Unclassified brief to Mitzi’s Energy Conversation, Arlington VA, 11 Mar 08

How DoD Can Win the Oil Endgame:

More Fight, Less Fuel, Lower Cost, Safer World

Amory B. Lovins
Chairman & Chief Scientist Director & Chairman Emeritus
Rocky Mountain Institute
www.r mi.org www.fiberforge.com
ablovins@rmi.org

Copyright © 2008 Rocky Mountain Institute. All rights reserved. PDF licensed to participants for internal use. Hypercar® and Fiberforge™ are trademarks of Fiberforge
Corporation. All the views expressed here are the author’s personal opinions as a private citizen, not the views of the Department of Defense nor the Defense Science Board.
 Rocky Mountain Institute

◊ Independent, nonpartisan, nonprofit (1982– )

◊ Vision: abundance by design (www.natcap.org)
◊ Mission: foster the efficient and restorative use of
resources to make the world secure, just,
prosperous, and life-sustaining
◊ 83 staff in Old Snowmass CO and Boulder CO
◊ Entrepreneurial
 $12M/y income, mostly earned by private-sector consultancy
 Five for-profit spinoffs, 11 different funding models so far
 Three practice areas (Energy & Resources, Built Environment,
Mobility & Vehicle Efficiency), 30 business sectors
 In recent years, redesigned >$30b worth of facilities
 Recently served or been asked to serve >80 Fortune 500s
 Core capability: integrative design/radical efficiency/lower cost
◊ Motto: “In God we trust”; all others bring data
 RMI’s work with DoD
(besides Winning the Oil Endgame)
◊ DSB: 99–01 platform efficiency, 06–08 energy strategy
◊ SECNAV: Surveyed CG-59 hotel-load savings 00–01
◊ COMNAVSEA: Tasked Dec 04 to transform ship design
◊ Facilities: Overhauled NAVFAC design; led “greening”-
of-Pentagon and USMC, USA, USAF design workshops;
recently engaged by USA REF to help with FOBs
◊ Hosted CNO Strategic Studies Group (2×), C3F seminar
◊ Lectures: OSD, OJCS,STRATCOM, NDU, AWC, NWC,
NPS, USMA, WPAFB,…
◊ Definitive unclass study of domestic energy vuln. (81)
◊ Extensive unclass nonproliferation analyses 70s–80s
◊ Synthesized principles for redesigning refugee camps
(after Operation Strong Angel I) for 3F Surgeon 01–02
I am not, however, a military expert!
“[A]ggressively developing and
applying energy-saving tech-
nologies to military applica-
tions would potentially do more
to solve the most pressing
long-term challenges facing
DoD and our national security
than any other single invest-
ment area.”
— LMI review of Winning the Oil Endgame, Jan 05, emphasis added
Independent, transparent,
peer-reviewed, uncontested,
DoD-cosponsored, Sept 04
For business/mil. leaders
Based on competitive
strategy cases for cars,
trucks, planes, oil, military
Book and technical backup
are free at:
www.oilendgame.com
Over the next few decades,
the U.S. can eliminate its use
of oil and revitalize its
economy, led by business for
profit
(So, probably, can others)

This work was cosponsored by OSD and ONR. The views expressed are those of the authors alone, not of the sponsors.
 A profitable US transition beyond
oil (with best 2004 technologies)

35 U.S. oil use and imports, 1950–2035

Petroleum product equivalent consumption

government projection (extrapolated after 2025)

30
end-use efficiency @ $12/bbl

plus supply substitution @<$26/bbl (av. $18/bbl) Vs. $26/bbl oil,

25 a single $180b
plus optional hydrogen from leftover saved
(million barrels/day)

natural gas and/or renewables (illustrating investment

saves $70b/y
10% substitution; 100%+ is feasible) net; cuts CO2
20
26%; 1M new +
1M saved jobs
) You
You are
are here
here
15
Petroleum use
Practice
Practice run
run 1977–
1977 –85: GDP
1977–85: GDP +27%,
+27%,
oil
oil use
use ––17%,
17%, oil
oil imports
imports ––50%,
50%,
Persian
Persian Gulf
Gulf imports
imports ––87%
87%
10

…and all implementable

5 Petroleum imports without new fuel taxes,
subsidies, mandates, or
OPEC’
OPEC
OPEC’s ’s exports
exports fell
fell 48%,
48%, breaking
breaking
its federal laws
its pricing power for aa decade;
pricing power for decade; US
US
0 is
is Saudi
Saudi Arabia
Arabia ofof negabarrels
negabarrels
1950 1960 1970 1980 1990 2000 2010 2020 2030
 Integrating ultralight, ultra-low-drag,
and advanced propulsion triples car,
truck, & plane efficiency at low cost
CARS: save 69% at 57¢/gal PLANES: save 20% free,
Surprise:
45–~65% @ ~46¢/gal
ultralighting
is free —
offset by
simpler
automaking
and 2–3×
smaller
powertrain!
BLDGS/IND: big, cheap
155 mph, 94 mpg
savings;
TRUCKS: save 25% free, 65% often
@ 25¢/gal lower
capex

Technology is improving faster for efficient end-use than for energy supply
 Each day, your car uses ~100×
its weight in ancient plants.
Where does that fuel energy go?
13% tractive load
87% of the fuel energy is wasted

0% 20% 40% 60% 80% 100%

Braking resistance Rolling resistance Aerodynamic drag
Engine loss Idling loss Drivetrain loss
Accessory loss

 6% accelerates the car, 0.3% moves the driver

 Three-fourths of the fuel use is weight-related
 Each unit of energy saved at the wheels saves ~7–8
units of gasoline in the tank (or ~3–4 with a hybrid)
 So first make the car radically lighter-weight!
Midsize 5-seat Revolution concept crossover SUV
Ultralight (1,889 lb, –53%) but ultrasafe
0–60 mph in 8.2 s, 114 mpg (H2)…
or 0–60 mph in 7.1 s, 67 mpg
(gasoline hybrid)

“We’ll take two.”

— Automobile
magazine
World Technology
Award, 2003

Show car and a complete virtual design (2000),

uncompromised, production-costed, manufac-
turable; hybrid’s +$2,511 MSRP pays back in <2 y
 Radically simplified manufacturing

◊ Mass customization
 Revolution designed for 50k/year production volume
 Integration, modular design, and low-cost assembly
 Low tooling and equipment cost

 14 major structural parts, no hoists

 14 low-pressure diesets (not ~103)
 Self-fixturing, detoleranced in 2 dim.
 No body shop, optional paint shop
 Plant 2/5 less capital/car-y, 2/3 smaller
 Toyota’s Hypercar®-class
1/X concept car (Tokyo Motor Show, 26 Oct 2007)
◊ 2× Prius efficiency, simi-
lar interior vol. (4 seats)
◊ 3× lighter (420 kg)
◊ carbon-fiber structure
◊ 0.5-L flex-fuel engine
◊ powertrain under rear
seat), rear-wheel drive
◊ plug-in hybrid-electric

• One day before, Toray announced a ¥30b plant to mass-produce

carbon-fiber autobody panels and other parts for Toyota et al.
• Ford announced Nov 07 a 250–750-lb weight cut in every car,
cadenced MY2012–20, to capture unexpectedly big synergies
• Nissan announced Dec 07 an average 15% weight cut by 2015
 2025 demand-supply integration
demand or supply (million bbl/d)

30 28.1 7.7
petroleum product equivalent supply & demand, 2025
25 by
2025 20.4 5.7
20
after
2025 1.6
15 7.8

7.0
10
5.2
5

0
EIA 2025 $12/bbl net 2025 biofuels saved natural domestic oil balance
demand efficiency demand gas (partial)

Great flexibility of ways and timing to eliminate oil in next few decades
• Buy more efficiency (it’s so cheap)
• Wait to capture the other half of it — 7 Mbbl/d is still underway at 2025
• “Balance” can import crude oil/product (can be all N. Amer.) or biofuels
• Or saved U.S. natural gas @ $0.9/million BTU can fill the “balance”…or
• H2 from saved U.S. natural gas can displace “balance” plus domestic oil
• Not counting other options, e.g., ND+SD windpower/H2 for all hwy vehs
 Breakthrough competitive
strategy via platform efficiency
◊ Boeing’s crisis in 1997 was like Detroit’s today
 Wrenching changes instituted at BCA, including TPS (e.g., moving
assembly); mfg. & costs brought back under control; but what next?
◊ In 2003, Airbus for the first time outproduced Boeing
 “This is really a pivotal moment…could be the beginning of the end for
Boeing's storied airplane business,” said Richard L. Aboulafia, a Teal
Group aerospace analyst, in 2003
◊ Boeing’s bold, efficiency-led 2004 response: 787 Dreamliner
 ≥20% more fuel-efficient than comparable modern aircraft, same price
 80% advanced composite by volume, 50% by mass
› Bigger windows, higher-pressure cabin
 3-day final assembly (737 takes 11 days)
 885 orders (857 firm + 28 pending) + 430 options & rights
 Sold out well into 2016—fastest order takeoff of any jetliner in history
 Now rolling out 787’s radical advances to all models (Yellowstone)
◊ Airbus: Ultra-jumbo A380, 2 years late, ~€5b over budget
 Response? Efficient, composite A350—probably too late
◊ Boeing’s breakthrough strategy flipped the sector in 3 years
 WTOE implementation is underway
via “institutional acupuncture”
◊ RMI’s 3-year, $4-million effort is leading & consolidating shifts
◊ Need to shift strategy & investment in six sectors
 Aviation: Boeing did it (787 Dreamliner)…and beat Airbus
 Heavy trucks: Wal-Mart led it (with other buyers being added)
 Military: emerging as the federal leader in getting the U.S. off oil
 Fuels: strong investor interest and industrial activity
 Finance: rapidly growing interest/realignment will drive others

◊ Cars and light trucks: slowest, hardest, but now changing

 Alan Mulally’s move from Boeing to Ford with transformational intent
 Workers and dealers not blocking but eager for fundamental innovation
 Schumpeterian “creative destruction” is causing top executives to be far
more open to previously unthinkable change
 Emerging prospects of leapfrogs by China, India, ?new market entrants
 RMI’s two transformational projects and “feebate” promotion are helping
 Competition, at a fundamental level and at a pace last seen in the 1920s,
will change automakers’ managers or their minds, whichever comes first
 The oil industry’s conventional wisdom:
approximate long-run supply curve for world
crude oil and substitute fossil-fuel supplies

(IEA, 2006)

Source: BP data as graphed by USDoD JASON, “Reducing DoD Fossil-Fuel Dependence” (JSR-06-
135, Nov. 2006, p. 6, www.fas.org/irp/agency/dod/jason/fossil.pdf), plus (red crosshatched box)
IEA’s 2006 World Energy Outlook estimate of world demand and supply to 2030, plus (black/gray)
RMI’s coal-to-liquids (Fischer-Tropsch) estimate derived from 2006–07 industry data and subject
to reasonable water constraints. This and following graphic were redrawn by Imran Sheikh (RMI)
 How that supply curve stretches ~3 Tbbl if the
U.S. potential shown in Winning the Oil End-
game scales, very approximately, to the world

(IEA, 2006)

†These substitutions make sense at any relative prices. *Probably much understated because scaling from U.S. to
Depending on future prices, additional such substitutions world should count abundant tropical cane potential; also, the
several- to manyfold larger than shown are also available estimate does not include emerging major options like algal oils

To scale from U.S. alternatives-to-oil potential in Mbbl/d achievable by the 2040s (at
average cost $16/bbl in 2004 $: www.oilendgame.com) to world potential over 50 y,
multiply the U.S. Mbbl/d × 146,000: 365 d/y × 50 y × 4 (for U.S.→world market size) × 2
(for growth in services provided). Obviously actual resource dynamics are more complex
and these multipliers are very rough, so this result is only illustrative and indicative.
Stretching oil supply curve by ~3 Tbbl
averts >1 trillion tonnes of carbon emissions
and tens of trillions of dollars

Cumulative emissions (gigatonnes Carbon equivalent)

Nobody can know who’s right about peak oil,
but it doesn’t matter
DoD can be the key techno-
logical catalyst and govern-
mental leader in getting the
U.S. forever off oil…

…but should do all the

same things anyway, just
for its own mission success
 DoD’s apparent fuel cost [FY06:
LPG Gasoline ~$12.5b] is a modest fraction of true
2%
1% fully-burdened delivered fuel cost; the
added delivery costs are mainly for
Diesel
30% the 9% of AF fuel delivered aerially for
Approximate DoD >$49/gal, and for forward fuel to Army
Jet Fuel
FY05 oil use 67% Fighters
28%
Facilities
2%
Ground
Vehicles
DoD 4%
Bombers
1.80% 7%
Transports Trainers
TK million 3%
and Tankers
bbl, $TKb Air Force C4ISR etc.
51%
Civilian Marines and 57% 6%
Others
98.05% 1%
Other ~25* million

Fed Army bbl, $TKb

44 million bbl,
9% $TKb
Gov. (~1/3 combat,
Ships
0.15% ~2/3 logistics)
Navy
Other
5% 41% (~13% hotel
Fixed Ground loads, ~28%
33%
Facilities Vehicles propulsion/
US 2005: 7.54b Maritime 4%
8% weapons/C 3I)

bbl, ~$TKb, 1/4 Vessels

Shore
8%
of world oil use 10%

Land Aircraft
[TK = to come] 36%
15%

*Army, ?FY, wartime OPTEMPO (3.6 × peacetime): 34% generators, 30% combat
aircraft,16% combat vehicles, 16% tactical vehicles, 5% nontactical (DSB 2008 p. 44)
Air
73% NB: An unknown fraction of AF and Navy fuel transports Army materiel.
Oil used by contractors to which DoD has outsourced work is unknown.
 DoD requirements-&-acquisition process
grossly undervalues fuel efficiency (DSB 01)
◊ Logistics has been assumed free and invulnerable
◊ The reality—divisions hauling oil, more trying to
guard them—compromises combat effectiveness,
force protection, hence recruit/retain goals
◊ Severalfold-more-fuel-efficient platforms offer
major warfighting, logistics, and budget benefits
◊ Can unlock vast transformational gains (multi-
divisional tail-to-tooth realignment, 10s of b$/y)
◊ Force multiplier: trigger-pullers can win battles
without the deadly distraction of protecting fuel
◊ Biggest win: catalyze leap-ahead civilian tech
transition that can eliminate U.S. oil use by 2040s
 US Defense Science Board
Energy Strategy Task Force
Former SECDEF/SECEN/SECTREAS/DCI James R. Schlesinger
and GEN Mike Carns (USAF Ret), Co-Chairs

More Fight, Less Fuel

Unofficial slides reflecting my own personal views
(consistent with the Task Force’s briefs & discussions)

(official report briefed to DSB ~7 Feb 07, posted 13 Feb 08 at

www.acq.osd.mil/dsb/reports/2008-02-ESTF.pdf)
 The headlines
• There is a clear and present crisis in national and theater
energy security, but it’s not about oil; rather, electrical
vulnerabilities are blocking stabilization in Iraq, are
becoming acute in Afghanistan, and could take down both
DoD’s basic operating capability and the US economy
• Reliable, affordable oil supply is a gathering storm for the
world and US, but not specifically for DoD, which will
remain able to get the mobility fuels it needs
• Rather, DoD’s oil issue is that the costly burdens imposed
by using oil inefficiently also weaken combat effectiveness
• Conversely, DoD can radically boost combat effectiveness
and fuel efficiency at reasonable or reduced up-front cost
• Thus exploiting two new strategic vectors—endurance and
resilience—can turn DoD’s energy risks into revolutionary
gains in warfighting capability and national security
 Major energy threats to DoD mission
execution and the US economy
• Takedown of US electric grid (national, regional,
local, including military facilities) for long periods
• Takedown of vital oil infrastructure (Saudi, straits,
ports/terminals, Strategic Petroleum Reserve, re-
fineries, pipelines) or other interruption of oil supply
• Unnecessary energy inefficiency of military systems
degrades combat effectiveness, worsens operation-
al vulnerabilities, and creates major logistical
burdens paid in both dollars and blood
• National policies continue to create and exacerbate
these unnecessary and largely self-inflicted threats
 New threats require new strategy
• Competition drives strategy, which changes
required capabilities and hence technologies
• Adversaries are now often asymmetrical, demassi-
fied, elusive, remote, irregular, techno-savvy
• So we need unprecedented persistence (dwell),
agility, mobility, maneuver, range, reliability, and
autonomy…all at low cost, so many small units can
cover large areas
• Our half-century-old heavy legacy forces and their
fat fuel-logistics tail are now a magnet for insur-
gents, a serious vulnerability, a major cause of
casualties, and a huge financial burden
 Two missing strategic vectors can turn
these threats into decisive advantages
• DSB 2008, p. 35: “The Task Force…concluded DoD’s energy problems [are]
sufficiently critical to add two new strategic vectors: endurance and
resilience.”
• Endurance turns radically improved energy efficiency and autonomous
supply into manyfold greater range and dwell —hence affordable dominance,
requiring little or no fuel logistics, in persistent, dispersed, and remote
operations, while enhancing overmatch in more traditional operations
• Resilience combines efficient energy use with more diverse, dispersed,
renewable supply—turning big energy supply failures (by accident or malice)
from inevitable to near-impossible
• These two new vectors complement, and are as urgent, vital, and
fundamental as, speed, stealth, precision, and networking
• Without the two new vectors, exploitation of electricity and fuel vulnerability
(already critical in OIF/OEF) could soon come to CONUS
• But with them, DoD can gain far more effective forces and a safer world—
generally at reduced budgetary cost and risk
 Situational assessment: electricity
• Vital to run all other energy systems too: no power means little oil and gas
• Very capital-intensive, very long lead times, technologically unforgiving
• Central plants/grids are inherently vulnerable to simple, devastating attacks
– Continuous and exact synchrony required over huge areas
– This needs long power lines (easily destroyed), comms, & vulnerable transfor-
mers etc.—often with no spares, and taking 1–2 y to manufacture and import
• Attacks on the power grid are driving Iraq insurgents’ success
– Baghdad nearly isolated (7/9 big lines down lately); takedown beats rebuild; chronic lack
of electricity undercuts all reconstruction and stability efforts
– Similar Taliban tactics in Afghanistan are ramping up but still look reversible
– Near-invulnerable “distributed” systems deliver 1/6 of world’s total & 1/3 of new el., are
often cheaper (all financed by private capital mkt), but US has so far rejected in OIF/OEF
• DoD, though the world’s #1 buyer of renewable energy, is at least 98%
reliant on the brittle electric grid, and to assure mission performance, must
quickly make its bases’ power supplies resilient and mainly renewable
– Of 584 bases in CONUS, ~90% have good supply options onsite or nearby, mostly renewable, and most of their
electricity can readily be renewable; could achieve zero daily net energy need for facilities/ops/ground vehicles, full
independence in hunker-down mode (no grid), then power export to nearby communities and to nucleate grid blackstart
– So DoD bases’ energy independence collaterally enables national electric grid resilience, which electricity industry and
institutions will otherwise approach far too slowly to meet the gravity and urgency of the takedown threat
– OCONUS potential for austere-FOB energy independence is even larger because avoidable delivered costs are higher
 Situational assessment: DoD oil
• In WWII, heavy steel forces “floated to victory on a sea of oil,” and 6/7ths of
oil to defeat Axis came from Texas; today, warfighting is ~16× more
energy-intensive, and Texas is a net importer of oil
• DoD is the world’s #1 single buyer of oil and uses 92% of all US Gov’t oil
• Yet DoD directly uses only 0.36 Mbbl/d—0.4% of world or 1.8% of US oil
– Equivalent to just two big offshore platforms, or 22% of 2005 CA+AK output
– 96% of US mobility and ~99.96% of DoD’s is oil-fueled; ~3/5 is used in CONUS
– But different fuel split: 73% of DoD’s oil use, vs. 8% of US, is jet fuel
– DoD’s jet fuel buy makes it the #1 or #2 US airline; can blend JP-x from Jet-A
• DoD’s oil problem/opportunity is not whether it can get oil now and indefi-
nitely, but rather the degraded combat performance, higher casualties,
and higher costs caused by using oil very inefficiently
– A $10/bbl increase in oil price directly costs AF ~$0.8b/y, DoD ~$1.3b/y
– Military platforms are generally less fuel-efficient than civilian counterpart, I.e., poor
– DoD’s FY06 oil buy ($13b) looks like 3% of the main DoD budget, but its true cost
delivered to platform in theater is severalfold higher
– OSD is analyzing this “fully burdened cost” and will apply it in three pilot acquisitions;
this much higher fuel value is expected, over years, to elicit far more efficient use
– Total cost, both in blood and in degraded combat capability, is far higher still
– At Nov 07, ~80 convoys, hauling mainly fuel, were traveling continuously between
Kuwait and Iraq destinations; ~half of theater casualties are associated with convoys
 Is this trip necessary?

One inefficient 5-ton a/c uses ~1 gal/h of genset fuel. Truck’s 68-barrel cargo can cool 120 uninsulated tents for 24 h. This 3-mile convoy invites attack. (Photos aren’t all in the same place.)

• A third of the Army’s wartime fuel runs gensets. In a typical FOB recently measured, 95%
of the genset electricity air-conditions tents and CHUs, space-cooling by cooling outer space
• Half of all theater casualties are linked to convoys. COL Dan Nolan (USA Ret.) on fuel
convoys: “We can up-gun or down-truck. The best way to defeat an IED is…don’t be there.”
• In above example, the task (comfort) can probably be done with no oil. No gensets, no
convoys, no problem. Turn tail into trigger-pullers. Multiply force. Grow stronger by eating
our own tail. Or breed a Manx force: no tail.
• Of Clausewitz’s three conditions for success in war—government decision, military capacity,
and the will of the people—current adversaries are attacking mainly the third, but are figuring
out that the second is fragile too. How soon will they bring that tactic to CONUS? COL Nolan:
“We are in crisis now, and if we don’t fix it, we’ll be in catastrophe in five years.”
• The “endurance” strategic vector is at least as vital for stability as for combat ops (they now
have comparable priority: DoDD Memo 3000.05, §4.1), because stability ops may need even
more persistence, dispersion, and affordability
• Some Iraq overlays suggest that areas with reliable electricity have substantially less
violence, reducing risks to forces and likelihood of insurgence
 Common DoD views on energy
• We exist to be effective, not efficient, so platform perform-
ance always trumps fuel cost—and rightly so
• DoD energy technology and innovation will be driven by the
civilian marketplace, and need no attention from us
• DoD has no rewards for energy efficiency*, no penalties for
energy inefficiency†, and sparse energy-use data; that’s OK
• We don’t “do” energy; we buy it
• Energy is a necessary expense, not an investment issue
• Energy’s supporting infrastructure is not a major factor in
requirements and procurement choices
– Fuel logistics is invisible, free, and invulnerable
– Its burden (in dollars, billets, equipment, blood, and the major lost
opportunities of degraded or foregone combat power) can safely be
ignored when we make decisions that determine DoD’s fuel use
– Existing KPPs like range, speed, and payload implicitly include all
worthwhile energy goals, so “energy KPPs” would be superfluous
*With one modest but effective Navy exception †However, Congressional and Executive mandates drove ~30% drops in Service facilities’ J/m2-y
 First-principles observations
• Reliable and affordable access to energy—all kinds—is
a national strategy issue and a national security issue
• Energy infrastructure is brittle—CONUS and OCONUS
• Strategic petroleum situation is adverse and worsening
• Foreign policy options are distorted by dependency
• Treasure transfer weakens US economy and national
security, retards democratization, increases instability
• Yet our energy future is not fate but flexible choice
• Over the long term DoD can help reverse these trends
by leadership, innovation, procurement, demand pull,
and training—thus supporting its mission by making US
energy more secure and the world more stable
• These shifts would markedly improve combat effective-
ness, save lives, and avoid annual costs >$20 billion
 What must the “endurance” vector do?
◊ Radically redesign military energy flows to support new
strategic, operational, & tactical requirements
◊ Affordably dominate asymmetric, persistent, remote,
dispersed combat, using little or no fuel logistics
◊ Apply an impressive new suite of technologies, e.g.:
 Ultralight but low-cost materials and manufacturing methods (suitable also for
numerous small high-endurance platforms)
 Ultralow aero/hydrodynamic drag and rolling resistance
 Advanced propulsion and electric efficiency techniques
 Radically simplified & integrated design eliminating KPP tradeoffs
 Distributed, often renewable, electricity and fuel supplies

◊ Raise platform fuel efficiency by at least 3–4× with same or

(usually) better warfighting capabilities
 Where to find winners
• The most total fuel can be saved in aircraft: Since aircraft use 73% of
DoD oil, a 35% saving in aircraft would equal the total fuel use by all land
and maritime vehicles plus facilities
– Fortunately, 35% is conservative because 60% of Heavy Fixed Wing inventory (which uses 61% of AF aviation fuel)
uses 50–60-year-old designs, and nearly all Vertical Lift fleet is 30–50-year-old configurations and derivatives
– Heavy Fixed Wing fleet can halve fuel use by practical geometrically compounded improvement in aero, materials,
systems, and propulsion including shift to integrated-wing-body configurations; in vertical lift, OSTR saves 5–6×
• The greatest gains in combat effectiveness will come from fuel-efficient
ground forces (land and vertical-lift platforms, land warriors, FOBs)
• Savings downstream, near the spear-tip, save the most total fuel: deliver-
ing 1 liter to Army speartip consumes ~1.4 extra liters in logistics
– Need careful reexamination of noncombatant platforms at the speartip: in a typical armored Army unit today, #5
battlefield fuel user is Abrams, #10 Apache, and the other eight are noncombatants—trucks, kitchen, etc.
• Savings in aerially refueled aircraft and forward-deployed ground forces
save the most delivery cost and thus realignable support assets
• The biggest gains in platform* efficiency will:
– Come from radical concepts and technologies (though properly valuing fuel savings will also drive a myriad
incremental gains that are collectively large)
– Strongly emphasize far lower weight, drag, and onboard energy burden—then make propulsion and onboard power
generation more efficient (i.e., platform physics before propulsion—opposite of now)
• Especially emphasize reduced weight—near-stagnant for decades in airframes, but now poised for dramatic reduction
with ultralight / ultrastrong materials (yet JSF’s advanced-composite mass fraction is less than a Boeing 787’s)
– Not just combine but integrate technologies, optimizing whole systems for multiple benefits rather than isolated
components for single benefits
• No option should be rejected due to entrenched assumptions about
diminishing returns, incrementalism, and tradeoff, because those
assumptions are generally unsound—the enemies of effectiveness
*“Platform” means here any device that directly or indirectly consumes fuel or electricity in the battlespace
 Top technical finding: dramatic gains in combat effectiveness
and energy efficiency are available almost everywhere, e.g.:

(scaled-down wind-tunnel model)

VAATE engines: loiter × Optimum Speed Tilt Re-engine M1 with
BWB quiet aircraft: SensorCraft ( ): C4ISR modern diesel, range
range & payload × 50-h loiter, sorties 2, fuel – 25–40%, far less Rotor (OSTR): range
× ≥2, fuel ÷ 3–4
~2, sorties ÷ 5–10, ÷ 18, fuel ÷ >30, maintenance, often lower × 5–6, speed × 3,
capital cost quiet, fuel ÷ 5–6
fuel ÷ 5–9 (Σ 2–4) cost ÷ 2

25% lighter, 30% cheaper

Actuators: per- advanced composite
More lethal, highly Hotel-load retrofits FOB uses 95% of gen- formance × 10, structures; aircraft can
IED-resistant, stable could save ~40–50% set fuel to cool desert; fault tolerance × have ~95% fewer parts,
HMMVV replacement, of onboard electricity could be ~0 with same 4, size & mass weigh ≥1/3 less, cost less
weight ÷ 3, fuel ÷ >3 (thus saving ~1/6 of the or better comfort ÷ 3–10
(up-armored HMMVV ~4 mpg) Navy’s non-aviation fuel)
Advanced propulsors A zero-net-
160-Gflops
can save much energy supercomputer,
noise and fuel building (it’s ultrareliable with
Rugged, 2.5- been done in
no cooling at
W PC, $150, –44˚ to 46˚C
solar + back- at lower cost) 31˚C, lifecycle
up crank cost ÷ 3–4
 Briefs to DSB Task Force were fully consistent with 2004
WTOE finding that DoD fuel efficiency and advanced
materials could eliminate ~2/3 of Services’ fuel need

Airforce Aircraft Navy Ships Navy/Marine Aircraft

Army Ground Vehicles DoD Commercial Vehicles

1.00
…NOT counting avoided inter-
0.80 Service fuel to lift less fuel (and
Quads per year

perhaps lighter platforms)

0.60
(Data weak…but conservative)
0.40

0.20

0.00
Baseline,
1998-9

Complete

Complete
2025

CW, 2025

CW, 2025
SOA, 2025

SOA, 2025
Baseline,

Plausible
Deployment

Plausible
Deployment

Deployment

Deployment
Source: 2004 RMI analysis based on DSB, IDA, AAN, civilian platforms
 What is fully burdened fuel cost?
• Whole-system, end-to-end, lifecycle cost of delivering
a gallon of fuel to the platform, in theater, in wartime
(OPTEMPO & site)
– Platforms are designed, bought, and fielded to win wars; we
hope but don’t intend they’ll see only peace
– Every KPP is based on combat performance; fuel
efficiency’s logic should be identical
• Thus: all costs we can ultimately avoid if that gallon
need never again be delivered
– The metric is avoided cost, even though we’ll probably
often choose to “cash in” that cost and realign tail-to-tooth
for a more effective force structure
• PA&E’s preliminary Nov 06 look found* DoD’s
FY06 bill was not $7b (DESC) but $29b (delivered)—
4× more. Good to know! Now how can costs be
refined, as is now underway in/for OSD?
*Matt Kastantin (PA&E), brief to DSB Task Force on DoD Energy Strategy, 29 Nov 06; RMI analysis, 29 Nov
06, totaling its Service-specific conclusions
11 common methodological traps (1)
1. Weight, or average, wartime w/peacetime OPTEMPO
– Their actual future ratio is unknowable…perhaps Long War
– We design platforms for combat, not training, so average conditions are
a way to estimate fuel savings, not a criterion for optimizing them
• If utilities built to meet only average load, not peak load, the lights would go out
– PA&E’s 20-y depreciation is far slower than the current ~$2b/mo rate
• Washington Post, 4 Dec 06: “Helicopters are flying two or three times their planned usage rates.
Tank crews are driving more than 4,000 miles a year—five times the normal rate. Truck fleets
that convoy supplies down Iraq’s bomb-laden roads are running at six times the planned mileage,
according to Army data.”
– DSB 2008 report p 31: “The Task Force does not support”
OSD(PA&E)’s guidance that fully burdened cost of fuel should
generally assume peacetime OPTEMPO, because “FBCF is a wartime
capability planning factor, not a peacetime cost estimate.”
2. Omit wartime force protection and logistics
– DDR&E rightly tasked IPT 12 Apr 06 to find fuel costs “including logistics and
force protection”
– Roughly how many escorts, IEDs, and casualties could we avoid if we had ~3/4
fewer fuel convoys?
– Army’s Energy and Security Group’s Sustain the Mission project estimated (07)
a 450-mile-roundtrip supply to a Stryker brigade in Iraq costs $25.29/gal— 65%
for air and 12% for ground protection—totaling 4–12× the $2.14 DESC fuel
price; if the roundtrip were 950 miles, $44.51/gal, or >20× the DESC fuel price
 11 common methodological traps (2)
3. Count only specifically dedicated POL resources,
not shared or multi-purpose ones
– This omits most protection and support assets
4. Count only short-run, not long-run, marginal
costs
– Time horizon must be sufficient to realign slow assets
5. Use weighted-average AF aerial & ground refueling
costs—a good way to estimate average dollar savings,
but it grossly undervalues efficiency in combat
– PA&E estimated 9% of AF gallons cost $42.49 delivered, 91% cost $2.79;
but de-signing long-range bombers for a $6.36 wtd. av. will buy and run
too many tankers
6. Claim battle scenarios are so diverse that wartime
conditions are unassessable
– We should emphasize representative theater conditions, e.g., OIF/OEF, and
assess but not assume pathological cases, e.g., deep multi-helicopter relays
– But we should pick a worse-than-average base-case, because the goal isn’t
to win the average battle; fuel efficiency is most vital in the exceptional
cases when we must stretch performance to win, so we must design for it
 11 common methodological traps (3)
7. Look for lost keys under a distant lamppost
– Good wartime data are confusing and scarce; just do your best
8. Let the perfect be the enemy of the good
– We should seek sound and clear approximations, not spurious precision
– Better to be approximately right than precisely wrong
9. Ignore higher-order effects
– Trucks hauling fuel for trucks, fueled at fully-burdened cost, will raise
that cost
– “If the fuel truck is late, I’m sitting up in my truck idling the engine to
charge my batteries.” — Field radar operator
10. Count fielded personnel and equipment without the
rotational multiplier (~3×?) to obtain total force
structure
11. Use accounting cost—not opportunity cost to the
warfighter
– For example, diverting fighting forces to protect fuel convoys foregoes combat
capability: logistics enables forces but subtracts from their net capability
– “Unleash us from the tether of fuel”—attributed to GEN Mattis, USMC
– Priority 1 certified for USMC MG Zilmer’s urgent request for “renewable and
self-sustainable energy solution” for MNF-W’s battlespace (al-Anbar Province)
 Examining DoD energy reveals a hidden fallacy
• What the requirements/acquisition system currently calls “capability” is
really theoretical performance of “tooth” alone at the platform or system
level… omitting the tail needed to produce capability
• Tail takes money, people, and materiel that detract from tooth
• True net capability, constrained by sustainment, is thus the gross
capability (performance) of a platform or system times its “effectiveness
factor”—its ratio of effect to effort:
Effectiveness Factor = Tooth / (Tooth + Tail)
• Also, in an actual budget, Tooth = (Resources – Tail), so:
Effectiveness Factor = (Resources – Tail) / Resources
• Effectiveness factor ranges from zero (with infinite tail) to one (with zero
tail). If tail > 0, true net capability is always less than theoretical (tail-
less) gross performance; but DoD consistently confuses these two
metrics, and so misallocates resources
– Buying more tooth that comes with more (but invisible) tail may achieve little,
no, or negative net gain in true capability; we often seem to do this
– But dramatically trimming tail can create revolutionary net-capability gains
and free up support personnel, equipment, and budget for realignment
 Fully burdened fuel costs needs a
broad, not a narrow, assessment
• Simplicity is attractive and easy to grasp
• But the remedy for genuine complexity is not
oversimplification but transparency: don’t omit
costs that are fuzzy but obviously important
• This isn’t about just adding depreciation and
maintenance costs for some fuel trucks
• Behind each truck/driver is force protection
• All need a support pyramid and a rotational
multiplier back to force structure
• All these assets are diverted from the core
combat mission at a major opportunity cost
 Follow the causal chain to its end
• This is the gallon that Jack pumped. This is the truck that Stephanie drove
to carry the gallon that Jack pumped. This is the platoon that guarded the
road that Stephanie drove to carry the gallon that Jack pumped. This is the
base that housed the platoon that guarded the road that Stephanie drove to
carry the gallon that Jack pumped. This is the cook who fed the barber
who cut the hair of the intel officer who briefed the platoon that guarded
the road that Stephanie drove to carry the gallon that Jack pumped. Etc….
• We must count the approximate long-run avoidable cost not just of
dedicated POL personnel (including contractors, cross-Service loans, and
non-POL staff doing POL duties/missions) and their immediate, fuel-spe-
cific physical assets, but also of everyone and everything needed to feed,
house, power, move, equip, sustain, protect, heal, train, lead, manage, and
otherwise support them, worldwide, lifecycle—recruitment through burial
and survivors’ benefits. Planning tools contain this information.
• We must count every every activity that over the long run (decades) need
not occur if that gallon need never again be delivered. Otherwise we’ll
continue to undervalue and underbuy fuel efficiency, weaken warfighters,
squander resources, and waste the Nation’s lives and treasure.
• Let our last thought in battle never be that we wish we’d saved more fuel.
 Army’s true delivered fuel cost:
wildly divergent estimates
• GEN Paul Kern, CG of Army Materiel Command: can
range from $1/gal to $400/gal depending on how it’s
delivered (2002 Tactical Wheeled Vehicles Conference, Monterey, quoted in National Defense, Mar 02, p 37)
• ARL’s Dr. Robert Bill: “Fuel costs $13/gal—well to
tank—in peacetime at home” (brief to DSB Truly panel at TARDEC, 19
Oct 99, emphasis added; $13/gal in 1999$ = $15.4/gal in 2006$)

• DSB 01 (Truly report) seems more conservative

– p. 16: ~$13 at FEBA, ~$25 at FEBA+100 km
– p. ES-3: “hundreds of dollars [by air]…[600 km] deep in the
battlespace,” or (p. 20) “at least $40–50” if overland
– Omitted ~$13 theater infrastructure/handling, & protection
• JASON 06: told $100–600 in theater dep. on “front line” to “back
line” separation in distance, terrain, defense, etc. (Reducing DoD Fossil-Fuel Dependence, p. 30)

• PA&E/IPT Nov 06: $5.62 (at peacetime OPTEMPO)

 Where did DSB 01 get those high
cost estimates? From the Army…
Above: p. 16. Below; pp. 18–20, with accompanying
text in middle column. Army sources are at far right.
DSB 01 reported:
Original source of lower graph:
“PES-Hoeper-Final[1].ppt,” slide
9, Results of Power and Energy
Seminar, briefed to ASECA(AL&T)
Paul J. Hoeper, 28 Jun 99, and to
Truly DSB panel mtg 1, 29 Jun 99.
(Slide 4 envisaged AAN fuel saving ~50%, or
282,500 gal/d for an AOE Armored Div that
would then need 57 fewer 5,000-gal tankers.
Slide 14 first-cut seminar goals from Motive
Power Panel says: save 35% of fuel in legacy
systems, 75% in new [both by 2025, FY98 base-
line], 20% cut in annual fuel expenditures in 10
years, strike capability independent of fossil fuel
refueling [stretch goal]; soldier electricity also
aiming for 80% saving in soldier resupply rate.)
Lower graph was briefed in detail to
Truly mtg 2, 17 Aug 99, by LTC
Ronald F. Salyer (USARL, NASA
Langley, 757 864 7617), slide 7, and
by others. (Salyer and other Army
briefers repeatedly told DSB 01 that
75% fuel savings are feasible for
combat systems.)
DSB 01: Army estimated its ~FY99
fuel delivery direct cost was $3.2b*
Original source of table: slide 2,
“The Impact of Fuel Efficiency on
the Army 2010 and beyond,” ARL
brief by Dr. Robert Bill to Truly
panel mtg 3 at TARDEC, 19 Oct
99. The data are stated to refer to
operations “in peacetime at
home,” so would presumably be
higher in theater in wartime.
Slide 3 states: “Fuel comprises
70% of tonnage shipped. Armored
division consumes approx.
600,000 gal/day. Air assault
division requires approx. 300,000
gal/day.”
Slide 5 shows potential 79% fuel
saving for air assault division
maneuver brigade, and slide 17
(also from LTC Salyer) sketches
81% armored-unit fuel savings.
Several Army briefers to DSB 01
repeated this ARL information.
*= $3.8b in 06$. In FY06, w/63% more
www.acq.osd.mil/dsb/reports/fuel.pdf (DSB 01 Truly report), Jan 01, pp. 39–40 fuel, PA&E ests $2.1b, or 58% less/gal
 Army fuel cost: what’s in, what’s out?
Army briefs to DSB
2006$/gallon DoD historic 01: $15 (in CONUS in
PA&E Nov 06 fully burdened
norm: $2-odd peacetime); up to hundreds av. JP-8 est.: delivered cost:
of $ if far beyond FEBA
$5.62 (to DSB 29 Nov 06) being assessed
DESC direct cost
(refined product, delivered in bulk to
Service customer at global-average
 ($2.53/gal Jun 06;   (PA&E found & is working a nearly 2×

uncertainty in Army’s FY06 fuel usage—a warning


location with no protection cost) + $3.04/gal 19 Dec 07) of data problems, probably due to fuzzy
notional carbon adder Service/contractor boundaries)

Placeholder market
CO2 cost    (10¢/gal) 
Trucks to deliver to
FOB and thence into   (details  (but only the two most
heavily used types: 1,593 M978
 (should include fully
burdened end-to-end life-cycle cost of
platform unreported) @ $5k/y + 1,291 M969 @ ownership of all physical fuel-
$4.3k/y; others?) delivery assets)

POL personnel (those

actually doing POL   (~FY99: Army delivered
300Mgal with 20k Active @
 (FY06 Army used 490Mgal
with 16k Active @ $55k/y
 (check headcounts—
DESC says much theater
tasks, whether POL $100k/y + 40k Reserve @ $30k/y; [FY05] + 15k Reserve @ $17k/y; POL is now interService or
specialists or not) update both; +19% to 06$) where are contractors/AF/MC…? outsourced—and 2× lower
POL personnel cost per head)

Vehicle & logistics

support, base fuel  ? ? (only to the extent included 
dir.+indir. infrastr. in the trucks’ average O&S cost)

Force protection (incl.

air escort, MP pump guards,…)  ??  
  
Lifecycle support
pyramids and rota- ??
tional multipliers to
force structure for all
Adjust for theft &
attrition    
   
AF & Navy lift cost
 New policy framework emerging

◊ USECDEF Ken Krieg memo 10 Apr 07: “Effec-

tive immediately, it is DoD policy to include
the fully burdened cost of delivered energy in
trade-off analyses conducted for all tactical
systems with end items that create a demand
for energy and to improve the ener-gy
efficiency of those systems, consistent with
mission requirements and cost effectiveness.”
◊ ADM Giambiastiani (Vice Chair JCS), JROCM
161-06, 17 Aug 06, endorsed “selectively
applying an Energy Efficiency KPP…as
appropriate.”
◊ Memo to primes: DoD will value saved fuel far
more highly—a key to competitive advantage
 How can DoD create and exploit
the fifth strategic vector?

◊ Top-level leadership must “energize” Department

◊ By doctrine, align incentives to reward what we
want, and culture and structure to produce it
◊ Adopt lifecycle end-to-end cost accounting
 Require, design, & acquire platforms based on fully burdened fuel
cost delivered to platform in theater—to cut both capex and opex
◊ Make wargaming “play fuel” so resilience is valued
◊ Require, reward, and embed whole-system design
 Purge diminishing returns, tradeoffs, and incrementalism from
design mentality—KPPs needn’t degrade; may improve markedly
 Will need basic reforms in design practice, pedagogy, rewards
◊ Lead the Nation off oil, so we needn’t fight over oil
 Radically reduce the fuel consumption of uncompromised land,
sea, and air platforms—and civilian vehicles too
 Could be DoD’s greatest contribution ever to its security mission
 Supporting actions to help
win DoD’s oil endgame
 As we require/design/acquire fuel-efficient platforms…
 Retrofit the legacy force: National Defense Energy Savings Act
 Realign to capture fuel logistics benefits all the way upstream
 Diversify fuels (and reconsider single-fuel doctrine?)
 If problem is supply-chain interruptions, stockpile end-use fuel
 If problem is long-term unavailability or unaffordability of oil…
 Why should that affect DoD (0.4% of world mkt, w/DPA supply priority)?
 Must consider all technologies in fungible-competitive-market context
 Cost: CTL > GTL > advanced biofuels >> efficient end-use
 The biggest, cheapest, fastest mil-fuel “reserve” is civilian efficiency
 But DoD can speed cellulosic EtOH (DARPA flyoff), algal oil, H2, …
 Finish reforming DoD’s building design & retrofits
 Like NAVFAC ’95; big budget, ~100-y av. life; reduce capex
 DoD is now procuring >200k mil housing units even less efficient
than normal civilian stds—but far better could cost less to build
 Superefficient buildings make onsite renewable supply cost-effective
 Beware of the usual distractions

◊ Coal-to-liquids (enthusiasts in USAF & USN)

 Strongly unrecommended by DSB (p. 51) & JASON 2006–08
 Huge capital & water needs; no investment without big,
very costly, long-term, imprudent DoD purchase contracts
 Even costlier w/ carbon capture (1.64–1.89× oil’s C/bbl)
 Diverts investment from far cheaper, faster oil efficiency
 JASONs: oil is a fungible commodity in a competitive global
market; invest in USPS vans’ efficiency instead!
◊ Small nuclear power plants on military bases
 Considered but not recommended by DSB
 Extremely expensive—more than efficiency + renewables
(economics worse than unfinanceable big nuclear plants’)
 Less resilient and less reliable than efficiency + renewables
 Special training and security challenges, needs full backup
◊ No business would dream of investing in either,
and there’s no good reason DoD should either
 Big picture: DoD investment in advanced
materials can achieve DoD and U.S. goals
as DARPA did w/ Internet, GPS, & chips
◊ DoD S&T investment in ultra- The prize
light materials, especially high-
volume/low-cost manufacturing, More capable and
and advanced propulsion confident warfighting
Enable DoD transformational tenets

Less need for it, bec.
 Strengthen warfighting capability
 Cut DoD fuel costs by $multi-b/y
less conflict over oil
 Cut fuel logistics cost many-x more U.S. (…) dependence on
 Huge realignment potential oil phases out
◊ Transforming car/truck/plane Stronger economy
industries “finds” a Saudi Arabia
(~12 Mbbl/d) under Detroit and A nega-Gulf every 7
Seattle—but domestic, secure, years, so cheaper oil
inexhaustible, clean, & costing
~1/7th of today’s world oil price More balanced U.S.
 Could cut U.S. oil use by 50% in trade, global develop-
2025, imports by 75%
 By 2040s, can save half the 98.2%
ment, and diplomacy
of U.S. oil that DoD doesn’t use Safer world
And there’s a sixth needed strategic
vector: resilience
EPRI-website synthetic
satellite image, 10 August
1996…utilities routinely
keeping the lights on. But
~98–99% of U.S. outages
are caused by the grid.
E.g.:
35 seconds later, after an
Oregon powerline sags into a
tree limb, operational goofs &
poor communications black
out 4 million people in nine
Western states and parts of
Canada. (Local supply
prevents that—and up to
95+% of grid failures are in
the distribution system)
 About that blackout…

• –71 GW in 9 sec.
• Affected areas
containing 50
million people (but
no one knows how
many lost power)
• What’s important
is not what went
out but what
stayed on due to
islanded distributed
generation, backup
2121 EDT 13 Aug 2003 vs. 2103 EDT 14 Aug 2003:
generators, and
NOAA satellite via New York Times, local systems that
www.nytimages.com/portal/wieck_preview_page_07 isolated manually
3377, downloaded 3 Sept 2003
 Lessons from the 14 Aug 03 blackout

◊ Modest tx modernization (switches, management) is needed

◊ But more & bigger tx lines and power plants—the focus of Federal
policy, now being forced upon an unreceptive market—mean more
and bigger blackouts
◊ Basic problem: grid architecture, overconcentration, critical
vulnerabilities
 Brittle Power: Energy Strategy for National Security, RMI report to DoD,
1981, www.rmi.org/sitepages/pid533.php
◊ Three solutions are faster, cheaper, resilient, and ample
1. End-use efficiency (also saves gas, cuts gas price & emissions)
2. Demand response (does so dramatically; also saves cap., stabilizes kWh
& gas prices, and insures against price-gouging)
3. Distributed generation designed for islanding (IEEE P1547) — the
“islands of light” amidst the darkness; also nucleate restart
◊ FERC and power pools don’t yet let these compete with transmission
◊ Big generating units far from load are not equivalent to small ones
nearby, but rarely get credit for this reliability value
 Inherently vulnerable system architecture

◊ Complexity—sometimes beyond full understanding

(big electric grids)
◊ Control and synchronism requirements
◊ Reliance on vulnerable telecoms & IT
◊ Hazardous fuels, often in or near cities
 Standard fuel-oil delivery truck ~0.3 kiloton
 Fueled 757/767 at speed ~0.8 kiloton total
 Typical LNG marine tanker ~0.7 megaton
◊ Inflexibility of fuels and equipment
◊ Interdependence of most energy systems
◊ Specialized equipment & labor needs
◊ Difficulty of repair, paucity of spare parts
 Power grids are worse

◊ Blackouts are instant and propagating

◊ No storage, vulnerable controls/telecoms
◊ Many key spare-parts vulnerabilities, e.g.,
Auckland NZ’s months’ downtown blackout
◊ Bulk transmission vulnerable to rifle fire
◊ Nuclear facilities: 1-GW operating reactor
>15 GCi (~2,000 Hiroshimas’ fallout) +
heat and mech./chem. energy facilitating
release comparable to a MT groundburst
 Cut onsite & offsite power, and core melts
 1-kT bomb 1 km away probably melts core
 Widebody jet or certain standoff attacks can release
virtually the full core inventory
 Seriously contaminate ~105 km2 for ~102–3 y
 Alas, in the past 25 years...

◊ Little has changed, none for the better

◊ Brittle Power findings were confirmed by CSIS,
LANL, Dahlgren,…, including much classified work
◊ Modest hardening of some of the softest sites...
but adversaries will shop around
◊ Federal energy policy for most of the period,
continuing today, emphasizes the most vulnerable
options, and tends to ignore or try to suppress the
resilient ones that can make the system efficient,
diverse, dispersed, and renewable
◊ So DOE is undercutting DoD’s mission, whose
execution capability is at serious risk
 A troublesome thought

“These brittle devices are supposed to form the

backbone of America’s energy supplies well into
the 21st century—a period likely to bring
increasing uncertainty, surprise, unrest, and
violence. The U.S. cannot afford vulnerabilities
that so alter the balance between large and small
groups in society as to erode not only military
security but also the freedom and trust that
underpin constitutional government.”
—Brittle Power, 1981, slightly edited 1984
 Military history lessons

◊ Significant attacks on centralized energy systems

occurred every few days in the 1980s
◊ Goering & Speer said after WWII: Allies could have
shortened the war by two years by bombing the
Nazis’ highly centralized electricity system
◊ 78% of Japan’s WWII el. (like most Vietnamese el.
later) came from dispersed hydro—so it sustained
just 0.3% of the bombing damage
◊ Energy-system attacks are now part of U.S. and
Russian standard tactics
◊ Energy decentralization is favored by Israel, China,
Sweden,… for military security—but not yet by U.S.
 Fortunately, resilience is
cheaper

◊ Energy insecurity is not necessary

◊ It isn’t even economic: inherently resilient
alternatives work better and cost less
◊ Thus the “insurance premium” against energy
vulnerability is negative—it’d put several trillion
dollars back in Americans’ pockets over the next
20 y
◊ Design lessons from biology and from many
engineering disciplines suggest ~20 principles of
a design science of resilience whose systematic
application can make major failures impossible
 Designing for resilience

◊ Fine-grained, modular structure

◊ Early fault detection
◊ Redundancy and substitutability
◊ Optional interconnection
◊ Diversity
◊ Standardization
◊ Dispersion
◊ Hierarchical embedding
◊ Stability
◊ Simplicity
◊ Limited demands on social stability
◊ Accessibility/vernacularity
Summarized from Chapter 13, “Designing for Resilience,” A.B. & L.H. Lovins, Brittle Power: Energy Strategy for National Security, Brick House 1982, RMI 2001
 Designing for resilience
(1981–84)...
“An inherently resilient system should include many
relatively small, fine-grained elements, dispersed in
space, each having a low cost of failure. These sub-
stitutible components should be richly interconnected by
short, redundant links…Failed components or links should
be promptly detected, isolated, and repaired. Compon-
ents need to be so organized that each element can
interconnect with the rest at will but stand alone at need,
and that each successive level of function is little affected
by failures or substitutions at a subordinate level. Sys-
tems should be designed so that any failures are slow
and graceful. Components, finally, should be understand-
able, maintainable, reproducible at a variety of scales,
capable of rapid evolution, and societally compatible.”

—Brittle Power, 1981, www.rmi.org/sitepages/pid114.php

 DoD and DIB are at least as vulnerable
to grid failure as the civilian economy
◊ After WWII, DoD set up the Dahlgren Mission Assurance
Division to assess DoD’s and DIB’s vulnerabilities; decades of
good analyses reside there, mostly in a GIS
◊ Deeply disturbing vulnerabilities, described in the classified
Appendix G to 2008 DSB report, were recently discovered
◊ DSB Task Force Co-Chair Dr. Jim Schlesinger and Policy Panel
Co-Chair Jim Woolsey have a firm grip on this issue and made
it a priority to brief personally Steve Hadley and Energy
Secretary Sam Bodman
◊ The extent and implications of this “Aurora” issue, and the
actions urgently required to protect military capabilities, can
only be understood, as the DSB 2008 Task Force learned, by
exposure to classified briefs from Dahlgren and INEL about
recent development in electric grid vulnerability
◊ I strongly encourage those of you professionally concerned and
engaged with DoD to contact Policy Panel Co-Chair Gueta
Mezzetti, 202 256 6716, to arrange to take the classified briefs
◊ We could become more like Iraq than we meant to…perhaps
permanently
 Resilient electrical supplies are
DoD policy…but unimplemented
“DoDI 1470.11 §5.2.3 states it is DoD policy to use onsite,
self-contained power for critical functions, DoD-facilities-
based microgrids, and netted area microgrids for extended
strategic islanding, coupled with end-use efficiency
measures. The Renewable Energy Purchasing and On-Base
Development Plan developed in 2004 by the Renewables
Assessment Working Group was designed to quickly improve
energy reliability and security at installations….Thus, policy
and plans are in place to move towards islanding for mission
critical purposes. However, the Task Force could find no evi-
dence that DoD has taken tangible steps to implement this
policy or plans beyond a very small of high profile projects.
This is so even though renewable energy sources…are often
economically advantageous and resilient, reducing the risk
of mission interruption.”
—DSB 2008, pp. 59–60
 Efficiency gives most “bounce per buck”

◊ Fastest, cheapest way to replace the most

vulnerable supplies
◊ Those failures it can’t prevent, it makes
slower, more graceful/fixable, less severe
◊ Buys time to improvise substitutes, and
stretches the job they can do
 Electric efficiency stretches distributed resources, and
greatly simplifies blackstart of failed local/regional grids
 67-mpg light-vehicle fleet stretches oil stocks ~3×; half-filled
tanks can run 3 weeks (a dispersed, delivered, refined-
product SPR); 1981 wellhead-to-car buffer stocks could last
not for days or weeks but for up to nearly a year, buying
precious time to mend or improvise around what’s broken
 1989 supply curve for saveable US
electricity (vs. 1986 frozen efficiency)
Best 1989 commerci-
ally available, retrofit-
table technologies
Similar S, DK, D, UK…
EPRI found 40–60%
saving 2000 potential
Now conservative:
savings keep getting
bigger and cheaper
faster than they’re
being depleted
Measured technical cost and performance data for
~1,000 technologies (RMI 1986–92, 6 vol, 2,509 pp, 5,135 notes)
 –47 to +115˚F with no heating/cool-
ing equipment, less construction cost
7100’, frost any day, 39 days’ ◊ Lovins house / RMI HQ,
continuous midwinter cloud…yet
28 banana crops with no furnace
Snowmass, Colorado, ’84
 Saves 99% of space & water
heating energy, 90% of home el.
(4,000 ft2 use ~120 Wav costing
~$5/month @ $0.07/kWh)
 10-month payback in 1983

◊ PG&E ACT2, Davis CA, ’94

 Mature-market cost –$1,800
 Present-valued maint. –$1,600
 82% design saving from best
1992 std., ~90% from US norm
◊ Prof. Soontorn Boonyatikarn
Key: integrative house, Bangkok, Thailand, ’96
design—multiple  84% less a/c capacity, ~90%
benefits from single less a/c energy, better comfort
expenditures  No extra construction cost
 Examples from RMI’s industrial
practice (>$30b of facilities)
◊ Retrofit eight chip fabs, save 30–50+% of HVAC energy, ~2-y paybacks
◊ Retrofit very efficient oil refinery, save 42%, ~3-y payback
◊ Retrofit North Sea oil platform, save 50% el., get the rest from waste
◊ Retrofit USNavy Aegis cruiser’s hotel loads, save ~50%, few-y paybacks
◊ Retrofit huge LNG plant, ≥40% energy savings; ~60% new, cost less
◊ Retrofit giant platinum mine, 43% energy savings, 2–3-y payback
◊ Redesign $5b gas-to-liquids plant, save >50% energy and 20% capex
◊ Redesign next new chip fab, eliminate chillers, save 2/3 el. & 1/2 capex
◊ Redesign new data center, save 89%, cut capex & time, improve uptime
◊ Redesign new mine, save 100% of fossil fuel (it’s powered by gravity)
◊ Redesign supermarket, save 70–90%, better sales, ?lower capex
◊ Redesign new chemical plant, save ~3/4 of auxiliary el., –10% capex
◊ Redesign cellulosic ethanol plant, –50% steam, –60% el, –30% capex
◊ Redesign new 58m yacht, save 96% potable H2O & 50% el., lower capex
◊ “Tunneling through the cost barrier” now observed in 29 sectors
◊ None of this would be possible if original designs had been good
◊ Needs engineering pedadogy/practice reforms; see www.10xE.org
Electric shock: low-/no-carbon decentral-
ized sources are eclipsing central stations
RMI analysis: www.rmi.org/sitepages/pid171.php#E05-04

• Two-thirds combined-heat-and-
power (cogeneration)*, ~63–70%
gas-fired, ≥50% CO2 reduction
*Gas turbines ≤120 MWe, engines ≤30 MWe, steam turbines only in China

• One-third renewable (including

hydropower only up to 10 MWe)
• In 2006, micropower added 6× as
much output and 30× (incl peaking
& standby units, 41×) as much
capacity as nuclear power added
• Micropower now makes 1/6 of all
el, 1/3 of new el., 1/6 to >1/2 of all
el. in a dozen industrial nations
• Negawatts comparable or bigger;
central plants have <1/2 of market!
• Micropower is winning due to
lower costs & financial risks, so it’s
financed mainly by private capital
$56b/y (only central planners buy nuclear)
 Micropower is the world’s top
source of new electricity
Global Additions of Electrical Generating Capacity by Year and
Technology: 1990–2006 Actual and 2007–2010 Projected
90
Non-nuclear decentralized total
85
80 Non-nuclear decentralized total, including standby and
peaking decentralized cogeneration
75
Net New Electrical Capacity (net GWe)

70 Wind
65
Decentralized non-Biomass Cogeneration
60
Decentralized Cogeneration including
55

Source of Projection
Peak and Standby (WADE)
50
45 Geothermal, Biomass, & Small Hydro
IEA (2003),
40 Photovoltaics GWEC (2006)
35 WADE target
Nuclear
30
25 [Memo: Nuclear Construction Starts]

20
15 Navigant, IEA &
IASH
10 IAEA, IEA & WNA
5 PV industry
0
Actual Projected
-5
1990 1995 2000 2005 2010
Year
 Worldwide in 2006 …

◊ New nuclear capacity was smaller than solar

PV additions, or 1/10th of windpower additions
◊ Nuclear retirements exceeded additions, but
upratings boosted net nuclear capacity by
1.44 GW; micropower added 43–60 net GW
◊ Micropower surpassed nuclear power in total
annual electricity production (16% of total)
◊ Distributed renewables got $56b of private
risk capital; nuclear, as always, got zero
◊ China’s distributed renewables reached 49
GW—7× nuclear capacity—and grew 7× more
◊ And in 2007, nuclear added less world capa-
city than China or Spain added windpower
 ↑↑↑↑↑↑↑↑↑
Keystone
(6/07): Central power stations’ fatal competitors
10.3 to
12.9¢ Levelized cost of delivered electricity or end-use efficiency (zero distributed benefits); remote
4%/y real discount rate; Supply: merchant cashflow model or market empirical;

sources incur 2.75¢/kWh (1996 embedded IOU average) delivery cost, including grid losses
Cost of saved or supplied electricity, 2004 US¢/kWh (Savings: 12-y av. life,

10

Natural gas: 1 “MCF” (thousand cubic feet)

wind: 30-y life, 4%/y real; cogeneration: 25-y life, 4%/y real)

~ 1.03 million BTU ~ 1.09 GJ

all at levelized real prices

Median price of 5.7 GW commis-

sioned in 1999–2006, σ = 0.12¢;
cheapest was >1.3¢ lower
5 kWh of coal-fired generation’s net carbon emissions displaceable per $0.10 spent:
1.0 1.2–1.7 0.9–1.7+ 2.2–6.5+ 2.4–8.9+ 2–11+
Broader,
esp.
residen-
tial, and
sub-
Actual costs depend on many site- and optimal
plant-specific factors; all costs on this programs
Good
chart are indicative. Remote Onsite business
retrofits
Nuclear (MIT) Coal (MIT) Combined-cycle 2003–04 wind, Combined- Building- Recovered- Optimized
new
+ at least + $100/tC gas (MIT) firmed (0.6¢/kWh) cycle scale heat installations
$4–7/MCF + integration (0.3¢) industrial industrial (all sectors)
new 2005 carbon tax
subsidies + $100/tC add back subsidy
carbon tax (but ignore the
probably bigger $5–8/MCF gas
nuclear subsidies)
expected 2012
Central stations, 2004 subsidies, (some cost less now) Cogeneration (CHP) End-use
–5 no reserve margin; the official efficiency
studies count only these www.rmi.org/sitepages/pid171.php#E05-14, -15; LBL-41435
Nuclear is the costliest of the
low- or no-carbon resources
 Cheapest and lowest-carbon
sources save the most C per $
Coal-fired CO2 emissions displaced per dollar spent on electrical services 1¢
(calculated by multiplying coal-plant carbon displaced per kWh times kWh delivered per dollar)
50

2¢
45
kg CO2 displaced per levelized 2007 US$

40
Illustrative carbon displacement at
various efficiency cost/kWh
35

3¢
30

25
4¢
2006 Wind mean price Recovered heat credit
20
Keystone high nuclear cost scenario
15

10

N/A
0
Nuclear Coal Combined- Wind Combined- Building-scale Recovered- End-use
cycle gas cycle cogen heat industrial efficiency
industrial cogen
cogen
 All options face implementation risks;
what does market behavior reveal?
◊ California’s 1982–85 fair bidding with roughly equal
subsidies elicited, vs. 37-GW 1984 load:
 23 GW of contracted electric savings acquisitions over the next
decade (62% of 1984 peak load)
 13 GW of contracted new generating capacity (35% of 1984
load), most of it renewable
 8 GW (22%) of additional new generating capacity on firm offer
 9 GW of new generating offers arriving per year (25%)
 Result: glut (143%) forced bidding suspension in April 1985
 Lesson: real, full competition is more likely to give you too
many attractive options than too few!
◊ Ultimate size of alternatives also dwarfs nuclear’s
 El. end-use efficiency: ~2–3× (EPRI) or 4× nuclear’s 20% US
share at below its short-run marginal delivered cost
 CHP: industrial alone is comparable to nuclear; + buildings CHP
 On-/nearshore wind: >2× US & China el., ~6× UK, ~35× global
 Other renewables: collectively even larger, PVs almost unlimited
 Land-use and variability are not significant problems or costs
 “Baseload” ≠ “big thermal plant”
(cf. telephony and computing)
◊ Arithmetically, one 1-GWe unit or a thousand 1-MWe
units or a million 1-kWe units are equivalent
◊ But in practice, many small units are more reliable
than a few big ones even if all are equally reliable—and
those near customers are more reliable than faraway
units (98–99% of US outages originate in the grid)
◊ Anyhow, not only wind August 2003 Daily Nuclear Output for the Nine U.S. Nuclear
Units Affected by the 14 August 2003 Northeast Blackout

arrays can lose output 9

www.nrc.gov/reading-rm/doc-collections/event-status/reactor-status/2003/index.html, www.nrc.gov/info-finder/reactor/

100% = 7.851 GWe

for an extended period: 8

7
av. cap. loss:
97.5% / 3 days 90%
88%

av. US nuclear outage is

82.5% / 5 days
59.4% / 7 days
99% 100%
53.8%/10 days
6
53.2% / 12 days 69%
Output (GWe)

37 days every 17
69%
5
59%

months, and many units

4
45%

3
35%

can fail simultaneously 2

and without warning

1
0% 2.5% 5%
blackout
0 *

(unlike renewables)…
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Date
 The most comprehensive threat
to national energy security is…
current national energy policy
◊ Perpetuates America’s expanding oil dependence
 Policy ranges from rhetorical support (mention of “addiction” &
advanced biofuels in SoU06) to inaction (natural-gas efficiency) to
opposition (seriously improving light-vehicle efficiency)
 Bailed out Iran & Saudi, “created” Ahmadinejad/Chávez/Putin/…
 Funds both sides of the war and impugns U.S. moral standing
 Systematically distorts foreign policy, postures, and attitudes
 Weakens competitiveness, enhances vulnerability and fragility

◊ Strongly favors overcentralized system architecture

 Natural gas (Katrina), electricity (regional blackouts worsening)

◊ Creates terrorist targets (LNG, nukes, Iraq infrastr.)

 Centerpiece: make an all-American Strait of Hormuz (ANWR/TAPS)

◊ Nuclear power drives & reprocessing worsens prolif’n.

◊ If these aren’t desired outcomes, DoD should say so
What are we waiting for?
We are the people we have been waiting for!

“Only puny secrets need protection.

Big discoveries are protected
by public incredulity.”
—Marshall McLuhan

www.oilendgame.com,
Your move…
www.fiberforge.com,
www.r mi.org
(Publications),
www.natcap.org