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Reducing DoD Fossil-Fuel Dependence JASON The MITRE Corporation 7515 Colshire Drive McLean, Virginia 22102-7508 (703) 983-6997 JSR-06-135 September 2006 Approved for public release; distribution unlimited Study Leaders: Paul Dimotakis Robert Grober Nate Lewis Contributors: Henry Abarbanel Michael Brenner Graham Candler J. Mike Cornwall Freeman Dyson Stanley Flatté David Hammer Jonathan Katz Mara Prentiss Roy Schwitters John Vesecky Robert Westervelt Intern: Brent Fisher (IDA)
Transcript

Reducing DoD Fossil-Fuel Dependence

JASONThe MITRE Corporation

7515 Colshire DriveMcLean, Virginia 22102-7508

(703) 983-6997

JSR-06-135

September 2006

Approved for public release; distribution unlimited

Study Leaders:Paul DimotakisRobert Grober

Nate Lewis

Contributors:Henry AbarbanelMichael BrennerGraham CandlerJ. Mike CornwallFreeman DysonStanley Flatté

David HammerJonathan KatzMara PrentissRoy SchwittersJohn VeseckyRobert Westervelt

Intern:Brent Fisher (IDA)

REPORT DOCUMENTATION PAGE Form Approved

OMB No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing this collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to Department of Defense, Washington Headquarters Services, Directorate for Information Operations and Reports (0704-0188), 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302. Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. PLEASE DO NOT RETURN YOUR FORM TO THE ABOVE ADDRESS. 1. REPORT DATE (DD-MM-YYYY) 12-09-2006

2. REPORT TYPE

3. DATES COVE RED (From - To)

4. TITLE AND SUBTITLE Reducing DoD Fossil-Fuel Dependence

5a. CONTRACT NUMBER 13069022-PS

5b. GRANT NUMBER

5c. PROGRAM ELEMENT NUMBER

6. AUTHOR(S) Paul Dimotakis, Nathan Lewis, Robert Grober, et al.

5d. PROJECT NUMBER

5e. TASK NUMBER

5f. WORK UNIT NUMBER

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)

8. PERFORMING ORGANIZATION REPORT NUMBER

The MITRE Corporation JASON Program Office 7515 Colshire Drive McLean, Virginia 22102

JSR-06-135

9. SPONSORING / MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSOR/MONITOR’S ACRONYM(S)

Office of the Deputy Under Secretary of Defense (S&T)

1777 N. Kent St, Suite 9030 11. SPONSOR/MONITOR’S REPORT

Rosslyn, VA 22209 NUMBER(S) 12. DISTRIBUTION / AVAILABILITY STATEMENT

Approved for public release. Distribution is unlimited. Distribution Statement A. 13. SUPPLEMENTARY NOTES

14. ABSTRACT In light of an increasing U.S. dependence on foreign oil, as well as rising fuel costs for the U.S. and the DoD, and implications with regard to national security and national defense, JASON was charged in 2006 by the DDR&E to assessing pathways to reduce DoD’s dependence on fossil fuels. The key conclusions of the study are that, barring unforeseen circumstances, availability concerns are not a decision driver in the reduction of DoD fossil-fuel use at present. However, the need to improve logistics requirements and military capabilities, and, secondarily, the need to reduce fuel costs, as well as providing a prudent hedge against a foggy future, especially in the Middle East and South America, argue for a reduction in fuel use, in general.

15. SUBJECT TERMS

16. SECURITY CLASSIFICATION OF:

17. LIMITATION OF ABSTRACT

18. NUMBER OF PAGES

19a. NAME OF RESPONSIBLE PERSON

a. REPORT Unclassified

b. ABSTRACTUnclassified

c. THIS PAGEUnclassified

UL

19b. TELEPHONE NUMBER (include area code)

Standard Form 298 (Rev. 8-98)Prescribed by ANSI Std. Z39.18

i

Table of contents

Table of contents .………………………………………………………………. i

Executive summary ..……………………………………………………………. iii

World major oil trade movements and distribution of US oil imports …………... iv

I. Background and context ………………………………………………………….. 1

II. Briefings, discussions, and other input ……………………………………………. 2

III. Statement of the problem ………………………………………………………….. 3

IV. Global, domestic, and DoD fossil-fuel supply and demand ………………….…. 5

A. Global fossil energy perspectives ……………………………………….…… 6

B. Domestic fossil energy perspectives ………………………………………… 9

C. DoD fossil energy perspective ………………………………………….…… 13

1. U.S. production and DoD consumption ..……………………………….. 13

2. DoD demand breakdown by service and fuel use ………...……...……... 15

3. Regulatory factors affecting DoD fuel use, planning, and policies ..…… 29

4. Drivers to minimize DoD fuel use ……………………………..………. 31

V. Technology options for the reduction of DoD fossil fuel use ………………….. 33

A. Modification of patterns of use of DoD platforms ………………………….. 33

B. Engine and drive-train technology options ………………………………… 35

1. Hybrid vehicles ………………………………………………………….. 35

2. All-electric vehicles ……………………………………………………... 37

3. Fuel-cell vehicles ………………………………………………………... 39

4. Advanced diesel engine vehicles ………………………………………... 41

C. Lightweighting DoD platforms …………………..………………..……....... 43

1. Manned vehicles ………………………………………………………... 43

2. Unmanned land vehicles ………………………………………………... 45

3. Unmanned aerial vehicles ………………………………………………. 49

D. Alternate fuels in place of crude oil-derived fuels …..……………………… 51

1. Fossil fuel fungibility: conversion of gaseous and solid forms of fossil fuel into liquid hydrocarbon fuels through the Fischer-Tropsch process …… 55

2. Biofuels ………………………………………………………………… 63

Ethanol derived from corn ……………………………………………… 63

Cellulosic ethanol ………………………………………………………. 65

3. Well-To-Pump (WTP) and Well-To-Wheel (WTW) analyses ………….. 68

ii

VI. Discussion and concluding remarks ……………………………………………... 75

A. International and national considerations ……………………………….…… 75

B. Considerations for the DoD …….……………………………………………. 76

VII. Findings ………………………………………………………………………… 79

A. Global, domestic, and DoD fossil-fuel supplies ……………………………... 79

B. DoD fuel costs …………...………………………………………………….. 81

C. Decreasing DoD fuel use …………………………………………………… 83

D. Liquid fuels from coal or natural gas ………………………………………... 85

E. Biofuels ……………………………………………………………………… 87

VIII. Recommendations and path forward ……………………..……………………… 89

Appendices

Appendix I: Energy glossary ….……………………………………………… 90

Appendix II: Air-to-air jet-fuel delivery costs ………………………………… 93

iii

Executive summary In light of an increasing U.S. dependence on foreign oil, as well as rising fuel costs for the U.S. and the DoD, and implications with regard to national security and national defense, the JASONs were charged in 2006 by the DDR&E with assessing pathways to reduce DoD’s dependence on fossil fuels. The study charge included the following tasks:

A. Explore technology options to reduce the DoD dependence on fossil fuels and/or increase energy efficiency of our operating forces. This assessment will include an assessment of alternative fuels and energy sources at DoD-required energy densities, e.g., exotic alternate fuels, biomass/cellulosic biofuels, hydrogen, shale oil, oil sands, geothermal, etc., and an assessment of the potential of structural shaping, structural mechanical design, and novel materials application in enhancing the survivability of lightweight vehicles.

B. Assess the viability of technologies to provide at least the performance required of current DoD platforms and effort to integrate the technology and achieve the desired level of performance. In particular, alternate fuels and energy sources are to be assessed in terms of multiple parameters, to include (but not limited to) stability, high & low temperature properties, water affinity, storage & handling.

C. Assess blast and penetration resistance in lightweight vehicles.

D. Analyze structures and materials designs that could be adapted for use on combat and utility vehicles, or other DoD platforms.

E. In addition, JASON was asked to defer detailed analyses of USAF energy/fuel use. Some key findings and recommendations are summarized below.

1. Based on proven reserves, estimated resources, and the rate of discovery of new resources, no extended world-wide shortage of fossil-fuel production is reasonably expected over, approximately, the next 25 years. While the possibility of short-term shortages of refined gasoline or diesel product exists, depending on domestic refining capacity relative to domestic petroleum demand, there is not a strong basis to anticipate sustained global shortages of crude oil in the next 25 year (or more) time frame. In addition, there is no basis to anticipate shortages in petroleum available to the DoD, especially considering that present DoD fuel consumption is less than 2% of the total U.S. domestic fuel consumption – a demand that can be met by only a few domestic supply sources, at present – even though likely decreases in domestic-oil production will make the future domestic-coverage margin smaller. This finding is premised on the assumption of no major upheavals in the world, in general, and in the major oil-producing nations and regions, and oil-transportation corridors, in particular, over the next 25-year period.

2. The 2006 DoD fossil-fuel budget is, approximately, 2.5-3% of the national-defense budget, the range dependent on what is chosen as the total national-defense budget.

iv

Larger (percentage) fuel costs are borne by families and many businesses, for example, and fuel costs have only relatively recently become noticeable to the DoD.

3. At present, there is a large spread between oil-production cost and crude-oil prices. Many projections, however, including that of the U.S. Energy Information Agency, indicate that crude oil prices may well decrease to $40-$50/barrel within the next few years, as production and refining capacity increases to match demand.

4. DoD is not a sufficiently large customer to drive the domestic market for demand and consumption of fossil fuel alternatives, or to drive fuel and transportation technology developments, in general. Barring externalities, e.g., subsidies, governmental and departmental directives, etc., non-fossil-derived fuels are not likely to play a significant role in the next 25 years.

5. DoD fuel consumption constraints and patterns of use do not align well with those of the commercial sector. Most commercial-sector fuel use, for example, is in ground transportation, with only 4% of domestic petroleum consumption used for aviation. In contrast, almost 60% of DoD fuel use is by the Air Force, with additional fuel used in DoD aviation if Naval aviation consumption is included. Options for refueling ships at sea are more limited (or nonexistent) compared to those for commercial vehicles in urban areas. Options for DoD use of electrical energy on ground vehicles are limited, since one can not expect to plug into the grid in hostile territory, for example, to refuel/recharge an electric vehicle. Furthermore, drive cycles for DoD ground vehicles differ significantly from EPA drive cycles that, as a consequence, provide poor standards for fuel consumption.

6. Even though fuel is only a relatively small fraction of the total DoD budget, there are several compelling reasons to minimize DoD fuel use:

a. Fuel costs represent a large fraction of the 40-50 year life-cycle costs of mobility aircraft and non-nuclear ships. Note that this is consistent with the life-cycle costs of commercial airliners.

b. Fuel use is characterized by large multipliers and co-factors: at the simplest level, it takes fuel to deliver fuel.

c. Fuel use imposes large logistical burdens, operational constraints and liabilities, and vulnerabilities: otherwise capable offensive forces can be countered by attacking more-vulnerable logistical-supply chains. Part of this is because of changes in military doctrine. In the past, we used to talk of the “front line”, because we used to talk of the line that was sweeping ahead, leaving relatively safe terrain behind. This is no longer true. The rear is now vulnerable, especially the fuel supply line.

d. There are anticipated, and some already imposed, environmental regulations and constraints.

Not least, because of the long life of many DoD systems,

e. uncertainties about an unpredictable future make it advisable to decrease DoD fuel use to minimize exposure and vulnerability to potential unforeseen disruptions in world and domestic supply.

v

The JASONs conclude that the greatest leverage in reducing the DoD dependence on fossil fuel is through an optimization of patterns of use, e.g., planning and gaming, as well as the development of in-situ optimization tools of fuel use that would help planners and field officers choose between operational scenarios to minimize logistical support requirements by minimizing fuel consumption. Such tools for planning and for conducting operations could evolve and improve tactics, and enable significant reductions in fuel consumption, while improving military effectiveness at the same time.

The JASONs noted that little or no hard data are available on fuel consumption at the level of individual vehicles and vehicle types. Instrumenting an adequate fraction of vehicles with the equivalent of commercially available telemetry/logging vehicle-monitoring systems for fuel consumption, vehicle speed, acceleration, etc., e.g., equivalent to the GM “On-star” system, or the real-time fuel monitoring systems as in the Toyota Prius, Honda Accord, etc., would yield valuable database information and help establish realistic baselines against which vehicle mix and operational choices can be optimized with an eye towards fuel consumption.

Large fuel savings could potentially be achieved by considering and optimizing the unmanned platforms and systems to replace functionality of manned platforms and systems.

Other areas with high leverage, in order of importance, include:

1. Optimization of engine types for DoD missions and use patterns. Commercial hybrids are not optimized to DoD use patterns. Re-engine the M1A1 and M1A2 tanks, HMMWVs, B-52 bombers, etc. with modern engines designed and optimized for their pattern of use.

2. Lightweighting vehicles costs money but can return significant fuel savings and other benefits. The greatest potential weight savings are not in armor, but in design, structural materials, and components of the vehicle drive system, radiator, etc.

Alternative fossil-fuel derived fuels, e.g., Fisher-Tropsch liquid fuels from coal, etc., are more costly and less energy efficient than fuels produced by refining crude oil. If crude oil sources are, for some reason, not indicated, the next most-cost-effective method to achieve assured domestic fuels is Fisher-Tropsch on stranded natural gas, such as in Alaska, albeit with attendant Greenhouse Gas (GHG) emission burdens, unless carbon-sequestration measures are employed and prove efficacious and cost-effective. No scaleable biomass processes today can yield DoD-suitable fuels.

The key conclusions of the study are that, barring unforeseen circumstances, availability concerns are not a decision driver in the reduction of DoD fossil-fuel use at present. However, the need to improve logistics requirements and military capabilities, and, secondarily, the need to reduce fuel costs, as well as providing a prudent hedge against a foggy future, especially in the Middle East and South America, argue for a reduction in fuel use, in general.

We conclude by recommending that a more-in-depth analysis be undertaken that would consider future possibilities and scenarios that could invalidate these findings by altering the basic premise of no major upheavals in the next quarter-century, and the consequences to the DoD, indeed, to the nation, should such upheavals occur.

vi

The figure below summarizes world-wide oil movements (crude + refined products) and is extracted from the BP Statistical Review of World Energy (June 2006, page 21). The bottom figure depicts the U.S. imports distribution.

So

uth

& C

entr

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West

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0%

10%

20%

30%

40%

50%

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America Africa Middle East North Sea Russia

U.S. oil import sources (based on the 2005 BP data in the figure above).

1

I. Background and context In light of an increasing U.S. dependence on foreign oil, as well as rising fuel costs and implications with regard to national security and national defense, the JASONs were charged in 2006 by the DDR&E with assessing pathways that could enable a reduction of the DoD’s dependence on fossil fuels.

The study charge included the following tasks:

A. Explore technology options to reduce the DoD dependence on fossil fuels and/or increase energy efficiency of our operating forces. This assessment will include an assessment of alternative fuels and energy sources at DoD-required energy densities, e.g., exotic alternate fuels/biomass/cellulosic biofuels, hydrogen, shale oil, oil sands, geothermal, etc., and an assessment of the potential of structural shaping, structural mechanical design, and novel materials application in enhancing the survivability of lightweight vehicles.

B. Assess the viability of technologies to provide at least the performance required of current DoD platforms and the effort required to integrate the technology and achieve the desired level of performance. In particular, alternate fuels and energy sources are to be assessed in terms of multiple parameters, to include (but not limited to) stability, high- and low-temperature properties, water affinity, storage and handling.

C. Assess blast and penetration resistance in lightweight vehicles.

D. Analyze structures and materials designs that could be adapted for use on combat and utility vehicles, or other DoD platforms.

E. Defer detailed analyses of USAF energy/fuel use.

Part of the original study charge included a call for a study of energetic materials. That was addressed in a separate JASON 2006 study (Prentiss et al. JSR-06-130).

Prior studies on this general topic have been performed by the Defense Science Board (2001), by the Air Force Science Advisory Board (2005), and by other DoD advisory groups. These studies helped place the present study in context and provided an important input to the present study. Other studies for the DoD on this general topic are also in progress by the DSB and other groups at this time.

The JASON study focused more on Science and Technology aspects than on policy perspectives. In addition, the JASON study was performed within the context of the U.S. and global situation in 2006.

At present, U.S. crude oil imports provide 63% of domestic consumption and are slowly rising, public awareness or perception of climate change and global warming concerns attributable to fossil-fuel consumption are also rising, and there are tensions in the relationship between the U.S. and several countries with large proven oil reserves, both in the Middle East and South America (Venezuela, for example), as well as other regions of the world (cf. figures on page iv).

2

II. Briefings, discussions, and other input This was a large study by JASON standards with many dimensions requiring attention, examination, and analysis. We are grateful to the following briefers for their presentations, follow-up materials and conversations, and general assistance and insights.

26Jun06:

Ed Schaffer [ARL / OSD APTI]: Energy and Power Technology Initiative Update Marvin Wenberg [DESC, SC, USN]: DESC Overview William Voorhees [NAVAIR]: Department of the Navy Future Fuels for Tactical

Applications

27Jun06:

Charles Raffa [TARDEC]: Ground Vehicle Powertrains Ghasan Kahlil [TARDEC]: Army Hybrid Electric Efforts Anthony Nickens [ONR]: ONR Science and Technologies for Fuel Savings James Webster [NAVSEA]: Propulsion Methods for Surface Combatants Dieter Multhopp [AFRL]: Addressing Air Force Fuel Issues: Air Vehicle

Efficiency Chris Norden [AFRL]: Turbine Engine Technologies and Future Innovative

Opportunities for Fuel Efficiency Tim Edwards [AFRL]: Alternative Fuels

28Jun06:

Stan Horky [GM]: Current Development of Fuel-Cell Vehicles Ann Karagozian [AFSAB]: Technology Options for Improved Air Vehicle Fuel

Efficiency Paul Scott [ISE]: Advanced Power-Trains and Hydrogen-Fueled Hybrid Electric

Buses: Reporting on In-Service Experience and Fossil-Fuel Substitution. Bill van Amburg [Weststart-CALSTART]: Medium and Heavy Hybrid Vehicles: Field Experience and Commercial Development Scott Kochan [Ovonic Hydrogen]: Hydrogen ICES Vehicles

13Jul06:

Scott Schoenfeld [ARL]: Advances in Armor

17Jul06:

Tad Patzek [UC Berkeley]: The Real Biofuel Cycles Michael Wang [ANL]: Well-to-Wheels Analysis of Vehicle/Fuel Systems

20Jul06: (VTC) Robert Roche and Peter Melik [Army, AMSAA]: Fuel Consumption Modeling

and Support Insights

In addition, we would like to acknowledge the assistance and reference material provided by Prof. David Pimentel [Cornell U.] on biofuels and agricultural-sustainability issues and to Dr. Steven Koonin [BP], for providing otherwise difficult to obtain cost and other data to our study, as acknowledged specifically below.

3

III. Statement of the problem The JASON study was organized around the following series of questions: The first group of questions concerns the present:

1. Is there is a potential future shortage in (crude) oil supply to the DoD?

2. What are the national-security/national-defense implications of the global and domestic oil supply/demand picture?

3. Are present/anticipated DoD fuel costs a decision driver?

4. What are the logistical, operational, and tactical consequences of present DoD fuel-use patterns?

5. What are the main fuel-efficiency and conservation drivers? The second series of questions relates to the future:

6. How could DoD fuel-use reductions be realized and what advantages (e.g., financial, operational, and tactical) would be realized if these reductions were to be achieved?

7. How could one beneficially change tactics, CONOPs, use patterns, etc., in response to a reduction in fossil fuel consumption?

8. What technology options are available to the DoD to facilitate reductions in (fossil-) fuel use?

9. Where should DoD invest for the greatest return on investment?

4

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s fr

om ‘

blue

bar

rel

of o

il’ t

hat

deno

tes

the

colo

r of

sta

ndar

d co

ntai

ners

in th

e pa

st th

at h

eld

42 (

U.S

.) g

allo

ns.

6

7

• N

on-c

onve

ntio

nal

heav

y oi

l ha

s a

larg

e po

tent

ial

(som

e 10

00 B

bbl

betw

een

depo

sits

in

C

anad

a,

Ven

ezue

la

and

othe

r co

untr

ies)

at

$2

0-40

/bbl

, in

clud

ing

CO

2 an

d en

viro

nmen

tal-

miti

gatio

n co

sts,

e.g

., ca

rbon

cap

ture

and

st

orag

e (C

CS)

mea

sure

s.

• O

il sh

ales

bec

ome

econ

omic

al a

t $2

5/bb

l an

d a

sign

ific

ant

port

ion

of t

hose

res

ourc

es c

an b

e ex

ploi

ted

at l

ess

than

$7

0/bb

l, in

clud

ing

CO

2 an

d en

viro

nmen

tal-

miti

gatio

n co

sts.

The

se e

stim

ates

are

illu

stra

ted

on p

age

6. I

n th

e to

p fi

gure

, the

ve

rtic

al

axis

sh

ows

oil

pric

e at

w

hich

th

e ex

ploi

tatio

n of

va

riou

s re

sour

ce

volu

mes

be

com

es

econ

omic

al,

taki

ng

into

ac

coun

t th

e co

st o

f ca

ptur

e an

d st

orag

e of

CO

2 pr

oduc

ed i

n th

e ex

trac

tion

of n

on-c

onve

ntio

nal

oils

. T

he h

oriz

onta

l ax

is s

how

s cu

mul

ativ

e re

sour

ces.

In

cont

rast

with

cla

ssic

cos

t cu

rves

, th

is

pres

enta

tion

faci

litat

es a

lin

k w

ith t

he t

ype

of r

esou

rces

and

th

eref

ore

with

th

e di

ffer

ent

tech

nolo

gies

re

quir

ed.

It

also

un

derl

ines

tha

t su

ch p

roje

ctio

ns a

re n

ot a

n ex

act

scie

nce

and

that

onl

y a

rang

e of

cos

ts c

an b

e pr

ojec

ted.

The

bar

lab

eled

“W

EO

est

. req

uire

d to

tal

need

to

2030

” sh

ows

the

cum

ulat

ive

oil

dem

and

expe

cted

bet

wee

n 20

03 a

nd 2

030

acco

rdin

g to

the

IE

A W

orld

Ene

rgy

Out

look

(W

EO

) 20

04.

Thi

s pr

ovid

es a

us

eful

“sc

ale”

for

leve

ls o

f av

aila

ble

oil.

The

bot

tom

fig

ure

depi

cts

the

sam

e da

ta in

a d

iffe

rent

way

. The

ho

rizo

ntal

axi

s re

pres

ents

oil-

prod

uctio

n co

st a

nd t

he v

ertic

al

axis

the

cor

resp

ondi

ng c

umul

ativ

e ec

onom

ical

ly e

xplo

itabl

e re

sour

ces.

A

t th

e tim

e of

th

at

asse

ssm

ent

(200

4),

mos

t co

mpa

nies

bas

ed th

eir

inve

stm

ent d

ecis

ions

on

a lo

ng-t

erm

cos

t of

$20

-25/

bbl.

The

gra

ph s

ugge

sts

that

acc

eptin

g a

long

-ter

m

prod

uctio

n co

st o

f $3

0-35

/bbl

, for

exa

mpl

e, w

ould

hav

e a

larg

e im

pact

on

econ

omic

ally

ava

ilabl

e fu

ture

res

erve

s.

If r

esou

rces

bec

ome

econ

omic

al a

t a

give

n pr

ice,

allo

win

g fo

r no

rmal

ret

urn

on i

nves

tmen

t, th

is d

oes

not

nece

ssar

ily m

ean

they

will

be

expl

oite

d. O

ther

fac

tors

, how

ever

, com

e in

to p

lay:

dem

and;

com

peti

tion

fro

m m

ore

appe

alin

g in

vest

men

ts;

• re

gula

tion

s; ta

x, o

ther

ince

ntiv

es, a

nd r

oyal

ty f

ram

ewor

ks;

• ac

cess

to r

esou

rces

; and

geop

oliti

cal f

acto

rs.

Thi

s m

eans

the

pri

ce l

evel

s in

dica

ted

are

nece

ssar

y bu

t no

t (s

olel

y) s

uffi

cien

t to

gua

rant

ee t

hat

a pa

rtic

ular

res

ourc

e w

ill

cont

ribu

te t

o w

orld

sup

plie

s. A

lso,

the

se f

igur

es a

re b

ased

on

long

-ter

m,

sust

aine

d pr

ices

, no

t te

mpo

rary

pe

ak-o

f-cy

cle

pric

es,

and

they

ass

ume

long

-ter

m c

osts

for

equ

ipm

ent

and

serv

ices

. T

he l

atte

r co

sts

also

go

thro

ugh

cycl

es a

nd h

ave

incr

ease

d co

nsid

erab

ly b

etw

een

2003

and

200

5.3

JASO

N a

gree

s th

at, a

t le

ast

over

the

nex

t 25

yea

rs a

nd b

arri

ng

unfo

rese

en c

ircu

mst

ance

s, l

onge

r-te

rm m

arke

t m

echa

nism

s ar

e lik

ely

to r

emov

e tig

htne

ss i

n th

e su

pply

and

dem

and

bala

nce,

en

hanc

ing

the

supp

ly c

hain

. C

avea

ts s

tem

fro

m t

he i

ncre

asin

g in

stab

ility

in

th

e M

iddl

e E

ast

and

the

rise

of

na

tiona

l oi

l co

mpa

nies

(N

OC

s) t

hat

pres

ently

dom

inat

e th

e w

orld

sup

ply

chai

n in

rec

ent y

ears

.4

3 T

he e

xpla

nato

ry te

xt o

n th

e da

ta d

epic

ted

in th

e fi

gure

s on

pag

e 6

is b

ased

on

IE

A m

ater

ial r

elay

ed to

the

JASO

N s

tudy

team

by

S. K

ooni

n [B

P].

4 T

he n

atio

naliz

atio

n of

Pet

róle

os d

e V

enez

euel

a (P

DV

SA)

unde

r H

ugo

Cha

vez

and

the

repl

acem

ent

of l

ocal

and

for

eign

pro

fess

iona

ls t

han

ran

it re

port

edly

re

sulte

d in

co

nsid

erab

le

dam

age

to

the

high

-mai

nten

ance

V

enez

uela

n oi

l fi

elds

, pe

rhap

s pe

rman

ently

re

mov

ing

as

muc

h as

0.

4 M

bbl/d

ay f

rom

the

wor

ld p

rodu

ctio

n (E

cono

mis

t, 12

Aug

06).

8

9

The

wor

ld c

urre

ntly

con

sum

es 8

5 M

bbl (

Mbb

l = 1

06 bbl

) of

oil

per

day.

5 T

he

Inte

rnat

iona

l E

nerg

y A

genc

y (I

EA

) W

orld

E

nerg

y O

utlo

ok (

WE

O)

proj

ectio

ns,

assu

min

g a

reas

onab

le

infl

ator

for

the

fut

ure

that

ris

es t

o a

wor

ld-w

ide

dem

and

of

100

Mbb

l/day

of

oil

aver

aged

ove

r th

e ne

xt 2

5 ye

ars,

pro

ject

a

dem

and

for

the

next

25

year

s of

ano

ther

~1

Tbb

l of

oil:

Hen

ce,

as m

uch

oil

will

be

need

ed i

n th

e ne

xt 2

5-30

yea

rs a

s ha

s be

en

prod

uced

cum

ulat

ivel

y to

dat

e ov

er t

he l

ast

150

year

s.

Such

gr

owth

ca

n no

t be

su

stai

ned

inde

fini

tely

an

d pr

ojec

tions

be

yond

a 2

5-ye

ar s

pan

mus

t be

rega

rded

as

spec

ulat

ive.

The

WE

O d

ata

depi

cted

on

page

6 i

ndic

ate

that

oil

dem

and

for

the

next

25

year

s ca

n be

met

at

a 20

04 p

rodu

ctio

n co

st u

nder

$3

0/bb

l. T

hese

dat

a al

so i

ndic

ate

that

a s

imil

ar d

eman

d ca

n be

m

et f

or a

n ad

ditio

nal

25 y

ears

, w

ith t

he a

dditi

onal

cav

eat

that

ex

trap

olat

ions

to 5

0 ye

ars

henc

e ar

e of

que

stio

nabl

e va

lue.

Not

ewor

thy

is t

hat

wor

ld-m

arke

t cr

ude-

oil

pric

es a

re c

urre

ntly

m

uch

high

er t

han

crud

e oi

l pr

oduc

tion

cost

s.

Thi

s re

flec

ts a

pr

ice

prem

ium

com

man

ded

by a

num

ber

of f

acto

rs,

incl

udin

g pr

ofit

that

can

be

sust

aine

d by

the

pre

sent

sup

ply-

dem

and

bala

nce

and

the

limite

d cu

rren

t su

pply

m

argi

nal

capa

city

re

lativ

e to

dem

and,

geo

polit

ical

-ris

k co

nsid

erat

ions

suc

h as

the

pr

esen

t si

tuat

ion

in t

he M

iddl

e E

ast

and

Ven

ezue

la,

and

a nu

mbe

r of

oth

er f

acto

rs.

For

ref

eren

ce,

acco

rdin

g to

the

U.S

. E

nerg

y In

form

atio

n A

genc

y (E

IA),

a $

30/b

bl p

rodu

ctio

n co

st

in a

glo

bal

com

mod

ity s

uch

as c

rude

oil

shou

ld,

in t

he l

ong

term

, sho

uld

resu

lt in

cru

de p

rice

s in

the

rang

e of

$40

-45/

bbl.

5 W

orld

pri

mar

y en

ergy

con

sum

ptio

n in

crea

sed

by 2

.7%

in 2

005.

Coa

l was

th

e w

orld

’s f

aste

st-g

row

ing

fuel

, in

crea

sing

by

5% i

n 20

05,

with

Chi

na

acco

untin

g fo

r 80

% o

f gl

obal

gro

wth

. B

P S

tati

stic

al R

evie

w o

f W

orld

E

nerg

y (J

anua

ry 2

006)

.

Coa

l an

d na

tura

l ga

s re

sour

ces

are

not

incl

uded

in

this

gra

ph.

Hen

ce,

the

reso

urce

bas

e fo

r co

nver

sion

of

foss

il en

ergy

int

o liq

uid

fuel

s is

pot

entia

lly e

ven

larg

er t

han

show

n he

re.

Thi

s w

ill b

e di

scus

sed

in g

reat

er d

etai

l bel

ow.

Est

imat

ed U

.S. f

ossi

l re

sour

ces,

i.e

., oi

l, en

hanc

ed o

il re

cove

ry

(EO

R),

coa

l, sh

ale,

nat

ural

gas

(N

G),

etc

., am

ount

to

abou

t 2

Tbb

l, i.e

., ap

prox

imat

ely

260

year

s w

orth

of

reso

urce

s at

the

pr

esen

t co

nsum

ptio

n ra

te o

f 7.

5 B

bbl

of o

il pe

r ye

ar.

As

note

d la

ter,

how

ever

, the

con

vers

ion

of s

uch

reso

urce

s to

liq

uid

fuel

s re

quir

es

othe

r re

sour

ces,

su

ch

as

ener

gy6

and

cons

ider

able

am

ount

s of

cle

an w

ater

, an

d th

e pr

oduc

tion

of,

in s

ome

case

s,

cons

ider

able

gre

en-h

ouse

gas

(G

HG

) em

issi

ons.

B

. D

omes

tic

foss

il en

ergy

per

spec

tive

As

depi

cted

in

the

figu

re o

n pa

ge 8

, th

e U

.S.

cons

umes

abo

ut

one

quar

ter

of t

he w

orld

’s o

il pr

oduc

tion.

O

ne c

an s

ee t

he

effe

cts

of H

urri

cane

Kat

rina

as

the

smal

l re

duct

ion

in U

.S.

supp

ly d

urin

g th

e su

mm

er o

f 20

05.

The

dat

a w

ere

com

pile

d by

JA

SON

cor

resp

ondi

ng t

o nu

mbe

rs p

ublis

hed

for

annu

al t

otal

s pr

ior

to 2

005,

and

qua

rter

ly t

here

afte

r by

the

EIA

. T

he s

light

de

viat

ion

betw

een

the

wor

ld p

rodu

ctio

n an

d co

nsum

ptio

n lin

es

in t

he g

raph

occ

urs

beca

use

a si

gnif

ican

t fr

actio

n of

oil

is i

n tr

ansi

t an

d st

orag

e at

any

one

tim

e.

The

re a

re a

lso

seas

onal

ad

just

men

ts.

6

Typ

ical

ly,

conv

ersi

on

ener

gy

requ

irem

ents

ar

e m

et

by

burn

ing

the

feed

stoc

k, e

.g.,

natu

ral

gas,

or

coal

, al

beit

with

an

atte

ndan

t de

crea

se i

n en

ergy

eff

icie

ncy

rela

tive

to s

tart

ing

with

cru

de o

il as

a s

ourc

e, f

or

exam

ple,

and

an

incr

ease

d G

HG

pro

duct

ion

burd

en.

Suc

h is

sues

will

be

asse

ssed

and

dis

cuss

ed la

ter.

10

11

As

alre

ady

note

d, p

rese

nt o

il pr

ices

are

sig

nifi

cant

ly h

ighe

r th

an th

e co

st o

f pr

oduc

tion,

pri

mar

ily b

ecau

se d

eman

d is

ahe

ad

of s

uppl

y.

Thi

s is

exa

cerb

ated

by

inst

abili

ty i

n th

e pa

rts

of t

he

wor

ld c

ontr

ibut

ing

to o

il pr

oduc

tion.

T

he m

arke

t pr

ice

of o

il,

defi

ned

by th

e fu

ture

s m

arke

t, bu

ilds

into

it a

pre

miu

m h

edgi

ng

agai

nst

unan

ticip

ated

re

duct

ion

in

prod

uctio

n fr

om

such

po

litic

al i

nsta

bilit

ies

and

othe

r fa

ctor

s.

With

oil

dem

and

clos

e to

sup

ply,

sm

all

redu

ctio

ns i

n su

pply

, w

heth

er b

y ac

cide

nt,

wea

ther

, em

barg

o, o

r w

ar, d

ram

atic

ally

aff

ect o

il m

arke

ts.

The

spr

ead

betw

een

the

pric

e of

cru

de a

nd r

efin

ed p

rodu

cts

in

abso

lute

te

rms

is

also

ri

sing

fo

r th

ree

reas

ons.

Ref

inin

g ca

paci

ty i

s pr

esen

tly c

lose

r to

dem

and.

W

hile

U.S

. re

fine

ry

capa

city

an

d ef

fici

ency

ha

ve

incr

ease

d in

th

e la

st

quar

ter

cent

ury,

no

new

U.S

. re

fine

ries

hav

e be

en b

uilt

in t

he l

ast

30

year

s.

Seco

nd,

the

incr

easi

ng m

ix i

n hi

gh-s

ulfu

r Sa

udi

oil

incr

ease

s re

fini

ng c

osts

if

sulf

ur c

onte

nt i

s to

be

cont

rolle

d.

Fina

lly, p

art o

f th

e sp

read

is s

cale

d by

the

pric

e of

oil

itsel

f.

At

pres

ent,

the

U.S

. us

es 7

.5 B

bbl/y

ear

of c

rude

oil.

Gro

ss

impo

rts

cove

r 63

% o

f U

.S.

cons

umpt

ion.

T

his

is c

ompa

rabl

e (±

10%

) to

the

fra

ctio

n of

im

port

ed o

il fo

r E

urop

e an

d C

hina

. In

con

tras

t, Ja

pan

impo

rts

90%

of

its o

il.7

U.S

. con

sum

ptio

n is

7

The

sig

nifi

canc

e of

oil

impo

rts

in n

atio

nal

and

regi

onal

eco

nom

ies,

suc

h as

th

e E

.U.,

is

a st

rong

fu

nctio

n of

th

e co

rres

pond

ing

bala

nce

of

paym

ents

. T

he E

.U.

as a

who

le,

Chi

na,

and

Japa

n ar

e ne

t ex

port

ers

(pos

itive

bal

ance

of

paym

ents

) an

d, a

s a

cons

eque

nce,

the

mai

n lo

ng-t

erm

co

ncer

ns f

ocus

on

avai

labi

lity

of c

rude

-oil

supp

lies

and

tran

spor

tatio

n ro

utes

, and

not

on

thei

r ec

onom

ic c

onse

quen

ces.

T

his

is n

ot t

he c

ase

for

the

U.S

., as

dis

cuss

ed b

elow

. A

lso

note

wor

thy

is t

hat

Chi

na’s

bal

ance

of

paym

ents

is

actu

ally

neg

ativ

e w

ith r

espe

ct t

o th

e re

st o

f th

e w

orld

, bu

t

incr

easi

ng a

t a

rate

of

0.5-

1% p

er y

ear,

wit

h re

cent

inc

reas

es

clos

er t

o th

e lo

wer

bou

nd.

E.U

. co

nsum

ptio

n is

inc

reas

ing

at

half

the

rate

of

incr

ease

of

the

U.S

. con

sum

ptio

n, w

hile

Chi

na’s

is

incr

easi

ng 6

tim

es f

aste

r th

an th

e U

.S. c

onsu

mpt

ion.

The

pea

k in

U.S

. oi

l pr

oduc

tion,

gen

eral

ly d

enot

ed a

s “p

eak

U.S

. oil”

, has

oft

en b

een

inte

rpre

ted

to in

dica

te th

at th

e am

ount

of

oil

that

can

be

extr

acte

d fr

om U

.S.

soil

is i

n ir

reve

rsib

le

decl

ine.

H

owev

er,

the

part

icul

ar p

eak

is m

ore

dire

ctly

rel

ated

to

the

int

rodu

ctio

n at

the

tim

e of

ine

xpen

sive

for

eign

oil

(<

FY05

$ 4/

bbl

prod

uctio

n co

sts)

, mos

tly

from

Sau

di A

rabi

a, i

nto

the

wor

ld m

arke

t. R

ecen

t eco

nom

ic d

rive

rs f

avor

red

ucti

ons

of

dom

estic

pro

duct

ion,

with

for

eign

sou

rces

of

oil

avai

labl

e at

lo

wer

pr

ices

.

Des

pite

th

e on

goin

g de

plet

ion

of

the

U.S

. re

sour

ce,

dom

estic

pr

oduc

tion

is

prim

arily

dr

iven

by

ec

onom

ics

and

perh

aps

seco

ndar

ily b

y ge

olog

ical

con

stra

ints

.8 C

onve

rsel

y,

risi

ng

oil

(and

ot

her)

im

port

s,

unba

lanc

ed

by

com

men

sura

te i

ncre

ases

in

expo

rts,

tra

nsla

te i

nto

a ba

lanc

e-of

-pa

ymen

ts is

sue

for

the

U.S

.

Not

ewor

thy

is

the

2005

U

.S.

impo

rt

sour

ce

dist

ribu

tion

(pag

e iv

),

with

th

e re

mai

nder

of

th

e A

mer

ican

co

ntin

ent

cont

ribu

ting

51.1

%,

Afr

ica

19.1

%,

the

Mid

dle

Eas

t 18

%,

and

the

bala

nce

from

the

Nor

th S

ea a

nd R

ussi

a.

po

sitiv

e ov

eral

l, w

hen

the

larg

e an

d po

sitiv

e im

port

-exp

ort

bala

nce

with

re

spec

t to

the

U.S

. is

incl

uded

(FY

2004

dat

a).

8 T

hat

said

, it

is u

nlik

ely

that

fut

ure

U.S

. pr

oduc

tion

will

ris

e to

val

ues

high

er th

an th

e pa

st p

eak

befo

re th

e 19

80s.

12

13

The

gra

ph o

n pa

ge 1

0 al

so i

ndic

ates

the

dra

mat

ic r

educ

tion

in

dom

estic

con

sum

ptio

n in

the

ear

ly 1

980s

, in

resp

onse

to

stro

ng

pric

ing

sign

als

(cf.

fig

ure

on p

. 61)

. T

he d

eclin

e w

as i

n pa

rt

beca

use

of c

onse

rvat

ion

and

in p

art

beca

use

of t

he t

rans

ition

fr

om o

il-fi

red

to c

oal-

fire

d el

ectr

ic p

ower

pla

nts.

9 The

dat

a fr

om

the

1980

s al

so

dem

onst

rate

th

e ab

ility

to

re

duce

oi

l co

nsum

ptio

n in

res

pons

e to

suf

fici

ently

sev

ere

pric

e si

gnal

s on

oi

l, ev

en t

houg

h a

sim

ilar

sw

itch

from

con

sum

ptio

n of

oil

in

the

pow

er s

ecto

r is

no-

long

er a

vaila

ble.

N

otew

orth

y is

tha

t th

e re

spon

se t

o th

e ec

onom

ic i

mpe

tus

of t

he p

rice

hik

es r

equi

red

abou

t 5

year

s. A

lso

note

wor

thy

is t

hat,

at p

rese

nt,

even

in

the

face

of

high

ret

ail

gaso

line

pric

es, U

.S. o

il c

onsu

mpt

ion

is a

t a

reco

rd h

igh.

T

his

indi

cate

s ei

ther

tha

t th

e ca

paci

ty t

o re

duce

co

nsum

ptio

n w

as e

xhau

sted

larg

ely

by d

e-em

phas

is o

f cr

ude

in

the

elec

tric

-pow

er-p

rodu

ctio

n se

ctor

in

the

1980

’s, t

hat

curr

ent

pric

es a

re i

nsuf

fici

ently

hig

h to

spu

r si

gnif

ican

t co

nser

vatio

n ef

fort

s, o

r th

at t

he t

ime

requ

ired

to

resp

ond

to t

he p

rice

cha

nge

at t

his

time

is l

onge

r th

an h

as a

lrea

dy t

rans

pire

d.

How

ever

, pr

oduc

tion

of h

igh

fuel

-con

sum

ptio

n ve

hicl

es (

e.g.

, SU

Vs)

is in

de

clin

e, a

t pre

sent

. C

. D

oD f

ossi

l ene

rgy

pers

pect

ive

1.

U.S

. pro

duct

ion

and

DoD

con

sum

ptio

n

The

fi

gure

s on

pa

ges

10

and

14

indi

cate

th

at

the

U.S

. G

over

nmen

t co

nsum

es 1

.9%

of

the

oil

cons

umed

by

the

rest

of

the

coun

try.

Fu

rthe

rmor

e, t

he D

oD a

ccou

nts

for

93%

of

the

9

Thi

s tr

ansi

tion

occu

rred

with

an

atte

ndan

t in

crea

se i

n gr

een-

hous

e ga

s (G

HG

) em

issi

ons,

per

kW

h of

ele

ctri

cal

pow

er p

rodu

ced.

A

t pr

esen

t, al

mos

t no

oil-

fire

d el

ectr

ic p

ower

pla

nts

are

oper

ated

in th

e U

.S.

U.S

. Gov

ernm

ent c

onsu

mpt

ion.

Fo

r re

fere

nce,

DoD

con

sum

ed

0.36

Mbb

l/day

in F

Y05

, or

133

Mbb

l tha

t yea

r.

DoD

fu

el

use

both

in

th

e co

ntin

enta

l U

.S.

(CO

NU

S)

and

abro

ad (

out

of C

ON

US,

or,

OC

ON

US)

, as

rep

orte

d by

the

D

efen

se E

nerg

y Su

ppor

t C

ente

r (D

ESC

), i

s a

rela

tivel

y sm

all

frac

tion

of t

he t

otal

dom

estic

cur

rent

cru

de-o

il pr

oduc

tion

rat

e (c

f. f

igur

e on

p. 1

2).

The

ann

ual

DoD

cru

de o

il co

nsum

ptio

n ca

n be

cov

ered

by

the

tota

l an

nual

pro

duct

ion

of t

wo

Gul

f of

M

exic

o oi

l pl

atfo

rms

(Thu

nder

hors

e an

d A

tlant

is),

or

by a

sm

all

frac

tion

of C

alif

orni

a an

d A

lask

a pr

oduc

tion,

at

pres

ent.

Thu

nder

hors

e is

a

plat

form

th

at

cost

~$

3B,

size

d fo

r a

0.25

Mbb

l/day

pro

duct

ion,

and

whi

ch i

s pr

esen

tly p

rodu

cing

, ap

prox

imat

ely,

90

Mbb

l/yea

r.

If t

here

wer

e re

al s

uppl

y is

sues

fo

r th

e D

oD,

the

depa

rtm

ent

coul

d, i

n pr

inci

ple,

pur

chas

e a

Gul

f oi

l pl

atfo

rm f

or a

n as

sure

d su

pply

for

man

y ye

ars,

at

an

amor

tized

pro

duct

ion

cost

of

unde

r $3

0/bb

l, as

is

done

by

the

larg

e co

mm

erci

al o

il pr

oduc

tion

firm

s at

pre

sent

, ev

en t

houg

h th

at is

har

dly

advi

sabl

e.

In t

his

cont

ext,

the

tota

l de

ep w

ater

Gul

f of

Mex

ico

prod

uctio

n is

1.5

Mbb

l/day

. Pr

oduc

tion

from

the

Nor

th S

lope

of

Ala

ska

is,

appr

oxim

atel

y, 1

Mbb

l/day

. H

ence

, to

tal

DoD

nee

ds c

ould

be

prov

ided

fro

m a

por

tion

of t

he p

rodu

ctio

n of

jus

t on

e of

the

se

regi

ons

of

the

U.S

.

Thu

s,

even

th

ough

63

%

of

US

oil

cons

umpt

ion

is d

eriv

ed f

rom

im

port

s, i

t do

es n

ot f

ollo

w t

hat

a do

mes

tic-s

uppl

y su

pply

sho

rtag

e fo

r D

oD is

inev

itabl

e. I

n fa

ct,

pres

ent-

day

DoD

re

quir

emen

ts

are

rela

tivel

y m

odes

t w

hen

com

pare

d no

t onl

y to

the

pres

ent n

atio

nal-

cons

umpt

ion

rate

but

al

so w

hen

com

pare

d w

ith th

e pr

esen

t dom

estic

-pro

duct

ion

rate

.

14

15

We

note

tha

t th

ese

infe

renc

es a

ssum

e re

lativ

ely

stab

le D

oD

mis

sion

req

uire

men

ts,

e.g.

, m

issi

ons

no m

ore

dem

andi

ng o

f fo

ssil

fuel

s th

an t

he c

urre

nt I

raqi

con

flic

t. J

ASO

N h

as n

ot

anal

yzed

th

e co

nseq

uenc

es

on

foss

il-fu

el

avai

labi

lity

of

a fu

ture

, WW

II-s

cale

DoD

mis

sion

. Pr

esum

ably

, suc

h a

conf

lict

wou

ld

requ

ire

and

indu

ce

cons

ider

able

na

tiona

l sa

crif

ice,

in

clud

ing

civi

lian

rest

rict

ions

on

acce

ss t

o pe

trol

eum

pro

duct

s,

and

is n

ot c

onsi

dere

d as

par

t of

thi

s st

udy

and

repo

rt.

Furt

her,

th

e an

alys

es a

bove

als

o as

sum

e no

maj

or w

orld

-wid

e up

heav

als

that

cou

ld d

isru

pt e

ither

sup

plie

s fr

om, s

ay, t

he M

iddl

e E

ast

or

Ven

ezue

la,

or

mai

n cr

ude-

oil

or

refi

ned

oil-

prod

uct

tran

spor

tatio

n co

rrid

ors.

10 O

ther

than

to n

ote

that

suc

h sc

enar

ia

cann

ot b

e ex

clud

ed a

t th

is t

ime

and

to n

ote

the

sign

ific

ant

cons

eque

nces

on

the

DoD

and

the

nat

ion

they

wou

ld i

mpl

y,

they

wer

e no

t con

side

red

as p

art o

f th

e pr

esen

t JA

SON

stu

dy.

Inst

abili

ty i

n th

e pr

ice

of o

il pr

ovid

es a

n im

port

ant

budg

etar

y im

pact

of

foss

il-fu

el u

se o

n D

oD.

Whi

le p

rese

nt f

uel

cost

s re

pres

ent

a sm

all

part

of

the

over

all

DoD

bud

get,

at c

urre

nt

cons

umpt

ion

rate

s,

for

ever

y $1

0/bb

l ri

se

in

pric

e,

DoD

re

quir

es a

n ad

ditio

nal $

1.5B

in it

s an

nual

bud

get.

The

re a

re, i

n ge

nera

l, tw

o w

ays

to d

eal

with

thi

s is

sue.

O

ne i

s to

red

uce

DoD

dem

and,

whi

ch is

dis

cuss

ed b

elow

. T

he s

econ

d is

to

atte

mpt

to

beat

the

com

mer

cial

mar

ket

pric

e at

any

one

tim

e in

curr

ing

som

e m

arke

t ri

sk b

y en

teri

ng i

nto

long

-ter

m

cont

ract

s, o

r he

dgin

g ag

ains

t fu

ture

pri

ces

of c

rude

oil

on t

he

wor

ld m

arke

t.

10

The

rec

ent

tens

ions

and

dis

agre

emen

ts b

etw

een

Rus

sia

and

the

Ukr

aine

ov

er t

he R

ussi

an n

atur

al-g

as p

ipel

ine

over

Ukr

aine

had

an

imm

edia

te

impa

ct o

n th

e E

.U.’

s na

tura

l-ga

s su

pplie

s an

d ou

tlook

.

2.

DoD

dem

and

brea

kdow

n by

ser

vice

and

fuel

use

The

dem

and

for

petr

oleu

m i

n th

e D

oD b

y se

rvic

e an

d by

use

is

now

ass

esse

d. A

s de

pict

ed o

n pa

ge 1

4, th

e U

.S. g

over

nmen

t, at

pr

esen

t, ac

coun

ts f

or 1

.9%

of

the

tota

l oi

l co

nsum

ed b

y th

e co

untr

y.

DoD

con

sum

ptio

n re

pres

ents

93%

of

the

tota

l U

.S.

gove

rnm

ent

cons

umpt

ion.

W

ithin

DoD

, th

e U

.S.

Air

For

ce i

s th

e la

rges

t co

nsum

er o

f pe

trol

eum

pro

duct

s, i

ts 7

5 M

bbl/y

ear

amou

ntin

g to

57%

of

DoD

con

sum

ptio

n.

Seco

nd i

s th

e N

avy,

w

ith 3

3% o

f to

tal

DoD

con

sum

ptio

n, f

ollo

wed

by

the

Arm

y (9

%)

and

the

Mar

ines

( <

1%

).

The

se f

igur

es a

re s

kew

ed b

y th

e fa

ct t

hat

som

e pa

rt o

f th

e U

.S.

Air

For

ce’s

use

of

jet

fuel

is

cons

umed

mov

ing

the

Arm

y an

d su

pply

ing

the

Nav

y.

JASO

N w

as n

ot a

ble

to o

btai

n th

ese

num

bers

and

we

reco

mm

end

that

suc

h ac

coun

ting

shou

ld b

e im

plem

ente

d to

hel

p pr

ovid

e th

e ba

sis

for

a us

eful

bud

geta

ry

plan

ning

tool

.

With

in t

he A

ir F

orce

, th

e la

rges

t sh

are

of f

uel

(54.

2%)

is

cons

umed

by

tank

ers

and

tran

spor

ts.

Fig

hter

s ac

coun

t fo

r 30

.1%

of

the

fuel

, bo

mbe

rs f

or 7

.1%

, an

d tr

aine

rs f

or 4

.2%

. M

oder

n co

mpu

ter-

base

d sy

stem

s ca

n he

lp d

ecre

ase

the

latte

r fu

rthe

r.

For

refe

renc

e, J

P-8,

the

pri

mar

y fu

el u

sed

by t

he A

ir F

orce

, co

st $

0.91

/gal

in

FY04

but

ros

e to

$2.

58/g

al i

n FY

06,

i.e.,

a fa

ctor

of

over

2.8

in ju

st tw

o ye

ars.

11

11

Com

mer

cial

avi

atio

n ha

s be

en f

aced

with

sim

ilar

fuel

pri

ce i

ncre

ases

, as

as

sess

ed a

nd d

iscu

ssed

bel

ow.

16

17

The

Def

ense

Ene

rgy

Supp

ort

Cen

ter

(DE

SC)

is r

espo

nsib

le f

or

the

proc

urem

ent,

tran

spor

tatio

n,

owne

rshi

p,

acco

unta

bilit

y,

budg

etin

g, q

ualit

y as

sura

nce,

and

qua

lity

surv

eilla

nce

of a

ll pe

trol

eum

pr

oduc

ts

used

by

th

e D

oD.

In

FY

05,

DE

SC

di

stri

bute

d 13

3 M

bbl o

il.

Acc

ordi

ng t

o da

ta p

rovi

ded

by D

ESC

and

ava

ilabl

e on

the

ir

Web

site

, m

obili

ty f

uels

rep

rese

nt t

he p

repo

nder

ant

frac

tion

of

DoD

fue

l us

e.

The

se m

obili

ty f

uels

are

dom

inat

ed b

y di

esel

fu

el, a

nd J

P-5

and

JP-8

. T

he la

tter

repr

esen

ts t

he la

rges

t sin

gle

com

pone

nt,

by

cate

gory

, of

fu

el

supp

lied.

JP

-5

is

a N

avy

ship

boar

d je

t fu

el w

ith a

hig

her

flas

h po

int

tem

pera

ture

tha

n JP

-8.

The

fla

sh t

empe

ratu

re,

Tfl

ash,

for

JP-

5 is

+60

°C (

140°

F),

whe

reas

Tfl

ash

for

JP-8

is

+38

°C (

100°

F).

Alth

ough

JP-

5 co

sts

slig

htly

mor

e th

an J

P-8,

it is

use

d on

shi

ps f

or s

afet

y re

ason

s.

JASO

N n

otes

that

, exc

ludi

ng o

il pu

rcha

ses/

deliv

erie

s on

beh

alf

of T

F-R

IO,12

DoD

fue

l co

nsum

ptio

n de

crea

sed

cont

inuo

usly

in

the

FY03

-05

peri

od.

Furt

her

decr

ease

s in

fue

l co

nsum

ptio

n by

the

U.S

. A

ir F

orce

, th

e la

rges

t co

nsum

er,

are

also

ant

icip

ated

, as

the

num

ber

of

airc

raft

in

the

U.S

. Air

For

ce i

nven

tory

dec

reas

es i

n th

e fu

ture

, as

dis

cuss

ed b

elow

.

12 T

F-R

IO i

s th

e 20

04 T

ask

Forc

e -

Res

tore

Ira

qi O

il th

at p

rovi

ded

oil

to

Iraq

.

18

19

Jet A

and

Jet

A-1

, th

e do

min

ant

com

mer

cial

avi

atio

n fu

els,

di

ffer

onl

y by

thei

r re

spec

tive

free

zing

poi

nts,

whi

ch a

re −

40°C

fo

r Je

t A

and

−47

°C f

or J

et A

-1,

and

in t

heir

fla

sh p

oint

s, a

s di

scus

sed

abov

e.

Whi

le t

here

are

min

or d

iffe

renc

es i

n an

d su

bsta

ntia

l ov

erla

p be

twee

n w

orld

-wid

e co

mm

erci

al a

viat

ion

fuel

del

iver

y sp

ecif

icat

ions

,13 m

ost

com

mer

cial

avi

atio

n fu

els

toda

y m

eet t

he J

et A

-1 s

peci

fica

tion.

One

can

obt

ain

JP-8

and

JP-

8 +

100

from

Jet

A a

nd J

et A

-1

thro

ugh

the

use

of a

dditi

ves.

A

ddin

g a

fuel

sys

tem

ici

ng

inhi

bito

r, a

cor

rosi

on i

nhib

itor/

lubr

icity

im

prov

er,

and

an a

nti-

stat

ic a

dditi

ve t

o Je

t A

-1,

yiel

ds t

he m

ilita

ry J

P-8.

Fu

rthe

r ad

ding

a d

ispe

rsan

t, an

ant

i-ox

idan

t, an

d a

met

al d

eact

ivat

or t

o JP

-8 y

ield

s JP

-8 +

100,

whi

ch a

dds

an a

dditi

onal

100

°F t

o th

e op

erat

iona

l ra

nge

of J

P-8.

In

tot

al,

thes

e ad

ditiv

es c

ost

at

pres

ent,

appr

oxim

atel

y, $

0.05

per

gal

lon

of f

uel.

Oil

refi

neri

es

tend

to

re

alig

n th

eir

dist

ribu

tion

of

refi

ned

prod

ucts

eve

ry f

ew d

ays.

If

the

DoD

has

an

unus

ually

lar

ge

need

for

JP-

8, D

oD c

an i

nduc

e th

e re

fine

ries

to

prod

uce

mor

e JP

-8 f

rom

the

ir c

omm

erci

al a

viat

ion

fuel

str

eam

at

a no

min

al

incr

ease

d co

st o

f, a

ppro

xim

atel

y, $

0.05

/gal

.

If D

oD i

s op

erat

ing

in a

par

t of

the

wor

ld w

here

JP-

8 is

un

avai

labl

e, i

t co

uld

prod

uce

JP-8

for

its

use

by

the

addi

tion

of

13

By

way

of

exam

ple,

a q

uest

ion

that

aro

se i

n th

e in

vest

igat

ion

of t

he

TW

A-8

00 a

ccid

ent o

n 17

Jul

y 19

96 is

whe

ther

the

(rem

aini

ng)

fuel

in th

e ai

rcra

ft’s

cen

tral

tan

k w

as (

som

ewha

t) m

ore

vola

tile

than

usu

al b

ecau

se

the

airc

raft

had

bee

n fu

eled

in

Ath

ens,

Gre

ece,

for

the

ret

urn

trip

to

New

Y

ork,

and

not

ref

uele

d in

New

Yor

k fo

r th

e tr

ip b

ack,

ow

ing

to th

e lig

hter

lo

ad f

or t

he f

light

out

. As

a co

nseq

uenc

e, v

apor

s in

the

cent

ral

tank

whe

n th

e ai

rcra

ft e

xplo

ded

wer

e fr

om f

uel t

hat h

ad b

een

obta

ined

in A

then

s.

the

indi

cate

d ad

ditiv

es

to

Jet

A-1

, w

hich

is

ge

neri

cally

av

aila

ble

acro

ss m

uch

of t

he w

orld

, ra

ther

tha

n tr

ansp

ort

it fr

om

CO

NU

S.

JA

SON

is

un

der

the

impr

essi

on

that

th

is

poss

ibili

ty h

as n

ot b

een

asse

ssed

and

is

not

bein

g ex

ploi

ted

at

this

tim

e.

20

21

22

23

As

note

d ab

ove,

the

cos

t of

JP-

8 ha

s in

crea

sed

by a

fac

tor

of

2.8

sinc

e 20

04.

T

his

incr

ease

tr

ansl

ates

in

to

a $4

B/y

r ad

ditio

nal

cost

for

the

U.S

. Air

For

ce.

At

pres

ent

cons

umpt

ion

rate

s, e

very

$10

/bbl

inc

reas

e in

pri

ce d

rive

s up

U.S

. A

ir F

orce

fu

el c

osts

by

~ $0

.6B

/yr.

Show

n on

pa

ge

21

is

the

DE

SC

sale

s di

stri

butio

n.

A

s in

dica

ted,

del

iver

ies

to f

orei

gn g

over

nmen

ts in

200

4, a

s w

ell a

s to

for

eign

gov

ernm

ents

and

com

mer

cial

rec

ipie

nts

(tog

ethe

r) in

20

05 a

re s

igni

fica

nt.

JA

SON

cou

ld n

ot a

scer

tain

whe

ther

the

T

F-R

IO

deliv

erie

s (c

f.

page

16

) w

ere

coun

ted

as

2004

de

liver

ies

to f

orei

gn g

over

nmen

ts,

or w

heth

er t

he n

ear-

mat

ch

of th

e to

tal o

f fo

reig

n-go

vern

men

t and

com

mer

cial

del

iver

ies

in

2005

w

ith

deliv

erie

s to

fo

reig

n go

vern

men

ts

in

2004

is

co

inci

dent

al.

Not

ewor

thy

also

in

the

figu

re o

n pa

ge 2

1 is

the

lar

ge i

ncre

ase

in t

he c

ost

of U

.S.

Air

For

ce d

eliv

erie

s in

200

5 ov

er t

hose

in

2004

.

As

show

n on

pag

e 22

, de

spite

som

e re

duct

ion

in D

oD f

uel

cons

umpt

ion,

th

e pr

ice

DoD

pa

id

for

fuel

ha

s in

crea

sed

dram

atic

ally

fro

m F

Y04

($5

.9B

) to

FY

05 (

$8.3

B).

D

oD f

uel

purc

hase

s in

FY

06 a

re e

xpec

ted

to b

e hi

gher

than

$12

B.

The

fig

ure

on p

age

22 a

lso

indi

cate

s th

e la

rge

exte

nt t

o w

hich

m

obili

ty f

uels

are

res

pons

ible

for

the

pre

dom

inan

t fr

actio

n of

D

oD f

uel c

onsu

mpt

ion,

as

note

d pr

evio

usly

.

24

25

It i

s he

lpfu

l to

put

the

U.S

. Air

For

ce j

et f

uel

cons

umpt

ion

into

th

e co

ntex

t of

th

e do

mes

tic

cons

umpt

ion

of

com

mer

cial

av

iatio

n fu

els.

In

ter

ms

of f

uel,

the

Air

For

ce w

ith $

4.6B

in

fuel

pur

chas

es i

n 20

05,

is a

som

ewha

t la

rger

fue

l co

nsum

er

than

, bu

t cl

ose

to,

the

larg

est

com

mer

cial

U

.S.

airl

ine

(Am

eric

an).

A

s su

ch,

the

DoD

and

the

U.S

. A

ir F

orce

are

not

m

arke

t dr

iver

s fo

r av

iatio

n fu

els,

or

an

y ot

her

petr

oleu

m

prod

uct,

for

that

mat

ter.

Com

mer

cial

av

iatio

n is

ex

pend

ing

cons

ider

able

ef

fort

s to

de

crea

se i

ts f

uel

use.

A

t th

is t

ime,

com

mer

cial

avi

atio

n fu

el

cost

s al

mos

t mat

ch la

bor

cost

s, a

s in

dica

ted

in th

e fi

gure

bel

ow

that

plo

ts u

nit

oper

atin

g co

sts

(¢ p

er a

vaila

ble

seat

-mile

) fr

om

1990

thr

ough

the

fou

rth

quar

ter

of 2

005.

N

ote

that

the

tim

e un

its f

or 2

005

are

in q

uart

ers,

vs.

yea

rs f

or t

ime

prio

r to

200

5,

indi

catin

g th

e ve

ry r

apid

rec

ent i

ncre

ase

in f

uel-

cost

bur

dens

to

U.S

. com

mer

cial

air

lines

.

26

27

In

wha

t ca

n on

ly

be

char

acte

rize

d as

an

ag

gres

sive

bu

t ob

viou

sly

corr

ect

call,

Sou

thw

est

Air

lines

, so

me

time

ago,

he

dged

75%

of

thei

r fu

el p

urch

ases

at

$35/

bbl

in l

ong-

term

co

ntra

cts.

In

the

com

mer

cial

-avi

atio

n in

dust

ry,

whi

ch

is

char

acte

rize

d by

ver

y sm

all

prof

it m

argi

ns a

nd w

hose

pro

fits

ar

e a

cons

eque

nce

of v

ery

high

gro

ss s

ales

, lo

wer

fue

l co

sts

rela

tive

to c

ompe

titor

s ca

n pr

oduc

e la

rge

diff

eren

ces.

Pro

fits

be

ing

the

perc

enta

ge-w

ise

smal

l di

ffer

ence

of

larg

e nu

mbe

rs,

smal

l va

riat

ions

in

un

anti

cipa

ted

cost

s or

ev

en

min

or

acco

untin

g er

rors

tra

nsla

te i

nto

the

diff

eren

ce b

etw

een

prof

it an

d (p

oten

tially

lar

ge)

loss

es.

In t

he u

nreg

ulat

ed c

omm

erci

al

avia

tion

indu

stry

, co

mpe

titor

s ar

e lim

ited

in t

heir

abi

lity

to

rais

e pr

ices

uni

late

rally

, fo

r fe

ar o

f si

gnif

ican

t lo

ss i

n m

arke

t sh

are.

Par

tly a

s a

resu

lt, S

outh

wes

t A

irlin

es i

s qu

ite p

rofi

tabl

e,

at p

rese

nt, c

erta

inly

rel

ativ

e to

the

mai

n bo

dy o

f th

e re

st o

f th

e co

mm

erci

al a

irlin

e in

dust

ry.

Thi

s m

etho

d il

lust

rate

s on

e ap

proa

ch t

o en

suri

ng s

tabi

lity

of

fuel

pr

icin

g:

ente

ring

in

to

long

-ter

m

cont

ract

s as

a

hedg

e ag

ains

t si

gnif

ican

t fu

ture

pri

ce i

ncre

ases

and

thu

s al

low

ing

for

budg

etar

y pl

anni

ng f

or a

per

iod

of y

ears

int

o th

e fu

ture

. T

he

pote

ntia

l dow

nsid

e, o

f co

urse

, is

the

high

er c

osts

in th

e ev

ent o

f fu

ture

de

crea

ses

in

crud

e-oi

l pr

ices

.

Such

ef

fect

s ca

n be

m

itiga

ted

by h

edgi

ng f

or o

nly

a fr

actio

n of

fut

ure

antic

ipat

ed

oil n

eeds

, as

the

airl

ines

list

ed o

n pa

ge 2

6 ha

ve d

one.

28

29

3.

Reg

ulat

ory

fact

ors

affe

ctin

g D

oD f

uel

use,

pla

nnin

g, a

nd

poli

cies

D

oD l

ives

in

a co

mpl

ex a

nd c

hang

ing

regu

lato

ry e

nvir

onm

ent.

A

dditi

onal

ly,

mos

t of

th

e D

oD

fuel

is

co

nsum

ed

in

the

cont

inen

tal

U.S

. C

ongr

ess

has

man

date

d th

at m

ost

of t

his

fuel

m

ust

mee

t th

e 15

ppm

sul

fur

regu

latio

n in

the

fut

ure.

JP

-8

does

not

mee

t th

is s

peci

fica

tion.

N

ote

that

exc

eptio

ns a

re

prov

ided

for

gro

und

com

bat

vehi

cles

, e.

g.,

Bra

dley

, A

bram

s,

and

Stry

ker

vehi

cles

.

A m

yria

d of

oth

er r

egul

atio

ns a

nd d

irec

tives

are

man

date

d by

C

ongr

ess.

Fo

r in

stan

ce,

as t

he s

lide

indi

cate

s, D

oD h

as b

een

dire

cted

to d

evel

op a

str

ateg

y to

use

fue

l pro

duce

d, in

who

le o

r in

par

t, fr

om c

oal,

oil s

hale

, and

tar

sand

s an

d to

dev

elop

a p

lan

for

coal

-to-

liqui

d fu

el p

rodu

ctio

n an

d co

nsum

ptio

n.

The

tra

de-

offs

be

twee

n ob

tain

ing

liqui

d fu

el

from

co

al

rela

tive

to

biom

ass,

nat

ural

gas

, m

unic

ipal

sol

id w

aste

, or

oth

er s

ourc

es

are

disc

usse

d in

som

e de

pth

and

in r

espo

nse

to t

he s

tudy

ch

arge

, in

a la

ter

sect

ion

of th

is r

epor

t.

DoD

mus

t liv

e w

ithin

the

se C

ongr

essi

onal

, typ

ical

ly u

nfun

ded,

m

anda

tes

and

othe

r di

rect

ives

. T

o th

e ex

tent

th

at

it ha

s in

flue

nce

over

the

m,

DoD

sho

uld

atte

mpt

to

ensu

re t

hat

the

mos

t co

st-e

ffec

tive

mea

ns a

re e

ncou

rage

d an

d im

plem

ente

d in

ea

ch c

ase

in o

btai

ning

the

fue

l it

need

s to

sup

port

its

mis

sion

s ef

fect

ivel

y.

30

31

4.

Dri

vers

to m

inim

ize

DoD

fuel

use

Bar

ring

unf

ores

een

uphe

aval

s an

d if

pri

ce i

s im

port

ant

but

not

a de

cisi

on d

rive

r, w

hy s

houl

d th

e D

oD r

educ

e fu

el u

se?

As

disc

usse

d be

low

, th

ere

are

com

pell

ing

reas

ons

for

the

DoD

to

redu

ce f

uel

cons

umpt

ion,

for

whi

ch t

he d

rive

rs a

re:

pote

ntia

l fu

ture

un

cert

aint

ies

over

th

e ne

xt

25

year

s an

d be

yond

, lo

gist

ics,

sup

ply

cost

s, a

nd o

ther

rel

ated

con

side

ratio

ns.

In

part

icul

ar,

deliv

ery

of f

uel

is c

ostly

not

onl

y in

ter

ms

of f

uel-

acqu

isiti

on d

olla

rs, b

ut a

lso

in in

fras

truc

ture

and

live

s.

Fuel

del

iver

y co

sts

are

acco

mpa

nied

by

larg

e m

ultip

liers

. A

s ca

n be

ap

prec

iate

d vi

a va

rian

ts

of

the

rock

et

or

Bre

guet

eq

uatio

ns,

it ca

n re

quir

e a

lot

of f

uel

to d

eliv

er f

uel.

Fue

l de

liver

ed

is

the

payl

oad

of

the

fuel

-del

iver

y ve

hicl

e.

Unf

ortu

nate

ly, l

ittle

qua

ntita

tive

info

rmat

ion

is a

vaila

ble

on th

e m

ultip

liers

tha

t pe

rvad

e th

e lo

gist

ics

chai

n fo

r re

pres

enta

tive

scen

ario

s of

m

issi

ons.

To

wit,

ho

w

muc

h fu

el

mus

t be

de

liver

ed a

t the

rea

r to

sup

ply

a ga

llon

of f

uel t

o th

e fr

ont?

As

part

of

this

stu

dy, J

ASO

N a

ttem

pted

to a

naly

ze w

hat i

t cos

ts

to d

eliv

er f

uel a

ir-t

o-ai

r. D

etai

ls o

f th

e an

alys

is a

re p

rovi

ded

in

App

endi

x II

. T

he e

stim

ated

FY

05 c

ost

is $

20-2

5/ga

l. T

his

incl

udes

the

cos

t of

the

fue

l, w

hich

rep

rese

nts

the

smal

lest

fr

actio

n, t

he c

ost

of o

pera

tions

and

mai

nten

ance

(O

&M

), a

nd

the

acqu

isiti

on c

ost o

f th

e K

C-1

35 ta

nker

air

craf

t (FY

98-$

40M

, ea

ch,

acqu

isiti

on c

ost,

amor

tized

ove

r a

40 y

ear

lifet

ime

of t

he

airc

raft

, ad

just

ed f

or i

nfla

tion

to F

Y05

dol

lars

) an

d in

ter

ms

of

gallo

ns d

eliv

ered

in a

ir-t

o-ai

r re

fuel

ing.

Thi

s an

alys

is d

emon

stra

tes

that

the

cos

t of

fue

l is

not

the

de

cisi

on

driv

er;

rath

er,

the

prim

ary

cost

is

O

&M

.

For

refe

renc

e, in

200

5, o

nly

6.5%

(3.

9 M

bbl)

of

U.S

. Air

For

ce f

uel

was

del

iver

ed i

n th

e ai

r. T

he J

ASO

N e

stim

ate

is a

lso

in a

ccor

d w

ith t

he 2

001

DSB

est

imat

e, e

ven

thou

gh c

apita

l co

sts

for

the

tank

er f

leet

wer

e no

t con

side

red

in th

at a

naly

sis.

14

JASO

N w

as a

dvis

ed t

hat

the

cost

of

deliv

erin

g A

rmy

fuel

to

the

fron

t lin

e ca

n be

in

the

rang

e of

$10

0-60

0/ga

l. T

he l

arge

co

st r

ange

dep

ends

on

“fro

nt l

ine”

to

“bac

k lin

e” s

epar

atio

n in

di

stan

ce, t

erra

in, d

efen

se a

nd o

ther

logi

stic

s re

quir

emen

ts, e

tc.

A l

arge

fra

ctio

n of

inf

rast

ruct

ure

cost

s an

d vu

lner

abili

ties

scal

e w

ith t

he f

uel

volu

me

that

mus

t be

del

iver

ed.

One

mus

t al

so

cons

ider

the

cos

t in

liv

es o

f de

liver

ing

fuel

due

to

rece

nt

chan

ges

in m

ilita

ry d

octr

ine.

The

pre

sent

log

istic

sup

ply

chai

n w

as d

esig

ned

at a

tim

e w

hen

“beh

ind

the

fron

t lin

es”

deno

ted

mor

e-or

-les

s sa

fe te

rrai

n.

Thi

s is

no

long

er tr

ue.

Furt

her,

fue

l-su

pply

veh

icle

s ar

e no

t ar

mor

ed a

nd, a

s a

cons

eque

nce,

pre

sent

a

vuln

erab

le t

arge

t an

d a

cost

ly l

iabi

lity

in t

erm

s of

liv

es a

nd

trea

sure

for

U.S

. for

ces.

We

conc

lude

tha

t th

e gr

eate

st d

rive

r fo

r re

duci

ng f

uel

use

lies

not

in t

he r

educ

tion

of t

he d

irec

t co

st o

f th

e fu

el i

tsel

f, b

ut i

n th

e re

duct

ion

of t

he a

ttend

ant

indi

rect

cos

ts o

f lo

gist

ics

to

supp

ly t

he f

uel,

the

cost

of

the

fuel

req

uire

d to

del

iver

the

fue

l ne

eded

, as

wel

l as

the

enh

ance

men

ts i

n ta

ctic

s th

at w

ould

ac

com

pany

in

crea

sed

vehi

cula

r ra

nge,

if

fu

el

cons

umpt

ion

wer

e to

be

decr

ease

d on

a g

iven

type

of

vehi

cle.

14 D

efen

se S

cien

ce B

oard

Tas

k Fo

rce

on I

mpr

ovin

g Fu

el E

ffic

ienc

y of

W

eapo

ns P

latf

orm

s (J

anua

ry 2

001)

Mor

e ca

pabl

e w

arfig

htin

g th

roug

h re

duce

d fu

el b

urde

n.

32

33

V.

Tec

hn

olo

gy

op

tio

ns

for

the

red

uct

ion

o

f D

oD

fo

ssil

fuel

use

G

iven

tha

t m

ost

of D

oD f

ossi

l fu

el u

se i

s re

late

d to

mob

ility

an

d gi

ven

the

com

pelli

ng r

atio

nale

for

red

ucin

g fo

ssil

fuel

use

, va

riou

s ve

hicl

e te

chno

logy

op

tions

ar

e no

w

eval

uate

d th

at

wou

ld

enab

le

fuel

-use

re

duct

ions

. T

echn

olog

y op

tions

ev

alua

ted

incl

ude

hybr

id d

iese

l-el

ectr

ic v

ehic

les,

all-

elec

tric

ve

hicl

es,

fuel

-cel

l ve

hicl

es,

stru

ctur

al-w

eigh

t re

duct

ion

and

light

-arm

ored

ve

hicl

es,

com

pari

sons

be

twee

n m

anne

d an

d un

man

ned

vehi

cles

, and

veh

icle

mix

.

In

a su

bseq

uent

se

ctio

n,

othe

r ge

neri

c ap

proa

ches

ar

e ex

amin

ed, i

.e.,

repl

acin

g D

oD f

uel

cons

umpt

ion

from

100

% o

f fu

els

deri

ved

from

cru

de o

il to

inc

lude

fue

ls d

eriv

ed f

rom

a

dive

rsity

of

so

urce

s,

incl

udin

g m

ater

ial

cont

ribu

tions

fr

om

alte

rnat

e fu

els

such

as

gas-

to-l

iqui

ds,

coal

-to-

liqui

ds,

biof

uels

, an

d/or

oth

er s

uppl

y-si

de f

uel t

echn

olog

ies.

A

. M

odif

icat

ion

of p

atte

rns

of u

se o

f D

oD p

latf

orm

s

Ove

rall

fuel

con

sum

ptio

n is

str

ongl

y de

pend

ent

on t

he p

atte

rns

of u

se o

f ve

hicl

es, w

hich

inc

lude

veh

icle

mix

, the

tot

al n

umbe

r of

en

gine

-hou

rs

per

day,

m

obili

ty

vs.

idlin

g/ho

tel-

pow

er

cons

umpt

ion

whe

n st

oppe

d, e

tc.

App

aren

tly,

the

Arm

y do

es

not

have

su

ffic

ient

da

ta

on

this

su

bjec

t to

fa

cilit

ate

a qu

antit

ativ

e ev

alua

tion

of t

he v

ario

us o

ptio

ns.

We

ther

efor

e st

rong

ly

reco

mm

end,

as

a

criti

cal

firs

t st

ep

to

achi

evin

g im

prov

ed

fuel

ef

fici

ency

, th

at

the

Arm

y in

stal

l re

lativ

ely

inex

pens

ive,

com

mer

cial

ly a

vaila

ble,

sys

tem

s si

mila

r to

the

G

M “

On-

Star

” ve

hicl

e m

onito

ring

sys

tem

, or

equ

ival

ent,

to

trac

k fu

el u

se.

Thi

s w

ill a

llow

the

Arm

y to

dev

elop

a d

atab

ase

that

w

ill

enab

le

plan

ning

, pr

ojec

tion,

an

d op

erat

iona

l op

timiz

atio

n, a

s w

ell

as p

rovi

ding

a b

asel

ine

agai

nst

whi

ch

futu

re

vehi

cles

ca

n be

co

mpa

red

and

asse

ssed

.

Fuel

co

nsum

ptio

n ra

te, p

er u

nit p

ower

pro

duce

d, is

a s

tron

g fu

nctio

n of

the

pow

er le

vels

req

uire

d fo

r ea

ch v

ehic

le a

nd e

ngin

e, w

hich

de

pend

on

th

e pa

ttern

of

us

e.

If

the

use

patt

ern

is

not

unde

rsto

od,

relia

ble

optim

izat

ion

of

engi

ne

sele

ctio

n an

d ef

fici

ency

is n

ot p

ossi

ble.

Des

pite

the

lac

k of

qua

ntita

tive

data

on

actu

al A

rmy

vehi

cle

oper

atio

n, i

t is

pos

sibl

e to

dra

w s

ome

qual

itativ

e an

d se

mi-

quan

titat

ive

infe

renc

es

rega

rdin

g th

e re

lativ

e m

erits

of

te

chno

logy

opt

ions

to

achi

eve

fuel

con

sum

ptio

n re

duct

ion

in

Arm

y ve

hicl

es.

The

se v

ario

us o

ptio

ns b

road

ly i

nvol

ve n

ew

engi

ne d

esig

n op

tions

and

/or

stru

ctur

al l

ight

wei

ghtin

g. S

uch

choi

ces

are

disc

usse

d an

d ev

alua

ted

belo

w i

n th

e co

ntex

t of

th

eir

suita

bilit

y fo

r D

oD m

issi

ons

and

goal

s.

34

35

B.

Eng

ine

and

driv

e-tr

ain

tech

nolo

gy o

ptio

ns

1.

H

ybri

d ve

hicl

es

Hyb

rid

vehi

cles

hav

e th

e ca

paci

ty t

o do

wor

k us

ing

both

an

inte

rnal

com

bust

ion

engi

ne (

ICE

) an

d an

ele

ctri

cal

mot

or,

in

seri

es,

or i

n pa

ralle

l. T

he I

CE

dri

ves

an e

lect

ric

gene

rato

r,

stor

ing

ener

gy

in

batte

ries

.

The

en

ergy

st

ored

is

us

ed

to

augm

ent

the

ICE

out

put

to m

eet

peak

-pow

er d

eman

ds.

Thi

s co

mbi

natio

n re

sults

in

a de

crea

se i

n th

e in

stal

led

ICE

pla

nt

peak

-pow

er r

equi

rem

ents

, w

hich

is

wha

t sc

ales

eng

ine

size

(d

ispl

acem

ent)

an

d,

ultim

atel

y,

fuel

co

nsum

ptio

n.

Add

ition

ally

, hy

brid

izat

ion

of t

he e

ngin

e w

ith t

he e

lect

rica

l m

otor

por

tion

of t

he p

ower

pla

nt a

llow

s th

e IC

E t

o op

erat

e (m

ostly

) w

ithin

its

pe

ak-e

ffic

ienc

y re

gim

e.

T

he

elec

tric

ge

nera

tor

and

stor

age

syst

em

can

augm

ent

elec

tric

-pow

er

dem

ands

whe

n th

e ve

hicl

e is

sto

pped

. The

eff

icie

nt a

nd c

apab

le

gene

rato

r ca

n al

so b

e us

ed f

or o

ther

veh

icle

nee

ds,

e.g.

, in

pr

ovid

ing

hote

l and

oth

er (

elec

tric

al-)

pow

er r

equi

rem

ents

.

Hyb

rid

vehi

cles

ar

e at

trac

ting

muc

h at

tent

ion

in

the

com

mer

cial

tra

nspo

rtat

ion

sect

or d

ue t

o th

eir

incr

ease

d fu

el

econ

omy

rela

tive

to c

onve

ntio

nal I

CE

veh

icle

s. T

he e

ffic

ienc

y of

hyb

rid

vehi

cles

is,

how

ever

, str

ongl

y de

pend

ent

on t

heir

use

pa

ttern

s.

Rec

over

y of

ene

rgy

by r

egen

erat

ive

brak

ing

mak

es

thes

e ve

hicl

es e

spec

ially

goo

d in

sto

p-an

d-go

dri

ving

on

low

-fr

ictio

n su

rfac

es.

Thu

s, t

he g

reat

est

fuel

sav

ings

for

hyb

rid

vehi

cles

are

inc

urre

d fo

r ci

ty b

uses

, ut

ility

-ser

vice

veh

icle

s,

espe

cial

ly i

f po

wer

dem

ands

whe

n st

oppe

d ar

e m

odes

t an

d ca

n be

(m

ostly

) pr

ovid

ed b

y st

ored

ele

ctri

cal

ener

gy i

n ba

tteri

es,

and

post

al-d

eliv

ery

vehi

cles

. A

s an

exa

mpl

e of

this

, the

Toy

ota

Priu

s ca

n ob

tain

(sl

ight

ly)

bette

r m

ileag

e in

city

dri

ving

tha

n

unde

r hi

ghw

ay

driv

ing

cond

ition

s.

Und

er

high

way

dr

ivin

g co

nditi

ons,

th

e ad

vant

age

of

rege

nera

tive

brak

ing

ener

gy

reco

very

is

min

imal

, an

d fu

el e

cono

my

is a

ctua

lly a

dver

sely

af

fect

ed b

y ha

ving

to c

arry

the

extr

a w

eigh

t ass

ocia

ted

with

the

(unu

sed

unde

r th

ese

cond

ition

s) b

atte

ries

, ge

nera

tor,

and

mor

e co

mpl

icat

ed/h

eavy

dri

ve tr

ain

for

the

requ

ired

hor

sepo

wer

.

Thi

s is

con

firm

ed b

y th

e re

sults

of

the

anal

ysis

dep

icte

d in

the

fi

gure

abo

ve t

hat

com

pare

s hy

brid

vs.

con

vent

iona

lly p

ower

ed,

20-t

on t

rack

ed v

ehic

les,

mod

eled

as

oper

atin

g ov

er a

var

iety

of

terr

ains

.15 I

n ge

nera

l, hy

brid

veh

icle

s of

fer

little

or

no f

uel

savi

ngs

if th

e av

erag

e po

wer

del

iver

ed b

y th

e en

gine

is c

lose

to

(i.e

., w

ithin

app

roxi

mat

ely

30%

of)

the

pea

k po

wer

loa

d of

a

typi

cal d

rivi

ng c

ycle

.

15

Rob

ert

M. R

oche

[A

rmy

Mat

erie

l Sy

stem

s A

naly

sis

Act

ivity

- A

MSA

A]

Fuel

Con

sum

ptio

n M

odel

ing

Supp

ort

and

Insi

ghts

. JA

SON

20

July

200

6 (V

TC

) br

iefi

ng.

Not

iona

l Dat

a

Mov

ing

Onl

y,

Leve

l Ter

rain

36

37

In o

ff-r

oad

envi

ronm

ents

, co

nditi

ons

for

whe

n hy

brid

s ca

n of

fer

impr

oved

per

form

ance

are

eve

n m

ore

disc

oura

ging

. Su

ch

cond

ition

s m

ore-

clos

ely

refl

ect

DoD

veh

icle

use

tha

n th

e E

PA

driv

e cy

cle

for

com

mer

cial

veh

icle

use

, for

exa

mpl

e, o

r th

e bu

s dr

ive

cycl

e de

pict

ed a

bove

. H

ence

, th

e pa

ttern

of

use

for

the

Arm

y do

es n

ot l

end

itsel

f to

ren

deri

ng h

ybri

d-ve

hicl

e de

sign

s ad

vant

ageo

us f

or f

uel-

use-

redu

ctio

n pu

rpos

es.

Ano

ther

pos

sibl

e ad

vant

age

of h

ybri

d ve

hicl

es i

nvol

ves

the

capa

bilit

y fo

r si

lent

wat

ch.

If

no o

ther

dem

ands

are

pla

ced

on

the

syst

em (

i.e.,

sust

aine

d ho

tel p

ower

), th

e st

oppe

d ve

hicl

e ca

n tu

rn t

he e

ngin

e of

f co

mpl

etel

y, e

limin

atin

g id

ling

fuel

cos

ts.

The

eng

ine

wou

ld t

hen

be t

urne

d on

onl

y w

hen

the

batte

ries

ne

ed to

be

repl

enis

hed.

Arm

y co

mba

t ve

hicl

es s

pend

as

muc

h as

80%

of

the

time

stop

ped,

i.e

., pr

ovid

ing

hote

l po

wer

, on

ly.

Hen

ce,

a si

lent

w

atch

cap

abili

ty s

eem

s at

trac

tive.

H

owev

er,

for

the

futu

re

com

bat

syst

em,

hote

l po

wer

req

uire

men

ts a

re s

peci

fied

to

be

25-3

2 kW

(t

he

addi

tiona

l 7

kW

for

air

cond

ition

ing

whe

re

need

ed).

T

o m

eet

this

req

uire

men

t fo

r ev

en 1

-2 h

ours

wou

ld

requ

ire

a ve

ry l

arge

sui

te o

f ba

tteri

es, w

hich

are

hea

vy p

er u

nit

of

stor

ed

ener

gy.

A

ty

pica

l L

i ba

ttery

pa

ck

wou

ld,

for

exam

ple,

pro

vide

0.2

kW

⋅hr/

kg.

Supp

lyin

g 25

kW

for

2 h

ours

is

50

kW⋅h

r w

ould

req

uire

an

addi

tiona

l 200

kg

of e

xtra

bat

tery

w

eigh

t ju

st

to

mee

t ho

tel-

pow

er

requ

irem

ents

.

Thi

s ex

tra

wei

ght w

ould

com

e at

the

expe

nse

of p

aylo

ad, f

uel c

arri

ed, a

nd

fuel

eco

nom

y w

hile

dri

ving

the

vehi

cle.

The

dis

adva

ntag

es o

f th

e in

crea

sed

wei

ght o

f th

e hy

brid

ext

end

furt

her.

Hea

vier

veh

icle

s ar

e m

ore

diff

icul

t to

dep

loy

by a

irlif

t. A

dditi

onal

ly, i

f th

e ov

eral

l w

eigh

t of

the

hyb

rid

rela

tive

to t

hat

of a

con

vent

iona

l pl

atfo

rm i

s in

crea

sed,

the

pay

load

of

the

hybr

id v

ehic

le i

s ne

cess

arily

red

uced

. C

onsi

deri

ng t

hat

a la

rge

frac

tion,

if n

ot th

e m

ajor

ity, o

f ta

ctic

al g

roun

d ve

hicl

es a

re u

sed

for

carr

ying

sup

plie

s in

the

ater

, a

mor

e ap

prop

riat

e m

etri

c fo

r fu

el e

ffic

ienc

y sh

ould

be

payl

oad-

mile

s (t

on-m

iles

) pe

r ga

llon

inst

ead

of v

ehic

le-m

iles

per

gallo

n.

By

this

met

ric,

hyb

rid

vehi

cles

off

er e

ven

few

er a

dvan

tage

s in

ter

ms

of p

oten

tial

fuel

sa

ving

s.

Add

ition

ally

, hy

brid

veh

icle

s ha

ve h

ighe

r ca

pita

l co

sts

and

incr

ease

d po

wer

-pla

nt c

ompl

exity

(an

d m

aint

enan

ce).

T

hese

co

sts

are

diff

icul

t to

am

ortiz

e ov

er v

ehic

le l

ife

even

in

the

case

of

an

aver

age

com

mer

cial

-veh

icle

10,

000

mile

per

yea

r ra

nge.

In

the

cas

e of

the

mil

itar

y, J

ASO

N w

as i

nfor

med

tha

t th

e ty

pica

l HM

MW

V tr

avel

s on

ly ~

2000

mile

s pe

r ye

ar.

Such

low

m

ileag

e m

akes

it

espe

cial

ly d

iffi

cult

to j

ustif

y th

e hi

gher

cos

t of

the

hyb

rid

syst

em p

ower

plan

t on

the

bas

is o

f fu

el c

ost

savi

ngs

(if

any)

alo

ne.

As

disc

usse

d be

low

, JA

SON

fou

nd t

hat

mod

ern

dies

el e

ngin

es

offe

r a

cons

ider

able

adv

anta

ge o

ver

hybr

id v

ehic

les

for

mos

t D

oD c

omba

t, an

d pe

rhap

s ta

ctic

al, v

ehic

le p

atte

rns

of u

se.

2.

A

ll-e

lect

ric

vehi

cles

All-

elec

tric

veh

icle

s pr

ovid

e ef

fici

ent c

onve

rsio

n (~

85-9

0%)

of

stor

ed e

lect

rica

l en

ergy

to

mec

hani

cal

pow

er.

An

all-

elec

tric

po

wer

tr

ain

is

wel

l-su

ited

to

vehi

cles

w

ith

high

el

ectr

ical

de

man

ds.

In

pr

inci

ple,

su

ch

vehi

cle

desi

gns

enab

le

quie

t/ste

alth

y op

erat

ion,

w

ith

a re

duct

ion

in

acou

stic

no

ise

emis

sion

s,

IR

emis

sion

s,

(det

ecta

ble)

co

mbu

stio

n ex

haus

t/odo

rs, a

nd o

ther

gre

enho

use

gas

(GH

G)

emis

sion

s.

38

39

All-

elec

tric

veh

icle

s, h

owev

er,

have

ver

y ex

pens

ive

batte

ry

life-

cycl

e co

sts.

C

harg

ing

is s

low

and

req

uire

s ei

ther

a d

iese

l ge

nera

tor

or a

cces

s to

wal

l-pl

ug e

lect

rici

ty.

Thi

s by

its

elf

seem

s to

pre

clud

e th

eir

wid

espr

ead

use

in m

ilita

ry t

actic

al

oper

atio

ns.

Mor

eove

r, th

ese

vehi

cles

hav

e a

smal

l ran

ge u

nles

s ag

gres

sive

ly li

ght-

wei

ghte

d.

Ene

rgy

stor

age

(per

uni

t m

ass

or v

olum

e) o

f ev

en t

he b

est

avai

labl

e L

i ba

tter

ies

is t

oo s

mal

l fo

r m

ost

mili

tary

veh

icul

ar

uses

. T

he e

nerg

y st

orag

e de

nsity

of

the

best

bat

teri

es i

s,

appr

oxim

atel

y, 1

% t

hat

of d

iese

l fu

el (

by v

olum

e),

i.e.,

2% o

f di

esel

-fue

l eq

uiva

lent

(be

caus

e el

ectr

ic v

ehic

les

are

~2×

mor

e ef

fici

ent

than

a d

iese

l IC

E).

E

lect

ric

vehi

cles

(lik

e ga

s or

di

esel

-bas

ed h

ybri

ds)

mig

ht b

e su

ited

for

spec

ializ

ed c

ivili

an-

type

use

s (l

ocal

-mai

l de

liver

y, b

ase

patr

ols,

etc

.) o

n D

oD b

ases

in

CO

NU

S, a

nd c

ould

pro

vide

fue

l sav

ings

in th

at c

apac

ity, b

ut

are

not

indi

cate

d fo

r us

e in

gen

eral

mil

itary

app

licat

ions

in

thea

ter.

3.

F

uel-

Cel

l veh

icle

s

Fuel

ce

ll ve

hicl

es

prov

ide

dire

ct

conv

ersi

on

of

fuel

to

el

ectr

icity

. T

hey

have

dem

onst

rate

d hi

gh b

ench

-top

eff

icie

ncy

(> 5

0%)

rela

tive

to t

he t

ypic

al I

CE

pow

erpl

ants

(15

-25%

).

Hyd

roge

n fu

el c

ells

hav

e no

(ve

hicl

e) G

HG

em

issi

ons,

tho

ugh

thei

r up

stre

am G

HG

em

issi

ons

can

be l

arge

, as

wel

l as

the

ir

emis

sion

s fr

om in

-veh

icle

-pro

duce

d re

form

ed h

ydro

gen.

Fuel

ce

lls

are

low

po

wer

de

nsity

sy

stem

s,

if

the

requ

ired

th

erm

al-m

anag

emen

t sys

tem

s ar

e in

clud

ed. F

uel c

ells

gen

eral

ly

scal

e po

orly

to

high

pow

er d

ensi

ties

on a

mas

s ba

sis.

L

ow-

tem

pera

ture

fue

l ce

lls a

re p

oiso

ned

by f

uel

impu

ritie

s su

ch a

s su

lfur

and

car

bon

mon

oxid

e an

d, a

s a

cons

eque

nce,

req

uire

hi

ghly

pur

ifie

d fu

el.

Add

ition

ally

, ev

en i

f th

e fu

el f

eeds

tock

w

ere

suita

bly

puri

fied

, in

trod

uctio

n of

the

se c

onta

min

ants

int

o th

e ai

r in

take

of

a fu

el c

ell

vehi

cle

rapi

dly

pois

ons

the

cata

lyst

an

d im

mob

iliz

es th

e ve

hicl

e.

Cur

rent

H2-

base

d fu

el c

ells

hav

e pr

ohib

itive

cat

alys

t co

sts,

of

orde

r $1

00K

-$1M

, for

100

kW

pow

er p

lant

s, t

ypic

al o

f bu

sses

, he

avy-

duty

car

s, o

r tr

ucks

, fo

r ex

ampl

e.

Add

ition

ally

, su

ch

fuel

cel

ls h

ave

very

exp

ensi

ve m

embr

ane

cost

s w

ith n

o lo

ng-

term

(i.e

., 1-

year

) du

rabi

lity

and/

or w

arra

nty.

Ano

ther

dra

wba

ck o

f H

2-fu

el-c

ell b

ased

veh

icle

s is

the

logi

stic

s tr

ain

that

wou

ld b

e re

quir

ed to

sup

ply

the

gas-

phas

e fu

el, H

2, to

th

eate

r.

Can

iste

rs t

o co

ntai

n H

2 ga

s ar

e la

rge

and

heav

y; a

n ob

viou

s fl

amm

abili

ty a

nd, u

nder

som

e co

nditi

ons,

an

expl

osio

n an

d de

tona

tion

liabi

lity

wou

ld e

xist

thr

ough

out

the

logi

stic

s tr

ain.

On-

boar

d H

2 st

orag

e al

so r

equi

res

muc

h la

rger

mas

s (w

eigh

t) o

r vo

lum

e th

an l

iqui

d fu

els.

T

his

draw

back

wou

ld

dele

teri

ousl

y im

pact

veh

icle

ran

ge,

mili

tary

per

form

ance

, an

d su

pply

-cha

in lo

gist

ics

of s

uch

a sy

stem

.

For

dire

ct d

iese

l us

e in

a f

uel

cell,

hig

h-te

mpe

ratu

re c

eram

ics

are

also

pr

ohib

itive

ly

expe

nsiv

e,

have

lo

ng

star

t-up

tim

es,

suff

er c

okin

g, a

nd s

cale

poo

rly

to h

igh

pow

er.

Fue

l ce

lls u

sed

in

conj

unct

ion

with

re

form

ers

exhi

bit

low

ef

fici

ency

at

m

oder

ate

pow

er a

nd e

nerg

y de

nsity

.

40

41

4.

Adv

ance

d di

esel

eng

ine

vehi

cles

The

com

mer

cial

sec

tor

is f

ocus

ed o

n op

timiz

ing

engi

nes

to

exce

l on

the

EPA

dri

ve c

ycle

and

tes

ting

prot

ocol

s.

In t

hat

test

ing,

whi

ch i

nvol

ves

a dy

nam

omet

er,

ther

e is

no

elec

tric

al

load

on

the

vehi

cle

due

to t

he a

ir c

ondi

tione

r, f

or e

xam

ple,

no

aero

dyna

mic

(w

ind)

res

ista

nce,

and

no

road

fri

ctio

n.16

N

or

does

the

pat

tern

of

use

in a

n E

PA d

rive

cyc

le (

city

sto

p-an

d-go

or

hig

hway

dri

ving

) re

flec

t th

e pa

ttern

of

use

of D

oD v

ehic

les.

In

par

ticul

ar, D

oD c

omba

t ve

hicl

es s

pend

a s

igni

fica

nt a

mou

nt

of t

ime

stop

ped

and

prov

idin

g ho

tel

pow

er.

The

y al

so g

o of

f-ro

ad a

nd g

o th

roug

h m

ud, e

tc.

Hen

ce, e

ngin

es th

at d

o no

t yie

ld

high

sco

res

in t

he E

PA d

rive

cyc

le a

nd t

est

cond

ition

s co

uld

yiel

d ve

ry d

iffe

rent

res

ults

for

mili

tary

use

and

, in

par

ticul

ar,

sign

ific

ant

impr

ovem

ents

in

DoD

lan

d-ve

hicl

e fu

el e

cono

my

if

they

are

wel

l-m

atch

ed to

DoD

pat

tern

s of

use

.

Spec

ific

ally

, re

cent

adv

ance

s in

die

sel

engi

nes

offe

r a

grea

ter

retu

rn i

n fu

el s

avin

gs f

or A

rmy

patte

rns

of u

se,

and

obvi

ate

mos

t, if

not

all,

of

the

pote

ntia

l ad

vant

ages

tha

t m

ight

pos

sibl

y be

gai

ned

by h

ybri

diza

tion.

In

par

ticul

ar,

the

new

inl

ine-

6 di

esel

eng

ines

are

ver

y at

trac

tive

in t

his

rega

rd.

The

y ar

e al

so

muc

h m

ore

fuel

eff

icie

nt t

han

prio

r di

esel

eng

ines

. T

hese

en

gine

s ar

e de

sign

ed t

o ha

ve v

ery

good

eff

icie

ncy

at i

dle

and

whe

n pr

ovid

ing

hote

l po

wer

.17

T

hey

thus

ap

pear

to

be

pr

efer

able

to

hy

brid

izat

ion

as

a m

etho

d of

im

prov

ing

fuel

16

The

var

ianc

e be

twee

n pe

ople

s’ a

ctua

l m

iles-

per-

gallo

n ex

peri

ence

and

ex

pect

atio

ns

base

d on

sh

ow-r

oom

E

PA

stic

ker

mile

age

data

(“

You

r m

ilea

ge m

ay v

ary.

”) a

re n

ot d

iffi

cult

to u

nder

stan

d.

17 C

harl

es R

affa

[T

AR

DE

C]

27Ju

n06

JASO

N b

rief

ing

and

acco

mpa

nyin

g m

ater

ial.

effi

cien

cy f

or A

rmy

vehi

cles

, red

ucin

g fo

ssil-

fuel

con

sum

ptio

n,

impr

ovin

g ve

hicl

e ra

nge,

dec

reas

ing

the

ther

mal

-man

agem

ent

burd

en,

and

ther

eby

impr

ovin

g m

ilita

ry

capa

bilit

y.

Add

ition

ally

, th

ey a

re c

apab

le o

f a

fair

ly r

apid

tra

nsiti

on i

nto

the

exis

ting

mili

tary

fue

l inf

rast

ruct

ure

and

perh

aps

pose

less

of

a pe

rtur

batio

n on

logi

stic

s an

d O

&M

.

Not

ewor

thy

is

that

in

crea

ses

in

engi

ne

effi

cien

cy,

i.e.,

a re

duct

ion

in

fuel

co

nsum

ptio

n fo

r a

give

n (m

echa

nica

l)

hors

epow

er o

utpu

t is

acc

ompa

nied

by

decr

ease

s in

the

the

rmal

m

anag

emen

t bu

rden

. T

his

is a

ver

y im

port

ant

cons

ider

atio

n in

th

at a

rmor

ed v

ehic

les

are

not o

nly

seve

rely

vol

ume-

lim

ited,

but

ar

e fo

rced

to

re

ject

un

wan

ted

heat

th

roug

h pl

aces

on

th

e ve

hicl

e of

hig

her

vuln

erab

ility

to e

nem

y fi

re; t

he m

ore

heat

that

m

ust

be r

ejec

ted

the

mor

e vu

lner

able

the

arm

ored

veh

icle

is,

ot

her

fact

ors

held

con

stan

t.

Est

imat

es f

rom

tes

ts i

n th

e la

te 7

0s f

or t

he f

uel

cons

umpt

ion

of

the

turb

ine-

pow

ered

Abr

ams

vs. t

he d

iese

l-po

wer

ed M

60 t

anks

w

ere

roug

hly

2:1,

bu

t fi

eld

data

fr

om

the

RE

FOR

GE

R

exer

cise

s in

Ger

man

y sh

owed

the

tur

bine

tan

ks h

ad a

bout

4:1

ra

ther

tha

n th

e pr

evio

usly

est

imat

ed 2

:1 f

uel

cons

umpt

ion.

The

di

ffer

ence

was

attr

ibut

ed t

o tim

e at

idl

e, e

stim

ated

to

be a

s m

uch

as 8

3% o

f to

tal

oper

atin

g tim

e. W

hat

little

dat

a ex

ist

indi

cate

tha

t, at

idl

e, t

he r

atio

of

fuel

con

sum

ptio

n be

twee

n th

e tw

o ta

nks

is

mor

e th

an

4:1

(at

10 k

W

elec

tric

al

outp

ut,

10.6

gal

/hr

norm

al i

dle

vs.

2.3

gal/h

r).

At

the

Abr

ams

“tac

tical

id

le”

setti

ng w

ith t

he e

ngin

e at

120

0-12

50 r

pm i

nste

ad o

f th

e 89

0-90

0 rp

m

of

norm

al

idle

an

d w

ith

the

tran

smis

sion

in

ne

utra

l, in

stal

led

fuel

con

sum

ptio

n is

abo

ut 1

7 ga

l/hr.

18

18

Cha

rles

Raf

fa [

TA

RD

EC

] 31

Jul0

6 pv

t. co

mm

. (cf

. als

o fi

gure

on

p. 3

5).

42

43

Rel

ativ

e to

the

tur

bine

eng

ines

cur

rent

ly u

sed

in t

he A

bram

s ta

nk,

mod

ern

dies

els

offe

r im

prov

ed e

ffic

ienc

y, e

spec

ially

at

idle

, dr

amat

ic

impr

ovem

ents

in

fu

el

cons

umpt

ion

(3-4

×,

depe

ndin

g on

the

pat

tern

of

use)

, de

crea

ses

in m

aint

enan

ce

cost

s, a

nd a

n in

crea

se in

(au

tono

mou

s) r

ange

(~2

×, o

r m

ore)

.19

For

thes

e re

ason

s, t

he M

1-A

bram

s ta

nk s

houl

d be

re-

engi

ned

with

die

sel

engi

nes

as s

oon

as p

ossi

ble.

T

hese

veh

icle

s ar

e li

kely

to

rem

ain

in t

he i

nven

tory

for

som

e ti

me

– pe

rhap

s th

roug

h 20

20, o

r m

ore

– an

d sh

ould

be

upgr

aded

. Thi

s pr

opos

al

has

been

arg

ued

for

som

e tim

e an

d th

e re

ason

s ar

e m

ore

com

pelli

ng to

day

than

they

wer

e in

the

past

. C

. L

ight

wei

ghti

ng D

oD p

latf

orm

s

Ano

ther

m

etho

d to

in

crea

se

fuel

ef

fici

ency

w

ill

now

be

di

scus

sed:

re

duct

ion

of

vehi

cle

wei

ght

whi

le

mai

ntai

ning

m

ilita

ry p

erfo

rman

ce.

The

re a

re t

wo

appr

oach

es:

light

wei

ght

man

ned

vehi

cles

, an

d re

plac

e m

anne

d ve

hicl

es b

y un

man

ned

vehi

cles

. T

he f

orm

er m

aint

ains

sim

ilar

mis

sion

s an

d pe

rson

nel

dem

ands

and

req

uire

men

ts t

o th

e on

es i

n pl

ace

now

, th

e la

tter

chan

ges

thos

e de

man

ds a

nd r

equi

rem

ents

sig

nifi

cant

ly.

Eac

h op

tion

is d

iscu

ssed

sep

arat

ely.

1.

M

anne

d ve

hicl

es

The

fue

l con

sum

ptio

n of

a h

eavy

veh

icle

in m

otio

n at

mod

erat

e sp

eeds

is d

omin

ated

by

fric

tion

loss

es to

gro

und,

as

oppo

sed

to

aero

dyna

mic

s.

For

this

rea

son,

fue

l co

nsum

ptio

n is

nea

rly

19

One

(m

inor

) dr

awba

ck m

ay b

e in

acc

eler

atio

n in

tha

t tu

rbin

e-en

gine

rpm

ca

n in

crea

se/d

ecre

ase

fast

er th

an w

ith a

die

sel.

prop

ortio

nal

to t

he p

rodu

ct o

f w

eigh

t an

d di

stan

ce (

i.e.,

ton-

mile

).

Thu

s, i

f th

e w

eigh

t of

a v

ehic

le i

s re

duce

d by

, th

e fu

el c

onsu

mpt

ion

is r

educ

ed b

y ap

prox

imat

ely

2×.

The

net

ef

fect

of

this

inc

reas

ed e

ffic

ienc

y m

ultip

lies

sign

ific

antly

bac

k th

roug

h th

e su

pply

cha

in.

Arm

y ve

hicl

e w

eigh

t ca

n be

par

titio

ned

into

arm

or,

stru

ctur

e,

fuel

, an

d pa

yloa

d. F

or m

ilit

ary

vehi

cles

use

d in

com

bat,

arm

or

wei

ght

natu

rally

at

trac

ts

atte

ntio

n as

a

wei

ght–

redu

ctio

n ca

ndid

ate.

H

owev

er, a

t pr

esen

t, ar

mor

is

~20%

of

tota

l w

eigh

t of

mos

t ar

mor

ed v

ehic

les,

so

the

pote

ntia

l ov

eral

l be

nefi

ts a

re

not

larg

e.

Prog

ress

in

arm

or c

apab

ilitie

s co

uld

decr

ease

arm

or

wei

ght

by

a fa

ctor

of

tw

o,

for

a gi

ven

prot

ectio

n le

vel.

H

owev

er,

chan

ges

in t

hrea

t le

vels

and

eng

agem

ent

scen

aria

dr

ive

the

desi

gn s

pace

tow

ards

inc

reas

ed p

rote

ctio

n fo

r th

e sa

me

wei

ght,

rath

er t

han

decr

ease

d ar

mor

wei

ght.

JA

SON

en

cour

ages

fu

rthe

r im

prov

ed-a

rmor

ca

pabi

litie

s,

but

favo

rs

incr

ease

d pr

otec

tion

over

red

uctio

ns in

tota

l arm

or w

eigh

t.

Pote

ntia

l sa

ving

s in

wei

ght

are

likel

y po

ssib

le b

y re

duct

ion

of

the

rem

aini

ng 8

0% o

f ve

hicl

e w

eigh

t. T

his

can

be d

one

by

redu

cing

ve

hicl

e st

ruct

ural

w

eigh

t by

th

e us

e of

m

oder

n m

ater

ials

and

con

stru

ctio

n m

etho

ds,

such

as

carb

on r

einf

orce

d po

lym

er a

nd t

he r

educ

tion

in f

uel

wei

ght/v

olum

e fo

r a

give

n ra

nge

that

the

red

uctio

n in

wei

ght

will

ena

ble.

A

dditi

onal

ly,

one

may

be

ab

le

to

redu

ce

the

requ

ired

pa

yloa

d th

roug

h im

prov

emen

ts in

pat

tern

s of

use

.

It i

s w

orth

not

ing

that

, as

cur

rent

ly p

ract

iced

in

Iraq

, up

-ar

mor

ing

is d

one

at th

e ex

pens

e of

pay

load

. T

his

is n

ot a

goo

d tr

ade

for

over

all

fuel

con

sum

ptio

n pu

rpos

es,

but

of c

ours

e is

ne

cess

ary

in t

he c

urre

nt t

heat

er e

nvir

onm

ent

to c

ount

er t

he

thre

at to

per

sonn

el in

thes

e ve

hicl

es.

44

45

2.

Unm

anne

d la

nd v

ehic

les

Fuel

con

sum

ptio

n pe

r m

ile tr

avel

ed o

n la

nd is

sca

led

by w

eigh

t (a

erod

ynam

ic

drag

is

no

t im

port

ant

for

mos

t D

oD

land

ve

hicl

es).

Fu

el u

se i

s th

en (

near

ly)

prop

ortio

nal

to t

he t

on-

mile

s dr

iven

, m

ultip

lied

by t

he p

ower

-pla

nt e

ffic

ienc

y, a

nd

incl

udin

g th

e fu

el c

onsu

mpt

ion

idlin

g an

d th

e ne

ed f

or h

otel

-po

wer

pro

duct

ion

whe

n st

oppe

d.

Spec

ializ

ed u

nman

ned

vehi

cles

can

obv

iate

(m

ost)

arm

or –

th

ey c

ould

be

trea

ted

as e

xpen

dabl

e –

and

coul

d re

quir

e m

uch

low

er h

otel

pow

er.

Bot

h gu

ided

and

aut

onom

ous

land

veh

icle

s ar

e, h

owev

er,

at a

ver

y di

ffer

ent

tech

nica

l re

adin

ess

leve

l th

an

unm

anne

d ai

r ve

hicl

es, f

or e

xam

ple,

dis

cuss

ed b

elow

. Fo

r la

nd

vehi

cles

, th

e le

ap t

o to

tally

aut

onom

ous

vehi

cles

may

not

be

war

rant

ed,

cons

ider

ing

the

tech

nica

l di

ffic

ultie

s an

d de

velo

pmen

t co

sts,

con

side

ring

the

pot

entia

l be

nefi

ts f

rom

the

us

e of

gui

ded

(rem

ote-

cont

rolle

d) v

ehic

les

that

can

rel

ay d

ata

from

the

ir o

wn

sens

ors,

inc

ludi

ng c

amer

as,

crea

ting

a vi

rtua

l pa

nel

for

a (r

emot

e) c

ontr

olle

r w

ho m

ay b

e ei

ther

dis

tant

, or

in

a fo

llow

ing

vehi

cle,

dep

endi

ng o

n ap

plic

atio

n.

For

exam

ple,

m

uch

light

er g

uide

d un

man

ned

vehi

cles

dri

ving

ahe

ad o

f ot

her

vehi

cles

in a

col

umn

coul

d he

lp s

erve

eith

er a

s de

coys

for

, or

to

help

cle

ar im

prov

ised

exp

losi

ve d

evic

es (

IED

s).

46

47

48

49

3.

Unm

anne

d ae

rial

veh

icle

s

Am

ong

the

DoD

unm

anne

d ve

hicl

es, U

AV

s re

pres

ent

the

mos

t m

atur

e te

chno

logy

, ben

efiti

ng f

rom

dec

ades

of

deve

lopm

ent

of

auto

pilo

t sys

tem

s in

man

ned

airc

raft

. The

tran

sfer

of

trad

ition

al

pilo

ted-

airc

raft

fun

ctio

ns t

o U

AV

s co

uld

enab

le t

he r

ealiz

atio

n of

ver

y hi

gh f

uel-

use

redu

ctio

ns.

Thi

s is

esp

ecia

lly t

rue

if a

ir-

to-a

ir r

efue

ling

can

be o

bvia

ted

com

plet

ely.

In a

maj

or d

evel

opm

ent p

rogr

am, o

n-go

ing

sinc

e 20

00 a

nd n

ow

focu

sed

on a

maj

or f

light

tes

t in

201

0, t

he A

ir F

orce

Res

earc

h L

abor

ator

y (A

FRL

) ha

s be

en w

orki

ng o

n a

desi

gn f

or a

hig

h-al

titud

e,

long

-end

uran

ce,

auto

nom

ous

ISR

pl

atfo

rm

dubb

ed

Sens

orC

raft

. O

ne s

uch

unm

anne

d sy

stem

cou

ld r

epla

ce a

nd

inte

grat

e th

e fu

nctio

nalit

y of

3 m

anne

d sy

stem

s:

JST

AR

S,

AW

AC

S, a

nd R

ivet

Joi

nt.

Its

lon

g en

dura

nce

wou

ld o

bvia

te

in-f

light

ref

uelin

g, s

avin

g 20

0 kl

b of

fue

l (2

8,56

0 ga

llons

) pe

r ai

rcra

ft s

ortie

. A

sin

gle

Sens

orC

raft

with

a 3

0 hr

loi

ter

sort

ie

wou

ld r

epla

ce 3

cur

rent

ISR

10

hr lo

iter

mis

sion

s, w

hich

wou

ld

requ

ire

9 IS

R s

ortie

s an

d 9

tank

er s

ortie

s.

The

res

ultin

g fu

el

savi

ngs

is a

ppro

xim

atel

y 97

%,

i.e.,

a fu

el-s

avin

g fa

ctor

of

30.

If o

pera

tiona

l or

oth

er c

onsi

dera

tions

ind

icat

e th

at t

he t

hree

fu

nctio

ns t

hat

can

be i

nteg

rate

d in

thi

s U

AV

sho

uld

not

be

collo

cate

d,

thre

e su

ch

craf

t w

ould

m

ore

than

re

stor

e th

e pr

evio

us f

unct

iona

lity

with

a s

till-

sign

ific

ant f

uel-

use

redu

ctio

n fa

ctor

of

10, r

athe

r th

an th

e fa

ctor

of

30 f

or a

sin

gle

craf

t.

As

the

AFR

L s

lides

im

ply,

UA

Vs

can

be s

ized

and

con

figu

red

to

acco

mm

odat

e co

nfor

mal

ar

ray

ante

nnas

fo

r SA

R,

for

exam

ple.

Ass

umin

g an

an

tenn

a si

ze

of

20×

0.5

m2 ,

for

exam

ple,

SA

R p

erfo

rman

ce,

with

the

cen

tral

fre

quen

cy o

f th

e L

ynx

SAR

of

abou

t 17

GH

z (K

u ba

nd),

the

for

war

d-lo

okin

g re

al-a

pert

ure

azim

uth

reso

lutio

n w

ould

be,

, m

km)

/(

7.0λ

real

RDR

x=

Whe

re D

is th

e (r

eal)

ape

rtur

e, λ

is th

e ra

dar

wav

elen

gth,

and

R

the

rang

e. A

tra

nsve

rse

aper

ture

of

D⊥=

20

m i

s th

en p

erti

nent

to

for

war

d-lo

okin

g re

solu

tion

and

an a

long

-pat

h ap

ertu

re o

f D

|| =

0.5

m

for

side

-loo

king

re

solu

tion.

The

im

plie

d ra

nge

reso

lutio

n is

1 m

in

the

stri

p-m

ap m

ode

and

0.1

m i

n th

e sp

ot-

light

mod

e. I

n gr

ound

-mov

ing

targ

et i

ndic

ator

(G

MT

I) m

ode,

th

e m

inim

um d

etec

tabl

e ve

loci

ty (

MD

V)

is,

, λ DU

u=

Δ

at U

AV

spe

eds

of U

= 1

00-2

00 m

/s,

i.e.,

Δu⊥ =

0.1

5 m

/s i

n fo

rwar

d-lo

okin

g m

ode

(D =

D⊥)

and

Δu|| =

3-5

m/s

in

side

war

d m

ode

(D =

D||)

.

As

part

of

this

stu

dy,

JASO

N e

xplo

red

the

desi

gn p

ossi

bilit

ies

offe

red

by

the

altit

ude-

spee

d-si

ze

corr

idor

, w

ith

an

eye

to

max

imiz

ing

endu

ranc

e (u

nref

uele

d fl

ight

tim

e) f

or U

AV

s in

the

1000

kg-

clas

s pa

yloa

d re

gim

e.

Pr

elim

inar

y ca

lcul

atio

ns

sugg

est

that

it

shou

ld b

e po

ssib

le t

o do

con

side

rabl

y be

tter

(> 2

×)

than

the

tar

get

30 h

r en

dura

nce

targ

et i

ndic

ated

for

Se

nsor

Cra

ft.

The

pot

entia

l fo

r pe

rsis

tent

ISR

as

wel

l as

for

ot

her

uses

nee

d no

t be

emph

asiz

ed h

ere.

Con

side

ring

the

mul

tiplie

rs o

f de

liver

ing

fuel

to th

e ai

r ta

nker

s,

the

savi

ngs

wou

ld b

e la

rger

yet

bec

ause

of

the

fuel

-del

iver

y m

ultip

liers

. As

is t

he c

ase

gene

rica

lly,

fuel

sav

ings

pro

paga

ted

thro

ugh

the

entir

e su

pply

cha

in s

houl

d be

an

impo

rtan

t pa

rt o

f th

e sy

stem

cos

t an

alys

is i

n th

e pl

anni

ng,

logi

stic

s, a

nd D

oD

acqu

isiti

on p

roce

ss.

50

51

D.

Alt

erna

te f

uels

in p

lace

of

crud

e oi

l-de

rive

d fu

els

Ano

ther

tool

to r

educ

ing

the

DoD

dep

ende

nce

on f

ossi

l fue

ls is

to

sub

stitu

te s

ome

port

ion

of c

rude

-oil-

deri

ved

fuel

s w

ith f

uels

de

rive

d fr

om o

ther

sou

rces

. In

thi

s co

ntex

t, an

alte

rnat

ive

fuel

is

def

ined

to

be a

ny f

uel

that

is

not

dire

ctly

der

ived

fro

m c

rude

oi

l. H

ence

, liq

uid

hydr

ocar

bon

fuel

s de

rive

d fr

om c

oal

or

natu

ral g

as w

ould

be

clas

sifi

ed a

s al

tern

ativ

e fu

els,

eve

n th

ough

th

ey a

re in

fac

t der

ived

fro

m f

ossi

l sou

rces

.

Poss

ible

pri

mar

y en

ergy

sou

rces

for

pro

duct

ion

of a

ltern

ativ

e fu

els

also

inc

lude

non

-car

bon

ener

gy s

ourc

es s

uch

as n

ucle

ar,

sola

r,

win

d,

geot

herm

al,

and

tidal

-ene

rgy

sour

ces.

T

hese

so

urce

s, h

owev

er, a

re b

est u

sed

in th

e pr

oduc

tion

of e

lect

rici

ty,

whi

ch i

s hi

gh t

herm

odyn

amic

ava

ilabi

lity

ener

gy.

Usi

ng s

uch

sour

ces

to

prod

uce

liqui

d fu

els

conv

erts

hi

gh-v

alue

(h

igh-

ther

mod

ynam

ic-a

vaila

bilit

y) e

nerg

y in

to l

ow-v

alue

ene

rgy.

In

ad

ditio

n to

con

vers

ion

loss

es to

obt

ain

fuel

, an

addi

tiona

l fac

tor

of, a

ppro

xim

atel

y, 3

red

uctio

n in

its

ultim

ate

ener

gy v

alue

, e.g

., to

war

ds t

he p

rodu

ctio

n of

mec

hani

cal

wor

k, i

s th

en i

ncur

red

in

the

conv

ersi

on o

f th

e (l

ow-v

alue

) fu

el t

o (h

igh-

valu

e) w

ork.

A

s a

rule

, hi

gh-a

vaila

bilit

y/-v

alue

ene

rgy

is b

est

used

as

such

, ra

ther

tha

n be

ing

conv

erte

d to

low

-val

ue e

nerg

y to

the

n be

co

nver

ted

back

, at

con

side

rabl

e lo

ss,

to h

igh-

valu

e en

ergy

and

w

ork.

Furt

her,

the

re i

s cu

rren

tly n

o st

raig

htfo

rwar

d or

eco

nom

ical

m

etho

d to

con

vert

the

se e

lect

rica

l en

ergy

sou

rces

int

o fu

els,

ot

her

than

H2

(thr

ough

ele

ctro

lysi

s),

and

H2

is n

ot w

ell-

suite

d fo

r us

e by

the

DoD

for

a v

arie

ty o

f te

chni

cal a

nd in

fras

truc

ture

-ba

sed

reas

ons

(vid

e in

fra)

. A

bre

akth

roug

h in

thi

s ar

ea w

ould

be

a

met

hod

to

dire

ctly

co

nver

t, fo

r ex

ampl

e,

sunl

ight

ef

fici

ently

and

cos

t-ef

fect

ivel

y in

to l

iqui

d fu

els

with

out

goin

g

thro

ugh

elec

tric

ity

as

an

inte

rmed

iate

st

ep.

A

bsen

t su

ch

brea

kthr

ough

s,

such

al

tern

ativ

e en

ergy

so

urce

s w

ill

not

be

cons

ider

ed f

urth

er i

n th

is r

epor

t, at

lea

st i

n th

e co

ntex

t of

po

tent

ial D

oD f

uel-

supp

ly s

ourc

es.

Bel

ow,

alte

rnat

ive

foss

il-de

rive

d fu

els

are

cons

ider

ed,

incl

udin

g th

ose

from

enh

ance

d oi

l re

cove

ry (

EO

R),

coa

l an

d ga

s, a

s w

ell

as b

iofu

els,

inc

ludi

ng e

than

ol,

biod

iese

l, an

d bi

o-Fi

sche

r-T

rops

ch (

FT)

dies

el.

52

53

As

note

d ea

rlie

r, e

ven

thou

gh t

he U

.S.

has

only

2%

of

the

wor

ld’s

con

vent

iona

l oi

l re

serv

es, i

t ha

s ap

prox

imat

ely

30%

of

the

wor

ld’s

unc

onve

ntio

nal

foss

il re

sour

ces,

inc

ludi

ng ~

1 T

bbl

(tri

llion

bar

rels

of

oil

equi

vale

nt =

100

0 bo

e) o

f sh

ale

oil,

800

boe

of F

T c

oal,

0.15

boe

of

petr

oleu

m-d

eriv

ed c

oke,

and

gr

eate

r th

an 3

2 bo

e of

oil

from

enh

ance

d oi

l re

cove

ry (

EO

R).

In

tota

l, th

e U

.S. h

as e

stim

ated

res

ourc

es e

qual

ing

1.9

Tbo

e.

At

a U

.S.

cons

umpt

ion

rate

of

7.5

Bbb

l/yr,

thi

s ca

n yi

eld

a ~2

60 y

ear

supp

ly f

rom

the

se s

ourc

es a

lone

. T

he F

T p

roce

ss

that

con

vert

s on

e fo

rm o

f fo

ssil

ener

gy i

nto

anot

her,

e.g

., vi

a co

al-t

o-liq

uid

(CT

L)

or g

as-t

o-liq

uid

(GT

L)

proc

esse

s w

ould

yi

eld

an a

ssur

ed d

omes

tic s

uppl

y of

liq

uid

hydr

ocar

bon

fuel

s fo

r th

e D

oD

for

man

y de

cade

s in

to

the

futu

re,

albe

it ac

com

pani

ed w

ith l

arge

env

iron

men

tal

burd

ens,

as

disc

usse

d be

low

, un

less

car

bon

sequ

estr

atio

n an

d ot

her

mea

sure

s ar

e ad

opte

d w

ith a

ttend

ant i

ncre

ases

in c

ost.

In a

dditi

on t

o pr

oduc

tion

cost

s, c

arbo

n se

ques

trat

ion,

bas

ical

ly,

capt

urin

g C

O2

from

the

com

bust

ion

of f

ossi

l fu

els

and

bury

ing

it un

der

grou

nd t

o ke

ep i

t fr

om c

ontr

ibut

ing

to g

reen

hous

e-ga

s em

issi

ons

in

the

atm

osph

ere,

al

so

enta

ils

envi

ronm

enta

l un

know

ns.

For

exam

ple,

a p

ilot e

xper

imen

t in

Hou

ston

, Tex

as,

foun

d th

at,

the

CO

2 dr

oppe

d th

e pH

of

the

form

atio

n’s

brin

e fr

om a

nea

r-ne

utra

l 6.

5 to

3.0

, abo

ut a

s ac

idic

as

vine

gar.

Tha

t ch

ange

in

turn

dis

solv

ed m

any

min

eral

s, r

elea

sing

met

als

such

as

iro

n an

d m

anga

nese

. O

rgan

ic m

atte

r en

tere

d so

lutio

n as

w

ell,

and

rela

tivel

y la

rge

amou

nts

of

carb

onat

e m

iner

als

diss

olve

d. T

hese

nat

ural

ly o

ccur

ring

che

mic

als

seal

por

es a

nd

frac

ture

s in

the

roc

k th

at,

if o

pene

d, c

ould

rel

ease

CO

2 as

wel

l as

fou

led

brin

e in

to o

verl

ying

aqu

ifer

s th

at s

uppl

y dr

inki

ng a

nd

irri

gatio

n w

ater

. Pe

rhap

s m

ore

trou

blin

g, i

s th

at t

he a

cid

mix

coul

d at

tack

car

bona

te i

n th

e ce

men

t se

als

plug

ging

aba

ndon

ed

oil

or g

as w

ells

, 2.5

mill

ion

of w

hich

pep

per

the

Uni

ted

Stat

es.

The

le

sson

is

th

at

wha

teve

r w

e do

[w

ith

CO

2],

ther

e ar

e en

viro

nmen

tal i

mpl

icat

ions

that

we

have

to d

eal w

ith.20

It i

s im

port

ant

to e

stab

lish

scie

ntif

ical

ly w

heth

er i

n fa

ct,

at

scal

e, i

f ca

rbon

seq

uest

ratio

n ca

n be

rel

ied

upon

to

keep

CO

2 fr

om le

akin

g to

the

atm

osph

ere

for

the

inde

fini

te f

utur

e –

if n

ot,

the

prob

lem

is

only

del

ayed

– o

r if

oth

er,

seco

ndar

y, s

ide

effe

cts

prov

e to

be

seri

ous.

20

Y.K

. Kha

raka

et a

l. (2

006)

Gas

-wat

er-r

ock

inte

ract

ions

in F

rio

Form

atio

n fo

llow

ing

CO

2 in

ject

ion:

Im

plic

atio

ns f

or th

e st

orag

e of

gre

enho

use

gase

s in

sed

imen

tary

bas

ins.

Geo

logy

34:

577-

80.

54

55

1.

Fos

sil

fuel

fun

gibi

lity

: co

nver

sion

of

gase

ous

and

soli

d fo

rms

of f

ossi

l fu

el i

nto

liqu

id h

ydro

carb

on f

uels

thr

ough

the

F

isch

er-T

rops

ch p

roce

ss

Ove

r su

itabl

e ca

taly

sts,

hea

ting

any

carb

onac

eous

mat

eria

l in

th

e pr

esen

ce o

f w

ater

will

pro

duce

syn

thes

is g

as (

syng

as):

CO

an

d H

2.

Thr

ough

use

of

appr

opri

ate

Fisc

her-

Tro

psch

(FT

) ca

taly

sts,

th

e sy

ngas

ca

n th

en

be

conv

erte

d in

to

liqui

d hy

droc

arbo

n fu

els.

T

he F

T p

roce

ss w

as u

sed

for

larg

e-sc

ale

prod

uctio

n of

liq

uid

fuel

s fr

om

coal

by

th

e G

erm

ans

and

Japa

nese

dur

ing

Wor

ld W

ar I

I.

In t

he g

as-t

o-liq

uid

(GT

L)

proc

ess,

one

bur

ns m

etha

ne (

CH

4)

with

ai

r to

(p

artia

lly)

prod

uce

hydr

ogen

(H

2)

and

carb

on

mon

oxid

e (C

O),

and

then

the

high

er h

ydro

carb

ons,

i.e.

,

CH

4 +

½ O

2 →

2 H

2 +

CO

(2n+

1) H

2 +

n C

O →

CnH

2n+

2 +

n H

2O

The

fir

st r

eact

ion

is v

ery

endo

ther

mic

and

req

uire

s en

ergy

in

put.

In a

dditi

on, m

ore

H2

is n

eede

d th

an is

for

med

alo

ng w

ith

CO

in

the

firs

t re

actio

n fo

r th

e se

cond

rea

ctio

n to

pro

ceed

. Fu

rthe

r, p

art

of t

he m

etha

ne i

n th

e fi

rst

reac

tion

is o

xidi

zed

all

the

way

to

CO

2, i

.e.,

not

all

mak

es C

O,

decr

easi

ng e

ffic

ienc

y fu

rthe

r. T

he r

atio

of

H2

to C

O is

fur

ther

adj

uste

d by

run

ning

the

wat

er-g

as s

hift

rea

ctio

n, C

O +

H2O

→ C

O2

+ H

2, i

nvol

ved

in

the

chem

istr

y of

cat

alyt

ic c

onve

rter

s. T

hese

con

sum

e en

ergy

, w

hich

ul

timat

ely

com

es

from

th

e fo

ssil

or

othe

r en

ergy

fe

edst

ock,

one

way

or

the

othe

r. F

or C

TL

, st

artin

g fr

om c

oal,

whi

ch i

s es

sent

ially

all

carb

on,

H2

mus

t co

me

from

wat

er a

nd

O2,

and

tha

t re

quir

es m

ore

coal

ene

rgy

inpu

t (b

urne

d to

mak

e C

O2

outp

ut)

to f

orm

H2

in t

he f

irst

pla

ce s

o as

to

mak

e th

e hy

droc

arbo

n fu

el in

the

seco

nd p

lace

.

All

DoD

mob

ility

fue

l sto

cks

can

be m

ade

by F

T p

roce

sses

. In

so

me

case

s, t

he l

ack

of a

rom

atic

s in

the

FT

pro

cess

req

uire

s in

trod

uctio

n of

ad

ditiv

es

to

rest

ore

the

exac

t di

esel

fu

el

spec

ific

atio

ns o

f JP

-8,

for

exam

ple,

but

thi

s ca

n be

don

e fo

r re

lativ

ely

little

cos

t by

pay

ing

a re

fine

ry t

o bl

end

the

need

ed

addi

tives

into

the

FT f

uel.

Ano

ther

opt

ion

is to

mix

the

FT f

uel

50:5

0 w

ith c

onve

ntio

nal

JP-8

die

sel

fuel

, so

as

to p

rodu

ce a

m

ixtu

re t

hat

gene

rally

mee

ts t

he J

P-8

fuel

spe

cifi

catio

ns f

or

lubr

icity

, vo

latil

ity,

and

othe

r pe

rfor

man

ce-r

elat

ed p

rope

rtie

s.

The

re s

houl

d th

us b

e no

nee

d to

req

ualif

y al

l D

oD e

ngin

es o

n FT

fue

l, si

nce

it ca

n be

mad

e to

be

nom

inal

ly i

dent

ical

to

JP-8

fu

el w

ith r

elat

ivel

y lo

w-c

ost b

lend

ing

proc

esse

s.

The

FT

pr

oces

s is

ca

pita

l-in

tens

ive,

w

ith

capi

tal

cost

s ap

prox

imat

ely

four

tim

es h

ighe

r th

an th

ose

requ

ired

to p

rodu

ce

an

equi

vale

nt

quan

tity

of

fuel

s by

re

fini

ng

crud

e oi

l. T

he

larg

est

coal

-to-

liqui

d pr

oduc

tion

plan

t is

pre

sent

ly l

ocat

ed i

n So

uth

Afr

ica

(SA

SOL

), p

rodu

cing

up

to 2

00 k

bbl o

f liq

uid

fuel

pe

r da

y.

Ori

gina

lly

built

to

co

unte

r ea

rlie

r fu

el-e

mba

rgo

polic

ies

agai

nst

that

cou

ntry

, at

pre

sent

it

also

pro

duce

s FT

av

iatio

n fu

el

that

it

mix

es

(50:

50)

with

cr

ude-

oil-

deri

ved

avia

tion

fuel

, as

dis

cuss

ed a

bove

. It

has

ins

talle

d no

car

bon

sequ

estr

atio

n m

easu

res,

how

ever

, an

d at

pre

sent

, it

repo

rted

ly

repr

esen

ts

the

larg

est

sing

le

CO

2 em

issi

on

sour

ce

in

the

Afr

ican

con

tinen

t an

d, p

erha

ps,

the

wor

ld.

At

pres

ent,

Roy

al

Dut

ch S

hell

and

SASO

L a

re d

evel

opin

g 10

CT

L p

lant

s in

C

hina

.

In t

he f

igur

e on

pag

e 54

, ‘W

TW

’ is

an

abbr

evia

tion

for

‘Wel

l-T

o-W

heel

s’ a

naly

sis

that

will

be

disc

usse

d be

low

.

56

57

Les

s of

the

ene

rgy

cont

ent

(MJ/

kg)

of t

he f

eeds

tock

(e.

g., c

oal,

natu

ral

gas)

end

s up

in

FT-d

eriv

ed f

uels

com

pare

d to

cru

de o

il pr

oces

sing

and

ref

inin

g. I

gnor

ing

pass

-thr

ough

wat

er,

a C

TL

pl

ant

wou

ld r

equi

re 8

gal

lons

of

wat

er p

er g

allo

n of

FT

die

sel

prod

uced

(cf

. pag

e 54

).

Add

ition

ally

, in

th

e FT

pr

oces

s,

mor

e fe

edst

ock

carb

on

is

rele

ased

as

GH

Gs

than

wou

ld b

e re

leas

ed t

o pr

oduc

e th

e sa

me

amou

nt o

f fu

el f

rom

cru

de o

il.

The

se p

roce

sses

the

refo

re h

ave

an in

crea

sed

wel

l-to

-whe

el (

WT

W)

GH

G b

urde

n pe

r to

n-m

ile.

GT

L-F

T i

s m

ore

effi

cien

t (a

nd l

ess

cost

ly)

than

CT

L-F

T,

as

allu

ded

to a

bove

and

as

indi

cate

d in

the

figu

re o

n pa

ge 5

6. T

he

50%

CT

L e

nerg

y ef

fici

ency

lea

ds t

o tw

o tim

es m

ore

CO

2 em

issi

ons

than

fr

om

petr

oleu

m-d

eriv

ed

dies

el

fuel

, fo

r th

e sa

me

ultim

ate

mec

hani

cal

pow

er

deliv

ered

to

th

e ve

hicl

e w

heel

. W

hile

it

is p

ossi

ble

to m

itiga

te t

he G

HG

s by

car

bon-

sequ

estr

atio

n m

easu

res,

suc

h m

easu

res

com

e at

an

incr

ease

in

cost

(+

25-

40%

) an

d w

ith

som

e un

cert

aint

y on

fu

ture

an

d se

cond

ary

cons

eque

nces

, as

disc

usse

d ab

ove.

Fina

lly,

as n

oted

on

page

54,

an

FT p

lant

is

(ver

y) c

apita

l-in

tens

ive,

app

roxi

mat

ely

4 tim

es th

at o

f an

equ

ival

ent p

lant

(oi

l re

fine

ry)

that

pro

duce

s fu

el s

tart

ing

with

cru

de o

il fe

edst

ock.

A

bsen

t ex

tern

aliti

es

and

othe

r co

nsid

erat

ions

, th

e co

st

of

capi

tal a

lone

suf

fice

s to

dis

cour

age

such

pla

nts.

In

a m

anne

r th

at

para

llels

re

cent

cr

ude-

oil

rese

rves

vs

. pr

oduc

tion

patte

rns,

w

orld

na

tura

l-ga

s re

serv

es/p

rodu

ctio

n ra

tios

have

bee

n su

stai

ned

at a

roun

d 60

yea

rs,

or m

ore,

as

indi

cate

d in

the

gra

phic

on

this

pag

e, d

espi

te i

ncre

ases

in

cons

umpt

ion

over

the

sam

e pe

riod

.

Wor

ld-w

ide

natu

ral g

as r

eser

ves-

to-p

rodu

ctio

n ra

tio.21

21

BP

Sta

tist

ical

Rev

iew

of W

orld

Ene

rgy

(Jan

uary

200

6, p

age

26).

58

59

The

re

sour

ce

base

of

th

e va

riou

s ca

rbon

so

urce

s is

no

w

eval

uate

d to

ass

ess

whe

ther

the

re w

ould

be

suff

icie

nt d

omes

tic

prod

uctio

n ca

pabi

lity

to a

t le

ast

mee

t an

ticip

ated

DoD

fue

l su

pply

nee

ds.

The

gra

phic

on

page

58

show

s th

e an

nual

US

cons

umpt

ion

and

prod

uctio

n of

fue

ls,

pote

ntia

l fu

el s

ourc

es,

and

biom

ass,

ref

eren

ced

to c

arbo

n m

ass.

T

he d

ata

on t

he l

eft-

mos

t si

de o

f th

e gr

aph

indi

cate

car

bon

dom

estic

ally

con

sum

ed

in t

he f

orm

of

foss

il fu

els,

inc

ludi

ng g

asol

ine

(‘pe

trol

’) a

nd

dies

el

fuel

s,

othe

r pe

trol

eum

pr

oduc

ts,

natu

ral

gas

liqui

ds

(pro

pane

, bu

tane

, et

c.),

coa

l an

d na

tura

l ga

s.

In t

otal

, th

ese

dom

estic

ally

co

nsum

ed

fuel

s am

ount

to

2.

4 G

t-C

(b

illio

n m

etri

c to

ns o

f ca

rbon

) ea

ch y

ear.

The

gr

aphi

c al

so

show

s th

e bi

omas

s ca

rbon

-equ

ival

ent

curr

ently

use

d do

mes

tical

ly f

or e

nerg

y.

Mos

t of

tha

t bi

omas

s is

was

te p

rodu

cts

used

to

mak

e el

ectr

icity

. H

owev

er,

the

tota

l al

so i

nclu

des

the

14%

of

the

corn

cro

p th

at i

s cu

rren

tly u

sed

to

mak

e et

hano

l, as

dis

cuss

ed b

elow

. T

he b

iom

ass

pote

ntia

l re

pres

ents

the

1.3

Gt

(tot

al, ×

½ f

or c

arbo

n) o

f dr

y bi

omas

s th

at

the

DO

E-U

SDA

est

imat

es c

an b

e su

stai

nabl

y pr

oduc

ed f

or

ener

gy c

onsu

mpt

ion

in t

he U

.S.

Thi

s es

timat

e as

sum

es t

hat

73%

of

the

biom

ass

will

com

e fr

om a

gric

ultu

re a

nd t

hat

27%

w

ill c

ome

from

for

est

prod

ucts

. J

ASO

N d

id n

ot h

ave

the

oppo

rtun

ity to

ass

ess

the

asse

rtio

n of

sus

tain

abili

ty in

the

DO

E-

USD

A s

tudy

of

such

lar

ge a

mou

nts

of d

omes

tical

ly p

rodu

ced

biom

ass.

Fina

lly,

for

refe

renc

e, t

he r

ight

-mos

t si

de o

f th

e ch

art

depi

cts

the

equi

vale

nt c

arbo

n co

nten

t of

cur

rent

dom

estic

agr

icul

tura

l pr

oduc

tion.

C

lear

ly,

thes

e va

lues

are

rel

ativ

ely

mod

est

in

com

pari

son

to t

he a

mou

nt o

f bi

omas

s th

at w

ould

hav

e to

be

prod

uced

to

di

spla

ce

a re

ason

able

qu

antit

y of

cu

rren

t do

mes

tical

ly c

onsu

med

liqu

id f

uel d

eriv

ed f

rom

cru

de o

il.

Of

som

e si

gnif

ican

ce is

the

indi

catio

n of

the

equi

vale

nt c

arbo

n-m

ass

requ

irem

ents

that

the

DoD

fos

sil-

fuel

nee

ds c

orre

spon

d to

(f

ar

righ

t).

If

econ

omic

ally

pe

rmis

sibl

e,

they

co

uld,

in

pr

inci

ple,

be

co

vere

d by

ex

ploi

ting

the

natio

nal

mun

icip

al

solid

-was

te (

MSW

) st

ream

alo

ne.

60

61

Hav

ing

esta

blis

hed

the

feas

ibili

ty

of

conv

ertin

g no

n-liq

uid

form

s of

fos

sil

ener

gy i

nto

liqui

d hy

droc

arbo

n fu

els

thro

ugh

the

FT p

roce

ss a

nd h

avin

g es

tabl

ishe

d th

at th

ere

is, i

n pr

inci

ple

at l

east

, an

am

ple

supp

ly o

f su

ch c

arbo

n fr

om a

var

iety

of

dom

estic

res

ourc

es,

the

rela

tive

cost

s of

pro

duci

ng l

iqui

d fu

el

from

the

vari

ous

diff

eren

t for

ms

of c

arbo

n av

aila

ble

in th

e U

.S.

are

now

ass

esse

d.

Prod

uctio

n co

sts

of

FT

dies

el

depe

nd

on

the

choi

ce

of

feed

stoc

k.

Dif

fere

ntia

l cos

ts r

efle

ct d

iffe

renc

es i

n ha

ndlin

g th

e fe

edst

ock

in t

he f

acili

ty (

solid

vs.

gas

, et

c.)

as w

ell

as e

nerg

y co

sts

need

ed t

o pr

oduc

e th

e hi

gh t

empe

ratu

res

from

gas

eous

(n

atur

al g

as)

vs.

poro

us m

ater

ial

(bio

mas

s),

vs.

solid

s (c

oal)

. Pr

oduc

tion

cost

s va

ry f

rom

$30

/bbl

for

str

ande

d ga

s (G

TL

),22

to

$7

0+/b

bl

for

biom

ass.

CT

L

($45

/bbl

) is

50

%

mor

e ex

pens

ive

than

GT

L (

$30/

bbl)

. I

n al

l ca

ses,

it

cost

s m

ore

to

prod

uce

dies

el b

y an

y FT

pro

cess

tha

n it

does

to

mak

e JP

-8

from

cru

de o

il.

The

mos

t-co

st-e

ffec

tive

sour

ce o

f FT

die

sel

is v

ia c

onve

rsio

n of

str

ande

d ga

s, e

.g.,

on t

he n

orth

slo

pe o

f A

lask

a.

As

also

no

ted

abov

e, in

add

ition

to h

igh

prod

uctio

n co

sts,

FT

pro

cess

es

have

hig

h ca

pita

l co

sts

that

det

er i

nves

tmen

t in

the

fac

e of

un

cert

ain

futu

re c

rude

-oil

pric

es,

i.e.,

in t

he e

vent

of

a fa

ll in

pr

ices

. T

hat

larg

e sw

ings

are

par

t of

the

his

tori

cal

reco

rd i

s

22

A ‘

stra

nded

gas

’ re

serv

e is

a n

atur

al g

as f

ield

tha

t ha

s be

en d

isco

vere

d,

but

rem

ains

unu

sabl

e fo

r ei

ther

phy

sica

l or

eco

nom

ic r

easo

ns. G

as t

hat

is

foun

d w

ithin

oil

wel

ls i

s co

nven

tiona

lly r

egar

ded

as a

ssoc

iate

d ga

s [o

r st

rand

ed

gas]

an

d ha

s hi

stor

ical

ly

been

fl

ared

. It

is

al

so

som

etim

es

reci

rcul

ated

ba

ck

into

oi

l w

ells

to

m

aint

ain

extr

actio

n pr

essu

re,

or

conv

erte

d in

to e

lect

rici

ty u

sing

gas

-pow

ered

eng

ines

.

[http

://en

.wik

iped

ia.o

rg/w

iki/S

tran

ded_

gas_

rese

rve,

6 A

ugus

t 200

6]

ampl

y do

cum

ente

d in

the

fig

ure

belo

w t

hat

depi

cts

the

pric

e of

cr

ude

oil,

sinc

e 18

61,

in

FY05

do

llars

.

It

illus

trat

es

the

cons

ider

able

ris

k th

at w

ould

be

incu

rred

by

assu

min

g th

at t

he

curr

ent

high

pri

ces

in t

he v

icin

ity o

f $7

5/bb

l w

ill b

e su

stai

ned.

It

als

o ill

ustr

ates

tha

t th

ey w

ere

exce

eded

aro

und

1980

(Ir

ania

n re

volu

tion)

.23

As

with

any

inv

estm

ents

and

bar

ring

ext

erna

litie

s, i

nves

tmen

ts

in b

iofu

els,

FT

pro

cess

es,

etc.

, ne

ed t

o co

mpe

te w

ith c

urre

nt

retu

rns

from

dri

lling

for

cru

de o

il.

23

BP

Sta

tist

ical

Rev

iew

of W

orld

Ene

rgy

(Jan

uary

200

6, p

. 16)

.

62

63

2.

Bio

fuel

s

For

com

pari

son,

the

pro

duct

ion

of l

iqui

d fu

els

from

non

-fos

sil

ener

gy s

ourc

es w

ill n

ow b

e di

scus

sed.

Bio

mas

s is

the

mos

t oft

-ci

ted

rout

e fo

r su

ch p

urpo

ses

beca

use,

in

prin

cipl

e, b

iom

ass-

deri

ved

fuel

s co

uld

be w

idel

y av

aila

ble.

A

dditi

onal

ly, b

iofu

els

coul

d be

, at l

east

to s

ome

exte

nt, s

usta

inab

le a

nd r

enew

able

. Of

conc

ern,

the

refo

re,

is n

ot o

nly

the

rela

tive

cost

of

the

biof

uel

with

res

pect

to

the

cost

of

crud

e-oi

l-ba

sed

fuel

s, o

r FT

-der

ived

fu

els,

bu

t th

e su

itabi

lity

of

bio-

deri

ved

fuel

s fo

r th

e D

oD

mis

sion

and

whe

ther

the

pro

duct

ion

of s

uch

fuel

s st

ems

from

a

rene

wab

le p

roce

ss,

e.g.

, th

e fr

actio

n of

sun

light

ene

rgy

stor

ed

in t

he f

inal

fue

l pr

oduc

t, as

wel

l as

the

res

ult

of a

ful

l ac

coun

t of

all

othe

r en

ergy

and

oth

er i

nput

s re

quir

ed t

o pr

oduc

e th

e bi

ofue

l. E

than

ol d

eriv

ed f

rom

cor

n

The

mai

n pr

esen

ce i

n th

e do

mes

tic b

iofu

els

mar

ket

at t

his

time

is e

than

ol d

eriv

ed f

rom

cor

n.

In t

he U

.S.,

etha

nol

is p

rim

arily

us

ed a

s an

oxy

gena

te in

aut

omot

ive

fuel

, rep

laci

ng th

e ad

ditiv

e M

TB

E (

met

hyl

tert

iary

-but

yl e

ther

).

Pres

ently

, 14

% o

f U

.S.

corn

pro

duct

ion

is u

sed

to p

rovi

de t

he e

than

ol t

hat

com

pris

es

2% o

f U

.S. t

rans

port

atio

n fu

el.

The

vol

umet

ric

ener

gy c

onte

nt o

f et

hano

l (C

2H5O

H)

is 2

/3 t

hat

of g

asol

ine

or d

iese

l fue

ls (

1.5

gallo

ns o

f et

hano

l sto

re th

e sa

me

ener

gy a

s 1

gallo

n of

gas

olin

e).

Thi

s is

bec

ause

one

car

bon

in

etha

nol

is a

lrea

dy p

artly

oxi

dize

d an

d th

eref

ore

is l

ess

of a

co

ntri

buto

r to

the

hea

t of

com

bust

ion

to f

orm

CO

2 th

an t

he

fully

red

uced

for

m o

f ca

rbon

in li

quid

hyd

roca

rbon

fue

ls.

Cor

n is

con

vert

ed t

o et

hano

l in

eith

er a

dry

or

wet

mill

ing

proc

ess.

In

dry

mill

ing,

liq

uefi

ed c

orn

star

ch i

s pr

oduc

ed b

y he

atin

g co

rn m

eal

with

wat

er a

nd e

nzym

es.

A s

econ

d en

zym

e co

nver

ts t

he l

ique

fied

sta

rch

to s

ugar

s th

at a

re f

erm

ente

d by

ye

ast,

prod

ucin

g et

hano

l and

car

bon

diox

ide.

In

the

(pre

ferr

ed)

wet

mill

ing

proc

ess,

the

fib

er,

germ

(oi

l),

and

prot

ein

are

sepa

rate

d fr

om th

e st

arch

bef

ore

ferm

enta

tion

to e

than

ol.

In B

razi

l, et

hano

l is

deri

ved

from

sug

ar c

ane.

E

than

ol c

an a

lso

be p

rodu

ced

from

whe

at a

nd s

oybe

ans.

Of

the

sola

r en

ergy

in

cide

nt

per

unit

area

fa

rmed

, ap

prox

imat

ely,

0.2

2 kW

/m2 y

earl

y an

d da

y-ni

ght

aver

aged

at

repr

esen

tativ

e m

id-l

atitu

des,

onl

y 0.

1% e

nds

up i

n co

rn.

Aft

er

the

fina

l pr

oces

s, o

nly

0.03

-0.0

5% o

f th

e in

itial

ins

olat

ion

ener

gy i

s co

ntai

ned

in l

iqui

d fu

el.24

A

noth

er f

acto

r of

thr

ee i

s th

en l

ost

duri

ng c

onve

rsio

n of

the

fue

l in

to u

sefu

l w

ork

in a

n in

tern

al c

ombu

stio

n en

gine

.

The

low

sol

ar-e

nerg

y co

nver

sion

eff

icie

ncy,

cou

pled

with

the

en

ergy

-int

ensi

ve p

roce

ss t

o pr

oduc

e co

rn e

than

ol,

resu

lts i

n an

ov

eral

l pr

oces

s th

at y

ield

s no

sig

nifi

cant

net

ene

rgy

bene

fit

from

cor

n-de

rive

d et

hano

l, as

it

is w

ithin

±20

% o

f “e

nerg

y br

eake

ven”

. A

s im

plem

ente

d in

the

U.S

. at

pre

sent

, m

uch

of

the

ener

gy u

sed

to m

ake

corn

-bas

ed e

than

ol i

s pr

oduc

ed b

y bu

rnin

g co

al to

pro

vide

hea

t to

the

proc

ess.

24 A

noth

er f

acto

r of

3,

or s

o, i

s th

en l

ost

in c

onve

rtin

g th

e (l

ow-v

alue

) en

ergy

in

the

fuel

to

wor

k (h

igh-

valu

e en

ergy

), i.

e., a

n ov

eral

l co

nver

sion

ef

fici

ency

of

in

cide

nt

sunl

ight

en

ergy

to

hi

gh-v

alue

en

ergy

(e

.g.,

mec

hani

cal

wor

k) o

f 0.

01%

. In

con

tras

t, so

lar

cells

hav

e an

eff

icie

ncy

in

the

rang

e of

15-

22%

and

pro

duce

hig

h-va

lue

ener

gy (

elec

tric

ity),

alb

eit a

t to

o hi

gh a

cos

t in

ter

ms

of $

/inst

alle

d-kW

to

be c

ompe

titiv

e fo

r m

ost

appl

icat

ions

.

64

65

Cel

lulo

sic

etha

nol

The

net

ene

rgy

conv

ersi

on e

ffic

ienc

y in

a p

roce

ss i

n w

hich

ce

llulo

sic

biom

ass

is c

onve

rted

int

o liq

uid

fuel

is

pote

ntia

lly a

t le

ast

thre

e tim

es

high

er

than

th

e 0.

03-0

.05%

va

lue

char

acte

rist

ic

of

etha

nol

from

co

rn.

H

owev

er,

a pr

oper

(t

herm

odyn

amic

-) c

ycle

ana

lysi

s th

at a

ccou

nts

for

cons

erva

tion

of m

ass

and

wha

t fr

actio

n of

the

ene

rgy

is s

usta

inab

le w

ill

redu

ce t

his

figu

re.

The

low

con

vers

ion

effi

cien

cy c

ombi

ned

with

the

rel

ativ

ely

low

pow

er/e

nerg

y de

nsity

of

the

year

ly

aver

aged

in

sola

tion

requ

ire

very

la

rge

area

s to

pr

ovid

e si

gnif

ican

t (ne

t) e

nerg

y re

sour

ces

from

suc

h a

proc

ess.

The

req

uisi

te c

ellu

losi

c bi

omas

s co

uld

be p

rodu

ced

from

a

wid

e va

riet

y of

fee

dsto

cks,

inc

ludi

ng a

gric

ultu

ral

plan

t w

aste

s (c

orn

stov

er,

cere

al s

traw

s, s

ugar

cane

bag

asse

), w

aste

s fr

om

fore

st p

rodu

cts

(saw

dust

, pa

per

pulp

, et

c.),

and

cro

ps g

row

n sp

ecif

ical

ly f

or f

uel

prod

uctio

n (m

isca

nthu

s, s

witc

hgra

ss).

A

s di

scus

sed

abov

e,

the

2005

D

OE

-USG

A

Bil

lion

T

on

Vie

w

estim

ated

tha

t th

e U

.S. c

ould

sus

tain

ably

pro

duce

1.3

Gt

of d

ry

biom

ass

annu

ally

, of

whi

ch a

ppro

xim

atel

y ha

lf i

s ca

rbon

by

mas

s.

Cel

lulo

sic

biom

ass

is c

ompo

sed

of c

ellu

lose

, he

mic

ellu

lose

, an

d lig

nin,

w

ith

smal

ler

amou

nts

of

prot

eins

, lip

ids

(fat

s,

wax

es,

and

oils

) an

d as

h.

Rou

ghly

, 2/

3 of

the

dry

mas

s of

ce

llulo

sic

mat

eria

ls

is

com

pose

d of

ce

llulo

se

and

hem

icel

lulo

se,

whi

le l

igni

n m

akes

up

mos

t of

the

rem

aini

ng

dry

mas

s.

Cel

lulo

se a

nd h

emic

ellu

lose

can

be

conv

erte

d in

to

etha

nol,

whi

le li

gnin

can

not

. L

igni

n ca

n be

bur

ned

to p

rodu

ce

elec

tric

ity,

or

coul

d be

co

nver

ted

to

fuel

th

roug

h th

e FT

pr

oces

s.

The

cel

lulo

sic-

biom

ass

com

mun

ity m

ust d

evel

op c

ost-

effe

ctiv

e pr

oces

ses

to c

onve

rt c

ellu

losi

c bi

omas

s to

liq

uid

fuel

s if

the

y ar

e to

com

pete

in

the

mar

ketp

lace

with

fos

sil-

fuel

bas

ed l

iqui

d fu

els.

At p

rese

nt, a

via

ble

proc

ess

does

not

exi

st.

Cel

lulo

sic

biom

ass

mus

t al

so

com

pete

ec

onom

ical

ly

with

gr

owin

g fo

od

on

the

sam

e pa

rcel

of

la

nd.

Pr

esen

tly,

(uns

ubsi

dize

d)

farm

ing

for

food

is

m

ore

prof

itabl

e th

an

(uns

ubsi

dize

d) f

arm

ing

for

ener

gy.

66

67

It m

ust

also

be

dem

onst

rate

d th

at s

uffi

cien

t ce

llulo

sic

biom

ass

feed

stoc

k ca

n be

har

vest

ed w

ith s

usta

inab

le a

gric

ultu

ral c

ycle

s.

Sust

aina

bilit

y re

quir

es t

hat

a fu

ll th

erm

odyn

amic

cyc

le f

or t

he

proc

ess

be c

onsi

dere

d, in

clud

ing

the

mas

s, p

artic

ular

inor

gani

c,

orga

nic,

and

bio

mas

s sp

ecie

s, a

s w

ell

as e

nerg

y re

quir

ed t

o re

med

iate

an

y “d

amag

e”

to

crop

la

nd

from

gr

owin

g an

d ha

rves

ting

the

ener

gy

crop

ov

er

man

y ye

ars

(in

orde

r to

m

aint

ain

prod

uctio

n in

defi

nite

ly).

T

op s

oil

is g

ener

ated

on

cent

ury

time

scal

es.

Mon

itori

ng f

or d

amag

e/de

plet

ion

from

ev

en c

aref

ul a

gric

ultu

ral

prac

tices

on

such

a t

ime

scal

e is

a

chal

leng

e.

The

sus

tain

able

bio

mas

s fu

el c

ycle

sho

uld

incl

ude

all

of t

he

inpu

ts a

nd o

utpu

ts o

f th

e pr

oces

s.

Inpu

ts t

o th

e cy

cle

wou

ld

need

to

incl

ude

fert

ilize

r an

d th

e en

ergy

and

fee

dsto

ck t

o pr

oduc

e it,

che

mic

als,

fue

ls,

pest

icid

es,

labo

r, m

achi

nery

, so

il,

sun,

rai

n, C

O2

upta

ke,

and

any

wat

er.

Out

puts

sho

uld

incl

ude

heat

, GH

Gs,

and

was

te w

ater

.

An

impo

rtan

t asp

ect o

f a

com

plet

e cy

cle

is w

ater

. U

sing

wat

er,

othe

r th

an

relia

nce

on

rain

wat

er,

to

grow

en

ergy

cr

ops

is

com

mon

ly a

ckno

wle

dged

to

incu

r a

larg

e pe

nalty

bec

ause

of

the

requ

ired

ene

rgy

(and

cos

t) t

o de

liver

the

wat

er (

ener

gy i

s re

quir

ed t

o de

liver

it,

or p

ump

it up

fro

m t

he g

roun

d: a

100

m

rise

is

not

atyp

ical

), a

nd b

ecau

se l

ong

term

irr

igat

ion

impl

ies

a bu

ild-u

p of

sal

inity

(so

il sa

ltifi

catio

n).25

25

See

art

icle

s in

(19

94)

Agr

. Wat

er M

anag

emen

t, vo

l. 25

, “M

anag

emen

t of

Ir

riga

tion

Wat

er a

nd i

ts E

colo

gica

l Im

pact

,” C

omm

issi

on I

I: S

ympo

sia

of

the

Tra

nsac

tion

s of

the

15t

h W

orld

Con

gres

s of

Soi

l Sc

ienc

e (A

capu

lco,

M

exic

o,

1994

),

vol.

3a;

Pim

ente

l et

al

. (1

995)

E

nvir

onm

enta

l an

d ec

onom

ic

cost

s of

so

il er

osio

n an

d co

nser

vatio

n be

nefi

ts.

Scie

nce

276:

1117

-23;

T

. Pa

tzek

&

D

. Pi

men

tel

(200

5)

“The

rmod

ynam

ics

of

Eve

n w

here

the

re i

s pl

enty

of

rain

to

grow

the

can

dida

te

feed

stoc

k, e

than

ol g

ener

atio

n fr

om b

iom

ass

requ

ires

a g

reat

de

al o

f pr

oces

s w

ater

. A

ssum

ing

an e

nzym

atic

pro

cess

tha

t re

ache

s 10

-15%

eth

yl a

lcoh

ol, t

here

will

be

abou

t 6-

10 g

allo

ns

of w

aste

wat

er f

or e

very

gal

lon

of f

uel-

qual

ity a

lcoh

ol.

The

dr

egs

will

hav

e to

be

rem

oved

fro

m t

he w

ater

(an

d pe

rhap

s re

turn

ed t

o th

e la

nd),

if

the

wat

er i

s to

be

re-u

sed

and

that

par

t of

the

cyc

le c

lose

d.

Thi

s al

so i

ncur

s tr

ansp

orta

tion

cost

s. T

he

only

al

tern

ativ

e to

be

arin

g th

e en

ergy

co

st

of

this

w

ater

tr

ansp

orta

tion

and

clea

nup

is p

ollu

tion

of w

ater

way

s or

the

oc

ean.

Fina

lly,

no c

ellu

losi

c co

nver

sion

tec

hnol

ogy

exis

ts t

oday

on

a co

mm

erci

al s

cale

and

an

eval

uatio

n of

its

eff

icac

y, r

elat

ive

cost

s, s

usta

inab

ility

, or

its

pot

entia

l to

mee

t D

oD f

uel-

supp

ly

need

s ca

nnot

be

mad

e at

this

tim

e.

E

nerg

y Pr

oduc

tion

from

Bio

mas

s,”

Cri

tica

l R

evie

ws

in P

lant

Sci

ence

s,

24:3

27–6

4; a

nd P

imen

tel

(200

6) S

oil

eros

ion:

A f

ood

and

envi

ronm

enta

l th

reat

. Env

. Dev

. & S

usta

inab

ility

8:1

16-1

37.

68

69

70

71

3.

Wel

l-T

o-P

ump

(WT

P)

and

Wel

l-T

o-W

heel

(W

TW)

anal

yses

A

prop

er

anal

ysis

re

quir

es

the

eval

uatio

n of

th

e en

ergy

re

quir

ed t

o no

t on

ly p

rodu

ce,

but

also

to

stor

e, d

istr

ibut

e, a

nd

ultim

atel

y ut

ilize

var

ious

fue

ls o

f po

tent

ial

inte

rest

to

the

DoD

. W

ithou

t su

ch a

n an

alys

is,

a fo

cus

on o

nly

fuel

pro

duct

ion

will

no

t ad

equa

tely

cap

ture

the

tru

e su

pply

con

stra

ints

and

nee

ds,

nor

the

suita

bilit

y of

the

fuel

for

DoD

use

. In

suc

h an

ana

lysi

s,

it is

use

ful

to a

ccou

nt f

or t

he e

ntir

e en

ergy

str

eam

fro

m t

he

wel

l, i.e

., th

e en

ergy

sou

rce,

to th

e w

heel

, i.e

., th

e (f

uel)

ene

rgy

cons

umpt

ion

by t

he e

nd u

ser.

Thi

s is

kno

wn

as t

he W

ell-

To-

Whe

el (

WT

W)

proc

ess.

T

his

proc

ess

is o

ften

sub

divi

ded

into

tw

o se

para

te

com

pone

nts,

on

e fr

om t

he w

ell

to t

he p

ump

(WT

P), a

nd th

e se

cond

fro

m th

e pu

mp

to th

e w

heel

(PT

W).

The

WT

P en

ergy

eff

icie

ncy

for

dies

el a

nd g

asol

ine

is o

f or

der

85%

, w

hile

th

e W

TP

effi

cien

cy

of

cellu

losi

c et

hano

l is

es

timat

ed to

be

clos

er to

40%

(cf

. pag

e 68

).26

Hen

ce, t

o su

pply

a

cert

ain

need

ed

ener

gy

to

DoD

pl

atfo

rms

wou

ld

requ

ire

alm

ost

twic

e as

man

y jo

ules

in

etha

nol

prod

uctio

n as

in

dies

el

or g

asol

ine

prod

uctio

n fr

om c

rude

oil.

The

PT

W e

ffic

ienc

y is

pri

mar

ily a

fun

ctio

n of

eng

ine

type

. I

t is

typ

ical

ly o

f or

der

30%

, whi

ch i

s a

mea

sure

of

the

frac

tion

of

the

ener

gy o

f th

e fu

el th

at c

an b

e co

nver

ted

to u

sefu

l wor

k.

26

‘L

S D

iese

l’ a

nd ‘

LS

Gas

olin

e’ d

enot

e ‘L

ow-S

ulfu

r’ d

iese

l/gas

olin

e, a

s pr

oduc

ed i

n E

urop

e.

Rem

oval

of

sulf

ur f

rom

tra

nspo

rtat

ion

fuel

s is

re

quir

ed t

o pr

even

t po

ison

ing

of c

atal

ytic

con

vert

ers

in t

he e

xhau

st-g

as

stre

am.

At

pres

ent,

U.S

. die

sel

does

not

mee

t th

e lo

w-s

ulfu

r re

quir

emen

t an

d di

esel

-pow

ered

car

s in

the

U.S

., at

pre

sent

, can

not a

vail

them

selv

es o

f th

e sa

me

emis

sion

s bu

rden

red

uctio

n te

chno

logy

.

Com

bini

ng

thes

e tw

o co

mpo

nent

s in

to

the

anal

ysis

of

an

ov

eral

l ene

rgy

proc

ess

prod

uces

the

full

WT

W a

naly

sis.

It i

s us

eful

to

perf

orm

tw

o se

para

te W

TW

ana

lyse

s, o

ne b

ased

on

the

net

ene

rgy

deliv

ery/

inpu

t an

d th

e ot

her

base

d on

the

net

G

HG

s em

itted

for

the

ful

l fu

el p

rodu

ctio

n to

con

sum

ptio

n pr

oces

s.

The

lef

t-m

ost

WT

W g

raph

ic o

n pa

ge 6

9 de

pict

s th

e to

tal

ener

gy r

equi

red

to m

ove

100

km.

Con

vent

iona

l di

esel

an

d ga

solin

e fu

els

are

supe

rior

on

this

ene

rgy

basi

s, w

hile

w

ood

prod

ucts

are

the

wor

st.

How

ever

, on

a G

HG

bas

is,

biom

ass

can

be

a ve

ry

low

G

HG

so

urce

, w

hen

mea

sure

d W

TW

, whi

le m

ost a

ll fo

ssil

fuel

s ar

e le

ss f

avor

able

. C

oal i

s by

fa

r th

e m

ost o

ffen

sive

GH

G e

mitt

er.

From

this

per

spec

tive,

gas

(G

TL

) is

a m

uch

bette

r so

urce

of

fuel

than

coa

l (C

TL

).

72

73

Ove

rall-

proc

ess

(WT

W)

ener

gy a

nd G

HG

em

issi

ons

prov

ide

usef

ul c

rite

ria,

but

not

the

only

con

side

ratio

ns f

or a

sses

sing

the

suita

bilit

y of

va

riou

s fu

els

for

DoD

us

e.

A

n es

peci

ally

im

port

ant

oper

atio

nal

cons

trai

nt f

or t

he D

oD i

s en

ergy

den

sity

, i.e

., th

e en

ergy

con

tent

per

uni

t vo

lum

e, o

r its

rec

ipro

cal,

the

fuel

vol

ume

requ

ired

for

a g

iven

ene

rgy

cont

ent.

Ene

rgy

per

unit

volu

me

in e

ssen

ce d

eter

min

es v

ehic

le r

ange

for

a g

iven

fu

el-t

ank

capa

city

, an

d ca

n di

ctat

e (l

imit

or e

nhan

ce)

mili

tary

ta

ctic

s of

mob

ile p

latf

orm

s.

In t

his

rega

rd,

it is

use

ful

to c

onsi

der

the

fuel

vol

ume

requ

ired

fo

r a

give

n en

ergy

con

tent

in

term

s of

the

rat

io o

f th

e fu

el

volu

me

for

a gi

ven

ener

gy c

onte

nt, r

elat

ive

to t

hat

of g

asol

ine.

T

he g

raph

ic o

n pa

ge 7

2 ill

ustr

ates

that

die

sel,

gaso

line,

and

JP-

8 ar

e ve

ry s

imila

r, w

ith b

utan

ol (

C4H

9OH

) po

sses

sing

90%

of

the

ener

gy d

ensi

ty o

f ga

solin

e.

Eth

anol

, ho

wev

er,

has

a 50

% l

ower

vol

umet

ric

ener

gy d

ensi

ty

than

gas

olin

e. W

ith 5

0% l

ess

ener

gy d

ensi

ty t

han

gaso

line,

D

oD

oper

atio

ns

will

re

quir

e 50

%

mor

e fu

elin

g so

rtie

s by

ta

nker

tr

ucks

, im

plyi

ng

a 50

%

grea

ter

dang

er

for

thos

e re

spon

sibl

e fo

r th

at e

ndea

vor.

T

o ke

ep th

e sa

me

rang

e pe

r fi

ll-up

by

com

bat

vehi

cles

, fu

el t

anks

wou

ld h

ave

to b

e in

crea

sed

in s

ize

by 5

0%.

Fur

ther

mor

e, e

than

ol h

as a

low

er f

lash

poi

nt

and,

th

eref

ore,

m

ore

pron

e to

ex

plos

ion

than

is

ga

solin

e.

Hen

ce, e

ven

if i

t w

ere

com

para

ble

on a

WT

W e

nerg

y or

GH

G

emis

sion

s ba

sis,

eth

anol

wou

ld s

till

be u

nsui

tabl

e fo

r us

e on

D

oD m

issi

ons

on a

per

form

ance

bas

is.

On

this

per

form

ance

bas

is, l

iqui

d hy

droc

arbo

n fu

els

emer

ge a

s th

e pr

efer

red

ener

gy s

ourc

e fo

r m

obili

ty o

n D

oD t

actic

al a

nd

com

bat v

ehic

les,

bot

h ai

r an

d la

nd-b

ased

. Si

nce

thes

e fu

els

are

mos

t ch

eapl

y m

ade

from

fos

sil

ener

gy o

f on

e ty

pe o

r an

othe

r,

and

sinc

e,

barr

ing

unfo

rese

en

uphe

aval

s,

the

foss

il-fu

el

feed

stoc

k su

pplie

s ap

pear

ad

equa

te

for

som

etim

e in

to

the

futu

re,

the

best

m

etho

d fo

r re

duct

ion

of

a D

oD

fuel

co

nsum

ptio

n is

to

redu

ce d

eman

d, a

s de

scri

bed

abov

e, t

hrou

gh

a va

riet

y of

met

hods

inc

ludi

ng p

atte

rns

of u

se,

light

wei

ghtin

g ve

hicl

es,

re-e

ngin

ing

tank

s an

d B

-52

bom

bers

, an

d re

plac

ing

man

ned

plat

form

s w

ith u

nman

ned

ones

. I

n ag

greg

ate,

the

se

appr

oach

es c

an y

ield

con

side

rabl

e fu

el s

avin

gs w

hile

at

the

sam

e ti

me

enha

ncin

g pe

rfor

man

ce

of

DoD

pl

atfo

rms

and

open

ing

up n

ew m

issi

on c

apab

iliti

es f

or D

oD f

orce

s.

74

[Thi

s pa

ge in

tent

iona

lly le

ft b

lank

.]

75

VI.

Dis

cuss

ion

an

d c

on

clu

din

g r

emar

ks

The

pre

cedi

ng d

ata

and

anal

ysis

pro

vide

a b

asis

for

ass

essi

ng

prob

lem

s an

d is

sues

ass

ocia

ted

with

U.S

. an

d D

oD f

ossi

l-fu

el

use,

the

sho

rt-

and

inte

rmed

iate

-ter

m p

rosp

ects

, as

wel

l as

gu

idan

ce f

or a

pat

h fo

rwar

d th

at w

ould

red

uce

the

DoD

’s

foss

il-fu

el d

epen

denc

e.

A. I

nter

nati

onal

and

nat

iona

l con

side

rati

ons

The

tw

o fi

gure

s on

pag

e iv

, fo

llow

ing

the

exec

utiv

e su

mm

ary,

de

pict

th

e m

ovem

ent

of

crud

e oi

l an

d oi

l pr

oduc

ts

acro

ss

boun

dari

es o

f th

e m

ajor

pro

duct

ion

and

cons

umpt

ion

area

s in

th

e w

orld

. T

hey

also

dep

ict t

he p

rese

nt d

epen

denc

e of

the

U.S

. on

its

maj

or f

orei

gn s

uppl

iers

.

Oil

impo

rts

acco

unt

for

a la

rge

frac

tion

of t

he U

.S.

curr

ent

acco

unt b

alan

ce. T

he E

cono

mis

t (20

Apr

il 20

06)

note

s th

at,

“Ple

nty

of A

mer

ican

s bl

ame

unfa

ir c

ompe

titio

n fr

om A

sia,

and

es

peci

ally

C

hina

, fo

r th

eir

coun

try'

s gi

gant

ic

curr

ent-

acco

unt

defi

cit.

Yet

th

e gr

oup

of

coun

trie

s w

ith

the

wor

ld's

bi

gges

t cu

rren

t-ac

coun

t su

rplu

ses

is

no

long

er

emer

ging

A

sia,

bu

t ex

port

ers

of

oil.

As

the

pric

e of

th

eir

chie

f re

sour

ce

has

clim

bed—

this

wee

k it

hit

a ne

w n

omin

al r

ecor

d pr

ice

of m

ore

than

$7

0 a

barr

el—

thes

e ec

onom

ies

have

en

joye

d a

huge

w

indf

all.

From

an

Am

eric

an p

oint

of

view

, th

e ri

se i

n oi

l pr

ices

ha

s ex

plai

ned

half

of

the

wid

enin

g of

the

cur

rent

-acc

ount

def

icit

si

nce

2003

, a

bigg

er s

hare

tha

n th

at a

ccou

nted

for

by

Chi

na.

[ita

lics

our

s] …

Am

eric

a ga

ins

little

, in

term

s of

its

curr

ent-

acco

unt b

alan

ce, e

ven

from

the

im

port

s th

at o

il ex

port

ers

do b

uy.

It n

ow a

ccou

nts

for

only

8%

of

OPE

C c

ount

ries

' tot

al i

mpo

rts;

the

Eur

opea

n U

nion

ha

s 32

%.

So e

ven

if t

he e

xpor

ters

spe

nt a

ll th

eir

extr

a re

venu

e,

Am

eric

a's

curr

ent-

acco

unt

defi

cit

wou

ld i

ncre

ase

as o

il pr

ices

ri

se.

Thi

s pa

rtly

exp

lain

s w

hy i

n re

cent

yea

rs t

he E

U's

tra

de

bala

nce

with

th

e oi

l ex

port

ers

has

bare

ly

chan

ged

even

as

A

mer

ica'

s de

fici

t has

gro

wn

shar

ply.

It i

s si

gnif

ican

t th

at t

he p

repo

nder

ant

frac

tion

(51.

1%)

of c

rude

oi

l and

ref

ined

oil

prod

ucts

impo

rted

into

the

U.S

. der

ives

fro

m

the

(rem

aind

er)

of t

he A

mer

ican

con

tinen

t (S

outh

and

Cen

tral

A

mer

ica,

Mex

ico,

and

Can

ada)

. W

est

and

Nor

th A

fric

a co

me

seco

nd w

ith a

tot

al o

f 19

.1%

of

U.S

. oi

l im

port

s, a

nd t

he

Mid

dle

Eas

t, w

hile

it

is t

he w

orld

’s m

ajor

oil

supp

lier

to b

e su

re, i

t is

thi

rd i

n im

port

ance

as

a U

.S. s

uppl

ier,

acc

ount

ing

for

18%

of

U.S

. oi

l im

port

s. T

hese

dat

a in

dica

te t

hat

unde

r th

e as

sum

ptio

n th

at U

.S. a

nd n

on-M

iddl

e-E

aste

rn p

rodu

ctio

n co

uld

be h

eld

(app

roxi

mat

ely)

con

stan

t, it

wou

ld s

uffi

ce t

o de

crea

se

U.S

. fos

sil-

fuel

con

sum

ptio

n by

12%

, at p

rese

nt, f

or th

e U

.S. t

o be

in

a po

sitio

n to

wea

n its

elf

free

fro

m M

iddl

e E

ast

oil,

in t

he

shor

t te

rm,

shou

ld

the

need

ar

ise.

As

disc

usse

d ea

rlie

r,

how

ever

, th

e w

orld

fun

gibi

lity

of o

il th

roug

h th

e w

orld

oil

supp

ly m

arke

ts w

ould

res

pond

to th

is d

ecre

ase

by a

djus

ting

the

supp

ly-d

eman

d ba

lanc

e.

Such

a g

oal

mig

ht b

e ac

hiev

ed w

ithou

t de

lete

riou

s ef

fect

s to

th

e U

.S.

econ

omy

by

any

of

a nu

mbe

r of

m

eans

in

co

mbi

natio

n.

Thi

s w

ould

pr

oduc

e,

at

leas

t te

mpo

rari

ly,

a w

orld

-wid

e ex

cess

pro

duct

ion

capa

city

and

a d

ecre

ase

in o

il pr

ices

, im

prov

ing

both

the

nat

iona

l ec

onom

y an

d th

e na

tiona

l de

fens

e po

stur

e.

Reg

ardi

ng o

il pr

ices

, it’

s w

orth

not

ing

that

the

y ar

e no

t at

hi

stor

ical

ly h

igh

leve

ls w

hen

adju

sted

for

inf

latio

n.

As

the

char

t on

pag

e 61

ind

icat

es,

pric

es a

roun

d th

e 19

80 t

ime

peri

od

peak

ed

at

$36/

bbl

in

then

-yea

r m

oney

, co

rres

pond

ing

to

76

FY05

$ 85

/bbl

. T

he r

apid

dec

reas

e in

pri

cing

fol

low

ing

that

pe

ak a

nd t

he d

ata

depi

cted

in

the

figu

res

on p

age

6 ca

n on

ly

indu

ce a

con

serv

ativ

e st

ance

in

the

oil

indu

stry

, di

scou

ragi

ng

inve

stm

ents

tha

t re

quir

e th

at t

he p

rese

nt h

igh

pric

es m

ust

be

sust

aine

d to

be

just

ifie

d.

Fina

lly, a

ddin

g to

the

gene

ral c

avea

t of

a fo

ggy

futu

re, v

is-à

-vis

in

stab

ility

in

th

e M

iddl

e E

ast,

cons

eque

nces

on

w

orld

pr

oduc

tion

from

ine

ffic

ienc

ies

and

dam

age

from

the

ris

e of

(m

ost)

nat

iona

l oil

com

pani

es,4,

27 a

nd th

e co

nseq

uenc

es o

f po

or

gove

rnan

ce a

nd h

ostil

ity t

owar

ds t

he U

.S.

in m

any

of t

he

wor

ld’s

oil-

prod

ucin

g na

tions

, str

ongl

y ar

gue

for

cons

erva

tion.

B. C

onsi

dera

tion

s fo

r th

e D

oD

Thi

s st

udy

find

s th

at t

he g

reat

est

leve

rage

on

DoD

fos

sil-

fuel

us

e is

exe

rted

by

patte

rns

of D

oD f

ossi

l-fu

el u

se.

Rec

ent

and

pres

ent

doct

rine

, ta

ctic

s, a

nd p

ract

ices

evo

lved

dur

ing

a tim

e w

hen

fuel

cos

ts r

epre

sent

ed a

n in

sign

ific

ant f

ract

ion

of th

e U

.S.

natio

nal-

defe

nse

budg

et,

with

fue

l co

sts

entir

ely

dom

inat

ed b

y th

e as

soci

ated

O&

M l

ogis

tical

sup

ply

chai

n co

sts

and

not

by

thos

e of

th

e fu

el

itsel

f.

W

hile

O

&M

co

sts

cont

inue

to

do

min

ate,

ac

tual

fu

el

cost

s ha

ve

rece

ntly

ri

sen

rapi

dly,

at

tain

ing

a si

gnif

ican

t re

cent

vis

ibili

ty. A

t pr

esen

t, fu

el b

udge

ts

are

in c

ompe

titio

n w

ith o

ther

DoD

non

-fix

ed c

osts

, su

ch a

s re

sear

ch,

deve

lopm

ent,

and

engi

neer

ing

(RD

&E

), a

nd o

ther

di

scre

tiona

ry f

undi

ng, o

f w

hich

they

are

a m

uch

larg

er p

art.28

27

Ind

ones

ia,

an i

mpo

rtan

t oi

l pr

oduc

er w

ith s

igni

fica

nt (

prov

en)

rese

rves

, re

cent

ly b

ecam

e a

net o

il im

port

er. [

Eco

nom

ist,

12A

ug06

] 28

Al S

haff

er [

OD

DR

E]

24Ju

l06

priv

ate

com

mun

icat

ion.

With

in t

he D

oD, t

he l

arge

st f

uel

cons

umer

is

the

Air

For

ce (

cf.

page

s 14

and

21)

. C

ontin

uous

eff

orts

and

mon

itori

ng b

y th

e A

ir F

orce

and

oth

er s

ervi

ces

have

res

ulte

d in

dec

reas

es i

n fu

el

use

over

the

last

few

yea

rs,29

des

pite

the

pros

ecut

ion

of th

e w

ar

in I

raq.

T

his

can

only

be

appl

aude

d.

As

the

data

and

ana

lysi

s ab

ove

indi

cate

, ho

wev

er,

cons

ider

ably

gre

ater

ben

efits

can

be

expe

cted

fro

m a

mor

e-ag

gres

sive

sta

nce

as r

egar

ds f

uel

use

acro

ss a

ll D

oD s

ervi

ces.

Ave

rage

age

of

U.S

. Air

For

ce a

ircr

aft.30

Som

e, p

erha

ps s

igni

fica

nt,

futu

re r

educ

tions

in

fuel

use

will

oc

cur

of

thei

r ow

n ac

cord

, as

in

th

e U

.S.

Air

Fo

rce,

fo

r ex

ampl

e, w

here

the

airc

raft

inve

ntor

y is

exp

ecte

d to

dec

line,

as

the

figu

re o

n pa

ge 7

6 su

gges

ts, d

espi

te a

n ag

ing

U.S

. Air

For

ce

29

P.E

. M

ike

Aim

one

[Ass

t. D

ep.

Chi

ef o

f St

aff,

Log

istic

s, I

nsta

llatio

ns &

M

issi

on S

uppo

rt]

5Jun

06 p

rese

ntat

ion:

The

Air

For

ce E

nerg

y St

rate

gy fo

r th

e 21

st C

entu

ry.

77

flee

t (c

f. f

igur

e ab

ove)

.30

Whi

le n

ew a

ircr

aft

will

be

plac

ed i

n se

rvic

e du

ring

the

nex

t de

cade

, it

is u

nlik

ely

they

will

rep

lace

th

e nu

mbe

r th

at w

ill r

etir

e (c

f. f

igur

e be

low

).30

,31

In c

oncl

usio

n, w

hile

the

re m

ay b

e no

sin

gle

silv

er b

ulle

t to

re

duce

the

dep

ende

nce

of t

he D

oD o

n fo

ssil-

fuel

s, m

any

step

s,

in t

he a

ggre

gate

, m

any

of w

hich

hav

e be

en d

iscu

ssed

and

ad

dres

sed

by a

naly

sis

on t

he s

ubje

ct i

n th

e pa

st,

shou

ld b

e un

dert

aken

.

30

B

rig.

G

en.

"And

y"

Dic

hter

[D

ep.

Dir

., A

F O

pera

tiona

l C

apab

ility

R

equi

rem

ents

(A

F/X

OR

)]

20

Oct

ober

20

05

pres

enta

tion:

Fo

rce

Mul

tiplie

rs

for

the

Join

t B

attl

espa

ce:

Issu

es,

Cha

lleng

es

and

Opp

ortu

nitie

s.

31

The

re

tirem

ent

of

the

F-11

7 w

as

rece

ntly

an

noun

ced,

de

spite

th

e pr

ojec

tion

depi

cted

in

the

figu

re o

n th

is p

age

that

it

wou

ld r

emai

n in

se

rvic

e fo

r so

me

time.

As

with

sai

ling

raci

ng,

one

can

win

(bi

g) b

y no

t lo

sing

in

lots

of

littl

e w

ays.

78

79

VII.

F

ind

ing

s

In t

his

sect

ion

we

sum

mar

ize

the

key

find

ings

of

the

JASO

N

stud

y, b

roke

n do

wn

into

key

cat

egor

ies:

A

. G

loba

l, do

mes

tic,

and

DoD

fos

sil-

fuel

sup

plie

s

Oil

is a

wor

ldw

ide-

fung

ible

com

mod

ity. C

onsi

sten

t with

glo

bal

prov

en

rese

rves

, no

D

oD

foss

il-fu

el

supp

ly

shor

tage

s ar

e ex

pect

ed

in

the

next

25

ye

ars.

Alth

ough

as

m

uch

oil

is

proj

ecte

d to

be

need

ed i

n th

e ne

xt 2

5 ye

ars

as t

he t

otal

alr

eady

pr

oduc

ed

to

date

, w

orld

pr

oven

re

serv

es

are

capa

ble

of

acco

mm

odat

ing

this

dem

and

at l

ess

than

$30

/bbl

pro

duct

ion

cost

.

JASO

N

emph

asiz

es

that

th

is

find

ing

is

prem

ised

on

th

e as

sum

ptio

n of

no

maj

or w

orld

-wid

e up

heav

als,

or

polit

ical

and

ot

her

chan

ges

in t

he p

rim

ary

oil

and

natu

ral-

gas

prod

uctio

n re

gion

s of

the

wor

ld t

hat

supp

ly t

he U

.S.,

nota

bly,

the

Mid

dle

Eas

t, V

enez

uela

, and

Rus

sia,

or

othe

r ev

ents

and

dev

elop

men

ts

that

m

ay

com

prom

ise

the

secu

rity

of

m

ajor

fo

ssil-

fuel

fe

edst

ock

rout

es a

nd t

rans

port

atio

n co

rrid

ors

(cf.

fig

ure

on

page

iv

of t

his

repo

rt).

Suc

h up

heav

als

have

occ

urre

d in

the

pa

st p

rodu

cing

maj

or c

hang

es i

n th

e w

orld

-wid

e av

aila

bilit

y an

d pr

icin

g of

fos

sil-

fuel

res

ourc

es,

as d

ocum

ente

d fo

r th

e pe

riod

ar

ound

19

80

in

the

grap

hics

on

pa

ges

10

and

61,

follo

win

g th

e Ir

ania

n re

volu

tion

and

its c

onse

quen

ces

on t

he

Mid

dle

Eas

t and

the

wor

ld.

Pres

ent

oil

pric

es

on

the

spot

m

arke

t ar

e hi

gh

rela

tive

to

prod

uctio

n co

sts.

Pro

duct

ion

cost

s ar

e co

mpo

unde

d w

ith o

ther

fa

ctor

s to

yie

ld th

ese

high

mar

ket p

rice

s, th

e di

ffer

ence

ref

lect

s th

e m

arke

t’s

conf

iden

ce i

n as

sure

d fu

ture

sup

plie

s, i

mba

lanc

es

betw

een

supp

ly a

nd d

eman

d, a

nd, n

ot l

east

, the

pro

fits

tha

t th

e m

arke

t is

will

ing

to b

ear.

O

n th

e ot

her

side

of

the

fulc

rum

, ho

wev

er,

JASO

N n

otes

tha

t w

hile

sho

rt-t

erm

res

pons

e op

tions

to

oil

pric

e in

crea

ses

are

limite

d, l

onge

r-te

rm o

ptio

ns a

re n

ot

inco

nsid

erab

le, a

s ev

ery

dolla

r in

crea

se i

n w

orld

mar

ket

pric

es

invi

te a

dditi

onal

fos

sil-

fuel

sou

rces

to

join

the

wor

ld m

ix,

as

wel

l as

non

-fos

sil

ener

gy s

ourc

es t

o be

com

e ec

onom

ical

. T

he

oil-

prod

ucin

g na

tions

are

qui

te c

onsc

ious

of

this

bal

ance

. Sau

di

Ara

bia,

in

part

icul

ar,

has

used

its

res

erve

pro

duct

ion

capa

city

fo

r th

e la

st f

ew d

ecad

es t

o da

mpe

n bo

th r

apid

inc

reas

es a

nd

decr

ease

s in

oil

pric

es.

Futu

re o

il pr

ices

are

dif

ficu

lt to

pre

dict

, es

peci

ally

in

dolla

r-de

nom

inat

ed t

erm

s, t

he l

atte

r he

dge

as a

con

sequ

ence

of

the

sign

ific

ant U

.S. c

urre

nt-a

ccou

nt im

bala

nce

depi

cted

in th

e in

set

grap

hic

on p

age

78.

At

pres

ent,

the

wor

king

ass

umpt

ion

of t

he e

nerg

y in

dust

ry,

as

docu

men

ted

in E

IA a

sses

smen

ts, i

s th

at t

he m

arke

t pr

ice

of o

il w

ill r

etur

n to

a $

40-4

5/bb

l ra

nge

in t

he n

ext

five

yea

rs,

as

incr

ease

d pr

oduc

tion

faci

litie

s co

me

on l

ine,

acc

omm

odat

ing

incr

ease

s in

dem

and.

Thu

s, i

ncre

asin

g U

.S. i

mpo

rts

rela

tive

to d

omes

tic s

uppl

y ha

ve

no d

irec

t na

tiona

l-de

fens

e im

plic

atio

ns,

othe

r th

an f

inan

cial

. T

hey

do,

how

ever

, im

pose

cl

ear

bala

nce-

of-p

aym

ents

an

d na

tiona

l-ec

onom

y co

nseq

uenc

es,

and

sign

ific

ant

indi

rect

na

tiona

l-se

curi

ty i

mpl

icat

ions

the

reby

. S

tron

g de

fens

e is

and

ha

s hi

stor

ical

ly a

lway

s be

en p

redi

cate

d on

a s

tron

g ec

onom

y.

80

81

The

st

udy

note

s th

at

a re

duct

ion

of

12%

in

U

.S.

oil

cons

umpt

ion,

at

pr

esen

t, w

ould

re

lax

the

wor

ld-w

ide

tight

su

pply

-dem

and

situ

atio

n, a

t le

ast

for

a w

hile

, an

d al

low

the

U

.S.

the

optio

n of

for

egoi

ng a

ll o

il im

port

s fr

om t

he M

iddl

e E

ast

and

avoi

danc

e of

the

dep

ende

ncie

s an

d vu

lner

abili

ties

impo

sed

by th

is s

ensi

tive

impo

rt s

trea

m, s

houl

d th

e ne

ed a

rise

. B

. D

oD f

uel c

osts

DoD

fue

l co

sts

have

bec

ome

visi

ble

only

rel

ativ

ely

rece

ntly

. E

ven

at p

rese

nt,

they

rep

rese

nt o

nly

2.5-

3% o

f th

e na

tiona

l-de

fens

e bu

dget

, the

spr

ead

depe

ndin

g on

wha

t is

cho

sen

as t

he

deno

min

ator

fo

r to

tal

natio

nal-

defe

nse

cost

s.

Whi

le

unce

rtai

ntie

s an

d th

e re

cent

lar

ge i

ncre

ase

in f

uel

cost

s pr

esen

t D

oD b

udge

t pl

anne

rs w

ith f

orm

idab

le c

halle

nges

, re

pres

entin

g a

(muc

h-la

rger

) fr

actio

n of

no

n-fi

xed

(“di

scre

tiona

ry”)

sp

endi

ng,

JASO

N m

ust

conc

lude

tha

t fu

el c

osts

, pe

r se

, w

hile

no

t neg

ligib

le, c

anno

t be

rega

rded

as

a pr

imar

y de

cisi

on d

rive

r,

at p

rese

nt.

The

lar

gest

fra

ctio

n (~

62%

) of

DoD

fue

l us

e is

exp

ende

d in

C

ON

US.

C

ontin

uous

pro

gres

s ha

s be

en m

ade

by D

oD i

n re

cent

ye

ars

to

decr

ease

en

ergy

an

d fu

el

use.

How

ever

, be

caus

e w

eapo

ns

syst

ems

have

ve

ry

long

lif

e-cy

cles

, fu

el

repr

esen

ts a

sig

nifi

cant

fra

ctio

n of

lif

e-cy

cle

cost

s fo

r U

.S.

Air

Fo

rce

mob

ility

ca

rrie

rs

(~ 4

0%)

and

conv

entio

nally

fu

eled

N

avy

ship

s (~

30%

).

JASO

N

also

no

tes

that

ex

pect

ed

redu

ctio

ns in

the

U.S

. Air

For

ce ta

ctic

al in

vent

ory

(num

ber

and

type

of

airc

raft

on

activ

e du

ty),

as

disc

usse

d on

pag

es 7

6 an

d 77

, w

ill,

perf

orce

, de

crea

se f

utur

e co

nsum

ptio

n of

avi

atio

n fu

el,

whi

ch

repr

esen

ts

the

larg

est

sing

le

DoD

fu

el-u

se

com

pone

nt.

DoD

fue

l us

e is

sub

ject

to

com

plex

int

erre

late

d go

vern

men

tal

and

cong

ress

iona

l re

gula

tions

, as

wel

l as

for

eign

and

dom

estic

po

licie

s an

d di

rect

ives

. T

hese

in

ject

ex

tern

aliti

es

that

co

mpl

icat

e bo

okke

epin

g an

d of

ten

ham

per

prop

er D

oD f

uel-

use

optim

izat

ion.

JASO

N f

inds

com

pelli

ng r

easo

ns f

or th

e D

oD to

min

imiz

e fu

el

use,

bot

h ov

eral

l an

d in

ind

ivid

ual

vehi

cles

and

car

rier

s.

Fuel

, ev

en i

f it

is c

urre

ntly

a r

elat

ivel

y sm

all

port

ion

of t

he o

vera

ll bu

dget

is

acco

mpa

nied

by

larg

e m

ultip

liers

– i

t ta

kes

fuel

to

deliv

er

fuel

and

is

acco

mpa

nied

by

hi

gh

cost

s in

bo

th

infr

astr

uctu

re (

O&

M)

and,

in th

e ba

ttlef

ield

, in

lives

.

Pric

e un

cert

aint

ies

com

poun

d bu

dget

pla

nnin

g, a

nd f

uel

cost

s m

ay r

ise

to r

epre

sent

a m

ore-

sign

ific

ant

fact

or f

or t

he D

oD i

n th

e fu

ture

, ev

en

thou

gh

curr

ent

proj

ectio

ns

may

in

dica

te

othe

rwis

e. M

ore

impo

rtan

tly, t

he im

pact

s of

del

iver

ing

fuel

are

ev

iden

t in

dict

atin

g ta

ctic

s, o

pera

tions

cos

ts, m

aint

enan

ce c

osts

, an

d m

ilita

ry c

apab

ilitie

s.

82

83

C.

Dec

reas

ing

Do

D f

uel

use

Hyb

rid

vehi

cles

are

opt

imiz

ed f

or i

nter

mitt

ent/s

top

and

go u

se

patte

rns

with

fue

l-co

nsum

ptio

n be

nefi

ts t

hat

are

antic

ipat

ed i

n th

at d

rivi

ng e

nvir

onm

ent.

Hyb

rid

vehi

cles

off

er l

ittle

or

no

fuel

-eco

nom

y be

nefi

ts i

f th

e av

erag

e po

wer

exp

ende

d is

clo

se

to th

e pe

ak-p

ower

cap

abili

ty o

f th

e po

wer

plan

t. H

ence

, hyb

rids

of

fer

muc

h m

ore

fuel

con

sum

ptio

n sa

ving

s in

the

com

mer

cial

se

ctor

than

in th

e ty

pica

l DoD

(A

rmy)

pat

tern

of

vehi

cle

use.

JASO

N

find

s no

si

gnif

ican

t fo

rese

eabl

e D

oD

role

fo

r al

l-el

ectr

ic v

ehic

les.

T

hese

veh

icle

s ha

ve p

ossi

ble

appl

icat

ions

in

the

limit

of s

hort

-ran

ge, l

ow-f

rict

ion

terr

ain,

if

the

vehi

cles

are

ve

ry l

ight

wei

ght,

and

for

spec

ial-

purp

ose

mis

sion

s su

ch a

s ro

botic

ve

hicl

es.

M

ost

of

thes

e ap

plic

atio

ns

are

outs

ide

(cur

rent

) D

oD p

atte

rns

of u

se.

Sim

ilarl

y, J

ASO

N s

ees

no s

igni

fica

nt D

oD u

se f

or f

uel-

cell

vehi

cles

on

any

reas

onab

le t

ime

hori

zon.

T

hese

veh

icle

s ar

e ve

ry c

ostly

and

the

tec

hnol

ogy

is n

ot m

atur

e.

We

also

do

not

see

a go

od m

echa

nism

by

whi

ch t

he f

uel

to p

ower

the

m c

ould

be

sup

plie

d to

the

ater

. A

s su

ch,

JASO

N d

oes

not

antic

ipat

e th

at t

hey

will

pla

y a

role

in

DoD

tac

tical

or

com

bat

vehi

cles

in

the

fore

seea

ble

futu

re.

JASO

N b

elie

ves

that

the

re c

an b

e re

volu

tiona

ry c

hang

es i

n th

e us

e of

unm

anne

d ve

hicl

es,

espe

cial

ly a

ircr

aft,

if t

he d

esig

n sp

ace

is e

xplo

red

to o

ptim

ize

fuel

eff

icie

ncy

and

endu

ranc

e.

Such

veh

icle

s w

ould

im

prov

e fu

el e

ffic

ienc

y an

d ad

d ne

w

capa

bilit

ies,

pot

entia

lly o

bvia

ting

air-

to-a

ir r

efue

ling

in m

any

inst

ance

s.

Futu

re s

peci

al-u

se r

obot

ic v

ehic

les

can

play

an

impo

rtan

t ro

le

by s

avin

g liv

es a

nd f

uel.

Thi

s is

tru

e fo

r ai

r, s

ea,

and

for

land

(c

f. J

SR-0

1-22

5).

In g

ener

al, l

ight

-wei

ghtin

g co

sts

mon

ey, b

ut c

an i

n re

turn

sav

e fu

el a

nd w

ill e

nhan

ce m

ilita

ry c

apab

ility

.

Fina

lly,

mod

ern

dies

el e

ngin

es o

ffer

lar

ge i

ncre

ases

in

fuel

co

nsum

ptio

n re

lativ

e to

turb

ines

or

olde

r di

esel

eng

ines

that

are

ve

ry in

effi

cien

t, es

peci

ally

at i

dle,

or

near

-idl

e co

nditi

ons.

84

85

D.

Liq

uid

fu

els

fro

m c

oal

or

nat

ura

l gas

DoD

is n

ot a

larg

e en

ough

cus

tom

er to

dri

ve th

e fu

el m

arke

t or

to d

rive

fut

ure

deve

lopm

ents

in

alte

rnat

ive

fuel

s.

Acc

ount

ing

for

less

tha

n 2%

of

U.S

. fu

el c

onsu

mpt

ion,

DoD

is

likel

y to

de

pend

on

th

e w

orld

-wid

e an

d co

mm

erci

al

sect

ors

for

its

supp

lies

and

alte

rnat

ive

fuel

s ar

e a

wor

ld-w

ide

issu

e.

Liq

uid

fuel

s fr

om

stra

nded

na

tura

l ga

s pr

ovid

e th

e ec

onom

ical

ly a

nd e

nvir

onm

enta

lly m

ost-

favo

rabl

e al

tern

ativ

e to

fue

ls f

rom

cru

de o

il.

Und

ergr

ound

coa

l ga

sifi

catio

n (U

CG

) pr

ovid

es

the

next

-bes

t al

tern

ativ

e fr

om

an

econ

omic

pe

rspe

ctiv

e,

but

is

only

ac

cept

able

fr

om

an

envi

ronm

enta

l pe

rspe

ctiv

e if

GH

G e

mis

sion

s (m

ostl

y C

O2)

fro

m t

he f

uel

prod

uctio

n pr

oces

s ar

e se

ques

tere

d.

86

87

E.

Bio

fuel

s

Pres

ently

, liq

uid

fuel

fro

m b

iom

ass

proc

esse

s do

not

com

pete

ec

onom

ical

ly w

ith p

rodu

ctio

n of

fue

l fro

m c

rude

oil.

Bio

fuel

s pr

ovid

e lit

tle,

if a

ny,

net

ener

gy b

enef

it, e

spec

ially

if

the

com

plet

e pr

oces

s is

ta

ken

into

ac

coun

t, an

d ar

e no

t ec

onom

ical

ly c

ompe

titiv

e (w

ithou

t su

bsid

ies)

with

oth

er u

ses

of a

gric

ultu

ral l

and,

e.g

., gr

owin

g fo

od.

Cur

rent

bi

omas

s-to

-fue

l m

etho

ds

of

prod

uctio

n pr

esen

t a

sign

ific

ant

envi

ronm

enta

l bu

rden

(G

HG

s, s

oil

depl

etio

n an

d er

osio

n, w

aste

wat

er, e

tc.)

.

Fuel

pro

cess

es b

ased

on

cellu

losi

c et

hano

l, bu

tano

l, et

c. c

ould

ev

entu

ally

pro

vide

a s

igni

fica

nt f

ract

ion

of th

e fu

el d

eman

ds o

f th

e U

.S.,

if

they

ar

e pr

oven

ec

onom

ical

ly

viab

le

and

if

asso

ciat

ed

envi

ronm

enta

l bu

rden

s ar

e ac

cept

able

.

Such

pr

oces

ses

do n

ot e

xist

at

pres

ent,

how

ever

, an

d ne

ither

the

y,

nor

othe

r no

n-et

hano

l bi

ofue

ls a

nd b

iofu

els

proc

esse

s ca

n be

as

sess

ed,

eith

er i

n te

rms

of t

heir

eco

nom

ics

or e

nvir

onm

enta

l ra

mif

icat

ions

, at t

his

time.

The

bio

fuel

s co

mm

unity

mus

t de

mon

stra

te s

usta

inab

ility

with

re

spec

t to

soi

l de

plet

ion/

eros

ion,

was

te w

ater

, and

oth

er r

elat

ed

cons

ider

atio

ns,

and

they

mus

t de

mon

stra

te t

hat

such

met

hods

ar

e al

so p

refe

rred

env

iron

men

tally

, i.e

., th

roug

h a

Wel

l-T

o-W

heel

s an

alys

is,

if i

t is

to

be a

rgue

d th

at t

hey

can

prov

ide

a se

nsib

le a

ltern

ativ

e to

fos

sil-

deri

ved

fuel

s.

Eth

anol

’s

low

en

ergy

de

nsity

, hi

gh

flam

mab

ility

, an

d tr

ansp

orta

tion

diff

icul

ties,

re

lativ

e to

di

esel

an

d JP

-8,

for

exam

ple,

ren

der

it un

suita

ble

as a

DoD

fue

l. T

he p

rim

ary

cons

ider

atio

ns

that

en

ter

this

fi

ndin

g ar

e lo

gist

ics,

en

ergy

de

nsity

(hi

gh v

olum

e pe

r un

it en

ergy

con

tent

), a

nd s

afet

y.

88

[Thi

s pa

ge in

tent

iona

lly le

ft b

lank

.]

89

VIII. Recommendations and path forward

1. Consider buffers against future crude-oil and fuel price increases:

a. inventory timing, e.g., seasonal buying choices,

b. investing in long-term contracts, and

c. diversifying sources and supplies.

2. Make long-term planning for future fuel sources, production, and use. Be aware of present and anticipated environmental (GHG, etc.) regulations.

3. Optimize exploitation of commercial aviation fuels. Consider distributed and OCONUS local production of military fuels (JP-5, JP-8, JP-8 +100) from commercial aviation fuels.

4. Review and minimize CONUS fuel use; most DoD fuel is used in CONUS.

a. Increase reliance on simulator training programs

b. Devise fuel-use optimization tools for gaming, planning, and in-situ field use with an eye to fuel consumption (vehicle mix, tactics, operational choices) and logistical requirements.

c. Optimize vehicles to DoD patterns of use.

5. Track the pattern of use for vehicles and fuels.

a. Track fuel use and different vehicle patterns of use (idling vs. in-motion engine use time fractions) across the DoD to develop a database for use in optimizing fuel efficiency, and designing/selecting future vehicles.

b. Optimize platforms, powerplants, with respect to DoD-relevant patterns of use, in each case. Include fuel in vehicle/platform life-cycle costs as a (strong) factor in the optimization.

6. Develop the necessary accounting and tracking tools to determine fuel delivery and logistics burdens and multipliers, so that it is possible to know what has been saved throughout the logistics chain when a gallon of fuel consumption is reduced at any point in the fuel demand chain.

7. Determine fuel delivery/use logistics burdens and multipliers.

a. Gallons required per gallon delivered.

b. Cost per gallon delivered to the field, in the air, at sea, etc.

8. Reengine the M1 tank, the B-52 bomber, etc., to exploit modern engine technology and engines designed for the purpose, in each case.

9. Lightweight armored and tactical vehicles, leveraging modern design, structural, and materials developments. Exploit new armor technologies for increased effectiveness for the same mass. We recommend that DoD resist down-armoring. Weight reductions are more likely achievable without loss in functionality in other parts of the vehicle.

10. Manned vs. unmanned vehicles: Reexamine and extend UAV, UUV, and robotic land vehicle uses. Consider new designs that can only be realized in unmanned vehicles and platforms.

90

Appendix I: Energy glossary AAFC Agriculture and Agri-Food Canada

AAV Amphibious Assault Vehicle

ARMS Agricultural Resources Management Survey

bagasse (sometimes spelled bagass): biomass remaining after crushing sugarcane stalks to extract their juice. A sugar factory produces nearly 30% of bagasse out of its total crushing that is often used as a primary fuel source for sugar mills. When burned in quantity, it produces sufficient heat energy to supply all the needs of a typical sugar mill, with energy to spare. A secondary use for this waste product is in cogeneration to provide both heat energy, used in the mill, and electricity, which is typically sold to the grid. [Wikipedia, 13Aug06]

barrel (of oil) = 42 (U.S.) gallons = 1 bbl (“blue barrel” of oil).

BL Black Liquor. By-product of paper pulping that contains the lignin part of the wood, commonly used as an internal fuel source to power the paper mills. Through gasification, one can generate syngas and synfuels

boe barrel of oil equivalent = 5.8 MBTU = 6.12 MJ

BTL Biomass-To-Liquid (fuel)

BTU British Thermal Unit = (heat) energy needed to raise the temperature of one pound (lbm) of water by one oF = 1.055056 kJ

BTU/ft3 = 37.258946 kJ/m3

BTU/gal = 0.278716 kJ/liter

BTU/lbm = 2.326 kJ/kg

CAA Clean Air Act Amendments

CCGT Combined-cycle gas turbine: refers to a power plant that utilizes both the Brayton (gas-turbine) cycle and the Rankine (steam) cycle. The exhaust from the gas turbine is used to generate the energy for the Rankine cycle.

CCS Carbon capture and storage, aka, carbon sequestration

CGF Corn gluten feed (21 percent protein)

CGM Corn gluten meal (60 percent protein)

CHP Combined heat and power: the simultaneous and high-efficiency production of heat and electrical power in a single process.

CO Carbon monoxide. Constituent, along with H2, of the first step(s) of the Fischer-Tropsch process

CO2 Carbon dioxide: a gas produced by many organic processes, including human respiration and the decay or combustion of animal and vegetable matter. Greenhouse gas with strong absorption bands at the thermal-emission spectrum.

CTL Coal to Liquid (fuel), as via the Fisher-Tropsch process.

DB Dry basis, i.e., w/o water, for starch content in grains

DDGS Distiller’s dried grains with solubles

91

DICI Direct Injection Compression Ignition (engine)

DME Dimethyl ether. Surrogate for diesel.

DOE Department of Energy. The federal agency that oversees the production and distribution of electricity and other forms of energy.

DPF Diesel Particulate Filter (emissions mitigation). Decreases diesel-engine power output if installed.

E85 A fuel mixture of 85% ethanol and 15% gasoline

EIA Energy Information Administration: the statistical and data-gathering arm of the Department of Energy.

EOR Enhanced oil recovery

EPA U.S. Environmental Protection Agency: the agency that oversees and regulates the impact of, among other things, the production of energy on the environment of the United States.

ERRATA Energy Regulatory Reform and Tax Act: a plan to deregulate the production and distribution of electricity, to update environmental laws regarding energy production, and to alter the existing tax structures.

Ethanol C2H5OH: Next-lightest alcohol, after methanol.

FC Fuel Cell

FCRS Farm Costs and Returns Survey

GHG Greenhouse gas.

GREET Greenhouse gases, regulated emissions, and energy use in transportation

GTL Gas To Liquid (conversion)

GW Gigawatt = 109 Watts.

GWh Gigawatt-hour: the amount of energy available from one gigawatt in one hour.

HFCS High-fructose corn syrup

HHV High-heat value HICE Hydrogen internal combustion engine

ICE Internal combustion engine

IEA International Energy Agency: a twenty-six member union of national governments with the goal of securing global power supplies.

IED Improvised explosive device

IPP Independent power producers: companies that generate electrical power and provide it wholesale to the power market. IPPs own and operate their stations as non-utilities and do not own the transmission lines.

Joule The (kinetic) energy acquired by a mass of one kilogram moving at a speed of one meter per second

kJ kilojoule = 103 Joules

kW, KW kilowatt = 103 Watts = 1.341 HP

kWh, KWh = energy available from one kilowatt in one hour = 3.6 MJ

LHV Low-heat value

92

LNG Liquified Natural Gas

LPG Liquefied petroleum gas

M85 a fuel mixture of 85% methanol and 15% gasoline

Methane CH4: Main constituent of natural gas. Also, important greenhouse gas.

Methanol CH3OH: Lightest alcohol. Toxic, causing nerve and eye damage.

MJ Megajoule = 106 Joules = 0.2778 kWh

MTBE Methyl tertiary-butyl ether. Fuel oxygenate additive. Being phased out (toxic) in favor of ethanol.

MW Megawatt = 106 Watts = 1 MJ/s

MWh Megawatt hour: energy available from one megawatt in one hour.

NASS National Agricultural Statistics Service

NEDC New European Driving Cycle (standard)

NEV Net energy value

NOX, NOx Nitrogen oxide(s): assorted oxides of nitrogen, generally considered pollutants, that are commonly produced by combustion reactions.

PISI Port Injection Spark Ignition (engine)

PM10 Particulate matter in the atmosphere that is between 2.5 and 10 μm in size.

PTW Pump-To-Wheels (analysis)

PURPA Public Utility Regulatory Policy Act: act of Congress targeting the reduction of American dependence on foreign oil through the encouragement of the development of alternative energy sources and the diversification of the power industry.

Quad Quadrillion BTU = 1015 BTU = 1.055 EJ (exajoule)= 172 Mbbl-eq

RFG Reformulated gasoline

S Sulfur

SAGD Steam Assisted Gravity Drainage

stover (corn): the leaves and stalks of corn (maize), sorghum or soybean plants left in a field after harvest. It can be directly grazed by cattle or dried for use as fodder (forage). It is similar to straw, the residue left after any cereal grain or grass has been harvested at maturiry for its seed. [Wikipedia, 13Aug06]

TW Terawatt = 1012 Watts

UAV Unmanned/Unpiloted Air Vehicle

UCG Underground coal gasification

USDA U.S. Department of Agriculture

UUV Unmanned Underwater Vehicle

Watt = one Joule per second.

WEO World energy outlook: a projection analysis made by the IEA

WTP Well-To-Pump (analysis)

WTW Well-To-Wheels (analysis)

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Appendix II: Air-to-air jet-fuel delivery costs

As part of this study, an estimate was made of the cost per gallon delivered in mid-air using one of the 530 KC-135s or one of the 59 KC-10s in the U.S. Air Force tanker fleet. The resulting estimates are depicted in the figure on page 30.

An earlier study [DSB2001] reported that, “the fully burdened cost per gallon delivered in midair” was $17.50/gal in FY1999 (then-year dollars). This cost is shown in the figure on page 30, brought forward to FY2005 dollars. The present study’s estimates of FY05$22/gal and FY06$23/gal are consistent with the previous (DSB2001) estimate reported for FY99.

The present study considered the per-gallon cost breakdown for the mid-air refueling enterprise into infrastructure capital costs; operations and maintenance (O&M); and the DESC wholesale cost of fuel carried by the tankers. Costs to fuel and fly the tankers themselves are captured in the O&M costs for the tankers. The wholesale fuel costs cover only the cost of the fuel delivered to tanker customers in mid-air.

To normalize the per-gallon estimates, the total volume of AVFUEL (JP-8, F-76 and Jet-A) delivered to tanker customers was used in the denominator: 207 million gallons in FY05 and 213 million gallons in FY06 estimated based on figures through May of 2006.

These include fuel delivered mid-air via tanker to non-USAF customers (~ 20% of tanker deliveries). Excluding non-USAF mid-air deliveries, the fraction of USAF fuel consumption delivered to USAF aircraft in midair was about 6.3%. This is similar to the percentage previously reported [DSB2001].

The wholesale price per gallon of AVFUEL was obtained from the DESC Fact Book for 2005 and 2006, while the 1999 figure was taken from the earlier study [DSB2001]. If the DESC price changed during the fiscal year, then the time-weighted average of the various per-gallon prices was calculated and used for that year.

Because the acquisition history of the tanker fleet was not available for this study, the annual cost of midair fuel delivery infrastructure (i.e., the KC-135 tanker fleet) was based on a reported $40M (FY1998 dollars) unit cost, amortized over a 40 year aircraft life, brought forward to current-year dollars. A fleet of 516 KC-135s was used for this calculation as an equivalent to the actual current fleet, based on reported capabilities of KC-135Rs versus KC-135Es versus KC10s.

O&M costs were obtained for FY05 from the USAF directly [L. Klapper, AFCAA, pvte. Comm.], and were reported as $3.7B for the operation of 112 KC135Es, 418 KC135Rs, and 59 KC10s. Based on separate cost figures also provided by the USAF, the variable cost per gallon delivered by aircraft was calculated and summed over the fleet to get the component of O&M costs that scale with the amount of fuel delivered. This was ~30% of total O&M costs. Using these figures the 2006 O&M per-gallon costs were estimated by scaling the variable costs by the estimated volume delivered in midair in 2006, keeping the fixed O&M costs the same as 2005. These calculations were done in FY05 dollars.

The results of this cost analysis, shown in the figure on page 30, illustrate how infrastructure, and operations (O&M, here) multiply the cost of fuel delivered to a front-end user. A numerical estimate of the fuel-multiplier in this case can be estimated by

94

assuming, conservatively, that 20% of the O&M costs result from mobility fuel to fly the tankers themselves. This assumption yields the estimate that tankers burned 482 million gallons (20% of $O&M / [$/gal at wholesale]) of fuel to deliver 207 million gallons of fuel in FY2005. This yields a fuel-delivery multiplier of 3.3 . This multiplier leads to corresponding overhead and logistics costs, in both dollars and tactical/operational terms.

At least 37% of the $20-$25 /gal cost, i.e., ~$8.45/gal, is estimated to scale with fuel consumption, illustrating the potential benefit of improved fuel efficiency.

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