Projections that the U.S. will become all but self-sufficient in energy by 2035 have profound implications for an aviation fuels market in the early stages of moving from a dependence on petroleum to encompassing a wide and varied range of sources.
Abundant and inexpensive natural gas is making it more difficult for renewable energy sources to establish themselves in the U.S. The nascent biofuels industry is being affected, as gas can be converted to liquid fuels in the near term and in the longer term liquefied natural gas could be used directly in aircraft engines (see page 46). Some alternative-fuel start-ups have switched from biomass to natural gas.
The dynamic developments in the energy market have thrown a spotlight on the Obama administration's moves to use the buying power of the military to help foster an alternative-fuels marketplace with the goal of providing energy security by reducing reliance on imported oil. The's role in scaling up biofuel production to commercial volumes is now in question.
As it did last year, conservative opposition is taking root in the Republican-controlled House of Representatives' National Defense Authorization Act for fiscal 2014, via several provisions that attempt to restrict or undo Pentagon spending on alternative fuels (AW&ST June 18, 2012, p. 40). And, like last year, there is practically no equivalent language in the Democratic-run Senate Armed Services Committee's version of the bill, meaning there will be a fight in congressional conference over the language when lawmakers meet to hash out a House-Senate compromise.
Last year, for the 2013 National Defense Authorization Act, most anti-alternative-fuels provisions were watered down or removed in conference—as Democrats and more biofuel-friendly Republicans outnumber the anti-alternative conservatives—and the Pentagon was allowed to inch ahead in its efforts. The Senate is expected to debate its defense authorization bill after its August break, and a compromise bill is not expected until the end of the year.
Conservative opponents of defense alternative-fuel spending assert that they are not against biofuel or other non-oil energy, and have no qualms about Army and Air Force efforts to prepare for future fuels. The Army has a broad aim of increasing the use of renewable energy, including on its helicopters, but has not adopted any specific alternative-fuel goals. The Air Force is certifying all aircraft to use a 50:50 blend of conventional and alternative fuels and preparing to acquire half its domestic aviation fuel from alternative sources including biomass by 2016.
But it is the Navy's goals that are drawing the most criticism from conservative lawmakers. Empowered by the Defense Production Act, the Navy has entered into a $510 million agreement with the Energy and Agriculture Departments to promote the development of a domestic advanced biofuel industry through the construction of biofuel refineries. The Navy's share is a $170 million investment, mainly in procurement of fuels to meet its goal of deploying a “Great Green Fleet” strike group of ships and aircraft running entirely on alternative blends by 2016, en route to meeting half of its total energy needs from alternative sources by 2020. To do so, the Navy would need to replace about 8 million barrels of petroleum with unblended alternative fuels by 2020, the Congressional Research Service (CRS) reported in December.
But being an early adopter means paying higher prices, and House Armed Services Committee (HASC) Republicans such as Reps. Randy Forbes (Va.) and Michael Conaway (Texas) say the Navy spending is misguided—particularly as sequestration cuts are hurting military readiness and threatening future technological advantages by starving research and procurement spending. As part of the HASC bill markup in June, Conaway sponsored three successful amendments to ban defense buys of biofuels until their price matches conventional fuel, as well as to halt defense spending for biofuel refineries and encourage Pentagon spending on oil sands and coal-to-liquid fuel.
“This is an area that is better suited for the Energy Department to pursue and to get these fuels affordable and competitive,” Conaway says of alternatives. “If we are needing to apply them, to use these biofuels here in the U.S. to protect the homeland, that would be one thing—but that's not the case.”
But HASC Democrats such as Rep. Rick Larsen (Wash.) stress that finding alternatives to petroleum has been a key naval concern for decades, leading to innovations like nuclear-powered aircraft carriers and submarines or the's integrated electric-drive technology. “If in the short term there is a little bit of an expense, well, in the short term there was a little bit of expense in developing oil way back in the day,” Larsen says. “But having alternatives to oil and not being completely dependent, that is important. It's been important in the Navy for a while.”
For the military, the drive toward alternative fuels is strategic. The Pentagon's goals are to “ensure operational military readiness, improve battlespace effectiveness,” and increase “the ability to use multiple, reliable fuel sources,” says Sharon Burke, assistant secretary of defense for operational energy plans and programs. As the leading single consumer, the Defense Department has “an interest in the long-term viability of the liquid fuels market, and we keep a hand in” research and development, she says. “Our departmental policy is that as far as bulk purchases and commercial purchases go, we will buy alternatives when they are cost-competitive.”
For the Pentagon, domestic U.S. energy consumption is just part of the equation. “We purchase 60% of our fuel overseas, because we buy as close to where we operate as we can,” says Burke. War may be winding down, but consumption is not, as training uses almost as much fuel as fighting. Despite the prospect of cheap energy at home, the Pentagon is staying the course to change the way it operates and procures systems to reduce its consumption, and its reliance on any single source.
“We will keep using liquid fuels bought around the world,” says Adm. Philip Cullum, deputy chief of naval operations for fleet readiness and logistics. “Prices are going up and will keep going up. Volatility will continue because there are fewer shock absorbers in the system—oil in reserves, or in transit—so price increases whip through the supply chain.” Alternative fuels are viewed as a way not only to provide price competition, but to help dampen the spikes that characterize oil pricing.
When it comes to liquid fuels for the military—or for commercial aviation—the U.S. cannot think only domestically. Low-cost natural gas is plentiful in the U.S.—and in China, which similarly has massive reserves of shale gas—but not elsewhere, so its impact on energy costs varies from region to region. “Prices elsewhere affect us,” says Burke.
And while the Pentagon's push for energy security is principally to secure supplies by reducing reliance on imports, the seismic shifts in the energy market have wider implications. “If we become self-sufficient in energy in the U.S., what does it mean for the exporting countries if the U.S. is not a big consumer anymore?” asks Burke.
Cullum highlights other potential factors playing into energy security. One is that U.S. home bases have become involved directly in combat operations, with unmanned aircraft being controlled from the continental U.S. “Those bases are connected to the local grid, which now has a role to play in future warfare,” he says. Another factor is that “the Arctic is going to be an ocean, which will change how fuel flows.”
Against this background, the Pentagon continues efforts to drive down its energy use while fostering alternative sources. It is bringing energy into wargames—“how it can be attacked, or be an advantage,” says Burke—and including it as a key performance parameter in new procurements. The Defense Acquisition Board must now consider the energy burden in approving systems, and winning contractors are will be accountable for energy performance.
“We lost our way” during the Cold War, says Cullum. “Energy was cheap, and consumption increased,” he says, noting theP-8 uses 25% more fuel than the Lockheed P-3 it replaces, the 69% more than the Boeing and the F-35B 110% more than the Boeing AV-8B, while today's warships use 70% more fuel. “Energy efficiency in the military is . . . more about effectiveness for the energy input,” cautions Burke.
While the U.S. military has benefited from new renewable technologies, Burke says it will be a challenge to continue to be a pull for innovation. “The rest of the world will continue to look for renewables, and we hope it will continue on the commercial side,” she says. “On the military side, we will have to see what they can do to meet our needs.”
Tap the icon in the digital edition of AW&ST for a table of Defense Department alternative fuels contracts, or go to AviationWeek.com/pentagonfuel