In Defense of Energy: Unlocking an Untapped Resource

BY JEFFREY M. VOTH

The morning of 2 March 2013 could have started better for Americans. Although most did not wake up to Sonny and Cher singing “I Got You, Babe” as their Saturday morning alarm, it was hard to avoid turning on the television, opening the paper, or glancing at the latest news feed without feeling a bit like Bill Murray’s character—a weatherman reliving the same day over and over again—in the 1993 cult-classic movie Groundhog Day.

As federal programs braced for $85 billion in indiscriminate cuts, half of which would fall on the shoulders of a military stretched thin after a decade of war, politicians reverted to familiar partisan rhetoric and dire predictions—a nod to Punxsutawney Phil, the venerable prognosticator and icon of the small Pennsylvania town featured in the film.

Unfortunately, it is not enough to agree that political inaction is the problem. Confronted with mounting government deficits, no relief to a demanding military operational tempo, and an increasing focus on the Asia-Pacific region, how can U.S. forces improve security, offset austerity measures, and preserve American global commitments critical for economic growth?

They can do so by leading an unconventional energy revolution.

Exempt from requirements outlined by federal statutory laws and regulations, the energy consumed by America’s operational forces has largely gone unchecked. The cost to power our nation’s military could be significantly reduced by 2035 simply by making concerted efforts to transform energy efficiency. Defense operational energy consumption grew by just 0.3 percent in 2011, significantly below the 1.7 percent average annual growth experienced during the last decade of war.^[i] This article posits that energy efficiency for U.S. operational forces is an untapped resource and should be considered a vital “fifth fuel” in efforts to reduce consumption.

This article proceeds in three stages. First, I examine U.S. security commitments in the Middle East region, with a focus on the operational energy required to provide a persistent presence to ensure the export of millions of barrels of oil every day. Next, I explore the relationship between energy security and security policy, discussing the primary challenges that the United States faces in adopting energy efficiency reforms within current defense acquisition and operational frameworks. Finally, this article brings these themes together to argue that effective mitigation of oil/energy price shocks and supply disruptions resulting from exogenous political events in the Middle East region needs an expanded energy policy framework to unlock the energy efficiency potential of the U.S. military, the single-largest energy consumer in the world. As part of this strategy, the United States will be able to effectively leverage the power of a strong domestic energy agenda and support an emerging national security strategy focused on the Asia-Pacific region.

Securing American Energy

U.S. policy in the Middle East region has been predicated on the notion that the United States will use military force if necessary to defend its national interest to secure the flow of oil. First articulated during President Jimmy Carter’s 1980 State of the Union Address, the pronouncement—dubbed the Carter Doctrine—declared that “an attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States.”^[ii] This doctrine underpins American policy in the Middle East that endured with an increased dependence on oil exports transiting through the Strait of Hormuz. The policy has not come without economic consequences, however. Recent studies have employed full-cost accounting methods to estimate the cost of force projection in the Middle East, including the cost for the U.S. Navy to continuously maintain a single carrier strike group in the region. These studies, sponsored by Princeton University’s Oil, Energy, and the Middle East program, estimate the cost of sustained operations over the past three decades to be more than $7 trillion—nearly one-half of America’s growing national debt.^[iii]

Assured access to reliable and sustainable supplies of energy has been central to the U.S. military’s ability to meet operational requirements within the Middle East, whether keeping the seas safe from Somali pirates operating in the Strait of Hormuz, providing humanitarian assistance in the wake of a natural disaster in Pakistan, or delivering counterterrorism and special-mission units to hostile regions throughout the Middle East. With the war in Afghanistan drawing to a close by the end of 2014, the United States needs to take the opportunity to establish broader operational energy reduction targets (see Figure 1) and balance regional security commitments in the Middle East while embracing a new defense strategy that calls for a strengthened American presence in the Asia-Pacific region. New approaches and innovative technologies are required to improve fuel efficiency, increase the length of time between refueling, and enhance operational flexibility with the goal of reducing vulnerability inherent in a long supply line tether. From both a strategic and operational perspective, the call to action is clear: energy efficiency must transform the military’s energy security posture to meet an increasingly interconnected series of global commitments.

As illustrated in Figure 1, extreme volatility of oil prices and the cost to provide an ongoing maritime presence to ensure access to foreign fuel supplies present a significant challenge for the U.S. Department of Defense (DOD). Between 2003 and 2009, the global oil market witnessed its most significant period of volatility in decades. After relentlessly increasing, oil prices reached a historic high in 2008. Oil prices retreated following the global economic crisis, but consistently climbed over the next three years, averaging the second-highest level on record in 2012.^[iv] Operating in a fiscally constrained environment over the next few decades could magnify the impact of the DOD’s dependence on foreign and nonrenewable sources of energy. For every dollar increase in the price of a barrel of oil, the DOD’s annual fuel costs rise by $130 million.^[v] Implementing a modest 1.5 percent annual reduction target—half of the current National Energy Conservation Policy Act (NECPA) mandate—would be a step to align military operational energy goals with targets established for the DOD’S fixed installations and broader federal initiatives. Efforts are already underway to significantly reduce building energy consumption within the DOD, managing a facility footprint three times larger than Wal-Mart, the world’s largest retailer. Expanding federal initiatives to operational energy, which comprises more than 75 percent of the military’s total consumption,^[vi] would offset more than 195 trillion British thermal units (BTUs) from the 2010 baseline, enough total energy to power the entire city of Washington, DC.^[vii]

Accelerating America’s Energy Transformation

Historically, operational energy considerations have not played a significant role within DOD acquisition or operational policy. Operational energy programs have encountered funding challenges, particularly a lack of sufficient development and procurement funding, which has impeded significant technology development for energy efficiency gains. Rapid rises in fuel costs without relief to the U.S. military’s high operating tempo have limited the funds available for ship maintenance, stretched operational budgets, and forced postponement of several high-visibility deployments. Therefore, as energy policy has evolved as a national security issue, more emphasis has been placed on operational energy efficiency, including the establishment of a central office within the DOD to provide guidance and oversight for operational energy plans and programs.

Recent policy progress has included an agreement from the Joint Requirements Oversight Council (JROC) to apply energy efficiency as a key performance parameter. The new energy efficiency metric will reference the total, or “fully burdened” cost of energy in analyses for selected acquisition decisions. While introducing new methods to assess total lifecycle energy costs is an important step within the overall acquisition framework for defense systems, in general, policy and regulatory structures tend to delay energy transformation. The typical time elapsed from a decision to proceed for defense systems until its initial operational capability averages more than ten years. The real barrier to an energy transformation within military operational energy will be slow adoption rates rather than the adequacy of available technologies.

As former U.K. Prime Minister Winston Churchill once famously declared, “Gentlemen, we have run out of money; now we have to think.” Churchill’s admonition underlies the need for reform throughout the U.S. federal government, including its largest energy consumer. The DOD comprises 80 percent of federal consumption^[viii] yet is largely exempt from recent energy reform policies due to the nature of the missions, the prioritization of warfighter safety, and the large fleet of tactical vehicles (i.e., tactical fuels are exempt from any federal mandate). Energy efficiency initiatives, particularly off-the-shelf technology, should employ a fast-track process, introducing new capabilities in fewer than twenty-four months, and should actually improve the safety and functionality of the warfighters. The DOD has the proven ability to respond effectively to urgent operational needs, establishing rapid response teams to match critical technology with warfighter demands. Finally, policies mandating energy efficiency considerations, consistent with mission needs, should be established during operational commanders’ efforts to design theater campaign plans. Reshaping the traditional strategic planning process by expanding efficiency requirements within acquisition and operational policies will produce distinct advantages that will enhance national and global energy security imperatives.

Recognizing Future Global Energy Challenges

The DOD will need to enhance its security posture by significantly reducing warfighter dependence of vulnerable fuel supplies while ensuring military forces are able to meet the increasing demands as attention shifts from the Middle East to the Asia-Pacific region. Energy security will continue to be inextricably linked to national security interests. “The global energy landscape is changing rapidly. And those changes will recast our expectations about the role of different countries, regions and fuels over the coming decades,” according to International Energy Agency (IEA) Executive Director Maria van der Hoeven.^[ix] The U.S. currently imports two million barrels of oil each day from the Middle East, according to the latest IEA report, the world’s source for authoritative data and analysis on energy.^[x] The Paris-based intergovernmental organization predicts that the combined effect of surging production of unconventional oil, known as “tight oil,” and efficiency improvements to curtail demand will reduce U.S. dependence on Middle East oil imports by up to 85 percent over the next two decades.^[xi] As America secures its domestic energy future and ends a decade-long war in the Middle East, it will, “of necessity rebalance toward the Asia-Pacific region,” according to the U.S. national security strategy released in 2012.^[xii]

The Asia-Pacific region will account for more than 90 percent of Middle East oil exports by 2035,^[xiii] shifting U.S. military attention to the Malacca, Lombok, and Sunda Strait, which will become a growing strategic choke point for oil supplies bound for Allied nations and require a growing U.S. military presence in the Asia-Pacific region. Critical regional allies such as Japan and Korea both have large refining sectors but rely on crude imports for nearly all of their oil needs. Vulnerabilities presented by the volatility of energy costs, dependence on limited foreign oil sources, and threat of foreign energy suppliers attempting to influence the global economy all address the need to transform energy supply, demand, and security for the DOD. With a newly established Marine Corps presence in Australia, an established Army and Air Force infrastructure in Korea, and more than half of Naval Forces scheduled to be based in the Asia-Pacific region, deliberate and strategic measures are required to mitigate operational energy challenges for a globally deployed U.S. force structure.

Expanding the current energy policy framework to incorporate the military’s operational requirements will require confidence, vision, and a comprehensive strategy that will drive transformation throughout a globally deployed force. Improving energy efficiency will allow forces to quickly incorporate new mission capabilities that require increased power demand while reducing overall fuel consumption. Expanding the domestic blueprint for a secure energy future to incorporate its globally deployed force will unlock an untapped resource, aligning policy objectives and fully embracing energy as a strategic resource—firmly establishing America as a global energy leader in the decades ahead.

Photo source here.

Jeffrey M. Voth was a 2012 Senior Executive Fellow at the John F. Kennedy School of Government at Harvard University. He is the president of Herren Associates, an engineering and management consulting firm, based in Washington, DC, focused on maximizing the value of every taxpayer dollar spent.