Tuesday, May 07, 2013

Gaggley Green Gobbledegook

The blessings of technology and geography have us heading in the direction of more oil production than Saudi Arabia inside of 7 years.

Our defense budget groans under the stress of recapitalizing after a decade of war, cuts & sequestration ... and yet - there is always time for vanity projects, it seems.

Solar instead of batteries, good idea ... but ....
The Pentagon increasingly sees this energy dependence as a military weakness and is trying to reduce it. The Navy is attempting to transition to biofuels for its ships and planes, and the Army and Marine Corps are exploring a host of initiatives, including using solar energy to power radio batteries.

"Every time some yahoo says 'I'm going to close the Strait of Hormuz' (the price of) oil spikes," Navy Secretary Ray Mabus told USA TODAY in an interview.

In the past, Iran has threatened to close the Strait of Hormuz, through which 20% of the world's oil supply travels.

"Right now, we buy our oil from foreign sources, and some of those sources don't have our best interest at heart," Mabus said.
OK, let's check a few facts, shall we?
The United States relied on net imports (imports minus exports) for about 45% of the petroleum (crude oil and petroleum products) that we consumed in 2011. Just over half of these imports came from the Western Hemisphere. Our dependence on foreign petroleum has declined since peaking in 2005.
Join us in 2013 people! The economy blows, but otherwise the water is warm ... or changing ... whatever.
The United States isn’t quite as reliant on foreign oil as it used to be.

Imports of crude oil and other petroleum products are on pace to drop to 6 million barrels per day by 2014, according to new forecasts by the Energy Information Administration. That’s the lowest level since 1987. It’s also just half as much liquid fuel as the country was importing back in 2005, at 12.5 million barrels per day.

So what’s responsible for the drop? For starters, the United States is producing more of its own crude. New drilling techniques such as hydraulic fracturing for shale have helped companies access “tight oil” in places like North Dakota and Texas.

And the less-noticed flip side is that Americans are using less oil. Consumption of liquid fuels plummeted during the recession, and it isn’t expected to rebound anytime soon. The EIA projects that Americans will be driving slightly more over the next few years as the economy recovers, but that will be offset by more-efficient vehicles and the retirement of older cars and trucks:
Combine those two trends together, and U.S. imports are falling rapidly. By 2014, the EIA expects the country to import just 32 percent of its oil, down from 60 percent in 2005.
So, let's review.

We buy SOME of our oil from other nations, and the percentage is dropping. As of right now, half of that oil comes from countries in the Western Hemisphere. As far as I know, Canada and Mexico generally have our interests at heart, and Venezuela is a basket case.

Look to the right shipmates - which nations is the SECNAV referring to that don't have our best interests at heart?

Let's assume that the Western Hemisphere generally is "feh" to "meh" about the USA at the worst (post-Hugo Venezuela I'm talking to you).

Ditto for African sources of oil. They actually mostly like us.

That leaves the Persian Gulf. 12.9%. Who in the SECNAV's office wants to call the Saudi embassy and tell them that the SECNAV does not think that The Kingdom does not have the best interest at heart? 
Hey, I think honest people can debate that point ... but let's play Mr. Mumble Grumpypants and say they don't. That is 8.1%.  Kuwait? Bahrain? Qatar? UAE? I'm stretching here ... but no, they're mostly fine.

What if we just got rid of Persian Gulf oil at 12.9%.  And the economist in me says;
"Anybody who follows the oil industry will tell you that it doesn't make any difference where the oil comes from," says Keith Crane, an energy expert at RAND Corp.

Global oil markets are so intertwined, Crane says, that changes in any one part of the system can trigger effects elsewhere.

He points out that the U.S. has imposed sanctions on Iran and therefore does not import its oil. But "if Iranian oil goes off the [world] market, it still affects the price in the United States," Crane says.

Meanwhile, Iran has had no real problem selling its oil to Asian countries, though tougher sanctions are set to go into place this summer.

Now that the U.S. involvement in Iraq has wound down, Crane says, oil seems to be less of an American security concern.

"Do you need military might to preserve access to oil? I don't think there's a lot of evidence to say that's really important," he says.
OK. Another opinion, perhaps?
People have tended to exaggerate how much oil we imported from the Middle East. In the long term, it may look like a historical anomaly that the U.S. became so involved in the Persian Gulf.
- John Duffield, energy expert at Georgia State University
OK; get your political Vince Lombardi playing cards out.  Ace of Spades; "Who benefits?"

Let's review the project;
A centerpiece of Mabus' initiative was the Great Green Fleet, a demonstration last year of the Navy's ability to operate its ships and aircraft on biofuels.

During the demonstration, the Navy powered a carrier strike group, which consists of escort ships and aircraft, with 50% biofuels over a two-day exercise. The biofuels were made from a number of sources, including used cooking oil and algae.

The Green Fleet name is a reference to President Theodore Roosevelt's Great White Fleet, a battle group that circled the globe in a demonstration of American seapower in the early part of last century.

Critics saw the Great Green Fleet as a demonstration of wasted taxpayer money. Sen. James Inhofe, R-Okla., has pointed out that the Navy spent $12 million for biofuels at $27 a gallon for the demonstration.

The Navy acknowledges it has paid a premium for biofuels, but insists it is for experimental and test purposes only until the price becomes competitive with conventional fuel.

The Navy's use of the Defense Production Act, designed to allow the military to support industries considered critical to national security, to invest in biofuel refineries has drawn criticism.

"The Navy wants to spend hundreds of millions of dollars in companies to create the market," Forbes says.

Mabus sees the investment in biofuels as a hedge against the vagaries of the world oil markets.

U.S. military aircraft and ships patrolling the Persian Gulf or in the far reaches of the Pacific are forced to purchase much of their fuel from foreign suppliers, where they are hostage to price fluctuations and vulnerable to supply disruptions by rogue states.

Mabus said the Navy has faced skeptics before.

"The Navy has always been on the forefront of changing energy use," Mabus says. He said there were skeptics when the Navy moved from wind to steam.

"Every single time, those naysayers were absolutely wrong," Mabus says. "If price had been the only consideration, we'd still be using sails."
I am all about experimentation, but this vanity project should stop there. The Navy should not be in the industrial energy policy business. The economics is wrong, the geo-political basis is wrong, the justifications are wrong ... and the spin simply cannot stand up to the follow-on question.

The last part of the pull quote is just insulting. The Navy went from sail to steam just as industry did. Ditto from coal to oil. When you look at the driver of sail to coal to oil, what was the big driver? Simple; energy density and economics of moving something further cheaper.

Biofuels - as the MPG on my FlexFuel truck tells me - is not as energy efficient as traditional oil. So, actually, the SECNAVs argument works against him. Not only are biofuels less efficient than normal fuels - they cost more. Pay more - get less.  That is 180deg policy lock-off if I have ever seen it.

I'm sorry - of all the things to expend political capital on - this is not it. 

Meanwhile ... 8-month deployments are being called the norm SECNAV. Please pivot.

UPDATE: The folks at CIMSEC are engaged in a little parallel play. Worth a read.


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