The Pentagon Fights to Kick Its Oil Habit

Every year, final debate over the defense authorization bill is dominated by a few controversial topics, most recently terrorist detainees and gays in the military. This year, one of the biggest fights is shaping up over alternative energy.

As the country’s — and perhaps even the world’s — single largest consumer of petroleum, the Defense Department considers it a national-security priority and an operational necessity to diversify the types of fuel it uses in its aircraft, ships, tanks and trucks. But alternative-energy sources, most notably biofuels, cost significantly more than the gasoline and oil that the military now pays more than $17 billion a year to power its equipment and installations around the world.

Republicans on Capitol Hill are balking at this investment, saying they don’t want limited defense dollars spent on anything they don’t consider a necessity. Expensive alternative energy appears to be topping their list.

GOP lawmakers managed to insert language in both the House and Senate versions of the fiscal 2013 defense authorization bill restricting the Pentagon’s ability to buy alternative energy. Late last month, those provisions were removed from the Senate bill by amendments on the floor. Conferees on the bill hope to iron out their differences this week or next, but the debate over alternative energy, which percolated during the presidential campaign, will undoubtedly spill over into the next Congress.

The question comes down to whether the military, which has long been a leader in technological innovation, including more efficient batteries and solar power, can afford to gamble on alternative-energy technology that might not work out.

Many Republicans want an assured return on investment and are pushing to spend the money instead on what they consider high-priority measures, such as buying more ships and aircraft. Others, however, maintain that the military, even in a time of budget constraints, cannot focus myopically on today’s needs.

“You always have to spend money that isn’t necessary if you’re in the national-security business,” says David Berteau, an analyst at the Center for Strategic and International Studies, a prominent nonpartisan think tank in Washington. “If you’re only looking at today, you’re never spending money the right way.”

For the Pentagon, the issue isn’t primarily about budget or environmental impact. It is, first and foremost, about strategic needs.

Developing alternatives to traditional fossil fuels, officials say, is a hedge against potential supply disruptions and future price volatility in the petroleum market. The Defense Department cut its petroleum use by 4 percent from 2005 to 2011, but its spending on petroleum nearly quadrupled, driven by price increases.

In addition, military officials say, developing alternative-energy sources, coupled with more efficient energy use, may one day help cut down on the military’s expansive and vulnerable fuel-supply lines, which have been a primary target of insurgents and other enemies in Iraq and Afghanistan.

“We’re all in,” Joint Chiefs of Staff Chairman Gen. Martin E. Dempsey told the Senate Armed Services Committee in February, adding that alternative energy could save lives and make the military more agile.

Leading the charge for Republicans in the Senate is their senior member on Environment and Public Works, James M. Inhofe of Oklahoma. He has argued that the Energy Department, not the military, should take the lead on developing alternative energy. Defense accounts for about 80 percent of the government’s energy usage but only 1 percent of all U.S. energy consumption. So why, Republicans ask, should the military foot the bill to develop these fuels for everybody else?

While the fight appears to pit two longtime allies against each other — pro-military members of Congress and the military itself — Republicans say they see it more as a political battle, with the White House trying to advance a “green” agenda on the military’s dime.

Military leaders “haven’t jumped on. They’re doing what they’re told,” says Inhofe, who is expected to be the top Republican on the Senate Armed Services Committee in the next Congress.

Senate Maneuvers

During the Senate Armed Services Committee’s closed-door markupof the fiscal 2013 defense authorization bill in May, Michigan Democrat Carl Levin, the chairman, suffered a rare defeat when his colleagues adopted two Republican amendments to limit the Pentagon’s ability to produce and procure alternative-fuels. The House had also voted that month to limit the use of such fuels.

The Pentagon complained and actively worked to remove the provisions from the Senate bill. Late last month, in a strong 62-37 vote, Democrats managed to kill the provision that would have blocked the Defense Department from buying alternative fuels — which cost more than traditional fossil fuels — except for testing purposes.

“Energy security is national security, and this is exactly the kind of investment our military should be making,” Colorado Democrat Mark Udall argued on the Senate floor.

The other provision Democrats had removed, on a 54-41 vote, would have barred Defense from awarding any contracts to plan, design or construct biofuels refineries.

That provision would have sidelined one of the most controversial Defense energy initiatives: a Navy proposal to invest $170 million to jump-start an advanced biofuels industry in the United States.

The Navy has teamed up with the Energy and Agriculture departments and the energy industry to develop “drop in” biofuels that mimic hydrocarbons of oil and gasoline and can be used interchangeably. The Navy’s involvement is aimed at guaranteeing enough demand to attract investors and reduce the financial risk. The House version of the bill, passed in May, doesn’t mention the program.

Military and Defense officials, who are usually reluctant to comment on pending legislation, have been working for months to protect their alternative-energy investments. Indeed, Udall, who sponsored the amendment striking the alternative-fuel restriction, said he took the step “in concert with our military officials and leadership.”

In a July 13 letter to Udall, a senior Navy official warned that the language in the committee-passed bill could “restrict investments that would address tactical and operational needs for our Navy.”

“It would make price the sole factor in determining whether the department of Defense may produce or purchase an alternative fuel, without any consideration of military capability, mission or circumstances,” wrote Vice Adm. Philip Hart Cullom, deputy chief of naval operations and logistics.

The biofuels refinery provision, meanwhile, would prevent the Navy from “implementing plans to diversify fuel sources and protect the budget from the risk of drastic spikes in petroleum prices,” Cullom added.

Meanwhile, Sharon E. Burke, assistant secretary of Defense for operational energy plans and programs, took to Twitter last week to celebrate the Senate’s approval of the two Democratic amendments. “Thank you to the #Senate for ensuring that our military can be ready for any energy future,” she wrote after the Senate passed the authorization measure.

Although the biofuels refinery issue has been resolved, at least for now, because the House bill has no comparable language, the broader alternative-energy provision will almost certainly be a hot topic during the conference on the authorization measure. For his part, Inhofe says he thinks Republicans will prevail in conference and put the alternative-energy restrictions back into the final version of the bill.

However, compromise language watering down the House provision may be the more likely outcome. One option could be to require the Defense Department to report to Congress on its long-term plan for alternative fuels and on the rationale behind the spending.

‘Energy Experimentations’

Regardless of what happens in conference, the Defense Department’s plans to develop and procure alternative-energy sources will continue to be scrutinized by Republicans in the next Congress. Given Inhofe’s years as both chairman and ranking member of the Environment and Public Works Committee, he will make energy a key issue for Armed Services next year, saying he wants to ensure that defense dollars are not “drained off for energy experimentations.”

In the House, Peter J. Visclosky of Indiana, who has gained experience in energy issues as the senior Democrat on the Energy and Water Appropriations Subcommittee, is expected to have a comparable role on the Defense Appropriations Subcommittee when Norm Dicks of Washington retires at the end of this Congress.

The subcommittee, under the leadership of Florida Republican C.W. Bill Young, has previously supported Pentagon energy plans, even trying to increase spending for the Navy’s alternative-energy program for fiscal 2013. But it has been wary of the more controversial Navy effort to, in effect, subsidize the fledgling biofuels industry.

Young is seeking a waiver from his party’s term limits in order to retain his chairmanship. If he doesn’t receive one, Rep. Rodney Frelinghuysen of New Jersey, Visclosky’s Republican counterpart on the Energy and Water Subcommittee, could take the gavel. He, too, is considered to be more moderate on energy issues than Inhofe, which could lead to differences in Republican talking points on the issue.

The Pentagon, for its part, is continuing to make investments in so-called operational-energy initiatives — stronger batteries and better engines, for example — 90 percent of which are aimed at energy efficiency, says Lt. Col. Melinda Morgan, a Pentagon spokeswoman.

The Defense Department has requested more than $1.4 billion in the current fiscal year for these initiatives.

“That is first and foremost because it gives us a more effective military, but it can also lower risk to our forces and save money,” Morgan wrote in an email response to questions.

The Pentagon’s efforts include more fuel-stingy propulsion systems for combat vehicles, ships and aircraft, which would reduce the staffing and costs required to transport and protect fuel-supply lines. Much of the department’s investments in alternative fuels is focused on ensuring that military equipment can operate on a wide range of fuels, with only a small investment in the actual production of the fuels, Morgan says.

Blending at the Pump

The Air Force, which accounts for more than half of all Defense Department fuel use, is certifying that all of its aircraft, infrastructure and aerospace ground equipment can use a blend of petroleum and alternative fuels .

“As the processing costs for these fuels come down, the Air Force will stand ready to purchase and utilize them in our current and future systems,” Air Force spokeswoman Tonya Racasner wrote in an email response to questions.

Critics, however, argue that the Pentagon is trying to drive the energy market to technology that is more expensive.

“Before there will be bipartisan support on this issue, DoD has to find a way to make biofuels cost-competitive with traditional fossil fuels,” says Jeffrey Green, a former House Armed Services staff member who is now a lobbyist working on energy and other issues for several U.S. manufacturers. “Until that happens,” he says, the Defense Department “will spend a lot of time and effort that is going to cost us more in the short term, and that’s a tough sell in this fiscal environment.”

But with operations overseas winding down after two protracted wars that relied heavily on traditional fossil fuels to transport troops and equipment into and around the battlefield, Berteau says this may be the time to invest in biofuels and other alternative-energy sources.

“During war, you can’t afford the luxury of longer-term experimentation,” Berteau says. “This is the time to be looking at those investments and evaluating them for the best-possible benefit for DoD.”

It’s the wrong time, Berteau added, for Congress to be cutting off the funding.

Frank Oliveri contributed to this story.