Trump Transition and Sustainable Energy: Department of Defense Positioned to Untangle the Tether of Fuel
The nomination of retired General James Mattis as Secretary of Defense is a cabinet choice that most Republicans can get behind. What many don’t know about Mattis, however, is that he intimately understands the vulnerabilities created by our military’s dependence on traditional energy sources. During his military service, he took key steps to document the need for wide-scale diversification of energy resources and the deployment of innovative energy solutions, with a focus on tactical ground mobility. This nomination may ultimately lead to addressing the Department of Defense’s (DoD) energy-related mission vulnerabilities given the wide array of cost-competitive, innovative energy technology solutions that are now economically viable and commercially available.
As noted in our previous blog post on this topic, Mattis challenged the DoD to “unleash us from the tether of fuel” as Commanding General of the Marine Corps Combat Development Command during Operation Iraqi Freedom. In response, the Naval Research Advisory Committee developed a report entitled “Future Fuels” in 2006, which concludes that the military could “lengthen and untangle the tether of fuel” by committing to procure alternative, cost-competitive, synthetic fuels and other sustainable solutions. The report further delineates how DoD should encourage commercial financing, drive technology innovation, and prioritize the requisite manufacturing and infrastructure technology.
Over 10 years later, the synthetic fuels industry has forged ahead and is inching closer and closer to meeting this metric despite historically low oil prices and minimal funding beyond the highly contentious Defense Production Act (DPA) synthetic fuels program. Notably, nearly half a dozen commercial airlines have negotiated long-term offtake agreements with advanced biofuel suppliers that have reportedly been at or near price-competitive according to IATA. More notably, energy storage and plug-in passenger vehicles are gaining notable market adoption globally which will further reduce costs for such near term. For example, energy storage investment reached a record high of $659.8 million for the third quarter of 2016, as the U.S. moves toward eight-fold installations growth by 2021, according to a report released recently by the Energy Storage Association and GTM Research. Relatedly, global sales of plug-in passenger vehicles stand at 75,500 units for September, which is 55% higher than September of last year, according to the latest data.
Ideological disagreements aside, the increasing market adoption of the solutions outlined in the “Future Fuels” report signals a notable opportunity for sustainable energy deployment within the DoD. This fact when combined with increased military infrastructure spending – including a renewed focus on grid resiliency and mission assurance – could prove pivotal in further untangling DoD from the tether of fuel under the Trump Administration. For now, these developments should help shore up industry confidence in the DoD market in 2017 and the years to come.