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Delivering Air Power through the Next Great Energy...
Transcript of Delivering Air Power through the Next Great Energy...
Risks to the Air Force Mission from
Declining Energy Security
Delivering Air Power through the
Next Great Energy Transition
Wing Commander Mia Clapton
Introduction
‘An energy transition … is inevitable; the only
questions are when and how abruptly or smoothly
such a transition occurs.’
‘An energy transition from one type of fuel to
another is an event that historically has only
happened once a century at most with momentous
consequences.’
United States (US) National Intelligence Council
The Global Oil Transition
Establishing the context for identifying Air Force Risks
The scale and breadth of the energy challenge is enormous – far greater than
many people realise.
International Energy Agency (IEA), 2009
Oil Depletion and Peak Oil
Typical oil production
profile for
(a) a single field
(b) a region consisting
of an aggregation
of progressively
smaller fields
High EROEI Low EROEI
Volume of
Energy
Discretionary - consumption
and investment
Essentials –
food, welfare,
government, law
Reinvested in
energy extraction
Volume of
Energy
Discretionary - consumption
and investment
Essentials –
food, welfare,
government, lawReinvested in
energy extraction
Energy Returned on Energy Investment and the Impact on Society
Peak Oil and Risk Management
Future supply projections
developed from the Monte
Carlo simulation using
petroleum geology and oil
supply expert analyses
Declining Availability and
Affordability of Oil
Australian Vulnerability to the Global Oil Transition
Oil Depletion and
Australia’s Energy Security
Actual (blue) and predicted (red) Australian crude oil production
Australia’s Vulnerability to Declining
Long Term Energy Security
Type of energy used in major Australian industry sectors
Oil Depletion in Australian Government
Inquiries and Research Reports
‘[I]n the committee’s view the possibility of a peak of conventional oil production before 2030 should be a matter of concern.’
‘In view of the enormous changes that will be needed to move to a less oil dependent future, Australia should be planning for it now.’
The Senate Standing Committee on Rural and Regional Affairs and Transport, 2007
‘There is likely to be only moderate preparation by individuals and businesses in relation to the possible decline in oil supplies due to the uncertainty surrounding such an event.’
‘As a result, there is an argument for greater government intervention...’
CSIRO Future Fuels Forum, 2008
Total world oil production
‘[I]t is predicted that we have entered … onto a slightly upward slanting plateau in potential oil production that will last only to about 2016.’
BITRE, 2008
Oil Depletion in
Australian Government Energy Policy
‘The spectre of ‘peak oil’ should … not be used to panic policy makers into wholesale interventions in the market.’
ACIL Tasman, 2011
‘[T]here is a very low probability of reaching global supply limits (so-called ‘peak oil’) in the period to 2035.’
DRET, 2011
Oil Depletion and
Australian Defence Policy
‘[O]n the matter of peak oil, oil shocks and alternatives to oil, Defence’s current policy stance does not sufficiently protect Australia’s Defence capability against foreseeable risk.’
Joint Standing Committee on Foreign Affairs, Defence and Trade, 2009
The Geopolitics of Oil and the
Militarisation of Energy Security
Implications for Australia’s Strategic Interests
‘Our strategic environment is undergoing many points of transition; the assumptions of the past will not necessarily define our future.’
General D.J. Hurley, Chief of the Defence Force
The Geopolitics of Oil: Energy Importers
‘In the future, nations will go to war over resources, especially those nations prone to resource scarcity. Of all of the world’s resources, none is more likely to provoke conflict between nations in this new century than oil.’
Jim Puplava, 2014
The Militarisation of Energy Security
‘The issue of energy security is one in which governments, and defence organisations, will increasingly have to be engaged… States who perceive that energy security is impacting on national survival are likely to challenge conventional interpretations on the legality of the use of force.’
UK Ministry of Defence, 2010
Australia’s Strategic Defence Interests
and Objectives
A secure Australia
A secure nearer region
A stable Indo-Pacific region
A rules-based global order
Defence Policy Response to the
Militarisation of Energy Security
‘[I]ncreased demand for imported commodities is unlikely to lead to major interstate conflict as long as the global market operates freely, since it is cheaper to pay for a commodity than to go to war for it.
However, the likelihood of miscalculation is higher where conflicting territorial claims and resource imperatives overlap, such as in the South China Sea.’
Department of Defence, 2013
‘Around 40 per cent of the world’s offshore oil production comes from the Indian Ocean. Over the next 20 years, the Indian Ocean will see a substantial increase in intra-regional maritime trade, including in energy…’
‘The Indian Ocean region is also likely to become a more significant zone of competition among major powers, with China, India and the United States all increasing their levels of military activity in this region.’
Department of Defence, 2016
Australia’s Declining
Domestic Refining Capacity
Liquid fuel infrastructure in Australia (as at 2013)
Australia’s Increased Reliance on
Petroleum Product Imports
Australian Imports of Petroleum Products (2012-13)
‘Liquid fuel in transit to Australia through some of the world's geopolitical hotspots is not fuel security, it is wishful thinking.’
Engineers Australia, 2015
Australian Commercial Stockholding
Practices
:Australian Supply Chain – Stocks as days consumption cover
‘Australia does not hold government-controlled or regulated industry stocks for drawdown in an emergency, and our capacity for short-term surge production and fuel-switching is limited.’
Energy White Paper, 2012
Responses to Australia’s vulnerability to
liquid fuel disruption
‘Apart from the highly exceptional
circumstances that could arise from major
unforeseen national, regional or global
security events, the Australian Government
believes that … energy security developments
considered possible in the foreseeable future
can be managed effectively using existing
energy security mechanisms and market
responses.’
Energy White Paper 2012
‘Energy security assessments
should not consider ‘national
security’ settings and
scenarios in which crude oil
or product supply is disrupted
for an extended period by
widespread military conflict.’
Australian Institute of Petroleum, 2015
‘Energy and economic security issues
are distinct from national security
issues.’
The National Security, Economic
Security and Energy Security Nexus
‘There is little comfort in an
energy security assessment
that is only valid during
times of peace and regional
stability.’
John Blackburn AO
Recommendation 1
‘The Australian Government undertake a
comprehensive whole-of-government risk
assessment of Australia's fuel supply,
availability and vulnerability. ‘
‘The assessment should consider the
vulnerabilities in Australia's fuel supply to
possible disruptions resulting from military
actions, acts of terrorism, natural disasters,
industrial accidents and financial and other
structural dislocation.’
Rural and Regional Affairs and Transport
References Committee, 2015
Defence Policy Response to Australia’s
vulnerability to liquid fuel disruption
Recommendation 6
‘Defence adopt a more assertive strategy with regard to oil shocks and alternative fuels, with the specific purpose of providing a capability to mitigate risk due to a dependence on oil-based fuels.’
‘Defence should provide such a capability, sufficient to maintain an identified core capability, within a timeframe of 10 years.’
Joint Standing Committee on Foreign Affairs, Defence and Trade, 2009
Military Energy Security and Defence
Operational Energy Vulnerabilities
‘Fossil fuels, while the lifeblood and
enabler of air power, are also its
Achilles’ heel.’
Group Captain Maurice Dixon,
Royal Air Force (RAF)
Operational Energy
‘The energy required for training,
moving, and sustaining military
forces and weapons platforms for
military operations.’
US Department of Defense, 2016
Defence Fuel Supply Chain
Vulnerabilities
‘Fuel is a critical enabler for all Defence activities and has the potential
to be the greatest supply chain risk in the medium to longer term.’
Joint Logistics Command, 2010
‘Fuel storage and supply is a
critical limiting factor for air
bases.’
Australian Defence Force Posture Review, 2012
Energy considerations for future
Defence capabilities
‘As we are making capability decisions often with 30-year outcomes, energy
needs to be properly conceptualised from the tactical to the strategic level,
and will need to be more prominent in capability decisions.’ Air Vice-Marshal Hart, 2014
Defence Fuel Management:
Organisation, Governance, and Culture
Strategic
Policy
Executive
Joint
Capability
Coordination
(JCC) Division
Joint Logistics
Command
(JLC)
Estate and
Infrastructure
Group (E&IG)
Three
Services
-Defence’s
strategic policy
- engagement with
industry
-Overall energy
preparedness and
integration
-Set strategic fuel
policy
-manage the fuel
supply chain
- purchase fuel
- act as the
technical authority
for fuel
- Design,
construct,
maintain and (for
some
establishments)
operate the
Defence Fuel
Installations
(DFIs)
-Set fuel
consumption
targets
- allocate funds for
the purchase of
fuel
-Determine
reserve
stockholding
requirements
The fragmented nature of Defence Fuel Management
Australian Government policy fails to
address the link between economic
security, energy security and national
security
Recommendation for future research
Economic Security
Geo-political Security
National
Security
Military Security
Energy Security
A better understanding of the National Security and Energy Security Nexus in Australia
Recommendation for Air Force
Develop a risk management strategy to analyse, evaluate and treat the identified risks.
Defence Policy Response to Australia’s
vulnerability to liquid fuel disruption
Reliance on Commercial
Providers
‘In the event of an oil shock
Defence will have access to a
proportion of fuel oil available in
the domestic market’. Department of Defence, 2009
‘It is not the role for fuel
suppliers to hold buffer stocks to
guarantee the ongoing business
operations of major fuel users
during a major fuel supply
disruption.’
Australian Institute of Petroleum, 2013
‘[As] World War Two experience
faded from the collective memory
of policymakers, as the defence of
Australia became a less
immediate concern… national
emergency fuel legislation moved
away from a defence focus.’
Martin White, 2013
Reliance on Australian Liquid
Fuel Emergency Legislation
‘In the event of a sudden scarcity of
oil, Defence would have recourse to
a framework established under
federal legislation...’
Department of Defence, 2009