Another military report is targeting future oil supply concerns.

Fueling the Future Force: Preparing the Department of Defense for a Post-Petroleum Environment, published September 27, is the third military consideration of a future of scarce oil published so far this year. It states that 77 per cent of the US Department of Defense’s “massive energy needs” are met by petroleum – but “given projected supply and demand, we cannot assume that oil will remain affordable or that supplies will be available to the United States reliably three decades hence.” To remain as an effective fighting force, the entire US military must transition from oil over the coming 30 years.

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It’s a notable publication for a couple of reasons – being co-authored by lieutenant colonel (Ret.) John Nagl (left), who literally wrote the book on US counterinsurgency operations, and for being the second report produced for the American military this year to consider the strategic importance of oil. It also follows on neatly from a German military report that squarely addresses the issue of peak oil.

As such, it’s hard not to compare all three military documents.

Back in February, the United States Joint Forces Command published The Joint Operating Environment 2010. Written by the military for the military, this was seemingly intended as a discussion document to guide “future force development.” As such, it was concerned with probable “future trends and disruptions” – a variety of geopolitical issues: demographics, globalization, US debt, the global recession, water shortages, food supply, climate change and dwindling oil supply.

It projects an image of a chronically unstable world, with the high probability of “revolution or war, including civil war” ripping through the Middle East and Sub-Saharan Africa over access to food and water. While it puts oil on the list of dwindling resources, it cannot be called a peak oil report, stating: “The central problem for the coming decade will not be a lack of petroleum reserves, but rather a shortage of drilling platforms, engineers and refining capacity.”

But then it continues that despite technological innovations and non-conventional oils, “by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.”

But The Joint Operating Environment’s main concern is not fueling the US military machine so much as funding it:

Another potential effect of an energy crunch could be a prolonged U.S. recession which could lead to deep cuts in defense spending (as happened during the Great Depression). Joint Force commanders could then find their capabilities diminished at the moment they may have to undertake increasingly dangerous missions.

(More about this report here.)

Then in late August, a German military report came out that directly targeted peak oil. Sicherheitspolitische Implikationen knapper Ressourcen (or Implications of Resource Scarcity on National Security – translation here) was leaked in Der Speigel, a German weekly with a long and fine track record of creating scandals. It was written by the Future Analysis department of the Bundeswehr Transformation Center, a “think tank tasked with fixing a direction for the German military,” and was still in draft form as it “has not yet been edited by the Defense Ministry and other government bodies.”

Like The Joint Operating Environment, it envisions an unstable future – except oil is front and centre of this. While not offering a view on the likely timing of peak oil, it states the most severe consequences will come about “15-30 years after the peak has hit.” While “resources have always triggered conflicts, mostly of regional nature,” this will be different – a “global problem, as scarcity (mainly of crude oil) will affect everybody.” Probable geopolitical shifts will include a move away from democracy and human rights, and the decline of free market mechanisms in favour of “protectionism, exchange deals, and political alliances between suppliers and customers.” There will be an overall reduction in the standards of living across the globe, but it will be felt worse in countries “that are a) highly dependent on imports and b) are susceptible to price-increases of food products, particularly affecting Africa, parts of Asia and Latin America, and the Middle East.” Meanwhile, Western nations face “systematic risks”:

In addition to the gradual risks, there might be risks of non-linear events, where a reduction of economic output based on Peak Oil might affect market-driven economies in a way that they stop functioning altogether, leaving the possibility of a relatively steady downward trajectory.

Investment will decline and debt service will be challenged, leading to a crash in financial markets, accompanied by a loss of trust in currencies and a break-up of value and supply chains – because trade is no longer possible. This would in turn lead to the collapse of economies, mass unemployment, government defaults and infrastructure breakdowns, ultimately followed by famines and total system collapse.

(More here.)

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The latest military report, Fueling the Future Force, was published Sept. 27 by Washington, DC “national security and defence” think tank, Center for a New American Security (CNAS). Although it was not written by the military, CNAS has big-time political connections, with several former employees being picked for key posts by the Obama administration. Indeed, a June 2009 Washington Post opinion piece, The ‘it’ think tank: when CNAS talks, people listen, stated that “In the era of Obama…the Center for a New American Security may emerge as Washington’s go-to think tank on military affairs.”

If nothing else, the fact that the report was co-written by Dr. John Nagl (along with Christine Parthemore) guarantees it a reading in both political and military circles. A 2008 Washington Post report, High-Profile Officer Nagl to Leave Army, Join Think Tank, introduces him as “one of the Army’s most prominent younger officers, whose writings have influenced the conduct of the U.S. troop buildup in Iraq.” It continues: “Lt. Col. John Nagl, 41, is a co-author of the Army’s new manual on counterinsurgency operations, which has been used heavily by U.S. forces carrying out the strategy of moving off big bases, living among the population and making the protection of civilians their top priority.”

Fueling the Future Force is written with an understanding of frontline operations, and that these are fuel intensive. But it constantly repeats that the military must find a way to transition from a dependence on petroleum within 30 years. This is how the report begins:

The U.S. Department of Defense (DOD) must prepare now to transition smoothly to a future in which it does not depend on petroleum. This is no small task: up to 77 percent of DOD’s massive energy needs – and most of the aircraft, ground vehicles, ships and weapons systems that DOD is purchasing today – depend on petroleum for fuel. Yet, while many of today’s weapons and transportation systems are unlikely to change dramatically or be replaced for decades, the petroleum needed to operate DOD assets may not remain affordable, or even reliably available, for the lifespans of these systems.

To ready America’s armed forces for tomorrow’s challenges, DOD should ensure that it can operate all of its systems on non-petroleum fuels by 2040. This 30-year timeframe reflects market indicators pointing toward both higher demand for petroleum and increasing international competition to acquire it. Moreover, the geology and economics of producing petroleum will ensure that the market grows tight long before petroleum reserves are depleted. Some estimates indicate that the current global reserve-to-production (R/P) ratio – how fast the world will produce all currently known recoverable petroleum reserves at the current rate of production – is less than 50 years. Thus, given projected supply and demand, we cannot assume that oil will remain affordable or that supplies will be available to the United States reliably three decades hence.

The report does not contain the term peak oil – the hypothesis that oil production will soon reach its ultimate limit due to geological considerations – but the above is a clear reference to it. The background is all here: increasing demand, geological constraints and resulting supply-and-demand price shocks.

Fueling the Future Force has already been perceptively criticized by journalist Mason Inman for focusing on reserves-to-production ratios (R/P ratios) and making misleading claims about biofuels, on his Failing Gracefully blog. While I accept that R/P ratios may indeed be “one of the favorite argumentative tools used by people who do not understand oil production,” being prone to simultaneously overestimate extractable oil and underestimate future demand, using them does at least enable the report authors to replace all those oil depletion charts with a good ole’ map. Seeing the countries of the world coloured different tones is a more immediate visual than bell charts and wavy lines on a graph. Above all it enables the writers to hammer home some stark geopolitical realizations:

Ominously, many major suppliers to the United States could produce their current proved reserves in fairly short time horizon if they continue at the present rate: For example, the R/P ratio for Canada (the top supplier to the United States in 2009, providing more than 20 percent of total oil imports) stands at about 28 years today. For the United States itself, it is 11 years. The only countries with current R/P ratios longer than 75 years are Venezuela, Iran, Iraq, Kuwait and the United Arab Emirates.

What it’s really saying, then, is pick your allies carefully. Senior military and politicians reading this report will be all too painfully aware that China is building close relationships with Venezuela – expecting to import 1 million barrels a day by 2012, the same as the US does right now – and Iran, and is currently investing heavily in Iraq, with long-term investments throughout Kuwait and the United Arab Emirates. Meanwhile, the main US oil ally is Canada which, according to R/P thinking, is only good for three decades. . . But forget the wonky R/P math and see the big picture. China is strategizing over the long term while Western leaders are looking at their feet and beginning to mutter about a coming spike in fuel costs.

Image RemovedThis is not an attempt to rehabilitate reserves-to-production ratios so much as observe that the authors possibly used them for tactical reasons: to sidestep the entire notion of peak oil – which is tough to explain at the best of times – and deliver a visually strong message (right) about the last remaining oil being in the hands of the bad guys. Even if it does involve the frankly bizarre suggestion that, based on current usage the world would entirely run out of oil in 45.7 years. (Any peak oil writer would get laughed out of town for making that kind of suggestion.)

The authors of Fueling the Future Force are smart enough to know that when you are delivering a message no-one wants to hear you have to choose your battles very carefully – so out goes peak oil.

And what it has to say is quite stark: the Department of Defense’s “petroleum dependence” is a “long-term vulnerability.” Basically:

DOD cannot be assured of continued access to the energy it needs at costs it can afford to pay over the long term. Today DOD meets its energy needs primarily through petroleum, which accounts for more than 77 percent of DOD’s total energy use. However, both demand and supply trends are likely to raise the price and perhaps even limit the availability of petroleum.

The military is an intensive petroleum user, accounting for “132.5 million barrels in petroleum sales in fiscal year 2008, totaling nearly 18 billion dollars.” As it currently stands, “every dollar increase in the price of petroleum costs DOD up to 130 million additional dollars.”

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I’ve taken a table from the report, DOD Energy Consumption by Fuel (left), which breaks down US military fuel use. It shows that the military is beginning to use renewable energy and other fuels, but that petroleum is king. I’m sure the percentage figure for petroleum would be much higher if the chart was to focus on operational matters.

It gets worse when you consider that petroleum use is structurally built into the system. “The majority of the vehicles, aircraft and weapons systems that DOD purchases in the near term will be designed to be fueled by petroleum, as are most of DOD’s current assets. Most of these systems will remain in commission for decades before replacements are seriously considered.” And even more technically complex when you consider that half of the military’s petroleum use is aviation fuel, for which no completely renewable alternatives exist. (The airforce is working on a 50/50 alternative fuel blend.)

What the US military needs is a direct replacement for gasoline, “drop-in fuels” that can be used in its existing vehicles. Preferably something homegrown, but also universal enough that it can be sourced overseas, and something that its allies also use. With that in mind, Fueling the Future Force turns its attention to biofuels – and becomes downright cornucopian:

There is an array of reliable, renewable fuels that should be considered as alternative supplies to petroleum, including multiple generations of biofuels. Biotechnicians have long proven the technical ability to produce hydrocarbon equivalents to fossil fuels, including the jet fuel blends that DOD requires. Efforts by the National Laboratories, academia and the private sector are focusing on basic science that will enable more efficient use of second-generation biological fuel sources (made from non-food crops) by increasing efficiency in processing plant materials while retaining net energy gains, and by overcoming other technical hurdles. Others are leap-frogging beyond second-generation biofuels to fuels derived from algae. Still other options include displacing petroleum by using electricity or natural gas to power transportation, and using distributed renewable energy at overseas and forward operating bases to displace petroleum in powering generators. It is encouraging that growth in renewable energy supply availability frequently outpaces expectations. Ethanol production grew 164 percent between 2002 and 2006, and biodiesel production expanded from 1 trillion Btu to 32 trillion Btu over the same period.

Fueling the Future Force is quite rightly, if a little indirectly, critical of the so-called first-generation biofuels, created from food crops, which it states increase food prices and, in the case of “corn-based ethanol” may well lead to more greenhouse gas emissions than current fuel sources – a roundabout way of calling it an energy-loser.

But the second-generation alternative suggested is not “reliable,” as Fueling the Future Force claims, and not all that different from the first attempt at biofuels. Second-generation biofuels may sound ideal, being made from biomass – stems, leaves and husks, various non-food crops, and industry waste such as wood pulp and the residue from fruit pressing – that is fermented into alcohol. But, really, it’s just moonshine. A 2007 Biofuel Watch report seems to sum it up, Second Generation Biofuels: An Unproven Future Technology with Unknown Risks. It reviews the technology as unworkable, and notes it would require an unsustainable level of highly intensive farming that would “put intense pressure on land both for food production and communities, and for natural ecosystems. . . [it] is not close to becoming commercially available, and faces technical barriers which may not be overcome in the foreseeable future.”

It’s a tough sell to suggest that the 132.5-million-barrel-a-year US military can maintain its imperial adventures on alcohol made from waste plant products. It’s too good to be true. Frankly the report authors should know better than to make that suggestion, although I suggest it was through desperation rather than inspiration.

The German report, Implications of Resource Scarcity on National Security, is far more direct. I get the impression that Fueling the Future Force is written for the Obama administration, as a public way of moving the energy debate forward. It contains the following plea for leadership:

It is important to note that this challenge is not distinct to DOD: Due to relatively (and often artificially) cheap energy and the normalization of consistent and abundant supplies, the country broadly undervalues the true cost of energy and therefore faces few incentives to change its behavior. Change will take time, and it will involve consistent leadership and public education. A culture that recognizes the cost of failing to change the energy status quo will help facilitate DOD’s smooth transition to more sustainable longterm energy use. It will also have ripple effects for the country.

After all, it’s not just the US military that will need to transition away from oil as we lurch towards a decidedly uncertain future. It’s time for some leadership.