Will War Drawdown Dampen Pentagon’s Green Energy Program?

12/22/2011
By Sandra I. Erwin

Navy Secretary Ray Mabus often reminds audiences that, for the Defense Department, renewable energy is not a fad or a “way to be politically correct.” Energy security, Mabus and other Pentagon officials have stressed, is about national security.
The end of the war in Iraq and the gradual withdrawal of U.S. forces from Afghanistan, however, could throw a wrench in the Pentagon’s ambitious energy strategy. As per a congressional mandate, the Pentagon unveiled in 2010 a comprehensive plan to reduce fuel use on the battlefield in an effort to avert casualties in war zones, where thousands of troops and contractors have been killed moving and guarding fuel supplies. The Pentagon’s strategy also sets broad goals to reduce the Defense Department’s dependence on fossil fuels and to require that all future weapon systems be more energy efficient. The military today consumes less than 2 percent of the nation’s oil supply, or about 300,000 barrels per day.
The troop drawdown, in and of itself, could weaken the sense of urgency that has so far propelled projects such as replacing Army and Marine Corps diesel-hogging generators with solar panels.
Sharon Burke, assistant secretary of defense for operational energy plans and programs, said it would be unwise to return to “business as usual” after the current wars end. “If we do that, we’ll have the same revelation [that we had when the current wars started] next time we have to fight a war,” she said in an October interview with National Defense.
“Yes, sometimes we forget when we come home,” she said. “But we’ll pay a price” if energy priorities are not addressed during peacetime, before the next conflict erupts. “If we are going to be a global force, it’s going to take a lot of energy to sustain a global force,” Burke said. “We should not wait until the problem is manifested.”
But a shift in the energy debate over the past several months has sparked questions about the prospects of long-term support for the Defense Department’s program.
Entering the conversation is the idea that energy security — defined as lowering U.S. dependence on Middle Eastern oil — could be achieved by increasing domestic production of fossil fuels. This could influence support for some of the military’s green-energy effort such as increased use of biofuels. The Navy and Air Force have spent hundreds of millions of dollars procuring biofuels and modifying aircraft so they can fly on a mix of alternative and conventional fuel. Last month, the Defense Logistics Agency purchased 450,000 gallons of biofuels for future tests. It was billed as the largest ever U.S. government biofuel buy.
Recent statistics about U.S. domestic energy production have raised eyebrows within industry and political circles. Daniel Yergin, chairman of IHS Cambridge Energy Research Associates and author of "The Quest: Energy, Security, and the Remaking of the Modern World," noted in a Wall Street Journal article that the United States has become less dependent on petroleum imports from unstable countries while U.S. crude oil output has risen by 18 percent since 2008. “The big surprise is onshore, where the United States is experiencing an oil boom.” U.S. petroleum imports, he wrote, reached their peak (60 percent) in 2005, and they are now down to 46 percent.
The Journal also reported that U.S. exports of gasoline, diesel and other oil-based fuels are soaring, and “putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years.”
According to Politico’s “Issues Forecast” for 2012, “Republicans on the Hill and on the campaign trail have been pressing for more oil drilling on- and offshore.” Tax credits for production of renewable energy, meanwhile, are set to expire in the next two years. Politico projects that “renewables face going off a cliff unless they find some strong allies in Congress.”
Experts say it is too soon to foretell what these developments mean for alternative-energy investments, including the Pentagon’s financial backing of biofuels and green technologies.
Retired Air Force Gen. Charles F. Wald, a supporter of biofuels, said it would be “extremely shortsighted and narrow minded to think that our energy problem is resolved” by relatively small increases in domestic oil production. “The energy problem is not waning,” said Wald, who is director of the consulting firm Deloitte's defense practice. Regardless of recent developments in domestic energy, he said, the United States remains highly dependent on foreign oil that has to be transported through volatile areas. “If the Straits of Hormuz is shut down, that is one-fifth of the world’s oil,” he said. “The global economy would go into a tailspin.”
As to whether the troop drawdown will take the wind out of the defense energy sails, Wald said that is entirely possible, unless the nation’s leaders bring the issue to the forefront.
“We go through cycles. There are periods of great concern and nervousness about energy disruption and high prices,” he said. “If we’re net exporters, does that mean we no longer care because we have bigger things to worry about?” he asked. “I think it’s a leadership issue.”
The Defense Department’s biofuels program will remain strong, he said. It may progress at a slower pace, but the Pentagon will muddle through, he added.
Another retired Air Force general and renewable energy advocate, Norman Seip, said he is optimistic about the Defense Department’s green efforts.
“I don’t see the enthusiasm dampening,” he said. Even if domestic production of fossil fuels picks up steam, that is still no reason to give up on alternative energy, Seip said.
Green energy enthusiasts caution that it is too soon to interpret these recent domestic energy numbers as a sign that the United States is truly becoming more energy independent.
“The United States still uses 20 percent of the world’s oil supplies and produces around 2 percent. That has not changed,” said Nicole Lederer, co-founder of Environmental Entrepreneurs.
“We are not a net exporter of domestically drilled oil. We are a net exporter of refined oil products,” which is an important distinction to make, she said. U.S. refineries bring in oil from foreign sources, and exports the proceeds which are sold at global market prices. “We have no more access [to domestically refined oil] than any other country,” she said. “So we continue to be very vulnerable to global price fluctuation.”
Lederer praised the Defense Department for seeking to diversify its energy supply and reduce demand. “The Pentagon is not walking away from these issues,” she said. “They’re committed.”
The biofuels industry is counting on the Defense Department to “help get through the valley of death” as these products transition from the lab to the field. “As soon as the market sees a demand, private investors will continue to swarm into this space to help them scale up,” she said. “The Defense Department is playing an extremely important role establishing that demand.”
One sector of the military’s green-energy business that is expected to see rampant growth is upgrades to Army bases. Army Secretary John McHugh formed an “Energy Initiatives Task Force” as a one-stop shop for the development of cost-effective large-scale renewable energy projects. Army officials are betting that the private sector will jump at the opportunity to spend billions of dollars to build utility-scale solar plants and wind turbines, or produce geothermal energy on federal lands. The large upfront investment would be offset by future government contracts to supply electricity to military bases and surrounding communities.

Topics: Energy, Alternative Energy, Energy Security

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