Dr. Leo Goff, Captain USN (Ret.) Program Manager CNA Military Advisory Board President ACARYIS

1. Dr. Leo Goff, Captain USN (Ret.) Program Manager CNA Military Advisory Board President ACARYIS Former Commanding Officer USS City of Corpus Christi SSN 705 Biofuels, National Security and The Evolving US Energy Posture Sixth Annual EBI Biofuels Law and Regulation Conference "Re-Imagining Policy Incentives for Biofuels”

2. BLUF • Oil Dependence is a National Security Threat • DOD can be a Driver for Oil Independence

3. CNA’s Leadership on Energy & National Security CNA -- Research organization providing in-depth analysis and solutions for government leaders • MAB -- 2007-2013 Over 30 Members (Rotational) • General Gordon Sullivan, USA (Ret) • General James Conway, USMC (Ret) • Admiral “Skip” Bowman, USN (Ret) • General Paul Kern, USA (Ret) • General “Chuck”. Wald, USAF (Ret) • General Ron Keys, USAF (Ret) • Admiral Joseph Lopez, USN (Ret) • General Robert Magnus, USMC (Ret) • Admiral Steve Abbot, USN (Ret) • Vice Admiral Denny McGinn, USN (Ret) • Vice Admiral Lee Gunn, USN (Ret) • Sherri Goodman

4. CNA MAB National Security Framework • Economic Strength • Geopolitical Stability • Military Capability • Environmental Sustainability National Security Is More Than DOD

5. MAB #1 Finding America’s dependence on fossil fuels constitutes a significant national security threat

6. Oil - The Facts • U.S. uses ~ 18-19 million barrels/day • About 40% is imported • About 40% of imported is from OPEC • Global commodity – price set by global supply (OPEC) and demand (ROW) • China is NOW world the largest importer and growing at 7% each year • China exceed US imports THIS Year (years earlier than predicted)

8. Evolving Energy Posture -- US Oil Production U.S. Energy Information Administration | Annual Energy Outlook 2013 Early Release Overview

9. New Energy Posture: Five “Myths”? 1 North American can achieve oil independence 2 US can achieve energy independence 3 The new found oil/gas will allow us to reduce US presence in the Middle East 4 New found gas supplies solve the GHG problem 5 We can shift away from renewable/clean energy U.S. Energy Information Administration | Annual Energy Outlook 2013 Early Release Overview

10. New Posture: North American Oil Independence

12. Non OCED Oil Demand Accelerates

13. New Posture: US Energy Independence

16. New Posture: US and the Middle East 16

17. New Posture: Climate Stress U.S. Energy Information Administration | Annual Energy Outlook 2013 Early Release Overview

18. New Posture: Climate Stress CNA Military Advisory Board National Security and the Threat of Climate Change (2007) • Projected climate change poses a serious threat to America’s national security • Climate change acts as a threat multiplier for instability in some of the most volatile regions of the world • Projected climate change will add to tensions even in stable regions of the world • Climate change, national security, and energy dependence are a related set of global challenges • U.S. should commit to stabilize climate changes to avoid significant disruption to global security and stability

19. New Posture: The Impact of Clean Energy

20. New Posture and Renewables

21. DOD as a Leader in Renewables DOD consumes 145 million barrels annually • DOD alternative fuels policy: • Ensure operational military readiness • Improve battlespaceand expeditionary effectiveness • Increase the ability to use multiple, reliable fuel sources • Increased resilience - supply disruptions- price volatility • Increased fuel options for operational commanders • “drop-in,” that is, requiring no modification to existing engines • cost-competitive with conventional petroleum fuels • available in sufficient quantities; • derived from a non-food crop feedstock; and • have lifecycle greenhouse gas emissions less than or equal to conventional petroleum

22. Service Initiatives • Army • By 2025, at least 25% of energy used for tactical power derived from renewable. • By 2028 50% of the fuel requirement in the training base for the tactical mobility met by alternative fuel blends • Air Force • As of 2012 tested and certified all aircraft and systems on a 50:50 alternative fuel • By 2016 acquire 50% of the Air Force’s domestic aviation fuel requirements via an alternative fuel blend in which the alternative component is derived from domestic sources produced in a manner that is greener than fuels produced from conventional petroleum • Navy • By 2016 deploy a “Great Green Fleet” strike group of ships and aircraft running entirely on alternative fuel blends by 2016. Demonstrated during the 2012 RIMPAC • By 2020 50% of the Navy's total energy consumption from alternative sources

23. Other Initiatives • 2006 and 2009 DOD • clean energy investments increased 300 % • from $400 million to $1.2 billion • Starting in 2015 Pentagon will be spending $2.25 billion per year • By 2030 projected at $10 billion annually

24. Other Initiatives • 2011 Defense Production Act -- Departments of the Navy, Energy and Agriculture Memorandum of Understanding • "assist the development and support of a sustainable commercial biofuels industry.“ • Support advanced drop-in biofuel plants and refineries to produce advanced biofuels that • meet military specifications; • • are price competitive with petroleum; • • are at geographically diverse locations with ready market access; • have no significant impact on the food supply.24 • $510 million over a period of three years, with $170 million each from the Navy, the Department of Energy, and the • Department of Agriculture.

25. Questions

26. Back-up

27. CNA- Military Advisory Board Ensuring America’s Freedom of Movement (2011) • America’s dependence on oil constitutes a significant national security threat • A 30 percent reduction in our use of petroleum would significantly improve our national security • We can achieve a significant portion of a 30 percent reduction through greater efficiency in oil use • There are many promising alternatives to oil as a transport… all of the most promising alternative fuels examined can lower overall national security risks rather than continuing our overreliance on oil

28. CNA Military Advisory Board (MAB) CNA -- Research organization providing in-depth analysis and solutions for government leaders • MAB -- 2007-2011 Over 30 Members (Rotational) • General Gordon Sullivan, USA (Ret) Chief of Staff, US Army • General James Conway, USMC (Ret) Commandant of Marine Corps • Admiral “Skip” Bowman, USN (Ret) Director, Navy Nuclear Power • General Paul Kern, USA (Ret) Commander, Army Materiel Command • General “Chuck” Wald, USAF (Ret) Deputy Commander, U.S. European CMD • General Ronald Keys, USAF (Ret) Commander, Air Combat Command • Admiral Joseph Lopez, USN (Ret) Commander, US Navy Europe • General Robert Magnus, USMC (Ret) Assistant Commandant, USMC • Admiral John Nathman, USN (Ret) Commander, Fleet Forces Command • Admiral Steve Abbot, USN (Ret) Deputy Commander, US European Command • Vice Admiral D. McGinn, USN (Ret) Commander, Third Fleet • Vice Admiral Lee Gunn, USN (Ret) Inspector General, Department of the Navy • General Paul Kern, USA (Ret) Commanding General, Army Material Command

29. New Posture: US Oil Demand