Friday, May 18, 2012

Fools Paradise and Arguing with Idiots: More Obstacles in DOD Road to Energy Security

Inhofe Slams DOD for Thinking Ahead
I believe that America has the opportunity, capability and financial wherewithal to lead the world in the production of alternative forms of electricity and fuel.  We already lead the world in energy storage R&D and a concerted effort by government and industry could push us into the lead in other areas, just as it did with electrification and information technologies.  But now, shortsighted politicians (I used to call them political leaders, but they have lost the right to that sobriquet) are not only attempting to strangle that baby in the crib, they want to turn back the clock.

DOD is doing R&D on biofuels to determine their impact on their mobility systems and as well as the ability to sustain domestic training operations with a substitute for petroleum.  They are doing it because they are required by law.   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. These, along with the National Defense Authorization Act of 2007 require DOD to have target purchase, by 2022, of cellulosic ethanol - 16 billion gallons; biomass based diesel - 5 billion gallons; and other biofuels - 15 billion gallons.   Not so fast, says the right Horrible Senator from Oklahoma.

In an article in Forbes magazine, Senator James Inhofe (R-OK) blasts SecDef Panetta for ensuring that DOD follows the law.  Sen. Inhofe accuses Panetta of wasting money on expensive fuels while the President is  gutting the DOD by a half trillion dollars over the next ten years. I might be wrong, but I seem to recall that that was an effect of Congress’ failure to trim $1.2 trillion from the Fed budget, which invoked the sequestration clause, also penned by Congress.  Gee, Senator, if you and your 99 buddies in the upper house could have issued a budget at all in the last three years, perhaps we could be having a more enlightened discussion.  Unfortunately, we cannot.

The version of the NDAA 2013 that came out of the House Armed Services Committee contained provisions to prevent DOD from investing in and deploying low-carbon, renewable fuels. This turns back time.  I am sure that will make Senator Inhofe very happy, much the way it would Hugo Chavez and Mahmoud Ahmadinejad.  But othersare not so pleased.

Nine former flag officers have written to Senators Levin and McCain to express their views on this effort.  In their opinion:
We have to find new sources of fuel. As long as the United States is beholden to global energy prices, our country is vulnerable. The Air Force and Army are increasing the fuel efficiency of the vehicles we use to fight, transport troops, and provide support. The Navy is investing in advanced biofuels programs that will enhance its power-projection capability. The Marines are operationalizing common assets like wind and solar power to decrease energy vulnerability. These initiatives have been undertaken in partnerships with American firms and are creating jobs for American workers.
Some Members of Congress, however, oppose these critical programs. They choose to waste time by advocating policies that have already proven to be failures and attack the military for investing in prudent measures that will save lives. Taking control of our energy future would mean preventing future conflicts around the world and protecting Americans here at home.
It is time to secure America with clean energy. All of our civilian leaders must match the military’s commitment and stop putting partisan politics ahead of good policy. We call on Congress to support the Department of Defense as it invests in clean, domestic, alternative sources of energy for the sake of the security of the United States of America.
Since the opposition to DOD’s efforts seem to be coming from the political party that professes to defer to the Generals in matters pertaining to the military, it should be relatively easy to, well, defer to the Generals.  Go ask Generals Marty Dempsey and Ray Odierno what they think.  I am sure ADM Greenert as well as Generals Amos and Schwartz will give you their professional opinions as well.
 Nicole Lederer, Co-Founder of Environmental Entrepreneurs ( has called upon her constituency to petition their Senators to oppose this action and to allow DOD to take the prudent action necessary to secure their mission essential energy requirements. As a fellow entrepreneur, the market that DOD represents is enticing. Their commitment will improve the technology, increase private investment and drives down the cost.  Think microprocessor.  Their change in behavior could impact the society at large.  Think racial and gender equality.  What is at risk here?  Worst case scenario is we identify a dead end path for economic investment.  The upside?  The Saudi Arabia of biofuels. 

If anyone knows the cost for operating a U.S. Navy Battle Group in the Straits of Malacca for a day, please pass that along to me.   Right now, Japan and China feel assured in their access to oil because the U.S. insures it.  If they do not get oil, America’s economy suffers, so we have to insure their access.  What if we develop the technology to create drop in replacement biofuels that we can license to Japan and China?  Worst case scenario?  China steals it and exploits it.  Upside?  Petro-dictators can no longer buy off political dissidents with the profits you and I put in their pockets.  Ever wonder why there was no Arab Spring in Saudi Arabia?

It is quite possible that I am living in a fool’s paradise, where all men and women have a sense of loyalty, duty, respect, selfless service, honor, integrity and personal courage.  The dysfunction of our government, the shortsightedness of business and the lack of commitment from our populace to pay the price of civilization will not dissuade me from my Pollyanna view of the world.  But at some point, I will stop arguing with idiots; they just drag you down to their level and beat you with experience.  

For all who are headed to New Orleans next week for the NDIA Environment, Energy Security and Sustainability Conference, see you there.  Dan Nolan


Anonymous said...

I fail to see the big deal here. In case it wasn't obvious, we have a bit of a debt crisis on our hands. The DOD is taking a huge hit in the form of budgetary cuts and everything is under the microscope. The DOD has already tested biofuels, understands its effect on performance and equipment, its a capability that exists today. The only problem is that the fuel costs are 6 to 8 times more than conventional fuels ( and some in congress, as you suggest, view this extra fuel cost as unwarranted, thus they are trying to save some money. At least they are trying to do something about our debt issue (what little it may be).

Dan Nolan said...

To the previous Anonymous poster: If you are considering the purchase of biofuels, from a tactical perspective, as a straight fuel purchase, biofuels do not make sense. If you consider it from a strategic perspective as an investment in a technology that will eliminate your critical vulnerability (no option but oil) then it is comparable to R&D and costs for prototypes are always more expensive than cost for mature technology. In two years the cost has come down significantly. In four years there could be parity. I personally don’t like putting money in petrodictators’ pockets, but we have no alternative. When DOD bought expensive microprocessors in the ‘60s, I am sure there was someone saying, “Hey, you could do that with vacuum tubes!”. I don’t want to be that guy; do you? Dan Nolan

Scott Pugh said...

DOD's energy initiatives are important and commendable - lightwieghting, advanced propulsion, energy efficiency, microgrids, wind, solar, storage all increase range, endurance, energy security or tooth-to-tail. Biofuels on the other hand do nothing to enhance DOD mission effectiveness or combat survivability. Since they cost much more on an energy basis than conventional fuels their purchase unavoidably means that there is less DOD budget remaining to support other energy technologies that are more valuable to DOD. Establishing a national market for biofuels shouldn't be a priority for DOD at the expense those other more useful areas. DOD accounts for only about 1% of US oil consumption so saying that replacing a small fraction of that with biofuels will influence the national market is like saying that the US with 3% of world oil reserves and 25% of global consumption can drill its way to energy independence. DOE should advance biofuel R&D but DOD should focus on energy technologies that can make the military more capable of performing its warfighting mission, reduce the logistics burden or improve energy security at bases and outposts. Biofuels are currently incapable of doing any of that.

Scott Pogue said...

It's people like Nicole Lederer that don't just post comments like ananymous...she actually makes a difference. Go Nicole!

Corvan said...

Americans like you gents make me think we may actually have a chance after all. More power to you.

Anonymous said...

I have no problem with the DOD doing R&D on alternative biofuels to have the technology on the shelf in case of a supply crisis. It is good military planning. Buying massive quantities of expensive biofuels when supply of oil is available is fiscally irresponsible. I do have a problem with Mme. Nicole's promotion of alternative energy. Is she saying that extortion of taxpayer's money for her buddies is more desirable than extortion for petrodictators and their buddies? I am having difficulty discriminating her "difference". The petrodictators seem to be demanding less for their cut, probably due to commodity price pressures of a free market. Claims that biofuel costs will be competitive with oil if only the stingy government would spend more on R&D wore thin 20 years ago. Forty years ago I drank the kool-aid, but I'm done now. Talk to the hand.

Anonymous said...

I respectfully disagree with the other Anonymous in this section. I think that he or she is correct in observing that DoD biofuels won’t swing the world oil market. But DoD purchases finished product and conventional refining capacity is in decline. Flat gasoline demand and escalating crude prices mean that refining margins are tightening, which could lead to eventual rationalization and closure (EIA predicts a 2mbd downsize from today’s fleet). Why is this a problem for DoD? Because DLA relies on competition between a limited number of conventional refineries to deliver affordable product. As some of these companies exit the downstream business, DLA risks a less competitive acquisition environment and thus less downward price pressure. I personally believe that it is in DoD’s long term financial interest to get ahead of the curve and help new companies repopulate the potential losses.

Is there a risk? Probably. But we should be okay with DoD adapting to foreseeable events if they take prudent steps to protect taxpayers. DoD’s Warstopper program, for instance, maintains industrial preparedness by investing in manufacturing surge capacity that is uneconomic for private industry during peacetime. Clear market intervention, but probably a pretty good idea. My point is that we sometimes tolerate DoD’s long term view where private markets fail in the near term. To me, DoD’s biofuel work falls into this category, so I disagree with the argument that DoD has no business filling the void- the argument that is being applied to biofuel. As a taxpayer (who believes in free markets), I’m okay with forward looking risk management. Better than 20/20 hindsight, IMO.

Multiple zones energy saving said...

My primary goal for this project is to improve comfort by better controlling the temperature. I want the system to be automated so that I can “set it and forget it”. My secondary goal is to improve HVAC efficiency and reduce my energy costs. With the cost savings, I hope to have a break even point within a few years.