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Unclassified brief to Mitzi’s Energy Conversation, Arlington VA, 11 Mar 08

How DoD Can Win the Oil Endgame: More Fight, Less Fuel, Lower Cost, Safer World

Amory B. Lovins Chairman & Chief Scientist Rocky Mountain Institute www.r

Director & Chairman Emeritus

Copyright © 2008 Rocky Mountain Institute. All rights reserved. PDF licensed to participants for internal use. Hypercar® and Fiberforge™ are trademarks of Fiberforge Corporation. All the views expressed here are the author’s personal opinions as a private citizen, not the views of the Department of Defense nor the Defense Science Board.

Rocky Mountain Institute ◊ Independent, nonpartisan, nonprofit (1982– ) ◊ Vision: abundance by design ( ◊ Mission: foster the efficient and restorative use of resources to make the world secure, just, prosperous, and life-sustaining ◊ 83 staff in Old Snowmass CO and Boulder CO ◊ Entrepreneurial      

$12M/y income, mostly earned by private-sector consultancy Five for-profit spinoffs, 11 different funding models so far Three practice areas (Energy & Resources, Built Environment, Mobility & Vehicle Efficiency), 30 business sectors In recent years, redesigned >$30b worth of facilities Recently served or been asked to serve >80 Fortune 500s Core capability: integrative design/radical efficiency/lower cost

◊ Motto: “In God we trust”; all others bring data

RMI’s work with DoD (besides Winning the Oil Endgame) ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊

DSB: 99–01 platform efficiency, 06–08 energy strategy SECNAV: Surveyed CG-59 hotel-load savings 00–01 COMNAVSEA: Tasked Dec 04 to transform ship design Facilities: Overhauled NAVFAC design; led “greening”of-Pentagon and USMC, USA, USAF design workshops; recently engaged by USA REF to help with FOBs Hosted CNO Strategic Studies Group (2×), C3F seminar Lectures: OSD, OJCS,STRATCOM, NDU, AWC, NWC, NPS, USMA, WPAFB,… Definitive unclass study of domestic energy vuln. (81) Extensive unclass nonproliferation analyses 70s–80s Synthesized principles for redesigning refugee camps (after Operation Strong Angel I) for 3F Surgeon 01–02 I am not, however, a military expert!

“[A]ggressively 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.� — LMI review of Winning the Oil Endgame, Jan 05, emphasis added

Independent, transparent, peer-reviewed, uncontested, DoD-cosponsored, Sept 04 For business/mil. leaders Based on competitive strategy cases for cars, trucks, planes, oil, military Book and technical backup are free at: Over the next few decades, the U.S. can eliminate its use of oil and revitalize its economy, led by business for profit (So, probably, can others) This work was cosponsored by OSD and ONR. The views expressed are those of the authors alone, not of the sponsors.

A profitable US transition beyond oil (with best 2004 technologies) U.S. oil use and imports, 1950–2035

Petroleum product equivalent consumption (million barrels/day)


government projection (extrapolated after 2025)


end-use efficiency @ $12/bbl plus supply substitution @<$26/bbl (av. $18/bbl)


plus optional hydrogen from leftover saved natural gas and/or renewables (illustrating 10% substitution; 100%+ is feasible)




Petroleum use

Petroleum imports OPEC’ ’s exports OPEC OPEC’s exports fell fell 48%, 48%, breaking breaking its pricing power for its pricing power for aa decade; decade; US US is is Saudi Saudi Arabia Arabia of of negabarrels negabarrels

0 1950


You You are are here here

Practice –85: GDP 1977 Practice run run 1977– 1977–85: GDP +27%, +27%, oil 17%, oil 50%, oil use use ––17%, oil imports imports ––50%, Persian 87% Persian Gulf Gulf imports imports ––87%



Vs. $26/bbl oil, a single $180b investment saves $70b/y net; cuts CO2 26%; 1M new + 1M saved jobs




…and all implementable without new fuel taxes, subsidies, mandates, or federal laws





Integrating ultralight, ultra-low-drag, and advanced propulsion triples car, truck, & plane efficiency at low cost CARS: save 69% at 57¢/gal Surprise: ultralighting is free — offset by simpler automaking and 2–3× smaller powertrain!

PLANES: save 20% free, 45–~65% @ ~46¢/gal

BLDGS/IND: big, cheap 155 mph, 94 mpg savings; TRUCKS: save 25% free, 65% often @ 25¢/gal lower capex

Technology is improving faster for efficient end-use than for energy supply

Each day, your car uses ~100× its weight in ancient plants. Where does that fuel energy go? 13% tractive load 87% of the fuel energy is wasted



Braking resistance Engine loss Accessory loss



Rolling resistance Idling loss



Aerodynamic drag Drivetrain loss

6% accelerates the car, 0.3% moves the driver

Three-fourths of the fuel use is weight-related

Each unit of energy saved at the wheels saves ~7–8 units of gasoline in the tank (or ~3–4 with a hybrid) 

So first make the car radically lighter-weight!

Midsize 5-seat Revolution concept crossover SUV Ultralight (1,889 lb, –53%) but ultrasafe 0–60 mph in 8.2 s, 114 mpg (H2)… or 0–60 mph in 7.1 s, 67 mpg (gasoline hybrid)

“We’ll take two.” — Automobile magazine World Technology Award, 2003

Show car and a complete virtual design (2000), uncompromised, production-costed, manufacturable; hybrid’s +$2,511 MSRP pays back in <2 y

Radically simplified manufacturing ◊ Mass customization   

    

Revolution designed for 50k/year production volume Integration, modular design, and low-cost assembly Low tooling and equipment cost

14 major structural parts, no hoists 14 low-pressure diesets (not ~103) Self-fixturing, detoleranced in 2 dim. No body shop, optional paint shop Plant 2/5 less capital/car-y, 2/3 smaller

Toyota’s Hypercar®-class 1/X concept car (Tokyo Motor Show, 26 Oct 2007) ◊

2× Prius efficiency, similar interior vol. (4 seats)

3× lighter (420 kg)

carbon-fiber structure

0.5-L flex-fuel engine

powertrain under rear seat), rear-wheel drive

plug-in hybrid-electric

• One day before, Toray announced a ¥30b plant to mass-produce carbon-fiber autobody panels and other parts for Toyota et al. • Ford announced Nov 07 a 250–750-lb weight cut in every car, cadenced MY2012–20, to capture unexpectedly big synergies • Nissan announced Dec 07 an average 15% weight cut by 2015

demand or supply (million bbl/d)

2025 demand-supply integration 30



by 2025

25 20

petroleum product equivalent supply & demand, 2025 20.4


after 2025







5 0

EIA 2025 demand

$12/bbl efficiency

net 2025 demand


saved natural domestic oil gas (partial)


Great flexibility of ways and timing to eliminate oil in next few decades • Buy more efficiency (it’s so cheap) • Wait to capture the other half of it — 7 Mbbl/d is still underway at 2025 • “Balance” can import crude oil/product (can be all N. Amer.) or biofuels • Or saved U.S. natural gas @ $0.9/million BTU can fill the “balance”…or • H2 from saved U.S. natural gas can displace “balance” plus domestic oil • Not counting other options, e.g., ND+SD windpower/H2 for all hwy vehs

Breakthrough competitive strategy via platform efficiency ◊

Boeing’s crisis in 1997 was like Detroit’s today 

In 2003, Airbus for the first time outproduced Boeing 

“This is really a pivotal moment…could be the beginning of the end for Boeing's storied airplane business,” said Richard L. Aboulafia, a Teal Group aerospace analyst, in 2003

Boeing’s bold, efficiency-led 2004 response: 787 Dreamliner 

≥20% more fuel-efficient than comparable modern aircraft, same price

80% advanced composite by volume, 50% by mass › Bigger windows, higher-pressure cabin

3-day final assembly (737 takes 11 days)

885 orders (857 firm + 28 pending) + 430 options & rights

Sold out well into 2016—fastest order takeoff of any jetliner in history

Now rolling out 787’s radical advances to all models (Yellowstone)

Airbus: Ultra-jumbo A380, 2 years late, ~€5b over budget 

Wrenching changes instituted at BCA, including TPS (e.g., moving assembly); mfg. & costs brought back under control; but what next?

Response? Efficient, composite A350—probably too late

Boeing’s breakthrough strategy flipped the sector in 3 years

WTOE implementation is underway via “institutional acupuncture” ◊

RMI’s 3-year, $4-million effort is leading & consolidating shifts

Need to shift strategy & investment in six sectors

Aviation: Boeing did it (787 Dreamliner)…and beat Airbus

Heavy trucks: Wal-Mart led it (with other buyers being added)

Military: emerging as the federal leader in getting the U.S. off oil

Fuels: strong investor interest and industrial activity

Finance: rapidly growing interest/realignment will drive others

Cars and light trucks: slowest, hardest, but now changing 

Alan Mulally’s move from Boeing to Ford with transformational intent

Workers and dealers not blocking but eager for fundamental innovation

Schumpeterian “creative destruction” is causing top executives to be far more open to previously unthinkable change

Emerging prospects of leapfrogs by China, India, ?new market entrants

RMI’s two transformational projects and “feebate” promotion are helping

Competition, at a fundamental level and at a pace last seen in the 1920s, will change automakers’ managers or their minds, whichever comes first

The oil industry’s conventional wisdom: approximate long-run supply curve for world crude oil and substitute fossil-fuel supplies (IEA, 2006)

Source: BP data as graphed by USDoD JASON, “Reducing DoD Fossil-Fuel Dependence” (JSR-06135, Nov. 2006, p. 6,, plus (red crosshatched box) IEA’s 2006 World Energy Outlook estimate of world demand and supply to 2030, plus (black/gray) RMI’s coal-to-liquids (Fischer-Tropsch) estimate derived from 2006–07 industry data and subject to reasonable water constraints. This and following graphic were redrawn by Imran Sheikh (RMI)

How that supply curve stretches ~3 Tbbl if the U.S. potential shown in Winning the Oil Endgame scales, very approximately, to the world (IEA, 2006)

* †


substitutions make sense at any relative prices. Depending on future prices, additional such substitutions several- to manyfold larger than shown are also available

*Probably much understated because scaling from U.S. to world should count abundant tropical cane potential; also, the estimate does not include emerging major options like algal oils

To scale from U.S. alternatives-to-oil potential in Mbbl/d achievable by the 2040s (at average cost $16/bbl in 2004 $: to world potential over 50 y, multiply the U.S. Mbbl/d × 146,000: 365 d/y × 50 y × 4 (for U.S.→world market size) × 2 (for growth in services provided). Obviously actual resource dynamics are more complex and these multipliers are very rough, so this result is only illustrative and indicative.

Cumulative emissions (gigatonnes Carbon equivalent)

Stretching oil supply curve by ~3 Tbbl averts >1 trillion tonnes of carbon emissions and tens of trillions of dollars

Nobody can know whoâ&#x20AC;&#x2122;s right about peak oil, but it doesnâ&#x20AC;&#x2122;t matter

DoD can be the key technological catalyst and governmental leader in getting the U.S. forever off oilâ&#x20AC;Ś â&#x20AC;Śbut should do all the same things anyway, just for its own mission success

LPG 1%

DoDâ&#x20AC;&#x2122;s apparent fuel cost [FY06: ~$12.5b] is a modest fraction of true fully-burdened delivered fuel cost; the added delivery costs are mainly for the 9% of AF fuel delivered aerially for >$49/gal, and for forward fuel to Army

Gasoline 2%

Diesel 30%

Approximate DoD FY05 oil use

Jet Fuel 67%

Fighters 28% Facilities 2%

DoD 1.80% TK million bbl, $TKb

Civilian 98.05%

US 2005: 7.54b bbl, ~$TKb, 1/4 of world oil use [TK = to come]

Other Fed Gov. 0.15%

Air Force 57%

Marines and Others 1%

~25* million Army bbl, $TKb

9% (~1/3 combat, ~2/3 logistics) Fixed Facilities Maritime 4%

Transports and Tankers 51%

Ground Vehicles 4% Bombers 7% Trainers 3% C4ISR etc. 6%

44 million bbl, $TKb Other 5% Ground Vehicles 8%

Navy 33%

Vessels 8%

Ships 41% (~13% hotel loads, ~28% propulsion/ weapons/C 3I)

Shore 10% Aircraft 36%

Land 15%

*Army, ?FY, wartime OPTEMPO (3.6 Ă&#x2014; peacetime): 34% generators, 30% combat aircraft,16% combat vehicles, 16% tactical vehicles, 5% nontactical (DSB 2008 p. 44)

Air 73%

NB: An unknown fraction of AF and Navy fuel transports Army materiel. Oil used by contractors to which DoD has outsourced work is unknown.

DoD requirements-&-acquisition process grossly undervalues fuel efficiency (DSB 01) ◊ Logistics has been assumed free and invulnerable ◊ The reality—divisions hauling oil, more trying to guard them—compromises combat effectiveness, force protection, hence recruit/retain goals ◊ Severalfold-more-fuel-efficient platforms offer major warfighting, logistics, and budget benefits ◊ Can unlock vast transformational gains (multidivisional tail-to-tooth realignment, 10s of b$/y) ◊ Force multiplier: trigger-pullers can win battles without the deadly distraction of protecting fuel ◊ Biggest win: catalyze leap-ahead civilian tech transition that can eliminate U.S. oil use by 2040s

US Defense Science Board Energy Strategy Task Force Former SECDEF/SECEN/SECTREAS/DCI James R. Schlesinger and GEN Mike Carns (USAF Ret), Co-Chairs

More Fight, Less Fuel Unofficial slides reflecting my own personal views (consistent with the Task Forceâ&#x20AC;&#x2122;s briefs & discussions) (official report briefed to DSB ~7 Feb 07, posted 13 Feb 08 at

The headlines • There is a clear and present crisis in national and theater energy security, but it’s not about oil; rather, electrical vulnerabilities are blocking stabilization in Iraq, are becoming acute in Afghanistan, and could take down both DoD’s basic operating capability and the US economy • Reliable, affordable oil supply is a gathering storm for the world and US, but not specifically for DoD, which will remain able to get the mobility fuels it needs • Rather, DoD’s oil issue is that the costly burdens imposed by using oil inefficiently also weaken combat effectiveness • Conversely, DoD can radically boost combat effectiveness and fuel efficiency at reasonable or reduced up-front cost • Thus exploiting two new strategic vectors—endurance and resilience—can turn DoD’s energy risks into revolutionary gains in warfighting capability and national security

Major energy threats to DoD mission execution and the US economy • Takedown of US electric grid (national, regional, local, including military facilities) for long periods • Takedown of vital oil infrastructure (Saudi, straits, ports/terminals, Strategic Petroleum Reserve, refineries, pipelines) or other interruption of oil supply • Unnecessary energy inefficiency of military systems degrades combat effectiveness, worsens operational vulnerabilities, and creates major logistical burdens paid in both dollars and blood • National policies continue to create and exacerbate these unnecessary and largely self-inflicted threats

New threats require new strategy • Competition drives strategy, which changes required capabilities and hence technologies • Adversaries are now often asymmetrical, demassified, elusive, remote, irregular, techno-savvy • So we need unprecedented persistence (dwell), agility, mobility, maneuver, range, reliability, and autonomy…all at low cost, so many small units can cover large areas • Our half-century-old heavy legacy forces and their fat fuel-logistics tail are now a magnet for insurgents, a serious vulnerability, a major cause of casualties, and a huge financial burden

Two missing strategic vectors can turn these threats into decisive advantages •

• • •

DSB 2008, p. 35: “The Task Force…concluded DoD’s energy problems [are] sufficiently critical to add two new strategic vectors: endurance and resilience.” Endurance turns radically improved energy efficiency and autonomous supply into manyfold greater range and dwell —hence affordable dominance, requiring little or no fuel logistics, in persistent, dispersed, and remote operations, while enhancing overmatch in more traditional operations Resilience combines efficient energy use with more diverse, dispersed, renewable supply—turning big energy supply failures (by accident or malice) from inevitable to near-impossible These two new vectors complement, and are as urgent, vital, and fundamental as, speed, stealth, precision, and networking Without the two new vectors, exploitation of electricity and fuel vulnerability (already critical in OIF/OEF) could soon come to CONUS But with them, DoD can gain far more effective forces and a safer world— generally at reduced budgetary cost and risk

Situational assessment: electricity • • •

Vital to run all other energy systems too: no power means little oil and gas Very capital-intensive, very long lead times, technologically unforgiving Central plants/grids are inherently vulnerable to simple, devastating attacks – Continuous and exact synchrony required over huge areas – This needs long power lines (easily destroyed), comms, & vulnerable transformers etc.—often with no spares, and taking 1–2 y to manufacture and import

Attacks on the power grid are driving Iraq insurgents’ success – Baghdad nearly isolated (7/9 big lines down lately); takedown beats rebuild; chronic lack of electricity undercuts all reconstruction and stability efforts – Similar Taliban tactics in Afghanistan are ramping up but still look reversible – Near-invulnerable “distributed” systems deliver 1/6 of world’s total & 1/3 of new el., are often cheaper (all financed by private capital mkt), but US has so far rejected in OIF/OEF

DoD, though the world’s #1 buyer of renewable energy, is at least 98% reliant on the brittle electric grid, and to assure mission performance, must quickly make its bases’ power supplies resilient and mainly renewable –

– –

Of 584 bases in CONUS, ~90% have good supply options onsite or nearby, mostly renewable, and most of their electricity can readily be renewable; could achieve zero daily net energy need for facilities/ops/ground vehicles, full independence in hunker-down mode (no grid), then power export to nearby communities and to nucleate grid blackstart So DoD bases’ energy independence collaterally enables national electric grid resilience, which electricity industry and institutions will otherwise approach far too slowly to meet the gravity and urgency of the takedown threat OCONUS potential for austere-FOB energy independence is even larger because avoidable delivered costs are higher

Situational assessment: DoD oil • • •

In WWII, heavy steel forces “floated to victory on a sea of oil,” and 6/7ths of oil to defeat Axis came from Texas; today, warfighting is ~16× more energy-intensive, and Texas is a net importer of oil DoD is the world’s #1 single buyer of oil and uses 92% of all US Gov’t oil Yet DoD directly uses only 0.36 Mbbl/d—0.4% of world or 1.8% of US oil – – – –

Equivalent to just two big offshore platforms, or 22% of 2005 CA+AK output 96% of US mobility and ~99.96% of DoD’s is oil-fueled; ~3/5 is used in CONUS But different fuel split: 73% of DoD’s oil use, vs. 8% of US, is jet fuel DoD’s jet fuel buy makes it the #1 or #2 US airline; can blend JP-x from Jet-A

DoD’s oil problem/opportunity is not whether it can get oil now and indefinitely, but rather the degraded combat performance, higher casualties, and higher costs caused by using oil very inefficiently – A $10/bbl increase in oil price directly costs AF ~$0.8b/y, DoD ~$1.3b/y – Military platforms are generally less fuel-efficient than civilian counterpart, I.e., poor – DoD’s FY06 oil buy ($13b) looks like 3% of the main DoD budget, but its true cost delivered to platform in theater is severalfold higher – OSD is analyzing this “fully burdened cost” and will apply it in three pilot acquisitions; this much higher fuel value is expected, over years, to elicit far more efficient use – Total cost, both in blood and in degraded combat capability, is far higher still – At Nov 07, ~80 convoys, hauling mainly fuel, were traveling continuously between Kuwait and Iraq destinations; ~half of theater casualties are associated with convoys

Is this trip necessary? One inefficient 5-ton a/c uses ~1 gal/h of genset fuel. Truck’s 68-barrel cargo can cool 120 uninsulated tents for 24 h. This 3-mile convoy invites attack. (Photos aren’t all in the same place.)

• A third of the Army’s wartime fuel runs gensets. In a typical FOB recently measured, 95% of the genset electricity air-conditions tents and CHUs, space-cooling by cooling outer space • Half of all theater casualties are linked to convoys. COL Dan Nolan (USA Ret.) on fuel convoys: “We can up-gun or down-truck. The best way to defeat an IED is…don’t be there.” • In above example, the task (comfort) can probably be done with no oil. No gensets, no convoys, no problem. Turn tail into trigger-pullers. Multiply force. Grow stronger by eating our own tail. Or breed a Manx force: no tail. • Of Clausewitz’s three conditions for success in war—government decision, military capacity, and the will of the people—current adversaries are attacking mainly the third, but are figuring out that the second is fragile too. How soon will they bring that tactic to CONUS? COL Nolan: “We are in crisis now, and if we don’t fix it, we’ll be in catastrophe in five years.” • The “endurance” strategic vector is at least as vital for stability as for combat ops (they now have comparable priority: DoDD Memo 3000.05, §4.1), because stability ops may need even more persistence, dispersion, and affordability • Some Iraq overlays suggest that areas with reliable electricity have substantially less violence, reducing risks to forces and likelihood of insurgence

Common DoD views on energy • We exist to be effective, not efficient, so platform performance always trumps fuel cost—and rightly so • DoD energy technology and innovation will be driven by the civilian marketplace, and need no attention from us • DoD has no rewards for energy efficiency*, no penalties for energy inefficiency†, and sparse energy-use data; that’s OK • We don’t “do” energy; we buy it • Energy is a necessary expense, not an investment issue • Energy’s supporting infrastructure is not a major factor in requirements and procurement choices – Fuel logistics is invisible, free, and invulnerable – Its burden (in dollars, billets, equipment, blood, and the major lost opportunities of degraded or foregone combat power) can safely be ignored when we make decisions that determine DoD’s fuel use – Existing KPPs like range, speed, and payload implicitly include all worthwhile energy goals, so “energy KPPs” would be superfluous *With one modest but effective Navy exception

†However, Congressional and Executive mandates drove ~30% drops in Service facilities’ J/m2-y

First-principles observations • Reliable and affordable access to energy—all kinds—is a national strategy issue and a national security issue • Energy infrastructure is brittle—CONUS and OCONUS • Strategic petroleum situation is adverse and worsening • Foreign policy options are distorted by dependency • Treasure transfer weakens US economy and national security, retards democratization, increases instability • Yet our energy future is not fate but flexible choice • Over the long term DoD can help reverse these trends by leadership, innovation, procurement, demand pull, and training—thus supporting its mission by making US energy more secure and the world more stable • These shifts would markedly improve combat effectiveness, save lives, and avoid annual costs >$20 billion

What must the “endurance” vector do? ◊

Radically redesign military energy flows to support new strategic, operational, & tactical requirements

Affordably dominate asymmetric, persistent, remote, dispersed combat, using little or no fuel logistics

Apply an impressive new suite of technologies, e.g.:

Ultralight but low-cost materials and manufacturing methods (suitable also for numerous small high-endurance platforms)

Ultralow aero/hydrodynamic drag and rolling resistance

Advanced propulsion and electric efficiency techniques

Radically simplified & integrated design eliminating KPP tradeoffs

Distributed, often renewable, electricity and fuel supplies

Raise platform fuel efficiency by at least 3–4× with same or (usually) better warfighting capabilities

Where to find winners

The most total fuel can be saved in aircraft: Since aircraft use 73% of DoD oil, a 35% saving in aircraft would equal the total fuel use by all land and maritime vehicles plus facilities – –

• •

The greatest gains in combat effectiveness will come from fuel-efficient ground forces (land and vertical-lift platforms, land warriors, FOBs) Savings downstream, near the spear-tip, save the most total fuel: delivering 1 liter to Army speartip consumes ~1.4 extra liters in logistics –

• •

Fortunately, 35% is conservative because 60% of Heavy Fixed Wing inventory (which uses 61% of AF aviation fuel) uses 50–60-year-old designs, and nearly all Vertical Lift fleet is 30–50-year-old configurations and derivatives Heavy Fixed Wing fleet can halve fuel use by practical geometrically compounded improvement in aero, materials, systems, and propulsion including shift to integrated-wing-body configurations; in vertical lift, OSTR saves 5–6×

Need careful reexamination of noncombatant platforms at the speartip: in a typical armored Army unit today, #5 battlefield fuel user is Abrams, #10 Apache, and the other eight are noncombatants—trucks, kitchen, etc.

Savings in aerially refueled aircraft and forward-deployed ground forces save the most delivery cost and thus realignable support assets The biggest gains in platform* efficiency will: – –

Come from radical concepts and technologies (though properly valuing fuel savings will also drive a myriad incremental gains that are collectively large) Strongly emphasize far lower weight, drag, and onboard energy burden—then make propulsion and onboard power generation more efficient (i.e., platform physics before propulsion—opposite of now) •

Especially emphasize reduced weight—near-stagnant for decades in airframes, but now poised for dramatic reduction with ultralight / ultrastrong materials (yet JSF’s advanced-composite mass fraction is less than a Boeing 787’s)

Not just combine but integrate technologies, optimizing whole systems for multiple benefits rather than isolated components for single benefits

No option should be rejected due to entrenched assumptions about diminishing returns, incrementalism, and tradeoff, because those assumptions are generally unsound—the enemies of effectiveness *“Platform” means here any device that directly or indirectly consumes fuel or electricity in the battlespace

Top technical finding: dramatic gains in combat effectiveness and energy efficiency are available almost everywhere, e.g.:

(scaled-down wind-tunnel model)

VAATE engines: loiter × BWB quiet aircraft: SensorCraft ( ): range & payload × 50-h loiter, sorties 2, fuel – 25–40%, far less maintenance, often lower ~2, sorties ÷ 5–10, ÷ 18, fuel ÷ >30, capital cost fuel ÷ 5–9 (Σ 2–4) cost ÷ 2 C4ISR

Optimum Speed Tilt Rotor (OSTR): range × 5–6, speed × 3, quiet, fuel ÷ 5–6

Actuators: perHotel-load retrofits More lethal, highly FOB uses 95% of gen- formance × 10, IED-resistant, stable could save ~40–50% set fuel to cool desert; fault tolerance × HMMVV replacement, of onboard electricity could be ~0 with same 4, size & mass (thus saving ~1/6 of the weight ÷ 3, fuel ÷ >3 ÷ 3–10 or better comfort (up-armored HMMVV ~4 mpg) Navy’s non-aviation fuel)

Advanced propulsors can save much noise and fuel

A zero-netenergy building (it’s Rugged, 2.5- been done in W PC, $150, –44˚ to 46˚C solar + back- at lower cost) up crank

Re-engine M1 with modern diesel, range × ≥2, fuel ÷ 3–4

25% lighter, 30% cheaper advanced composite structures; aircraft can have ~95% fewer parts, weigh ≥1/3 less, cost less

160-Gflops supercomputer, ultrareliable with no cooling at 31˚C, lifecycle cost ÷ 3–4

Briefs to DSB Task Force were fully consistent with 2004 WTOE finding that DoD fuel efficiency and advanced materials could eliminate ~2/3 of Services’ fuel need Airforce Aircraft

Navy Ships

Army Ground Vehicles

DoD Commercial Vehicles

Quads per year


Navy/Marine Aircraft

…NOT counting avoided interService fuel to lift less fuel (and perhaps lighter platforms)

0.80 0.60

(Data weak…but conservative)

0.40 0.20

SOA, 2025 Complete Deployment

CW, 2025 Complete Deployment

SOA, 2025 Plausible Deployment

Source: 2004 RMI analysis based on DSB, IDA, AAN, civilian platforms

CW, 2025 Plausible Deployment

Baseline, 2025

Baseline, 1998-9


What is fully burdened fuel cost? • Whole-system, end-to-end, lifecycle cost of delivering a gallon of fuel to the platform, in theater, in wartime (OPTEMPO & site) – Platforms are designed, bought, and fielded to win wars; we hope but don’t intend they’ll see only peace – Every KPP is based on combat performance; fuel efficiency’s logic should be identical

• Thus: all costs we can ultimately avoid if that gallon need never again be delivered – The metric is avoided cost, even though we’ll probably often choose to “cash in” that cost and realign tail-to-tooth for a more effective force structure

• PA&E’s preliminary Nov 06 look found* DoD’s FY06 bill was not $7b (DESC) but $29b (delivered)— 4× more. Good to know! Now how can costs be refined, as is now underway in/for OSD? *Matt Kastantin (PA&E), brief to DSB Task Force on DoD Energy Strategy, 29 Nov 06; RMI analysis, 29 Nov 06, totaling its Service-specific conclusions

11 common methodological traps (1) 1. Weight, or average, wartime w/peacetime OPTEMPO – –

Their actual future ratio is unknowable…perhaps Long War We design platforms for combat, not training, so average conditions are a way to estimate fuel savings, not a criterion for optimizing them •

PA&E’s 20-y depreciation is far slower than the current ~$2b/mo rate •

If utilities built to meet only average load, not peak load, the lights would go out Washington Post, 4 Dec 06: “Helicopters are flying two or three times their planned usage rates. Tank crews are driving more than 4,000 miles a year—five times the normal rate. Truck fleets that convoy supplies down Iraq’s bomb-laden roads are running at six times the planned mileage, according to Army data.”

DSB 2008 report p 31: “The Task Force does not support” OSD(PA&E)’s guidance that fully burdened cost of fuel should generally assume peacetime OPTEMPO, because “FBCF is a wartime capability planning factor, not a peacetime cost estimate.”

2. Omit wartime force protection and logistics – – –

DDR&E rightly tasked IPT 12 Apr 06 to find fuel costs “including logistics and force protection” Roughly how many escorts, IEDs, and casualties could we avoid if we had ~3/4 fewer fuel convoys? Army’s Energy and Security Group’s Sustain the Mission project estimated (07) a 450-mile-roundtrip supply to a Stryker brigade in Iraq costs $25.29/gal— 65% for air and 12% for ground protection—totaling 4–12× the $2.14 DESC fuel price; if the roundtrip were 950 miles, $44.51/gal, or >20× the DESC fuel price

11 common methodological traps (2)

3. Count only specifically dedicated POL resources, not shared or multi-purpose ones –

This omits most protection and support assets

4. Count only short-run, not long-run, marginal costs –

Time horizon must be sufficient to realign slow assets

5. Use weighted-average AF aerial & ground refueling costs—a good way to estimate average dollar savings, but it grossly undervalues efficiency in combat –

PA&E estimated 9% of AF gallons cost $42.49 delivered, 91% cost $2.79; but de-signing long-range bombers for a $6.36 wtd. av. will buy and run too many tankers

6. Claim battle scenarios are so diverse that wartime conditions are unassessable – –

We should emphasize representative theater conditions, e.g., OIF/OEF, and assess but not assume pathological cases, e.g., deep multi-helicopter relays But we should pick a worse-than-average base-case, because the goal isn’t to win the average battle; fuel efficiency is most vital in the exceptional cases when we must stretch performance to win, so we must design for it

11 common methodological traps (3) 7. Look for lost keys under a distant lamppost –

Good wartime data are confusing and scarce; just do your best

8. Let the perfect be the enemy of the good – –

We should seek sound and clear approximations, not spurious precision Better to be approximately right than precisely wrong

9. Ignore higher-order effects – –

Trucks hauling fuel for trucks, fueled at fully-burdened cost, will raise that cost “If the fuel truck is late, I’m sitting up in my truck idling the engine to charge my batteries.” — Field radar operator

10. Count fielded personnel and equipment without the rotational multiplier (~3×?) to obtain total force structure 11. Use accounting cost—not opportunity cost to the warfighter – – –

For example, diverting fighting forces to protect fuel convoys foregoes combat capability: logistics enables forces but subtracts from their net capability “Unleash us from the tether of fuel”—attributed to GEN Mattis, USMC Priority 1 certified for USMC MG Zilmer’s urgent request for “renewable and self-sustainable energy solution” for MNF-W’s battlespace (al-Anbar Province)

Examining DoD energy reveals a hidden fallacy •

• •

What the requirements/acquisition system currently calls “capability” is really theoretical performance of “tooth” alone at the platform or system level… omitting the tail needed to produce capability Tail takes money, people, and materiel that detract from tooth True net capability, constrained by sustainment, is thus the gross capability (performance) of a platform or system times its “effectiveness factor”—its ratio of effect to effort: Effectiveness Factor = Tooth / (Tooth + Tail)

Also, in an actual budget, Tooth = (Resources – Tail), so: Effectiveness Factor = (Resources – Tail) / Resources

Effectiveness factor ranges from zero (with infinite tail) to one (with zero tail). If tail > 0, true net capability is always less than theoretical (tailless) gross performance; but DoD consistently confuses these two metrics, and so misallocates resources – Buying more tooth that comes with more (but invisible) tail may achieve little, no, or negative net gain in true capability; we often seem to do this – But dramatically trimming tail can create revolutionary net-capability gains and free up support personnel, equipment, and budget for realignment

Fully burdened fuel costs needs a broad, not a narrow, assessment • Simplicity is attractive and easy to grasp • But the remedy for genuine complexity is not oversimplification but transparency: don’t omit costs that are fuzzy but obviously important • This isn’t about just adding depreciation and maintenance costs for some fuel trucks • Behind each truck/driver is force protection • All need a support pyramid and a rotational multiplier back to force structure • All these assets are diverted from the core combat mission at a major opportunity cost

Follow the causal chain to its end •

This is the gallon that Jack pumped. This is the truck that Stephanie drove to carry the gallon that Jack pumped. This is the platoon that guarded the road that Stephanie drove to carry the gallon that Jack pumped. This is the base that housed the platoon that guarded the road that Stephanie drove to carry the gallon that Jack pumped. This is the cook who fed the barber who cut the hair of the intel officer who briefed the platoon that guarded the road that Stephanie drove to carry the gallon that Jack pumped. Etc…. We must count the approximate long-run avoidable cost not just of dedicated POL personnel (including contractors, cross-Service loans, and non-POL staff doing POL duties/missions) and their immediate, fuel-specific physical assets, but also of everyone and everything needed to feed, house, power, move, equip, sustain, protect, heal, train, lead, manage, and otherwise support them, worldwide, lifecycle—recruitment through burial and survivors’ benefits. Planning tools contain this information. We must count every every activity that over the long run (decades) need not occur if that gallon need never again be delivered. Otherwise we’ll continue to undervalue and underbuy fuel efficiency, weaken warfighters, squander resources, and waste the Nation’s lives and treasure. Let our last thought in battle never be that we wish we’d saved more fuel.

Army’s true delivered fuel cost: wildly divergent estimates • GEN Paul Kern, CG of Army Materiel Command: can range from $1/gal to $400/gal depending on how it’s delivered (2002 Tactical Wheeled Vehicles Conference, Monterey, quoted in National Defense, Mar 02, p 37) • ARL’s Dr. Robert Bill: “Fuel costs $13/gal—well to tank—in peacetime at home” (brief to DSB Truly panel at TARDEC, 19 Oct 99, emphasis added; $13/gal in 1999$ = $15.4/gal in 2006$)

• DSB 01 (Truly report) seems more conservative – p. 16: ~$13 at FEBA, ~$25 at FEBA+100 km – p. ES-3: “hundreds of dollars [by air]…[600 km] deep in the battlespace,” or (p. 20) “at least $40–50” if overland – Omitted ~$13 theater infrastructure/handling, & protection

• JASON 06: told $100–600 in theater dep. on “front line” to “back line” separation in distance, terrain, defense, etc. (Reducing DoD Fossil-Fuel Dependence, p. 30)

• PA&E/IPT Nov 06: $5.62 (at peacetime OPTEMPO)

Where did DSB 01 get those high cost estimates? From the Army… DSB 01 reported:

Original source of lower graph: “PES-Hoeper-Final[1].ppt,” slide 9, Results of Power and Energy Seminar, briefed to ASECA(AL&T) Paul J. Hoeper, 28 Jun 99, and to Truly DSB panel mtg 1, 29 Jun 99.

Above: p. 16. Below; pp. 18–20, with accompanying text in middle column. Army sources are at far right.

(Slide 4 envisaged AAN fuel saving ~50%, or 282,500 gal/d for an AOE Armored Div that would then need 57 fewer 5,000-gal tankers. Slide 14 first-cut seminar goals from Motive Power Panel says: save 35% of fuel in legacy systems, 75% in new [both by 2025, FY98 baseline], 20% cut in annual fuel expenditures in 10 years, strike capability independent of fossil fuel refueling [stretch goal]; soldier electricity also aiming for 80% saving in soldier resupply rate.)

Lower graph was briefed in detail to Truly mtg 2, 17 Aug 99, by LTC Ronald F. Salyer (USARL, NASA Langley, 757 864 7617), slide 7, and by others. (Salyer and other Army briefers repeatedly told DSB 01 that 75% fuel savings are feasible for combat systems.)

DSB 01: Army estimated its ~FY99 fuel delivery direct cost was $3.2b* Original source of table: slide 2, “The Impact of Fuel Efficiency on the Army 2010 and beyond,” ARL brief by Dr. Robert Bill to Truly panel mtg 3 at TARDEC, 19 Oct 99. The data are stated to refer to operations “in peacetime at home,” so would presumably be higher in theater in wartime. Slide 3 states: “Fuel comprises 70% of tonnage shipped. Armored division consumes approx. 600,000 gal/day. Air assault division requires approx. 300,000 gal/day.” Slide 5 shows potential 79% fuel saving for air assault division maneuver brigade, and slide 17 (also from LTC Salyer) sketches 81% armored-unit fuel savings. Several Army briefers to DSB 01 repeated this ARL information. (DSB 01 Truly report), Jan 01, pp. 39–40

*= $3.8b in 06$. In FY06, w/63% more fuel, PA&E ests $2.1b, or 58% less/gal

Army fuel cost: what’s in, what’s out? 2006$/gallon DoD historic

norm: $2-odd

DESC direct cost (refined product, delivered in bulk to Service customer at global-average location with no protection cost) + notional carbon adder

Placeholder market CO2 cost Trucks to deliver to FOB and thence into platform

Army briefs to DSB 01: $15 (in CONUS in peacetime); up to hundreds of $ if far beyond FEBA

 ($2.53/gal Jun 06;

(PA&E found & is working a nearly 2×

uncertainty in Army’s FY06 fuel usage—a warning of data problems, probably due to fuzzy Service/contractor boundaries)

$3.04/gal 19 Dec 07)

 

PA&E Nov 06 fully burdened av. JP-8 est.: delivered cost: $5.62 (to DSB 29 Nov 06) being assessed

  (details


(but only the two most


heavily used types: 1,593 M978 @ $5k/y + 1,291 M969 @ $4.3k/y; others?)

(should include fully

burdened end-to-end life-cycle cost of ownership of all physical fueldelivery assets)

POL personnel (those actually doing POL tasks, whether POL specialists or not)

Vehicle & logistics support, base fuel dir.+indir. infrastr.

Force protection (incl.

 

?? ??

 

 

 

 

 

 

air escort, MP pump guards,…)

Lifecycle support pyramids and rotational multipliers to force structure for all Adjust for theft & attrition AF & Navy lift cost

(~FY99: Army delivered

300Mgal with 20k Active @ $100k/y + 40k Reserve @ $30k/y; update both; +19% to 06$)


(FY06 Army used 490Mgal

with 16k Active @ $55k/y [FY05] + 15k Reserve @ $17k/y; where are contractors/AF/MC…?


(only to the extent included

(check headcounts— DESC says much theater POL is now interService or outsourced—and 2× lower POL personnel cost per head)

in the trucks’ average O&S cost)

New policy framework emerging ◊ USECDEF Ken Krieg memo 10 Apr 07: “Effective immediately, it is DoD policy to include the fully burdened cost of delivered energy in trade-off analyses conducted for all tactical systems with end items that create a demand for energy and to improve the ener-gy efficiency of those systems, consistent with mission requirements and cost effectiveness.” ◊ ADM Giambiastiani (Vice Chair JCS), JROCM 161-06, 17 Aug 06, endorsed “selectively applying an Energy Efficiency KPP…as appropriate.” ◊ Memo to primes: DoD will value saved fuel far more highly—a key to competitive advantage

How can DoD create and exploit the fifth strategic vector? ◊ Top-level leadership must “energize” Department ◊ By doctrine, align incentives to reward what we want, and culture and structure to produce it ◊ Adopt lifecycle end-to-end cost accounting 

Require, design, & acquire platforms based on fully burdened fuel cost delivered to platform in theater—to cut both capex and opex

◊ Make wargaming “play fuel” so resilience is valued ◊ Require, reward, and embed whole-system design  

Purge diminishing returns, tradeoffs, and incrementalism from design mentality—KPPs needn’t degrade; may improve markedly Will need basic reforms in design practice, pedagogy, rewards

◊ Lead the Nation off oil, so we needn’t fight over oil  

Radically reduce the fuel consumption of uncompromised land, sea, and air platforms—and civilian vehicles too Could be DoD’s greatest contribution ever to its security mission

Supporting actions to help win DoD’s oil endgame  As we require/design/acquire fuel-efficient platforms…  

Retrofit the legacy force: National Defense Energy Savings Act Realign to capture fuel logistics benefits all the way upstream

 Diversify fuels (and reconsider single-fuel doctrine?)  

If problem is supply-chain interruptions, stockpile end-use fuel If problem is long-term unavailability or unaffordability of oil…    

Why should that affect DoD (0.4% of world mkt, w/DPA supply priority)? Must consider all technologies in fungible-competitive-market context Cost: CTL > GTL > advanced biofuels >> efficient end-use The biggest, cheapest, fastest mil-fuel “reserve” is civilian efficiency

But DoD can speed cellulosic EtOH (DARPA flyoff), algal oil, H2, …

 Finish reforming DoD’s building design & retrofits   

Like NAVFAC ’95; big budget, ~100-y av. life; reduce capex DoD is now procuring >200k mil housing units even less efficient than normal civilian stds—but far better could cost less to build Superefficient buildings make onsite renewable supply cost-effective

Beware of the usual distractions ◊ Coal-to-liquids (enthusiasts in USAF & USN) 

Strongly unrecommended by DSB (p. 51) & JASON 2006–08

 

Huge capital & water needs; no investment without big, very costly, long-term, imprudent DoD purchase contracts Even costlier w/ carbon capture (1.64–1.89× oil’s C/bbl)

Diverts investment from far cheaper, faster oil efficiency

JASONs: oil is a fungible commodity in a competitive global market; invest in USPS vans’ efficiency instead!

◊ Small nuclear power plants on military bases 

Considered but not recommended by DSB

Extremely expensive—more than efficiency + renewables (economics worse than unfinanceable big nuclear plants’)

Less resilient and less reliable than efficiency + renewables

Special training and security challenges, needs full backup

◊ No business would dream of investing in either, and there’s no good reason DoD should either

Big picture: DoD investment in advanced materials can achieve DoD and U.S. goals as DARPA did w/ Internet, GPS, & chips ◊ DoD S&T investment in ultralight materials, especially highvolume/low-cost manufacturing, and advanced propulsion 

Enable DoD transformational tenets

Strengthen warfighting capability

Cut DoD fuel costs by $multi-b/y

Cut fuel logistics cost many-x more

Huge realignment potential

◊ Transforming car/truck/plane industries “finds” a Saudi Arabia (~12 Mbbl/d) under Detroit and Seattle—but domestic, secure, inexhaustible, clean, & costing ~1/7th of today’s world oil price 

Could cut U.S. oil use by 50% in 2025, imports by 75%

By 2040s, can save half the 98.2% of U.S. oil that DoD doesn’t use

The prize More capable and confident warfighting Less need for it, bec. less conflict over oil U.S. (…) dependence on oil phases out Stronger economy A nega-Gulf every 7 years, so cheaper oil More balanced U.S. trade, global development, and diplomacy Safer world

And there’s a sixth needed strategic vector: resilience EPRI-website synthetic satellite image, 10 August 1996…utilities routinely keeping the lights on. But ~98–99% of U.S. outages are caused by the grid. E.g.: 35 seconds later, after an Oregon powerline sags into a tree limb, operational goofs & poor communications black out 4 million people in nine Western states and parts of Canada. (Local supply prevents that—and up to 95+% of grid failures are in the distribution system)

About that blackout…

• –71 GW in 9 sec. • Affected areas containing 50 million people (but no one knows how many lost power)

2121 EDT 13 Aug 2003 vs. 2103 EDT 14 Aug 2003: NOAA satellite via New York Times, 3377, downloaded 3 Sept 2003

• What’s important is not what went out but what stayed on due to islanded distributed generation, backup generators, and local systems that isolated manually

Lessons from the 14 Aug 03 blackout ◊

Modest tx modernization (switches, management) is needed

But more & bigger tx lines and power plants—the focus of Federal policy, now being forced upon an unreceptive market—mean more and bigger blackouts

Basic problem: grid architecture, overconcentration, critical vulnerabilities 

Brittle Power: Energy Strategy for National Security, RMI report to DoD, 1981,

Three solutions are faster, cheaper, resilient, and ample 1.

End-use efficiency (also saves gas, cuts gas price & emissions)


Demand response (does so dramatically; also saves cap., stabilizes kWh & gas prices, and insures against price-gouging)


Distributed generation designed for islanding (IEEE P1547) — the “islands of light” amidst the darkness; also nucleate restart

FERC and power pools don’t yet let these compete with transmission

Big generating units far from load are not equivalent to small ones nearby, but rarely get credit for this reliability value

Inherently vulnerable system architecture

◊ Complexity—sometimes beyond full understanding (big electric grids) ◊ Control and synchronism requirements ◊ Reliance on vulnerable telecoms & IT ◊ Hazardous fuels, often in or near cities

◊ ◊ ◊ ◊

Standard fuel-oil delivery truck ~0.3 kiloton

Fueled 757/767 at speed ~0.8 kiloton total

Typical LNG marine tanker ~0.7 megaton

Inflexibility of fuels and equipment Interdependence of most energy systems Specialized equipment & labor needs Difficulty of repair, paucity of spare parts

Power grids are worse

◊ Blackouts are instant and propagating ◊ No storage, vulnerable controls/telecoms ◊ Many key spare-parts vulnerabilities, e.g., Auckland NZ’s months’ downtown blackout ◊ Bulk transmission vulnerable to rifle fire ◊ Nuclear facilities: 1-GW operating reactor >15 GCi (~2,000 Hiroshimas’ fallout) + heat and mech./chem. energy facilitating release comparable to a MT groundburst Cut onsite & offsite power, and core melts  1-kT bomb 1 km away probably melts core  Widebody jet or certain standoff attacks can release virtually the full core inventory  Seriously contaminate ~105 km2 for ~102–3 y 

Alas, in the past 25 years... ◊ Little has changed, none for the better ◊ Brittle Power findings were confirmed by CSIS, LANL, Dahlgren,…, including much classified work ◊ Modest hardening of some of the softest sites... but adversaries will shop around ◊ Federal energy policy for most of the period, continuing today, emphasizes the most vulnerable options, and tends to ignore or try to suppress the resilient ones that can make the system efficient, diverse, dispersed, and renewable ◊ So DOE is undercutting DoD’s mission, whose execution capability is at serious risk

A troublesome thought “These brittle devices are supposed to form the backbone of America’s energy supplies well into the 21st century—a period likely to bring increasing uncertainty, surprise, unrest, and violence. The U.S. cannot afford vulnerabilities that so alter the balance between large and small groups in society as to erode not only military security but also the freedom and trust that underpin constitutional government.” —Brittle Power, 1981, slightly edited 1984

Military history lessons ◊ Significant attacks on centralized energy systems occurred every few days in the 1980s ◊ Goering & Speer said after WWII: Allies could have shortened the war by two years by bombing the Nazis’ highly centralized electricity system ◊ 78% of Japan’s WWII el. (like most Vietnamese el. later) came from dispersed hydro—so it sustained just 0.3% of the bombing damage ◊ Energy-system attacks are now part of U.S. and Russian standard tactics ◊ Energy decentralization is favored by Israel, China, Sweden,… for military security—but not yet by U.S.

Fortunately, resilience is cheaper ◊ Energy insecurity is not necessary ◊ It isn’t even economic: inherently resilient alternatives work better and cost less ◊ Thus the “insurance premium” against energy vulnerability is negative—it’d put several trillion dollars back in Americans’ pockets over the next 20 y ◊ Design lessons from biology and from many engineering disciplines suggest ~20 principles of a design science of resilience whose systematic application can make major failures impossible

Designing for resilience ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊

Fine-grained, modular structure Early fault detection Redundancy and substitutability Optional interconnection Diversity Standardization Dispersion Hierarchical embedding Stability Simplicity Limited demands on social stability Accessibility/vernacularity

Summarized from Chapter 13, “Designing for Resilience,” A.B. & L.H. Lovins, Brittle Power: Energy Strategy for National Security, Brick House 1982, RMI 2001

Designing for resilience (1981–84)... “An inherently resilient system should include many relatively small, fine-grained elements, dispersed in space, each having a low cost of failure. These substitutible components should be richly interconnected by short, redundant links…Failed components or links should be promptly detected, isolated, and repaired. Components need to be so organized that each element can interconnect with the rest at will but stand alone at need, and that each successive level of function is little affected by failures or substitutions at a subordinate level. Systems should be designed so that any failures are slow and graceful. Components, finally, should be understandable, maintainable, reproducible at a variety of scales, capable of rapid evolution, and societally compatible.” —Brittle Power, 1981,

DoD and DIB are at least as vulnerable to grid failure as the civilian economy ◊

After WWII, DoD set up the Dahlgren Mission Assurance Division to assess DoD’s and DIB’s vulnerabilities; decades of good analyses reside there, mostly in a GIS

Deeply disturbing vulnerabilities, described in the classified Appendix G to 2008 DSB report, were recently discovered

DSB Task Force Co-Chair Dr. Jim Schlesinger and Policy Panel Co-Chair Jim Woolsey have a firm grip on this issue and made it a priority to brief personally Steve Hadley and Energy Secretary Sam Bodman

The extent and implications of this “Aurora” issue, and the actions urgently required to protect military capabilities, can only be understood, as the DSB 2008 Task Force learned, by exposure to classified briefs from Dahlgren and INEL about recent development in electric grid vulnerability

I strongly encourage those of you professionally concerned and engaged with DoD to contact Policy Panel Co-Chair Gueta Mezzetti, 202 256 6716, to arrange to take the classified briefs

We could become more like Iraq than we meant to…perhaps permanently

Resilient electrical supplies are DoD policy…but unimplemented “DoDI 1470.11 §5.2.3 states it is DoD policy to use onsite, self-contained power for critical functions, DoD-facilitiesbased microgrids, and netted area microgrids for extended strategic islanding, coupled with end-use efficiency measures. The Renewable Energy Purchasing and On-Base Development Plan developed in 2004 by the Renewables Assessment Working Group was designed to quickly improve energy reliability and security at installations….Thus, policy and plans are in place to move towards islanding for mission critical purposes. However, the Task Force could find no evidence that DoD has taken tangible steps to implement this policy or plans beyond a very small of high profile projects. This is so even though renewable energy sources…are often economically advantageous and resilient, reducing the risk of mission interruption.” —DSB 2008, pp. 59–60

Efficiency gives most “bounce per buck”

◊ Fastest, cheapest way to replace the most vulnerable supplies ◊ Those failures it can’t prevent, it makes slower, more graceful/fixable, less severe ◊ Buys time to improvise substitutes, and stretches the job they can do 

Electric efficiency stretches distributed resources, and greatly simplifies blackstart of failed local/regional grids

67-mpg light-vehicle fleet stretches oil stocks ~3×; half-filled tanks can run 3 weeks (a dispersed, delivered, refinedproduct SPR); 1981 wellhead-to-car buffer stocks could last not for days or weeks but for up to nearly a year, buying precious time to mend or improvise around what’s broken

1989 supply curve for saveable US electricity (vs. 1986 frozen efficiency) Best 1989 commercially available, retrofittable technologies Similar S, DK, D, UK… EPRI found 40–60% saving 2000 potential Now conservative: savings keep getting bigger and cheaper faster than they’re being depleted Measured technical cost and performance data for ~1,000 technologies (RMI 1986–92, 6 vol, 2,509 pp, 5,135 notes)

–47 to +115˚F with no heating/cooling equipment, less construction cost 7100’, frost any day, 39 days’ continuous midwinter cloud…yet 28 banana crops with no furnace

Key: integrative design—multiple benefits from single expenditures

Lovins house / RMI HQ, Snowmass, Colorado, ’84 

Saves 99% of space & water heating energy, 90% of home el. (4,000 ft2 use ~120 Wav costing ~$5/month @ $0.07/kWh)

10-month payback in 1983

PG&E ACT2, Davis CA, ’94 

Mature-market cost –$1,800

Present-valued maint. –$1,600

82% design saving from best 1992 std., ~90% from US norm

Prof. Soontorn Boonyatikarn house, Bangkok, Thailand, ’96 

84% less a/c capacity, ~90% less a/c energy, better comfort

No extra construction cost

Examples from RMI’s industrial practice (>$30b of facilities) ◊

Retrofit eight chip fabs, save 30–50+% of HVAC energy, ~2-y paybacks

Retrofit very efficient oil refinery, save 42%, ~3-y payback

Retrofit North Sea oil platform, save 50% el., get the rest from waste

Retrofit USNavy Aegis cruiser’s hotel loads, save ~50%, few-y paybacks

Retrofit huge LNG plant, ≥40% energy savings; ~60% new, cost less

Retrofit giant platinum mine, 43% energy savings, 2–3-y payback

Redesign $5b gas-to-liquids plant, save >50% energy and 20% capex

Redesign next new chip fab, eliminate chillers, save 2/3 el. & 1/2 capex

Redesign new data center, save 89%, cut capex & time, improve uptime

Redesign new mine, save 100% of fossil fuel (it’s powered by gravity)

Redesign supermarket, save 70–90%, better sales, ?lower capex

Redesign new chemical plant, save ~3/4 of auxiliary el., –10% capex

Redesign cellulosic ethanol plant, –50% steam, –60% el, –30% capex

Redesign new 58m yacht, save 96% potable H2O & 50% el., lower capex

“Tunneling through the cost barrier” now observed in 29 sectors

None of this would be possible if original designs had been good

Needs engineering pedadogy/practice reforms; see

Electric shock: low-/no-carbon decentralized sources are eclipsing central stations RMI analysis:

• Two-thirds combined-heat-andpower (cogeneration)*, ~63–70% gas-fired, ≥50% CO2 reduction *Gas turbines ≤120 MWe, engines ≤30 MWe, steam turbines only in China

• One-third renewable (including hydropower only up to 10 MWe) • In 2006, micropower added 6× as much output and 30× (incl peaking & standby units, 41×) as much capacity as nuclear power added • Micropower now makes 1/6 of all el, 1/3 of new el., 1/6 to >1/2 of all el. in a dozen industrial nations • Negawatts comparable or bigger; central plants have <1/2 of market!


• Micropower is winning due to lower costs & financial risks, so it’s financed mainly by private capital (only central planners buy nuclear)

Micropower is the world’s top source of new electricity Global Additions of Electrical Generating Capacity by Year and Technology: 1990–2006 Actual and 2007–2010 Projected 90 85 80 70 65 60 55 50

Non-nuclear decentralized total, including standby and peaking decentralized cogeneration Wind Decentralized non-Biomass Cogeneration Decentralized Cogeneration including Peak and Standby (WADE)


Geothermal, Biomass, & Small Hydro



35 30 25

IEA (2003), GWEC (2006) WADE target

Nuclear [Memo: Nuclear Construction Starts]

Source of Projection

Net New Electrical Capacity (net GWe)


Non-nuclear decentralized total

20 Navigant, IEA & IASH IAEA, IEA & WNA

15 10 5

PV industry

0 -5 1990

Actual 1995

Projected 2000 Year



Worldwide in 2006 … ◊ New nuclear capacity was smaller than solar PV additions, or 1/10th of windpower additions ◊ Nuclear retirements exceeded additions, but upratings boosted net nuclear capacity by 1.44 GW; micropower added 43–60 net GW ◊ Micropower surpassed nuclear power in total annual electricity production (16% of total) ◊ Distributed renewables got $56b of private risk capital; nuclear, as always, got zero ◊ China’s distributed renewables reached 49 GW—7× nuclear capacity—and grew 7× more ◊ And in 2007, nuclear added less world capacity than China or Spain added windpower

Cost of saved or supplied electricity, 2004 US¢/kWh (Savings: 12-y av. life, 4%/y real discount rate; Supply: merchant cashflow model or market empirical; wind: 30-y life, 4%/y real; cogeneration: 25-y life, 4%/y real)

↑↑↑↑↑↑↑↑↑ Keystone (6/07): 10.3 to 12.9¢



Central power stations’ fatal competitors Levelized cost of delivered electricity or end-use efficiency (zero distributed benefits); remote sources incur 2.75¢/kWh (1996 embedded IOU average) delivery cost, including grid losses Natural gas: 1 “MCF” (thousand cubic feet) ~ 1.03 million BTU ~ 1.09 GJ all at levelized real prices

Median price of 5.7 GW commissioned in 1999–2006, σ = 0.12¢; cheapest was >1.3¢ lower

5 kWh of coal-fired generation’s net carbon emissions displaceable per $0.10 spent:



Actual costs depend on many site- and plant-specific factors; all costs on this chart are indicative. Remote


2.2–6.5+ 2.4–8.9+

Broader, esp. residential, and suboptimal programs


Nuclear (MIT) Coal (MIT) Combined-cycle 2003–04 wind, Combined- Building- Recoveredgas (MIT) firmed (0.6¢/kWh) cycle scale heat + at least + $100/tC $4–7/MCF + integration (0.3¢) industrial industrial new 2005 carbon tax add back subsidy + $100/tC subsidies (but ignore the carbon tax $5–8/MCF gas probably bigger nuclear subsidies) expected 2012 Central stations, 2004 subsidies, (some cost less now) Cogeneration (CHP)

no reserve margin; the official studies count only these


Good business retrofits Optimized new installations (all sectors)

End-use efficiency, -15; LBL-41435

Nuclear is the costliest of the low- or no-carbon resources

Cheapest and lowest-carbon sources save the most C per $ Coal-fired CO2 emissions displaced per dollar spent on electrical services 1¢

(calculated by multiplying coal-plant carbon displaced per kWh times kWh delivered per dollar) 50 2¢

kg CO2 displaced per levelized 2007 US$

45 40

Illustrative carbon displacement at various efficiency cost/kWh

35 3¢

30 25 2006 Wind mean price

Recovered heat credit

20 Keystone high nuclear cost scenario 15 10 5 N/A

0 Nuclear


Combinedcycle gas


Combinedcycle industrial cogen

Building-scale Recoveredcogen heat industrial cogen

End-use efficiency

All options face implementation risks; what does market behavior reveal? ◊ California’s 1982–85 fair bidding with roughly equal subsidies elicited, vs. 37-GW 1984 load:      

23 GW of contracted electric savings acquisitions over the next decade (62% of 1984 peak load) 13 GW of contracted new generating capacity (35% of 1984 load), most of it renewable 8 GW (22%) of additional new generating capacity on firm offer 9 GW of new generating offers arriving per year (25%) Result: glut (143%) forced bidding suspension in April 1985 Lesson: real, full competition is more likely to give you too many attractive options than too few!

◊ Ultimate size of alternatives also dwarfs nuclear’s     

El. end-use efficiency: ~2–3× (EPRI) or 4× nuclear’s 20% US share at below its short-run marginal delivered cost CHP: industrial alone is comparable to nuclear; + buildings CHP On-/nearshore wind: >2× US & China el., ~6× UK, ~35× global Other renewables: collectively even larger, PVs almost unlimited Land-use and variability are not significant problems or costs

“Baseload” ≠ “big thermal plant” (cf. telephony and computing) ◊ Arithmetically, one 1-GWe unit or a thousand 1-MWe units or a million 1-kWe units are equivalent ◊ But in practice, many small units are more reliable than a few big ones even if all are equally reliable—and those near customers are more reliable than faraway units (98–99% of US outages originate in the grid) August 2003 Daily Nuclear Output for the Nine U.S. Nuclear Units Affected by the 14 August 2003 Northeast Blackout,

9 100% = 7.851 GWe 8


av. cap. loss:

90% 97.5% / 3 days 82.5% / 5 days 59.4% / 7 days 53.8%/10 days 53.2% / 12 days 69%


Output (GWe)

◊ Anyhow, not only wind arrays can lose output for an extended period: av. US nuclear outage is 37 days every 17 months, and many units can fail simultaneously and without warning (unlike renewables)…


99% 100%


5 59% 4




2 1 0% 2.5% 5% * 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 blackout

0 1









The most comprehensive threat to national energy security is… current national energy policy ◊ Perpetuates America’s expanding oil dependence 

Policy ranges from rhetorical support (mention of “addiction” & advanced biofuels in SoU06) to inaction (natural-gas efficiency) to opposition (seriously improving light-vehicle efficiency)

Bailed out Iran & Saudi, “created” Ahmadinejad/Chávez/Putin/…

Funds both sides of the war and impugns U.S. moral standing

Systematically distorts foreign policy, postures, and attitudes

Weakens competitiveness, enhances vulnerability and fragility

◊ Strongly favors overcentralized system architecture 

Natural gas (Katrina), electricity (regional blackouts worsening)

◊ Creates terrorist targets (LNG, nukes, Iraq infrastr.) 

Centerpiece: make an all-American Strait of Hormuz (ANWR/TAPS)

◊ Nuclear power drives & reprocessing worsens prolif’n. ◊ If these aren’t desired outcomes, DoD should say so

What are we waiting for? We are the people we have been waiting for! “Only puny secrets need protection. Big discoveries are protected by public incredulity.” —Marshall McLuhan

Your move…,, www.r (Publications),

Amory Lovings Presentation  

Amory Lovins presents the 2008 Defense Science Board Report

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