Wednesday, July 27, 2011

Breach or By-Pass: Overcoming Obstacles to DOD Energy Goals

In DOD energy, the vision is clear and the strategic goals are well articulated. What is missing is direction to those who will execute the strategy at the operational and tactical levels. If you ask a Director of Public Works at an Army Post (and I have) what their responsibilities are regarding achieving 25% renewable energy by 2025, they will look at you as if you have an even number of heads.

A recent article in National Defense Magazine questioned DOD’s ability “to turn glossy rhetoric into ironclad policies”. This observation came as results of remarks by former Vice Chief of Naval Operations, ADM (R) John Nathman of the Center for Strategic and International Studies (CSIS). Nathman attributes this in part to a lack of an overall National Energy Policy. I would agree that we do not have a new energy policy, but there are plenty of existing laws and executive orders still in effect.

The current energy policy is expressed in two laws (EPAct 2005 and EISA 2007) and two executive orders, (13423 and 13514). They provide sufficient guidance for DOD to create strategy, operational direction and tactical instruction. The following is what is required of DOD:

Biofuels Target Purchases by 2022 (at market price):

  • Cellulosic ethanol 16 Billion Gallons
  • Biomass Based diesel 5 Billion Gallons
  • Other Biofuels 15 Billion Gallons

Renewable Energy Goals (at “acceptable rates):

  • 2010 5%
  • 2013 7.5%
  • 2025 25%
  • 2050 50%

Energy Efficiency Goals (relative to 2003; where economically feasible)

  • 2015 30%

The lack of a new national energy policy is not a hindrance to DOD energy planning. What is missing is fixing the responsibilities. The authorities are there (ECIP, MILCON, UESC, ESPC, MATOC, PPA). Because no one is responsible, no one can be held accountable. As one comment I received stated, “who cares about the OEPP plan; show me the budget!".

For operational energy, the acquisition community and contracting command should be getting the rose for figuring out the COTS, GOTs, new development solutions and/or contract modifications necessary. For biofuels, Defense Logistics Agency – Energy will be responsible for that acquisition, but at competitive prices (if Shell Aviation will allow it; how long can Shell sell at a loss?). Infrastructure energy responsibility for renewables and energy conservation will have to devolve upon the Corps of Engineers, Army’s Installation Command, Navy Facilities Command and the Air Force Civil Engineering Support Agency. From there it will pass to the tactical level at the bases and post through the installation command structure. The HOW of this must be in the much promised, forthcoming PLANs. Will every base need to reduce by 7.5% by 2013 or will it be measured as a Service?

There is no question that this is hard work. By Title 10 of the U.S. Code, the Services control the budget. Any plan at the OSD level must be coordinated with (agreed to by) the Services. How hard could that be? Dwindling resources make budgeting agreements hard to achieve. Ask the President and Speaker.

The final piece of the article talked about getting DOD to change their appreciation of the “time value” of money. A dollar spent today on energy conservation saves hundreds in five years, but the Pentagon has been famously “penny-wise and pound-foolish”. As sexy as renewable are, conservation is the best bet for DOD. The smaller the energy foot print, the easier it is to get 7.5% from RE sources. Culture change indeed! Dan Nolan


  • EPAct 2005 – Energy Policy Act of 2005
  • EISA 2007 – Energy Independence and Security Act of 2007
  • ECIP – Energy Conservation Investment Program
  • MILCON - Military Construction
  • UESC – Utility Energy Services
  • ESPC - Energy Savings Performance Contracts
  • MATOC - Multiple Award Task Order Contract.
  • EUL – Enhanced Use Lease
  • PPA – Power Purchase Agreement
  • COTS – Commercial Off the Shelf Technology
  • GOTS – Government Off the Shelf Technology
  • OSD – Office of the Secretary of Defense


David Willson said...

Regarding "As sexy as renewables are, conservation is the best bet for DOD. The smaller the energy foot print, the easier it is to get 7.5% from RE sources", I could not agree more. In Afghanistan, Conservation (via passive means such as adobe building, geothermal heat pumps, and Evaporative Coolers) can reduce power needs by more than 50%. Wind & Solar are highly economic (with a payback of just months) when a fully-loaded energy cost of $30-40/gallon or more is properly imputed.
This raises an important question. Can DOD specify its own Management Accounting, or are there other things blocking such constructive changes?

Brian Smith said...

Agree with this statement, and the rhetorical question: "The HOW of this must be in the much promised, forthcoming PLANs. Will every base need to reduce by 7.5% by 2013 or will it be measured as a Service?"

To hold people accountable, they have to know how they're being measured. It seems IMCOM (or someone!) needs to assign specific goals for each installation in the Army (or USAF or Navy). These goals should be established in the context of the local cost of electricity per kWh, available renewable power, etc. If any Energy Manager fails to meet the goals, he/she should face consequences. If he/she succeeds, there should be rewards--monetary or otherwise.

To more efficiently meet energy goals, there could even be competition amongst DPW staff, whereby energy/resource manager get a certain amount of funds to "invest" in energy conservation/renewable energy. Those that achieve the biggest bang for the government's buck get rewarded with more responsibilities and bigger budget.