Killing a $12 million military program may seem like a paltry matter. The sum amounts to a mere 0.002 percent of the total defense budget. But the elimination of one such program this week by the House Armed Services Committee reveals—more brazenly than many larger tamperings—just how shortsighted, hypocritical, and beholden to special interests the custodians of national security can be.
The program in question is a two-day experiment by the Navy to power an aircraft carrier’s entire battle group—its jet planes and escort ships—not with petroleum but with biofuels. (The biggest ship in the group, the carrier itself, is excluded, since it is, and would remain, nuclear-powered.)
The rationale for barring the Navy from buying the 450,000 gallons of biofuels necessary for the experiment is economic: These fuels are too expensive—about four times more costly than conventional fuels.
To hammer home the point, the committee’s Republican leaders passed an amendment barring the entire Defense Department from using any alternative fuels, for any purpose, if they’re more expensive than oil. But then, in a shameless disclosure of who’s paying the tiller, they tacked on a provision exempting coal and natural gas from this prohibition. As Noah Shachtman put it in Wired’s Danger Room blog, they “didn’t put limits on all alternative fuels—just the ones with environmental benefits.”
But this is not a tale of green woe about the environment, or not just that; it’s a story about hard-headed national security and energy policy.
The Defense Department has stepped up alternative-energy projects in the past few years, and not for the sake of trendiness. The Army and Marines have been setting up solar panels in Afghanistan, because the convoys of trucks bringing in oil—mainly to fuel the military’s own operations—cost a tremendous amount to maintain and secure, not just in money but in lives. (In 2007, insurgent attacks on fuel convoys were responsible for one-third of U.S. casualties—a bit of data that prompted the alt-fuels program.)
Even now, in its early phases, solar is a more mature technology than biofuels. In part that’s because there’s almost no market for biofuels—mainly because, as the House committee complained, they’re too expensive. But some of modern history’s most revolutionary devices started out as too expensive; and they would have stayed that way—they might never have got off the ground—had the federal government not created the market. And since, in American politics, the military and space programs have been the federal government’s only sources of manufacturing, it’s the Pentagon and NASA that have created those markets.
Take the microchip. It was first demonstrated at the radio industry’s tech show in 1959, to little fanfare because, at $35 per chip, it was too expensive for any commercial application. The equation changed in 1961, when President John F. Kennedy proclaimed his goal of sending a man to the moon by the end of the decade—and when he and his secretary of defense, Robert McNamara, decided to build the Minuteman II missile. Those acts created a market for the microchip (conventional transistors weren’t adequate for the rockets’ guidance systems); the extra production spawned economies of scale, which brought the costs down to the point where commercial products were feasible, which triggered further demand, which spawned greater economies of scale and competition from other firms, which lowered prices further … and on it went, until 1971, when the price for a chip had plunged to $1.25. (By 2000, it was down to 5 cents.)
Ditto for the computer. The first model cost hundreds of thousands of dollars. Its only customers were the nuclear-weapons labs (to perform the elaborate calculations involved in designing an H-bomb), the Selective Service system (to keep track of draft-age men), and the Social Security Administration (to pay benefits to retirees). After even a few computers were built, the price dropped to the point where large private banks and railroads could afford them, at which point the price dropped further. The rest is history.
Alternative fuels are currently in the same trap. In the long run, they are likely to save money, reduce our dependence on foreign producers (many of them with less-than-stable regimes), and do less damage to the environment. But in the short run, they are too expensive—and, in some cases, their net benefits are too uncertain—for private citizens, or very many companies, to take the plunge.
This is where government comes in—where it has always come in.
Biofuels are riskier than solar. Their price may never plunge below the cost of oil (unless, of course, the price of oil skyrockets), and some variants produce their own carbon footprints. But they’re worth a modest experiment; they’re worth a boost in demand, which could spur more firms to take a leap into the market. Also this particular biofuel experiment employs far more promising technologies, based not on growing crops (like corn for ethanol or mustard seeds for an earlier Navy project) but rather on algae and the greases from chicken waste. (One of the companies, Dynamic Fuels, is a division of Tyson Foods.)
The military is very active in this realm, beyond the solar panels in Afghanistan—only sensible, given that the Defense Department spends over $16 billion a year on energy, nearly all of it fossil fuels. The Navy is in a joint project with the Departments of Agriculture and Energy to invest $510 million to convert old factories into bioprocessing plants. The Air Force is experimenting with fueling some of its fighter jets with biofuels.
But these plans will go bust if the House committee’s ban becomes law. Almost all new technologies cost more than existing ones at first. The cost drops—sometimes drastically, sometimes below the cost of the old technology—only after they develop, after there’s demand for the product; and in some cases the demand in early stages comes only from very large enterprises, in most cases an enterprise as large as a government.
By banning alternative fuels, the House committee is closing off the future.