The U.S. Navy's New Energy Revolution

Generous funding of the Carnegie Council's 2010-2011 sustainability programming has been provided by Hewlett-Packard and by Booz & Company.

• Introduction
• Remarks
• Questions and Answers

JOEL ROSENTHAL: Thank you all for coming this afternoon. Today I have the distinct honor of welcoming the 75th United States Secretary of the Navy, Ray Mabus, to the Carnegie Council.

Most of you will best know Secretary Mabus for the critical role he has played, and is continuing to play, in helping America's Gulf Coast recover from the Deepwater Horizon oil spill. This past June, as the Gulf Coast was confronted with the largest marine oil spill in history, Secretary Mabus was tasked with devising a framework for a long-term coastal recovery, focusing on restoring the Gulf ecosystem, economy, and health care.

For almost two years, Secretary Mabus has spearheaded a national effort to bring the Navy's energy policies into the 21st century. As part of the Obama Administration's priorities, he has set an ambitious agenda aimed at reducing the Navy's fuel usage and cutting its carbon emissions over the next decade. His passion and dedication are helping not only to revitalize the naval fleet, but also, and perhaps most importantly, to help the United States assume a leadership role in clean energy revolution.

It is precisely such efforts that bring Secretary Mabus to the Carnegie Council today. Indeed, his work within the Navy and Marine Corps offers yet another example of how the U.S. military is charting new territory in the climate change and energy efficiency debate.

As we learned this past September from our panel discussion, "Leading by Example," the U.S. military is making use of renewable energy, investing in research and technology, and reducing carbon emissions. By all accounts, while domestic and international progress on climate change often seems at a standstill, the U.S. military, and the Navy in particular, has taken threats posed by climate change seriously.

We are most fortunate that Secretary Mabus was able to make time for us today, and I think I can speak for all of us when I say we look forward to hearing his thoughts on the U.S. Navy's new energy revolution.

Secretary Mabus, thank you very much for joining us.

RAY MABUS: Joel, thank you so much, and I thank all of you all for being here. I've got some long-time friends here today—Meris Powell, Darrell Prescott, Maurice Sonnenberg—and I appreciate your willingness to endure yet another talk of mine.

The Carnegie Council for Ethics in International Affairs and the peaceful resolution of conflicts has a lot in common with the United States Navy and Marine Corps. We believe in deterrence when possible, building partnerships, and behaving ethically and aboveboard.

You can surge equipment, you can surge people; you cannot surge trust. The Navy and the Marine Corps have today on station the Africa Partnership Station, which has right now a large-deck amphibian around the coast of Africa doing training, humanitarian, medical, veterinary, and dental assistance, and also building things like schools and clinics. We are a persistent presence there. We are doing the same thing around South America, Latin America, and in the southern Pacific.

In Navy and Marine Corps 101 we are forward deployed, we are expeditionary, and we seek to deter when possible. We seek to engage at all times. In fact, the slogan now of the Navy is—and you might have seen it on television in some of our recruiting commercials—"The United States Navy—A Global Force for Good."

I am very happy to be here with you today to speak with you.

I'm going to talk about two things. I'm going to talk about what we are doing in the Navy in energy, and I am also going to talk a little bit about the Gulf Coast, because while they are disparate on the surface, at the bottom they show some of the problems with our insatiable need for energy and the way we attain it and the way we use it.

I'm going to say something that is absolutely self-evident. The United States military depends too much on fossil fuels. Those fuels come from potentially volatile places on earth. We would not let the countries that we buy fuel from build our aircraft, our ships, our land vehicles, but we do give them a say in whether those ships sail, whether those planes fly, and whether those vehicles run. We give them a say because they provide our energy.

We are moving toward alternative energy for several reasons.

One is strategic. We should not be buying energy from where we are buying it, in the amounts that we are buying it. We should be far more self-sufficient in that.

Second is tactical. To get a gallon of gasoline to a Marine frontline unit in Afghanistan—and gasoline is what we import the most into Afghanistan—you have to take it across the Pacific by convoy and road it up across the Hindu Kush and then down to one of the forward operating bases. Or, you have to take it across the Atlantic through the northern distribution network in the Baltics, across Russia, and down across the Amu Darya, again to a frontline base in Afghanistan.

It's incredibly expensive, hundreds of dollars a gallon, to get it there. But, probably more important, it is dangerous.

The Army did a study about a year ago that said for every 24 fuel convoys we take into Afghanistan we lose a soldier or a Marine guarding those convoys. In the last two months we've had six Marines wounded guarding fuel convoys.

That's a pretty high price to pay for fuel. It also keeps them from doing the things they were sent there to do, which is to fight, to engage, and to rebuild.

If we can change tactically the way Marines use energy—and Marines, who are now known as leaders of the environmental movement, have embraced this wholeheartedly. They are doing things now like solar-powered water purifiers and different sorts of insulation for their tents. They are beginning to have a tactical difference because of the way they produce and use energy.

As Joel said, I have come up with five goals for the Navy, the most far-reaching of which is that by the year 2020 half of all our energy, both afloat and ashore in the Navy, will come from non-fossil fuel sources.

We are getting a pretty good start on it. We have already tested an F18 Hornet on biofuels, the Green Hornet. Those of you who laughed are of a certain age and remember the Green Hornet. The biofuel it was made from is camelina, a seed from the mustard family.

We have also tested just recently an MH60 helicopter, one of the big helicopters. My naval aide, who is a 60 pilot, calls them "God's machines." We flew it on biofuels.

We have tested some of our surface ships on algae-based biofuels.

We are making some big strides. By 2016 we are going to deploy—not just put to sea, but deploy—the Great Green Fleet, which will be a carrier strike group that uses only alternative fuels.

We've got a head start. All our carrier and our submarines are nuclear. But the other ships, the surface ships and the aircraft that we use, are all going toward biofuels.

Onshore the Navy has 3.3 million acres of land. We have 72,500 buildings. Joel and I were talking earlier that we can do things that sometimes it's much harder to do if you are a mayor of a city or the governor of a state. We can mandate how buildings are built. We can set down goals and actually reach them by the way we buy and build things.

The federal government uses 2 percent of all the fossil fuels that America uses. The Department of Defense uses more than 90 percent of what the federal government does. The Navy and Marine Corps use about a third of what the federal government and DoD does. So we use about 1 percent of all the fossil energy that America does. That's a pretty big market.

The two possible impediments that we have seen: number one is the cost; alternative fuels simply cost a lot right now, because there's not much market for them. Secondly is infrastructure.

But, just since we have been doing this for a year, the price of biofuels that we have been buying has dropped in half. To reverse a line from the movie Field of Dreams, "If the Navy comes they will build it." If we create a market, we think that the infrastructure will come and the price will go down.

We've already begun to see that. We have been dealing with people like venture capitalists, saying, "Here is our need."

We have been dealing with the Department of Agriculture, working with farmers and the military. Our first pilot project with agriculture is in Hawaii. Hawaii is the most dependent state of all 50 states on imported oil and gas, as you can imagine. Their farmers are also hurting.

Because we've got such a big military presence there, we are looking into, and we are actually beginning to develop, biofuels, which will help Hawaiian farmers and which will help the United States Navy and the United States Marine Corps installations that are there.

By 2020 at least half of all our bases are going to be net zero in terms of energy usage. We've already got one, China Lake, which because of geothermal energy is now giving energy back to the grid.

We have invested in about 100 megawatts of solar. We are doing wind, geothermal, hydrothermal, and wave action. We are offering our bases as test beds for new technologies. We have been working with the Department of Energy to do that.

Finally, we have been working with the Small Business Administration to help some of the entrepreneurs that are in this line of work. We just opened a website, called Green Biz Opps on the Navy website. If you are interested in alternative energy, you've got a single point to go to and help in working through some of the—and I know you're going to find this hard to believe—sometimes confusing governmental acquisition rules and regulations.

We are making a good start. We are beginning to move the Navy and the Marine Corps off of fossil fuels for strategic and tactical reasons, and because we ought to be a good steward of this planet and of its resources.

The Navy has always led when energy sources have changed. We went from sail to coal in the 1850s; we went from coal to oil at the beginning of the 20th century; we went to nuclear in the 1950s. Every single time there was a group of folks who said, "You're trading one form of very proven energy for another form that you don't know if it's going to work or not. We've got the infrastructure for this. Look at all these sail makers, look at all the coaling stations around the world, and you're trading it in?"

I'm absolutely convinced that this is going to be another time when the Navy is going to lead the country in terms of changing the way we produce and the way we use energy.

I'm going to shift gears just a little bit.

This summer President Obama called and asked if I would head up an effort to come up with a long-term reconstruction plan for the Gulf in the wake of the Deepwater Horizon well disaster.

I'm a child of the Coast. I grew up in Mississippi and have lived most of my life there. I have a very special feeling and relationship to it.

But it's also America's Gulf. So much of our energy, seafood, and tourism depends on that place.

While the environmental impacts may not have been quite as great as we once feared, although the evidence is still coming in on that, the effects of this spill are going to be felt for a long, long time.

This is a region that had Katrina and Rita. It had Ike. It was reeling from natural disasters but was beginning to come back when the well blew out.

Things like tourism just dropped off a cliff—people who fish for a living, people who run sports fishing operations for a living, people who run hotels, motels and restaurants.

The challenge was: Once we get past the well, once it's capped, once it's killed, then what? How do we make the South and the Gulf and those five states better than they were the day before the well blew out?

I relied on muscle memory. I went back to politics. I went and listened a lot—because people will tell you what needs to be done, if you'll take the time to listen to them for a little while.

I and a lot of the people who are with me today went to the Gulf. We traveled more than 16,000 miles through those five states. We held more than 40 major events, including town halls in all five states.

We had tens of thousands of people that came, and they told you what needed to happen. It was pretty clear that three things needed to be addressed: one was the environmental issue; second was the economic harm; and third were health issues, perhaps long-term health issues, and mental health issues that had arisen from there.

That was the easy part. You knew what you had to deal with.

There are all sorts of laws and agencies that come in on this. There are more than two dozen federal agencies that have some sort of stake in this. Every one of them—and this will surprise you again—had an opinion, usually strongly held, as to exactly what needed to be done.

My report tried to focus on what was essential to bringing the Coast back. There were three recommendations in my report, which I gave to the president in September, which I'm happy to say that he has accepted, and it has gotten a good response from Republicans and Democrats in Congress. Everybody I think from the Coast—congressmen, senators, and governors—that has commented upon the plan has received it favorably.

Number one, you've got to have a stable funding source. You've got something called NRDA, [Natural Resource Damage Assessment] which is actually looking at the actual harm, because BP, the responsible party, has got to pay for that.

But over and above that, there is fine money, civil fines that will be levied against BP for spilling the oil. We don't know how much those are going to be. It depends. There's a wide range. It depends on how much culpability is found on behalf of the responsible party. It's a pretty big range. It ranges all the way up to $4,400 a barrel spilled. There were 4.9 million barrels spilled into the Gulf.

This money—and we've never had anything even remotely this size in the Gulf—if the law stays the way it is, will go into a trust fund and sit there waiting for the next spill. It will be used for the next spill only if there is not a responsible party. The odds are it will go there and sit maybe forever. It won't go to reduce the deficit, it won't go to anything else, it will simply go there and sit.

I said in my report that a significant part of this ought to be pulled out and sent back to the Gulf. The Gulf was the place that took the risk, the Gulf was the place that took the damage, and a significant part of the money from the fines ought to go to the Gulf.

Secondly, that it ought to be a plan that comes up from the Gulf and not mandated to the Gulf. So as a management structure I recommended a Gulf Restoration Council that had state participation in it, that decided how these moneys were to be used.

A smaller percentage of the fines, some money, would go straight to the governors for them to jump-start the recovery effort.

For health and mental health, places like Health and Human Services were working pretty well in terms of making sure that BP paid for what they needed to pay for out of this and to keep doing that.

Finally, there ought to be a private response as well. There ought to be some way for the people, companies, and organizations that are on the Gulf, to have a response. We recommended that we try to put together something that would allow private involvement in this and not just a governmental response.

That's where we are. Congress, we hope, is going to take up these things.

The day-to-day has been transitioned to an organization I recommended be set up, called the Gulf Ecosystem Restoration Task Force. It's headed by Lisa Jackson, the head of the Environmental Protection Agency and also from New Orleans. It is working closely with the NRDA process.

Those are the two energy things, the Gulf and the Navy, that I have been dealing with over the past few months.

One of the things that I've found that connects these two is that as I have traveled outside the United States, I discovered that this is not a U.S.-only situation.

I've stopped in both Greenland and Iceland in the past three weeks to talk to them a lot about the Arctic, because everybody thinks there is going to be an ice-free Arctic, at least in the summertime, within the next quarter-century. This has profound implications for the Navy and for our presence and for the resources that are in the Arctic and how and if they are going to be used.

But they all wanted to hear about the Gulf. They all wanted to know what was being done, because they are all looking for energy and they are all looking in deep water, in harsh climates, in places that are inherently risky to look for energy.

They all also are worried about energy dependence. I'll just give one example.

Our NATO allies are dependent on other places for their energy. They are concerned that energy could be used as a weapon against them. And we ought to be concerned, because if it's our NATO allies, it may determine what our response and what our responsibilities are there.

This is not just an American issue. This is an international issue. It's one that we have been working closely with a lot of different countries in terms of research, in terms of how we do this, in terms of trying to pull us away from our incredible reliance on very iffy fossil fuels.

Those are the two things. We know what we need to do. We absolutely know how to get there. But it's a case of being halfway home but a long way to go. We actually have to follow through. We actually have to do a lot more hard work. We have to not only talk the talk but walk the walk in doing some of these things.

The Navy and the Marine Corps are absolutely committed to doing that. For every one of those sailors and Marines out there who are committed to doing this and who are committed to freedom and democracy, you ought to be, and I know you are, very proud of them.

Thank you very much.

QUESTION: My name is Dan Thys. I'm with the Naval War College Foundation. Mr. Secretary, you mentioned nuclear energy, and clearly the Navy has had an amazing safety record with nuclear. Why not expand it to other platforms?

RAY MABUS: The reason nuclear has been only on carriers and subs—30 years ago we put nuclear on some cruisers—is purely a matter of economics. Oil has to be at about $180 a barrel for a sustained period of time for it to make sense to put nuclear, with all the up-front costs, not only in terms of putting the propulsion system onto a ship, but also the shore support, which is expensive, and also the training.

No pun intended, it's no accident that we have such a good safety record. It's because the training is so intense, it's because the procedures around nuclear are so rigorous and so well-enforced. You simply can't relax those standards.

It is always an option out there. It's simply that we can't afford to put it on other hull forms right now unless the price of oil goes up.

That's one of the reasons I started looking at biofuels. Second, the other reason I started looking at biofuels and other alternative fuels, was we have 288 ships in the battle fleet right now. We've got a majority of the fleet we're going to have ten years from now because of the time it takes to build ships and because of the length of the life of those ships. We had to do something that could use the existing propulsion plants. Those engines, those diesels, those jets can't tell the difference.

QUESTION: Susan Gitelson. Thank you. Among the admirable things that you said is that you listen to others, and today we had an extraordinary opportunity to listen to you.

Since you are the Secretary of the Navy and the president is in Asia, and we just sold naval warships to India and so forth, could you give us your strategic perspective on the priorities for the Navy in a very expanded world? It's not just the Atlantic and the Gulf, but it's also the Indian Ocean and many other places that can be reached best through the seas.

RAY MABUS: I'll give you the Cliff Notes version, if that's all right.

You're absolutely right. The reason we need a naval presence is, even in today's world, 90 percent of all our trade goes by sea, 95 percent of all telecommunications go under the sea.

We have 288 ships today. More than half of them are underway and more than 40 percent are forward deployed.

We are the only global fleet in the world today. We need to have that presence.

We need to have that presence because we can, on these same platforms—whether it's carriers, guided missile destroyers, amphibious ships—we can do high-end conventional warfare if we have to; we can do irregular warfare; we can do blue water operations or brown water, we can be out in the middle of the ocean or close to shore; we can do humanitarian assistance and disaster relief.

We are always the first responder to Haiti, to the tsunami in Indonesia, to Pakistan when the floods happened. We can also do partnership building, as I talked about, in these partnership stations.

Our priorities are to have the most flexible platforms and the most flexible people that we can because that's what differentiates us from virtually every other military on earth. The Marines have a term called the strategic corporal, that every corporal in the Marine Corps needs to know why that corporal is there, what they are up to, what the purpose is, and be a diplomat as well as a soldier.

A lot of times when a Navy ship with Marines embarked pulls into a port—in West Africa, in the Caribbean, in the south Pacific—they may be the only Americans that people will ever see. The face of America is those sailors and Marines.

We can do all these things without taking up one inch of anybody else's territory because we can come from the sea. That's our priority.

We've got geographical aims and issues. The president has given us the responsibility for ballistic missile defense—the first phase of the phased adaptive approach, for Europe, the Middle East, the western Pacific—with our Aegis System. That has been remarkably successful shooting down ballistic missiles.

The last thing I'll say, and I said it was the Cliff Notes version, is regardless of what dangers and risks we see out there today, there's almost certainly something that we don't know that may be out there in the next five or ten years.

We just finished the Quadrennial Defense Review. It happens, as the title suggests, every four years. We had a lot of very smart people working on that. They came up with a good document.

If you had done that review in 1989, right before the Wall came down, you would have been almost completely wrong about what the threats were that were going to face us. If you had done it in 1999, before 9/11, again you would have been more wrong than right.

I'm not sure—nobody is sure—what's out there. What we've got to do as a priority is have people and equipment that can meet whatever threat comes over the horizon.

QUESTION: Robert James, a businessman here and ex-Navy. I'm going to tell you my question first and then I have a comment. It goes this way: Do we really have a security problem?

Comments first, question afterwards. Over 60 percent of our crude comes from the Western Hemisphere, maybe another 15 or 20 percent comes from Indonesia and western Africa, and 20 percent maybe comes from the Persian Gulf. As for energy, I'm not exactly sure, but if you're talking energy rather than crude oil, we probably have 80 or 85 percent of our energy comes from the United States and the Western Hemisphere.

Is it the Persian Gulf you're interested in? Saudi Arabia has been our friends for 60 years. We have bases all over there. What is our security problem?

RAY MABUS: For one thing, it's not just the Persian Gulf. The Western Hemisphere also includes some countries that may not have our best interests at heart.

Secondly, that fuel, that energy, wherever it comes from, is susceptible to price shocks and to supply shocks. You saw it twice in the 1970s. You've seen it again in terms of how much the price has risen.

Third is simply the climate issue, that by exploring more and more in the United States offshore and around the world in harsher and harsher environments, in places that were marginal before or risky, we open up bigger risks for things like the Gulf to happen. Those are risks that need to be mitigated.

We do buy as a nation most of our fossil fuels from somewhere other than this country. Even if it's not coming to us, even if it's coming to our allies, we have some responsibilities if they are cut off, if they have fuel used as a weapon against them. That it is a security issue.

I lived for two years in Saudi Arabia. The friendship and the alliance that we have there is very important. I'm not so sure we should be dependent on that part of the world for our energy, though.

QUESTION: Edith Everett. I'm very heartened to hear your talk and your leadership. It's really gratifying to see you're out there doing the right thing, and that's great.

My question is something you alluded to in your talk, about the Arctic. Clearly you are concerned about global warming. But there are people in Congress who think there's no such thing. So we count on your leadership.

How do you convince people that this is a serious problem, not just for the Navy but for all of us?

RAY MABUS: We have set up something called Task Force Climate Change. It's run by Rear Admiral David Titley who is the chief meteorologist and oceanographer for the Navy. We try to make it absolutely science-based.

We are having a retreat of the ice in the Arctic. The same thing in the Antarctic. The reason we are taking a specific interest in it from the Navy's point of view is, number one, if you have an ice-free Arctic and you begin to have ships transiting that, there is an obvious question about naval presence, about freedom of navigation, and things like that. There becomes questions about where boundaries are, and where and who gets to exploit the mineral resources that have been off-limits before.

Second, if you have sea-level rise as a result, 70 percent of the world's population lives very close to the shore, and sea-level rise can trigger instability, particularly in developing countries, which would call for some sort of maritime response. It would be the Navy/Marine Corps that would be called on to do something if there is instability in these countries.

That's why, just from a military standpoint, we are very focused on climate change and some of the implications that it has for us as the Navy and the Marine Corps.

QUESTION: Sylvan Barnett, Rotary International.

RAY MABUS: Former Lieutenant Commander.

QUESTIONER: Thank you, sir.

Where do we stand on offshore drilling along the Atlantic from New Jersey down to Georgia?

RAY MABUS: As you know—I'll go back to the Gulf for a second—the administration lifted its moratorium on deepwater drilling in the Gulf. About two weeks before the well blew out, the Interior Department announced it was opening up areas along the Atlantic for exploration and for leasing.

What is fair to say is that the president has appointed this commission, headed by former head of the EPA [Environmental Protection Agency] Reilly and former senator and governor Graham from Florida, to look at what the future of offshore drilling should be, what the safety requirements are, and what the regulatory requirements should be. They are beginning to get toward the end of that process.

The short answer is I don't know, because whatever recommendations they come out with—I know that inside the Department of Interior, whatever the agency is that used to be known as the MMA [Minerals Management Agency], they have increased surveillance, they have tightened down significantly in terms of the rules that they have and the way that they enforce them on drilling that's going on today.

But in terms of future drilling, we'll have to wait for the president's commission to come back and the administration will make a decision based on that.

Thank you again.