DOD's Energy Challenge as Strategic Opportunity

Article excerpt

Energy is the lifeblood of modern societies and a pillar of America's prowess and prosperity. Yet energy is also a major source of global instability, conflict, pollution, and risk. Many of the gravest threats to national security are intimately intertwined with energy, including oil supply interruptions, oil-funded terrorism, oil-fed conflict and instability, nuclear proliferation, domestic critical infrastructure vulnerabilities, and climate change (which changes everything). (1)

Every combatant command has significant and increasing energy-related missions. Energy has become such a "master key"--it is so pervasive in its tangled linkages to nearly every other security issue--that no national security strategy or doctrine can succeed without a broad and sharp focus on how the United States and the world get and use energy. For the first time, 37 years after the 1973 oil embargo, the 2010 Quadrennial Defense Review is expected to recognize energy's centrality to the mission of the Department of Defense (DOD), and to suggest how DOD can turn energy from a major risk into a source of breakthrough advantage.

DOD faces its own internal energy challenges. The heavy steel forces that defeated the Axis "floated to victory on a sea of oil," six-sevenths of which came from Texas. Today, Texas is a net importer of oil, and warfighting is about 16 times more energy-intensive: its oil intensity per warfighter rose 2.6 percent annually for the past 40 years and is projected to rise another 1.5 percent annually through 2017 due to greater mechanization, remote expeditionary conflict, rugged terrain, and irregular operations. ( 2) Fuel price volatility also buffets defense budgets: each $10 per barrel (bbl) rise in oil price costs DOD over $1.3 billion per year. But of immediate concern, DOD's mission is at risk (as recent wargaming confirms), and the Department is paying a huge cost in lives, dollars, and compromised warfighting capability for two reasons:

* pervasively inefficient use of energy in the battlespace

* ~99 percent dependence of fixed-facility critical missions on the vulnerable electricity grid.

This discussion of both issues draws heavily on the Defense Science Board's (DSB's) 2008 report More Fight--Less Fuel. (3) That analysis, building on and reinforcing its largely overlooked 2001 predecessor, found that solutions are available to turn these handicaps into revolutionary gains in warfighting capability, at comparable or lower capital cost and at far lower operating cost, without tradeoff or compromise. The prize is great. As the Logistics Management Institute stated, "Aggressively developing and applying energy-saving technologies to military applications would potentially do more to solve the most pressing long-term challenges facing DOD and our national security than any other single investment area." (4)

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Fuel Logistics: DOD's Soft Underbelly

Fuel has long been peripheral to DOD's focus ("We don't do fuel--we buy fuel"), but turbulent oil markets and geopolitics have lately led some to question the Department's long-term access to mobility fuel. Echoing the International Energy Agency's chief economist, Fatih Birol--"We must leave oil before it leaves us"--some analysts assert world oil output capability has peaked or soon will. They overlook recent evidence that "peak oil" is more clearly imminent in demand than in supply. U.S. gasoline use--an eighth of world oil--is probably in permanent decline. (5) So may be Organisation for Economic Co-operation and Development countries' oil use, which has been falling since early 2005. (6) Deutsche Bank projects world oil use to peak in 2016, then be cut by electric cars to ~40 percent below the consensus forecast or ~8 percent below current levels by 2030. (7)This assumes China's new cars will be 26 percent electrified by 2020 (China's target is 80 percent), and omits lightweight and low-drag cars, superefficient trucks and planes, and other important oil savings well under way. …