Insights

Building a Stronger Navy through Fuel Efficiency

May 3, 2016

Green FleetEvery operational mission depends on fuel. When fuel is difficult to access, it creates vulnerability for our forces. If military operations are more energy efficient, commanders have more operational flexibility and can even save the lives of our support personnel. Our military is working to become more creative with fuel choices.

Being able to analyze the impact of fuel choices on operations and budgets is an LMI specialty. We know the technical, logistical, and political challenges. This expertise is essential to evaluate all fuel options, including biofuels.

Today, we must get more strategic about military fuel use—to make a more effective force, save funds, and do our part to address climate change.

One of these strategic initiatives began in 2009, when Secretary of the Navy Ray Mabus announced a vision for a Great Green Fleet. This fleet sailed earlier this year with a blend of biofuel (10 percent) and conventional fuels (90 percent).[1] Furthermore, Secretary Mabus established a goal for the Navy to meet 50 percent of its annual energy needs with renewable energy by 2020.

Saving Energy through Military Buildings

At the end of last year, the Navy successfully achieved its target of one gigawatt of renewable energy production for land-based operations. One gigawatt worth of renewable energy projects are either under contract or undergoing acquisition planning.

In working with many federal agencies on energy efficiency and renewable energy projects, LMI published A Federal Leaders Guide to Energy Efficiency and Renewable Energy. The first step is to reduce demand. A kilowatt saved is a kilowatt you don’t have to produce. We advise leaders to get baseline data and figure out where they can reduce demand. Our book goes through that process, with case studies and examples of opportunities for financing these types of projects.

Analyzing the Costs of Biofuels

As previously mentioned, earlier this year the Navy sailed the Great Green Fleet with vessels powered by conventional fuel mixed with biofuels.[2]

One challenge with biofuels is cost. Biofuels are not produced in large enough quantities yet so that the fuels costs are on par with conventional fuel. The government pays a premium for this greener fuel.

In 2013, LMI analyzed the opportunities and costs of alternative fuels for the Department of Defense. We looked at market conditions (availability) and estimated the increased costs of biofuels. Our calculations predicted a premium (up to $1 billion annually for all of DoD) would need to be paid by the Navy and DoD while a robust biofuels market was established. In the past three years, our predicted numbers have been mostly confirmed.

In 2014, the Navy pooled funds with the Departments of Energy and Agriculture to help build the nation’s biofuel production capacity. They funded construction of biorefineries.[3] This was a step towards bringing down the costs of renewable energy, but only a start. To put it in perspective, the investment from all three was a little over $500 million, equivalent to less than 1/10 percent of the total Department of Defense fuel budget.

Saving Fuel Costs by Studying How Fuel Is Used

Another reason why fuel is more expensive for the military is that military fuel specifications are different than commercial fuel specifications. The military needs more “specialized” fuel to ensure performance in austere or extreme environments. That has to be built-in, inspected, and managed. For example, when flying at altitude at Mach 1+, fuel acts differently and needs thorough testing.

Our research has focused on identifying opportunities where the military could use commercial-grade fuel, such as operations in non-extreme environments. It may not sound like much, but with nearly five billion gallons purchased per year, saving a couple of cents per gallon of fuel adds up.

 

[1] http://www.stripes.com/news/pacific/navy-launching-first-great-green-fleet-next-week-1.388769.

[2] http://www.stripes.com/news/pacific/navy-launching-first-great-green-fleet-next-week-1.388769.

[3] http://www.energy.gov/articles/departments-navy-energy-and-agriculture-invest-construction-three-biorefineries-produce.

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