Defence and liquid transport fuel resilience
30 Aug 2016|

Image courtesy of Flickr user Megabite Electronics.

Diversifying choice of fuel supplies can have a real impact on naval operational capacity, in addition to managing the costs sustaining capability.

This month there’s been lots of naval talk about alternative fuels when the USS Stethem, an Arleigh Burke class destroyer, arrived alongside Fleet Base East, Sydney.

Since Australia signed a statement of cooperation agreement with the US Navy in 2012 to share information on alternative fuels for naval aviation, surface and subsurface platforms, the RAN has progressed from testing one Seahawk helicopter during RIMPAC four years ago, to three warships that took more than 4.5 megalitres of blended alternative fuel from US oilers during RIMPAC that concluded early this month.

During RIMPAC 2016, one of the US Navy’s carrier strike groups deployed using alternative fuels, including nuclear power for the carrier and a blend of advanced biofuel made from beef fat and traditional petroleum for its escort ships. The USS Stethem was part of the group that included the three RAN vessels.

The RAN must maintain interoperability with the USN as it moves towards the introduction of alternative naval fuel to meet its Great Green Fleet energy initiative, which outlines the USN’s commitment to source 50% of fuel from renewable sources by 2020.

The USN are now trialing a synthetic diesel that’s 100% neat alternative fuel, which is the final step in reducing reliance on fossil fuels. In May, Australia’s Chief of Navy, Tim Barrett, approved the use of USN sourced alternative fuel blends for RAN ships diesel as a direct drop in replacement fuel for RAN ships manufactured via the USN approved pathways.

Technical constraints for the two current pathways for producing RAN diesel from synthetic crude require that it must be blended with at least 50% of diesel produced from fossil crude to meet Navy standards. In a related development last month, Queensland Premier Palaszczuk signed a Statement of Cooperation with the Deputy Under Secretary of the US Navy, Tom Hicks, which lays out the framework for discussions on research, development, supply and sale of advanced biofuels.

In addition to extending existing scientific development into bio-fuels, the agreement is likely to accelerate an innovative industrial opportunity for Queensland to become both a significant domestic producer of biofuels and a refueling station for the US Navy’s biofuel fleet, if it becomes available and in the quantities the USN needs.

The Queensland government is very aware of the local economic benefits that would come from that partnership. All this is good stuff and we should applaud it. But it raises the question about the ADF’s long-term plans for energy security and resilience policies.

The 2014 Defence Energy Integration Framework begins to highlight the strategic realities of maintaining the ADF’s supply chain into the longer term. It acknowledges, for example, that energy is ‘critical for Defence missions’ and that ‘Defence’s need for sufficient quantities of the right energy at the right time to be able to conduct operations is a significant and exploitable vulnerability’. And it notes the potential for renewables to provide cost-effective, reliable energy.

But it’s unclear who in Defence at a senior level is really looking at long-term issues of fuel supply chains and what pathway Defence is following. (Perhaps the name change from ‘Strategic Fuels’ to ‘Fuels Services’ Branch in Defence underlines this point.)

Of course Defence on its own won’t shape the energy market, even though it spent $524 million on fuel in 2014/15 (PDF), (just under 60% Air Force; 33% Navy and the residual to Army). Defence use of liquid fuels is a drop in the ocean of the nation’s overall fuels consumption (industry and mining are much bigger users).

But Defence can certainly look harder at changing its demand for energy to ensure the ADF becomes more energy independent, as well as looking at the supply issues raised by organisations such as the RAN’s Seapower Centre, the NRMA and Engineers Australia.

The RAN understands the interoperability issues associated with the USN moving to alternative fuels and it’s made significant progress in ensuring our ships and aircraft are certified to use USN sourced blends. But it’s not as clear that Defence has understood the justifications that have led the US departments of Defense, Agriculture, and Commerce to spend in excess of US$1 billion to assist industry to develop alternative fuels.

The US is concerned about reliance on fossil fuels sourced from foreign countries, the effects on the domestic economy on reliance on imported products, and the potential for domestically produced fuels to revive struggling rural economies by giving farmers new business options. Use of renewable fuels can offset growing global carbon emissions, and so the environment and future generations can benefit too.

Broader than Defence, it’s intriguing that Australia doesn’t appear to have the same concerns with reliance on imported fossil fuels sourced from foreign countries with a much higher exposure to imported liquid fuels. The 2015 Energy White Paper was published without National Energy Security Assessment and therefore it’s based on the 2011 NESA.

It was a modest step in the right direction when the government indicated in June this year that’ll achieve IEA stockholding compliance (90 days of our prior year daily net oil imports) by 2026. All this underlines the possible option of Defence setting an ambitious target in terms of moving towards alternative fuels, by announcing they’re ready to receive cost competitive blended products.