CORRECTION: An earlier version of this story incorrectly characterized the estimated sticker price of the propulsion systems in BAE's 75-ton hybrid tanks. The price range is $1 million to $2 million, which is about 5 percent to 10 percent higher than that of standard propulsion systems in combat vehicles.
For American drivers, $4-a-gallon gasoline is painful: It bites deeply into household incomes at a time when millions of people are stretched to a breaking point. But for the U.S. military, the cost of fuel is a magnitude greater—and a matter of life or death. Fuel shipments account for the majority of the supplies trucked through Afghanistan, and militants attack the convoys almost daily. At least one member of the armed forces is killed for every 24 fuel convoys that snake their way along Afghanistan’s dangerous roads; hundreds of troops and contractors have died protecting the trucks. All of that ramps up the cost of a gallon of military gasoline to stratospheric levels. Gen. James Conway, the former Marine Corps commandant, estimated in 2009 that gas sometimes cost his forces $400 a gallon once all of the expenses were taken into account.
Because of the military’s vast energy needs, senior Defense officials say that reducing those costs is a national-security imperative. On its own, the U.S. military is the single largest industrial consumer of oil in the world. It requires approximately 125 million barrels annually—more oil than 85 percent of the world’s nations consume. Every $10 increase in the price of a barrel of crude costs the Defense Department $1.3 billion. In 2008, the year that oil and gasoline prices last reached record highs, the Pentagon spent about $20 billion on fuel alone—a burden ultimately borne, of course, by U.S. taxpayers. Energy experts predict that prices will only rise in the coming years. Meanwhile, the nation’s broader dependence on oil all but ensures that the military will remain handcuffed to the Middle East, North Africa, and other volatile-but-oil-rich parts of the world.
So the Pentagon has launched an aggressive program to change all that, with a slew of ambitious plans to convert the oil-hungry U.S. military to alternative-energy sources—and, at the same time, spur creation of a commercial industry capable of producing enough renewable energy at affordable prices for civilians. The hope is that demand from a massive consumer like the armed forces could affect supply—scaling up energy production, driving down cost, and leading to technological breakthroughs for biofuels, solar panels, hybrid vehicles, and similar products. That would reduce the need for oil throughout the U.S. economy and spare the armed forces from future missions in war-torn, oil-exporting states. It’s not the military’s job to fight climate change, but many senior Defense officials contend that there is a clear national-security reason to do so, because government studies show that the fossil-fuel emissions behind global warming will induce food shortages, drought, and rising sea levels—inviting a world of political volatility.
The Pentagon has spawned a range of modern technologies, from the Internet (created by the Defense Advanced Research Projects Agency in 1969 as an internal communications network), to the GPS capability now commonly found in cars and smartphones (developed decades ago to help troops maneuver through unfamiliar terrain), to the microwave oven (which grew out of World War II microwave radar detectors). The list goes on: microchips, semiconductors, jet engines, and many other inventions were conceived and born within the military-industrial complex before the commercial economy adopted them.
So can the military-industrial complex do for clean energy what it did for the Internet, jet engines, and the microwave?
Experts in the worlds of defense, energy, finance, and policy say yes—but the hurdles are high. The Republican-controlled House, skeptical of climate change and renewable energy, isn’t a fan of the Pentagon’s green push. Renewable fuels are far more expensive than conventional ones, and it’s not clear when (or if) prices will fall enough to compete with petroleum. The success of the entire effort depends on the Pentagon’s ability to spur creation of an industry capable of producing enormous quantities of renewable energy despite largely unproven technologies and business models. The Defense Department “is in the process of playing a catalytic role with renewable energy,” said Arati Prabhakar, a former director of microelectronics for DARPA who now chairs the Energy Department’s Efficiency and Renewables Advisory Committee. “They won’t be the biggest, most important market over time. But for the newest technologies, those first few percentage points of market share are tremendously important.”
The rewards of sparking an industry that would transform the entire U.S. energy economy could be tremendous. But the challenges along the way will be, too. Transforming how people drive their cars and power their homes and businesses is much harder than inventing a single technology, such as digital communications, that changes the game once it is introduced. And clean energy is different from the GPS or the Internet: The private sector, not the Pentagon, is developing the underlying science. That means the military is heavily dependent on the business acumen of alternative-energy entrepreneurs and the vagaries of Wall Street, which has to decide whether to finance a company’s growth plans. Although a handful of firms are already producing high-octane biofuels that can replace conventional petroleum for tankers, fighter planes, and aircraft carriers, they have yet to do it on the large scale—and at the low price—necessary to power the entire military, let alone fill up the tanks of millions of U.S. drivers.
This article appears in the May 28, 2011 edition of National Journal Magazine.