Operational Energy: fending off a sea of troubles

By Eric Watkins

LOS ANGELES, Mar. 20 – Winston Churchill knew what he was doing when he took the decision to transform Britain’s Royal Navy from a coal-burning fleet to an oil-burning force in the early 1900s. But he also knew the risks.

“The advantages conferred by liquid fuel were inestimable,” he said, knowing that oil had double the thermal content of coal so that boilers could be smaller and ships could travel twice as far.

Then, too, oil enabled greater speed and burned with less smoke than coal so that the fleet would not reveal its presence as quickly. Oil also could be stored in tanks anywhere, allowing more efficient design of ships.

Oil could also be transferred through pipes without reliance on stokers, which reduced manning problems, and oil also enabled refueling at sea – something hard to imagine with coal.

Still, Churchill also knew that there was something about oil that would make it a hard sell with his defense chiefs. “To change the foundation of the navy from British coal to foreign oil was a formidable decision in itself,” he said.

VAST OIL TRUSTS

“The oil supplies of the world were in the hands of vast oil trusts under foreign control,” he said. “To commit the navy irrevocably to oil was indeed to take arms against a sea of troubles…”

Nearly a hundred years later, the U.S. Department of Defense has come to recognize the same risk in the use of oil that is under foreign control, and it has come to fight it with a new concept called Operational Energy.

“The newest area of focus for the DoD is energy – more specifically, renewable energy, and even more specifically, advanced biofuels,” said Raymond James analyst Pavel Molchanov in a note to investors this week.

“The DoD, however, is actually putting its money where its mouth is in terms of providing tangible support – not just rhetoric – for companies that could eventually be significant fuel suppliers for the armed forces,” Molchanov said.

STRAIT OF HORMUZ

“This comes at a time when geopolitical threats to oil supply abound – including, but by no means limited to, Iran’s threat to shut down the Strait of Hormuz,” he said, echoing an idea Churchill would have understood.

If anyone would know about Churchill’s sea of troubles, it would be the U.S. Navy, which reaches around the globe to every hotspot imaginable. It certainly has accepted the idea that energy is a strategic resource and that energy security is fundamental to its mission.

“From a strategic perspective, the objective is to reduce reliance on fossil fuels,” the Navy says. “Tactically, the objective is to use energy sources available on location and increase energy efficiency to reduce the volatility that is often associated with long fuel supply transport lines.”

As far as renewables go, the US Navy has a clear plan in mind: By 2020, 50% of its total energy consumption will come from alternative sources.

According to Molchanov, several firms are involved in the effort to step up production of biofuels for the Navy, including Solazyme, which produces algae-based oils, and Syntroleum, which produces biodiesel.

ORDERING BIOFUELS

In 2009, the Navy ordered 20,000 gallons of Solazyme’s HRF-76 Naval Distillate, the renewable equivalent of the Navy’s main shipboard fuel, and another 150,000 gallons a year later.

The June 2011 test flight of the MH-60S Seahawk helicopter, using a 50% biofuel blend, involved the first-ever military aircraft to fly with algae-based jet fuel.

Earlier this month, the Navy announced that the USS Ford successfully transited from the ship’s homeport in Everett, Wash., to San Diego, Calif., using “25,000 gallons of a 50/50 algae-derived, hydro-processed algal oil and petroleum F-76 blend in the ships LM 2500 gas turbines.”

THUMBS UP TO F-76

According to Richard Leung, Naval Sea Systems Command Navy Fuels engineering manager, the biofuel was virtually indistinguishable from ordinary marine diesel.

“The crew reported no change in their typical procedures when receiving, handling, or processing the biofuel, and said operational performance of the fuel system and gas turbine engines on the blend was almost identical to operations on traditional F-76,” Leung said.

For the U.S. Navy, the tide is turning. Its transition away from petroleum marks the end of an era, but one that makes sense – especially with demand rising and supplies concentrated in the hands of ever fewer producers.

Where’s the security in that?

Contact Eric Watkins at hippalus@yahoo.com

Advertisements

About Eric Watkins

Eric Watkins is a consultant specializing in oil diplomacy. A former journalist, Mr. Watkins's work has appeared in numerous leading publications including The Wall Street Journal, The Economist, The Financial Times, and specialist media such as Oil & Gas Journal, Middle East Economic Survey (MEES), and Lloyd's List.
This entry was posted in Uncategorized. Bookmark the permalink.

2 Responses to Operational Energy: fending off a sea of troubles

  1. Oudemos says:

    Interesting piece – yet if securing the Sea Lines of Communication to ensure adequate supplies of oil is a major purpose of the USN, the requirement for so many ships may be reduced if biofuels move across into the civilian economy as well.

    • oildiplomacy says:

      If biofuels do move across to the civilian economy, then one imperative for the USN might be removed or reduced. However, the sea lanes convey much more than oil or gas or coal or even uranium. They also carry much of the world’s commercial traffic for other other commodities as well as manufactured goods. International maritime commerce will always need commons that are safe for everybody, and that means the USN will remain in demand.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s