Monday, May 9, 2011

Energy Dollars in Austere Times: NDAA12 Markups

Recently the House Subcommittee on Readiness released their marks on H.R. 1540, the FY12 National Defense Authorization Bill with this press release. Energy was highlighted in the mark up. In their comments they said:

“The Committee continues to monitor DoD's energy use and encourage the Department to be more energy efficient, demonstrate a return of the energy investments, and enhance energy security. This year's NDAA includes several energy-related provisions for operation and maintenance, operational energy, and military installations.”

These provisions include:

  • Promoting energy-efficient technologies in logistics support contracts for contingency operations which will reduce demand for fuel and result in cost savings. We hope that this means that Logistics Civil Augmentation Program (LOGCAP) contracts will now contain a provision rewarding contractors for energy efficiency. As long as fuel is a government furnished item (as it often is), there is no incentive to be more efficient in diesel powered generator electricity production or more efficient heating, ventilation and air conditioning systems. Leasing energy inefficient structures means more money for contractors than if the government purchases and insulating those structures properly. If anyone has seen evidence that these provision are being included in LOGCAP contracts, please let me know. Happy to share that good news.
  • Requiring the Navy to meter piers to capture data when ships are docked in port, and authorizes $3.0 million for this effort. This is another case for “what can be measured can be managed”. A ship alongside routinely draws shore power and the Navy needs a way to determine the cost of that commodity.
  • Authorization for $30.4 million, an increase of $10.0 million for Operational Energy Capability Improvement. Presumably this is funding for the office of the Assistant Secretary of Defense for Operational Energy Plans and Programs. By now the plans must have been written so this money should be headed for programs. The question is, whose programs? The only entity that is focused solely on operational energy is the USMC’s Expeditionary Energy Office and they are slated for $9.0 million for the Marine Corps' Expeditionary Forward Operating Base. Otherwise it is likely to go to the SPIDERS JCTD. We look forward to that see how those funds are distributed. If you want to know what is important, follow the money.
  • Authorization for $45.0 million, an increase of $15.0 million for the Installation Energy Test Bed. This is the program mention in a previous posting, focused on finding ways to decrease energy demand, develop smart distribution systems and increase the use of alternative and renewable energy at U.S. military installations worldwide. This program has great potential for industry participation if not consumed by government research and development agencies. Although sponsored by the Strategic Environmental Research and Development Program and the Environmental Security Technology Certification Program, the hope it that the focus is on certification of commercial and government off the shelf technology.

Of course this is only the first step in a long process that may not reach the President’s desk until early 2011. In an era where ideology often trumps logic in the legislative process, what eventually makes it to DOD will be telling. The nearly $80 million represented above does not include the estimated $130 million in military construction dollars for the Energy Conservation Improvement Program. $210 million is a drop in the bucket compared with the overall budget, yet is does show a commitment by DOD to advance energy security. A much greater investment must be made by third party financing, if DOD and DOE can streamline the process and installation commanders can be convince it is economically responsible. All the stated energy goals and intent won’t accomplish this without strong leadership. Goals without responsibility, authority and accountability only set false expectations and create uncertainty. Dan Nolan

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