Thursday, June 10, 2010

Thinking about the End of Easy Oil (EOEO) and the DOD

There've been a lot of articles about EOEO in the last few years, and of course, a spike of interest in the topic since the BP DeepWater rig explosion and ensuing Gulf of Mexico oil deluge. Basically, the oft-repeated point is that while there's still a lot of oil left on the planet, much of what's left lies far below the floor of deep oceans, or in remote and often environmentally pristine latitudes. No matter how you slice it, the costs are higher in these places, and so are the risks.

But was there ever easy oil? I don't think it was ever quite as simple as depicted in the Beverly Hillbillies. But maybe the crude we got from our East Texas wells before they ran low was the easiest. If you really want to know about the phases of energy history (and you should), there's really only one book for it: Daniel Yergin's The Prize: The Epic Quest for Oil, Money & Power.

A case can be made that oil is often far from easy, even when it's relatively simple to extract. Here's what I mean:
  • Expeditionary oil is never easy. Consider the often enormous costs in dollars and soldiers
  • Our real warfighting orgs, the Unified Combatant Commands, don't have to plan for fuel problems or pay for fuel no matter how much they use ... that's easy for them. But maybe not good for helping focus DOD energy strategy
  • Theater commanders don't directly pay for fuel no matter how much they use ... that's easy for them and necessary for effective warfighting
  • DLA's DESC directly pays for fuel and ensures its delivery to where it is needed. That's not easy. And it masks our forces' dependency on the stuff
  • Is oil sourced from the Middle East, some percent of which is then used against us, easy? I'd have to say that's a big NO
Despite the recession-induced downward price pressure on oil since its 2008 peak, you don't need Daniel Yergin to tell you that oil prices will rise again as the recovery continues, Chinese and Indian demand rises steeply, and new controls are placed on offshore rigs. That's the money part. That's not going away. And neither are the hard facts about the heavy man and mission costs we pay via fuel convoys. Easy oil is over, and the pressure is relentlessly building on senior leadership to accelerate our moves away from dependency on this increasingly problematic resource.

Photo Credit: Sig Nygaard on

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