by Christina C. DiPasquale and Daniel J. Weiss
U.S. Navy servicemen and women recently debuted the “Great Green Fleet,” the first aircraft carrier strike group to be powered largely by alternative, nonpetroleum-based fuels. Despite this latest success, however, some congressional conservatives on the Senate and House Armed Services committees want to slash funding for this and other Defense Department clean energy programs. This would short-circuit investments in energy innovation that could have civilian applications and benefits, helping our nation become less reliant on oil. In addition, sole reliance on oil-based fuels subjects the defense budget to increased spending for fuel when the price of oil spikes.
Secretary of the Navy Ray Mabus provided the leadership to build the “Great Green Fleet”—an essential milestone in the Department of Defense’s efforts to reduce its oil dependence by diversifying fuels. The development and use of alternative fuels is vital to the safety of our troops because it diversifies the fuel mix that powers their vessels, planes, and vehicles. That makes them less vulnerable to an oil supply disruption in the Middle East or elsewhere. It is also vital to the long-term fiscal health of our nation because any effort to reduce our reliance on volatilely priced fossil fuels is good for our economy. The Navy’s investment in alternative fuels to power the “Great Green Fleet” is an essential effort to reduce its oil dependence and exposure to volatile prices.
The biofuel blends used in the five-ship demonstration were 50-50 mixtures of biofuels—made from used cooking oil and algae—and petroleum-based marine diesel or aviation fuel. About 450,000 gallons of 100 percent “neat” biofuel was purchased in 2011 for this purpose.
Conservative lawmakers have opposed the U.S. military’s use of advanced biofuels, however, claiming that they are concerned about the cost of these new, nonoil fuels. Sen. John McCain (R-AZ), the ranking Republican on the Senate Armed Services Committee, said, “I don’t believe we can afford it.” Another critic, Rep. Randy Forbes (R-VA), said during a hearing earlier this year that, “I understand that alternative fuels may help our guys in the field, but wouldn’t you agree that the thing they’d be more concerned about is having more ships, more planes, more prepositioned stocks?”
These arguments ignore the drain on America’s defense budget from oil price spikes such as those experienced earlier this year. The Department of Defense estimates that for every $1 increase in the price of a barrel of oil, the military incurs an additional $130 million in fuel costs. In fact, a Center for American Progress analysis (see table) found that the most recent oil price spike cost the Department of Defense $123 million more for oil purchases from January to May of this year compared to purchases one year ago over the same months. The 2012 price spike forced $1.1 billion more spending for oil compared to the same time in 2010.
There’s no end in sight for the strain of high oil prices on the Department of Defense. According to Energy Department statistics, world oil prices will average an estimated $145 a barrel in 2035 (in 2010 dollars), up from the current $85-to-$110 range this year.
This past May, groups including Pew Charitable Trusts, the American Farm Bureau Federation, and Airlines for America issued a joint statement voicing their opposition to the antibiofuel amendments adopted by the Senate Committee on Armed Services:
In fiscal years 2011 and 2012, DoD came up $5.6 billion short in its budget for military operations and maintenance because it spent more on fuel than anticipated. Moreover, the United States sends $1 billion overseas each and every day to pay for foreign oil, further draining resources from the U.S. economy.
Rep. Forbes argues that studies show biofuel will always be more expensive than petroleum, but the Defense Department’s purchase of small amounts of biofuel for research and development has already dramatically reduced its price, as manufacturers streamline production processes. In fact, the cost of biofuel was cut in half in two years, according to Secretary Mabus.
The conservative lawmakers’ push for measures to bar the Navy from spending funds on new alternative fuels that are not yet priced competitively with petroleum led Pentagon spokeswoman Lt. Col. Melinda Morgan to warn that if their amendments are enacted, they could “restrict DOD’s ability to increase our resilience against potential supply disruptions and future price volatility of petroleum products.”
Other advanced biofuel critics claim that such an investment is not worthwhile because the volume of biofuel production might be too small. James Bartis, senior policy researcher at the RAND Corporation, guessed that the eventual alternative fuels production might peak at 80,000 barrels per day. Even if he is correct, though, that would displace 25 percent of the 320,000 barrels of oil the Pentagon purchases every day.
What’s more, these provisions attacking alternative fuels that are currently more expensive than conventional fuels may impair the military’s purchase of nuclear-powered vessels, and consequently diminish its operational flexibility. The Government Accountability Office compared the cost-effectiveness of conventionally and nuclear-powered Navy aircraft carriers and found that life-cycle costs for nuclear-powered carriers are 34 percent higher than their conventional counterparts. The Government Accountability Office estimates include the cost of the nuclear fuel, as well as operation, support, and disposal costs. Nuclear carriers also require more personnel at higher wages with more labor hours.
But the use of nuclear-powered carriers offers operational flexibility as, according to the Government Accountability Office report, these carriers are able to “steam almost indefinitely without needing to replenish its propulsion fuel … [and have] larger fuel and ordnance storage capacity, thereby reducing dependence on logistics support ships.” The report also adds that, “Nuclear carriers can also accelerate faster than conventional carriers, enabling them to respond faster if conditions affecting the recovery of landing aircraft suddenly change.”
The proposal to limit the military’s use of fuels to those with a comparable cost to petroleum may also affect the readiness of the U.S. Navy. When endorsing the military’s use of advanced biofuels, American Veterans—one of America’s foremost veteran service organizations—wrote:
Recent criticisms of the U.S. military’s long-term investment in advanced biofuels, which are sourced from non-edible plants like grass and algae, fail to take into consideration the sacrifices of the men and women serving in uniform across the globe.
Protecting oil supply lines is hazardous duty. The current situation in the Strait of Hormuz, where the Navy is keeping the sea lanes open for Persian Gulf oil tankers, is a stark reminder that our nation’s reliance on foreign oil puts our sailors in harm’s way. At the same time, we’ve already seen the U.S. military forced to shift its budget to pay for skyrocketing fuel costs. In 2011, the Pentagon saw a 26 percent increase in fuel costs from the previous year. To pay this unplanned higher cost, the DoD had to shift $3.6 billion in its annual budget, which came at the cost of new, better equipment and training for our troops.
Our military’s readiness ought not to be subject to steadily increasing oil prices and the whims of hostile nations. We must stay the course with the military’s long-term commitment to advanced biofuels.
There are many opportunities to reduce Pentagon spending other than attacking investments in advanced biofuels. Lawrence Korb, CAP Senior Fellow and former assistant secretary of defense under President Ronald Reagan, outlined responsible defense cuts that could save $600 billion over a decade without undermining national security. These include cutting spending on the largely unneeded V22 Osprey helicopter program ($9.2 billion) and two more Virginia-class nuclear attack submarines to be built over the next five years ($5.6 billion).
ThinkProgress reported in May that the House Armed Services Committee’s proposed budget also includes pet projects such as a $5 billion initiative for a House GOP provision to build an East Coast missile defense system that the military doesn’t even want.
The recent attacks on the Navy’s efforts to innovate and reduce its dependence on oil are counter to the long and historically bipartisan support for Defense Department-related energy technology innovation. The Navy’s goal of using biofuels to supply roughly half of their non-nuclear fuel needs by 2020 is part of this tradition. The Pentagon remains the world’s single-largest energy consumer (excluding nations).
Secretary Mabus argues that the Navy is ideally positioned to invest in the research, development, and deployment of advanced biofuels—something the private sector would not undertake absent significantly higher oil prices. The military’s demand for biofuels could help create the market for advanced biofuels, which will in turn bring prices down due to economies of scale.
In a recent Reuters article, Secretary Mabus points out that the “Navy has been at the forefront of energy innovation for over a hundred years … transitioning from sail, to coal, to oil and then to nuclear from the 1850s to the 1950s.” Remaining undeterred despite this recent opposition to innovation from some lawmakers, Secretary Mabus remains committed to the goals of the advanced biofuels program, stating:
Every single time there were naysayers. And every single time, every single time, those naysayers have been wrong, and they’re going to be wrong again this time.
Taking its name from President Theodore Roosevelt’s “Great White Fleet,” which demonstrated the might of American sea power at the beginning of the 20th century, the “Great Green Fleet” promises to demonstrate that same might in this century.
Christina C. DiPasquale is an Associate Director for Press Relations at the Center for American Progress. Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy at the Center.