD. The DIO was formed on 1 April 2011, when the former Defence Estates organisation was brought together with other infrastructure functions in the MOD to form a single organisation.

UK Ministry of Defence Climate Change Strategy 2010 is the single source of strategic direction necessary to enable the MOD to mitigate and adapt to the challenges of climate change and, where possible, to exploit any opportunities it presents. The Climate Change Strategy forms a sub-strategy under the MOD Sustainable Development Strategy. MOD currently has an annual fuel bill of around £1 billion (USD 1.65 billion). Is that much? The DOD’s total energy bill is at least 10 times higher. The US Army alone spends $1 billion on fuel in Afghanistan only.

The MOD Sustainable Development Strategy sets out the MOD’s intended contribution to addressing the challenges of sustainable development. Its aim is to ensure that the MOD becomes a national leader in sustainable development. It provides the context and vision for the MOD’s approach to sustainable development; the strategic aims and objectives that we must achieve to realise this vision; and the means of delivering and reporting on these aims and objectives. (Sustainable Development Annual Report 09/10 was released in February 2011).

In Fiscal year 2008/9, The MOD was responsible for emissions of approximately 5.6 million tonnes of CO2 equivalent (Mt CO2e), roughly 1% of UK emissions. The use of Operational Energy (the fuel used to power military aircraft, ships, vehicles and generators) accounted for approximately two-thirds of MOD emissions in 2008/09, or 3.6 Mt CO2e The rest is Public Sector Estate and business travel. See, a full breakdown of MOD CO2 emissions.

The UK Armed Forces depend on a secure source of fossil fuels; for tankers that supply power to bases in Afghanistan; flying troops and supplies between the UK and Afghanistan; and for the Royal Navy patrolling the ocean’s trouble spots.

UK MOD Science and Technology Capability Visions are part of the Defence Technology Plan. These capability visions are aimed to seek, discover and support new innovation to meet long-term defence challenges. Launched in February 2009 with the aim of encouraging innovators and industry to work with MOD to develop revolutionary ideas, they address five long-term defence challenges.

The challenges listed are:

Electronics Defeat
Future Protected Vehicle
Novel Air Concept
Reducing Operational Dependency on Fossil Fuels
Reducing the Burden on the Dismounted Soldier

The item “reducing operational dependency on fossil fuels” is exactly what the US department of Defense is also aiming.

In February 2011 The MoD's Defence Equipment and Support (DE&S) agency has invited contractors to put forward ideas for how remote bases could switch to renewable energy sources. (also see here).

Most recent examples of the MOD’s green initiatives are the following:

Duke of York’s Military School Wind Turbine is the largest and the first grid connected wind turbine on the UK MOD installation. The wind turbine is expected to generate about 269,000 kWh of clean ‘green’ energy for the school.

Catterick Garrison Biofuel Project involves converting waste cooking oil from the Army kitchens into biofuel which is being used to fuel a Carillion Enterprise (C-E) vehicle.

Perhaps the most interesting thing about the MOD is its near real time energy monitoring page for the MOD headquarter building (MOD Main Building in Whitehall). Will the Pentagon follow?

Energy Technology Innovation and DOD

2011-04-16T01:57:00.000+03:00

Although it is often mentioned that renewable and alternative energy resources could be a game changer I believe that the real game changer is technology. After all, it is technologies that provide us the useful energy we as end-users utilize. So, not energy resources but energy technologies that are the game changers in energy equation. If we need to invent our energy future we first need to invent our future energy technologies.

This is my first critique of a recent study released by The Information Technology & Innovation Foundation in March 2011. The study is called Lean, Mean and Clean: Energy Innovation and the Department of Defense. In fact, it would have made more sense if the title had replaced the word energy with technology. The length of the paper could also be easily reduced by half by cutting especially the first 6 pages. Otherwise, it is an excellent reference paper.

It is true that the US Department of Defense (DOD) has served as a technology developer, demonstrator, early market driver, test-bed, and brought about technologies with huge commercial application by moving products from the labs to the market.

Many technologies we use today indeed grew initially out of military research. The military laid the groundwork for these technologies which later have become success. Examples include aviation technology, electronics and computing, space technology, satellites, GPS, nuclear energy. Like these technologies developed with DOD involvement, energy generation and efficiency represent dual-use technologies useful for both military and civilian purposes.

The paper’s real value is in its excellent review of DOD’s place in the innovation system. The authors list DoD innovations under three policy mechanisms: Direct R&D support, demonstration and validation, and finally procurement.

Direct R&D

• The Army Tank Automotive Research, Development, and Engineering Center (TARDEC) focuses on vehicle technologies, including advanced hybrid-electric combat vehicle systems and advanced battery storage.

• DOD and DOE’s Advanced Research Projects Agency-Energy (ARPA-E) aims (1) to develop an advanced, modular energy storage system that can rapidly charge and discharge, (2) to accelerate development of next-generation, large-scale grid solutions for use at bases and installations including to find ways to combine onsite renewable electricity generation with microgrids.

• The Air Force and DOD are developing a software package that simulates the optimum renewable energy strategy for operating bases worldwide

Testing and Evaluation: Efficient Installations & Forward Operating Bases

• Initially developed by the Army, Power Surety Task Force aims to foster alternative energy sources in forward areas, to reduce the amount of fuel transported for power generation systems

• The Environmental Security Technology Certification Program provides a testing program for both new environmental and energy technologies on the verge of deployment, but in need of validation and demonstration.

• The Smart Power Infrastructure Demonstration for Energy Reliability and Security Program (SPIDERS) aims to demonstrate a smart microgrid that incorporates numerous combinations of clean energy sources as well as energy efficiency technologies that could be deployed in numerous environments

• Innovative solar power systems investigate combination of rechargeable batteries and solar panels to be used on high impact equipments and to reduce the number of batteries carried by troops.

• Solar Thermal Bases are expected to generate their own electricity needs

• The Army Research Laboratory’s Field Assistance in Science and Technology Center will provide on-the-ground assistance to address technology issues on the front lines, including in the energy realm (an array of energy challenges from storage to conversion to intelligent management)

Testing and Evaluation: Fuel for Vehicles, Aircraft, and Battleships

• Air Force Synthetic fuels / Biofuels programs

• Navy’s research on the effective use of alternative logistics fuels in naval power systems

Procurement

• Army and Navy’s Advanced Geothermal Power

• Alternative Energy Vehicles

Looking Ahead

DOD is acting as a critical bridge in the broader clean technology innovation lifecycle, helping technologies developed in public and private laboratories. As the authors underline DOD is well-positioned to serve as this bridge, providing testing, demonstration and validation at a key point in the technology development cycle, and serving as a potential early market.

The authors come to the following conclusions:

• Continued, responsible support from Congress for DOD’s efforts should continue.

• Transparent partnership and collaboration is needed to maximize opportunities to innovate.

• Radical or revolutionary energy technologies may be developed in labs in universities, private firms, or public research institutions, but can require additional policy support post-invention at market entry and perhaps beyond to become commercially useful through cost curve reductions.

Their conclusions make sense but not complete. It gives an impression that as if all innovations come with private sector partnership . Where then should one put the NAVSEA Incentivized Energy Conservation Program? DOD is capable of innovating also without involvement of private sector. DoD has brilliant people. The question is whether DOD is or capable of fully utilizing them.

As the authors stress, DOD can both contribute to its own mission and fulfill a translational role in the technology development cycle represents a “win-win” combination for a nation in need of energy innovation. But the question is who wins more?

DOD is the first user of these technologies but at the end they become a private sector success. History has shown that DOD has spent billions of dollars for developing many technologies we use but at the end it is private companies that have reaped the benefit most in terms of money. Why does the DOD not get a share of the profit when the technology becomes fully operational and commercial?

This brings me to the procurement part of the technology innovation policy mechanisms. Why does the DOD always provide assured return on investment for private investment? Wrong choices (like the corn ethanol push) will only help wasting more money. The government should not have the luxury of being generous with tax payers money.

In his remarks on fiscal policy President Obaba said on 13 April 2011 that “We need to not only eliminate waste and improve efficiency and effectiveness, but we’re going to have to conduct a fundamental review of America’s missions, capabilities, and our role in a changing world.” Well, then he should do something about wasted money on clean energy gadgets.

Pentagon's Energy Projects Should Be Reexamined

2011-04-10T18:32:00.000+03:00

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.

The US Marine Corps and Energy

2011-04-09T23:07:00.000+03:00

In his testimonies before the Senate and House Armed Services Committee in March 2011, General James F. Amos, Commandant of the Marine Corps, gave useful insights about the marines and energy: (see, Statement-Senate, Statement-House): At any given time, approximately 30,000 Marines are forward deployed. As of December 2010, there were approximately 20,700 Marines in Afghanistan; 6,200 at sea on Marine Expeditionary Units; and 1,600 Marines engaged in various other missions, operations and exercises. The 30,000 statistic excludes over 18,000 Marines assigned to garrison locations outside the continental United States such as in Europe, the Pacific, etc. This requires a lot of energy.

On 13 August 2009, the Commandant of the Marine Corps (CMC) declared energy a top priority for the USMC. On 1 October 2009, the CMC created the USMC Expeditionary Energy Office (E2O), with the mission to “analyze, develop, and direct the Marine Corps’ energy strategy in order to optimize expeditionary capabilities across all Warfighting functions.”

The Marine Corps is leading the development of expeditionary energy solutions for DoD and the Department of the Navy. Marine Corps Expeditionary Energy website says “Marines are modern-day Spartans – our ethos demands that we change the way we think about energy as we train, equip, and lead our expeditionary force.” Marines dramatically increased their energy use in the past two decades driven by enhancements to command, control, communications, computers, and intelligence technologies; hardened vehicles; and weapons systems. This is quite normal. First, they have more vehicles which are about 3,000 to 5,000 pounds heavier apiece. Second, their total inventory of battlefield power generation increased nearly 5-fold (to 303 MW). Thus Marines may have become more lethal but they also become heavier and as a result lost speed.

As marines are not as light and agile as they once were, their demand for electricity and battery power has also grown immensely - a 300 percent increase in the use of computers, and the number of radios has increased threefold. About 60 percent of the power requirement in Afghanistan is to run environmental control units to keep command, control, and communications equipment operating.

The Marine Corps consumes more than five million barrels of petroleum a year. Ninety-seven percent of this is used for operational purposes. Within this, aviation requires about 75% of the total, with tactical ground activities using the remaining 25%.

Fuel requirement limits range and freedom of maneuver. Tethered to fuel, Marines have lost speed. Marines in Afghanistan use more than 200,000 gallons of fuel a day. Of this 75% was consumed by ground forces, which includes use by vehicles, generators, and other sustainment equipment. Aircraft consumed approximately 25% of the total. Of the 75% consumed by ground forces, a significant portion is used to generate electricity. Each of the more than 100 forward operating bases in Afghanistan requires a daily minimum of 300 gallons of diesel fuel.

The Marine Corps announced on 21 March 2011 its Expeditionary Energy Strategy. The strategy spans the full spectrum of Marine operations. Spanning Bases to Battlefield, the strategy centers on changing the way marines think about energy. Setting the course to move from paper to action, it also includes an Implementation Plan which sets goals, performance metrics for expeditionary and installations energy, and a plan for implementation by 2025.

In the words of General James F. Amos “Our growing demand for liquid logistics comes at a price. By tethering our operations to vulnerable supply lines, it degrades our expeditionary capabilities and ultimately puts Marines at risk. To maintain our lethal edge, we must change the way we use energy. The current and future operating environment requires an expeditionary mindset geared toward increased efficiency and reduced consumption, which will make our forces lighter and faster. We will aggressively pursue innovative solutions to reduce energy demand in our platforms and systems, increase our self-sufficiency in our sustainment, and reduce our expeditionary foot print on the battlefield. Transforming the way we use energy is essential to rebalance our Corps and prepare it for the future.”

Energy is an essential combat enabler and a critical vulnerability due to long logistic tails. Marines list the following key elements for success: (1) to aggressively pursue innovative solutions to reduce energy demand in platforms and systems, (2) to increase self-sufficiency in sustainment, and (3) to reduce expeditionary foot print on the battlefield.

That is why Marine Corps developed energy vision and strategy to 2025 with two main goals in mind: (1) to save lives by reducing the number of Marines at risk on the road hauling fuel and water, (2) to travel lighter -with less - and move faster by reducing the size and amount of equipment and dependence of bulk supplies.

Vision: To be the premier self-sufficient expeditionary force, instilled with a warrior ethos that equates the efficient use of vital resources with increased combat effectiveness.

Mission: By 2025 the only liquid fuel needed will be for mobility systems, which will be more energy efficient than systems are today.

To this end, on the battlefields marines aim to achieve resource self sufficiency in battlefield sustainment, reduce energy demand in platforms and systems, and reduce overall footprint in current and future expeditionary operations.

At bases and stations they aim to (1) ensure a secure, reliable, and affordable energy and water supply, (2) reduce lifecycle operating costs of installations and manage future commodity price volatility, (3) to reduce greenhouse gas emissions and environmental impacts, reduce dependence on foreign oil, and promote conservation of water supplies.

USMC Expeditionary Energy Goals:

• By 2025, increase operational energy efficiency on the battlefield by 50 percent and, in doing so, reduce fuel consumed per Marine per day by 50 percent.

• By 2020, 50 percent of bases and stations will be netzero energy consumers through the combination of on-installation alternative energy production and energy demand reduction.

• By 2015, reduce the amount of petroleum used in the commercial vehicle fleet by 50 percent.

The Strategy, as it applies to installations, is based on the CMC’s Facilities Energy and Water Management Program Campaign Plan (“Ten by ‘10”). These goals, developed as a proactive response to federal energy and water mandates, set the Marine Corps on the path toward efficient and judicious use of resources. The Strategy expands on the Ten by ‘10, incorporates commercial vehicle energy usage, and provides additional guidance and specific actions required to implement the strategy.

Driving to the Strategy, USMC is pursuing multiple lines of operation, including:
• Guiding Power and Energy S&T Enabling Capabilities

• Establishing new Training and Doctrine

• Including energy performance into Requirements and Acquisitions decisions

• Mitigating investment risk and building confidence in new equipment capabilities through the

• Experimental Forward Operating Base process.

Marine Corps established two experimental expeditionaryForward Operating Bases (one at Quantico, Virginia and the other at Twentynine Palms California) as test sites for alternative energy projects that can be used by our combat forces in Afghanistan. Trained infantry company in the latter with renewable energy technology was deployed to Afghanistan in the winter of 2010 where they operated two patrol bases entirely on renewable energy.

I personally liked very much that the USMC Expeditionary Energy Strategy calls for establishing the capability to capture, report and analyze energy demand and consumption data by 2015. Bravo. I congratulate USMC for providing a broad picture of its energy use. Other services should follow a similar and if possible a more detailed picture in their energy strategy documents.

Camelina to Supersonic Goes Ahead

2011-03-27T00:25:00.000+02:00

The US Air Force used to be the leading military service to moving a greener future. In the past couple of years the Department of the Navy has already taken over the Air Force. But USAF has not yet given up.

On 18 March 2011, an F-22 Raptor took off at Edwards Air Force Base powered by a 50/50 fuel blend of conventional petroleum-based JP-8 and biofuel derived from camelina. Testing consisted of air starts, operability, and performance at different speeds and altitude throughout the flight envelope. The F-22 Raptor performed several maneuvers including a supercruise (supersonic flight without using the engine's afterburner). (F-22 Raptor flown on synthetic biofuel).

Source;USAF

A year ago, in April 2010 a Navy F/A-18 aircraft flew on a 50/50 blend of camelina-based biofuel and JP-5. In November 2010 a test flight of an MH-60S Sea Hawk helicopter was successfully performed by using the same fuel blend. Winter 2011 issue of Currents, The Navy’s Environmental Magazine, gives a very good summary of the Navy’s efforts from Camelina Seed to Supersonic flight.

Just three days after the USAF’s F-22 test, the US Marine Corps announced on 21 March 2011, its Expeditionary Energy Strategy.

The strategy spans the full spectrum of Marine operations, from Bases to Battlefield. The Strategy, as it applies to installations, is based on the CMC’s Facilities Energy and Water Management Program Campaign Plan (“Ten by ‘10”). These goals, developed as a proactive response to federal energy and water mandates, set the Marine Corps on the path toward efficient and judicious use of resources. The Strategy expands on the Ten by ‘10, incorporates commercial vehicle energy usage, and provides additional guidance and specific actions required to implement the strategy.

In a separate post I will discuss Marine Corps and energy. I will also comment on its new energy strategy but so far my only comment is that USMC Expeditionary Energy Office should do something with its abbreviation —E2O- and find something less confusing.

Finally, I would like to quote the conclusion of Dr Fred C. Beach in his article DoD’s Addiction to Oil: Is there a Cure?, appeared on the IAGS Journal of Energy Security on 15 March 2011: “If DoD is serious about reducing their use of petroleum based liquid fuels to minimize their vulnerability to fluctuating oil prices, to reduce the logistics burden of transporting millions of gallons of aviation fuel around the globe and to limit their contribution to green house gases, they have a large part of the solution in hand. Their sincerity in doing so will be revealed not by listening to what they say but rather by watching what they do.”

In my opinion his last sentence should be revisited. What important is not what we are watching today but what we will be seeing five years later.

The US Military Agencies Non-Tactical Vehicles

2011-03-18T19:51:00.000+02:00

This post is about the statistics on the fuel use and vehicle characteristics of the US military agencies’ fleet vehicles. These vehicles are non-tactical vehicles (NTV) used as passenger cars, vans, SUVs, trucks, buses, ambulances etc.

The following statistics are derived from the GSA's Federal Fleet Reports.[1] The latest report for Fiscal Year 2010 is already available: download.

In FY2010, the US military services have had 197,477 vehicles in their inventory. Slightly more than half of that total is trucks, and the majority of the rest is passenger vehicles.

DoD’s potential to displace petroleum based fuels with biofuels is limited to non-tactical vehicles. DoD has done a good job increasing the number of vehicles capable of using biofuels in its NTV fleet.

Of the nearly 200,000 NTVs, some 44% run on gasoline and almost 30% were capable of using E85. Diesel vehicle’s share is about 23%.

The US Army announced (Army Announces Historic Electric Vehicle Lease) in January 2009 that it plans to lease 4000 neighborhood electric vehicles (NEVs) until the end of 2011, which will constitute the largest acquisition of electric vehicles not only in the US but probably in the world. They will be used on Army bases for passenger transport, security patrol, and maintenance and delivery services. They are hoped to reduce the Army’s fuel consumption by almost 2 million gallons per year.

Did you know that the US federal agencies have had a total of 412 Limousines? The Military Agencies have 19 of them. Of these 19, only one belongs to defense agencies (I assume for the Secretary of Defense) and 18 belong to the Department of Army. None of the other military services have Limousines. Why is that? I have no idea!

In FY2010, fuel use in military non-tactical vehicles was over 100 million gallons of gasoline equivalent. To be exact, 102,296,168 gasoline gallon equivalent, the second highest level in the past decade. This amount represents a quarter of total fuel consumed by the US Federal fleet.

With its 72 percent share, gasoline is the most consumed fuel in military non-tactical vehicles. Gasoline is followed by Diesel. What this means is that, despite all these biofuels and alternative fuels hype, conventional oil products remain to account for more than 92% of the total fuel consumption in NTV. Share of Biodiesel (B-20) is 5% and Ethanol/E85 is 2%. The strange jump in 2009 is LPG. All the other alternative fuels (compressed natural gas, electric, CNG, and hydrogen) make up the rest, 0.2%.

The largest fuel consumer in non-tactical vehicles is the Department of Army, accounting for half of total fuel use in all military NTV. Air Force, Navy and Marine Corps respectively follow the Army.

Naturally you would assume that the same order would follow as far as the fuel costs are concerned. Well, not exactly. Look at the chart below. It shows unit fuel cost by military agencies. Look at the Navy. Isn’t it strange that the Navy’s unit fuel cost for gasoline and diesel is nearly half of those of the other military agencies? Again, I don’t know the reason.

I know that the Secretary of the Navy, Ray Mabus, has been signing several cooperation agreements lately. (It is difficult to follow him. A paparazzi would get really tired.) Did Mr Mabus sign an agreement for cheap fuel that we are not aware of?

Although Army clear documents the Management and Use of Non- Tactical Vehicles I am not aware of any ambitious Army goal to cut the fuel use in these vehicles. The Department of the Navy, however, targets to reduce petroleum use in NTV by 50% by 2015.

Again, well done Navy!

Oil prices have become hostages of speculation

2011-03-13T20:29:00.002+02:00

My deepest condolences to the people of Japan.

Today oil market behaves irrationally and dominant players take advantage of it. I simply do not understand why media and many oil market analysts blame on market fundamentals for the increases in the oil prices again. It is in fact mostly speculators to be blamed. I still haven’t changed my position on that (see my previous post oil prices and speculator (2005), here (2006), here (2008), and also here, and here).

According to the oil market fundamentalists, the prices reflect the state of the market fundamentals (supply, demand and inventory levels). Instead of admitting that current crude oil prices are not justified anymore by the market fundamentals alone, the analysts start to look for other scapegoats.

Moreover, every time when market fundamentals are not convincing, Energy Information Administration of the US Department of Energy and the International Energy Agency become more paranoid about supply and repeat their call on OPEC to increase its production and spare capacity. The facts, however, contradict with their claim.

When OPEC increased oil production the market fundamentalists this time argued that it is heavier and sour crude, which is not a remedy to bring down the price of light, sweet crude. Why should OPEC invest billions of dollars to create extra capacity anyway? Instead, OPEC tries to send (often mixed) signals to futures market in an attempt to change the course of direction. What OPEC could do in order to get out of the blame game is to suspend production limits, to which its members do not obey anyway.

Speculators have fallen in love with oil

In the past, big consumers and producers were affecting the price behavior. Today, speculators mostly drive prices away from fundamentals, which have become disconnected from fundamentals. Thanks to the invisible hand of casino capitalism and globalization, trillions of speculative dollars change hand each day worldwide, looking for lucrative returns in the world markets. This influx of large speculative trading injects volatility into global markets. Since speculators make money by betting on prices they love volatility.

In practice, very insignificant number of contracts on NYMEX and ICE result in physical delivery. Instead contracts are liquidated with offsets. Therefore the role of futures market as a hedging mechanism is largely not correct anymore.

The price of oil is set by traders’ assessment of current and future factors that affect supply and demand of, not physical barrels, but paper barrels trading on the very liquid oil futures exchanges, mainly in New York and London, as well as off-exchange in exempt commercial and Over-the-Counter markets offering the world’s leading oil benchmarks.

There are two types of players in the world paper oil market: Commercials and non-commercials. However, the distinction between commercial and non-commercial transactions is not clear anymore.

As there is no supply constraint in paper barrel market, trading in paper barrels has grown significantly since 2000. Take the average number of contracts traded daily and then divide the corresponding barrel equivalent to daily world oil production. I don’t want to go into the technicalities here but I just tell you that the amount of paper barrels traded daily is more than 15 times of the world’s daily oil production. And yet this is without taking into account of the OTC markets. (God knows how much oil is traded in there.)

Therefore it is not the data on fundamentals, which are pathetically poor, but the perceptions of dominant players on the market that set the oil prices and their likely direction. Current and future fears, concern, worries and perceived risks on nearly everything which has a slight link to oil have become the main drivers of market sentiments. If speculators want to take the prices higher, the least they can do is to exaggerate any situation so that risk premium increases. Keep in mind that bad news are quickly reflected in price, especially in the short term. Therefore, any rumor, gossip, breaking news headline and announcement contribute to the tension in the market. Under such conditions, what John Maynard Keynes’ term called "the animal spirit" for market sentiment takes the stage and trade becomes much more news headlines driven.

Recent Experience

The recent turmoil across the Middle East and North Africa was a perfect catalyst for speculators. Oil prices have started to rise as domestic unrest grew and governments were toppled first in Tunisia and then in Egypt. Unrest in Tunisia had a limited impact on the prices because the country was not among the significant oil suppliers. Egypt is also not a significant supplier but what makes the country important is the Suez Canal and the Sumed pipeline. Although there was no disruption in oil flows in those transport channels worries of speculators pushed the prices up.

The rise in prices intensified since the start of violence in Libya. It simply sparked greater fears of contagion, especially to Saudi Arabia and Algeria. The possibility that world oil production could be curtailed has become the main worry although OPEC hinted that the block would increase supply should prices keep rising or should any real need in the market emerges.

Is the rise in oil prices justified? Look at the following facts:

Stockpiles at Cushing, Okla., are at a record high of over 40 million barrels. Kuwait, UAE, Nigeria and Saudi Arabia increased production which is estimated to be as high as 800,000 barrels per day, corresponding the loss of Libyan oil exports. There is over 5 million barrels per day of estimated OPEC spare capacity. Total OECD stocks are sufficient to cover 91 days of forward demand (1.6 billion barrels of government controlled and 2.7 billion barrels of industry stocks). And global demand is usually low in early months of the year.

And yet oil prices rose and fell (as much as $10 per barrel on 24 February, for instance) though the situation in the physical market looked no more settled or chaotic than it has. Well, look at this then: WTI options reached a record 324,655 contracts on February 23, surpassing the previous record of 294,411 contracts set on Jan. 31. ICE Brent Crude futures set a daily volume record of 821,857 contracts on February 24?

What can be done ?

I believe that, in today’s oil market, speculators do play an important role in determining the direction (if not setting) of the oil prices. It seems that the only effective remedy of high oil prices is higher prices. We all have to learn to drive less and have to get used to three digit oil prices.

Meanwhile, time has come to free oil prices from speculators. There seem to be four politically impossible or difficult solutions: close down futures exchanges, ban or restrict non-commercial’s paper barrel trading, put the position limits to especially of non-commercial traders, and oblige physical delivery rather than cash settlement.

Time also has come to question the representativeness of the WTI and Brent crude benchmarks for the world’s internationally traded crude oil. Their combined output, corresponding to less than five percent of global oil production, is declining.

From Green Power to Innovation

2011-03-06T17:42:00.000+02:00

For years the U.S. military has been increasing its reliance on alternative and renewable energy sources to provide power to all spectrum, from soldiers in the field to military installations around the world. Not surprisingly, the DOD has become the “greenest” of federal agencies in terms of its size.

Already, the Air Force is one of the top purchasers of green power in the US, according to the U.S. Environmental Protection Agency's National Top 50 list of Green Power Partners released in January 2011. The Air Force ranks number one in the Department of Defense, number two in the federal government, and number 15 among 1,300 Green Power Partners.

As indicated in an Air Force news article, the Air Force is being recognized for its purchase and on-site production of 243.9 GWh of green power from U.S. renewable facilities built after 1997. In addition, Air Force officials purchased 250 GWh of renewable energy from facilities built before 1997 for a total renewable usage of 493.9 GWh.

“In 2015, renewable energy is expected to make up more than 10 percent of all electricity used by the Air Force. Examples of Air Force renewable energy projects include: 14.2 MW photovoltaic solar array at Nellis AFB, Nev.; one MW photovoltaic solar array at Buckley AFB, Colo.; 388 kW photovoltaic thin-film integrated membrane roof on the base exchange at Luke AFB, Ariz.; 2.3 MW landfill gas generator at Hill AFB, Utah; 3.32 MW wind generation at F.E. Warren AFB, Wyo.; 400 kW roof photovoltaic system at Los Angeles AFB, Calif.; 660 kW photovoltaic at Fresno Air National Guard Base, Calif.; 500 kW photovoltaic at Toledo ANGB, Ohio; and a 250 kW wind generator at Tin City Long Range Radar Site, Alaska.”

The US Navy is not amongst the top 10 federal government list. US Army (Fort Lewis and Fort Carson) ranks number 6. Navy is not in Top 10 but it will surely join the list in the near future.

On 2 March 2011, the secretary of the Navy announced new steps in partnership between the DOD and the Department of Energy's Advanced Research Projects Agency-Energy (ARPA-e) to improve national security by innovating the way the military uses energy. The plan is to develop an energy storage device that will provide with long duration storage suitable for a variety of applications, including military bases and vehicles and eventually commercial grids.

Two joint initiatives are mentioned: The first is the development of hybrid energy storage modules to store the energy for later use. The second is a Grid Storage Study to assist in answering the question of how to make alternative energy such as solar and wind less reliant on weather conditions and therefore more consistent. (see video). Both initiatives are to be funded by a requested $25 million each from DoD and ARPA–e in the fiscal year 2012 budget.

Via the Agile Delivery of Electrical Power Technology and (Grid-scale Rampable Intermittent Dispatchable Storage programs, ARPA–e aims to prove the energy-storage technologies that the Navy and other armed forces need. "We want to develop storage and do that with batteries, flywheels at the cost of $100 per kilowatt-hour, [and] use it anywhere in the world, " Secretary of Energy Steven Chu is reported as saying in a Scientific American article on 3 March 2011 (U.S. Military Links Alternative Energy Research to Lives--and Dollars—Saved).

On 2 March 2011 Sharon Burke, assistant secretary of defense for operational energy plans and programs, gave a speech at Harvard University Science Center on "Energy for the War Fighter". She said that there are several initiatives already under way to release the military from the tether of fuel.

Developing more energy-saving equipment for troops in the field is one of these initiatives. “The average U.S. soldier on a 72-hour patrol carries between 10 and 20 pounds of batteries. There are seven kinds of batteries that power flashlights, GPS devices, night-vision gear, and other equipment considered essential for the modern soldier. Including spares, a soldier lugs 70 batteries, along with the devices themselves, weapons, food, water, and other necessities.” She admits that the soldiers’ battery burden is just the tip of the military’s energy problem.

She might be right. But I believe that one of the first priorities of her office should be to release the individual soldiers from the tether of battery burden. Soldiers must come first. The first priority of her office should have been to prepare a paper documenting the DOD’s current operational energy situation and challenges. Since coming into office in July 2010 Sharon E. Burke still has not prepared such a document. Why?

Inspector General Report on DOD-wide Energy Efficient Technology Projects

2011-02-27T14:49:00.000+02:00

In its report called Defense-Wide Research and Development Near Term Energy-Efficient Technologies Projects (February 18, 2011) Inspector General of the Department of Defense reviewed the planning, funding, contracting, and initial execution of 15 DOD-wide Near Term Energy-Efficient Technologies program research and development projects, valued at $72.94 million.

Inspector General reviewed these projects to ensure that they were complied with the American Recovery and Reinvestment Act of 2009 requirements, Office of Management and Budget guidance, the Federal Acquisition Regulation, and DoD implementing guidance. In other words, whether they were in line with the formalities. Of course they were. Inspector General only notes that contracting and transparency could be improved.

Here are the projects:

1. Materials – Ceramic Matrix Composites: These are high-temperature materials that are replacing metals in high-temperature components of turbine engines and nuclear reactors. They are more lightweight and last longer than metals but cost more to manufacture at the present time because the technology is just now being scaled up. ($4.86 million)

2. Fuel Efficient Ground Vehicle Demonstrators: designing and fabricating one full scale vehicle system demonstrator. This vehicle is utilizing fuel efficient technologies by maximizing fuel economy. ($8.75 million).

3. Energy Modeling: developing a fully burdened cost-of-fuel analysis tool. This is enabling the Army Contracting Command National Capital Region Contracting Center to predict the fuel consumption of all its vehicles for different scenarios with more accuracy ($1.60 million)

4. Continuous Building Commissioning: demonstrating monitoring systems capable of identifying, classifying, and quantifying energy and water consumption deviations from design intent or optimal usage. This project is identifying the causes of those deviations, and recommending, prioritizing, and implementing corrective actions. ($6.80 million)

5. Energy Enterprise Management: assessing, evaluating, and prototyping an energy enterprise management application that can be used from the building level, all the way up to the Office of the Secretary of Defense level, to manage and aggregate energy data and to affect technology information transfer. ($1.94 million)

6. Solid Waste Gasification: validating a Waste-to-Energy Conversion system capable of converting combustible municipal solid waste and biomass, such as plant materials, into electricity and heat on permanent DoD installations ($2.92 million)

7. Anaerobic Digester Technology: demonstrating anaerobic digestion of food and associated wastes for generating renewable energy in the form of biogas. ($1.94 million)

8. Landfill Gas Energy Capture: Landfills produce waste gas streams containing methane that is often vented, flared, or otherwise destroyed. This project is generating electrical power from these landfill gases. ($2.43 million)

9. Wind Lift Power Generator: The Wind Lift Power Generator is using a kite-like apparatus to harness the power of the wind. The harnessed wind is being converted into usable energy and stored in batteries that can be used to power lights, refrigerators, fans, etc. ($0.97 million)

10. Mobile Waste to Energy: assessing technology that converts waste to liquid fuel in a scalable mobile unit that could potentially be used at forward operating bases. ($7.31 million)

11. Energy Improvement Initiative: researching and developing high efficiency solar cells. This effort will produce a solar power demonstration, providing a significant power generation capability of new high-efficiency solar cells. ($3.89 million)

12. Algal Derived Biofuel Program: evaluating technology to increase the production of algae-derived fuels and to support the Military Services’ test and certification programs. ($ 5.85 million)

13. Plasma Fusion: developing a machine that uses magnetic fields to contain a cloud of electrons. The cloud of electrons establishes an electric field that will be used to accelerate positively charged ions of fusible material. ($1.94 million)

14. Fuel Cells: developing a fuel cell battery source capable of a 300-watt output. This fuel cell reduces the size and weight of past designs while increasing the reliability, durability, and service life. ($18.47 million)

15. Tactical, Deployable Micro-Grid: Micro-grid technology improves security, reliability, and efficiency of DoD power management, thus reducing energy costs and the carbon footprint. Renewable electrical power generation can come from a variety of distributed generation sources. ($3.26 million)

These are good developments. The contracts were awarded according to the rules. But who will control and judge whether they are executed correctly and will deliver tangible results? What happens when the result is “sorry, we tried but it didn’t work”?

To me this kind of answer would still be OK if the institution carrying out the project is a military or government institution. If they are carried out by private bodies than I would ask: Do the contractors take any risk? If not, can we consider the project as business creation with guaranteed revenue?

Quick Statistics on Libya Oil and Natural Gas

2011-02-24T00:07:00.000+02:00

Under normal conditions I never mix my job with my hobby (this blog). After seeing so many press articles containing inaccurate information, I decided to post the following information complied from best sources.

Oil and Natural Gas provides 95% of Libya’s hard currency earnings and 95% of the government’s budget.

Libya holds the largest proved oil reserves in Africa. Proved oil reserves stand at 46.4 billion barrels, as of January 2011. That represents a share of more than 3% of World proved oil reserves.

Preliminary trade data indicate that Libya produced some 1.69 million barrels of crude oil and natural gas liquids (NGL) per day in January 2011. Of this amount, 1.58 mb/d was crude oil and the rest was NGL. Spare crude oil production capacity in January 2011 was 0.22 mb/d.

Libya consumed some 270,000 barrels of oil per day in 2010. Of this amount, approximately 80,000 barrels per day was imported.

Libyan crude oil exports were 1.205 mb/d in 2010. Over 85% of exports destined the customers in Europe. In January 2011, Libyan crude exports amounted over 1.1 mb/d.

Libya has six major oil export terminals. Five of these are located in the eastern part of the country and one in the western part near Tripoli.

Libya has five refineries, with a combined crude distillation capacity of 378,000 barrels per day.

Proven natural gas reserves are 1549 billion cubic meters (bcm) as of January 2010, corresponding to less than 1% of World’s total.

In 2009, Libyan marketed natural gas production reached 16 billion cubic meters (bcm).

Libya exported 10 bcm of gas in 2009. 93% (9 bcm) were exported to Italy via the Greenstream pipeline. Nearly 1 bcm was exported by LNG tankers to Spain.

In the first 11 months of 2010, Italy imported 29 million cubic meters of gas per day from Libya, accounting for some 13% of total Italian gas imports. In the same period, Spain imported 1.5 million cubic meters per day of gas from Libya via LNG, accounting for slightly over 1.5% of total Spanish gas imports.

Major international companies operating in Libya include ExxonMobil, BP, Shell, Eni, Wintershall, StatoilHydro, Occidental, ConocoPhillips, Hess, Marathon, Repsol, Total, BG, RWE Dea, OMV.

Information compiled from:
IMF, press reports
Oil & Gas Journal, December 2010.
IEA Facts on Libya, 21 February 2011.
IEA, Oil Market Report, February 2011.
Joint Oil Data Initiative database, February 2011 update.
Cedigaz, Natural Gas in the World, October 2010.

Burn to Deliver

2011-02-12T21:57:00.003+02:00

Logistic is second to nothing in importance in warfare -- Vice Admiral Robert B. Carney, USN

During combat operations, more than 90 percent of all equipment and supplies needed to sustain US military forces is carried by sea. Since the start of operations in Iraq and Afghanistan, MSC ships have delivered nearly 110 million square feet of combat cargo, enough to fill a supply train stretching from New York City to Los Angeles. MSC ships have also delivered more than 15 billion gallons of fuel–enough to fill a lake 1 mile in diameter and 95 feet deep. (USTRANSCOM 2011 Strategic Plan)

Air Mobility Command airdropped 3.5 million pounds during the entire year in 2006 for Operation Enduring Freedom in Afghanistan. In 2009 this figure jumped to 32,267,606 pounds of cargo. In 2010, it doubled to 60.4 million pounds due the increase of an additional 30,000 troops to Afghanistan between December 2009 and August 2010.

The dual challenge of rugged terrain and sparse infrastructure significantly impact the effectiveness of traditional convoy resupply operations for many forward bases and combat outposts in Afghanistan. Vertical resupply enables rapid and precise delivery and distribution of tailored support packages to soldiers operating for extended periods of time in austere locations that are considerable distances from forward operating bases.

“The history of war proves that nine out of ten times an army has been destroyed because its supply lines have been cut off.” -- General Douglas MacArthur

In 2010, AMC flew more than153,000 sorties and about 529,000 flight hours. Its flying gas stations offloaded more than1.58 billion pounds of fuel to 115,000 receiver aircraft. (Air Mobility Command, 2010 Year in Review)

Three C-17 Globemaster IIIs carrying 120 bundles dropped the largest resupply of fuel ever to a remote forward operating base Was K'wah in the Paktika province of Afghanistan on 29-30 January 2011. The shipment contained a 30-day supply of JP8 fuel, approximately 20 thousand gallons of JP8. The base has not had a convoy ground resupply in nearly three years due to poor to non-existent roadway infrastructure and the high risk of enemy activity. Air drops have become so essential that when weather or other complications keep the planes at bay, the FOB has to prioritize what capabilities it can sustain. Without aerial supply these combat outposts will become ghost towns. (C-17s deliver largest OEF fuel resupply in Afghanistan)

“Logistics is the ball and chain of armoured warfare.” -- Guderian

Source: U.S. Air Force

Source:USAF

Now let us look at a very recent development. Air Force certified first aircraft for biofuel usage.

The C-17 Globemaster III has been certified for unlimited usage of hydroprocessed blended biofuels known as hydrotreated renewable jet fuels, officials announced Feb. 9, 2011. This certification clears the C-17 to fly on a volumetric blend of up to 50 percent HRJ fuel with 50 percent JP-8, as well as a blend of 25 percent HRJ, 25 percent synthetic paraffinic kerosene fuel, and 50 percent JP-8.

The C-17 is the largest user of fuel for AMC. Does it really make sense to use hydrotreated renewable jet fuels to run an elephant like C-17? Forget for a moment all the clean burning benefits. There is no such thing as a green military.

Department of Defense should answer the following two questions:

1) How much additional tax payers money does USAF have to pay for a C-17 running on that biofuel blend compared to conventional JP-8 to fly the same distance? (even if you assume that conventional JP-8 and the above mentioned biofuel blend cost the same)

2) How much fuel has the DOD consumed so far for all the logistics supports (dry cargo, passengers and fuel) to sustain operations in Afghanistan and Iraq?

3) The British army recently estimated that it takes seven gallons of fuel to deliver one gallon to Afghanistan. (source) What is the proportion for the US military?

“A little neglect may breed mischief: for want of a nail the shoe was lost; for want of a shoe the horse was lost; and for want of a horse the rider was lost.” -- Benjamin Franklin

Remarks on the RAND Report

2011-02-06T02:56:00.001+02:00

The US military has recently made a fundamental shift in looking at renewable energy. It has become a voluntary testing ground for renewable technology. The US Department of Defense has spent hundreds of millions of dollars for testing and certification of alternative fuels. By doing so, it expects to serve as an early customer and hence help create a commercial market. True, the US Congress has not yet required the DOD to use alternative fuels in tactical vehicles. It is an initiative taken by the DOD and its services.

On 24 January 2011 the RAND Corporation submitted a report titled “Alternative Fuels for Military Applications” to Congress. The report made a great publicity I guess because of it stood against biofuel hype of the US military.

The Rand report looks at key policy, management and technical issues associated with DOD’s alternative fuel efforts in tactical weapon systems. Alternative fuels should have some key characteristics: technical and commercial viability, environmental acceptability, and technical readiness for commercial production, among others. The Rand report examines these issues for a number alternative fuel processes and makes some strong recommendations. In this post I give my comments on the Rand report.

The Rand report is a good report but not good enough. I am not biased here. Note that I called some reports (for instance a 2009 Deloitte report) crap.

The first thing I do not understand is why the Rand report was released in January 2011? My impression is that a large part of the report was completed towards the end of 2009, and the rest before the mid 2010. Because, there is no mentioning of any new developments in the second half of 2010. If that is the case, why wait for 6 months to release it? This staying one year behind effect have big implications in the report. It makes it, well, not up-to-date. Why no mentioning of the Navy’s tests in 2010?

I believe that the authors of the report are not experts on world oil markets. They claim that it is impossible to predict where oil prices will be over the next few decades. Well, after 2020 the oil prices can only be in triple digits. Therefore the lower end of this triple digit price, which is $100, would already be a good constraint for analyzing the commerciability of alternative fuels. I also do not agree with the statement that “Increased production of alternative fuels will reduce demand for crude oil, resulting in lower world oil prices.” (P.2). By the way, the authors DLA Energy doesn’t procure all military fuels from refineries in the US.

Now let me look at some of the details in the report. I agree with many things stated in the report. Here is a short list:

“Concepts for forward-based alternative fuel production do not offer a military advantage”

“JP-8 is not a perfect diesel fuel.”

“Defense Department goals for alternative fuels in tactical weapon systems should be based on potential national benefits, since the use of alternative, rather than petroleum-derived, fuels offers no direct military benefits.”

“As long as the military is willing to pay higher prices, it is unlikely to have a problem getting the fuel it requires,” in case global oil supplies are disrupted for whatever reasons. “Despite the absence of a specific military benefit, there are nationally important benefits to be gained from the use of alternative fuels,” for instance it could lead to a commercial alternative fuels industry

“To cost-effectively promote early industrial production of alternative fuels, the Department of Defense needs extended contracting authority for fuel purchases.”

“Within the United States, the prospects for commercial production of alternative fuels that have military applications remain highly uncertain, especially over the next decade.” [I agree, but provided that there will be no substantial government subsidies]

“The military is best served by efforts directed at using energy more efficiently in weapon systems and at military installations,” i.e., demand management programs like efficiency of energy use and conservation.

“Current efforts by the services to test and certify alternative fuels are far outpacing commercial development.” [I partially agree].

Now about the parts I don’t agree and I heavily criticize:

“Algae-derived fuel is a research topic, not an emerging option that the military can use to supply its operations, and cultivating seed oils affordably without adverse effects on climate change has yet to be demonstrated. Because the prospects for appreciable domestic production of hydrotreated oils over the next decade are so uncertain, the Department of Defense should discontinue large-scale testing and certification efforts.”

“It is highly uncertain whether appreciable amounts of hydrotreated renewable oils can be affordably and cleanly produced within the United States or abroad. Jatropha and camelina are often mentioned as ideal plants to meet these requirements, but there exists little evidence to back these claims. Advanced approaches, such as those using algae as a feedstock are in the early stages of the development cycle.”

“Considering the very limited production potential for fuels derived from animal fats and waste oils, (2) the highly uncertain prospects for affordable, low greenhouse-gas fuels derived from seed crops, and (3) the early development status of algae-based concepts, hydrotreated renewable oils do not constitute a credible, climate friendly option for meeting an appreciable fraction of military fuel needs over the next decade.”

The pessimistic comment on Algea is not justified. In another part of the report pessimism about Algea extends to 2020.What is appreciable quantity? There is Algea-derived fuel production in the world.
Contrary to what is stated in the report, there is commercial jatropha production in the world. However, The jatropha is neither a profitable nor a sustainable investment, according to a new report released by Friends of the Earth “Jatropha : Money doesn't grow on trees” lists ten reasons why jatropha is neither a profitable nor a sustainable investment. (Released in January 2011).
PS: After I posted this article I have been informed about a recent article appeared in Biofueldigest which comments on the Rand report.

I do not have any intention to defend the biofuels here. But the authors simply ignored so many things and are so unscientific that it would take too long to go over all the points. Anyone who is interested in a classy report on the use of and research on alternatives/biofuels as jet fuel must read The International Air Transport Association (IATA) reports. IATA has prepared annual special reports on alternative fuels since 2006. Read the 2010 report. Also see, The growth of biofuels, Alternative Fuels Fact Sheet. The Rand report has NO reference to any IATA reports (unless I missed). Ignoring those reports and other work of IATA in the field and yet commenting on the use of alternative fuels in aircraft is something I cannot forgive.

Now, let me mention about the bulk of the Rand report.

“Fischer-Tropsch (FT) fuels are the most promising near-term options for meeting the Department of Defense’s needs cleanly and affordably. Considering economics, technical readiness, greenhouse gas emissions, and general environmental concerns, FT fuels derived from a mixture of coal and biomass (particularly 60/40 blend and preferably with carbon capture and storage) represent the most promising approach to producing amounts of alternative fuels that can meet military, as well as appreciable levels of civilian, needs by 2030.”

However, one needs to read footnote 10 carefully. The report’s bias to FT partly stems from how it handles carbon capture, transport and storage. It assumes that 90% of the FT plant’s emissions will be captured but excludes transport and storage simply because it assumes that the captured CO2 will be used for enhanced oil recovery. This is a huge assumption.

The report’s emphasis is on lifecycle greenhouse gas emissions (all greenhouse gas emissions associated with the production and use of a fuel) is understandable but the way they handle it is, well, VERY biased.

It is true that “For conventional petroleum fuels, these include greenhouse gas emissions associated with oil extraction, refining, delivery, and combustion in either a vehicle or aircraft. For coal-derived liquids, the life cycle begins with coal mining and includes emissions associated with the alternative fuel production facility, delivery, and final combustion. And for biofuels, the life cycle covers all aspects of cultivation and harvesting, delivery to a central processing facility, processing, and final combustion.” So far quite clear.

Then it continue “Most importantly, it is now evident that land-use changes—both direct and indirect—can play a dominant role in the lifecycle greenhouse gas emissions of biofuels. Our examination includes these emissions from land-use changes.” The last three words here are crucial.

Now, what lifecycle analysis methodology the Rand authors are talking about? There are several methodologies. Here is what the IATA 2010 report says on that:

“The International Organization for Standardization (ISO) provides a framework for undertaking LCA [life cycle analysis] studies. However, this framework does not prescribe a single standardized LCA methodology, therefore, the comparison of outputs from different methodologies for the same product or process is difficult. There are two main LCA approaches – attributional and consequential. The attributional approach focuses only on the environmental impacts of the product itself whereas the consequential approach also includes environmental impacts of associated products and processes. The consequential approach includes the identification and quantification of external variables such as energy, direct and indirect land-use change and food prices. In addition, the method for allocating emissions associated with biofuel co- or by-products can have an important impact on the net emissions.” See Table 7 on page 53. For much deeper analysis see PARTNER — the Partnership for AiR Transportation Noise and Emissions Reduction reports ( http://web.mit.edu/aeroastro/partner/projects/project28.html)

The question is: Did the Rand authors reach their conclusion about the superiority of the FT coal-biomass+CCS technology to other alternatives based on scientific comparison? I didn’t see anything in their report.

Then look at p.57 of the IATA report. It is reproduced from PARTNER Project 28 report.

The conclusion is this: If appropriate renewable feedstocks were used, both F-T fuels and Hydroprocessed Renewable Jet fuel could provide aviation with modest (~10%) to large (~50%) reductions in emissions that contribute to global climate change.

In sum: The Rand report has some good elements and contains several good recommendations but some of its heavy conclusions are not justified.

Rand Corporation Torpedoes the Green Fleet

2011-01-28T01:10:00.003+02:00

In 2010, the Navy News Service staff published nearly 6,000 stories on Navy.mil. At the end of 2009 the Service complied top 10 stories. Here is top number 10:

10. The Green Navy (Green Fleet, Green Hornet, 2010 Navy Energy Forum): The Navy celebrated Earth Day April 22 by showcasing a flight test of the “Green Hornet,” an F/A-18 Super Hornet multirole fighter jet powered by a biofuel blend. Participants in the 2010 Navy Energy Forum on Oct. 12-13 focused on achieving energy security and reviewed progress toward the energy targets. The U.S. Navy conducted a full power demonstration of a Riverine Command Boat powered by alternative fuel, Oct. 22.

The year 2010 ended well for Green Navy. Towards the end of January 2011 things were still fine.

On January 24, 2011, Secretary of the Navy Ray Mabus posted on The White House Blog a short but informative article titled “Moving the Navy and Marine Corps Off Fossil Fuels.”

He starts with his five ambitious goals of October 2009 to reduce fossil fuel consumption in the Navy and Marine Corps and increase the use of alternative energy to at least 50% of energy requirements no later than 2020. He list the following reasons for doing so:

• Reducing reliance on foreign sources of energy makes the country more secure.

• Reducing reliance on fossil fuels makes troops safer

• Increasing energy efficiency makes ships, aircraft, and vehicles more tactically capable.

• Increasing alternative energy use helps create an alternative energy market.

• Reducing the energy footprint significantly reduces military carbon footprint.

He also lists progress made towards his goals.He concludes with a statement that the Navy and Marine Corps are leading the nation in adopting new technology to make our country more secure, and helping to create a new energy future.

One day later the bad news hit the fan.

On 24 January 2011, the RAND Corporation submitted a report titled “Alternative Fuels for Military Applications” to Congress. The report made a great publicity I guess because of it stood against biofuel hype of the US military. The most quoted sentence of the report is “the use of alternative fuels offers no direct military benefit over the use of conventional petroleum-derived fuels,” they have little military value, and the U.S. service branches are wasting millions of dollars by trying to replace their consumption of fossil fuels.

A day later, on 25 January 2011, when the New York Times spread the news (Alternative Fuels Don’t Benefit the Military) DoDLive Bloggers Roundtable with Mr. Tom Hicks, Deputy Assistant Secretary of the Navy for Energy, was discussing the Rand report. ( interview, transcript).

Main headline of his criticism are the following:

The Navy, based on its engagement with the alternative fuels industry, has “come to some far different conclusions than this report suggests.”

The report has “factual errors”, was based on “secondhand knowledge,” and is “more of an op-ed than serious research,” contains “misrepresentations.”

“The Rand report erroneously describes the Navy as operating a testing program for a petroleum substitute used to make low-sulfur diesel fuel, whereas the service focuses exclusively on biofuels”

He argues that the report downplays the possibility government and industry would succeed in making such fuels practical. To him the American military wields sufficient purchasing power to sometimes drive market realities, increasing the chances of developing new fuels in sufficient quantities at the right price. Though the military represents only 2% of the U.S. petroleum market, the services would likely drive market trends given the anemic finances of America’s largest oil user—the commercial aviation industry.

This ambition might be reasonable but his claim “the Navy intends to soon drive down the price of fuel to a dollar per gallon” is unreasonable. His reiteration of the usual line “new energy would allow America to regain its energy independence while stopping the transfer of wealth to oil-rich countries sometimes hostile to U.S. interests,” is nonsense. (I will tell some other time why)

At the same time while Mr. Tom Hicks was discussing the Rand report, Secretary of the Navy Mabus was reviewing the effects converting the Department of the Navy from fossil fuels to alternative fuels will have on the economy during the Clean Energy Summit. Chinara Lucas, Secretary of the Navy Public Affairs, reported the following about what Mabus said there:

Mabus said: "History has taught us the competition for resources has been one of the fundamental causes of war for centuries," …. "I am very pleased that the cost of these fuels continues to decrease," … "As more is produced – and as our demand signal grows, I am confident that price will continue to fall."

Maybus said the dependence on fossil fuel continued to produce bad results during the time of war by endangering Sailors and Marines charged with guarding convoys bringing energy to bases and machinery. He urged that the solution to this reliance and resulting war and loss of lives is the utilization of alternative fuels.

The use of cotton-seed by Marines in Sangi, Afghanistan, was also presented by Mabus as an example of alternative energy at its best. Through this pilot program, Mabus said Marines have reduced the amount of fossil fuel they use by 20 percent. As a consequence, Marines utilize fuel convoys less. "If this program can be expanded, it has the potential to achieve monetary savings," said Mabus. (Well, I am sure he didn’t say how much less money, and how many less convoys)

Again, at the same time (25 January) Mary Rosenthal, Executive Director of Algal Biomass Organization released a statement saying “the report is likely based on outdated information. In our opinion, basing sweeping policy recommendations on such data is misguided if not reckless. The positioning of the entire US algae industry as a “research topic” is patently false. ….. It is unclear to us whether or not any actual “green” CTL fuels have been produced or tested. We believe algae commercialization is far closer than RAND suggests.”

Steve LeVine wrote on 26 January 2011 (Isn't reducing soldier casualties a military priority?) about the Rand report, After talking to the author of the Rand report, James Bartis, he reports that “Bartis's report is misleading by omission. His report focuses solely on non-fossil fuels, as Congress requested in a 2009 appropriations bill, and leaves out alternative energy such as solar and fuel cells.” LeVine argues that Bartis “simply laid out what we all know -- that biofuels may never be more economical than oil, and many of them will probably never be produced in commercial volumes.”

I am carefully reading the Rand report. In a separate post I will only focus on it, not who said what about it.

Interesting coincidence with the Rand report that I had concluded my previous post (Going Green and Greenbacks, posted on 18 January) with the following sentence: The US military must make the choice between "going green for greenbacks" and "going green without extra greenbacks".

Going Green and Greenbacks

2011-01-18T00:06:00.000+02:00

Retired Army brigadier general Steven M. Anderson had an article in the New York Times (on 12 January 2011) titled Save Energy, Save Our Troops.

His starting point is the very much repeated claim that “in the last nine years some 1,000 Americans have been killed on fuel-related missions in Iraq and Afghanistan.” It is true that there were many causalities in the past and that frequency of attacks to oil trucks in the Afghan theater increased tremendously in recent months. This misses a very important fact that protection of fuel trucks belongs to contractors, not to the US military (any more).

He may sound right by saying that “[U]ntil the Defense Department develops battlefield policies recognizing that energy efficiency contributes to military effectiveness, more blood will be shed, billions of dollars will be wasted, our enemies will have thousands of vulnerable fuel trucks for targets and our commanders will continue to be distracted by the task of overseeing fuel convoys.” But he should have also mentioned that for every fuel truck there are two trucks carrying water in the theater. Note that soldiers are not allowed to drink local water and hence all water must be brought in. So, should the soldiers drink less water to reduce the number attacks to convoys?

He also makes a grave mistake by comparing the living conditions of the US soldiers with Alexander the Great’s men did 23 centuries ago. No, dear general, the US soldiers today live in much more comfort in war zone than the men of Alexander the Great (for instance, air conditioning, swimming pools and much more). If they had lived in equal conditions there would have been much less need for fuel shipments.

True, DOD requires all structures in the combat zone be energy-efficient, through the application of new technology such as spraying foam on the exterior of tents to have better insulation. Gen. Anderson further mentions that “this initiative was saving about $1 billion a year and taking more than 11,000 fuel trucks off the road.” He complains that “despite three years of quantitative proof that insulated structures in extreme climates tremendously reduce fuel requirements, there has been little effort to broaden the scope of the initiative.”

He also makes the usual mistake of mixing up energy efficiency with energy conservation. If DOD wants to save lives, cut costs and lower its dependence on foreign oil then the first thing it should do is to reduce the unknown number of its bases, both overseas and in the US.

Despite focusing on only a tiny part of a big problem General Anderson knows what he talks about. This is something the New York Times columnist Thomas Friedman lacks. Right, I am not a fan of Friedman as can be seen in one of my previous posts.

Thomas Friedman argues in his article the USS Prius that the US Navy and Marines are building a strategy for “out-greening” Al Qaeda, “out-greening” the Taliban and “out-greening” the world’s petro-dictators. He believes that the third generation biofuels the Navy is testing has “a total end-to-end carbon footprint cleaner than fossil fuels and that can be grown in ways that will ultimately be cheaper than fossil fuels.” I wish he were right.

The US military might replace oil in generators, can in the long run go all nuclear to run its ships, can to some extent use alternative and renewable energy sources to power its installations, can be as energy efficient as possible and can built as many “green” forward operating bases as it wishes to but it will never be able to “out-green all the petro-dictators.”

Friedman further argues that “if Congress will simply refrain from forcing the Navy to use corn ethanol or liquid coal we might really get a green revolution in the military. That could save lives, money and the planet, and might even help us win — or avoid — the next war.” Go Friedman!

The US military runs on oil, accounting about 80% of the US military energy consumption. Aircraft and tactical vehicles run only on oil. To replace 350,000 barrels per day of oil with biofuels in the next two decades or so is more than wishful thinking. So, going “green” and magic are different things.

Blindly going “green” for the sake of appearing green will only green the green industry, i.e., will funnel tons of greenback without any tangible benefits.

The US military must make the choice between "going green for greenbacks" and "going green without extra greenbacks".

Energy in DOD’s Strategic Management Plan

2011-01-15T20:38:00.000+02:00

On 30 December 2010 the US Department of Defense released its Strategic Management Plan (SMP) for FY 2011 which directly maps to Departmental strategic goals and objectives derived from the February 2010 Quadrennial Defense Review.

The SMP, the highest-level plan for improving DoD’s business operations, describes the business strategic aims and actions DOD will take in FY2011. It also lists each military department’s top priorities for achieving integrated management of business operations.

The SMP lists 5 goals. One of the objectives under the Business Goal 3 (Reform the DoD Acquisition and Support Processes) is to “Increase energy efficiencies” with accompanied two performance measures:

• Cumulative average percent reduction in building energy intensity

• Percentage of renewable energy produced or procured based on DoD’s annual electric energy usage

Note that the DOD listed five Strategic Goals in QDR. One of the strategic objectives of these five goals (DoD Strategic Goal 5 - Implement the Reform Agenda) was to “Increase use of renewable energy and reduce energy demand at DoD installations.”

As for Departmental business priorities it is rather disappointing not to see any priority containing energy for Department of the Army. Navy and Air Force, however, insert energy into their business priorities.

One of the 7 business priorities of the Department of the Navy is to

“Improve the DON’s energy posture by reducing fossil fuel use and increasing the percentage of energy derived from alternative sources

• Enhanced Energy Security is achieved by utilizing sustainable alternative sources that meet tactical, expeditionary, and shore requirements and force sustainment functions, and have the ability to protect and deliver sufficient energy to meet operational needs.

• Enhanced Energy Independence is achieved when Naval forces obtain at least half of their energy from alternative sources. Enhanced energy independence increases operational effectiveness making Naval forces more energy self-sufficient and less dependent on vulnerable energy production and supply lines.”

One of the 5 business priorities of the Department of the Air Force to

“Increase energy efficiency by reducing aviation fuel use, installation energy intensity, and (non-tactical) vehicle fleet petroleum

• Reduce fuel consumption through improved operational planning, alternative training concepts, and installation modernization and management.”

All these are good efforts but like the ones I showed above all SMP priorities talk about “what” instead of “how”. This is unfortunate. The focus should have been how to ensure that taxpayer money is spent responsibly.

To specify “how” may be a difficult task but it should not be left out and must be synchronized with the legislative regulations and procedures.

While the SMP does not bother with “how”, some recent legislative actions focus solely on “how”. For instance, consider this story in the New York Times article: “The military authorization law signed by President Obama on Friday contains a little-noticed “Buy American” provision for the Defense Department purchases of solar panels.” And how about the Domestic Fuel for Enhancing National Security Act of 2010 introduced in House, which aims to extend the number of years (from maximum 5 to 15 years) that multiyear contracts may be entered into for the purchase of advanced biofuels?

Tragy-Comedy of the Manas Fuel Contracts

2010-12-23T03:24:00.000+02:00

Manas Transit Center (formerly Manas Air Base) at Manas International Airport in Bishkek, Kyrgyzstan, is one of the busiest U.S. military installations in the world. About one-third of all fuel delivered over Afghanistan comes from the flying gas stations (KC-135 Stratotankers) in that Center.

Since it opened in 2001, the US government paid over $1.5 billion to not more than three companies (AvCard, Red Star and Mina) for their services under five separate fuel contracts. In November 2010, the sixth contract was signed for an estimated $600 million through the end of 2012. Red Star and Mina account for 97% of the total ($2.1 billion).

Mina and Red Star are major jet fuel supplier to the Department of Defense. When supplied fuel to U.S. bases in Kyrgyzstan and Afghanistan in exchange for over $3 billion in remuneration.

Things were going fine until early 2010 when corruption allegation drums became too loud. I wrote on this too (Manas Fuel Supply Contract Stinks and Oil Money Fuels Corruption in Kyrgyzstan).

On 22 June 2010, the Majority staff of the Subcommittee on National Security and Foreign Affairs released a report entitled Warlord, Inc. Extortion and Corruption Along the U.S. Supply Chain in Afghanistan. On 21 December 2010, another report titled Mystery at Manas: Strategic Blind Spots in the Department of Defense’s Fuel Contracts in Kyrgyzstan followed. (Excellent titles by the way). Both reports show how the Pentagon and State Department turned a blind eye to glaring red flags and their failure to manage and oversee multibillion dollar fuel contracts in Central Asia. Both reports are well researched, very good written but hides the truth - that emperor is naked.

If I had written a similar caliber report I would title it “Tragedy or just a comedy of errors?”

Abovementioned “Mystery at Manas” report gives most of the elements. Here are the findings, each is a chapter in the report. I highly recommend you to read that 68 page report instead of watching a thriller or tragy-comedy.

1. Mina and Red Star Have Successfully Provided Massive Amounts of Aviation Fuel to the U.S. Military in Kyrgyzstan and Afghanistan, but the Companies Operate in a Highly Secretive Manner that Often Conflicts with U.S. Diplomatic Interests

2. Mina and Red Star Are Beneficially Owned by a Kyrgyz National and an American Citizen with Backgrounds in Fuel Supply at Manas

3. From 2003 through 2005, Red Star Subcontracted with Fixed-base Operators at Manas Controlled by the Family of President Akayev

4. Mina and Red Star Deny Financial Ties to the Bakiyev Regime and the Subcommittee’s Investigation Uncovered No Credible Evidence to Link Them Financially

5. Mina and Red Star’s CEO Served as an Intermediary Between Maksim Bakiyev and the U.S. Department of Defense After Russia Pressured President Bakiyev to Close Manas

6. DLA-Energy Conducted Only Superficial Due Diligence on Mina and Red Star, and Turned a Blind Eye to Allegations of Corruption

7. DLA-Energy Took Few Steps to Mitigate Potential Corruption and Ignored Red Flags of Anti-competitive Behavior

8. The Department of Defense Failed to Oversee a Highly Sensitive Fuel Supply Arrangement Created by Mina and Red Star to Disguise their Fuel Procurement

9. The U.S. Embassy in Bishkek Claimed to Know Little About the Manas Fuel Supply Contracts Even After They Began to Seriously Undermine U.S.-Kyrgyz Diplomatic Relations

10. The United States’ Lack of Strategic Visibility into the Fuel Supply at Manas Led to Over-reliance on Mina and Red Star and an Unaddressed Vulnerability in the Supply Chain

Here are a few striking points I want to mention.

1. “Despite awarding Mina and Red Star several billion dollars in contracts over the past eight years, the existence of two ongoing investigations into serious allegations of corruption, significant political and diplomatic fallout in Kyrgyzstan, the companies’ unusual behavior and hyper-secrecy, and the U.S. military’s strategic reliance on the fuel that they provide, the U.S. government knew little about who the companies were or how they operated.”

2. “The collateral consequences of the United States’ lack of strategic oversight of its fuel contracting in Central Asia have been significant. Allegations of corruption in the Manas contracts have been linked to two revolutions in Kyrgyzstan and resulted in widespread public perceptions … that the United States has deliberately and illicitly used the fuel contracts to bribe Kyrgyzstan’s two past presidents.”

3. The slow and disorganized fashion in which the (State) Department responded raises serious questions about the completeness of its document production and its current organizational capacity to respond to congressional inquiries.

One of the things disturbing in the report is the following conclusion: “Despite many of the ingredients for corruption, after a diligent eight-month investigation the Majority staff of the National Security Subcommittee uncovered no credible evidence to support the allegation that President Bakiyev, his family, or affiliates were financially linked to Mina and Red Star.”

This is to say there is smoke but we couldn’t find a fire. This also implies that everything was done according to the established rules. If you cannot change the rules then why not change the game?

I wonder why investigation team did not meet and discuss with Russian officials, relevant Kyrgyz national personnel who worked for the companies’ primary subcontractors, or prime suspects.

The report also says that “One of the key ingredients to their success, Mina and Red Star claim, is their secrecy. The companies operate entirely out of the public view: they have no website; their listed physical address is a corporate drop-box in Gibraltar; until April, their operations were run out of a second-floor hotel suite at the Hyatt in Bishkek; and their beneficial ownership is buried deep under layers of shell companies formed in countries whose corporate laws are designed to facilitate secrecy and tax avoidance.”

Apparently, this seems very normal to DOD and investigation team. It is a shame. Give billions to companies without knowing their beneficiaries and without knowing where the money goes. Continue a war on terror without knowing whether you finance the terror or not.

Advising the DoD “to consider how it can significantly improve its wartime contracting practices” is not enough. Improve means a positive progress. DoD cannot improve it simply because it is doing it already wrong. Secretary Mabus reiterates all the time that “We've got to change the way we do business.” Dear Secretary, not only renewable and alternative energy sources but signing billion dollars worth fuel contracts are business too.

The recommendations given in the report are very soft. Further research suggestion to focus on “(1) the impact of increased Russian influence over the supply chain, and (2) the U.S. military’s extraordinary reliance on Mina and Red Star for jet fuel,” are however very important. All senior DOD officials who make so much fuss about energy security should note this.

I mentioned several times in my articles that Defense Department’s wartime contracting practices is something that should be looked at very carefully. Government Accountability Office wrote many excellent reports on this issue. The problem is that many look, few see and nobody takes any action. And the story goes on.

I wish you a happy new year and thank you for following me.