Thank you very much Mike for that nice introduction. Thank you for your leadership of the Air Force overall and uniquely on energy issue. The role you play has been exemplary.
I want to thank you for putting together this forum—with the Army, with General Westphal, and General Pete Chiarelli, and for helping put energy on the agenda for our forces. I also want to thank all the distinguished speakers. I particularly want to thank the Secretary of Energy who just spoke, Stephen Chu.
It is a little hard to follow the Secretary of Energy at an energy conference. There is a little bit of a disparity between the two of us. He is a cabinet secretary. I am just a deputy. He has a PhD in physics. I just have a law degree. He won a Nobel Prize. I won my high school history award. But there is one other difference that helps me: I oversee most of your budgets. He does not. So I expect an equally warm reaction to what I am going to say.
I want to recognize Senator Warner who is here with us today who has shown leadership on energy as with so many issues. I know I speak for the President. He misses the bipartisan style of leadership that you showed in the Senate as we are going through this difficult period. So thank you very much Senator Warner.
This is the second DoD event in a row Secretary Chu is attending. Yesterday Secretary Chu was in Michigan, with Joe Westphal and the Army leadership, inaugurating a partnership between DOE and TARDEC, the Army’s center for vehicle innovation.
And as you heard today, Secretary Chu announced that DOE and DOD will jointly install and operate fuel cells that provide backup power at eight military installations. Building fuel cells and a more fuel efficient combat vehicle is the very kind of joint effort we envisioned last July when Deputy Secretary of Energy Dan Poneman and I went to the White House to sign the Energy Security Cooperation memorandum between our two departments.
Already, we are working closely with DOE on microgrids, alternative fuels, batteries, and energy storage. In the coming year, our collaboration will grow, targeting both energy reliability at installations and strike capability in operations. This partnership between our departments is important. Advances in energy technology that increase warfighter capability not only helps us better protect the nation, but these very same advances do two equally important things: they boost the competitiveness of American industry and raise our nation’s overall energy efficiency.
Today, I would like to address three particular things. First, how the changing nature of war, and fiscal pressures that are on our budget, gives new importance to having a cutting edge energy policy. Second, the role defense installations can play as a test bed for new energy technologies. And third, the importance of energy to the operational effectiveness of our fighting forces. Let me start with our changing fiscal and strategic circumstances.
The linkage between innovation in energy technology and the projection of military power has spanned history. Just as the shift from wind to coal revolutionized naval power in the 19th century, so did the introduction of nuclear-energy—on subs and aircraft carriers—transform the global balance of power in the 20th.
Our mastery of energy technology both enabled our nation to emerge as a great power and gave us a strategic edge in the Cold War. Today, staying at the cutting edge of energy technology remains a critical element of our military superiority. Addressing energy needs must be a fundamental part of our military planning.
At the same time, the nature of war itself is changing. Rather than confronting our forces head on, adversaries are increasingly employing asymmetric tactics – and energy in this environment can be a soft target.
Our forces in Afghanistan and Iraq have a long logistical tail. A majority of convoys in Afghanistan are used for fuel. We haul these supplies on roads laced with IEDs and prone to ambush. More than 3,000 troops and contractors have been killed or wounded protecting those convoys. Advances in energy technology may allow us to reduce our vulnerabilities to this type of asymmetric attack.
The nature of war is also changing in a second way.
Conflict is evolving from a focus on intense but short periods of combat that end decisively to longer, more drawn-out engagements, as we have seen in both Iraq and Afghanistan. As conflicts become longer in duration, and more expeditionary in nature, the amount of fuel it takes to keep our forces in the field is a significant and new operational challenge.
As a result of these two changes to our strategic environment, our current energy technology is not optimized for the battlefield of today or tomorrow. We need to make investments to change that. Yet we must also be realistic about how we execute our defense strategy—and develop the capabilities we need—with fewer resources.
For the past decade, we have lived in an environment in which new security challenges could be met by increased resources. Going forward, we will not have that luxury. We cannot simply spend more to cover a new mission. We are going to have to make hard choices about how to reallocate the resources we already have.
To change how we manage energy on the battlefield in these fiscally constrained times, we just released the Department’s first ever Strategy for Operational Energy. Sharon Burke will tell you more about it later today. But I want to highlight its key goals, and discuss a few specific examples of how the Department is working to improve energy security for our warfighters.
The strategy provides a blueprint for how to reduce demand, and increase capability, at all levels of our forces. It aims to increase the energy efficiency of our operations, to limit the risks our forces face as they use and transport energy, and to minimize the amount of defense dollars we spend consuming it.
The reality is that our Department operates in over 100 countries around the world. We have troops fighting in Afghanistan, maintaining over watch in Iraq, and support operations in Libya. Everything we do—every mission we perform—requires significant amounts of energy.
As a Department, we account for 80% of the federal government’s energy use and about 1% of total consumption nationwide. Three-quarters of the energy we use directly supports military operations. As a budget reality, our expenditures on energy are going up. Last year, we spent $15 billion on energy. And with increasing volatility in energy markets and the tightening of global supplies, we are spending 225% more on gasoline than we did a decade ago.
The money we spend on energy not only costs the taxpayer. It costs the warfighter. As budgets tighten, a dollar spent on increased energy costs is a dollar not spent on other warfighting priorities. Our operational energy strategy addresses both the increasing costs of energy and our need to use it more efficiently on the battlefield.
The strategy is premised on the notion that a new generation of military technologies that use and store energy more efficiently will only emerge if we change how we do business—especially in acquisition.
We are building a future force that is more capable, but also requires more energy – much more in some cases. So in addition to traditional performance parameters, such as speed, range, and payload, we will now consider system energy performance parameters in the requirements and acquisition process.
Integrating fuel efficiency criteria and the Fully Burdened Cost of Energy during the “Analysis of Alternatives” phase of all major defense acquisition programs will not only ensure we give the warfighter the speed, range and power they require. It will also help us manage the lifecycle costs of our systems, the energy footprint of our deployed forces, and the associated costs—both human and financial—of moving fuel into a theater of war.
The Marines have taken a small first step this year when they used “system energy performance parameters” in the development of a new surveillance system. And the Army and Air Force have a number of developmental programs that prioritize energy considerations, including fuel-saving turbine engines and more efficient ground vehicle.
Our push for highly efficient systems also extends to the individual soldier. Over the past decade, our ground forces increased their use of radios by 250% and their use of information technology by 300%. As a result, the demand for batteries has nearly doubled. Today, soldiers on a 72 hour patrol in Afghanistan carries almost 20 pounds of batteries. All this extra gear means more capable forces, but it increases our reliance on energy in theater. In Afghanistan, we are finding that clean energy technology is one way to lighten the load and give our troops more agility.
In January, the Iron Rangers of the 1-16 Infantry Battalion deployed to Afghanistan with a suite of advanced power and energy capabilities, including better batteries, solar power rechargers, and propane fuel cells, that can be refilled with fuel purchased locally.
I am also proud to announce that just last Friday, a one mega-watt microgrid project at Bagram Air Base began operating. A major source of inefficiency in theater are daisy-chains of fuel-hogging generators at forward operating bases. Rather than efficiently distributing right-sized generators across a FOB, everyone often brings their own, resulting in tremendous overcapacity and waste. The microgrid project at Bagram will replace 22 existing generators with four energy efficient ones, yielded a 30% savings in fuel.
Operations in theater are not the only opportunity for energy innovation. I also want to focus on another side of our business that is so important–our military installations. The Department of Defense is arguably the world’s biggest owner of buildings. We are responsible for over 300,000 structures and 2.2 billion square feet of space.
This is three times the footprint of Walmart, one of the largest private sector property owners. And ten times the amount of property managed by the General Services Administration for the rest of government.
Energy used by facilities is important to the Department for two key reasons. The first is mission assurance. Our installations here at home support combat operations more directly than ever before. From domestic bases, we perform intelligence analysis, deploy long range bombers, and even pilot UAVs.
Our bases meet 99% of their power needs from the same civilian electric grids that service your home—a grid that is vulnerable to disruption. This vulnerability highlights the importance of the fuel cell backup systems we are installing with DOE’s help.
The second reason energy used by facilities is important to the Department is cost. We spend $4 billon a year buying energy for our facilities. Our strategy must lower our energy bills while improving the energy security of our installations. And that is where all of you come in.
You have been picking what Secretary Chu calls “the fruit laying on the ground,” by retrofitting existing buildings with improved lighting, high efficiency HVAC systems, and double-pane windows. And you are transforming the roofs of our buildings into a vast platform for renewable energy. For example, in Hawaii, the 6,000 units of privatized Army family housing feature rooftop photovoltaic solar panels, making it the largest residential photovoltaic project in the world.
But an even greater opportunity lurks here: the ability to use our installations as a proving ground for next-generation energy technologies. We believe these technologies can reduce the energy demand at DoD facilities by a dramatic amount—up to 50 percent in existing buildings and 70 percent in new construction.
DoD is the ultimate test bed.
Whether it was advancing nuclear power in the 1960s, helping invent the internet in the 1970s, or developing microelectronics and high performance computing in the 1980s and 1990s, the Department has a proven track record of leveraging our R&D funds and buying power to seed our new industries.
Especially in facilities, where the buildings and systems we use are the same as in commercial industry, any innovations we achieve in-house can directly transfer to the rest of the economy. And because of our size and ability to serve as a sophisticated first user and early customer, the military can jump-start the broader commercial adoption of innovative energy technologies.
Our Installation Energy Test Bed program aims to do just this. Some of the technologies we are demonstrating are simple, like advanced lighting systems that calibrate their output to the amount of available daylight and use occupancy sensors to turn lights on-and-off. Others are more complex, such as the energy management system we are testing at Great Lakes Naval Station, which deploys distributed sensors to optimize performance on a continuous basis.
We are also demonstrating new micro-grid technology at Twenty Nine Palms, a Marine base in the Mojave Desert. There, a system of self-generated electricity and intelligent controls can be operated independently if the commercial grid goes down.
Micro-grids improve energy efficiency, make it easier to incorporate solar and wind power, and ensure that power can be directed to facilities that need it most. Most importantly, they reduce the vulnerability of our power supplies to disruption.
The response from industry to our Test Bed program has been dramatic: our latest solicitation generated 600 proposals for technology demonstration projects. Many of the proposals are very high in quality. And we are going to fund as many as we can.
Finally, I want to note a very different kind of achievement by the Department of Defense in the energy arena. In the past, the Department has often slowed or impeded private energy projects for fear that a wind farm or a solar collector could interfere with military testing or training.
To make our review process more user-friendly for developers, we are establishing a DoD Energy Siting Clearinghouse. This clearinghouse will serve as a single point of contact, both within the Department and between us and our partners in industry and local government.
Based on the work of the clearinghouse, the Department announced last week that it had approved 229 of 249 renewable energy projects being proposed in 35 states. These projects represent 10 Gigawatts of renewable energy generation capacity in wind energy alone.
Our action removes a major stumbling block for developers who are trying to attract financing, showing the Department’s commitment to supporting the President’s vision for energy future without compromising our national security.
Let me close on a hopeful note.
Change—in our use of energy, just as in anything else—is difficult. It took former Congresswomen Jane Harman months to advance one of the most common sense ideas in this field: higher efficiency standards for incandescent light bulbs.
Her bright idea for Americans to save both money and energy may have been common sense. But as she says, beltway politics is a lot like those inefficient incandescent light bulbs themselves—90% heat, and only 10% light.
With energy supplies tightening, and costs increasing, we have no choice but to make its efficient operational use a core part of fighting and winning the nation’s wars. The people who can do just that are right here in this room.
And in addition to all of you, we have a President who has put energy high on the agenda. We have a Secretary who has a strong environmental record. And we have strategic environment that demands careful stewardship of energy on the battlefield. For the first time, we also have a Defense Energy Security Caucus in Congress.
This does not mean the energy revolution we are trying to foster will come easily. But it does mean we have the winds of change at our back.