Thursday, October 15, 2009

The Great Green Fleet

I would have had difficult time keeping a straight face during this announcement, which would have got me thrown out of town had I attended the Naval Energy Forum. It is actually a very clever slogan and an idea well worth promoting and following through, but it does sound a bit corny the first time you say it out loud.

Navy Department leaders issued a set of ambitious new plans to boost the Navy and Marine Corps’ energy efficiency Wednesday, including the goal of fielding a completely sustainable carrier strike group dubbed “the Great Green Fleet.”

Navy Secretary Ray Mabus cited the example of President Theodore Roosevelt’s Great White Fleet, which announced the arrival of American sea power by circling the globe in 1907, and said a new focus on energy would augur just as big a turning point for the service.
Is there an Admiral bold enough to paint all the ships Green too, perhaps a camouflage kit similar to the General Dynamics LCS art? Maybe we can borrow the blue camouflage designs from the Chinese Type 022, but instead of white we use green? Could be fun in Photoshop anyway...

The basic idea is to use nuclear power and hybrid drives, like technologies previously discussed, for all the ships, aircraft, and submarines in the carrier strike group. I think it is a clever idea. According to the idea, the SECNAV wants the Navy to demonstrate that it can sail this green carrier strike group by 2012 and deploy it by 2016 as evidence the Navy can exert influence at sea without the need for foreign oil. Obviously this is all very possible.

The article by Phil Ewing lists other SECNAV energy plans for the Navy:
  • Mandate that energy usage, efficiency, life-cycle costs and other such factors be part of the Navy’s decision when acquiring new equipment or systems, as well as vendors’ efficiency or energy policies.
  • Cut petroleum use by half in the Navy’s fleet of commercial vehicles by 2015, by phasing in new hybrid trucks to replace older ones.
  • Get half the power at Navy shore installations from alternative energy sources — including wind or solar — by 2020, and where possible, supply energy back to the grid, as the Navy does today at Naval Air Weapons Station China Lake, Calif. Marine Corps Commandant Gen. James Conway said Wednesday he wants Marine Corps bases in the U.S. to eventually buy no external power, and sell back excess power when possible.
  • Reach the point that half the energy used throughout the Navy Department, including in ships, aircraft, vehicles and shore stations, comes from alternative fuel or alternative sources by 2020. Today that percentage is about 17 percent.
Here is a fact about Navy history that uniformed folks rarely mention when honoring their uniformed brothers throughout US Navy history. For every A. T. Mahan, there was a Theodore Roosevelt on the civilian side. Even Stephen Decatur had his Benjamin Stoddert and Paul Hamilton. It hasn't been since John Lehman that the Navy had a Secretary of the Navy who came out and gave a bold, forward looking vision that was relevant to the geopolitics of ones era. If Secretary Mabus truly makes bold initiatives in energy during this era, he will be remembered, because I think we are about to enter the decade of energy.

Look, a few things between just you and me. My spies tell me RAND is soon to release a report on Alternative Energy that is going to flat out say Algae energy is "impossible" and is going to recommend the federal government quits "wasting" its money on the technology. I read RAND reports and enjoy many of them for their analytical processes and development theories, but as a dumbass Arkansas redneck known to make a reckless rant or two, I really can't wait to see this report. Here is the dirty little secret... if that RAND report isn't released very, very soon, it will be obsolete and may never actually see the light of day, and it will save RAND from looking supremely foolish and out of touch. The analogy that will be used should this report see the light is that this report is like holding a hearing in Congress in late November 1903 saying that human controlled flight by man is impossible.

I recently solicited emails to every algae energy expert I could find mentioned in a LA Times, NY Times, and Wall Street Journal articles on algae energy asking what it will look like for a major oil replacement energy source technology to "break out" into the mainstream information space. I sent eight emails and had five responses, and all five of them asked the same thing: "Who are you working for?"

That is an interesting sign that tells how the politics of Green Energy are dominating, and the money of this sector is competitive. Seeing that I couldn't find one expert to go on the record for my little corner of the internet, I consulted my international businessmen friends instead, and asked what we are looking for. The answers are my top five tips for watching Green Tech break out, and I expect it to happen very soon.
  1. Don't watch the oil companies, watch the transportation companies. If an airline, transportation company, or shipping company signs a deal with a green energy company, the green technology is probably viable and preparing for commercial production. Everyone wants to be the next Southwest Airlines locking in cheap fuel for the next several decades like they did with oil long ago.
  2. The first big green energy contract will likely be an American company setting up shop overseas. All this talk of "Green Jobs" in the US is the stuff of politicians and academics; real investors will take advantage of cheap land and cheap labor. It will not be good politics when a US "Green Energy" company builds a billion dollar facility in the 3rd world, but it will be good business.
  3. The companies that break out with the first few huge commercial contracts will get raked over the coals by "experts" and "consultants" in the green energy field, including in mainstream media and with Washington elite, casting skepticism on both the contract and the technology. For many experts and consultants, their opinions are only worth anything as long as Green Energy remains a field of theory instead of practice.
  4. The DoE, indeed the entire federal government including the DoD, will likely be the very last to learn which company makes the big breakthrough in Green Energy technology that can take over for oil. The governments funding model is configured for people with concepts, not products. The Navy's contract with Solazyme is a perfect example how government is completely caught up looking at pretty trees instead of the forest when it comes to green technology. Solazyme has very cool technology for making SVO, but it can't scale because they literally cook sugar to create SVO. Show me what the kitchen looks like that Solazyme uses to cook enough SVO to replace gasoline used in cars. Hmm...
  5. The future oil replacement is Algae, not ethanol, and the algae technology that breaks out into commercial contracts will not be reliant on traditional methods of photosynthesis and therefore will not conform to the conventional wisdom of "expert" analysis. The major technology breakthrough will be when a company can find the right combination of an open pond capable photobioreactor for use on synergistic colonies of algae (several Algae companies already have algae strains to meet this requirement) and has perfected an extraction technology that scales to commercial levels. Everything else has been invented.
The SECNAV is being very smart with his recommendations and for pushing a vision of energy, in fact I would call the timing fantastic. Attend any energy forum or read any "expert" paper and they tell you we are still very far away from algae energy. We really aren't as far away as is suggested in the press, it is a lot closer than people think and on scales people are not prepared to believe. We will see 200,000+ bpd SVO facilities by 2015 that are capable of producing biodiesel at prices about equal to $30-$40 a barrel of crude. That is only 5 years from now.

You see, the conversation over Green Technology is soon no longer going to be about "what if," the questions will become "what now." After all, it will be American companies setting up these algae energy facilities in foreign countries, shifting the global energy center of gravity away from the Middle East and into places of cheap labor like South America, Africa, and southeast Asia.

With the ability to build mature 200,000+ bpd SVO facilities in 3-4 years, the transformation is going to happen a lot quicker than people think. I'm not even going to bother making the bonus points on how this positively influences food and water resources, which will make the algae technologies even more desirable to investors, including governments having problems with inland fishery problems.

The real conversation is whether you have even considered how this is going to change your near-term wargame? You better give it more than a thought or two, the decade of energy change will be 2010-2019. Want to hold me to a prediction? Hold me to this one... we will see the first billion+ dollar Algae Energy contracts to produce large quantities of SVO by 2Q 2010, if not sooner.

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