Operational energy (OE) is a buzzword in the halls of Washington for how new, improved and sometimes alternative energy and power solutions can be researched, tested, and ultimately deployed to make the warfighter more effective and efficient. While the US has put considerable resources and effort behind OE other nations are doing their part as well. At NATO headquarters in Brussels, the concept is referred to as Smart Energy and has its own Smart Energy Team (SENT) which was set up by NATO’s Emerging Security Challenges Division (ESCD). The team is comprised of a group of experts from six Allied and two Partner countries. SENT's main tasks are to identify the best existing 'smart energy' solutions, and to provide recommendations for improving NATO’s standards and best practices. IAGS, publisher of the Journal of Energy Security, maintains an observer status to the SENT and participates in the non-classified sessions of SENT meetings held in Brussels. As equally important as these developments are is the fact that the North Atlantic Council, NATO’s highest political body, approved the addition of the new Energy Security Center of Excellence in November 2012 at which OE research, discussion, and collaboration serve a key role in its core mission. On the R&D front this is lead by NATO’s Science and Technology Organization and contributed to by thousands of engineers, scientists from disciplines spanning the natural sciences to physical sciences, and other experts to move the OE process forward.
Operational energy in practice may be a nascent development but the needs for it are not. Fuel requirements during wartime have been a strategic concern for nations for over a century. During World War II, Japan’s retrofitting of its navy to run on coal in response to the American blockade, Germany’s push towards Baku to control the birthplace of the Soviet Union’s oil industry are but two examples of energy’s prominence in strategic operations and objectives over the last century. In Afghanistan, 70% of the logistics burden borne by the US military has been dedicated to moving fuel and water around. Future operations, given the landscape of uncertainty as to where and under what conditions conflict will occur, places an even greater responsibility on defense and military establishments to think through the energy burden beginning with defense planning, plowing through OE R&D, testing, and deployment and ending with how to effectively [and efficiently] clean-up, dispose of waste, and repatriate tons of equipment from a conflict zone. Add to this global environmental concerns, operational considerations by some nations on targeting access to strategic transport corridors (and the commodities that transit them) that impact on military strategies, shrinking defense budgets and the role of energy in military operations becomes a fire-storm on how best to win the next fight.
In the United States, the US Air Force deemed October Energy [Awareness] Month as has the US Army, Navy and Marine Corps. Awareness raising on how the different services are addressing operational energy as well as how military personnel can themselves contribute to energy savings for improved operational effectiveness and straight forward energy efficiency through behavioral change are but two of the reasons for the focus. From an Alliance standpoint, NATO’s Allied Command Transformation in Norfolk, Virginia is focusing on how OE can be streamlined into long term operations and strategy. And at NATO headquarters, in October the NATO Review –NATO’s flagship media outlet dedicates a good portion of its coverage to Smart Defense, of which Smart Energy, is a key component. So why the focus now on the nexus between improving military operational energy capabilities and lowering operational and security risks through the lens of energy and power?
Lessons learned: Afghanistan
The lessons of Afghanistan, of which there are many, provide a case in point. The logistical difficulties of moving fuel and power to where it is needed are enormous. Hundreds of lives have been lost in Afghanistan, and many more wounded (according to a US Army report in 2008 1 out of every 24 casualties in Afghanistan was tied to moving fuel and water). According to information drawn from NATO’s library guide, other statistics bring the OE challenges in Afghanistan into perspective. Among them,
• ISAF needs more than 4 million liters of fuel per day in Afghanistan.
• For each gallon of fuel to Afghanistan up to 4 gallons are consumed for transport.
• On average one soldier dies in every 24th fuel convoy of the US military in Afghanistan.
• Up to 1000 fuel convoys per year have been sent to bases in Afghanistan.
Three years ago, the US Department of Defense created the Office of the Assistant Secretary of Defense for Operational Energy at least in part in an attempt to focus and stop the blood-letting by US and ISAF forces in meeting their operational energy requirements. The office’s creation in 2010 came at a precarious time when budgets of all kinds, let alone budgets for military expenditures, had already been under pressure for years by the collapse of financial markets which lead to recession paralleled by skyrocketing prices for oil which peaked in July 2008. All of this came at a time when America was still deeply embedded both in Iraq and Afghanistan. In 2012 in the NATO Chicago Summit Declaration , Allied Heads of State and Government agreed that NATO [itself] should work “towards significantly improving the energy efficiency of our military forces” (paragraph 52).
So countries, like the US, and collective security organizations like NATO, have been mandated to act on operational energy; yet mandates are often ignored by the governments that declare them and through their attendant institutions through inaction. In the case of OE however this doesn’t seem to be the case. There is a small set of drivers behind OE R&D, testing, and deployment that help give some form to the current OE movement.
Drivers: Austerity, Current Operational Needs, and Future Uncertainties
Pressure from governments on their military institutions towards greater austerity and cost savings is a critical driver in the OE debate. Doing more with less, a common adage used in discussing Smart Defense, also applies to OE. Meeting current operational needs, through assisting the solider in being more effective in his/her mission, extending the time the solider can stay in the field without resupply, and gaining advantage through enhanced communications (power reliant) catalyzed and has sustained the drive to OE for the US and ISAF during combat operations in Afghanistan. However, this period is coming to an end and with it the shift from an ongoing, US and ISAF kinetic combat mission to training. With this change will come an even greater push towards austerity as the deployment of OE technologies will be drawn down and repatriated back home and in the immediate term the (real or perceived) need for OE reduced.
As the push for cost savings increase, in an era when NATO will have no ongoing combat operation after 2014, a second challenge is that while OE technologies may be strategically, tactically, and operationally performance efficient they may not necessarily be perceived as cost efficient as measured by traditional methodologies or metrics. In response, new metrics have been developed that put OE costs on a more equal footing with their traditional, and perhaps cheaper counterparts. Steps in this direction, from the development of Key Performance Indicators for consideration in system requirements or in developing a measurement for the Fully Burdened Cost of Energy go in the right direction and help level the playing field.
Where are we?
Instituting operational energy measures on a national basis let alone on a collective security basis is an incremental process. Further there has to be the political will to carry through on what at first may appear as consensus on the issue but which hides fissures between prospective partners themselves. On the first of these points, it is often not always entirely clear who within a Ministry of Defense, Department of Defense or even a particular service is responsible for OE research and development, program funding, and procurement and acquisition. Despite this obstacle, the initial challenge can be overcome but clearly transparency and communications need to be improved. Secondly, there needs to be enhanced public-private sector dialogue in order that private sector product and service providers understand the given priorities of a service or even national government. This isn’t a one-size fits all shop but needs to be nuanced by the clear identification and understanding of differences between nations and how service providers can practically go about approaching those with a check book. Third, there is a startling array of application, needs-driven sectors to be served. These include:
- building materials and installation technologies including portable HVAC systems
- Advanced fuel cell and battery systems for ground, air & space applications
- Further Performance metrics and measurements development
- Portable energy harvesting
- Biofuels and advanced “drop in” fuels
- Optimization of microgrids
- Energy integration in data-to-decision: Intelligent power management
- R&D in waste-to-energy conversions for FOBs
- Tactical renewable energy systems and networks
Whereas a country like the US may have its own priorities defined by an individual service, another country like Turkey, with Europe’s largest standing army, may have other priorities where operational energy is at play. What would help greatly, particularly within a NATO context, is to move OE further on as a strategic priority bolstered by the political will of its Members so that OE guidelines and standardization can be harnessed and developed based on NATO’s true strength of driving forward interoperability. This is much like creating a market for a product where competitors have to play by the same set of rules. There is nothing earth-shattering in this observation but simple, practical ideas rarely are.
Again on politics, it is recognized that different nations largely couch the OE challenge in different ways (beyond training and equipping) and these differences need to be bridged and respected. By way of example, the term energy security is often treated an anathema, not within a single nation, but among nations. Nations consider energy and power an issue of national sovereignty in short a no-go issue that is avoided because it can bleed into discussions, even with partners, into other areas nations consider sovereign such as foreign policy.
The politicalization of operational energy needs to avoid such a fate. Regardless of whether a given nation’s OE policy is driven by environmental concerns (Green Energy), Smart Energy (focused not only on cost efficiencies but on operational effectiveness) or Operational Energy (a clear focus on making the solider more effective) the fact is that these are all aspects of the same challenge: preparing for potential 21st century confrontations across a multitude of threat landscapes be it desert, arctic, island or sea-based scenarios where energy use, power generation, and fuels deployment will play a pivotal role in the outcome of a conflict.
Perhaps the biggest challenge to moving OE forward on a collective basis is the issue of trust that cannot be taken for granted even among like minded nations. Operational energy (driven by the need for interoperability) requires sharing, compromise, and a governable commitment to doing better together. This is easier said than done but is entirely realistic given that it is already happening albeit not as quickly as one might want in the field of Smart Defense; it is feasible in the domain of OE as well.
In 2012, the Methanol Institute, the Institute for the Analysis of Global Security and the U.S. Energy Security Council hosted the Methanol Policy Forum in Washington, D.C. bringing together industry leaders, energy policy experts, executive branch officials, Members of Congress, academics and the media to share information about methanol's potential as a liquid transportation fuel. Against the backdrop of the shale gas revolution and a resurgence of domestic methanol production, the second Washington Methanol Policy Forum will be held on March 18th, 2014, at the Hyatt Regency on Capitol Hill.
One of the least explored but increasingly important areas of critical energy infrastructure protection concerns offshore oil and gas installations. The international regulatory framework provides a number of countervailing measures that can be used by states to protect offshore installations and respond to attacks and security incidents involving these installations. Mikhail Kashubsky who is with the Centre for Customs and Excise Studies in Australia explores the international regulatory aspects of offshore installations security in the second part of a three-part series for the Journal of Energy Security.
Ambassador Gábor Iklódy, NATO Assistant Secretary General for Emerging Security Challenges
The Atlantic Alliance is at a historical watershed. The financial crisis is affecting Allied defence budgets in unprecedented ways. Shrinking defence budgets are threatening to compromise our ability to shape the strategic environment in line with our interests and values. If we do not adopt new ways of doing business, we will risk losing our military edge. Given the many threats and challenges of a globalized world, we simply cannot afford to let this happen.
Luckily, there are ways and means to help maintain NATO’s military competence. Enhancing the energy efficiency of our armed forces is one such area where major opportunities are waiting to be exploited. New energy-saving technologies, ranging from smart grids in deployable base camps to fuel cells and Light Emitting Diodes offer not only a reduction of fuel costs, but also enhance NATO’s operational effectiveness and reduces the risk for soldiers who protect supplies. At the same time, employing energy-saving technologies and procedures helps demonstrating environmental awareness.
This special issue of the “Journal of Energy Security” provides a sample of what NATO and industry are capable of if they embrace energy efficiency as a strategic objective. The collection of articles demonstrates the enormous potential inherent in new energy-saving approaches and procedures. Above all, they demonstrate that the goals of saving money, enhancing our military effectiveness, and saving lives, are not mutually exclusive, but can be achieved together. If NATO acts in line with this logic, it can confidently meet the challenges of an age of austerity.
Whether it’s called ‘Green Energy’, ‘Smart Energy’, or ‘Operational Energy’ NATO Member and Partner States have learned a lot about the implications of rising power and energy demands in military operations and how emerging technologies can make the warfighter more effective and efficient. This complex endeavor ranges across a wide range of fields from battery technologies, electric vehicles, and improving the built environment for the solider just to mention a few working examples. This article discusses the role of the NATO Science and Technology Organization in leading this effort, what they are looking at today, in providing scientific and technological leadership for tomorrow.
NATO forces have advanced operational energy capabilities over the past several years including development of alternative and more efficient energy technologies, and basic energy system analysis. Solar panels, insulated shelters, more efficient generators and air conditioners, and electrical power networks all have been recognized for reducing energy logistic demand where deployed. However, mitigating required fuel delivery requirements is only part of the operational energy opportunity, especially as energy contributions to operational capability continue to expand far beyond the traditional mobility focus. Operational technologies such as sensing, computing, communicating and networking depend, in turn, on such energy attributes as reliability, quality, density, flexibility, and interoperability for their effectiveness. We therefore must better define those dependencies, and develop effective models to balance the multitude of energy attributes and their impacts, if we seek to achieve the greatest net operational benefit – the ultimate goal of “energy-informed operations.”
Within the next six months, Algeria will be facing its next round of presidential elections. The stakes are high for incumbent President Abdelaziz Bouteflika and even higher for this hydrocarbon nation. The country's energy future is dominated by Sonatrach its national energy champion that has struggled in recent years to keep its oil and gas flowing at rates that can sustain economic growth, exports, and steadily increasing domestic demand for natural gas that powers Algeria's electricity grid. 2013 has not been kind to this North African country, surrounded by instabilities in Mali, Tunisia, Libya and further afield in Egypt. First there was the attack at the In Amenas gas facility that caused the international community to pause and ponder, however briefly, security in this vast state. But fundamental changes in energy markets are also challenging the country to develop its own significant reserves of shale gas, tight oil, and above all sunshine which if captured could secure Algeria's energy future for decades to come.
Turkmenistan, lead by its ever eager President Berdymukhamedov, forged ahead in October with its plans to put itself at the center of the energy security debate in Central Asia. It first hosted a meeting with the OSCE in the capitol city Ashgabat as another step to put itself front and center on security discussions within a UN context. Turkmenistan’s Deputy Prime Minister Rashid Meredov in September proposed not one but five meetings in 2014 to cover energy (and other issues like transport) explaining, “[energy security] is one of the most important components of stable world economy, its protection against distortions and disruptions," and further proposed the establishment of a new UN "universal international law tool kit" to form the legal basis for the international supplies of energy resources with a corresponding UN structure to enforce implementation of these provisions. Realistically the proposed efforts can also be seen as a flanking maneuver to ward off Russia’s ongoing influence in the republic and as a push-back to growing Chinese influence over its gas resources as contributor Anthony Rinna details in the following article.
When energy forecasters talk about future energy production and prices, people listen, especially if the modelers come from or represent vaunted organizations such as the International Energy Agency or the US Energy Information Administration. Although these are learned, serious people, relying on their long term forecasts - projections going out 10 or 20 years - is largely a mistake because they are almost always wrong, as suggested by a comparison of the Department of Energy’s 2005 forecasts to the actual outcomes. The piece offers explanations for why such forecasts are mistaken and explores the implications of society’s over-reliance on them.
Militarizing oil interests and assets is not something that oil companies openly attest or subscribe to based on their interests in maintaining their public, reputational value. However actions speak larger than words. The government of Ecuador has an interesting relationship with foreign oil companies as JES contributor Nicolai Due-Gundersen points out in his analysis of Iraq’s oil law and the potential inroads this law could provide to private military contractors (PMCs) in continuing their security activities in Iraq. In the meantime, Iraq has created an ‘oil police’ that Due-Gundersen maintains is the key to limiting the latitude of PMCs working in the Iraqi oil sector.
The Republic of Cyprus’ aspirations for a gas bonanza presently hang with pending developments of their Aphrodite natural gas field and the exploratory drilling that will take place there shortly. However the unknowns in the development path Cypriot gas will take to bring it ultimately to market appear as complex as the geopolitics of the region. Professor Theodoros Tsakiris deconstructs the landscape for us with a view towards grounding the reader with a solid understanding of what ultimately is at stake for Cyprus, the eastern Mediterranean and the European Union in building a more robust and secure energy supply infrastructure.
Providing safe and reliable electricity while incorporating generated power from renewable and sustainable resources is a major challenge for the world’s transmission operators. Recently the JES had an opportunity to exchange some questions and answers with Mr. Terry Boston, president of GO15, an association representing 70% of delivered power worldwide. Mr. Boston, during his day-job, has been CEO of PJM Interconnection, a regional transmission organization that controls the movement of wholesale electricity in all or part of 13 US states in addition to the District of Columbia, for the past four years. He is a US vice president of the International Council of Large Electric Systems and vice president of the Consortium for Electric Reliability Technology Solutions.
One of the least explored but increasingly important areas of critical energy infrastructure protection concerns offshore oil and gas installations. The threat environment encompasses potential attacks from terrorists and other disgruntled groups to sabotage carried out by employees of oil and gas companies themselves. Mikhail Kashubsky who is with the Centre for Customs and Excise Studies in Australia explores the threat environment for these installations in the first past of a three-part series for the Journal of Energy Security.
Paradigm shifts in thinking and innovation may be brought about by design or disaster; remember the adage ‘disaster is the mother of invention.’ In this article, contributor Michael Hallett calls on us to re-examine the panoply of threats and challenges to national electricity grids (the paradigm) and to make a pro-active paradigm shift today before disaster happens. Specifically the paradigm shift Hallett asks the reader to consider is the utility of parallel compressed natural gas (CNG) networks-in a world increasingly awash in gas-for bolstering electricity supply security that concurrently could keep the lights on and provide fuel diversity in transportation markets.
Like a horse race, the thoroughbred first out of the gate isn’t necessarily the first to cross the finish line. So it goes with the Israeli government’s treatment in the development of its Eastern Mediterranean natural gas fields that have turned a thoroughbred into a nag. The government has vacillated on issues such as how much of Israeli reserves can be exported, and how much to tax developed product so much so that it has dried up inward forward investment in what could be a potential game changer for resource import-dependent Israel. It’s anyone’s guess where things are headed but what’s at stake for Israel, foreign investors, and those who pine for new sources of natural gas in Europe and beyond are covered in the following article.
Recent development in the U.S. of technologies for extracting oil and natural gas from shale formations are changing the global energy landscape. Thanks to hydraulic fracturing or fracking U.S. oil imports have dropped to the lowest level in 20 years and the U.S. is well on its way to become a major player in the global market for liquefied natural gas (LNG). But this so called energy revolution has been received in China with perplexity and trepidation. Many Chinese officials believe that U.S. self-sufficiency in energy, should it come to pass, would weaken U.S. interest in the Persian Gulf, leading to a military withdrawal from the region. This could in turn compromise China’s energy security. Others see a U.S. energy transition as an American plot to de-industrialize China by luring industrial production from the mainland to the U.S., where natural gas prices are cheap.
None of these concerns are grounded in reality. Chinese need not fear the new energy architecture. In fact, they are only likely to benefit from it.
It is time to put to rest the myth that U.S. presence in the Persian Gulf is tied to its dependence on imports of the region's oil. It isn’t. In fact, this has never been the case. Today only nine percent of U.S. oil consumption originates from the Middle East. The highest it has ever been was fifteen percent. While the U.S. is not dependent on the Gulf for the physical supply of oil, it is dependent on the region for price stability. Oil is a global commodity with global price so when the region becomes unstable and oil prices spike, the U.S. is impacted by the hike just like any other nation regardless of how much of its crude comes from the Persian Gulf.
Because the U.S. economy is highly sensitive to oil shocks – Almost every recession since the Second World War was preceded by a spike in oil prices – it would not withdraw from the Persian Gulf even if its imports from the region dropped to zero. U.S. interests in the tumultuous Middle East are complex and transcend oil. Just like China Washington desires Middle East stability, and it will therefore continue to be the guarantor of the region’s security for many years to come.
Cheap natural gas will surely revive America’s industrial sector, creating new jobs and investment opportunities. In fact, some global manufacturers have already announced their plans to set up plants in the U.S. to take advantage of its cheap energy. But this should not be viewed as a threat to ...
"The coming American oil boom is bad news for Saudi Arabia. How the kingdom responds could very well determine if it survives. Current trends in the global energy market don't look good for Saudi Arabia. First, the International Energy Agency projected in November 2012 that the United States will surpass the Gulf petrogiant as the world's top energy producer by 2020. Then, last week, it revealed that North America, buoyed by the rapid development of its unconventional oil industry, is set to dominate global oil production over the next five years. These unforeseen developments not only represent a blow to Saudi Arabia's prestige but also a potential threat to the country's long term economic well-being -- particularly in the post-Arab Spring era of elevated per-capita government spending. Saudi Arabia's response, to drill or not to drill, will also have major repercussions for a world economy which remains tied to the oil drum.
"But if the kingdom's outlook is decidedly bleak, its official response has been muddled. In an April 25 speech at Harvard University, Prince Turki al-Faisal, a former head of Saudi Arabia's top intelligence agency and the current chairman of the King Faisal Center for Research and Islamic Studies, announced that the kingdom is set to increase its total production capacity from 12.5 million barrels per day (mbd) today to 15 mbd by 2020, an amount that would easily make it the world's top oil producer once again. But five days later, in a speech at the Center for Strategic and International Studies in Washington, DC, Saudi Arabian Minister of Petroleum and Mineral Resources Ali al-Naimi conveyed an entirely different message, rejecting Turki's statement out of hand. "We don't see anything like that, even by 2030 or 2040," he said. "We really don't need to even think about 15 million.""
So what are we to make of this 2.5 mbd discrepancy? To find out read the rest of Dr. Gal Luft's article in Foreign Policy .
The future of natural gas in Europe is a conundrum. While natural gas demand is soaring in the US and across Asia, demand has actually declined in Europe. Will a turn-away from natural gas dampen the EU's appetite for modernizing its critical energy infrastructure? Is Europe turning to coal to displace gas in power generation and if so is the European Carbon Market actually contributing to this fuel switch? First time contributor to the Journal of Energy Security, Jozef Badida, examines Europe's gas future within this complex context.
Germany has slowly but surely pursued a policy of energiewende (energy turn or transformation) since the 1980s, when the plan to move away from fossil fuels and toward renewable energy sources was first conceived. The plan was made policy in 2000 with the Renewable Energy Act, and by 2010 40% of Germany’s power generation came from either renewable (17%) or from nuclear energy (23%) and the plan to cut greenhouse gas emissions by 40% in 2020 and 80% by 2050 seemed a realistic goal. In 2011, however, in response to the post-tsunami nuclear disaster in Fukushima, Japan, German Chancellor Angela Merkel announced that eight of Germany’s oldest nuclear plants would be shut down immediately and all of the remaining plants would be decommissioned by 2022. Now, Germany finds itself pursuing ambitious clean energy goals without its biggest source of low-carbon emission energy.
ITER, with its nuclear license granted by the French nuclear authorities, with its headquarters inaugurated and over 80% of its procurements signed off on, is a nuclear fusion project well underway. In a few weeks from now the first test convoy for the heavy-lifts and exceptional size components which are currently being manufactured around the world will roll from the industrial port of Fos-sur Mer near Marseille, France to the ITER construction site in Cadarache, France some 80 kilometers further north. Here, the footprint of the largest fusion machine ever built is already clearly visible and some 3000 personnel will arrive on site in the course of then next months to erect the infrastructure that is necessary to conduct one of the most ambitious scientific endeavors mankind has ever undertaken.
The importance of what we term OPEC's "break even price of oil" was a key message in our recent book, Petropoly: the Collapse of America's Energy Security Paradigm. The break even price is the price of oil required to balance the budget of Saudi Arabia and other OPEC countries.
If you've read Petropoly you were thus not surprised by recent reporting that the price of oil Saudi Arabia needs to balance its national budget is $94 per barrel, while Iran requires $125, nor by comments by Ali Aissaoui of the Arab Petroleum Investments Corp that "OPEC will definitely need to cut production to shore up prices as they can't produce at prices close to their break-even level."
As we explain in Petropoly, when non-OPEC countries drill more, if the slack isn't taken up by developing world growth in consumption, OPEC drills less in order to tighten the supply/demand relationship and send prices back up, and for the same reason when we use less, OPEC also drills less.
America is facing an energy-security paradox. Our domestic oil production is on the rise; the cars that roll onto our roads are more efficient than ever, and net oil imports are at their lowest level since the days when President George Herbert Walker Bush lived in the White House. Yet none of this has reined in the price of gasoline. This runs counter to U.S. conventional wisdom over the past forty years, touted by every president since Richard Nixon. Read more of Gal Luft's article on the energy security paradox.
How oil is priced and who pays what price has long been a matter of concern to consumers around the world. Historically, Asian oil importers have believed that they pay an 'Asian price premium' for oil over the price consumers in Europe and North America pay for the same commodity. This article explores whether an Asian premium is in fact a reality or whether price differentials between what consumers of Middle Eastern oil pay in Asia as compared to other regions are attributable to other factors. This outstanding article lifts the lid on how oil is priced on international markets and provides a studied analysis for explaining regional oil price differentials using time series analysis.
"Remarkable collection spanning geopolitics, economy and technology. This timely and comprehensive volume is a one stop shop for anyone interested in one of the most important issues in international relations."
U.S. Senator Richard G. Lugar
"A small masterpiece -- right on the money both strategically and technically, witty, far-sighted, and barbeques a number of sacred cows. Absolutely do not miss this."
R. James Woolsey, Former CIA Director
"The book is going to become the Bible for everyone who is serious about energy and national security."
Robert C. McFarlane, Former U.S. National Security Advisor
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