[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 110-134]
DEPARTMENT OF DEFENSE ENERGY POSTURE
__________
HEARING
BEFORE THE
READINESS SUBCOMMITTEE
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
MARCH 13, 2008
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PRINTING OFFICE
45-066 WASHINGTON : 2009
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
READINESS SUBCOMMITTEE
SOLOMON P. ORTIZ, Texas, Chairman
GENE TAYLOR, Mississippi J. RANDY FORBES, Virginia
SILVESTRE REYES, Texas WALTER B. JONES, North Carolina
LORETTA SANCHEZ, California MIKE ROGERS, Alabama
ROBERT A. BRADY, Pennsylvania JOHN M. McHUGH, New York
JIM MARSHALL, Georgia HOWARD P. ``BUCK'' McKEON,
MADELEINE Z. BORDALLO, Guam California
MARK E. UDALL, Colorado ROBIN HAYES, North Carolina
DAN BOREN, Oklahoma FRANK A. LoBIONDO, New Jersey
NANCY BOYDA, Kansas TOM COLE, Oklahoma
CAROL SHEA-PORTER, New Hampshire ROB BISHOP, Utah
JOE COURTNEY, Connecticut TRENT FRANKS, Arizona
DAVID LOEBSACK, Iowa CATHY McMORRIS RODGERS, Washington
GABRIELLE GIFFORDS, Arizona DOUG LAMBORN, Colorado
ELIJAH E. CUMMINGS, Maryland ROB WITTMAN, Virginia
Eryn Robinson, Professional Staff Member
Lynn Williams, Professional Staff Member
Megan Putnam, Staff Assistant
C O N T E N T S
----------
CHRONOLOGICAL LIST OF HEARINGS
2008
Page
Hearing:
Thursday, March 13, 2008, Department of Defense Energy Posture... 1
Appendix:
Thursday, March 13, 2008......................................... 31
----------
THURSDAY, MARCH 13, 2008
DEPARTMENT OF DEFENSE ENERGY POSTURE
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bartlett, Hon. Roscoe G., a Representative from Maryland,
Committee on Armed Services.................................... 4
Forbes, Hon. J. Randy, a Representative from Virginia, Ranking
Member, Readiness Subcommittee................................. 2
Ortiz, Hon. Solomon P., a Representative from Texas, Chairman,
Readiness Subcommittee......................................... 1
WITNESSES
Arny, Wayne, Deputy Under Secretary of Defense, Installations and
Environment, Department of Defense............................. 5
Carns, Gen. Michael P.C., USAF (Ret.), Chairman, Defense Science
Board Task Force on Energy Strategy............................ 8
DiPetto, Chris, Deputy Director, Systems and Software Engineering
(Developmental Test & Evaluation), Office of the Under
Secretary of Defense (Acquisition and Technology).............. 7
Solis, William M., Director, Defense Capabilities and Management,
U.S. Government Accountability Office.......................... 11
APPENDIX
Prepared Statements:
Arny, Wayne.................................................. 48
Carns, Gen. Michael P.C...................................... 72
DiPetto, Chris............................................... 58
Forbes, Hon. J. Randy........................................ 43
Ortiz, Hon. Solomon P........................................ 35
Solis, William M............................................. 81
Documents Submitted for the Record:
[There were no Documents submitted for the record.]
Witness Responses to Questions Asked During the Hearing:
Mr. Forbes................................................... 103
Mr. Ortiz.................................................... 103
Mr. Taylor................................................... 104
Questions Submitted by Members Post Hearing:
Mr. Bartlett................................................. 111
Mr. Ortiz.................................................... 109
DEPARTMENT OF DEFENSE ENERGY POSTURE
----------
House of Representatives,
Committee on Armed Services,
Readiness Subcommittee,
Washington, DC, Thursday, March 13, 2008.
The subcommittee met, pursuant to call, at 10:34 a.m., in
room 2118, Rayburn House Office Building, Hon. Solomon Ortiz
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. SOLOMON P. ORTIZ, A REPRESENTATIVE
FROM TEXAS, CHAIRMAN, READINESS SUBCOMMITTEE
Mr. Ortiz. I understand that we might be having a vote in
about 25 minutes, but we will see if we can move forward, but
thank you so much for being with us today. I want to thank our
distinguished witnesses. We will have a few minutes, but maybe
I can get through with my opening statement.
I thank our distinguished witnesses for appearing before
this subcommittee today to discuss energy use and management at
military installations and for military operations.
Energy issues cut across all Department of Defense (DOD)
organizations and functions. Managing the demand for energy is
vital not only at facilities but also for fleet vehicles,
surface ships and submarines, aircraft, and tactical vehicles.
The Department is developing innovative energy sources for
soldier power and for forward-deployed locations, while also
striving to find sources of renewable energy and meet goals for
energy efficiency on installations at home.
Management is vital because the Department of Defense
spends billions of dollars every year on energy. The
Department's request for 2009 includes $3 billion more for
energy than last fiscal year. This week, the price of oil
topped $109 per barrel and is four times more expensive than it
was in 2001. Increased fuel prices strain the military
services' readiness accounts. For example, in fiscal year 2009,
roughly half of the increase in the Navy's operations and
maintenance budget request is due to projected increases in
fuel costs.
For the past several years, the Defense Energy Supply
Center raised bulk fuel rates mid-year, charging the services
more than they budgeted for fuel. In many ways, the Department
has already assumed a leadership role in addressing energy
demand challenges. For example, even before the National
Defense Authorization Act for fiscal year 2007 required it, the
Department of Defense already had established an internal goal
of using 25 percent renewable electricity by 2025.
The services are also implementing innovative energy
projects. For example, at Nellis Air Force Base, the Air Force
has partnered with private industry to build the largest solar
panel array in the Americas. This was accomplished through an
enhanced use lease which allows the installation to lease non-
excess land to private entities for 50 years or more. Other
plans for the use of enhanced use leases raise questions,
however.
The Air Force is proposing enhanced use lease agreements
for a coal-to-liquid production facility at Malmstrom Air Force
Base and for nuclear power plants on other Air Force
installations. I am concerned that use of such long-term
commitments may impede a base's primary mission and could
result in another form of encroachment. I will be very
interested to hear whether the Department thinks these
proposals serve the overall good for installations.
I also hope to address the criteria we use to evaluate
choices that affect energy use. For example, what lessons are
being learned from the pilot study using the fully burdened
cost of fuel for mobility systems? Of course, we also are
anxious to learn about recommendations by the Defense Science
Board (DSB) and Government Accountability Office (GAO), as well
as specific energy solutions and challenges from the
Department's perspective.
I look forward to thoughtful testimony from the
distinguished witnesses we have invited here today on these and
other issues of interest to my colleagues on the subcommittee.
The chair now recognizes my good friend, the distinguished
gentleman from Virginia, Mr. Forbes, for any remarks he would
like to make.
[The prepared statement of Mr. Ortiz can be found in the
Appendix on page 35.]
STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE FROM
VIRGINIA, RANKING MEMBER, READINESS SUBCOMMITTEE
Mr. Forbes. Mr. Chairman, I first want to applaud your
leadership and foresight in addressing not only the issues that
are impacting military readiness today, but also issues that a
long-term threats to the readiness of the Department of
Defense.
Today's hearing on DOD's energy posture and the hearing we
had this past Tuesday on inherently governmental functions
addressed issues that are complex and very often ill-defined.
They require a long-range strategy and commitment if we are to
have an impact, yet they truly are issues that define and
underpin the readiness posture of the Department.
Mr. Chairman, I want to thank you for your vision and thank
you for holding this hearing. I would also like to thank you
for assembling this absolutely terrific panel of witnesses.
Gentlemen, we thank you for taking time today to talk with us
and allow us to pick your brains and get some vision and
direction on this very important issue. We certainly appreciate
your expertise on this matter and we value your time.
Today, we have an opportunity to look at a wide variety of
issues related to the energy requirements and the energy
posture of the Department of Defense. The recently released
Defense Science Board study on DOD's energy strategy provides a
solid backdrop for our conversation. The findings and
recommendations in this report are important and timely.
As the chairman mentioned, with the rising price of crude
oil, one might even argue that they are overdue. We are honored
to have one of the study's co-chairmen with us today, General
Michael Carns. General, we thank you for your work on this
matter, and all the members of the task force for the work you
have done in examining the Department's energy challenges.
One of the goals of the hearing today is to discuss the two
serious energy risk areas that are identified in your report:
energy risk to our operational forces and the risk of extended
loss of power at fixed installations. As you proceed with your
testimony, I would ask each of you to also address what you
believe needs to be done so that we can actually see real
benefit from the study.
I say that because we study and report on things all the
time, yet it is very difficult for us as a Congress to bring
about real change sometimes. Mr. Solis, you probably understand
this point better than any of us, and I know the committee has
kept you very busy, and we just certainly appreciate all of
your efforts and your energy and all that you do to support
Congress.
I make this point because we cannot afford to have what I
believe are very salient and very plausible recommendations to
be put on a shelf and forgotten. I would like to know what
needs to be done to bring your commendations to fruition so
that we can take steps necessary to further strengthen DOD's
energy posture and therefore strengthen our national defense. I
am very interested in understanding how the DSB study will
inform the strategic plans of the Department and how such
strategic plan will be developed and implemented.
I would also like to ask that you let us know if there are
legislative changes that are needed to improve DOD's energy
posture. Oftentimes, energy legislation such as the Energy
Independence and Security Act of 2007 is written with a broad
focus across the government. While I agree that the U.S.
Government's energy policy should be just that--government-
wide--the Department of Defense has unique mission sets, a
unique structure, and unique operating requirements. We must
take care to ensure that legislation that has all the best
intentions does not have unintended consequences that unduly
degrade military capability.
Once again, thank you for joining us today. I look forward
to your testimony and to gaining a better understanding of what
we need to do to ensure military readiness through a strong
energy posture.
Mr. Chairman, thank you and I yield back the balance of my
time.
[The prepared statement of Mr. Forbes can be found in the
Appendix on page 43.]
Mr. Ortiz. I checked with the minority, and request
unanimous consent to allow my good friend, Mr. Bartlett, to
also have an opening statement.
STATEMENT OF HON. ROSCOE G. BARTLETT, A REPRESENTATIVE FROM
MARYLAND, COMMITTEE ON ARMED SERVICES
Mr. Bartlett. Thank you very much, Chairman Ortiz, for
allowing me to sit in on this subcommittee hearing. I welcome
this hearing for bringing attention to the new Defense Science
Board report on Department of Defense Energy Strategy: ``More
Fight--Less Fuel.''
I believe that energy is the most important challenge
facing the world and our country in the 21st century.
Specifically, I am most concerned about the imminent prospect
of global peak oil. Global peak oil is inevitable because each
oil well peaks and then declines in production after it has
produced about half of its reserves. Similarly, regions and
countries peak. U.S. oil production peaked in 1970.
My colleagues on the Energy and Environment Subcommittee of
the Science Committee and I received testimony from Dr. Bob
Hirsch in a field hearing held in Houston on February 29. Dr.
Hirsch said ``The Royal Swedish Academy tells us that 54 of the
65 most important oil producing countries are already past
their peak production.''
A 2007 GAO report that I commissioned warned that the U.S.
is particularly at risk for negative consequences from peak
oil. That is because we are the world's biggest user of oil,
consuming 25 percent, while producing only 8 percent of world
production from just 2 percent of world reserves. Recently,
chief executives from the Hess, ConocoPhillips, and Shell oil
companies all expressed doubts about the ability for world oil
supplies to meet demand by 2015, a very short time for DOD
planning horizons.
Oil is over $100 a barrel and Goldman Sachs is among those
estimating it could go to $150 or $200 a barrel this year. We
are acutely aware as members of the Armed Services Committee
that the Defense Department is the largest consumer of oil in
the country. We know that mobility platforms consume the most
energy used by the Department, with jet fuel representing
nearly 60 percent of fuel consumed by DOD.
I am really proud of the Defense Department for its
national leadership role in energy efficiency, advanced energy
technologies, and utilizing renewable energy. The military
trains like it fights. The military needs to plan like it
fights. A 2001 Defense Science Board report recommended that it
is imperative to reduce vulnerability and increase warfighting
capabilities by achieving greater energy efficiency and less
energy intensity of operational forces and weapons platforms.
It is common sense that if you don't measure it, you can't
manage it. That, in essence, was the hub of the challenge
concerning energy from the Defense Department when the 2001
Defense Science Board report was issued. Some may perceive that
this new DSB report represents deja vu. However, it is not.
There have been at least two key steps that were already
underway prior to the release of this new DSB report.
In August of 2006, the Vice Chairman of the Joint Chiefs of
Staff issued a memorandum endorsing a Joint Requirements
Oversight Council decision to establish an energy efficiency
key performance parameter (KPP). This KPP was subsequently
required by the chairman of the Joint Chiefs of Staff's
instruction, CSI-3170(f) dated May 2007. In April of 2007, an
under secretary of defense acquisition, logistics, and
technology (AT&L) memorandum established that it is Department
policy to use the fully-burdened cost of fuel for all
acquisition trade analyses.
I am looking forward to today's witnesses addressing the
Defense Science Board's first recommendation for the Department
to accelerate efforts to implement energy efficiency key
performance parameters and to use a fully-burdened cost of fuel
to inform all acquisition trades and analyses about their
energy consequences. Seventy percent of the tonnage delivered
to deployed forces is fuel. Fuel delivery convoys to deployed
forces add costs to the logistical chain and create targets for
improvised explosive devices (IEDs), the single greatest source
of casualties in Iraq.
Additional personnel protection measures to reduce
casualties from IEDs, such as air cover or air transport
substitutions for ground convoys increases costs further. I
look forward to learning from our witnesses your perspective
about energy management by the Defense Department.
Thank you very much, Mr. Chairman.
Mr. Ortiz. Today, we have a panel of distinguished
witnesses representing the Department of Defense, the Defense
Science Board, and the Government Accountability Office. We
have with us Mr. Wayne Arny, Deputy Under Secretary of Defense
for Installations and Environment. Wayne, welcome.
We have Mr. Chris DiPetto, Deputy Director of Systems and
Software Engineering in the Office of the Under Secretary of
Defense for Acquisition and Technology. Welcome, sir.
And we have General Michael P.C. Carns, United States Air
Force, retired, Chairman of the Defense Science Board Task
Force on Energy Strategy. General, thank you, sir.
And we have Mr. William Solis, a good friend. Good to see
you again, sir. He is Director of Defense Capabilities and
Management, United States Government Accountability Office.
Without objection, the witnesses' prepared statements will
be accepted for the record.
Mr. Arny, welcome. You can proceed with your opening
statement, sir.
STATEMENT OF WAYNE ARNY, DEPUTY UNDER SECRETARY OF DEFENSE,
INSTALLATIONS AND ENVIRONMENT, DEPARTMENT OF DEFENSE
Mr. Arny. Thank you, sir.
Chairman Ortiz, Congressman Forbes, distinguished members
of the subcommittee, I appreciate this opportunity to appear
before you to discuss the Department's installation energy
efficiency and conservation posture. As we mentioned before,
installations are a critical component of our defense
capabilities and directly affect our training, readiness, and
quality of life.
Besides maintaining that quality of our facilities, we
believe it is imperative for the Department to exercise good
stewardship of the natural resources, not only because of the
environmental impact, but also because there is a sound
business case for maximizing the expenditures of our resources.
There are two speakers here today representing DOD. I will
be speaking in the installation aspects of energy and non-
tactical vehicles, and Mr. Chris DiPetto from Director, Defense
Research and Engineering (DDR&E), will focus on mobility. After
our presentations, I hope you will have a better understanding
of our different roles.
As the deputy for installations and environment, I have
responsibility for the Department's installation and non-
tactical vehicle energy consumptions. This represents almost 28
percent of the total energy consumed by the Department, and of
that, only 1.5 percent is for non-tactical.
I am happy to report that for fiscal year 2007, facilities
energy utilization decreased by 10.1 percent on a British
Thermal Unit (BTU)-per-square-foot basis from the 2003
baseline, with a cost savings of $80 million, despite the
rising cost of energy. Our installation energy effort is guided
by the Energy Policy Act of 2005 and the Executive Order 13423.
These policies direct the agencies to take action in a wide
variety of functional management areas.
Further, the recently passed Energy Independence and
Security Act of 2007 also contains a number of new
requirements, as you mentioned, and we are examining them for
implementation. We will get back to you on the questions you
asked on that.
In January 2006, the Department also joined 16 other
federal agencies in signing a memorandum of understanding (MOU)
for federal leadership in high-performance and sustainable
buildings. We are pursuing the attainment of Leadership in
Energy and Environmental Design (LEED) silver-gold for 70
percent of the fiscal year 2009 military construction projects.
In addition, we are working to address the sustainability of
existing facilities.
Aside from construction of new facilities, we continue to
invest in initiatives to approve efficiency in existing
structures through the use of the energy savings performance
contract that you also renewed a couple of years ago, and
utility energy service contracts. These enable us to bring in
more cost-effective long-term facility operations and
maintenance with no up-front costs. The work, and typically
account for more than half of all of our facility energy
savings. They are paid for through energy savings. By 2005, we
had reduced facility energy use by 28.3 percent from the 1985
baseline.
We have also increased our focus on purchasing renewable
energy and developing renewable resources on our installations.
As you recall, we have special legislation that allows us to do
that. We have also increased the use of energy conservation
investment program funding for renewable projects from $5
million in fiscal year 2003 to $28.2 million planned for fiscal
year 2008. We intend to increase funding for these projects to
$10 million per year up to $120 million in fiscal year 2013.
In geothermal, for which I said we had legislation, we are
making tremendous progress. We are also working with the Office
of Management and Budget (OMB) to expand this legislation so
that we can exploit other forms of traditional and renewable
energy on our facilities. For the geothermal as of now, we have
a 270 megawatt power plant at China Lake that supplies enough
energy to serve 180,000 homes annually, and the base gets a
reduction in its own energy bill.
We have a second power plant under construction in Fallon
and three additional plants in the southwest are planned at El
Centro, 29 Palms, at Chocolate Mountains, and at the Army ammo
depot at--I draw a blank right now. The Navy is also working
with the Army to do geothermal exploration there.
We also have multiple solar facilities online, and
initiatives at several locations, including California, Texas,
and Arizona. The Air Force recently brought on North America's
largest solar array at Nellis. That produces 14 megawatts and
provides one-third of the base's electric requirement. That,
again, was done with no money up front on the part of the Air
Force and will provide significantly lower electric rates over
time.
We are also pushing into ocean and tidal wave technology,
and we are working to set up small wind farms with diesel
backups wherever they make sense, especially at remote
locations. We have these at San Clemente, Guantanamo Bay and on
the islands powering radar off of Point Mugu.
One that is very interesting, we funded a small business
innovative research project for an ocean thermal energy
conversion program. OTEP as it is called is being tested on
Diego Garcia. The project seeks to use the temperature
differences between the ocean surface and deeper water to
produce electricity and potable water to a location where we
all know both those commodities are very expensive to produce.
I will briefly mention non-tactical vehicles. The
Department is required by legislation to use alternative and
flexible fueled vehicles for at least 75 percent of new
vehicles in metropolitan service areas, and we meet that goal.
But unfortunately, we have not seen the development of the
alternative fuel infrastructure that we need to fuel those
vehicles. So consequently, while we have the number of
vehicles, they are still using regular fuel to power because we
don't have access to the alternative fuels.
We are investigating ways to help do that, as you have seen
at our Quarters K gas station up by the Pentagon, open to the
public, our alternative fuel facilities. We are working with
other exchanges.
In closing, I thank you for the opportunity to highlight
the Department's energy management of our installations and
non-tactical vehicle fleet, and to talk about our successes and
our plans for the future. Your support of the Department's
energy initiatives and investments is greatly appreciated, and
I look forward to continuing to work with this committee as we
increase energy security and reduce operating costs for the
Department.
Thank you.
[The prepared statement of Mr. Arny can be found in the
Appendix on page 48.]
Mr. Ortiz. Mr. DiPetto, whenever you are ready, sir.
STATEMENT OF CHRIS DIPETTO, DEPUTY DIRECTOR, SYSTEMS AND
SOFTWARE ENGINEERING (DEVELOPMENTAL TEST & EVALUATION), OFFICE
OF THE UNDER SECRETARY OF DEFENSE (ACQUISITION AND TECHNOLOGY)
Mr. DiPetto. Thank you.
Chairman Ortiz, Congressman Forbes, distinguished members
of the subcommittee, thank you for the opportunity to appear
here before you today to discuss the Department of Defense's
current efforts to address our energy risks and our energy
governance. The past year has been quite active as the
enterprise has begun to appreciate the challenges and potential
opportunities related to energy.
My name is Chris DiPetto and I am here representing the
Deputy Under Secretary of Defense for Acquisition and
Technology (A&T), Dr. James Finley. A&T has some specific
responsibilities related to examining and setting policy on DOD
mobile systems energy. Specifically, we were directed by the
deputy secretary to mature and incorporate a concept called
``the fully burdened cost of fuel'' into DOD business
processes.
Incorporating this concept, we believe, will give energy,
particularly the burdens of battle space-delivered fuel, proper
consideration as design, develop and acquire capabilities. The
DOD Energy Security Task Force is chaired by Under Secretary of
Defense for Acquisition, Technology, and Logistics, the
Honorable John Young. This task force was chartered in May,
2006, to delve into the unique energy challenges the Department
faces and to develop management and technology solutions.
This group has succeeded in raising the profile of energy
within the Department and is positioned to provide senior
leadership with actionable recommendations this year on how to
manage these energy risks in new and innovative ways. The
Office of the Director of Defense Research and Engineering
provides the day-to-day leadership to the Energy Security Task
Force, so I would defer to them to provide the committee a
broader description of the work plan and their successes to
date.
However, my organization, A&T, acquisition and technology,
participates actively in this group, along with other Office of
the Secretary of Defense (OSD), joint staff, service and
defense agency representatives. I hope to provide you with some
context on the energy challenges the Department faces.
Information on the work my leadership and I are doing to better
understand the Department's energy risks, and to explain some
of the planning and business process changes the Department is
considering to better manage these risks.
I provided my formal testimony for the record. So with
that, I thank the subcommittee for their attention on this
cross-cutting issue and I will welcome your questions.
[The prepared statement of Mr. DiPetto can be found in the
Appendix on page 43.]
Mr. Ortiz. Thank you, sir.
General Carns.
STATEMENT OF GEN. MICHAEL P.C. CARNS, USAF (RET.), CHAIRMAN,
DEFENSE SCIENCE BOARD TASK FORCE ON ENERGY STRATEGY
General Carns. Thank you, Chairman Ortiz, Ranking Member
Forbes, and other distinguished members.
In May, 2006, the Under Secretary of Defense for
Acquisition, Logistics and Technology commissioned the Defense
Science Board Task Force on DOD Energy Security. Citing the
specific energy security risks to both our Nation and to our
military forces, he challenged the task force to find
opportunities to reduce DOD's energy demand, to identify
institutional obstacles to their implementation, and assess
their potential commercial and security benefits to the Nation.
The task force was co-chaired by Dr. James Schlesinger and
myself. It included 77 members. We held 37 meetings, took 143
briefings, took 10 months to deliberate, and another 10 months
to finalize our report. We came to an agreement about the most
important energy tasks facing the Department, and a set of
recommendations that if followed would allow the Department to
manage those risks.
Here is a copy of the report which I submit for the record,
and I have also provided written testimony for the record.
[The information referred to is retained in the committee
files and can be viewed upon request.]
General Carns. The Department of Defense is the single
largest consumer of energy in the United States, using less
than 1 percent of the Nation's total energy consumption and
about 1.5 percent of its oil consumption. Interestingly enough,
the number two user is Wal-Mart. Buildings and facilities use
about one-quarter of DOD's total energy, and mobile systems
consume about three-quarters. To put this in perspective, the
Department uses somewhat more petroleum per year than a major
international airline, not twice as much, but almost as much.
We found that the Department faces two serious energy
risks. One is moving fuel to our operational forces, and the
other is the potential for an extended loss of commercial power
to certain selected critical missions at our fixed
installations.
Now, a few thoughts about the risk to operational forces.
Moving fuel to the deployed forces is difficult, expensive and
certainly dangerous. Logistics is a vulnerable soft underbelly
for us and a rich target for our enemies. The larger our
logistics tail gets, the more difficult it is to protect, and
as we have learned in the Iraqi conflict, more combat power
gets diverted from combat operations to assure the logistics
safety, the more casualties we take because of our supply
trucks can never be as survivable as our combat vehicles. As
Congressman Bartlett noted, both Iraq and Afghanistan have
taught us that we are no longer moving logistics around in
secure areas. Everything is at risk all the time.
The task force identified the best way to reduce energy
tasks to operational forces is to reduce the fuel demand. The
best approach to doing so was developed by the Defense Science
Board 2001, and I point out that Admiral Truly is present with
us and he chaired that board in 2001. In my view, the first
thing to do is to educate the leadership, incorporate fuel
logistics and convoy protection into war games, the scenarios,
the vignettes and the campaign analyses that DOD uses to
identify needed capabilities, and to develop options for
fielding these capabilities. Improved endurance--the amount of
capability we extract from each unit of energy an operational
system uses is an important capability.
Second, we need to put a lot more rigor in the system. As
was mentioned, this matter of establishing a key performance
parameter for all new systems that create a demand for fuel.
The results of the war games and the scenarios and other
campaign models will provide the basis for formulating those
KPPs.
Again, a parenthetical note, several years ago, many of us
participated in a war game up at Carlyle Barracks. During the
course of that game, it actually came to a halt. That is, we
were unable to execute the forces because they could not
sustain the logistics trail in this particular exercise. At the
time, the senior people were very critical of the control group
for allowing the game to stop, saying they would be unable to
fulfill their expectations of the game. We said: You just
learned the most important lesson that this game can teach you.
Back to the text here, my third comment would be to find
ways to value fuel and incentivize innovation. Establishing the
fully-burdened cost of fuel to capture costs of moving and
protecting fuel, and using that value as the financial basis
for investing in new technologies throughout the stages of
acquisition and re-set programs is a good start.
It also should be used for AoAs, or analysis of alternative
studies, that are used to select among competing alternatives
for new programs. The result of the war games, the scenarios,
and other campaign models will also allow a more accurate
estimate of the fully-burdened cost of fuel. ``Black'' programs
must not be exempt from these requirements.
To give you some perspective, by the time a gallon of fuel
flows out of the boom of an airborne tanker, years ago the
analysis showed the Air Force had spent at least $42 per
gallon. I am sure that cost is considerably higher today, given
the cost of operating systems as well as the basic cost of
fuel. The task force also looked at current operational
procedures that waste energy and financial practices that
incentivize waste, and have made recommendations for
operational changes and new financial incentives to reduce
energy waste.
Now, a few thoughts about risk to critical missions. There
are critical missions at fixed installations at absolutely
unacceptable risk of extended outage from loss of commercial
power. If the committee is interested at a later time, we would
be delighted to talk about that information which is contained
in a classified annex. Neither the grid nor on-base backup
power provides sufficient reliability to ensure continuity of
critical national priority functions and oversight of strategic
missions. We base this on a series of briefings and discussions
we held with the Department of Energy, industry, and Department
of Defense officials, as well as reports and other literature.
While DOD has conducted vulnerability analysis and
assessments of its installations, it has not yet developed an
overall risk management strategy to manage those
vulnerabilities. The task force has recommended that the
Department form a cross-functional team to assess the risk of
specific missions at specific locations. The task force also
recommended the Department develop a plan as a management tool
to achieve the business process changes we recommended by
establishing measurable goals and clear responsibility, and
most importantly, accountability.
We also recommended the Department invest in energy
technologies to a level commensurate to their value to the
Department. This includes operational, as well as financial
value. And finally, we recommended the DOD evaluate its
operational procedures for energy waste and make appropriate
changes.
Mr. Chairman, this concludes my abbreviated remarks. Thank
you.
[The prepared statement of General Carns can be found in
the Appendix on page 72.]
Mr. Ortiz. Thank you, general,
Mr. Solis.
STATEMENT OF WILLIAM M. SOLIS, DIRECTOR, DEFENSE CAPABILITIES
AND MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Solis. Chairman Ortiz, Ranking Member Forbes, members
of the subcommittee, I appreciate the opportunity to be here
today to discuss DOD's efforts to manage and reduce its
mobility energy demand. We refer to mobility energy as energy
DOD requires to move and sustain its forces and weapons
platforms for military operations. Your oversight of this issue
is paramount not only to improving the management of DOD's
mobility energy, but also helps ensure that we minimize the
mission risks our military forces are exposed to in operations.
My testimony will focus on three areas: first, energy
issues that will affect DOD operations; second, some of the key
departmental and military service efforts to reduce demand for
mobility energy; and third, current DOD management approaches
to guide and oversee these efforts.
First, many of the energy issues our Nation currently faces
have direct impact on DOD. Rising fuel costs, worldwide energy
demands, increased U.S. demand for oil, and uncertainties about
world oil supplies are just a few examples that underscore the
importance of energy to the Nation and to DOD. Fuel costs for
DOD are substantial. In 2007 alone, DOD reported that it
consumed almost 4.8 billion gallons of mobility fuel and spent
$9.5 billion.
Volatility of world oil prices are likely to continue,
which may require DOD to make difficult tradeoffs such as
redirecting funds from ongoing programs to pay for needed fuel.
Furthermore, the Department is directly and negatively affected
by DOD's high fuel requirements on the battlefield. These
requirements place, as has been mentioned, a significant
logistics burden on our military forces. They can limit the
range and pace of operations and can add to mission risk,
including exposing supply convoys to attack. Given these
issues, DOD must be well positioned to effectively manage
energy demands for military operations.
Next, I would like to acknowledge some of DOD's key
mobility energy demand initiatives underway. At the department
level, DOD created a task force to address energy security
concerns. We recognize that the task force is a good forum for
sharing ideas and monitoring progress of selected mobility
energy projects across the Department. Each of the military
services has its own ongoing initiatives.
For example, the Army is addressing fuel consumption at
four deployed locations by developing foam-insulated tents and
temporary dome structures that are more efficient to heat and
cool, thus reducing the need for fuel power generators. The
Navy has established an energy conservation program to
encourage ships to reduce energy consumption. The Air Force has
developed an energy strategy and is undertaking various fuel
reduction initiatives such as determining fuel-efficient flight
routes and optimizing air refueling. The Marine Corps has
initiated research and development efforts to develop
alternative power sources and improve fuel management.
Finally, although DOD has taken some positive steps to
address mobility energy, it lacks key elements of an
organizational arching framework to guide and oversee these
efforts. First, DOD's current approach lacks high-level
leadership necessary to advocate and coordinate mobility energy
issues across the Department. Without effective leadership, the
Department has been unable to comprehensively address the
development of a mobility energy strategic plan and improve
coordination among DOD stakeholders. DOD's current approach to
mobility energy is to centralize. Responsibilities are diffused
among several DOD and military service offices and working
groups without a single focal point who is accountable for
mobility energy across the Department.
As I stated, the establishment of the task force is a
positive step. However, this task force has been unable to
develop policy, provide for guidance for oversight, and be the
advocate for mobility energy Department-wide. For example, it
does not have a seat at the table in executive-level Department
discussions such as the Joint Requirements Oversight Council or
the Defense Acquisition Board. Moreover, the individuals that
lead the task force do so as an extra responsibility outside
their normal work duties.
It is also relevant to point out that DOD has established a
focal point for facility energy, which accounts for about one-
quarter of DOD's total energy consumption. Mobility energy
accounts, as has been mentioned, accounts for about three-
quarters of the total energy consumption, yet there is no
equivalent focal point to lead, advocate, and coordinate for
these issues.
Second, there is not a strategic plan for dealing with
mobility issues. Key elements of this plan would include DOD-
wide goals, priorities, resource requirements, timeframes for
implementation, and performance metrics to evaluate progress.
While we are not recommending specific goals for the
Department, we note that back in 2002, the Commandant of the
Marine Corps established the goal to reduce fossil fuel
consumption by 10 percent in the year 2010.
In closing, we issued a report today that recommends that
DOD establish an over-arching organizational framework for
mobility energy. To establish such a framework, DOD should
designate an executive-level official who is accountable for
mobility energy matters, develop a comprehensive Department-
side strategic plan, and improve business processes to
incorporate energy efficiency considerations.
In addition, we recommend that the military services
designate an executive-level person to establish effective
communication and coordination among DOD and military services
on Department-wide mobility reduction efforts, as well as to
provide leadership and accountability for their own efforts.
With a mobility energy organizational framework in place,
DOD would be better positioned to reduce its significant
reliance on petroleum-based fuel and address energy challenges
for the 21st century.
This concludes my prepared remarks. I will be happy to
answer any questions.
[The prepared statement of Mr. Solis can be found in the
Appendix on page 81.]
Mr. Ortiz. Thank you, Mr. Solis.
Before we go into the phase of questioning, I would like
unanimous consent to allow members of the House Armed Services
Committee to participate in the subcommittee hearing. After
consultation with the minority, I ask unanimous consent that
Mr. Bartlett and Mr. Davis, members of the House Armed Services
Committee, be allowed to participate in today's readiness
hearing and be authorized to ask questions from the witnesses.
Mr. Bartlett and Mr. Davis will be recognized at the conclusion
of questioning by the members of the Readiness Subcommittee.
Hearing no objection, so ordered.
We thank you so much for your testimony this morning. I
think we can learn a lot from you. This is something that all
of us need to work together to be able to bring the savings
that we need to. I know it is harder on my family to be paying
close to $4 a gallon.
Mr. DiPetto, based on your experience with the fully-
burdened cost of fuel pilot programs, what do you see as the
biggest challenge to implementing a fully-burdened cost of fuel
mentality? Do any of these challenges cause you to reconsider
whether this is a good idea to do that?
Mr. DiPetto. Let me answer the latter part of the question
first. No, none of the challenges we have experienced so far in
executing the pilot programs would cause us to re-think whether
this is a good idea or not. Clearly, there are some challenges.
We are nearing the conclusion, hopefully this summer, of the
pilot programs. We have learned quite a number of lessons in
executing these.
One of the biggest lessons we have learned to date, it has
become quite apparent that the acquisition trade space is
significantly constrained by decisions in the force planning
and requirements business processes that precede it. So without
applying fuel considerations and the value of fuel delivered to
the battle space very early in DOD's corporate processes, there
is a limit to what we can do in the acquisition trade space. So
I would probably highlight that as our biggest initial
observation in the pilot program.
Again, nothing that we have learned so far would question
the initial assumption that this makes good sense and is
something the Department should do.
Mr. Ortiz. So you think we have taken the right steps?
Mr. DiPetto. Absolutely. We are still maturing the
methodology and the analytical approach. We still have a lot of
work to do to incorporate it, even in the acquisition business
processes. But yes, I think we are on the right path.
Mr. Ortiz. Mr. Arny, DOD's installations are required to
meet many energy goals. Could you more or less enlighten us or
elaborate on DOD's plans to achieve these goals with an
emphasis on the two that DOD and the services have at their
disposal? Also, in your written testimony, you identify some
concerns about meeting some of the new requirements. Could you
elaborate on these concerns? I know I am asking too many
questions, but maybe you can respond. Does the Department need
any legislative assistance to meet these goals? Can you give us
an idea?
Mr. Arny. We have a number of tools. Again, as I mentioned
in oral testimony, you all had reauthorized some of the Energy
Savings Performance Contracts (ESPC) that we have, so we are
able to proceed forward. Let me give you an example of where we
were able to use it was at the carrier pier in Ukuskit. We have
a power plant. We are about to put in a large military
construction (MILCON) project to upgrade that for when we bring
in the nuclear carrier. We were able to do that with no money
up front through ESPC by bringing in a developer who could
develop the power plant, charge us the same amount of money.
Instead of one kind of electricity, we get both 60- and 50-
cycle power, as well as the level of pure water that we need to
work with the carriers.
So we have a number of those in place. Part of our problem
I see, we are analyzing the latest legislation to see how that
affects us, so I have to get back to you on the answer to that.
But we do have tools in place. We do think we can meet the
goals. It is harder because in the directives we are asked to
go on a steeper slope, but working with all the services, we
believe we can meet those targets.
[The information referred to can be found in the Appendix
beginning on page 103.]
Mr. Ortiz. I would like to allow my good friend Mr. Forbes
to introduce a new member from the minority who is with us.
Mr. Forbes. Thank you, Mr. Chairman.
We are delighted to have with us today our newest member of
the Armed Services Committee and also the Readiness
Subcommittee, Mr. Rob Wittman, from the First District of
Virginia. He likes to refer to it as the first district of
America, but we are certainly excited to have him with us, Mr.
Chairman. Thank you for that opportunity. We are delighted to
have him and looking forward to great things from him.
Mr. Ortiz. Welcome. They told me you would be the one that
would be able to solve the energy crisis. [Laughter.]
Let me yield to my good friend, Mr. Forbes, for any
questions that he might have. In a few minutes, we might have
to recess. I don't know how many votes we have, but when I look
at those lights--but is it two votes now? So let me go ahead
and yield to my good friend, Mr. Forbes, for any questions that
he might have.
Mr. Forbes. Mr. Chairman, thank you so much. Again, I want
to thank you for your leadership in holding this. We have had a
couple of really important hearings this week, and we thank you
for your vision on doing that, and for your patience in the
number of questions that I think all of us would have.
Mr. DiPetto, first of all, I would like to ask you, in your
written statement you make a brief comment regarding your
limited ability to perform analysis, for example through
modelings and simulation, war-gaming, and other accepted tools
in order to determine what it is worth to the larger force to
invest in fuel efficiency technology. I am a firm believer in
modeling and simulation, and the dollars it saves us and the
forecasting abilities it gives us. What needs to be done to
ensure the Department has the modeling and simulation tools it
needs to aid in making these value judgments?
One of the challenges in implementing change is that you
have to get buy-in at the lowest levels. Do you believe that
having appropriate modeling and simulation tools would increase
warfighter awareness and advocacy of energy efficiency in the
Department?
Mr. DiPetto. In one of my other hats, I sit on DOD's
modeling and simulation (M&S) steering committee, Congressman
Forbes, so I, too, agree on the value of modeling and
simulation. In my written statement, I was referring to the
lack of those tools up front in the business processes to let
us actually see the consequences of the fuel demand in the
battle space. One of our hopes is that as we sort through the
Department's vision on energy posture and develop our strategic
plan going ahead, some of those priorities will be reflected
and realized as we execute the strategic plan going forward.
What we are talking about there is specifically the tools
to let the warfighters, both in campaign analysis and in
variety of analytical agendas, actually see the utility of
reducing fuel in the battle space and how the burden of fuel
detracts from combat capability. So I would be a firm
supporter, and I think we will push going forward in that area.
It is a little out of my lane. I am an acquisition guy, but we
see the need, as I mentioned in answering the chairman's
question, to poke earlier in the corporate processes the value
of fuel, and M&S would be a big enabler to that.
Mr. Forbes. If you determine that there are any specific
things that we can do, if you would submit them to us for the
record so that we can work to try to do that, we certainly want
to make sure those tools are available and we are moving
forward with them.
Mr. DiPetto. Yes, sir.
[The information referred to can be found in the Appendix
beginning on page 103.]
Mr. Forbes. I have two other questions. One of them is a
little bit larger, then General Carns, one for you that if we
have time for you to answer, if not, maybe you could submit it
for the record. The big concern I have is, I am aware that
section 526 of the Energy Independence Security Act of 2007
prohibits any federal agency from contracting for an
alternative or synthetic fuel, including the fuel produced from
nonconventional petroleum sources unless the contract specifies
that the life-cycle greenhouse gas emissions be less than or
equal to the emissions from conventional fuel.
My question for any of our witnesses, if you can comment on
the impact of this legislation to the DOD and to the U.S.
economy and security. Is it likely that this legislation will
only make us more dependent on Middle East oil because we
cannot rely on sources such as Canadian tar sands to meet our
Nation's petroleum requirements?
Mr. Arny. Sir, I wanted to mention that earlier. The
problem we have with that is we are trying to figure out
exactly what it says. Many of the provisions are ill-defined,
and we are just not sure how it will affect us. We have the
same concerns you do, and we would like to work with you to see
if we can't, with the subcommittee, refine that. The goals seem
laudable, but we are just not sure of the effect, and we have
some of the same concerns as you do.
Mr. Forbes. Well, if you could get back with us when you
get that information, I think this is a very costly thing for
us and could be one of those things where we have some
unintended consequences that could be rather devastating. So
anything you could submit for the record.
[The information referred to can be found in the Appendix
beginning on page 103.]
Mr. Forbes. General, I know we have to run for a vote, but
one of the things--you made a comment that I think is very
appropriate. I just want to quote it again, if I can, but you
said, ``Logistics is a vulnerable soft underbelly for us and a
target-rich environment for our enemies. The larger our
logistics tail gets, the more difficult it is to protect and
more combat power we must divert from combat operations to
assure its safety, and the more casualties we take because our
supply trucks can never be as survivable as our combat
vehicles.''
I have always been interested in logistics because Fort Lee
is in my district and we like to refer to them as the logistics
capital of the Nation, sometimes the world. It is not sexy what
they do, but it is so vital to the operations we have. If we
implemented all the DSB recommendations today, it would still
be years before we began to see the full effect. My question
today is, what, if anything, can be done today to reduce the
risk to our forces that are currently engaged in the global war
on terror?
As you answer that, let me just point out for those
listening today, we are now transporting in just fuel alone
into Iraq on a daily basis about 1.5 million gallons of gas a
day, with 200,000 gallons coming in per day from the north;
about 500,000 gallons coming in from Jordan; and about 800,000
gallons coming in from Kuwait. The lines--we have pictures--are
sometimes as long as 32 miles long. I mean, that is a very real
risk that we have, a very difficult logistical problem.
General, what can we do as quickly as possible to protect
those forces that are there?
General Carns. Mr. Congressman, I would first say our near-
term alternatives are always limited because we have already
capitalized the systems. The Congress has been most generous in
funding such efforts as the Joint Improvised Explosive Device
Defeat Organization (JIEDDO), which has made a material
difference in reducing casualties, as well as the more-armored
vehicles. But so far as what we can do near term, there are
very limited options.
In the medium and long term, there are a number of
suggestions in the report that emphasize if we can make the
systems more efficient, we need less fuel, and of course we get
more fight. In that respect, it is that we have to get very
serious about innovative research and competitive prototyping,
rather than trying to just put appliques on existing systems.
In that respect, a program like Reset, which the Army is
committed to and is on the order of an $85 billion program, in
my estimation puts us too much back to the future, rather than
in the future, in the sense that we are going to refurbish what
we have, rather than forcing technologies to give us new
capabilities which are so desperately needed.
When we designed the systems we now have, our expectation
was that we would have a safe rear area. We are now in a
situation where we do not have that luxury. We have to adapt
and build new innovative ways to make sure we can reliably
operate in this hostile environment and supply the forces with
the logistics they need.
Mr. Forbes. Thank you, general.
Mr. Chairman, I yield back the balance of my time.
Mr. Ortiz. Thank you.
We are going to recess hopefully for 10 minutes, and we
will be coming back. The next member to ask questions when we
return is going to be Mr. Hayes. So we are going to be
recessing for about 10 or 15 minutes, and I hope there is no
other vote to adjourn.
Thank you.
[Recess.]
Mr. Ortiz. Okay, our hearing will resume. Mr. Hayes will be
the first gentleman who has some questions, right?
Mr. Hayes. Thank you, Mr. Chairman.
Gentlemen, thank you. As you may know, I represent Fort
Bragg and Pope Air Force Base. We appreciate the efforts that
the military and you in particular are making to develop
alternative sources of energy which is critically important. I
mentioned to you on the way out that I would like for you to
comment on how the Germans were able in the last two years of
World War II to operate their military on synthetic fuel, and
relate that to what we are doing now.
Also, if you would talk a little bit more about what is
being done at Fort Bragg and in the Air Force in developing
alternative fuel sources. As you are commenting, I would
appreciate your comments on us not losing sight of the bigger
energy picture, whereby exploration, nuclear power,
gasification of our most abundant resource, coal, and how all
those things play in. If anybody would like to start, please do
so.
Mr. DiPetto. I could start.
Sir, it is my understanding historically that the Germans
used or actually developed a process for liquefaction of coal
when they were denied the ability to use conventional petroleum
resources to fuel their air force. The process is called
Fischer-Tropsch, which I think the South Africans are still
doing to this day. It is called liquefaction process. That is
about as deep as I go on that issue.
Regarding the Air Force efforts on alternative energy, they
are in fact proceeding down a path to test the use of synthetic
fuels in their major mobility aircraft and some of their combat
aircraft as well. So they are on a path to test and certify
those fuels to give them the ability to use the fuel. I think
that is about as deep as I can go.
The other issues, I am going to hand over to Wayne. I think
the nuclear----
Mr. Arny. I do know that the Air Force, as far as
installation, the Air Force is looking at, as the lead agency
for us, looking particularly at is it feasible to do nuclear
power on some basis. We are all interested in what are the
parameters of that and what are the pluses and minuses. That
will be examined by the Department.
As far as other forms of installation energy, we have
geothermal plants in the west. We are putting more solar. We
are using the energy legislation we have now to modernize. We
have a lot of old power plants. We are either privatizing them
or trying to modernize them. Just by putting in new equipment,
we get better efficiency out of it. So there are a number of
things we are doing in terms of, for instance, very simple
things.
We never metered the homes or any of the buildings that we
had on our bases. Energy was just a cost we paid. We are now
beginning to meter all of our homes whether they are privatized
or whether we own them, and incentivizing the residents to
conserve energy. In the old family housing when I was a junior
officer, you could have the air conditioning running with the
windows open. It didn't matter because you didn't pay for it.
Now, we are incentivizing the members to conserve energy as
well.
So we are trying to do as much as we can using every aspect
that we can get to. As I said, we are doing more and more
exploration for geothermal using the profits that we get from
the existing plant. We are also looking to extend that to
exploit potential energy sources that are under our bases which
we really don't have the incentive to do right now. So there
are a number of things we are trying to do.
General Carns. Congressman Hayes, if I could comment very
briefly. The Germans thought up those ideas for the same reason
we need to do so. Namely, they were in a crisis. There was not
another alternative and so innovation bloomed very quickly. The
price of oil is driving us obviously to be more innovative, and
if there is a criticism it would be that we are not moving fast
enough.
In that respect, you mentioned nuclear. I would offer the
following operational perspective. As mentioned earlier, we
have notionally identified a number of capabilities at
installations which are essential for maintaining situational
awareness and being able to execute the forces in support of
national security objectives. In that respect, nuclear provides
an interesting opportunity in that were we to put nuclear
capability, nuclear power generation capability in selected
locations, we have the opportunity to put it in a secure
environment on an installation, and we have a way to not only
provide power to the base, but if there were a major
interruption in an area or a region, these facilities could
probably provide considerable power for the surrounding area.
It will not work to have a large power outage where we
crank the generators on the base and light up only the
installation, while the civilians who live within 10, 20, or 50
miles live in darkness for days or weeks or more. So nuclear is
one of the alternatives that may be a very interesting option
and it provides a secure federal facility to put it.
Mr. Hayes. I appreciate those comments. To wrap up, Mr.
Chairman, I think if people were to go back and look at the so-
called nuclear accidents--and Mr. Bartlett is much more of an
expert than I am--the things that were left out of the
construction of the plant in Chernobyl and the other things
that happened, if you have some real skeptics, it means that
with modern techniques and proper supervision, nuclear is
extremely safe.
Last but not least, if the oil speculators who are holding
us up for foreign oil were to see us get more actively involved
in additional exploration, nuclear and others, that would be a
good backstop against the marketplace.
Thank you, Mr. Chairman.
Mr. Ortiz. Thank you.
My good friend from Mississippi yields to our friend, Mr.
Courtney.
Mr. Courtney. Thank you, Mr. Ortiz.
Thank you, Mr. Taylor.
I actually just have a quick question, which maybe I can
start with Secretary Arny. There was in the last defense budget
some funding toward Specialized Technology Resources (STR)
Technology in Connecticut. They make the fabric for solar
panels which are going to be incorporated into pop-up tents and
actually backpacks to power radio equipment. Again, this is a
firm that is doing lots of work for the German effort to
promote renewable energy. Again, it was exciting to go to this
facility where they are probably looking at adding about 100
new production jobs based on this contract from the Department
of Defense.
When you think of solar, you always think of stationary
panels that are installed in buildings. Again, is it the
Pentagon's intention to really try and use it in other more
nontraditional manners?
Mr. DiPetto. I can take that question, congressman.
I am not familiar with that specific effort, but in general
if one looks at the cost of delivering the fuel to run
generators, for example, in the battle space, renewable power,
onsite generation has a huge advantage in terms of reducing the
logistics flow of fuel to theater if you can generate power
organically right there.
Certainly, solar is one aspect of getting at that demand
reduction, but on the supply side, onsite generation from
something like wind or solar organically, or even for the
combat warrior on foot, re-charging batteries. So there is a
terrific application in-theater for that type of technology. I
am not familiar with that specific effort, but----
Mr. Arny. Is this technology just man-carried, or is it for
facilities as well?
Mr. Courtney. Again, the specific contract was for man-
carried. Again, obviously, we have people deployed in parts of
the world where there is lots of sunlight, so it would seem
like a pretty smart direction
Mr. Arny. Absolutely. I will take a look at it. Also, I
know for our buildings, again as one of the members mentioned,
this is all driven by cost and having to save. One of the
things that we are doing, a lot of our buildings, as you have
seen, have flat roofs on them, and we tend to paint them black.
We are now looking at--not just us, but the private sector as
well--at embedding solar panels in the roof just to keep
bringing electricity.
And the solar technology is getting better and better. As
the technology goes, as the price of fuel goes up, it becomes
more efficient. In the early days, we were having to subsidize
our solar. To me, it was a little bizarre being basically a
private sector guy, that out in San Diego we put solar panels
in a parking area, you know, with nice sunlight, and we
subsidized it with our geothermal revenue, but we also had
state subsidies in there. I thought that was a little strange
that, okay, the Federal Government is getting subsidies from
the state. But anyway, it worked. But now it is becoming more
efficient.
In particular, the 14 megawatt plant at Nellis, they have a
long-term energy contract to buy electricity from that cheaper
than they would have with the price of electricity they were
getting. Ten years ago, you couldn't have done that.
Mr. Courtney. I would like to again follow up with you in
terms of this project, which again, it is very exciting. Again,
you are right. The photovoltaic technology is just improving
and becoming more efficient so that you actually can squeeze
more out of every square foot.
So thank you, Mr. Chairman.
Mr. Arny. You know, in hangars, we are even putting in huge
fans. If you think about it, put giant fans in the top of
aircraft hangars just to keep the air moving to keep it running
more efficiently. There are lots of new technologies.
Mr. Ortiz. Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
It is great to be part of this committee and it is great to
be learning about these readiness issues. I appreciate the
opportunity.
The U.S. Air Force has articulated ambitious goals with
respect to the development and use of domestically produced
synthetic fuels. Those things include accelerating the
development and use of alternative fuels, increasing the use of
synthetic fuels to 100 million gallons in the next 2 years, and
certifying the entire fleet on Fischer-Tropsch (FT) fuel by
2011, and having 50 percent of the U.S. Air Force fuel being
synthetic fuels by the year 2016.
Just a couple of questions within that particular
framework. What steps are being taken to ensure that the U.S.
Air Force will be able to achieve these goals that they have
put forth? And what steps are being taken to ensure that
section 526 of the Energy Independence and Security Act of 2007
will not interfere with the U.S. Air Force goals?
Mr. DiPetto. I am going to try and answer that one as best
I can. I am not a fuels guy. I am an acquisition demand-side
guy. I might have to defer you for specifics to the Air Force.
The Department's position on alternative fuels recognizes that
DOD, because we are such a small percentage of the fuels
market, will never be a market-driver. However that said, we
very well might be a market participant down the future. So the
Air Force efforts in certifying and testing probably go along
those lines to becoming a potential market participant.
That said, the under secretary--and I believe he speaks for
the deputy secretary--recommends we take a very cautious
approach to alternative fuels across the board. One recognition
is that supply-side solutions don't particularly solve our most
pressing problems, which is the cost of delivery of fuel into
the battle space. We feel and various Defense Science Board
studies have recognized that as DOD's most pressing challenge.
But some of these type of issues, the recommendations of the
various recent studies, the Air Force efforts will be sorted
out as we develop the Department's energy strategic plan
debriefed up to the Deputy Secretary in the coming months.
Mr. Arny. Let me, if I could, I will add to that. I know
that the Air Force has stated publicly that they are looking
for--I won't say cost-equal, but it must be cost-effective and
have no larger footprint than they can get under conventional
fuels. As I said earlier, the Department is examining the
effect of section 526 on all our aspects, and we intend to come
back to the Congress with the answer on that.
Mr. Wittman. Thank you. Yes, I know that those goals are
very aggressive and we just wanted to try to gauge where the
effort is.
Mr. Arny. If I recall, I was with Mr. Anderson yesterday
when he was talking about it, they are targets, rather than
goals. That is what they would like. If they don't get there,
it is an effort to break new ground. So if they don't make the
targets, but they make progress, that is also progress.
Mr. Wittman. I know they are looking across the board as
far as synthetic fuels. One of the efforts I know they are
pushing to undertake is coal to liquid fuel, and I know that is
an aggressive part of the process I just wanted to gauge. Is
that still continuing to be part of the strategy that they are
pursuing in this transition to increasing synthetic fuel use?
Mr. Arny. I believe so. We will get you a specific answer
on that.
Mr. Wittman. One additional question, in DOD's response to
GAO's report, DOD stated that it plans to address the issue of
military service governments and oversight of energy matters
once it completes its strategic plan in May, 2008. However, the
military services have various mobility energy reduction
efforts currently underway.
In the absence of executive-level military service focal
points for mobility energy, how are the services prioritizing
their own efforts and ensuring effective information-sharing
with each other and with the Department?
Mr. DiPetto. Again, I cannot speak for the services,
congressman. However, we have some visibility in our
acquisition role in overseeing major defense acquisition
programs and the acquisition of tactical systems. So we have
some visibility into how the services are addressing mobility
fuel. They have been participating with us on the fully-
burdened cost of fuel pilot programs to shake out the
methodology to move that forward hopefully next year. We are
working three pilot programs with each of the service.
But in terms of service priorities on mobility fuel, I
would have to defer to the services on that. I don't have any
insight on that.
Mr. Arny. But we do bring it together at OSD, and we are
trying to do a better job. Obviously, energy has become much
bigger since I have been here. I know Al Shaffer chairs the
Energy Security Task Force, which has participation by all the
services at senior levels. We are doing more and more of that,
because we do need to prioritize all these efforts and bring
them together and make sure they all make sense across the
Department.
Mr. Ortiz. Thank you.
Mrs. Boyda.
Mrs. Boyda. Thank you very much, Mr. Chairman.
Energy is such an incredibly important topic. When I talk
about energy back at home, I talk about it from a national
security standpoint, so having you guys here today really is
that intersection of national security, from whether you are
driving in Kansas or trying to fight terrorism.
I apologize. I have had to be kind of in and out, so I may
be going over plowed ground already. But so many of us have
talked about this go-to-the-moon with National Aeronautics and
Space Administration (NASA), when John Kennedy said in eight
years or before the end of the decade, we are going to go to
the moon. We have all said that we need a comprehensive energy
policy and somebody who really has firm hands on that steering
wheel and is guiding this. We haven't had that. We haven't even
gotten close to it.
Is there any vision or is there any possibility that--
again, if we have already been talking about this, I
apologize--but is this task force or is there a possibility
that the United States military will be able to bring together
the research that is needed, the brains that are needed? You
have a huge laboratory. It is called the United States Air
Force, Army, Marines, nuclear submarines. Are we envisioning
any of that?
Mr. Solis. I will just take a quick stab at that. I think
the military does have the ability to do it, but I think in the
current organizational structure and lack of overall
leadership, particularly on the mobility side, I think it is
going to be a real challenge to bring all that to bear.
The question was just asked about do we have oversight of
what the military services are doing and is everybody going in
the same direction in terms of goals and objectives, and are we
on the same wavelength. You know, there has been a lot of
discussion today about individual initiatives, and those are
all great and good, but the question is, how are they achieving
the goal of reducing, say, energy fuel demands in a forward-
deployed operation? What are we doing?
I mentioned the Marine Corps commandant to you. Several
years ago, he put a goal out there to reduce by 10 percent. You
know, those are the kinds of things when you have to look
across and say, are we positioned to do this.
Mrs. Boyda. We had something called NASA. We didn't get to
the moon because we had a few task forces here and there. We
got to the moon because somebody took some leadership. You have
not been given that mission, clearly. But if you were, and I
know today we wouldn't have the capability, but if you were,
what would you think about it being, is it even a reasonable
mission to assign not to one branch of the military, but to our
DOD?
Mr. Arny. Chris had mentioned it, and in my testimony I
talked that while we do consume, and we are the single largest
consumer of energy, we are still between one percent and two
percent. We do rely on the private sector. I believe we do have
leadership in this field.
When it comes to mobility vehicles, as far back as 20 or 30
years ago, I know in the destroyers and cruisers, the guys
working--everybody works on a weapons system. I flew F-4s. We
all know how to conserve fuel and when we have to. I could stay
airborne in my F-4 for three hours. It was a boring flight
because I wasn't doing much. On the other hand, I could come
back empty in 10 or 15 minutes with the same load of gas
because I was on a combat mission.
Mrs. Boyda. What I am looking for is not so much
applications to the military. I am looking for applications on
the civilian side.
Mr. Arny. I am not sure that it is the mission of the
Defense Department to lead that. We have our own problems,
again within installations in my field, within mobility, that
we all wrestle with. Every operator wrestles with that. We rely
on the private sector to bring that to us. A lot of the things
we are doing in installations is not stuff that is new to us.
It is exploiting what the civilian industry is doing.
Mrs. Boyda. What do you see is the leadership role? Mr.
Hayes was speaking about it, but I have been one to say we
should not start digging tomorrow. We are not going to start
digging tomorrow, but why we are not really aggressively
bringing nuclear into the overall discussion. We are paying for
that decision every day that we let it go by.
Certainly, I would think that we have a lot of good
nuclear. The Air Force is building some small nuclear----
Mr. Arny. No, they are not building. They have gone out
with an RFI--request for information--on what is available. You
and Congress, and I know we have seen people will come to your
door and say, I can do X for you. And you peel away the skins
of the onion and you find there is nothing there. So the Air
Force has gone out with RFIs and said, okay, what can you do
for us, in what timeframe, at what cost.
And we will get that information back and look at it from
the Air Force as a department, and then sit down and say, does
this make sense. If we put this power plant on a particular
base, does it make sense economically. Because let's face it,
people are trying to buy weapons systems and personnel costs
and medical costs, so we have to compete for dollars to do
things with other things.
So can this be done economically for us, and our economics
may be different than the private sector so it may work that
way, but then also does that plant encroach on the base? Is
there enough excess space on that base for something like that?
What are the aspects? How do you tie it into the grid? There
are all sorts of things that we will look at. I think, frankly,
like it or not, we are in the lead on that.
Mrs. Boyda. It works for me.
Mr. Arny. That is why we have to be careful about it.
Mrs. Boyda. Thank you.
Mr. Ortiz. Mr. Taylor.
Mr. Taylor. Thank you, gentlemen, for being here. You have
certainly raised some interesting thoughts. I am not so sure I
am hearing any answers.
Number one, if 75 percent of our fuel is mobility, and if
the Navy is a significant portion of that, we really don't have
an option on planes just yet. We really don't have an option on
Humvees just yet. We do have an option on the propulsion of
naval ships. We were going toward an all-nuclear surface fleet,
then we got fat and lazy when oil was cheap. I haven't heard
you guys talk about the importance of doing that.
We have another generation of cruisers coming along. This
Congress has passed legislation that says that next generation
of cruisers is going to be nuclear powered. We are getting some
pushback from the Navy. And quite frankly, if it made sense
when we did the study a year ago at $70-a-barrel fuel, you guys
ought to be all over it at $110 fuel. I haven't heard a word on
that, and the need to take other plants where applicable and
make them nuclear powered.
The second thing, even on a smaller scale, I am just
curious. I consider myself kind of a mechanical nut. I am
amazed when I go to visit the troops in the field and see those
diesel-powered generators. In any base you go to in Iraq or
Afghanistan, there is just the deafening sound of those
generators. Those generators are powering electric water
heaters, electric heaters in barracks.
Although on commercial boats and even recreational boats,
it has been common for years to have the heat exchanger, the
heat coming off that engine going through a heat exchanger to
warm the water on the boat, to warm the people on the boat
through something like your car heater. I have yet to have seen
that on a military installation.
Now, that is two commonsense approaches that I can buy
today from Hamilton Marine catalog that I haven't seen on a
single military installation. Why not? As a matter of fact, I
have both of those things on my boat. So why isn't the DOD
doing it? And why aren't you guys recommending it? I take the
engine, the heat. The hot water coming off my engine heats my
boat in the winter and heats the water that I use in the
shower. And yet I have never seen it on a DOD installation.
Mr. Arny. On an installation or on a----
Mr. Taylor. A base where you are using a generator. And
again, those generators, you made us aware of what is well over
one million gallons a day we are trucking into Iraq and
Afghanistan.
Mr. Arny. I believe on our domestic----
Mr. Taylor. And believe me, I want the kids to take a hot
shower during the winter. I want the kids to be warm in their
barracks, but again, those are commonsense approaches that are
available through the private sector that I have yet to see on
a military installation. Why not?
Mr. Arny. I will have to get back to you on that.
For deployed forces especially, I don't know the answer.
For the stateside installations, obviously the diesel
generators are used for backup.
[The information referred to can be found in the Appendix
beginning on page 104.]
Mr. Taylor. I understand. But let's talk about deployed,
particularly deployed.
Mr. Arny. I can't answer that for you.
Mr. Taylor. One of the last visions I have of going to
Kuwait is seeing a 300-truck convoy forming up, and knowing
that every inch that those guys are traveling could be the inch
that is mined, and that is going on every day, the days whether
I am there or not. They are performing a very important
function, and quite frankly if I was an enemy of the United
States, the first thing I would do is go after our fuel supply.
Mr. DiPetto. Congressman, in terms of the deployed use of
energy, forward operating bases, the Department recognizes the
problem delivering fuel to the battle space in those vulnerable
supply convoys. We have a group called the rapid equipping
force which is actually working in-theater right now to tackle
the problems you are raising. They are looking at it on both
the demand and the supply side. The demand side is looking at
more efficient generators in whatever capacity. I can't speak
specifically to the systems that you referenced, but clearly
more generating efficiency would reduce that need for fuel in-
theater.
They are also looking strongly on the demand side.
Insulating tents, for instance, has brought down the need for
fuel to run those generators incredibly. Some renewable power
solutions are also being looked at, but the Department
recognizes the severe burden by inefficient generators, as you
mentioned, in-theater.
Mr. Taylor. No, you are not making use of the incredible
amount of heat that is available just in the water that is
cooling those generators. By using the heat exchanger, you
would have more than enough hot water for all the showers. By
using the heat exchanger--again, it is not going to work if the
tent is two miles from the generator, but if the tent is 200
yards from the generator, that ought to be very simple.
Mr. DiPetto. I will take that back, sir. We are looking at
all solutions. The magnitude of the problem----
[The information referred to can be found in the Appendix
beginning on page 104.]
Mr. Taylor. Well, apparently you are not. If I can figure
this out, then you are not doing your job. Sorry. Again,
without a word on nuclear, which is something that Admiral
Rickover was exactly right about 30 or 50 years ago. Again, I
would think that your boards ought to be the ones saying to a
reluctant Navy, guys, this is the only way to go; accept the
future. And we are going to have to change some things, but
this is the way we have to go.
I would welcome your comments on either one of those. We
don't exactly have a big crowd in here, and I think the
chairman would waive the five-minute rule for a minute or two.
Mr. Ortiz. Sure. Go ahead. And I was just wondering, you
don't come to testify on the research that you are doing. Do
you have any limitations as to what you can look at?
Mr. DiPetto. I am sorry, sir. Limitations to research?
Mr. Ortiz. Yes.
Mr. DiPetto. The major limitation is that everything needs
to compete in the budget year with other priorities we have.
That is typically the limitation. And it also has to compete on
an economic basis, so business cases certainly get looked at.
I cannot speak specifically to the congressman's concern
about nuclear power in cruisers, but I know the Navy is
extremely motivated to do the analysis properly. Particularly,
I don't have any specifics on it. I could take that back for
the record and find out a little bit more about their specific
analysis for service ships, for example. It is a little bit out
of my lane, but we are happy to take that back.
[The information referred to can be found in the Appendix
beginning on page 103.]
Mr. Taylor. If I may, Mr. Chairman.
A year ago, we had a study which said for the cruiser it
made sense at $70-a-barrel fuel to go nuclear. At the time, the
Landing Platform Dock (LPD) was right on, to use a carpenter's
analogy, right on the bubble. That was at $70 fuel. What is
amazing is that now that it is at $110, I don't hear anyone
from the Navy who ought to be proposing this, saying, you know
what? It is time for a nuclear-powered LPD and large-deck
amphibs. I would think someone within the DOD would be taking
the lead on this.
Now, I don't mind doing it, and Congressman Bartlett
certainly doesn't mind doing it, but that really ought to be
coming from the uniformed services. And ought to be willingly
accepted by the uniformed services, rather than something we
literally seem like we are forcing it down their throats. So
how would you change that, sir? I would think that is what your
panel is all about.
Mr. Arny. Mr. Taylor.
Mr. Taylor. Yes, sir.
Mr. Arny. I agree. We need to take a look at it. I don't
know the study referred to, but if it was effective at $70 a
barrel, it ought to be more so at $110 a barrel. There may be
some other supply, tonnage, weight, redesign of a ship into it,
but we definitely from the OSD perspective should push that
analysis to make sure, because there are definite advantages. I
flew off nuclear-powered aircraft carriers. I also flew off
conventionally powered carriers. There is definitely an
advantage to nuclear power, especially in the aircraft carrier
business.
So we will push that with the service, the Navy, to make
sure that that analysis is complete, and then get back to you.
[The information referred to can be found in the Appendix
beginning on page 104.]
Mr. Taylor. Thank you, Mr. Chairman.
Mr. Ortiz. I think Mr. Taylor has had some good
recommendations. It is the small little inventions that can
grow into something big. I hope that when you guys study it,
maybe give us some answers that we can work with.
I am sorry. Go ahead.
Mr. Arny. You can see the efficiency as we have in nuclear
power. The Enterprise, which is still out there, had I think
eight generators on it, and now we do it with two on a carrier,
on modern carriers. So the plants are more efficient as design
propels itself. Back then, it was definitely not cost that was
driving it. If it had been cost, we would have not put nuclear
power on those ships because it did cost more in the end.
As a matter of fact, you remember the great debate over the
JFK that was supposed to have been nuclear, then it was
conventional, and it ended up being conventional. But today,
with the price of fuel, you are right. That analysis could
swing it and the plants are far more efficient than they were
30 or 40 years ago.
Mr. Ortiz. Mr. Bartlett.
Mr. Bartlett. Thank you very much. And thank you again, Mr.
Chairman, for letting me sit in on your hearing.
My good friend, Mr. Taylor, mentioned Hyman Rickover. We
fortunately listened to him about nuclear for submarines, but
we didn't listen to him when he gave what I think will shortly
be recognized as the most insightful speech given in the last
century. Hyman Rickover gave a speech--it will be 51 years ago,
on the 14th day of this May--to a group of physicians in St.
Paul, Minnesota. It is the most insightful, prophetic speech
that I have read relative to the problems that we are
discussing today, that is energy.
He noted that we were about 100 years into the age of oil,
and that out of 8,000 years of recorded history, there would be
a brief age of oil. He didn't know how long it would be. Now we
know pretty certainly how long the age of oil will be. We are
150 years into the age of oil, and in another 150 years we will
be through the age of oil. Hyman Rickover knew that would
happen. He said that how long it lasted was important in only
one regard: that the longer it lasted, the more time did we
have to plan the necessary transition from fossil fuels to
renewables.
Now, we have done absolutely nothing to plan for that, with
no more responsibility than the kids who found a cookie jar or
the hog who found the feed room door open. We have just been
pigging out on fossil fuels. And they are a finite resource.
General Carns, you very wisely suggested that we ought to
have nuclear electric generation at our military facilities.
You are exactly right, sir, we need to be able to island those
facilities because the grid is on the edge. When that power
goes down, we will not be able to fight if we can't island
ourselves, and nuclear is a great way. I would suggest, sir,
that the first place we ought to do that is in Guam. There, the
only electricity I think comes from diesel fuel, which is
hauled in boats to the island. It is our most western landmass,
very strategically located. We own about a third of the island?
And there, your suggestion that we ought to be giving
electricity use to the surrounding population would work
perfectly. I talked to the commanders there and they understand
that. I would hope that you could use your good influences to
push and act in that direction.
And I would hope, sir, that when we do that, following Mr.
Taylor's suggestion, we really ought to be using what we call
``district heat.'' I think we are probably the only country in
the world that stupidly places our power plants outside the
cities and then uses evaporated drinking water to dissipate the
heat. Everywhere else in the world they locate them near
population centers. And they use the heat that Mr. Taylor
mentioned to heat your buildings, and so forth, in the
wintertime, and cool yourself with the ammonia cycle
refrigeration in the summertime with this excess heat. So I
would hope that we would do that.
By the way, we are talking about energy here as if it were
fungible. Energy is really not all that fungible. I am pretty
sanguine about our electricity future. With more nuclear, I
think there could and should be a lot more nuclear with wind
and with solar and with micro-hydro, we can, I think, meet our
electricity needs. I am nowhere near as sanguine about our
liquid fuels. There is just no silver bullet there. There is
nothing out there in the near future that comes even close to
providing the quantity and quality of the 88 million barrels of
oil that we pump a day--22 million of those we use in our
country.
I really want to commend the military. You are the victims,
and you are planning now. You are the victims of the fact that
our country, in spite of signals that have been there for a
very long time, that we would be here today talking about this
issue with $110 oil was absolutely inevitable. It had to
happen. Oil is finite. Hyman Rickover 51 years ago knew that we
would be here today. It is inexcusable that our government has
had no energy policy. And you in the military, thank you very
much. You are doing more than any other entity in our country.
You know, the evidences that we would be here are
incontrovertible. Our country peaked in oil production in 1970,
in spite of drilling more oil wells than all the rest of the
world put together; in spite of finding a lot of oil in Alaska
and the Gulf of Mexico; and in spite of being really good at
enhanced oil recovery. In fact, we are getting now eight
percent of the world's oil from two percent of the world's
reserves. We now are producing half the oil that we did in
1970. The same person that correctly predicted that 19 years
before it happened said that about today the world would be
peaking in oil production.
Mr. Chairman, just one closing statement. Of the two great
entities in the world that follow oil production, the IEA and
the EIA, the International Energy Agency and the Energy
Information Administration, have both been tracking the
production and consumption, which are the same thing. We don't
have any stockpile anywhere. We just consume it as we produce
it. That has been flat for the last three years. In those last
3 years, the cost of oil has gone up from $55 a barrel to $110
a barrel. That is because production is flat, demand is
increasing, and the probability is that without some really
dramatic thing happening, the production for the world is going
to do what it did for the United States in 1970. It is going to
drop off.
We now have blown 28 years as a country and as a world,
because we knew darn well in 1980 that M. King Hubbert was
right about the United States peaking in 1970. We are 10 years
down the other side of Hubbert's peak. We have done absolutely
nothing in spite of four studies, one of them by the military--
a great study by the military, a great study by GAO--saying
that peaking of oil is either present or imminent, with
potentially devastating consequences. Still, our country has
done nothing.
We desperately need leadership in this area. Thank you very
much, DOD and military, for providing leadership from your
quarter.
Thank you, Mr. Chairman.
Mr. Ortiz. Thank you so much. You know, sometimes we are so
big that we fail to look at the little things that might be
able to give us some answers as to how we can solve this
problem.
Before I close this subcommittee hearing, I would like to
yield again to Mr. Taylor and see if he has any other questions
or any recommendations. I think his recommendations are well
taken. I think it makes a lot of sense.
Mr. Taylor. Could I say just for the record, I am going to
get you those examples of what I was talking about on the heat
exchangers for the hot water heater, the heat exchangers for
the actual cabin heat. Quite frankly, I don't see very much use
of that on our naval vessels at all, and I will contrast that
with a couple of years ago, the Marines purchased a Ukrainian
vessel. They added a mid-body extension to it, by the name of
the Roy Wheat that is now part of our prepositioned fleet.
One of the things that the Russians had done pretty well
was take just the heat coming off the exhaust, used it to
super-heat water that actually turned an auxiliary turbine to
get a few extra knots off the ship. It was a fairly complicated
process. I am sure it had some labor associations with it. But
again, they were doing a better job of making use of that waste
heat than we do as a rule.
Back when fuel was cheap and plentiful, maybe we didn't
have to do stuff like that, but certainly the circumstances are
there now where we have to. I would encourage you to do so. In
fact, if I am not mistaken on the Roy Wheat, they actually
disconnected the entire system as part of the transformation
from a Ukrainian vessel to an American naval ship. Maybe it is
time to look at it and reconnect it.
Thank you, Mr. Chairman.
Mr. Ortiz. Thank you so much.
As we go on this journey, there just seems to be no place
where we can find oil, and if we need it, we need to go to war.
And we don't want to do that. So I know that we can work
together and we can come up with some ideas. At least I have
learned a lot today. I want to thank you for being with us
today, for testifying before our panel.
Randy, do you have any other comments to make?
If not, thank you so much for testifying before our
committee.
This hearing stands adjourned.
[Whereupon, at 12:34 p.m., the subcommittee was adjourned.]
?
=======================================================================
A P P E N D I X
March 13, 2008
=======================================================================
PREPARED STATEMENTS SUBMITTED FOR THE RECORD
March 13, 2008
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
=======================================================================
WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
March 13, 2008
=======================================================================
RESPONSES TO QUESTIONS SUBMITTED BY MR. ORTIZ
Mr. Arny. The Energy Independence and Security Act (EISA) of 2007
comprises 16 titles, each covering a substantive area of energy policy.
The sections of this Act regarding assignment of energy managers to
each facility impacted by the Act, establishing a web-based tracking
system, conducting audits on 25 percent of affected facilities
annually, and the requirement to design facilities to reduce fossil
fuel use by 55 percent in 2010, increasing to 100 percent by 2030 will
cause implementation problems for DoD.
These issues are currently being discussed with the Department of
Energy (DoE) to develop implementation guidance for federal agencies.
The Department is concerned that initial DoE guidance would require a
significant increase of personnel and funding resources that are not
programmed and would not compete well against other DoD priorities. As
such, we continue to discuss other means to achieve EISA requirements
through the use of regional or pooling of assets. The Department does
not believe legislative relief will be necessary, but if we do, we will
seek the Congress's assistance.
DoD believes there are not sufficient energy efficiency measures to
achieve the 55 percent and 100 percent targets for some building types
(such as medical facilities, laboratories, and industrial facilities)
mandated in EISA. This requirement will also be more challenging due to
the loss of renewable tax credits. The loss of tax credits for
renewable energy investment and production have already begun to hamper
efforts to continue development of renewable resources. As part of its
implementation planning, the Department will determine if legislation
reauthorizing the tax credits should be included within our tool kit.
[See page 14.]
Mr. DiPetto. The decision whether nuclear power propulsion will be
incorporated in future surface combatants will be based on a thorough
examination in compliance with statute. The analysis of alternatives
(AoA) for the Maritime Air and Missile Defense of Joint Forces (MAMDJF)
capability, which includes an assessment of CG(X) alternatives,
examines both fuel efficient conventional power plants and nuclear
power alternatives. The Office of the Under Secretary of Defense
(OUSD(AT&L)) is learning from the experience of the CG(X) as well as
the Air Force Next Generation Long Range Strike program, and the Army-
Marine Corps Joint Light Tactical Vehicle program, to develop methods
and DoD guidance to more accurately factor operational fuel demand (and
logistics force structure requirements) into the acquisition
tradespace. This concept is called the Fully Burdened Cost of Fuel
(FBCF), and joint planning estimates will be factored into all major
programs in the future. This work will allow the Department to make
more useful estimates for evaluating the fiscal cost of various
propulsion options, hull forms, power requirements, construction
materials, etc. The MAMDJF Analysis of Alternatives used a FBCF
methodology in the analysis of alternative CG(X) power systems that
addressed both conventionally fueled and nuclear options. The
OUSD(AT&L) is reviewing the approach taken to inform the development of
a Department-wide methodology that will be applicable to all types of
systems and unit types. This FBCF construct will help the Department
and industry to evaluate technological and design options to best
manage the energy supply and energy demand options to best meet
operational requirements and strategic sustainability requirements for
future naval ships and other platforms. [See page 26.]
______
RESPONSES TO QUESTIONS SUBMITTED BY MR. FORBES
Mr. DiPetto. The Defense Science Board task force reports, both in
2001 and 2008, discussed the need for DoD force planning models to play
realistically the risks to missions resulting from the risk to fuel
logistics and lines of communication in operations. They asserted that
the DoD force planning process today tends to examine fuel and other
``logistics'' issues as a dependent variable, not as an independent
variable, when using models and other such analytic tools. While it
appears that some modifications would be necessary to examine this fuel
logistics risk more realistically, that is relatively simple to do from
a programming and design standpoint. However, models are only changed
when there is a clear demand from higher commands (typically Service
staff force planners or warfighting commands), along with funding, for
new modules to support new analyses. Hence, we have concentrated our
work on developing an appreciation of this risk factor among those
planners, such that the demand signal and resources flow to the
modeling and analysis organizations within the Services. This work is
on-going. The DoD Energy Security Strategic Plan, which is in draft,
will include an annex with specific proposed tasks that will address
the modeling issues related to analyzing DoD energy risks. [See page
15.]
Mr. Arny. In a January 30, 2008, letter (attached), Senators Henry
Waxman and Tom Davis requested information on how the Department was
complying with this legislation. The Department's response (attached)
to that request stated that a plan was being developed to identify
which fuels are covered and what standards will be used to measure
compliance. This plan is being developed in conjunction with the
Environmental Protection Agency and other federal agencies. The
Department can not make a rational judgment on the impact of the
legislation until this plan is completed.
[The information referred to was not available at the time of
printing.]
The Department is concerned that the provision could have far-
reaching implications, including some forms of ethanol and bio-diesel,
as well as synthetic fuels and petroleum derived from less traditional
sources such as tar sands and oil-shale. Additionally, given that
fuels, including conventional petroleum, are produced from numerous
sources and often mixed together. Current standards for determining
emissions of fuels from various origins are determined on averages.
However, section 526 requires an analysis of individual fuel purchases
for lifecycle greenhouse gas emissions. Therefore, determining the
emissions footprint for any batch of fuel may be impossible. For
example, conventional fuel derived from oil produced in Venezuela or
Nigeria is more likely to have a larger footprint than domestic oil
because of the energy used transporting the oil to the United States.
Foreign and domestic oil may be mixed together at a refinery. Once
foreign and domestic oils are mixed together, the oils cannot be
differentiated from one another. Therefore, the footprint of the
resulting fuel cannot be determined accurately under section 526.
Finally, Section 526 applies worldwide, not just to purchases
within the United States. There are no means to determine the lifecycle
greenhouse gas emissions from non-domestically produced fuels. For
example, our military aircraft used over 6 million gallons of Canadian
jet fuel in 2007 while exercising with the Canadian Armed Forces,
conducting joint operations along the Defense Early Warning line, and
refueling at Canadian commercial airports. Canadian fuels include fuel
produced from tar sands crude. If tar sands-derived fuels were subject
to section 526, our military aircraft may be required to stop refueling
in Canada, potentially affecting our national security. [See page 16.]
______
RESPONSES TO QUESTIONS SUBMITTED BY MR. TAYLOR
Mr. Arny. The Department of Defense, largely through the Office of
the Secretary of Defense's (OSD's) Energy Security Task Force, the
Army's Rapid Equipping Force and the Army Program Manager-Mobile
Electric Power, is assessing a range of alternatives to reduce the
operational energy demands of our deployed forces. A wide variety of
technical and procedural solutions have been identified and are being
fielded today. Initial efforts are focused on immediately executable,
high return on investment and risk mitigation solutions. One of the
most publicized solutions involves the introduction of spray foam-
insulated tents. This initiative is providing a high return on
investment while reducing risk to supply convoys and the force
protection demands they drive. The Joint Contracting Command in Iraq
just recently awarded a $95 million competitive contract to insulate 9
million additional square feet of tents. It is projected that this work
will reduce fuel demand in theater by 77,000 gallons a day, which
translates to roughly thirteen to fifteen tanker trucks taken off the
roads a day. When including the resulting reduced demand for force
protection for those tankers, this effort will provide a significant
operational capability benefit to commanders. While this is a positive
step, more technically complicated or location-specific efforts are
also being considered, to include the use of heat exchangers, as
requests are received from the field or as they mature through
traditional acquisition programs. Research and fielding of foam
insulation, tactical micro-grids and heat exchangers are in planning.
The Army currently has a heat co-generation Program of Record
requirement in their budget starting in FY 2012. [See page 24.]
Mr. DiPetto. The Department of Defense, largely through the Office
of the Secretary of Defense's (OSD's) Energy Security Task Force, the
Army's Rapid Equipping Force and the Army Program Manager-Mobile
Electric Power, is assessing a range of alternatives to reduce the
operational energy demands of our deployed forces. A wide variety of
technical and procedural solutions have been identified and are being
fielded today. Initial efforts are focused on immediately executable,
high return on investment and risk mitigation solutions. One of the
most publicized solutions involves the introduction of spray foam-
insulated tents. This initiative is providing a high return on
investment while reducing risk to supply convoys and the force
protection demands they drive. The Joint Contracting Command in Iraq
just recently awarded a $95 million competitive contract to insulate 9
million additional square feet of tents. It is projected that this work
will reduce fuel demand in theater by 77,000 gallons a day, which
translates to roughly thirteen to fifteen tanker trucks taken off the
roads a day. When including the resulting reduced demand for force
protection for those tankers, this effort will provide a significant
operational capability benefit to commanders. While this is a positive
step, more technically complicated or location-specific efforts are
also being considered, to include the use of heat exchangers, as
requests are received from the field or as they mature through
traditional acquisition programs. Research and fielding of foam
insulation, tactical micro-grids and heat exchangers are in planning.
The Army currently has a heat co-generation Program of Record
requirement in their budget starting in FY 2012. [See page 25.]
Mr. Arny. The decision whether nuclear power propulsion will be
incorporated in future surface combatants will be based on a thorough
examination. The analysis of alternatives (AoA) for the Maritime Air
and Missile Defense of Joint Forces (MAMDJF) capability, which included
an assessment of CG(X) alternatives, examined both fuel efficient
conventional power plants and nuclear power alternatives. The MAMDJF
AoA used a Fully-Burdened Cost of Fuel methodology in the analysis of
alternative CG(X) power systems.
Navy leadership is reviewing the AoA results. The Navy will select
a Service preferred alternative for CG(X) and then provide a
recommendation to the Office of Secretary of Defense at a Milestone A
Defense Acquisition Board (DAB).
The Navy's FY 2006 Report to Congress on Alternative Propulsion
Methods for Surface Combatants and Amphibious Warfare Ships indicated
an upfront nuclear acquisition cost premium of $600-$700 million, in FY
2007 dollars, per ship for a medium surface combatant. This premium is
over and above the acquisition cost of a fossil fueled ship. While the
nuclear power variant includes a higher upfront acquisition cost than
the fossil fuel variant, it should be offset over the life cycle by
lower operations and support costs completely or to some degree
depending on the ships' Operating Tempo, energy demands, and fuel
prices. [See page 26.]
?
=======================================================================
QUESTIONS SUBMITTED BY MEMBERS POST HEARING
March 13, 2008
=======================================================================
QUESTIONS SUBMITTED BY MR. ORTIZ
Mr. Ortiz. What is your assessment of the military value of
domestic coal-to-liquid fuel production facilities that are being
considered for construction on military installations such as Malmstrom
Air Force Base? Please compare the relative military utility of
domestic fuel production facilities with that of energy production
technologies that can be used by warfighters outside CONUS. Where
should the Department of Defense focus its efforts and resources to
develop operational energy technologies?
General Carns. The Department has developed a draft Energy Security
Strategic Plan which provides the framework for focusing energy efforts
across DoD. There are numerous projects ongoing that support our energy
posture for platforms, and fixed and tactical installations. We are
focusing efforts on a broad set of solutions to meet operational needs
of the warfighters.
Within the draft Strategic Plan, Goal #2 is to ``Increase energy
security through strategic resilience by increasing the availability
and use of alternative or assured energy sources.'' The Department's
work on synthetic fuels, as well as on other technological energy
solutions, is grounded in this goal.
DoD procures large volumes of military specification fuel for
storage and distribution in support of the Department's mobility fuel
requirements (i.e., ships and aircraft). Our goal is to be able to use
fuel derived from any source or process with an emphasis on using
assured sources where possible. Synthetic fuels, such as produced from
coal to liquids, offer a promise of an assured fuel source, and we are
focused on testing and certifying various fuels to ensure they can be
used in our systems. Within the U.S., we are considering the use of
domestically sourced synthetic fuel as an alternative to traditional
petroleum, thereby reducing our dependence on non-assured sources of
oil, with the desire of positively impacting the U.S. economy by
initiating a domestic market for synthetic fuels and strengthening our
energy security.
The Air Force is allowing private companies to use underutilized
land to build various energy facilities, for which the Air Force would
receive compensation, called an Enhanced Use Lease. Malmstrom is one
such facility that could help the Department reduce its dependence on
non-assured sources of oil.
Mr. Ortiz. What role does DoD play relative to the Department of
Energy in the development to alternative energies? How is DOD
positioned to participate in national-level energy discussions with the
Department of Energy and other agency partners? What needs to be done
to cultivate these relationships?
Mr. DiPetto. The Department of Defense and the Department of Energy
(DOE) collaborate on numerous interagency efforts. The most formally
established are the Interagency Working Group on Alternative Fuels and
the Unconventional Fuels Task Force, which examine the feasibility of
using various disparate feedstocks to create fuel that is capable of
being used in conventional engines. We also collaborate in the monthly
Energy Conversation, which meets with the goal of focusing on how
energy issues impact programs and increasing visibility across the DoD,
DOE and other Federal agencies. An ``Energy Yellow Pages'' is being
developed throughout approximately 27 federal entities, to include DoD
and DOE, that will enable partnerships across programs. We also are
identifying specific programs where we may collaborate, such as the
National Energy Technology Lab's work in algae-based fuels.
Mr. Ortiz. What process does each military service follow to
determine its priorities for funding alternative energies?
Mr. DiPetto. Each Military Department has established or is
establishing organizational processes for integrating energy efforts
and issues. The Army Energy Security Task Force (AESTF) was recently
stood up to develop the necessary strategic/action plans to satisfy
emerging issues identified in Defense Science Board and Government
Accountability Office (GAO) reports, Executive Order 13423, and other
associated drivers. Additionally, the AESTF was charged with the
development of a governance framework for all Army energy security
efforts. The Navy is setting up a Navy Energy Task Force to provide a
comprehensive Navy energy governance structure. For several years, the
Air Force has had a well-defined structure, led by the Assistant
Secretary of the Air Force for Installations, Environment, and
Logistics, with several technical panels underneath.
The Army's energy strategy is to create a culture of energy
accountability, reduce energy consumption, and increase efficiency to
enhance operational capabilities, increase the use of new/alternative
energy sources, establish benchmarks, and champion investment
strategies.
The Navy-Marine Corps investment strategy for alternative energy
programs uses a number of criteria depending on the application and the
maturity of the technology; however, the potential benefit versus cost
criterion is always a factor. Investment criteria are tailored to
assess the specific factors relevant to the evaluation and potential
adoption or implementation of a specific technology. Technology
investment criteria include factors such as the range of applicability
(single versus multiple target application), operational need
criticality (limited application range but critical to operational
need), estimated cost of development, estimated non-recurring cost, and
potential fossil fuel displacement.
The Air Force strategy is to minimize the use of tax-payer dollars
to develop alternative energies. As a consumer we are working with
private, alternative energy companies to provide alternative energy for
our consumption. Using this strategy, we were able to accomplish the
Nellis AFB solar project and we are attempting to duplicate this model
at other bases.
Mr. Ortiz. The Department of Defense and the military services
independently fund numerous research and development projects for
energy storage technologies such as fuel cells and batteries. What
steps are being taken by DOD to coordinate the energy storage
technology requirements and efforts of the services and to streamline
investments?
Mr. DiPetto. The Director of Defense Research and Engineering
(DDR&E) initiated the Energy and Power Technology Initiative (EPTI) in
2002 as a Department-wide effort to explore and develop advanced
capability-enabling power technologies. EPTI's mandate is to identify
technical objectives, quantified technical barriers, and enabling
technologies associated with development of advanced energy and power
components and systems. There are five major focus areas: Power
Generation, Electromechanical Conversion, Energy Storage, Thermal
Transport and Control, and Power Control and Distribution. Each focus
area has identified goals, objectives, challenges, approaches, and
programs; and provides a macro view of priorities, descriptions of
integrating demonstrations, and how they overlay onto specific
component technologies.
EPTI is also engaged with the Interagency Advanced Power Group,
which is a federal organization that facilitates exchange of
information in Advanced Power, with specific emphasis on high-energy
batteries, fuel cells, and other portable and mobile power sources.
Mr. Ortiz. What is your assessment of the military value of
domestic coal-to-liquid fuel production facilities that are being
considered for construction on military installations such as Malmstrom
Air Force Base? Please compare the relative military utility of
domestic fuel production facilities with that of energy production
technologies that can be used by warfighters outside CONUS. Where
should the Department of Defense focus its efforts and resources to
develop operational energy technologies?
Mr. DiPetto. The Department has developed a draft Energy Security
Strategic Plan which provides the framework for focusing energy efforts
across DoD. There are numerous projects ongoing that support our energy
posture for platforms, and fixed and tactical installations. We are
focusing efforts on a broad set of solutions to meet operational needs
of the warfighters.
Within the draft Strategic Plan, Goal #2 is to ``Increase energy
security through strategic resilience by increasing the availability
and use of alternative or assured energy sources.'' The Department's
work on synthetic fuels, as well as on other technological energy
solutions, is grounded in this goal.
DoD procures large volumes of military specification fuel for
storage and distribution in support of the Department's mobility fuel
requirements (i.e., ships and aircraft). Our goal is to be able to use
fuel derived from any source or process with an emphasis on using
assured sources where possible. Synthetic fuels, such as produced from
coal to liquids, offer a promise of an assured fuel source, and we are
focused on testing and certifying various fuels to ensure they can be
used in our systems. Within the U.S., we are considering the use of
domestically sourced synthetic fuel as an alternative to traditional
petroleum, thereby reducing our dependence on non-assured sources of
oil, with the desire of positively impacting the U.S. economy by
initiating a domestic market for synthetic fuels and strengthening our
energy security.
The Air Force is allowing private companies to use underutilized
land to build various energy facilities, for which the Air Force would
receive compensation, called an Enhanced Use Lease. Malmstrom is one
such facility that could help the Department reduce its dependence on
non-assured sources of oil.
______
QUESTIONS SUBMITTED BY MR. BARTLETT
Mr. Bartlett. Do you agree with the DSB Task Force report's general
finding, and specifically its classified appendix that lists critical
missions performed at DoD installations and non-DoD facilities that are
at risk of prolonged electricity outage due to the vulnerability of the
national grid and inadequate on-site backup power? If so, please
provide the HASC with an appropriately classified report or briefing
with your plans or recommendations to ensure continuity of electricity
for these missions.
Mr. Arny. The Department is fully aware of the broad spectrum of
vulnerabilities to the national power grid (and other U.S.
infrastructure issues) that could impact DoD installations. DoD
generally agrees with the findings of the Defense Science Board Task
Force on Energy Security's Report. The Department, however, is not
aware of an authoritative threat analysis or system assessment report
describing the possibility of long-term power outages that could impact
DoD installations and their missions.
Critical missions at DoD installations generally have adequate
back-up power generation, and, in some cases, have uninterruptible
power supplies to ensure national security is sustained in the event of
short-term outages. These systems are tested to ensure they can carry
the requisite loads and are constantly re-fueled to sustain operations
for power outages that could last hours/days/weeks in length.
The potential hazards of a prolonged electricity outage necessitate
a serious planning effort that continues to be developed, recognized,
and exercised for preparedness in the Department of Energy, Department
of Homeland Security, and DoD.
Mr. Bartlett. Do you agree that requiring a plan to assess and
prioritize critical missions at U.S. installations, incorporation of
the concept or resilience in strategy and planning documents,
identification of risk management options and identification of
barriers outside the control of the department to implementing these
options would reduce the risk from loss of power to within acceptable
levels? If not, please provide the HASC recommendations for specific
measures that would reduce the risk from loss of power to within
acceptable levels?
Mr. Arny. The Department agrees that a plan to identify missions,
required capabilities, and critical assets is needed. We have worked
diligently to establish a robust and disciplined approach to identify,
prioritize, and assess the risk to those assets the Department deems
critical to executing the National Defense Strategy. Such a plan would
help the Department minimize the risk and manage consequences to within
acceptable levels resulting from loss of power.
The Department released the Strategy for Defense Critical
Infrastructure (DCI), which articulates the approach required for
ensuring the availability of assets deemed essential to the successful
completion of DoD missions in an all-threat and all-hazard environment.
This strategy recognizes that although safeguarding the reliability of
the nation's critical infrastructure will require a national effort,
executing the strategy will provide defense stakeholders with a better
understanding of what DoD must do to ensure the availability and
resiliency of DCI.
Ownership of assets critical to the functioning of the DoD rests
not only within the Department and other government agencies, but also
throughout the private sector as well. The Department is cognizant of
and accounts for the need to coordinate the assessment of risk and
implementation of follow-on risk management activities with a myriad of
organizations internal and external to the DoD, the Federal government,
and private industry.
The Department recognizes Departmental equities must be addressed
across the interagency in order to execute the National Defense
Strategy and will use the framework established by the Department of
Homeland Security (DHS) under the National Infrastructure Protection
Plan to coordinate cross-sector, interdepartmental, and public-private
requirements.
The Department also agrees that a detailed Energy strategy is
needed, and efforts are underway to develop this strategy which we
anticipate completion by the end of the year. Underpinning this
strategy is the requirement and responsibility of the electric power
industry to ensure resilient systems servicing critical loads, such as
emergency services public sector as well as DoD installations
supporting national security, are provided.
The Department, working with the Department of Energy (DOE),
Federal Energy Regulatory Commission (FERC), and DHS can also help the
electric sector understand the threat as well as structure appropriate
war games to assess consequences management. The Department is also
working with the Idaho National Laboratories on specific protection
techniques for certain cyberattack modes. Finally, the Department is
committed to implementing Section 433 of the Energy Independence and
Security Act of 2007, specifically to ensure new DoD facilities have a
net zero energy impact on the national grid by 2030.
Mr. Bartlett. Do you agree that biomass, waste-to-power, geothermal
power generation systems, bio-based ground transportation fuels, and
other potential sources, such as nuclear, ocean thermal energy
conversion (OTEC) and space-based solar power should be included in an
update of the department's 2004 renewable energy assessment?
Mr. Arny. Providing an update to the renewable energy assessment is
no small endeavor. There are currently many renewable resource
assessment tools available to installations in planning for energy
security. The National Renewable Energy Lab (NREL) provides maps and
charts identifying renewable resources throughout the country. DoD
believes these tools should be used as the starting point for
developing additional renewable energy. NREL can also provide a
detailed analysis of the most cost-effective mix of energy sources for
a particular location. Assessing needs on an installation-by-
installation basis would be a more cost-effective method than a whole
scale update of the previous study.
Mr. Bartlett. To what extent can renewable resources be used to
meet the demands of critical mission loads?
Mr. Arny. When compared to the Nation-at-large, a considerable
portion of the Department's energy needs are met by renewable energy
resources. In Fiscal Year 2007, the Department produced or procured
renewable energy equivalent to 11.9 percent of electrical consumption
and that value will rise in the future. Considering the cost of
redundant infrastructure for reliability, critical missions are
sometimes not located in close proximity to life-cycle cost-effective
renewable energy sources, thereby making it a challenge to focus
renewable resources to meet the demands of critical mission loads. The
Department is committed to providing the appropriate level of energy
security for all missions, including critical missions, and will
continue to evaluate renewable resource availability and economic
feasibility to accomplish our missions.
Mr. Bartlett. Do you agree with the DSB Task Force report's
recommendations to ``island'' critical classified missions and
installations from the grid when necessary?
Mr. Arny. In general, I agree with the concept of having the
ability to ``island'' critical infrastructure from the grid when
necessary. This capability must be built over time and one step toward
this capability is compliance with Section 433 of the Energy
Independence and Security Act of 2007, which essentially requires Net
Zero buildings for the future. The Department is also developing a Net
Zero Energy Installation planning guide, which will help ensure entire
installations, not just specific buildings, have ``islanding''
capabilities. Still, we must be careful in developing these plans to
ensure that installations do not become islands unto themselves while
surrounding communities suffer in darkness. We believe it is at least
as important to solve vulnerability issues on the national level as it
is to have ``islanding'' capabilities.
Mr. Bartlett. Do you agree that a cross-agency and department and
intergovernmental working group is necessary in order to ``island''
critical classified missions and installations from the grid when
necessary? Would Presidential Leadership and authority be necessary to
support implementation of islanding of critical classified missions and
installation from the grid when necessary?
Mr. Arny. HSPD-7 (Critical Infrastructure Identification,
Prioritization and Protection) already directs the Department to work
with other Federal departments and agencies to ``prevent, deter, and
mitigate the effects of deliberate efforts to destroy, incapacitate, or
exploit'' critical infrastructure and key resources. The National
Infrastructure Protection Plan (2006) provides the framework for
addressing the entire national effort to execute coherent
identification, prioritization, and protection activities, across all
critical sectors, levels of government, and among private and public
entities.
Additionally, a committee of the National Science and Technology
Council recently recommended that a subcommittee be established to
examine the Science & Technology issues/opportunities associated with
this issue. DoD, along with the Department of Energy, Department of
Homeland Security, Federal Energy Regulatory Commission, Environmental
Protection Agency and other agencies will be engaged in this new
effort.
Internally, the Department is working to identify critical
infrastructure and ensure a capability to sustain military missions,
under the auspices of the Energy Security Task Force. Due to the
intensity of ongoing efforts, we do not feel additional authority is
necessary to accomplish the Department's goals.
Mr. Bartlett. Would the inclusion of energy demand, energy
logistics, energy protection requirements, and endurance of combat
forces into any models, simulations, and wargames and all other
analytical tools be used by the department improve the ability of the
department to calculate the fully burdened cost of fuel?
Mr. DiPetto. The purpose of the ``fully burdened cost of fuel'' is
to include a quantitative, financial value within the acquisition
tradespace to represent the logistics and force protection effort it
will take to ensure delivery of the needed volume of fuel to an
operational system. To develop a defendable number that will aid
decision-making between cost, schedule and performance trades, the
Department must consider all of those fuel delivery forces, and their
protection, employed within a given set of operational and non-
operational (e.g. training) scenarios. This is a natural extension of
the DoD scenario-based force planning and requirements generation
processes.
Hence, to do this work, a variety of fuel-related factors need to
be actively played in models, simulations, wargames and in the Defense
Planning Scenarios. The findings from these activities must then be
carried into the requirements development process, similar to variables
concerning lethality, survivability and maintainability, among others.
The weighting of these capability variables against each other, to
include energy demand, will be reflected in the Joint Requirements
Oversight Council (JROC)-validated capability direction for the force,
and potentially, the Key Performance Parameters chosen to guide the
development of individual systems and acquisition platforms.
The Department has begun to play these energy delivery risk
variables in a major Air Force wargame and in several Defense Planning
Scenario-related sessions (with interagency involvement). This
preliminary work is focused on building an appreciation of fuel as an
operational risk factor. Along with other guidance, this will lead to
the modification of key models, and to the analysis they support, to
treat fuel-related risks much like other capability variables.
The Office of the Under Secretary of Defense (Acquisition,
Technology and Logistics) is leading the development of a DoD Energy
Security Strategic Plan, as well as changes to key Directives and
guidance documents, to ensure these variables are considered
appropriately when designing and developing our future forces. This
work will directly inform how the ``fully burdened cost of fuel'' is
determined and applied for each acquisition system.
Mr. Bartlett. Has the integration of energy demand, energy
logistics, energy protection requirements, and endurance of combat
forces into any models, simulations, wargames, and any other analytical
tools be used by the department been mandated under the April 2007
USD(AT&L) memorandum requiring the inclusion of the fully burdened cost
of fuel for all acquisition trade analyses?
Mr. DiPetto. As directed in the April 2007 memorandum from the
Under Secretary of Defense (Acquisition, Technology and Logistics), the
Department reviewed three acquisition programs to understand how fuel
risk variables were considered in their cost, schedule and performance
tradespace. The lessons learned here, along with the assessment of the
Defense Science Board Task Force on Energy Security in 2008, are being
used to write guidance for the acquisition community on how and when to
consider the fully burdened cost of fuel (FBCF) in the course of a
Major Defense Acquisition Program. Both DoD Directive 5000.02 and the
Defense Acquisition Guidebook are being revised this year to
incorporate these guidance changes.
The integration of the energy variables will be addressed in the
DoD Energy Security Strategic Plan. The Strategic Plan is currently in
review by DoD senior leadership. Therefore, it is premature to comment.
Mr. Bartlett. Has the fully burdened cost of fuel been included as
a factor in any models and simulations used in DoD's Analytical
Baseline and vignettes used as the basis for Analyses of Alternatives
(AoA) and Evaluation of Alternatives studies since the issuance of the
April 2007 USD (AT&) memorandum requiring the inclusion of the fully
burdened cost of fuel acquisition trade analyses?
Mr. DiPetto. The Fully Burdened Cost of Fuel (FBCF) is a newly
devised factor for inclusion in DoD life-cycle cost estimating,
specifically for use in deciding between alternative designs and
technologies in the acquisition and science & technology investment
areas. Because FBCF is only an estimation of financial cost, it does
not inform DoD processes that evaluate capabilities gaps, such as the
modeling, simulations, wargames, and scenario-based planning that go on
in the DoD Joint Strategic Planning Process (which includes the Defense
Planning Scenarios and the Analytic Agenda).
Rather, FBCF is informed by the scenario-based force planning
analysis work. This analysis helps determine how much fuel is required
as well as the types and scale of fuel logistics forces that are
required, to execute notional future operations. The predicted costs of
the fuel and fuel logistics forces are then added up and are attributed
proportionally to the alternative platform designs to generate the
FBCF.
Analyses of Alternatives or Evaluations of Alternatives (AoA/EoA)
are performed at the juncture of the DoD requirements process, Joint
Capabilities Integration and Development System (JCIDS), and the
acquisition process to help determine how the Department will fill an
identified future capability gap with a materiel (equipment) solution.
The AoA/EoA is unique because it is the only point in the decision
process where both the capability of the alternative systems and their
respective costs are explicitly varied and compared as core decision
factors.
To date, no AoA/EoA has included a calculation of the Fully
Burdened Cost of Fuel. This is because the Department is still working
on an agreed methodology for how such cost estimates are to be
developed. The Office of Under Secretary of Defense (AT&L) is
collaborating with a variety of DoD organizations to develop this base
methodology and the rules for how the Components must apply it. Great
care is being taken to ensure the first application of the approach is
methodologically sound, and that fuel-related variables carry an
appropriate, not disproportionate, weight in the tradespace related to
capability and affordability.
Mr. Bartlett. Will the department please provide the HASC
information about any analyses and the outcome of those analyses that
have incorporated the fully burdened cost of fuel?
Mr. DiPetto. In April 2007, the Under Secretary of Defense
(Acquisition, Technology and Logistics) issued a policy memo directing
the use of the fully burdened cost of fuel (FBCF) concept in the DoD
acquisition process. To implement the FBCF, the AT&L policy memo called
for the initiation of a pilot program to develop the best business
practices to incorporate FBCF into DoD Acquisition. To date, the pilot
program is nearing conclusion and lessons learned are only now being
formally incorporated into DoD Acquisition instructions and guidance.
Consequently, as analyses are completed in response to formal
instruction and guidance requirements, the Department will provide the
House Armed Services Committee information as requested.
Mr. Bartlett. Would the inclusion of an energy efficiency Key
Performance Parameter (KPP) as required by the Chairman of the Joint
Chiefs of Staff Instruction CJCSI3170F dated may 2007 improve the
department's ability to manage energy use and costs in acquisition
trade analyses?
Mr. DiPetto. CJCSI 3170.01F outlines the policies and procedures of
the DoD Joint Capabilities Integration and Development System (JCIDS),
which is the Departments process to validate and prioritize war
fighting requirements. Within JCIDS, KPPs serve to define those system
attributes or characteristics that are deemed critical to fill an
identified capability gap with a materiel (equipment) solution.
Inclusion of an energy efficiency KPP could improve the Departments
ability to manage energy and fuel-related costs, if it is underpinned
by a flexible analytical methodology that can be applied to the full
range of air, ground and maritime environments. However, the analytical
tools and supporting methodology to make comparisons and to set targets
and minimum thresholds have yet to be developed. Some of this
methodological work has been initiated by the acquisition community for
the purpose of calculating the Fully Burdened Cost of Fuel. Once the
methodology is agreed to, and the modeling tools are developed and
applied by the force planning community, the KPP would inform the
acquirers of how the fuel demand of the system and the size of the fuel
delivery force structure it will require should be addressed against
other performance and cost factors.
Mr. Bartlett. What other measures would improve the department's
ability to manage energy use and costs?
Mr. DiPetto. The Department is finalizing an over-arching Energy
Security Strategic Plan that will provide a framework for understanding
and addressing energy challenges at all levels and activities across
the Department. The strategic plan identifies four goals and prescribes
actionable tasks for the Department to pursue in addressing these
challenges, thereby enhancing our energy security posture. The
strategic goals are:
1. Maintain or enhance operational effectiveness while
reducing total force energy demands - REDUCE DEMAND
2. Increase energy security through strategic resilience (e.g.
alternatives/renewables and reducing dependence on non-assured
sources) - ASSURE SUPPLY
3. Enhance operational and business effectiveness by
institutionalizing energy solutions in DoD planning and
business processes - IMPROVE PROCESSES
4. Establish and monitor Department-wide metrics - IMPROVE
PROCESSES
The strategic plan is currently in coordination within the
Department with an anticipated release later this year.
We have also initiated several demonstrations and other projects to
reduce energy consumption and increase alternatives for installations,
both fixed and tactical, and platforms, with anticipated savings
ranging from 5% to 25%. Together, these efforts will reduce costs and
enable sustained, uninterrupted operations for the Department. Efforts
at tactical installations will have the additional effect of reducing
fuel convoys, thereby putting fewer soldiers, sailors, airmen and
marines in harms way.
Mr. Bartlett. Would mandating the inclusion of energy demand,
energy logistics, energy protection requirements, and endurance of
combat forces into any models, simulations, wargames, and tactical
exercises or other planning tools used by the department and the
services provide more accurate calculations of the fully burdened cost
of fuel (FBCF)? If not, what measures would improve the accuracy of
calculations of the fully burdened cost of fuel?
General Carns. Yes, the inclusion of energy demand, energy
logistics, energy protection requirements, and endurance of combat
forces models, simulations, wargames, and tactical exercises or other
planning tools used by the department and the services would allow for
a more accurate calculation of the fully burdened cost of fuel (FBCF).
Accordingly, the Task Force recommended that DoD accelerate the
following three tasks:
1. Build fuel logistics into campaign analyses and other
analytical models and simulations to inform the requirements
process of the operational, force structure and cost
consequences of varying battlespace fuel demand;
2. Establish outcome-based energy Key Performance Parameters
(KPPs); and
3. Use FBCF as a factor in all Analyses of Alternatives/
Evaluation of Alternatives (EoAs) and throughout all
acquisition trades.\1\
---------------------------------------------------------------------------
\1\ http://www.acq.osd.mil/dsb/reports/2008-02-ESTF.pdf; Page 5
DSB Energy Strategy Task Force found that current modeling and
simulation conducted during Joint Capability Integration and
Development System (JCIDS) and the Service pre-JCIDS planning functions
lack the capability to quantify the contribution of system efficiency
to battlespace outcome or force structure requirements. Force-on-force
models and simulations used to explore new concepts and test new
systems do not explicitly include logistics; this is a serious
shortcoming. The Task Force recognizes that the models make simplifying
assumptions for the sake of looking at battlefield effects and outcomes
under certain constraints and limitations, but it strongly recommends
that analysts not turn a blind eye to the need to account for logistics
in the capability documents. Lessons learned and military judgment
sometimes get applied as sanity checks and programmatic goals, but in
the absence of explicit modeling it becomes easy to minimize what is
inherently inconvenient. Such explicit modeling of logistics assets
would better reflect reality, and would have significant impacts on
concepts and the way required capabilities are developed.
If the requirements process does not understand energy efficiency
in terms it values--operational capability, combat vulnerability, and
force structure balance--it will have no reason for making efficiency a
requirement. If the acquisition process does not understand the total
ownership cost of buying, moving and protecting fuel to systems in
combat (fully burdened cost of fuel), then its business case analyses
will use only the commodity price for fuel. This distorts the results
to make high return investments in efficiency look much worse than they
really are.\2\
---------------------------------------------------------------------------
\2\ http://www.acq.osd.mil/dsb/reports/2008-02-ESTP.pdf; Pages 26-
27
---------------------------------------------------------------------------
Mr. Bartlett. Would mandating the inclusion of energy demand,
energy logistics, energy protection requirements, and endurance of
combat forces into any models, simulations, wargames, and tactical
exercises or other planning tools used by the department and the
services provide more accurate calculations of the fully burdened cost
of fuel (FBCF)? If not, what measures would improve the accuracy of
calculations of the fully burdened cost of fuel?
General Carns. Yes, the inclusion of energy demand, energy
logistics, energy protection requirements, and endurance of combat
forces models, simulations, wargames, and tactical exercises or other
planning tools used by the department and the services would allow for
a more accurate calculation of the fully burdened cost of fuel (FBCF).
Accordingly, the Task Force recommended that DoD accelerate the
following three tasks:
1. Build fuel logistics into campaign analyses and other
analytical models and simulations to inform the requirements
process of the operational, force structure and cost
consequences of varying battlespace fuel demand;
2. Establish outcome-based energy Key Performance Parameters
(KPPs); and
3. Use FBCF as a factor in all Analyses of Alternatives/
Evaluation of Alternatives (EoAs) and throughout all
acquisition trades.\3\
---------------------------------------------------------------------------
\3\ http://www.acq.osd.mil/dsb/reports/2008-02-ESTF.pdf; Page 5
DSB Energy Strategy Task Force found that current modeling and
simulation conducted during Joint Capability Integration and
Development System (JCIDS) and the Service pre-JCIDS planning functions
lack the capability to quantify the contribution of system efficiency
to battlespace outcome or force structure requirements. Force-on-force
models and simulations used to explore new concepts and test new
systems do not explicitly include logistics; this is a serious
shortcoming. The Task Force recognizes that the models make simplifying
assumptions for the sake of looking at battlefield effects and outcomes
under certain constraints and limitations, but it strongly recommends
that analysts not turn a blind eye to the need to account for logistics
in the capability documents. Lessons learned and military judgment
sometimes get applied as sanity checks and programmatic goals, but in
the absence of explicit modeling it becomes easy to minimize what is
inherently inconvenient. Such explicit modeling of logistics assets
would better reflect reality, and would have significant impacts on
concepts and the way required capabilities are developed.
If the requirements process does not understand energy efficiency
in terms it values--operational capability, combat vulnerability, and
force structure balance--it will have no reason for making efficiency a
requirement. If the acquisition process does not understand the total
ownership cost of buying, moving and protecting fuel to systems in
combat (fully burdened cost of fuel), then its business case analyses
will use only the commodity price for fuel. This distorts the results
to make high return investments in efficiency look much worse than they
really are.\4\
---------------------------------------------------------------------------
\4\ http://www.acq.osd.mil/dsb/reports/2008-02-ESTF.pdf; Pages 26-
27
---------------------------------------------------------------------------
Mr. Bartlett. Do you agree that a cross-agency and department and
intergovernmental working group will be necessary in order to implement
``islanding'' of critical classified missions and installations from
the grid when necessary? Furthermore, would Presidential leadership and
authority be necessary to support implementation of islanding of
critical classified missions and installations from the grid when
necessary?
General Carns. Yes, DSB Energy Strategy Task Force recommends that
DoD collaborate closely in these endeavors with other agencies,
especially the Department of Energy (DoE) and its national
laboratories, whose mission is energy research and technology
deployment. DoE national laboratories have historical energy advisory
relationships with the Services that can accelerate results. Completely
isolating all installations from the grid is not practical, and
islanding with distributed generation of local electricity sources can
mitigate the risks.
DoDI 1470.11 Sec. 5.2.3 states it is DoD policy to use onsite,
self-contained power for critical functions, DoD-facilities-based
microgrids, and netted area microgrids for extended strategic
islanding, coupled with end-use energy efficiency measures. The
Renewable Electricity 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 by
working in deregulated states where no utility cooperation is required
to make them less vulnerable through islanding, as recommended by the
National Research Council. Thus, policy and plans are in place to move
towards islanding for critical mission 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 number of high
profile projects. This is so, even though renewable energy sources such
as solar, wind and geothermal are often economically advantageous and
resilient, reducing the risk of mission interruption. Buying renewable
energy credits, while an admirable step toward reducing carbon
footprint, accomplishes nothing toward mitigating risks from power loss
to critical missions.
At specific locations where remedies within DoD's ability to
implement are not technically or economically feasible, it may be
necessary to engage local utility companies, regulatory agencies, and
possibly State governments or the Congress to improve the reliability
of the grid. In principal this might be done through regulatory or
legislative action. However, it would require building redundancy at
key nodes, redundant substations or buying spare equipment. Where DoD
is the sole requesting party, it will probably have to fund these
improvements.
``Decoupling'' is a recent regulatory trend enacted in a number of
states that has the potential to reduce stress on the grid.
Historically, utility regulators have set electric and gas rates based
on projected sales volume. Since this also sets a utility's revenues,
it is a disincentive for them to promote efficiency or to make it easy
for customers to install on-site generation. ``Decoupling'' breaks the
linkage between the amount of electricity or gas a utility sells and
its ability to generate profits. This approach has the potential to
enable utilities to remain profitable while investing in improved
efficiency and reliability. Some states let utilities keep a small part
of what they save for their customers as extra profit. This fully
aligns utilities with customers' incentives and can strongly motivate
utilities to help customers use electricity more efficiently. DoD may
wish to include supporting such legislation as a possible approach to
reducing risk at high-risk locations.\5\
---------------------------------------------------------------------------
\5\ http://www.acq.osd.mil/dsb/reports/2008-02-ESTF.pdf; Pages 59-
60
---------------------------------------------------------------------------
Mr. Bartlett. Please make specific recommendations to HASC
concerning changes in the organization and composition of personnel
within the services and the department that would improve the
management of energy demand by operational forces.
General Carns. Defense Science Board (DSB) Task Force on DoD Energy
Strategy \6\ recommended that DoD establish a Department-wide strategic
plan that establishes measurable goals, achieves the business process
changes recommended by the 2001 DSB report \7\ and establishes clear
responsibility and accountability. Currently, energy demand is an
unplanned consequence of poorly informed decisions. Analytical tools
are needed to develop meaningful and achievable energy goals, and
business process changes are needed to enable new information to be
considered when making key decisions that affect energy use. Success
will require a plan that is horizontally and vertically integrated
throughout the Department, with participation by all functional areas
that make decisions affecting energy use with sustained oversight at
the Deputy Secretary of Defense level.
---------------------------------------------------------------------------
\6\ http://www.acq.osd.mil/dsb/reports/2008-02-ESTF.pdf
\7\ http://www.acq.osd.mil/dsb/reports/fuel.pdf
---------------------------------------------------------------------------
Specifically, the Task Force recommended:
1. By June 2008, establish a senior energy official
responsible for development of policies and procedures and
oversight of their implementation. This official should have a
voice at the key decision bodies throughout the requirements,
acquisition, and funding processes to ensure energy
considerations have been accurately factored into key decisions
that affect DoD's energy demand patterns and risks from
disruptions in commercial energy supplies.
2. By June 2008, USD(P) incorporate the concepts of resilience
and endurance of combat forces as tactically and strategically
important metrics to be included in future strategy and
planning documents. While the names of these documents change
frequently (e.g., Quadrennial Defense Review, National Military
Strategy, Strategic Planning Guidance (being renamed Guidance
for Development of the Force/Guidance for Employment of the
Force)), these concepts should guide the formulation of
Department goals and strategy for managing energy.
3. By July 2008, USD(AT&L) direct the establishment of
partnerships with the Director, Defense Research and
Engineering (DDR&E) and Department of Energy office of Energy
Efficiency and Renewable Energy (DoE/EERE) to identify
technologies with the potential to contribute to endurance
metrics by reducing battlespace fuel demand by deployed forces
and at forward operating bases.
4. By October 2008, develop and implement a Department-wide
plan to integrate energy into appropriate education and
training programs, to include professional military education,
to include Senior Service Schools, Capstone and Apex; and
specialty-specific education, such as acquisition corps and
engineering. Curricula should include risk to mission, cost and
force structure aspects of energy as addressed in this report
and appropriate to the course.\8\
---------------------------------------------------------------------------
\8\ 2008 DSB Energy Strategy Task Force Report, Recommendation 3,
pages 68-69
---------------------------------------------------------------------------