The Commerce Department has set up an Internet web portal for defense
industry to report specific production or supply problems resulting
from recent hurricanes. Of particular concern is the damage caused
by Hurricane Katrina to liquid hydrogen plants, which could affect
defense suppliers in the space and munitions sectors.
In
the aftermath of Hurricane Katrina in early September, the Commerce
Department’s office of strategic industries and economic security
(OSIES) was made responsible for identifying defense supply or production
issues being experienced by industry, particularly those companies
that are located along the Gulf Coast.
OSIES has established a special e-mail address (Katrina.defenseindustry@bis.doc.gov)
to receive reports from affected companies. Firms are asked to provide
a written description of the specific damages and the impact on
production and delivery.
Under the Defense Production Act of 1950, the president can request
that certain supplies and services be redirected from commercial
to military or government customers in support of national defense
and energy programs.
Regulations known as “Defense Priorities and Allocations
System” provide guidelines for reassigning industrial resources
in national emergencies. DPAS must ensure a rapid industrial response
during a national emergency and also attempt to minimize disruptions
to normal commercial activities. DPAS ratings are given to 300,000
Defense Department contracts. Those ratings are used to set priorities
for delivery of supplies and raw materials in the event of a crisis.
After Katrina hit, a group of officials from the Commerce and Defense
Departments, as well as the Department of Homeland Security, concluded
that the hurricane potentially would affect production of key materials
used in military equipment.
Katrina marked the first time that the Defense Priorities and Allocations
System was implemented in a domestic crisis not attributed to a
military conflict. “The magnitude of the area affected and
the potential impact on defense industry” warranted the decision
to enforce DPAS, said William J. Denk, director of the defense programs
division at the Commerce Department’s office of strategic
industries and economic security.
Among the top concerns are liquid hydrogen supplies. Liquid hydrogen
is an essential commodity for the steel and petrochemical industries
and public utilities, as well as NASA and the Air Force.
The area smashed by Katrina is home to 25 percent of the North
American industrial base for liquid hydrogen production. Liquid
hydrogen is used by the space industry to fuel rockets that launch
military satellites, and also is employed in munitions manufacturing.
NASA has a large supply of liquid hydrogen, which it has agreed
to temporarily share with the Defense Department until the Gulf
Coast area can recover.
The New Orleans Air Products liquid hydrogen plant alone represents
31 percent of North American industrial hydrogen production, according
to GlobalSecurity.org. About 44 percent of North America’s
liquid hydrogen supply had been lost because of a previously scheduled
shut down of the company’s hydrogen plant in Sarnia, Ontario,
Canada. That left Air Products with one operating liquid hydrogen
plant in Sacramento, Calif., with a capacity of only 2.3 million
standard cubic feet a day, reported GlobalSecurity. The New Orleans
plant can produce 26.8 million cubic feet, while the Sarnia facility
can make 11.5 million cubic feet.
The Army Corps of Engineers began repairing the New Orleans facility
Sept. 5. Air Products reported that it has been able to secure additional
hydrogen supplies from other sources.
Another supplier of liquid oxygen, Praxair, was operating its four
plants at 75 percent capacity before Hurricane Katrina. These facilities—located
in Alabama, California, Indiana and New York—are now running
at full capacity, said GlobalSecurity. The four facilities have
a combined capacity of 46.5 million standard cubic feet a day. The
increase of approximately 12 million standard cubic feet a day will
only partially offset the loss of 26.8 million cubic feet per day
from the New Orleans plant, which supplies 50 percent to 60 percent
of the total hydrogen consumed by the steel industry.
The Stennis Space Center uses 70 percent of all the liquid hydrogen
acquired by NASA, noted GlobalSecurity. The agency relies on super-cold
liquid hydrogen as the fuel to power the space shuttle’s three
main engines during the ascent phase of flight, ground testing and
propulsion development. Liquid hydrogen also acts as the propellant
for the shuttle’s onboard fuel cells.
“One of the most significant lessons from Hurricane Katrina
is the potential vulnerability of critical infrastructure and the
consequences of losing unique national assets,” said Daniel
Gouré, a military analyst at the Lexington Institute, a defense
industry and policy think tank.
The Ingalls shipyard at Pascagoula, Miss., which is responsible
for the production of Navy surface warships, will be operating at
reduced capacity for months to come, noted Gouré. “The
military industrial base is one infrastructure sector that is particularly
vulnerable to such single-node failures. Most military equipment
is produced or assembled at a single facility. A natural disaster
or terrorist strike in one part of the homeland could negatively
impact national security on a global scale.”
A case in point is small arms ammunition, Gouré wrote in
a policy brief. The military relies on a single production facility,
the Army’s Lake City Ammunition Plant, a government-owned
facility run by Alliant Techsystems. The Army plans to add a second
supplier that will be geographically separated from Lake City.
“The value of a second source for ammunition geographically
separated from the primary production site should be obvious to
everyone after Katrina,” Gouré said.