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Pentagon and Peak Oil: A Military Literature Review

Until the recent oil price hikes and world wide discussions on the future of oil, Peak Oil was nearly absent in military publications. Now, things have changed. This article attempts at providing a US military literature review on Peak Oil and related issues.

Before Iraq was Invaded

Back in 1983, Dr. Leonard Gaston[1] discussed Hubbert Peak in Air University Review. He warned right in the beginning that the article “makes no attempt to predict the future,” because “human beings can neither predict nor control the future. If anyone still suffers from the delusion that the ability to forecast beyond a very short time span is available to us, let him look at the headlines in yesterday’s paper, and then ask himself which of them he could possibly have predicted a decade or so ago.”

He doesn’t take any sides but reaches to the conclusion that “Resource shortages will continue to create an unstable world and a hazardous environment to planners. But attention to the nature of the shortages and actions our country should take to alleviate their worst effects are appropriate concerns for all of us.”

Up to 2002 there has not been (to my knowledge) any publicly available article discussing Peak Oil in military circles. But this has not meant that Pentagon is not aware of Peak Oil. In fact, October 2002 issue of Defense Horizons[2] demonstrated that Pentagon had already been thinking beyond the Peak.

Citing the Quadrennial Defense Review 2001[3] “access to key markets and strategic resources as part of our enduring national interests,” the article claimed “just as we currently demand assured access to sources of hydrocarbons, in the near future we will demand assured access to a broad-based, diverse supply of genes.” Note that with genes the author means plants and animals.

“As agricultural fields will assume the same significance as oil fields,” the article argued, “relations with oil-rich countries will be of less importance, and relations with gene-rich states will assume greater significance.” He pointed to equatorial regions, specifically Amazon Basin as the main target for securing the future needs.

After the Invasion

Following the invasion of Iraq, discussions of oil around national security in general and future of oil in particular have started to appear in military studies.

November 2003 issue of Defense Horizons[4] started with a soft warning: “While there is no near-term fuel crisis facing DoD, this situation is likely to change over the coming decades as fossil fuel reserves deplete and world demand for them grows. DoD will be confronted with some significant challenges, ranging from protecting U.S. interests as supply and demand come into increasing conflict, to resolving defense-unique fuel requirements as the Nation moves to alternate fuels.”

They mention two reasons for such as move: “the ultimate depletion of oil and natural-gas reserves, and environmental considerations such as the production of carbon dioxide as a greenhouse gas. While there is considerable disagreement over when fossil fuel resources will be depleted, there is little disagreement that eventually they will run out.”

The authors argue that non-fossil-fuel based economy is decades away, but urge to seek an immediate solution. Because, “competition for diminishing oil and natural gas reserves will increase in the coming years,” they state. If hydrogen is deemed to be the proper course, then, considering the massive task of moving toward a hydrogen economy, the groundwork to move in this direction needs to begin soon,” was their conclusion.

A meeting in March 2004 hosted at the Naval Research Laboratory Conference Center, was in fact questioning the same worries - “Energy Options for the Future.” Therefore it was not surprising to see a presentation on Peak Oil[5] in the meeting.

While some people, like the ones in that conference, have been working towards investigating scientific solutions, some others, such as Lieutenant Commander Joey Dodgen, have been thinking of other options. In his award winner paper at the Joint Forces Staff College, called “Imperialism 21: Hedging and Abandoning History[6] he made the following claims:

“As far-fetched as it sounds, the advantages captured through colonial or imperial ventures would be numerous, including, but certainly not limited to, resource control and forward military basing…Economic imperialism is crucial to securing resources, maintaining favorable trade, and calming America’s business market amidst the daily turmoil of global terrorism. Economic imperialism is of no less importance to the United States than military imperialism.”

Influence of ASPO

Fortunately, there have been much better sound and scientific studies in military circles. The most widely publicized is the September 2005 report prepared for the U.S. Army Corps of Engineers entitled “Energy Trends and Their Implications for U.S. Army Installations[7].

Except for a “Mission Impossible” style warning on inside cover stating “DESTROY THIS REPORT WHEN IT IS NO LONGER NEEDED. DO NOT RETURN IT TO THE ORIGINATOR” the complete report must be taken serious.

Seriously, if you didn’t know that the report belongs to Army you would have thought that it is another Peak Oil story belonging to the Association for the Study of Peak Oil and Gas school. Consider the following:

“The doubling of oil prices from 2003-2005 is not an anomaly, but a picture of the future. Oil production is approaching its peak; low growth in availability can be expected for the next 5 to 10 years.”

The report depicts the likely shape of future geopolitics: “In conclusion, we are clearly entering a very different period for global energy markets and relations. We shall continue to face geopolitical risks and uncertainties and concerns around energy security will continue to rise. Petroleum will remain the most strategic and political energy commodity with natural gas running a close second. .…The roles of leading actors in the global energy system will also change as the center of gravity for oil production shifts back towards the Middle East and Central Asia….Oil wars are certainly not out of the question.”

Then it looks at energy solutions by a rather impressive comparison of all major renewable and non-renewable energy options. That analysis convince the authors that best options for meeting future energy requirements are energy efficiency and renewable sources. But that does not prevent the authors to recommend increasing domestic supplies. The report, however, in many ways restricts itself to Army.

After that article we see several articles by people from Air Force.

An article by Lieutenant Colonel (USAF) John Amidon[8] in the winter 2005 issue of the Joint Forces Quarterly discusses in length the Peak Oil and Beyond from military point of view. The author first admits that current energy strategy of the US assumes oil needs to be met “by managing the oil-producing countries diplomatically and militarily.” He continues with “However, this thinking overestimates the available oil supply, ignores growing instability in the oil-producing countries, and understates the military costs of preserving access.”

He is doubtful that “any military, even that of a global hegemony, could secure an oil lifeline indefinitely. Failing to take urgent economic steps now will necessitate more painful economic steps later and likely require protracted military action.”

After discussing the concept of Hubbert’s Peak, optimists and pessimists as well as oil reserves, production and peak in important regions such as Caspian and countries such as Saudi Arabia, Mexico, Venezuela, Nigeria (from APSO point of view) he states that “recognition that world oil supplies have reached Hubbert’s peak will have major implications in the industrial world.” But he adds, “Although the pessimists offer a convincing argument presaging a peak in global oil production, what if they are wrong? What if technology and discovery can delay it far into the 21st century?”

Suggestion? The US must embark “on a comprehensive plan to achieve energy independence—a type of Manhattan Project for energy—to deploy as many conservation and replacement measures as possible.” To him such an effort should consist of two phases: conservation, and energy power shift through reduced dependence on oil. His suggestions are around (plug-in) Hybrid cars with increased CAFE standards, and biorefinery and (cellulosic) ethanol. All these, of course, with a financial help by the government.

The required long lead times for the alternatives to be in place is a worry for the author: “In sum, trying to drill our way out of this crisis will not address the real problem, which is soaring demand and the danger of military conflict over shrinking resources.”

Another Air Force Colonel, Richard Fullerton[9], concentrating on Peak Oil, argues that energy’s future in the Air Force will look much like its recent past: “For the foreseeable future, oil will continue to be a primary energy source.” He argues that Peak Oil doomers are wrong because according to the best estimates [referring to the EIA] we will reach peak by 2037. The world has still a lot of oil”

His conclusion is: “Energy independence is a myth as long as we consume oil, and our fuel prices will remain inextricably tied to the global oil market….the transition to new energy sources will take a evolutionary (become economical) rather than a revolutionary path.”

The US Navy, on the other hand, thinks that alternatives will be a savor. A study conducted by the Naval Research Advisory Committee recommended[10] in October 2005 argues making a long-term commitment to manufactured liquid hydrocarbon fuels made from domestically abundant feedstocks. It referenced “Hubbert’s Peak,” (including Les Magoon's Big Rollover chart) and discussed of the Fischer-Tropsch (FT) process for converting coal into manufactured liquid hydrocarbon fuels.

Those options and considerations are handled in a lengthy master thesis of UASF Lit. Col. Michael Hornitschek.[11] He investigated “whether a methodology exists in which the DoD can lead an immediate, coherent, and viable long-term strategy toward a vision of replacing petroleum as its primary energy source while maintaining all necessary strategic and operational capability to guarantee U.S. security to 2050 and beyond.”

He recognizes the fact that despite decades of efforts to free America of its petroleum addiction, over the last 30 years American oil consumption has increased and is forecasted to do so in the future.

In a methodological way he tackles the resources issue and asks the classical question: is the tank half full or half empty? While stressing the importance of accurate information on reserves he continues discussing oil production and forecasts.

His search for post petroleum military options for high technology American way of war starts with a discussion of Peak Oil.

The profound global geopolitical economic consequences of Peak leads him to investigate what could be done: “Proposals range from promoting conservation efforts, expanding the use of renewable energy for base support, intensifying turbine engine efficiency research, and even establishing an independent DoD oil shale-to-synthetic fuel industry.”

And that brings him to confess that “It is precisely the long acquisition lead times of these petroleum-fueled weapon systems [e.g., F-22A Raptor], in conjunction with their decades-long life cycles [e.g, the 45-year-old B-52 fleet], that will uniquely force the DoD to be the first government agency to address an approaching global oil peak.”

More importantly, he stresses that the Peak is “perhaps the most fundamental strategic problem the DoD, the U.S., and the world will all inevitably have to face in the next 100 years.”

Finally he proposes a post-petroleum DoD vision and a three phase DoD energy transformation strategy.

“Stage I (2006–2020) includes undertaking conservation, efficiency, acquisition and organizational reforms; the development of bridging energies; massive R&D efforts; the establishment of new energy standards; and identification of a primary alternate energy source most likely to be some combination of electricity and hydrogen produced from a variety of sources. Stage II (202 –2035) focuses on adjusting force structure, adjusting operational & training procedures, and creating a distributed energy infrastructure and technology transition in a modular fashion. Stage III (2035 – 2050) involves finishing infrastructure conversion; ensuring adequate, distributed, and ubiquitous energy production; and a continuation of R&D efforts that strive for ever greater energy answers.”

However, some authors have not understood Peak Oil and it’s basic concepts well. Let us explain them briefly.
 
According to ASPO (Colin Campbell’s definition): "The term Peak Oil refers the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion." Peak Oil does not mean running out of oil.
 
Peak Oil is based on two main concepts - an estimate of ultimate recoverable resources and extraction profile. Peak Oil extraction occurs once approximately half of the ultimate recoverable resources are gone.
 
First of all, reserves and resources cannot be used interchangeably since they do not mean the same thing.
 
The total amount of oil estimated to have originally existed in the earth’s crust in naturally occurring accumulations is defined as original resources. Original resources comprise discovered and undiscovered resources; in each of these, some are recoverable and some are unrecoverable.
 
The USGS mainly deals with undiscovered technically recoverable resources.
 
Ultimate recoverable resources are the sum of cumulative production and future production (some of which from undiscovered recoverable resources and some from reserves).
 
Reserves are the amounts of oil expected to be recoverable from known fields. Proved reserves denote the amount that can be extracted from the wells at the current stage of development and sold profitably under current market and technological conditions in a conservative way, commonly stated under defined degrees of certainty (mostly 90%) at the time when assessment is made.
 
Unproved reserves are considered less certain to be recovered than proved reserves. Their estimates are based on geologic and/or engineering data similar to that used to estimate proved reserves, but technical, contractual, economic considerations or regulations preclude such reserves from being classified as proved. Unproved reserves may be further sub-classified as probable and possible to denote progressively increasing uncertainty of recoverability.
 
Some authors, such as Lieutenant Colonel Tewksbury, use those concepts interchangeably.

In a recent study[12] he argues that “This country must be prepared to deploy military forces to secure supplies if we encounter a situation in which we are denied access to oil…..The challenges for the remaining oil reserves are quite simple: none exists within the United States; harvesting known reserves will be difficult; and a majority of them are concentrated in volatile areas. The consequences of a depleting supply are dire. …..our national strategy must identify the nation’s access to adequate supplies of oil as a vital national interest. The dire economic, social, and political consequences associated with a severe reduction in imported oil justify the use of military action, regardless of world opinion. We must act unilaterally if the circumstances warrant such action.”

“The American Petroleum Institute estimates that 1.1 trillion barrels of oil remain; accordingly, this supply would last only 43 years.  Estimates of peak world production vary. The U.S. Geological Survey predicts the world’s production rate will peak in 2040, while others see global capacity peaking in 2016.  Finding new fields or even accessing known reserves presents technological and political challenges. Tapping into reserves located under oceans or in rugged regions of western Asia have proven difficult and expensive.”

First of all, the US has not yet run out of oil. Hence his claim of none existing reserves in the US is wrong. Second, the API figure (43 years) refers to reserves-production ratio (R/P). Such a ratio assumes a) production will remain constant, b) there will be no new discoveries and no addition to reserves due to improved recovery or new discoveries, c) oil production would be zero in 44th year. Whereas the USGS peak year estimate, 2040, refers to ultimate recoverable resources mid life. He probably confuses the R/P with Peak Oil. Third, he thinks that all those estimates include non-conventional oils. Finally he does not mention that Peak Oil is about running out of easy and cheap oil, not running out of oil. I wonder whether he would still promote the Carter Doctrine if he understood Peak Oil perfectly.

Elhefnawy[13] also discuss Peak Oil in terms of energy security. Using the term “Cornucopian optimists,” he focuses on the problem of fossil fuel scarcity at the global level and seeks to provide an overview.

While accepting that there is widespread disagreement over actual size of the world’s proven oil reserves, he thinks roughly one trillion barrels an appropriate figure. Applying a linear projection brings him to “oil supplies running out around 2030” with a peak “generally expected to be sometime between 2010 and 2020.” Hence he demonstrates a clear example of how reserves and resources as well as running out and peak are misunderstood.

He is convinced that “the oil age may end within a generation given the present economic picture, with potentially dire consequences.” Even though “the doomsday scenario posited by Kunstler and others is not a necessary outcome.”

Solution? After discussing alternatives “such as the expanded use of nuclear energy or, ideally, renewable energy sources” he argues that alternatives will become attractive due to their competitive costs and technological advancement, but will not be sufficient. He therefore also promotes energy efficiency “through conservation technologies, telecommuting, movement of production closer to markets, including carefully thought-out tax credits, subsidies and buyback rates for net-excess power.”

He does not restrict energy options to a particular alternative: “the United States should pursue a broad range of approaches, not only hydrogen but also photovoltaics, wind, ethanol, biomass, and, while they are more dependent on geography, tidal and geothermal.”

Concerning EROEI, he believes “the energy base of the future will have to be created using the energy base existing now, just as the oil-based economy was built using previously existing sources.”

Likely regional armed conflicts over resources which also cause internal conflicts or unrest bother him too. Though he is very careful about not touching Iraq and Afghanistan, he finishes his article with “One might also protest that despite the unease surrounding oil prices of $70 a barrel, there is no emergency yet. The point, however, is to prevent the situation from ever becoming one.”

In a May 2006 US War College Strategic Studies Institute paper, Commander Thomas Kraemer[14] picks up that point and develops. He rightly points out the fact that despite the bold proclamations of the past three decades, the only way Americans have ever cut back on imported oil was in response to higher prices.

That is why he argues that “simple economics—as in higher prices—seem to do far more to free America from dependence on foreign oil imports and spur energy technology innovation than any federal program. The question is, can America afford to wait that long?”

He also argues, like the US President Bush and many other neo-cons, that “while spending billions of dollars on U.S. military efforts in the war, we are sending billions more to nations where the cash is used to finance training centers for terrorists, pay bounties to the families of suicide bombers, and fund the purchase of weapons and explosives.”

He continues with: “For half a century, the United States made Persian Gulf oil a primary security interest, boldly allying with these Muslim states to defend them from the godless Soviets. Our defense was a small price to pay for the uninterrupted flow of oil.”

Convinced with the idea that “Our enduring national interests are at stake,” he then talks about Peak Oil:

“While considerable debate continues about when world oil production will peak, most analysts agree that it will happen between now and the middle of the century. American oil production peaked in 1971. … The International Energy Agency estimates that the oil reserves of the world are sufficient to supply a considerable demand growth until 2030, and therefore there will be no “peak oil” problem before then. That being said, the rising appetite for a finite resource which will, at some point, be in short supply is a recipe for future conflict.”

According to him “since the oil economy is a free market and is global in nature, oil prices set in the Middle East and elsewhere will affect oil prices everywhere.” Thus, He assumes that oil market is free market but prices are set in the Middle East which does not make set.

He completely ignores all the other factors affecting oil factors in his paper. His stunning conclusion is therefore not surprising: “The bottom line is that America does not change because of good ideas—this must be driven economically. First, mandate automakers to produce vehicles with the new technologies and gasoline distributors to change their delivery systems to accommodate ethanol mixes. Second, a federal gas tax to stabilize gas prices artificially high and force consumers from an SUV mentality must be imposed. Third, find new reserves, such as the oil sands in Canada, the outer continental shelf off of North American coastlines, and the arctic Alaskan wilderness. Finally, America must realize that the greatest threat to global stability is not too much American power, but too little.”

It should be here mentioned that the only magazine or journal that put end of oil as cover is May/June 2006 issue of Defense Technology International: The Military and The End of Oil. The magazine discusses technical details for oil alternatives and their pilot uses and plans in militaries worldwide with a focus on the US.
An informed author who bases his analysis to data and makes concrete policy formulations is Scott Buchanan.[15] He mentions Peak Oil without taking a side: “Depending upon which view one chooses to accept, the global oil supply will either last no more than a few decades or will perhaps last a century. On one side of the debate, experts argue that because of the limited supply of oil, it will increase in expense as it depletes in availability or production (referred to as Hubbert’s peak). Market analysts, on the other hand, argue that the market will force a correction of the oil demand, thereby stemming the flow of oil and prolonging the inevitable. Both arguments underscore that oil is an increasingly scarce commodity.”

He points out the lessons learned from the fuel conversion in the Royal Navy before the WWI and makes suggestion for a DoD energy transformation.

Does DoD do anything on Peak Oil? Not directly yet.

The Office of Force Transformation (headed by Ken Krieg) and the Under Secretary for Acquisition, Technology and Logistics, supported by the Cebrowski Institute, have been hosting a series of dialogues on the theme “Energy: A Conversation About Our National Addiction” since March 2006. The dialogues are bringing high level attention to these important topics by providing a forum to engage senior leaders, academics and researchers, both inside and outside of the government.


The speakers as of end June 2006 included R. James Woolsey, Former Director of the CIA , Congressman Roscoe Bartlett and Dr. Robert Hirsch, Jeremy Rifkin, Matt Simmons, Dr. Michael Pacheco and Suzanne Hunt (on Biofuels).

Meanwhile, Defense Secretary Donald Rumsfeld has asked the Pentagon to examine ways the department can address its own oil use. Gordon England, the deputy defense secretary, is expected soon to announce a new office under Krieg’s supervision to coordinate the department’s oil use

Conclusions

Pentagon knows that the US is addicted to oil, the American way of life is non-negotiable, and we are late for alternatives. Pentagon is also well aware of the facts that American economy and the US dollar are in big danger.

But Pentagon is the world’s biggest power. Besides, it consumes at least 400 thousand barrels per day (half of which overseas) and hence is the largest oil consumer and purchaser in the US; it is one of the world’s largest landlords; by directly employing more than three million people it is the world’s largest employer; and its Armed Forces are deployed or stationed in approximately 130 countries. See my DoD Factsheet for more on this.

Pentagon knows how important the future of oil is. Moreover, Pentagon is well aware of Peak Oil. More and more publication citing or discussing Peak Oil in military publications is just one indication.

But is Pentagon Peak Oil literate? Most of the studies discussed here appear to be authored by Peak Oil literate people. However, some studies contain examples of Peak Oil Illiteracy.

Note: I thank Adam, co-editor of Energy Bulletin for his insightful comments.

References:
[1] Leonard G. Gaston, “Resource Shortages: How Serious?”, Air University Review, July-August 1983.
[2] Robert E. Armstrong, “From Petro to Agro: Seeds of a New Economy,” Defense Horizons, A publication of the Center for Technology and National Security Policy, National Defense University, October 2002.
[3] Department of Defense, Quadrennial Defense Review Report 2001, September 30, 2001.
[4] Timothy Coffey, Dennis R. Hardy, Gottfried E. Besenbruch, Kenneth R. Schultz, Lloyd C. Brown, and Jill P. Dahlburg, “Hydrogen as a Fuel for DOD”, Defense Horizons, Center for Technology and National Security Policy, National Defense University, Number 36, November 2003.
[5] David L. Greene, Janet Hopson and Jia Li, “Running out of and into oil: Analyzing Global Oil Depletion and Transition Through 2050”, Presentation at the Energy Options for the Future meeting hosted at the Naval Research Laboratory Conference Center on Washington, DC, 11-12 March 2004. A summary report of the conference is available.
[6] Joey Dodgen, “Imperialism 21: Hedging and Abandoning History”, Working Paper, Joint Forces Staff College, 08 April 2004.
[7] Donald F. Fournier and Eileen T. Westervelt, “Energy Trends and Their Implications for U.S. Army Installations”, ERDC/CERL TR-05-21, Construction Engineering Research Laboratory, U.S. Army Corps of Engineers, September 2005. See also for a more detailed discussion by the editors of Energy Bulletin.
[8][8] John M. Amidon, America’s strategic imperative: a “Manhattan Project” for energy, Joint Forces Quarterly, Issue 39, 4th Quarter 2005, pp. 68-77. The essay was the 3rd place winner for the 2005 CJCS Strategic Essay Contest. Note: It is strange that Air University puts Energy Bulletin version of the paper on its website.
[9] Richard Fullerton, “The Future: Oil, America, and the Air Force”, Air & Space Power Journal, Winter 2005.
[10] “Future Fuels”, presentation to Flag Officers & Senior Executive Service, 4 October 2005,
The Pentagon Auditorium.
[11] Michael J. Hornitschek, War Without Oil - A Catalyst for True Transformation, Masters Thesis on DoD Energy Transformation, Naval Postgraduate School, Cebrowski Institute, 17 February 2006.
[12] Dennis D. Tewksbury, “Preemptive Energy Security: An Aggressive Approach to Meeting America’s Requirements,” US Army War College Strategy Research Project, 15 March 2006.
[13] Nader Elhefnawy, “Toward a Long-Range Energy Security Policy”, Parameters, US Army War College Quarterly, Spring 2006, pp. 101-14.
[14] Thomas D. Kraemer, “Addicted to Oil: Strategic Implications of American Oil Policy”, Carliste Papers in Security Strategy, Strategic Studies Institute of the US Army War College, 31 May 2006.
[15] Scott C. Buchanan, “Energy and Force Transformation”, Joint Force Quarterly, 3rd Quarter 2006, pp. 51-54.

Editorial Notes: An earlier version is also available at Sohbet's blog. Other articles by Sohbet Karbuz. Dr. Sohbet Karbuz (a Turkish citizen), is former head of non-OECD energy statistics section of the International Energy Agency (Paris). Before joining the IEA he held academic positions in Germany and Austria. -AF

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