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Reducing DoD Fossil-Fuel Dependence Study Leaders: Paul Dimotakis Robert Grober Nate Lewis Contributors: Henry Abarbanel David Hammer Michael Brenner Jonathan Katz Graham Candler Mara Prentiss J. Mike Cornwall Roy Schwitters Freeman Dyson John Vesecky Stanley Flatté Robert Westervelt Intern: Brent Fisher (IDA) September 2006 JSR-06-135 Approved for public release; distribution unlimited JASON The MITRE Corporation 7515 Colshire Drive McLean, Virginia 22102-7508 (703) 983-6997 Form Approved REPORT DOCUMENTATION PAGE 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) 2. REPORT TYPE 3. DATES COVERED (From - To) 12-09-2006 4. TITLE AND SUBTITLE 5a. CONTRACT NUMBER Reducing DoD Fossil-Fuel Dependence 13069022-PS 5b. GRANT NUMBER 5c. PROGRAM ELEMENT NUMBER 6. AUTHOR(S) 5d. PROJECT NUMBER Paul Dimotakis, Nathan Lewis, Robert Grober, et al. 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 JSR-06-135 7515 Colshire Drive McLean, Virginia 22102 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 18. NUMBER 19a. NAME OF RESPONSIBLE PERSON OF ABSTRACT OF PAGES a. REPORT b. ABSTRACT c. THIS PAGE 19b. TELEPHONE NUMBER (include area code) Unclassified Unclassified Unclassified UL Standard Form 298 (Rev. 8-98) Prescribed by ANSI Std. Z39.18 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 i 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 ii 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. iii 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. iv 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. v 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. 60% 50% Mexico 40% Canada 30% 20% South & Central North 10% West 0% America Africa Middle East North Sea Russia U.S. oil import sources (based on the 2005 BP data in the figure above). vi 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). 1 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. 2 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? 3 4 IV. Global, domestic, and DoD fossil-fuel As indicated on the right, most conventional proven oil supply and demand resources/reserves are concentrated in the Middle East. North America has relatively little of the world's proven oil reserves A. Global fossil energy perspective and resources, but has 30% of the world's unconventional oil The present situation is assessed with respect to known, so- resources, e.g., tar sands, shale, etc. called "proven", reserves and resources of fossil energy, Oil available depends on the amount one is willing to pay to globally. As indicated in the left figure on page 4, the world extract it from the ground and, ultimately, the amount has approximately 41 years of proven reserves at this time, if remaining in the ground. Cumulative global crude oil the 2005 consumption rate is maintained. Less, of course, is production through the 20th century to the present accounts for assured if consumption increases. The inference, however, approximately one trillion barrels (Tbbl = 1012 bbl)2 of oil. should not be drawn that the world will run out of oil in 40 years, or so. The world increased its oil reserves from In the compilation depicted in the figures on page 6, the somewhat beyond 30 years to over 40 years (reserves-to- following assumptions are incorporated. production ratio), following the events in the early 1980s in the • All Middle East oil (proven and yet to be proved or Middle East, in spite of substantial increases in total discovered) is inexpensive to extract. consumption.1 Oil producers will not invest to secure reserves • Other proven reserves are below $20/barrel by definition; a on a time scale longer than ~40 years. The net present value of good portion of "reserve growth" and undiscovered oil will such an investment would be small compared to the (cost of) cost less then $25/barrel, according to evolving technology. capital required to explore and prove such additional reserves. • Deepwater will deliver 100 Bbbl at $20-35/bbl. On the other hand, the data also indicate that present U.S. oil • Arctic areas can deliver 200 Bbbl at $20-60/bbl. reserves, extracted at present production rates, will be depleted • Super-deep reservoirs will represent a small and relatively in the next 12 years. Whether this will be altered by new expensive oil contributor (they contain mostly gas). domestic discoveries during this period depends not only on • Enhanced Oil Recovery (EOR) can deliver 300 Bbbl above whether they exist within the U.S., but also on whether the what is contained in the USGS reserve growth estimates, production cost differential between foreign oil sources and but some will remain quite expensive. potential future U.S. resources warrants economic domestic production. 2 The abbreviation 'bbl' stems from 'blue barrel of oil' that denotes the 1 BP Statistical Review of World Energy (January 2006, page 10). color of standard containers in the past that held 42 (U.S.) gallons. 5 6 • Non-conventional heavy oil has a large potential (some If resources become economical at a given price, allowing for 1000 Bbbl between deposits in Canada, Venezuela and normal return on investment, this does not necessarily mean other countries) at $20-40/bbl, including CO2 and they will be exploited. Other factors, however, come into play: environmental-mitigation costs, e.g., carbon capture and • demand; storage (CCS) measures. • competition from more appealing investments; • Oil shales become economical at $25/bbl and a significant • regulations; tax, other incentives, and royalty frameworks; portion of those resources can be exploited at less than • access to resources; and $70/bbl, including CO2 and environmental-mitigation costs. • geopolitical factors. These estimates are illustrated on page 6. In the top figure, the This means the price levels indicated are necessary but not vertical axis shows oil price at which the exploitation of (solely) sufficient to guarantee that a particular resource will various resource volumes becomes economical, taking into contribute to world supplies. Also, these figures are based on account the cost of capture and storage of CO2 produced in the long-term, sustained prices, not temporary peak-of-cycle extraction of non-conventional oils. The horizontal axis shows prices, and they assume long-term costs for equipment and cumulative resources. In contrast with classic cost curves, this services. The latter costs also go through cycles and have presentation facilitates a link with the type of resources and increased considerably between 2003 and 2005.3 therefore with the different technologies required. It also JASON agrees that, at least over the next 25 years and barring underlines that such projections are not an exact science and unforeseen circumstances, longer-term market mechanisms are that only a range of costs can be projected. The bar labeled likely to remove tightness in the supply and demand balance, "WEO est. required total need to 2030" shows the cumulative enhancing the supply chain. Caveats stem from the increasing oil demand expected between 2003 and 2030 according to the instability in the Middle East and the rise of national oil IEA World Energy Outlook (WEO) 2004. This provides a companies (NOCs) that presently dominate the world supply useful "scale" for levels of available oil. chain in recent years.4 The bottom figure depicts the same data in a different way. The horizontal axis represents oil-production cost and the vertical axis the corresponding cumulative economically exploitable 3 The explanatory text on the data depicted in the figures on page 6 is based resources. At the time of that assessment (2004), most on IEA material relayed to the JASON study team by S. Koonin [BP]. 4 companies based their investment decisions on a long-term cost The nationalization of Petróleos de Venezeuela (PDVSA) under Hugo of $20-25/bbl. The graph suggests that accepting a long-term Chavez and the replacement of local and foreign professionals than ran it production cost of $30-35/bbl, for example, would have a large reportedly resulted in considerable damage to the high-maintenance Venezuelan oil fields, perhaps permanently removing as much as impact on economically available future reserves. 0.4 Mbbl/day from the world production (Economist, 12Aug06). 7 8 The world currently consumes 85 Mbbl (Mbbl = 106 bbl) of oil Coal and natural gas resources are not included in this graph. per day.5 The International Energy Agency (IEA) World Hence, the resource base for conversion of fossil energy into Energy Outlook (WEO) projections, assuming a reasonable liquid fuels is potentially even larger than shown here. This inflator for the future that rises to a world-wide demand of will be discussed in greater detail below. 100 Mbbl/day of oil averaged over the next 25 years, project a Estimated U.S. fossil resources, i.e., oil, enhanced oil recovery demand for the next 25 years of another ~1 Tbbl of oil: Hence, (EOR), coal, shale, natural gas (NG), etc., amount to about as much oil will be needed in the next 25-30 years as has been 2 Tbbl, i.e., approximately 260 years worth of resources at the produced cumulatively to date over the last 150 years. Such present consumption rate of 7.5 Bbbl of oil per year. As noted growth can not be sustained indefinitely and projections later, however, the conversion of such resources to liquid fuels beyond a 25-year span must be regarded as speculative. requires other resources, such as energy6 and considerable The WEO data depicted on page 6 indicate that oil demand for amounts of clean water, and the production of, in some cases, the next 25 years can be met at a 2004 production cost under considerable green-house gas (GHG) emissions. $30/bbl. These data also indicate that a similar demand can be met for an additional 25 years, with the additional caveat that B. Domestic fossil energy perspective extrapolations to 50 years hence are of questionable value. As depicted in the figure on page 8, the U.S. consumes about Noteworthy is that world-market crude-oil prices are currently one quarter of the world's oil production. One can see the much higher than crude oil production costs. This reflects a effects of Hurricane Katrina as the small reduction in U.S. price premium commanded by a number of factors, including supply during the summer of 2005. The data were compiled by profit that can be sustained by the present supply-demand JASON corresponding to numbers published for annual totals balance and the limited current supply marginal capacity prior to 2005, and quarterly thereafter by the EIA. The slight relative to demand, geopolitical-risk considerations such as the deviation between the world production and consumption lines present situation in the Middle East and Venezuela, and a in the graph occurs because a significant fraction of oil is in number of other factors. For reference, according to the U.S. transit and storage at any one time. There are also seasonal Energy Information Agency (EIA), a $30/bbl production cost adjustments. in a global commodity such as crude oil should, in the long term, should result in crude prices in the range of $40-45/bbl. 6 Typically, conversion energy requirements are met by burning the 5 World primary energy consumption increased by 2.7% in 2005. Coal was feedstock, e.g., natural gas, or coal, albeit with an attendant decrease in the world's fastest-growing fuel, increasing by 5% in 2005, with China energy efficiency relative to starting with crude oil as a source, for accounting for 80% of global growth. BP Statistical Review of World example, and an increased GHG production burden. Such issues will be Energy (January 2006). assessed and discussed later. 9 10 As already noted, present oil prices are significantly higher increasing at a rate of 0.5-1% per year, with recent increases than the cost of production, primarily because demand is ahead closer to the lower bound. E.U. consumption is increasing at of supply. This is exacerbated by instability in the parts of the half the rate of increase of the U.S. consumption, while China's world contributing to oil production. The market price of oil, is increasing 6 times faster than the U.S. consumption. defined by the futures market, builds into it a premium hedging The peak in U.S. oil production, generally denoted as "peak against unanticipated reduction in production from such U.S. oil", has often been interpreted to indicate that the amount political instabilities and other factors. With oil demand close of oil that can be extracted from U.S. soil is in irreversible to supply, small reductions in supply, whether by accident, decline. However, the particular peak is more directly related weather, embargo, or war, dramatically affect oil markets. to the introduction at the time of inexpensive foreign oil (< The spread between the price of crude and refined products in FY05$ 4/bbl production costs), mostly from Saudi Arabia, into absolute terms is also rising for three reasons. Refining the world market. Recent economic drivers favor reductions of capacity is presently closer to demand. While U.S. refinery domestic production, with foreign sources of oil available at capacity and efficiency have increased in the last quarter lower prices. Despite the ongoing depletion of the U.S. century, no new U.S. refineries have been built in the last 30 resource, domestic production is primarily driven by years. Second, the increasing mix in high-sulfur Saudi oil economics and perhaps secondarily by geological constraints.8 increases refining costs if sulfur content is to be controlled. Conversely, rising oil (and other) imports, unbalanced by Finally, part of the spread is scaled by the price of oil itself. commensurate increases in exports, translate into a balance-of- At present, the U.S. uses 7.5 Bbbl/year of crude oil. Gross payments issue for the U.S. imports cover 63% of U.S. consumption. This is comparable Noteworthy is the 2005 U.S. import source distribution (±10%) to the fraction of imported oil for Europe and China. (page iv), with the remainder of the American continent In contrast, Japan imports 90% of its oil.7 U.S. consumption is contributing 51.1%, Africa 19.1%, the Middle East 18%, and the balance from the North Sea and Russia. 7 The significance of oil imports in national and regional economies, such as the E.U., is a strong function of the corresponding balance of payments. The E.U. as a whole, China, and Japan are net exporters (positive balance of payments) and, as a consequence, the main long-term concerns focus on availability of crude-oil supplies and transportation positive overall, when the large and positive import-export balance with routes, and not on their economic consequences. This is not the case for respect to the U.S. is included (FY2004 data). 8 the U.S., as discussed below. Also noteworthy is that China's balance of That said, it is unlikely that future U.S. production will rise to values payments is actually negative with respect to the rest of the world, but higher than the past peak before the 1980s. 11 12 The graph on page 10 also indicates the dramatic reduction in U.S. Government consumption. For reference, DoD consumed domestic consumption in the early 1980s, in response to strong 0.36 Mbbl/day in FY05, or 133 Mbbl that year. pricing signals (cf. figure on p. 61). The decline was in part DoD fuel use both in the continental U.S. (CONUS) and because of conservation and in part because of the transition abroad (out of CONUS, or, OCONUS), as reported by the from oil-fired to coal-fired electric power plants.9 The data Defense Energy Support Center (DESC), is a relatively small from the 1980s also demonstrate the ability to reduce oil fraction of the total domestic current crude-oil production rate consumption in response to sufficiently severe price signals on (cf. figure on p. 12). The annual DoD crude oil consumption oil, even though a similar switch from consumption of oil in can be covered by the total annual production of two Gulf of the power sector is no-longer available. Noteworthy is that the Mexico oil platforms (Thunderhorse and Atlantis), or by a response to the economic impetus of the price hikes required small fraction of California and Alaska production, at present. about 5 years. Also noteworthy is that, at present, even in the Thunderhorse is a platform that cost ~$3B, sized for a face of high retail gasoline prices, U.S. oil consumption is at a 0.25 Mbbl/day production, and which is presently producing, record high. This indicates either that the capacity to reduce approximately, 90 Mbbl/year. If there were real supply issues consumption was exhausted largely by de-emphasis of crude in for the DoD, the department could, in principle, purchase a the electric-power-production sector in the 1980's, that current Gulf oil platform for an assured supply for many years, at an prices are insufficiently high to spur significant conservation amortized production cost of under $30/bbl, as is done by the efforts, or that the time required to respond to the price change large commercial oil production firms at present, even though at this time is longer than has already transpired. However, that is hardly advisable. production of high fuel-consumption vehicles (e.g., SUVs) is in decline, at present. In this context, the total deep water Gulf of Mexico production is 1.5 Mbbl/day. Production from the North Slope of Alaska is, C. DoD fossil energy perspective approximately, 1 Mbbl/day. Hence, total DoD needs could be provided from a portion of the production of just one of these 1. U.S. production and DoD consumption regions of the U.S. Thus, even though 63% of US oil The figures on pages 10 and 14 indicate that the U.S. consumption is derived from imports, it does not follow that a Government consumes 1.9% of the oil consumed by the rest of domestic-supply supply shortage for DoD is inevitable. In fact, the country. Furthermore, the DoD accounts for 93% of the present-day DoD requirements are relatively modest when compared not only to the present national-consumption rate but also when compared with the present domestic-production rate. 9 This transition occurred with an attendant increase in green-house gas (GHG) emissions, per kWh of electrical power produced. At present, almost no oil-fired electric power plants are operated in the U.S. 13 14 We note that these inferences assume relatively stable DoD 2. DoD demand breakdown by service and fuel use mission requirements, e.g., missions no more demanding of The demand for petroleum in the DoD by service and by use is fossil fuels than the current Iraqi conflict. JASON has not now assessed. As depicted on page 14, the U.S. government, at analyzed the consequences on fossil-fuel availability of a present, accounts for 1.9% of the total oil consumed by the future, WWII-scale DoD mission. Presumably, such a conflict country. DoD consumption represents 93% of the total U.S. would require and induce considerable national sacrifice, government consumption. Within DoD, the U.S. Air Force is including civilian restrictions on access to petroleum products, the largest consumer of petroleum products, its 75 Mbbl/year and is not considered as part of this study and report. Further, amounting to 57% of DoD consumption. Second is the Navy, the analyses above also assume no major world-wide upheavals with 33% of total DoD consumption, followed by the Army that could disrupt either supplies from, say, the Middle East or (9%) and the Marines ( < 1%). Venezuela, or main crude-oil or refined oil-product transportation corridors.10 Other than to note that such scenaria These figures are skewed by the fact that some part of the U.S. cannot be excluded at this time and to note the significant Air Force's use of jet fuel is consumed moving the Army and consequences on the DoD and the nation they would imply, supplying the Navy. JASON was not able to obtain these they were not considered as part of the present JASON study. numbers and we recommend that such accounting should be implemented to help provide the basis for a useful budgetary Instability in the price of oil provides an important budgetary planning tool. impact of fossil-fuel use on DoD. While present fuel costs represent a small part of the overall DoD budget, at current Within the Air Force, the largest share of fuel (54.2%) is consumption rates, for every $10/bbl rise in price, DoD consumed by tankers and transports. Fighters account for requires an additional $1.5B in its annual budget. 30.1% of the fuel, bombers for 7.1%, and trainers for 4.2%. Modern computer-based systems can help decrease the latter There are, in general, two ways to deal with this issue. One is further. to reduce DoD demand, which is discussed below. The second is to attempt to beat the commercial market price at any one For reference, JP-8, the primary fuel used by the Air Force, time incurring some market risk by entering into long-term cost $0.91/gal in FY04 but rose to $2.58/gal in FY06, i.e., a contracts, or hedging against future prices of crude oil on the factor of over 2.8 in just two years.11 world market. 10 The recent tensions and disagreements between Russia and the Ukraine 11 over the Russian natural-gas pipeline over Ukraine had an immediate Commercial aviation has been faced with similar fuel price increases, as impact on the E.U.'s natural-gas supplies and outlook. assessed and discussed below. 15 16 The Defense Energy Support Center (DESC) is responsible for the procurement, transportation, ownership, accountability, budgeting, quality assurance, and quality surveillance of all petroleum products used by the DoD. In FY05, DESC distributed 133 Mbbl oil. According to data provided by DESC and available on their Web site, mobility fuels represent the preponderant fraction of DoD fuel use. These mobility fuels are dominated by diesel fuel, and JP-5 and JP-8. The latter represents the largest single component, by category, of fuel supplied. JP-5 is a Navy shipboard jet fuel with a higher flash point temperature than JP-8. The flash temperature, Tflash, for JP-5 is +60°C (140°F), whereas Tflash for JP-8 is +38°C (100°F). Although JP-5 costs slightly more than JP-8, it is used on ships for safety reasons. JASON notes that, excluding oil purchases/deliveries on behalf of TF-RIO,12 DoD fuel consumption decreased continuously in the FY03-05 period. Further decreases in fuel consumption by the U.S. Air Force, the largest consumer, are also anticipated, as the number of aircraft in the U.S. Air Force inventory decreases in the future, as discussed below. 12 TF-RIO is the 2004 Task Force - Restore Iraqi Oil that provided oil to Iraq. 17 18 Jet A and Jet A-1, the dominant commercial aviation fuels, the indicated additives to Jet A-1, which is generically differ only by their respective freezing points, which are −40°C available across much of the world, rather than transport it for Jet A and −47°C for Jet A-1, and in their flash points, as from CONUS. JASON is under the impression that this discussed above. While there are minor differences in and possibility has not been assessed and is not being exploited at substantial overlap between world-wide commercial aviation this time. fuel delivery specifications,13 most commercial aviation fuels today meet the Jet A-1 specification. One can obtain JP-8 and JP-8 +100 from Jet A and Jet A-1 through the use of additives. Adding a fuel system icing inhibitor, a corrosion inhibitor/lubricity improver, and an anti- static additive to Jet A-1, yields the military JP-8. Further adding a dispersant, an anti-oxidant, and a metal deactivator to JP-8 yields JP-8 +100, which adds an additional 100°F to the operational range of JP-8. In total, these additives cost at present, approximately, $0.05 per gallon of fuel. Oil refineries tend to realign their distribution of refined products every few days. If the DoD has an unusually large need for JP-8, DoD can induce the refineries to produce more JP-8 from their commercial aviation fuel stream at a nominal increased cost of, approximately, $0.05/gal. If DoD is operating in a part of the world where JP-8 is unavailable, it could produce JP-8 for its use by the addition of 13 By way of example, a question that arose in the investigation of the TWA-800 accident on 17 July 1996 is whether the (remaining) fuel in the aircraft's central tank was (somewhat) more volatile than usual because the aircraft had been fueled in Athens, Greece, for the return trip to New York, and not refueled in New York for the trip back, owing to the lighter load for the flight out. As a consequence, vapors in the central tank when the aircraft exploded were from fuel that had been obtained in Athens. 19 20 21 22 As noted above, the cost of JP-8 has increased by a factor of 2.8 since 2004. This increase translates into a $4B/yr additional cost for the U.S. Air Force. At present consumption rates, every $10/bbl increase in price drives up U.S. Air Force fuel costs by ~ $0.6B/yr. Shown on page 21 is the DESC sales distribution. As indicated, deliveries to foreign governments in 2004, as well as to foreign governments and commercial recipients (together) in 2005 are significant. JASON could not ascertain whether the TF-RIO deliveries (cf. page 16) were counted as 2004 deliveries to foreign governments, or whether the near-match of the total of foreign-government and commercial deliveries in 2005 with deliveries to foreign governments in 2004 is coincidental. Noteworthy also in the figure on page 21 is the large increase in the cost of U.S. Air Force deliveries in 2005 over those in 2004. As shown on page 22, despite some reduction in DoD fuel consumption, the price DoD paid for fuel has increased dramatically from FY04 ($5.9B) to FY05 ($8.3B). DoD fuel purchases in FY06 are expected to be higher than $12B. The figure on page 22 also indicates the large extent to which mobility fuels are responsible for the predominant fraction of DoD fuel consumption, as noted previously. 23 24 It is helpful to put the U.S. Air Force jet fuel consumption into the context of the domestic consumption of commercial aviation fuels. In terms of fuel, the Air Force with $4.6B in fuel purchases in 2005, is a somewhat larger fuel consumer than, but close to, the largest commercial U.S. airline (American). As such, the DoD and the U.S. Air Force are not market drivers for aviation fuels, or any other petroleum product, for that matter. Commercial aviation is expending considerable efforts to decrease its fuel use. At this time, commercial aviation fuel costs almost match labor costs, as indicated in the figure below that plots unit operating costs (¢ per available seat-mile) from 1990 through the fourth quarter of 2005. Note that the time units for 2005 are in quarters, vs. years for time prior to 2005, indicating the very rapid recent increase in fuel-cost burdens to U.S. commercial airlines. 25 26 In what can only be characterized as an aggressive but obviously correct call, Southwest Airlines, some time ago, hedged 75% of their fuel purchases at $35/bbl in long-term contracts. In the commercial-aviation industry, which is characterized by very small profit margins and whose profits are a consequence of very high gross sales, lower fuel costs relative to competitors can produce large differences. Profits being the percentage-wise small difference of large numbers, small variations in unanticipated costs or even minor accounting errors translate into the difference between profit and (potentially large) losses. In the unregulated commercial aviation industry, competitors are limited in their ability to raise prices unilaterally, for fear of significant loss in market share. Partly as a result, Southwest Airlines is quite profitable, at present, certainly relative to the main body of the rest of the commercial airline industry. This method illustrates one approach to ensuring stability of fuel pricing: entering into long-term contracts as a hedge against significant future price increases and thus allowing for budgetary planning for a period of years into the future. The potential downside, of course, is the higher costs in the event of future decreases in crude-oil prices. Such effects can be mitigated by hedging for only a fraction of future anticipated oil needs, as the airlines listed on page 26 have done. 27 28 3. Regulatory factors affecting DoD fuel use, planning, and policies DoD lives in a complex and changing regulatory environment. Additionally, most of the DoD fuel is consumed in the continental U.S. Congress has mandated that most of this fuel must meet the 15 ppm sulfur regulation in the future. JP-8 does not meet this specification. Note that exceptions are provided for ground combat vehicles, e.g., Bradley, Abrams, and Stryker vehicles. A myriad of other regulations and directives are mandated by Congress. For instance, as the slide indicates, DoD has been directed to develop a strategy to use fuel produced, in whole or in part, from coal, oil shale, and tar sands and to develop a plan for coal-to-liquid fuel production and consumption. The trade- offs between obtaining liquid fuel from coal relative to biomass, natural gas, municipal solid waste, or other sources are discussed in some depth and in response to the study charge, in a later section of this report. DoD must live within these Congressional, typically unfunded, mandates and other directives. To the extent that it has influence over them, DoD should attempt to ensure that the most cost-effective means are encouraged and implemented in each case in obtaining the fuel it needs to support its missions effectively. 29 30 4. Drivers to minimize DoD fuel use was delivered in the air. The JASON estimate is also in accord with the 2001 DSB estimate, even though capital costs for the Barring unforeseen upheavals and if price is important but not tanker fleet were not considered in that analysis.14 a decision driver, why should the DoD reduce fuel use? As discussed below, there are compelling reasons for the DoD to JASON was advised that the cost of delivering Army fuel to reduce fuel consumption, for which the drivers are: potential the front line can be in the range of $100-600/gal. The large future uncertainties over the next 25 years and beyond, cost range depends on "front line" to "back line" separation in logistics, supply costs, and other related considerations. In distance, terrain, defense and other logistics requirements, etc. particular, delivery of fuel is costly not only in terms of fuel- A large fraction of infrastructure costs and vulnerabilities scale acquisition dollars, but also in infrastructure and lives. with the fuel volume that must be delivered. One must also Fuel delivery costs are accompanied by large multipliers. As consider the cost in lives of delivering fuel due to recent can be appreciated via variants of the rocket or Breguet changes in military doctrine. The present logistic supply chain equations, it can require a lot of fuel to deliver fuel. Fuel was designed at a time when "behind the front lines" denoted delivered is the payload of the fuel-delivery vehicle. more-or-less safe terrain. This is no longer true. Further, fuel- Unfortunately, little quantitative information is available on the supply vehicles are not armored and, as a consequence, present multipliers that pervade the logistics chain for representative a vulnerable target and a costly liability in terms of lives and scenarios of missions. To wit, how much fuel must be treasure for U.S. forces. delivered at the rear to supply a gallon of fuel to the front? We conclude that the greatest driver for reducing fuel use lies As part of this study, JASON attempted to analyze what it costs not in the reduction of the direct cost of the fuel itself, but in to deliver fuel air-to-air. Details of the analysis are provided in the reduction of the attendant indirect costs of logistics to Appendix II. The estimated FY05 cost is $20-25/gal. This supply the fuel, the cost of the fuel required to deliver the fuel includes the cost of the fuel, which represents the smallest needed, as well as the enhancements in tactics that would fraction, the cost of operations and maintenance (O&M), and accompany increased vehicular range, if fuel consumption the acquisition cost of the KC-135 tanker aircraft (FY98-$40M, were to be decreased on a given type of vehicle. each, acquisition cost, amortized over a 40 year lifetime of the aircraft, adjusted for inflation to FY05 dollars) and in terms of gallons delivered in air-to-air refueling. This analysis demonstrates that the cost of fuel is not the 14 decision driver; rather, the primary cost is O&M. For Defense Science Board Task Force on Improving Fuel Efficiency of reference, in 2005, only 6.5% (3.9 Mbbl) of U.S. Air Force fuel Weapons Platforms (January 2001) More capable warfighting through reduced fuel burden. 31 32 V. Technology options for the reduction of track fuel use. This will allow the Army to develop a database DoD fossil fuel use that will enable planning, projection, and operational optimization, as well as providing a baseline against which Given that most of DoD fossil fuel use is related to mobility future vehicles can be compared and assessed. Fuel and given the compelling rationale for reducing fossil fuel use, consumption rate, per unit power produced, is a strong function various vehicle technology options are now evaluated that of the power levels required for each vehicle and engine, which would enable fuel-use reductions. Technology options depend on the pattern of use. If the use pattern is not evaluated include hybrid diesel-electric vehicles, all-electric understood, reliable optimization of engine selection and vehicles, fuel-cell vehicles, structural-weight reduction and efficiency is not possible. light-armored vehicles, comparisons between manned and Despite the lack of quantitative data on actual Army vehicle unmanned vehicles, and vehicle mix. operation, it is possible to draw some qualitative and semi- In a subsequent section, other generic approaches are quantitative inferences regarding the relative merits of examined, i.e., replacing DoD fuel consumption from 100% of technology options to achieve fuel consumption reduction in fuels derived from crude oil to include fuels derived from a Army vehicles. These various options broadly involve new diversity of sources, including material contributions from engine design options and/or structural lightweighting. Such alternate fuels such as gas-to-liquids, coal-to-liquids, biofuels, choices are discussed and evaluated below in the context of and/or other supply-side fuel technologies. their suitability for DoD missions and goals. A. Modification of patterns of use of DoD platforms Overall fuel consumption is strongly dependent on the patterns of use of vehicles, which include vehicle mix, the total number of engine-hours per day, mobility vs. idling/hotel-power consumption when stopped, etc. Apparently, the Army does not have sufficient data on this subject to facilitate a quantitative evaluation of the various options. We therefore strongly recommend, as a critical first step to achieving improved fuel efficiency, that the Army install relatively inexpensive, commercially available, systems similar to the GM "On-Star" vehicle monitoring system, or equivalent, to 33 34 B. Engine and drive-train technology options under highway driving conditions. Under highway driving conditions, the advantage of regenerative braking energy 1. Hybrid vehicles recovery is minimal, and fuel economy is actually adversely affected by having to carry the extra weight associated with the Hybrid vehicles have the capacity to do work using both an (unused under these conditions) batteries, generator, and more internal combustion engine (ICE) and an electrical motor, in complicated/heavy drive train for the required horsepower. series, or in parallel. The ICE drives an electric generator, storing energy in batteries. The energy stored is used to augment the ICE output to meet peak-power demands. This combination results in a decrease in the installed ICE plant Notional Data peak-power requirements, which is what scales engine size (displacement) and, ultimately, fuel consumption. Additionally, hybridization of the engine with the electrical motor portion of the power plant allows the ICE to operate (mostly) within its peak-efficiency regime. The electric generator and storage system can augment electric-power demands when the vehicle is stopped. The efficient and capable generator can also be used for other vehicle needs, e.g., in Moving Only, Level Terrain providing hotel and other (electrical-) power requirements. Hybrid vehicles are attracting much attention in the commercial transportation sector due to their increased fuel This is confirmed by the results of the analysis depicted in the economy relative to conventional ICE vehicles. The efficiency figure above that compares hybrid vs. conventionally powered, of hybrid vehicles is, however, strongly dependent on their use 20-ton tracked vehicles, modeled as operating over a variety of patterns. Recovery of energy by regenerative braking makes terrains.15 In general, hybrid vehicles offer little or no fuel these vehicles especially good in stop-and-go driving on low- savings if the average power delivered by the engine is close to friction surfaces. Thus, the greatest fuel savings for hybrid (i.e., within approximately 30% of) the peak power load of a vehicles are incurred for city buses, utility-service vehicles, typical driving cycle. especially if power demands when stopped are modest and can be (mostly) provided by stored electrical energy in batteries, 15 and postal-delivery vehicles. As an example of this, the Toyota Robert M. Roche [Army Materiel Systems Analysis Activity - AMSAA] Prius can obtain (slightly) better mileage in city driving than Fuel Consumption Modeling Support and Insights. JASON 20 July 2006 (VTC) briefing. 35 36 of a conventional platform is increased, the payload of the In off-road environments, conditions for when hybrids can hybrid vehicle is necessarily reduced. Considering that a large offer improved performance are even more discouraging. Such fraction, if not the majority, of tactical ground vehicles are used conditions more-closely reflect DoD vehicle use than the EPA for carrying supplies in theater, a more appropriate metric for drive cycle for commercial vehicle use, for example, or the bus fuel efficiency should be payload-miles (ton-miles) per gallon drive cycle depicted above. Hence, the pattern of use for the instead of vehicle-miles per gallon. By this metric, hybrid Army does not lend itself to rendering hybrid-vehicle designs vehicles offer even fewer advantages in terms of potential fuel advantageous for fuel-use-reduction purposes. savings. Another possible advantage of hybrid vehicles involves the Additionally, hybrid vehicles have higher capital costs and capability for silent watch. If no other demands are placed on increased power-plant complexity (and maintenance). These the system (i.e., sustained hotel power), the stopped vehicle can costs are difficult to amortize over vehicle life even in the case turn the engine off completely, eliminating idling fuel costs. of an average commercial-vehicle 10,000 mile per year range. The engine would then be turned on only when the batteries In the case of the military, JASON was informed that the need to be replenished. typical HMMWV travels only ~2000 miles per year. Such low Army combat vehicles spend as much as 80% of the time mileage makes it especially difficult to justify the higher cost stopped, i.e., providing hotel power, only. Hence, a silent of the hybrid system powerplant on the basis of fuel cost watch capability seems attractive. However, for the future savings (if any) alone. combat system, hotel power requirements are specified to be As discussed below, JASON found that modern diesel engines 25-32 kW (the additional 7 kW for air conditioning where offer a considerable advantage over hybrid vehicles for most needed). To meet this requirement for even 1-2 hours would DoD combat, and perhaps tactical, vehicle patterns of use. require a very large suite of batteries, which are heavy per unit of stored energy. A typical Li battery pack would, for 2. All-electric vehicles example, provide 0.2 kW⋅hr/kg. Supplying 25 kW for 2 hours is 50 kW⋅hr would require an additional 200 kg of extra battery All-electric vehicles provide efficient conversion (~85-90%) of weight just to meet hotel-power requirements. This extra stored electrical energy to mechanical power. An all-electric weight would come at the expense of payload, fuel carried, and power train is well-suited to vehicles with high electrical fuel economy while driving the vehicle. demands. In principle, such vehicle designs enable quiet/stealthy operation, with a reduction in acoustic noise The disadvantages of the increased weight of the hybrid extend emissions, IR emissions, (detectable) combustion further. Heavier vehicles are more difficult to deploy by airlift. exhaust/odors, and other greenhouse gas (GHG) emissions. Additionally, if the overall weight of the hybrid relative to that 37 38 All-electric vehicles, however, have very expensive battery temperature fuel cells are poisoned by fuel impurities such as life-cycle costs. Charging is slow and requires either a diesel sulfur and carbon monoxide and, as a consequence, require generator or access to wall-plug electricity. This by itself highly purified fuel. Additionally, even if the fuel feedstock seems to preclude their widespread use in military tactical were suitably purified, introduction of these contaminants into operations. Moreover, these vehicles have a small range unless the air intake of a fuel cell vehicle rapidly poisons the catalyst aggressively light-weighted. and immobilizes the vehicle. Energy storage (per unit mass or volume) of even the best Current H2-based fuel cells have prohibitive catalyst costs, of available Li batteries is too small for most military vehicular order $100K-$1M, for 100 kW power plants, typical of busses, uses. The energy storage density of the best batteries is, heavy-duty cars, or trucks, for example. Additionally, such approximately, 1% that of diesel fuel (by volume), i.e., 2% of fuel cells have very expensive membrane costs with no long- diesel-fuel equivalent (because electric vehicles are ~2× more term (i.e., 1-year) durability and/or warranty. efficient than a diesel ICE). Electric vehicles (like gas or Another drawback of H2-fuel-cell based vehicles is the logistics diesel-based hybrids) might be suited for specialized civilian- train that would be required to supply the gas-phase fuel, H2, to type uses (local-mail delivery, base patrols, etc.) on DoD bases theater. Canisters to contain H2 gas are large and heavy; an in CONUS, and could provide fuel savings in that capacity, but obvious flammability and, under some conditions, an explosion are not indicated for use in general military applications in and detonation liability would exist throughout the logistics theater. train. On-board H2 storage also requires much larger mass (weight) or volume than liquid fuels. This drawback would 3. Fuel-Cell vehicles deleteriously impact vehicle range, military performance, and Fuel cell vehicles provide direct conversion of fuel to supply-chain logistics of such a system. electricity. They have demonstrated high bench-top efficiency For direct diesel use in a fuel cell, high-temperature ceramics (> 50%) relative to the typical ICE powerplants (15-25%). are also prohibitively expensive, have long start-up times, Hydrogen fuel cells have no (vehicle) GHG emissions, though suffer coking, and scale poorly to high power. Fuel cells used their upstream GHG emissions can be large, as well as their in conjunction with reformers exhibit low efficiency at emissions from in-vehicle-produced reformed hydrogen. moderate power and energy density. Fuel cells are low power density systems, if the required thermal-management systems are included. Fuel cells generally scale poorly to high power densities on a mass basis. Low- 39 40 4. Advanced diesel engine vehicles efficiency for Army vehicles, reducing fossil-fuel consumption, improving vehicle range, decreasing the thermal-management The commercial sector is focused on optimizing engines to burden, and thereby improving military capability. excel on the EPA drive cycle and testing protocols. In that Additionally, they are capable of a fairly rapid transition into testing, which involves a dynamometer, there is no electrical the existing military fuel infrastructure and perhaps pose less of load on the vehicle due to the air conditioner, for example, no a perturbation on logistics and O&M. aerodynamic (wind) resistance, and no road friction.16 Nor does the pattern of use in an EPA drive cycle (city stop-and-go Noteworthy is that increases in engine efficiency, i.e., a or highway driving) reflect the pattern of use of DoD vehicles. reduction in fuel consumption for a given (mechanical) In particular, DoD combat vehicles spend a significant amount horsepower output is accompanied by decreases in the thermal of time stopped and providing hotel power. They also go off- management burden. This is a very important consideration in road and go through mud, etc. Hence, engines that do not yield that armored vehicles are not only severely volume-limited, but high scores in the EPA drive cycle and test conditions could are forced to reject unwanted heat through places on the yield very different results for military use and, in particular, vehicle of higher vulnerability to enemy fire; the more heat that significant improvements in DoD land-vehicle fuel economy if must be rejected the more vulnerable the armored vehicle is, they are well-matched to DoD patterns of use. other factors held constant. Specifically, recent advances in diesel engines offer a greater Estimates from tests in the late 70s for the fuel consumption of return in fuel savings for Army patterns of use, and obviate the turbine-powered Abrams vs. the diesel-powered M60 tanks most, if not all, of the potential advantages that might possibly were roughly 2:1, but field data from the REFORGER be gained by hybridization. In particular, the new inline-6 exercises in Germany showed the turbine tanks had about 4:1 diesel engines are very attractive in this regard. They are also rather than the previously estimated 2:1 fuel consumption. The much more fuel efficient than prior diesel engines. These difference was attributed to time at idle, estimated to be as engines are designed to have very good efficiency at idle and much as 83% of total operating time. What little data exist when providing hotel power.17 They thus appear to be indicate that, at idle, the ratio of fuel consumption between the preferable to hybridization as a method of improving fuel two tanks is more than 4:1 (at 10 kW electrical output, 10.6 gal/hr normal idle vs. 2.3 gal/hr). At the Abrams "tactical 16 idle" setting with the engine at 1200-1250 rpm instead of the The variance between peoples' actual miles-per-gallon experience and 890-900 rpm of normal idle and with the transmission in expectations based on show-room EPA sticker mileage data ("Your mileage may vary.") are not difficult to understand. neutral, installed fuel consumption is about 17 gal/hr.18 17 Charles Raffa [TARDEC] 27Jun06 JASON briefing and accompanying 18 material. Charles Raffa [TARDEC] 31Jul06 pvt. comm. (cf. also figure on p. 35). 41 42 Relative to the turbine engines currently used in the Abrams proportional to the product of weight and distance (i.e., ton- tank, modern diesels offer improved efficiency, especially at mile). Thus, if the weight of a vehicle is reduced by 2×, the idle, dramatic improvements in fuel consumption (3-4×, fuel consumption is reduced by approximately 2×. The net depending on the pattern of use), decreases in maintenance effect of this increased efficiency multiplies significantly back costs, and an increase in (autonomous) range (~2×, or more).19 through the supply chain. For these reasons, the M1-Abrams tank should be re-engined Army vehicle weight can be partitioned into armor, structure, with diesel engines as soon as possible. These vehicles are fuel, and payload. For military vehicles used in combat, armor likely to remain in the inventory for some time – perhaps weight naturally attracts attention as a weight–reduction through 2020, or more – and should be upgraded. This proposal candidate. However, at present, armor is ~20% of total weight has been argued for some time and the reasons are more of most armored vehicles, so the potential overall benefits are compelling today than they were in the past. not large. Progress in armor capabilities could decrease armor weight by a factor of two, for a given protection level. C. Lightweighting DoD platforms However, changes in threat levels and engagement scenaria Another method to increase fuel efficiency will now be drive the design space towards increased protection for the same weight, rather than decreased armor weight. JASON discussed: reduction of vehicle weight while maintaining military performance. There are two approaches: lightweight encourages further improved-armor capabilities, but favors increased protection over reductions in total armor weight. manned vehicles, and replace manned vehicles by unmanned vehicles. The former maintains similar missions and personnel Potential savings in weight are likely possible by reduction of demands and requirements to the ones in place now, the latter the remaining 80% of vehicle weight. This can be done by changes those demands and requirements significantly. Each reducing vehicle structural weight by the use of modern option is discussed separately. materials and construction methods, such as carbon reinforced polymer and the reduction in fuel weight/volume for a given 1. Manned vehicles range that the reduction in weight will enable. Additionally, one may be able to reduce the required payload through The fuel consumption of a heavy vehicle in motion at moderate improvements in patterns of use. speeds is dominated by friction losses to ground, as opposed to aerodynamics. For this reason, fuel consumption is nearly It is worth noting that, as currently practiced in Iraq, up- armoring is done at the expense of payload. This is not a good trade for overall fuel consumption purposes, but of course is 19 necessary in the current theater environment to counter the One (minor) drawback may be in acceleration in that turbine-engine rpm can increase/decrease faster than with a diesel. threat to personnel in these vehicles. 43 44 2. Unmanned land vehicles Fuel consumption per mile traveled on land is scaled by weight (aerodynamic drag is not important for most DoD land vehicles). Fuel use is then (nearly) proportional to the ton- miles driven, multiplied by the power-plant efficiency, and including the fuel consumption idling and the need for hotel- power production when stopped. Specialized unmanned vehicles can obviate (most) armor – they could be treated as expendable – and could require much lower hotel power. Both guided and autonomous land vehicles are, however, at a very different technical readiness level than unmanned air vehicles, for example, discussed below. For land vehicles, the leap to totally autonomous vehicles may not be warranted, considering the technical difficulties and development costs, considering the potential benefits from the use of guided (remote-controlled) vehicles that can relay data from their own sensors, including cameras, creating a virtual panel for a (remote) controller who may be either distant, or in a following vehicle, depending on application. For example, much lighter guided unmanned vehicles driving ahead of other vehicles in a column could help serve either as decoys for, or to help clear improvised explosive devices (IEDs). 45 46 47 48 3. Unmanned aerial vehicles λR Δxreal = = 0.7 ( R / km) m , Among the DoD unmanned vehicles, UAVs represent the most D mature technology, benefiting from decades of development of Where D is the (real) aperture, λ is the radar wavelength, and R autopilot systems in manned aircraft. The transfer of traditional the range. A transverse aperture of D⊥= 20 m is then pertinent piloted-aircraft functions to UAVs could enable the realization to forward-looking resolution and an along-path aperture of of very high fuel-use reductions. This is especially true if air- D|| = 0.5 m for side-looking resolution. The implied range to-air refueling can be obviated completely. resolution is 1 m in the strip-map mode and 0.1 m in the spot- In a major development program, on-going since 2000 and now light mode. In ground-moving target indicator (GMTI) mode, focused on a major flight test in 2010, the Air Force Research the minimum detectable velocity (MDV) is, Laboratory (AFRL) has been working on a design for a high- λU altitude, long-endurance, autonomous ISR platform dubbed Δu = , SensorCraft. One such unmanned system could replace and D integrate the functionality of 3 manned systems: JSTARS, at UAV speeds of U = 100-200 m/s, i.e., Δu⊥ = 0.15 m/s in AWACS, and Rivet Joint. Its long endurance would obviate forward-looking mode (D = D⊥) and Δu|| = 3-5 m/s in sideward in-flight refueling, saving 200 klb of fuel (28,560 gallons) per mode (D = D||). aircraft sortie. A single SensorCraft with a 30 hr loiter sortie would replace 3 current ISR 10 hr loiter missions, which would As part of this study, JASON explored the design possibilities require 9 ISR sorties and 9 tanker sorties. The resulting fuel offered by the altitude-speed-size corridor, with an eye to savings is approximately 97%, i.e., a fuel-saving factor of 30. maximizing endurance (unrefueled flight time) for UAVs in the If operational or other considerations indicate that the three 1000 kg-class payload regime. Preliminary calculations functions that can be integrated in this UAV should not be suggest that it should be possible to do considerably better collocated, three such craft would more than restore the (> 2×) than the target 30 hr endurance target indicated for previous functionality with a still-significant fuel-use reduction SensorCraft. The potential for persistent ISR as well as for factor of 10, rather than the factor of 30 for a single craft. other uses need not be emphasized here. As the AFRL slides imply, UAVs can be sized and configured Considering the multipliers of delivering fuel to the air tankers, to accommodate conformal array antennas for SAR, for the savings would be larger yet because of the fuel-delivery example. Assuming an antenna size of 20×0.5 m2, for multipliers. As is the case generically, fuel savings propagated example, SAR performance, with the central frequency of the through the entire supply chain should be an important part of Lynx SAR of about 17 GHz (Ku band), the forward-looking the system cost analysis in the planning, logistics, and DoD real-aperture azimuth resolution would be, acquisition process. 49 50 D. Alternate fuels in place of crude oil-derived fuels through electricity as an intermediate step. Absent such Another tool to reducing the DoD dependence on fossil fuels is breakthroughs, such alternative energy sources will not be to substitute some portion of crude-oil-derived fuels with fuels considered further in this report, at least in the context of derived from other sources. In this context, an alternative fuel potential DoD fuel-supply sources. is defined to be any fuel that is not directly derived from crude Below, alternative fossil-derived fuels are considered, oil. Hence, liquid hydrocarbon fuels derived from coal or including those from enhanced oil recovery (EOR), coal and natural gas would be classified as alternative fuels, even though gas, as well as biofuels, including ethanol, biodiesel, and bio- they are in fact derived from fossil sources. Fischer-Tropsch (FT) diesel. Possible primary energy sources for production of alternative fuels also include non-carbon energy sources such as nuclear, solar, wind, geothermal, and tidal-energy sources. These sources, however, are best used in the production of electricity, which is high thermodynamic availability energy. Using such sources to produce liquid fuels converts high-value (high- thermodynamic-availability) energy into low-value energy. In addition to conversion losses to obtain fuel, an additional factor of, approximately, 3 reduction in its ultimate energy value, e.g., towards the production of mechanical work, is then incurred in the conversion of the (low-value) fuel to (high-value) work. As a rule, high-availability/-value energy is best used as such, rather than being converted to low-value energy to then be converted back, at considerable loss, to high-value energy and work. Further, there is currently no straightforward or economical method to convert these electrical energy sources into fuels, other than H2 (through electrolysis), and H2 is not well-suited for use by the DoD for a variety of technical and infrastructure- based reasons (vide infra). A breakthrough in this area would be a method to directly convert, for example, sunlight efficiently and cost-effectively into liquid fuels without going 51 52 As noted earlier, even though the U.S. has only 2% of the could attack carbonate in the cement seals plugging abandoned world's conventional oil reserves, it has approximately 30% of oil or gas wells, 2.5 million of which pepper the United States. the world's unconventional fossil resources, including ~1 Tbbl The lesson is that whatever we do [with CO2], there are (trillion barrels of oil equivalent = 1000 boe) of shale oil, environmental implications that we have to deal with.20 800 boe of FT coal, 0.15 boe of petroleum-derived coke, and It is important to establish scientifically whether in fact, at greater than 32 boe of oil from enhanced oil recovery (EOR). scale, if carbon sequestration can be relied upon to keep CO2 In total, the U.S. has estimated resources equaling 1.9 Tboe. from leaking to the atmosphere for the indefinite future – if not, At a U.S. consumption rate of 7.5 Bbbl/yr, this can yield a the problem is only delayed – or if other, secondary, side ~260 year supply from these sources alone. The FT process effects prove to be serious. that converts one form of fossil energy into another, e.g., via coal-to-liquid (CTL) or gas-to-liquid (GTL) processes would yield an assured domestic supply of liquid hydrocarbon fuels for the DoD for many decades into the future, albeit accompanied with large environmental burdens, as discussed below, unless carbon sequestration and other measures are adopted with attendant increases in cost. In addition to production costs, carbon sequestration, basically, capturing CO2 from the combustion of fossil fuels and burying it under ground to keep it from contributing to greenhouse-gas emissions in the atmosphere, also entails environmental unknowns. For example, a pilot experiment in Houston, Texas, found that, the CO2 dropped the pH of the formation's brine from a near-neutral 6.5 to 3.0, about as acidic as vinegar. That change in turn dissolved many minerals, releasing metals such as iron and manganese. Organic matter entered solution as well, and relatively large amounts of carbonate minerals dissolved. These naturally occurring chemicals seal pores and fractures in the rock that, if opened, could release CO2 as well 20 as fouled brine into overlying aquifers that supply drinking and Y.K. Kharaka et al. (2006) Gas-water-rock interactions in Frio Formation irrigation water. Perhaps more troubling, is that the acid mix following CO2 injection: Implications for the storage of greenhouse gases in sedimentary basins. Geology 34:577-80. 53 54 1. Fossil fuel fungibility: conversion of gaseous and solid All DoD mobility fuel stocks can be made by FT processes. In forms of fossil fuel into liquid hydrocarbon fuels through the some cases, the lack of aromatics in the FT process requires Fischer-Tropsch process introduction of additives to restore the exact diesel fuel Over suitable catalysts, heating any carbonaceous material in specifications of JP-8, for example, but this can be done for the presence of water will produce synthesis gas (syngas): CO relatively little cost by paying a refinery to blend the needed and H2. Through use of appropriate Fischer-Tropsch (FT) additives into the FT fuel. Another option is to mix the FT fuel catalysts, the syngas can then be converted into liquid 50:50 with conventional JP-8 diesel fuel, so as to produce a hydrocarbon fuels. The FT process was used for large-scale mixture that generally meets the JP-8 fuel specifications for production of liquid fuels from coal by the Germans and lubricity, volatility, and other performance-related properties. Japanese during World War II. There should thus be no need to requalify all DoD engines on FT fuel, since it can be made to be nominally identical to JP-8 In the gas-to-liquid (GTL) process, one burns methane (CH4) fuel with relatively low-cost blending processes. with air to (partially) produce hydrogen (H2) and carbon monoxide (CO), and then the higher hydrocarbons, i.e., The FT process is capital-intensive, with capital costs approximately four times higher than those required to produce CH4 + ½ O2 → 2 H2 + CO an equivalent quantity of fuels by refining crude oil. The (2n+1) H2 + n CO → CnH2n+2 + n H2O largest coal-to-liquid production plant is presently located in South Africa (SASOL), producing up to 200 kbbl of liquid fuel The first reaction is very endothermic and requires energy per day. Originally built to counter earlier fuel-embargo input. In addition, more H2 is needed than is formed along with policies against that country, at present it also produces FT CO in the first reaction for the second reaction to proceed. aviation fuel that it mixes (50:50) with crude-oil-derived Further, part of the methane in the first reaction is oxidized all aviation fuel, as discussed above. It has installed no carbon the way to CO2, i.e., not all makes CO, decreasing efficiency sequestration measures, however, and at present, it reportedly further. The ratio of H2 to CO is further adjusted by running the represents the largest single CO2 emission source in the water-gas shift reaction, CO + H2O → CO2 + H2, involved in African continent and, perhaps, the world. At present, Royal the chemistry of catalytic converters. These consume energy, Dutch Shell and SASOL are developing 10 CTL plants in which ultimately comes from the fossil or other energy China. feedstock, one way or the other. For CTL, starting from coal, which is essentially all carbon, H2 must come from water and In the figure on page 54, 'WTW' is an abbreviation for 'Well- O2, and that requires more coal energy input (burned to make To-Wheels' analysis that will be discussed below. CO2 output) to form H2 in the first place so as to make the hydrocarbon fuel in the second place. 55 56 Less of the energy content (MJ/kg) of the feedstock (e.g., coal, natural gas) ends up in FT-derived fuels compared to crude oil processing and refining. Ignoring pass-through water, a CTL plant would require 8 gallons of water per gallon of FT diesel produced (cf. page 54). Additionally, in the FT process, more feedstock carbon is released as GHGs than would be released to produce the same amount of fuel from crude oil. These processes therefore have an increased well-to-wheel (WTW) GHG burden per ton-mile. GTL-FT is more efficient (and less costly) than CTL-FT, as alluded to above and as indicated in the figure on page 56. The 50% CTL energy efficiency leads to two times more CO2 emissions than from petroleum-derived diesel fuel, for the same ultimate mechanical power delivered to the vehicle wheel. While it is possible to mitigate the GHGs by carbon- sequestration measures, such measures come at an increase in cost (+ 25-40%) and with some uncertainty on future and secondary consequences, as discussed above. Finally, as noted on page 54, an FT plant is (very) capital- intensive, approximately 4 times that of an equivalent plant (oil refinery) that produces fuel starting with crude oil feedstock. Absent externalities and other considerations, the cost of capital alone suffices to discourage such plants. World-wide natural gas reserves-to-production ratio.21 In a manner that parallels recent crude-oil reserves vs. production patterns, world natural-gas reserves/production ratios have been sustained at around 60 years, or more, as indicated in the graphic on this page, despite increases in consumption over the same period. 21 BP Statistical Review of World Energy (January 2006, page 26). 57 58 The resource base of the various carbon sources is now comparison to the amount of biomass that would have to be evaluated to assess whether there would be sufficient domestic produced to displace a reasonable quantity of current production capability to at least meet anticipated DoD fuel domestically consumed liquid fuel derived from crude oil. supply needs. The graphic on page 58 shows the annual US Of some significance is the indication of the equivalent carbon- consumption and production of fuels, potential fuel sources, mass requirements that the DoD fossil-fuel needs correspond to and biomass, referenced to carbon mass. The data on the left- (far right). If economically permissible, they could, in most side of the graph indicate carbon domestically consumed principle, be covered by exploiting the national municipal in the form of fossil fuels, including gasoline ('petrol') and solid-waste (MSW) stream alone. diesel fuels, other petroleum products, natural gas liquids (propane, butane, etc.), coal and natural gas. In total, these domestically consumed fuels amount to 2.4 Gt-C (billion metric tons of carbon) each year. The graphic also shows the biomass carbon-equivalent currently used domestically for energy. Most of that biomass is waste products used to make electricity. However, the total also includes the 14% of the corn crop that is currently used to make ethanol, as discussed below. The biomass potential represents the 1.3 Gt (total, ×½ for carbon) of dry biomass that the DOE-USDA estimates can be sustainably produced for energy consumption in the U.S. This estimate assumes that 73% of the biomass will come from agriculture and that 27% will come from forest products. JASON did not have the opportunity to assess the assertion of sustainability in the DOE- USDA study of such large amounts of domestically produced biomass. Finally, for reference, the right-most side of the chart depicts the equivalent carbon content of current domestic agricultural production. Clearly, these values are relatively modest in 59 60 Having established the feasibility of converting non-liquid amply documented in the figure below that depicts the price of forms of fossil energy into liquid hydrocarbon fuels through crude oil, since 1861, in FY05 dollars. It illustrates the the FT process and having established that there is, in principle considerable risk that would be incurred by assuming that the at least, an ample supply of such carbon from a variety of current high prices in the vicinity of $75/bbl will be sustained. domestic resources, the relative costs of producing liquid fuel It also illustrates that they were exceeded around 1980 (Iranian from the various different forms of carbon available in the U.S. revolution).23 are now assessed. Production costs of FT diesel depend on the choice of feedstock. Differential costs reflect differences in handling the feedstock in the facility (solid vs. gas, etc.) as well as energy costs needed to produce the high temperatures from gaseous (natural gas) vs. porous material (biomass), vs. solids (coal). Production costs vary from $30/bbl for stranded gas (GTL),22 to $70+/bbl for biomass. CTL ($45/bbl) is 50% more expensive than GTL ($30/bbl). In all cases, it costs more to produce diesel by any FT process than it does to make JP-8 from crude oil. The most-cost-effective source of FT diesel is via conversion of stranded gas, e.g., on the north slope of Alaska. As also As with any investments and barring externalities, investments noted above, in addition to high production costs, FT processes in biofuels, FT processes, etc., need to compete with current have high capital costs that deter investment in the face of returns from drilling for crude oil. uncertain future crude-oil prices, i.e., in the event of a fall in prices. That large swings are part of the historical record is 22 A 'stranded gas' reserve is a natural gas field that has been discovered, but remains unusable for either physical or economic reasons. Gas that is found within oil wells is conventionally regarded as associated gas [or stranded gas] and has historically been flared. It is also sometimes recirculated back into oil wells to maintain extraction pressure, or converted into electricity using gas-powered engines. 23 [http://en.wikipedia.org/wiki/Stranded_gas_reserve, 6 August 2006] BP Statistical Review of World Energy (January 2006, p. 16). 61 62 2. Biofuels Corn is converted to ethanol in either a dry or wet milling For comparison, the production of liquid fuels from non-fossil process. In dry milling, liquefied corn starch is produced by energy sources will now be discussed. Biomass is the most oft- heating corn meal with water and enzymes. A second enzyme cited route for such purposes because, in principle, biomass- converts the liquefied starch to sugars that are fermented by derived fuels could be widely available. Additionally, biofuels yeast, producing ethanol and carbon dioxide. In the (preferred) could be, at least to some extent, sustainable and renewable. Of wet milling process, the fiber, germ (oil), and protein are concern, therefore, is not only the relative cost of the biofuel separated from the starch before fermentation to ethanol. with respect to the cost of crude-oil-based fuels, or FT-derived In Brazil, ethanol is derived from sugar cane. Ethanol can also fuels, but the suitability of bio-derived fuels for the DoD be produced from wheat and soybeans. mission and whether the production of such fuels stems from a Of the solar energy incident per unit area farmed, renewable process, e.g., the fraction of sunlight energy stored approximately, 0.22 kW/m2 yearly and day-night averaged at in the final fuel product, as well as the result of a full account representative mid-latitudes, only 0.1% ends up in corn. After of all other energy and other inputs required to produce the the final process, only 0.03-0.05% of the initial insolation biofuel. energy is contained in liquid fuel.24 Another factor of three is then lost during conversion of the fuel into useful work in an Ethanol derived from corn internal combustion engine. The main presence in the domestic biofuels market at this time The low solar-energy conversion efficiency, coupled with the is ethanol derived from corn. In the U.S., ethanol is primarily energy-intensive process to produce corn ethanol, results in an used as an oxygenate in automotive fuel, replacing the additive overall process that yields no significant net energy benefit MTBE (methyl tertiary-butyl ether). Presently, 14% of U.S. from corn-derived ethanol, as it is within ±20% of "energy corn production is used to provide the ethanol that comprises breakeven". As implemented in the U.S. at present, much of 2% of U.S. transportation fuel. the energy used to make corn-based ethanol is produced by The volumetric energy content of ethanol (C2H5OH) is 2/3 that burning coal to provide heat to the process. of gasoline or diesel fuels (1.5 gallons of ethanol store the same 24 energy as 1 gallon of gasoline). This is because one carbon in Another factor of 3, or so, is then lost in converting the (low-value) ethanol is already partly oxidized and therefore is less of a energy in the fuel to work (high-value energy), i.e., an overall conversion contributor to the heat of combustion to form CO2 than the efficiency of incident sunlight energy to high-value energy (e.g., mechanical work) of 0.01%. In contrast, solar cells have an efficiency in fully reduced form of carbon in liquid hydrocarbon fuels. the range of 15-22% and produce high-value energy (electricity), albeit at too high a cost in terms of $/installed-kW to be competitive for most applications. 63 64 Cellulosic ethanol The cellulosic-biomass community must develop cost-effective The net energy conversion efficiency in a process in which processes to convert cellulosic biomass to liquid fuels if they cellulosic biomass is converted into liquid fuel is potentially at are to compete in the marketplace with fossil-fuel based liquid least three times higher than the 0.03-0.05% value fuels. At present, a viable process does not exist. characteristic of ethanol from corn. However, a proper Cellulosic biomass must also compete economically with (thermodynamic-) cycle analysis that accounts for conservation growing food on the same parcel of land. Presently, of mass and what fraction of the energy is sustainable will (unsubsidized) farming for food is more profitable than reduce this figure. The low conversion efficiency combined (unsubsidized) farming for energy. with the relatively low power/energy density of the yearly averaged insolation require very large areas to provide significant (net) energy resources from such a process. The requisite cellulosic biomass could be produced from a wide variety of feedstocks, including agricultural plant wastes (corn stover, cereal straws, sugarcane bagasse), wastes from forest products (sawdust, paper pulp, etc.), and crops grown specifically for fuel production (miscanthus, switchgrass). As discussed above, the 2005 DOE-USGA Billion Ton View estimated that the U.S. could sustainably produce 1.3 Gt of dry biomass annually, of which approximately half is carbon by mass. Cellulosic biomass is composed of cellulose, hemicellulose, and lignin, with smaller amounts of proteins, lipids (fats, waxes, and oils) and ash. Roughly, 2/3 of the dry mass of cellulosic materials is composed of cellulose and hemicellulose, while lignin makes up most of the remaining dry mass. Cellulose and hemicellulose can be converted into ethanol, while lignin can not. Lignin can be burned to produce electricity, or could be converted to fuel through the FT process. 65 66 It must also be demonstrated that sufficient cellulosic biomass Even where there is plenty of rain to grow the candidate feedstock can be harvested with sustainable agricultural cycles. feedstock, ethanol generation from biomass requires a great Sustainability requires that a full thermodynamic cycle for the deal of process water. Assuming an enzymatic process that process be considered, including the mass, particular inorganic, reaches 10-15% ethyl alcohol, there will be about 6-10 gallons organic, and biomass species, as well as energy required to of waste water for every gallon of fuel-quality alcohol. The remediate any "damage" to crop land from growing and dregs will have to be removed from the water (and perhaps harvesting the energy crop over many years (in order to returned to the land), if the water is to be re-used and that part maintain production indefinitely). Top soil is generated on of the cycle closed. This also incurs transportation costs. The century time scales. Monitoring for damage/depletion from only alternative to bearing the energy cost of this water even careful agricultural practices on such a time scale is a transportation and cleanup is pollution of waterways or the challenge. ocean. The sustainable biomass fuel cycle should include all of the Finally, no cellulosic conversion technology exists today on a inputs and outputs of the process. Inputs to the cycle would commercial scale and an evaluation of its efficacy, relative need to include fertilizer and the energy and feedstock to costs, sustainability, or its potential to meet DoD fuel-supply produce it, chemicals, fuels, pesticides, labor, machinery, soil, needs cannot be made at this time. sun, rain, CO2 uptake, and any water. Outputs should include heat, GHGs, and waste water. An important aspect of a complete cycle is water. Using water, other than reliance on rainwater, to grow energy crops is commonly acknowledged to incur a large penalty because of the required energy (and cost) to deliver the water (energy is required to deliver it, or pump it up from the ground: a 100 m rise is not atypical), and because long term irrigation implies a build-up of salinity (soil saltification).25 25 See articles in (1994) Agr. Water Management, vol. 25, "Management of Irrigation Water and its Ecological Impact," Commission II: Symposia of the Transactions of the 15th World Congress of Soil Science (Acapulco, Mexico, 1994), vol. 3a; Pimentel et al. (1995) Environmental and Energy Production from Biomass," Critical Reviews in Plant Sciences, economic costs of soil erosion and conservation benefits. Science 24:327–64; and Pimentel (2006) Soil erosion: A food and environmental 276:1117-23; T. Patzek & D. Pimentel (2005) "Thermodynamics of threat. Env. Dev. & Sustainability 8:116-137. 67 68 69 70 3. Well-To-Pump (WTP) and Well-To-Wheel (WTW) analyses Combining these two components into the analysis of an A proper analysis requires the evaluation of the energy overall energy process produces the full WTW analysis. required to not only produce, but also to store, distribute, and It is useful to perform two separate WTW analyses, one based ultimately utilize various fuels of potential interest to the DoD. on the net energy delivery/input and the other based on the net Without such an analysis, a focus on only fuel production will GHGs emitted for the full fuel production to consumption not adequately capture the true supply constraints and needs, process. The left-most WTW graphic on page 69 depicts the nor the suitability of the fuel for DoD use. In such an analysis, total energy required to move 100 km. Conventional diesel it is useful to account for the entire energy stream from the and gasoline fuels are superior on this energy basis, while well, i.e., the energy source, to the wheel, i.e., the (fuel) energy wood products are the worst. However, on a GHG basis, consumption by the end user. This is known as the Well-To- biomass can be a very low GHG source, when measured Wheel (WTW) process. This process is often subdivided into WTW, while most all fossil fuels are less favorable. Coal is by two separate components, one from the well to the pump far the most offensive GHG emitter. From this perspective, gas (WTP), and the second from the pump to the wheel (PTW). (GTL) is a much better source of fuel than coal (CTL). The WTP energy efficiency for diesel and gasoline is of order 85%, while the WTP efficiency of cellulosic ethanol is estimated to be closer to 40% (cf. page 68).26 Hence, to supply a certain needed energy to DoD platforms would require almost twice as many joules in ethanol production as in diesel or gasoline production from crude oil. The PTW efficiency is primarily a function of engine type. It is typically of order 30%, which is a measure of the fraction of the energy of the fuel that can be converted to useful work. 26 'LS Diesel' and 'LS Gasoline' denote 'Low-Sulfur' diesel/gasoline, as produced in Europe. Removal of sulfur from transportation fuels is required to prevent poisoning of catalytic converters in the exhaust-gas stream. At present, U.S. diesel does not meet the low-sulfur requirement and diesel-powered cars in the U.S., at present, cannot avail themselves of the same emissions burden reduction technology. 71 72 Overall-process (WTW) energy and GHG emissions provide and since, barring unforeseen upheavals, the fossil-fuel useful criteria, but not the only considerations for assessing the feedstock supplies appear adequate for sometime into the suitability of various fuels for DoD use. An especially future, the best method for reduction of a DoD fuel important operational constraint for the DoD is energy density, consumption is to reduce demand, as described above, through i.e., the energy content per unit volume, or its reciprocal, the a variety of methods including patterns of use, lightweighting fuel volume required for a given energy content. Energy per vehicles, re-engining tanks and B-52 bombers, and replacing unit volume in essence determines vehicle range for a given manned platforms with unmanned ones. In aggregate, these fuel-tank capacity, and can dictate (limit or enhance) military approaches can yield considerable fuel savings while at the tactics of mobile platforms. same time enhancing performance of DoD platforms and In this regard, it is useful to consider the fuel volume required opening up new mission capabilities for DoD forces. for a given energy content in terms of the ratio of the fuel volume for a given energy content, relative to that of gasoline. The graphic on page 72 illustrates that diesel, gasoline, and JP- 8 are very similar, with butanol (C4H9OH) possessing 90% of the energy density of gasoline. Ethanol, however, has a 50% lower volumetric energy density than gasoline. With 50% less energy density than gasoline, DoD operations will require 50% more fueling sorties by tanker trucks, implying a 50% greater danger for those responsible for that endeavor. To keep the same range per fill- up by combat vehicles, fuel tanks would have to be increased in size by 50%. Furthermore, ethanol has a lower flash point and, therefore, more prone to explosion than is gasoline. Hence, even if it were comparable on a WTW energy or GHG emissions basis, ethanol would still be unsuitable for use on DoD missions on a performance basis. On this performance basis, liquid hydrocarbon fuels emerge as the preferred energy source for mobility on DoD tactical and combat vehicles, both air and land-based. Since these fuels are most cheaply made from fossil energy of one type or another, 73 [This page intentionally left blank.] 74 VI. Discussion and concluding remarks America's current-account deficit would increase as oil prices rise. This partly explains why in recent years the EU's trade The preceding data and analysis provide a basis for assessing balance with the oil exporters has barely changed even as problems and issues associated with U.S. and DoD fossil-fuel America's deficit has grown sharply." use, the short- and intermediate-term prospects, as well as guidance for a path forward that would reduce the DoD's It is significant that the preponderant fraction (51.1%) of crude fossil-fuel dependence. oil and refined oil products imported into the U.S. derives from the (remainder) of the American continent (South and Central A. International and national considerations America, Mexico, and Canada). West and North Africa come second with a total of 19.1% of U.S. oil imports, and the The two figures on page iv, following the executive summary, Middle East, while it is the world's major oil supplier to be depict the movement of crude oil and oil products across sure, it is third in importance as a U.S. supplier, accounting for boundaries of the major production and consumption areas in 18% of U.S. oil imports. These data indicate that under the the world. They also depict the present dependence of the U.S. assumption that U.S. and non-Middle-Eastern production could on its major foreign suppliers. be held (approximately) constant, it would suffice to decrease Oil imports account for a large fraction of the U.S. current U.S. fossil-fuel consumption by 12%, at present, for the U.S. to account balance. The Economist (20 April 2006) notes that, be in a position to wean itself free from Middle East oil, in the short term, should the need arise. As discussed earlier, "Plenty of Americans blame unfair competition from Asia, and however, the world fungibility of oil through the world oil especially China, for their country's gigantic current-account deficit. Yet the group of countries with the world's biggest supply markets would respond to this decrease by adjusting the current-account surpluses is no longer emerging Asia, but supply-demand balance. exporters of oil. As the price of their chief resource has Such a goal might be achieved without deleterious effects to climbed—this week it hit a new nominal record price of more the U.S. economy by any of a number of means in than $70 a barrel—these economies have enjoyed a huge combination. This would produce, at least temporarily, a windfall. From an American point of view, the rise in oil prices has explained half of the widening of the current-account deficit world-wide excess production capacity and a decrease in oil since 2003, a bigger share than that accounted for by China. prices, improving both the national economy and the national [italics ours] … defense posture. America gains little, in terms of its current-account balance, even Regarding oil prices, it's worth noting that they are not at from the imports that oil exporters do buy. It now accounts for historically high levels when adjusted for inflation. As the only 8% of OPEC countries' total imports; the European Union chart on page 61 indicates, prices around the 1980 time period has 32%. So even if the exporters spent all their extra revenue, peaked at $36/bbl in then-year money, corresponding to 75 FY05$ 85/bbl. The rapid decrease in pricing following that Within the DoD, the largest fuel consumer is the Air Force (cf. peak and the data depicted in the figures on page 6 can only pages 14 and 21). Continuous efforts and monitoring by the induce a conservative stance in the oil industry, discouraging Air Force and other services have resulted in decreases in fuel investments that require that the present high prices must be use over the last few years,29 despite the prosecution of the war sustained to be justified. in Iraq. This can only be applauded. As the data and analysis Finally, adding to the general caveat of a foggy future, vis-à-vis above indicate, however, considerably greater benefits can be instability in the Middle East, consequences on world expected from a more-aggressive stance as regards fuel use production from inefficiencies and damage from the rise of across all DoD services. (most) national oil companies,4,27 and the consequences of poor governance and hostility towards the U.S. in many of the world's oil-producing nations, strongly argue for conservation. B. Considerations for the DoD This study finds that the greatest leverage on DoD fossil-fuel use is exerted by patterns of DoD fossil-fuel use. Recent and present doctrine, tactics, and practices evolved during a time when fuel costs represented an insignificant fraction of the U.S. national-defense budget, with fuel costs entirely dominated by the associated O&M logistical supply chain costs and not by those of the fuel itself. While O&M costs continue to dominate, actual fuel costs have recently risen rapidly, Average age of U.S. Air Force aircraft.30 attaining a significant recent visibility. At present, fuel budgets are in competition with other DoD non-fixed costs, such as Some, perhaps significant, future reductions in fuel use will research, development, and engineering (RD&E), and other occur of their own accord, as in the U.S. Air Force, for discretionary funding, of which they are a much larger part.28 example, where the aircraft inventory is expected to decline, as the figure on page 76 suggests, despite an aging U.S. Air Force 27 29 Indonesia, an important oil producer with significant (proven) reserves, P.E. Mike Aimone [Asst. Dep. Chief of Staff, Logistics, Installations & recently became a net oil importer. [Economist, 12Aug06] Mission Support] 5Jun06 presentation: The Air Force Energy Strategy for 28 Al Shaffer [ODDRE] 24Jul06 private communication. the 21st Century. 76 fleet (cf. figure above).30 While new aircraft will be placed in As with sailing racing, one can win (big) by not losing in lots service during the next decade, it is unlikely they will replace of little ways. the number that will retire (cf. figure below).30,31 In conclusion, while there may be no single silver bullet to reduce the dependence of the DoD on fossil-fuels, many steps, in the aggregate, many of which have been discussed and addressed by analysis on the subject in the past, should be undertaken. 30 Brig. Gen. "Andy" Dichter [Dep. Dir., AF Operational Capability Requirements (AF/XOR)] 20 October 2005 presentation: Force Multipliers for the Joint Battlespace: Issues, Challenges and Opportunities. 31 The retirement of the F-117 was recently announced, despite the projection depicted in the figure on this page that it would remain in service for some time. 77 78 VII. Findings between supply and demand, and, not least, the profits that the market is willing to bear. On the other side of the fulcrum, In this section we summarize the key findings of the JASON however, JASON notes that while short-term response options study, broken down into key categories: to oil price increases are limited, longer-term options are not inconsiderable, as every dollar increase in world market prices A. Global, domestic, and DoD fossil-fuel supplies invite additional fossil-fuel sources to join the world mix, as Oil is a worldwide-fungible commodity. Consistent with global well as non-fossil energy sources to become economical. The proven reserves, no DoD fossil-fuel supply shortages are oil-producing nations are quite conscious of this balance. Saudi expected in the next 25 years. Although as much oil is Arabia, in particular, has used its reserve production capacity projected to be needed in the next 25 years as the total already for the last few decades to dampen both rapid increases and produced to date, world proven reserves are capable of decreases in oil prices. accommodating this demand at less than $30/bbl production Future oil prices are difficult to predict, especially in dollar- cost. denominated terms, the latter hedge as a consequence of the JASON emphasizes that this finding is premised on the significant U.S. current-account imbalance depicted in the inset assumption of no major world-wide upheavals, or political and graphic on page 78. other changes in the primary oil and natural-gas production At present, the working assumption of the energy industry, as regions of the world that supply the U.S., notably, the Middle documented in EIA assessments, is that the market price of oil East, Venezuela, and Russia, or other events and developments will return to a $40-45/bbl range in the next five years, as that may compromise the security of major fossil-fuel increased production facilities come on line, accommodating feedstock routes and transportation corridors (cf. figure on increases in demand. page iv of this report). Such upheavals have occurred in the past producing major changes in the world-wide availability Thus, increasing U.S. imports relative to domestic supply have and pricing of fossil-fuel resources, as documented for the no direct national-defense implications, other than financial. period around 1980 in the graphics on pages 10 and 61, They do, however, impose clear balance-of-payments and following the Iranian revolution and its consequences on the national-economy consequences, and significant indirect Middle East and the world. national-security implications thereby. Strong defense is and has historically always been predicated on a strong economy. Present oil prices on the spot market are high relative to production costs. Production costs are compounded with other factors to yield these high market prices, the difference reflects the market's confidence in assured future supplies, imbalances 79 80 The study notes that a reduction of 12% in U.S. oil DoD fuel use is subject to complex interrelated governmental consumption, at present, would relax the world-wide tight and congressional regulations, as well as foreign and domestic supply-demand situation, at least for a while, and allow the policies and directives. These inject externalities that U.S. the option of foregoing all oil imports from the Middle complicate bookkeeping and often hamper proper DoD fuel- East and avoidance of the dependencies and vulnerabilities use optimization. imposed by this sensitive import stream, should the need arise. JASON finds compelling reasons for the DoD to minimize fuel use, both overall and in individual vehicles and carriers. Fuel, B. DoD fuel costs even if it is currently a relatively small portion of the overall DoD fuel costs have become visible only relatively recently. budget is accompanied by large multipliers – it takes fuel to Even at present, they represent only 2.5-3% of the national- deliver fuel – and is accompanied by high costs in both defense budget, the spread depending on what is chosen as the infrastructure (O&M) and, in the battlefield, in lives. denominator for total national-defense costs. While Price uncertainties compound budget planning, and fuel costs uncertainties and the recent large increase in fuel costs present may rise to represent a more-significant factor for the DoD in DoD budget planners with formidable challenges, representing the future, even though current projections may indicate a (much-larger) fraction of non-fixed ("discretionary") otherwise. More importantly, the impacts of delivering fuel are spending, JASON must conclude that fuel costs, per se, while evident in dictating tactics, operations costs, maintenance costs, not negligible, cannot be regarded as a primary decision driver, and military capabilities. at present. The largest fraction (~ 62%) of DoD fuel use is expended in CONUS. Continuous progress has been made by DoD in recent years to decrease energy and fuel use. However, because weapons systems have very long life-cycles, fuel represents a significant fraction of life-cycle costs for U.S. Air Force mobility carriers (~ 40%) and conventionally fueled Navy ships (~ 30%). JASON also notes that expected reductions in the U.S. Air Force tactical inventory (number and type of aircraft on active duty), as discussed on pages 76 and 77, will, perforce, decrease future consumption of aviation fuel, which represents the largest single DoD fuel-use component. 81 82 C. Decreasing DoD fuel use Future special-use robotic vehicles can play an important role by saving lives and fuel. This is true for air, sea, and for land Hybrid vehicles are optimized for intermittent/stop and go use (cf. JSR-01-225). patterns with fuel-consumption benefits that are anticipated in that driving environment. Hybrid vehicles offer little or no In general, light-weighting costs money, but can in return save fuel-economy benefits if the average power expended is close fuel and will enhance military capability. to the peak-power capability of the powerplant. Hence, hybrids Finally, modern diesel engines offer large increases in fuel offer much more fuel consumption savings in the commercial consumption relative to turbines or older diesel engines that are sector than in the typical DoD (Army) pattern of vehicle use. very inefficient, especially at idle, or near-idle conditions. JASON finds no significant foreseeable DoD role for all- electric vehicles. These vehicles have possible applications in the limit of short-range, low-friction terrain, if the vehicles are very light weight, and for special-purpose missions such as robotic vehicles. Most of these applications are outside (current) DoD patterns of use. Similarly, JASON sees no significant DoD use for fuel-cell vehicles on any reasonable time horizon. These vehicles are very costly and the technology is not mature. We also do not see a good mechanism by which the fuel to power them could be supplied to theater. As such, JASON does not anticipate that they will play a role in DoD tactical or combat vehicles in the foreseeable future. JASON believes that there can be revolutionary changes in the use of unmanned vehicles, especially aircraft, if the design space is explored to optimize fuel efficiency and endurance. Such vehicles would improve fuel efficiency and add new capabilities, potentially obviating air-to-air refueling in many instances. 83 84 D. Liquid fuels from coal or natural gas DoD is not a large enough customer to drive the fuel market or to drive future developments in alternative fuels. Accounting for less than 2% of U.S. fuel consumption, DoD is likely to depend on the world-wide and commercial sectors for its supplies and alternative fuels are a world-wide issue. Liquid fuels from stranded natural gas provide the economically and environmentally most-favorable alternative to fuels from crude oil. Underground coal gasification (UCG) provides the next-best alternative from an economic perspective, but is only acceptable from an environmental perspective if GHG emissions (mostly CO2) from the fuel production process are sequestered. 85 86 E. Biofuels considerations that enter this finding are logistics, energy density (high volume per unit energy content), and safety. Presently, liquid fuel from biomass processes do not compete economically with production of fuel from crude oil. Biofuels provide little, if any, net energy benefit, especially if the complete process is taken into account, and are not economically competitive (without subsidies) with other uses of agricultural land, e.g., growing food. Current biomass-to-fuel methods of production present a significant environmental burden (GHGs, soil depletion and erosion, waste water, etc.). Fuel processes based on cellulosic ethanol, butanol, etc. could eventually provide a significant fraction of the fuel demands of the U.S., if they are proven economically viable and if associated environmental burdens are acceptable. Such processes do not exist at present, however, and neither they, nor other non-ethanol biofuels and biofuels processes can be assessed, either in terms of their economics or environmental ramifications, at this time. The biofuels community must demonstrate sustainability with respect to soil depletion/erosion, waste water, and other related considerations, and they must demonstrate that such methods are also preferred environmentally, i.e., through a Well-To- Wheels analysis, if it is to be argued that they can provide a sensible alternative to fossil-derived fuels. Ethanol's low energy density, high flammability, and transportation difficulties, relative to diesel and JP-8, for example, render it unsuitable as a DoD fuel. The primary 87 [This page intentionally left blank.] 88 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. 89 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 90 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 91 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. MethanolCH3OH: 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) 92 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 93 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. 94 DISTRIBUTION LIST Director of Space and SDI Programs Defense Threat Reduction Agency [6] SAF/AQSC Attn: Dr. Mark Byers 1060 Air Force Pentagon 8725 John J. 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