Rand: No direct benefit from US military development of alternate fuels

If the US military were to continue investing in alternate fuel development, researchers see no mission-specific, direct benefit to the nation’s armed forces, Rand Corp. concluded. The US Department of Defense asked the nonprofit research group to study the potential of alternate fuels for the Army, Navy, and Air Force.

Rand researchers recommend the DOD and Congress reconsider whether defense appropriations should support the development of advanced alternate fuel technologies.

“The Department of Defense consumes more fuel than any other federal agency, but military fuel demand is only a very small fraction of civilian demand, and civilian demand is what drives competition, innovation, and production,” said James Bartis, study author and Rand senior policy researcher.

The Rand study identified liquid fuel produced via the Fischer-Tropsch process as the most promising option for affordably and cleanly meeting military fuel specifications. With carbon dioxide capture, the study found Fischer-Tropsch fuels made from a mix of coal and biomass generate lifecycle greenhouse gas emissions that are less than half of petroleum-based fuels.

The military has invested in advanced technology to produce jet fuel from algae-derived oils. But Rand researchers said algae-derived fuel is more a research topic rather than an emerging option with which the military can run its operations.

Most of DOD’s efforts in alternate fuel development has been geared toward providing technical viability rather than establishing a process that yields affordable, environmentally sound fuel production, Rand said.

The US Department of Energy already knows about how hard it is demonstrate affordable, environmentally sound production. DOE has experienced this from its efforts in fuel cell and solar photovoltaic technology development, Rand researchers noted.

Texas agency skips EPA hearing

The most telling news coming out of a US Environmental Protection Agency hearing in Dallas was the absence of the Texas Commission on Environmental Quality (TCEQ). EPA’s Jan. 14 hearing concerned the federal takeover of permits for new or expanding Texas power plants, refineries and other industrial plants.

"The state's position on proposed greenhouse gas regulations has been clearly articulated to the EPA and well documented in several pending court cases,” TCEQ said in an email statement to OGJ.

“Our attempts to reason with EPA and efforts to have constructive discussions on our position and their authority under federal law have been ignored,” TCEQ said. “We look forward to pursuing our position in the court system, and we are confident that science and the law will prevail."

The EPA and Texas state officials disagree about whether EPA legally can regulate GHG emissions such as carbon dioxide, and whether EPA has a right to issue GHG-gas permits in Texas when the state refuses to do so.

Effective this year, permit applications for industrial plant expansions must outline plans to use “best available control technology” to reduce GHGs. That stems from a 2007 US Supreme Court decision saying that the Clean Air Act authorizes limits on GHG emissions.

State agencies in every state but Texas are issuing the permits or putting procedures in place to do so. But Texas refuses to take part, saying the EPA overstepped its authority by regulating GHG emissions.

Meanwhile, the battle continues in federal court. Separately, the EPA is taking written comments until Feb. 14.

Deloitte: Oil, gas industry faces well-organized cyber security threats

Oil and gas companies face cyber security threats, including well-organized efforts by criminal syndicates and terrorist groups. The cybercrime landscape has evolved into highly specialized criminals having sophisticated tools that can routinely evade many security controls, analysts said.

Rich Baich of Deloitte& Touche LLP said the changing threat environment means companies need to evaluate their security strategies, concentrating on espionage and critical infrastructure vulnerabilities.

“This isn’t an issue that is going to be solved by buying some technology,” Baich said.

Speaking during a Dec. 15, 2010, webcast, Baich urged senior executives to build an effective cyber security program. Executives should ask themselves if their company has enough skilled employees or contractors to mitigate advanced, persistent cyber security threats, he said.

Oil and gas companies are at high risk from web-based malware encounters and cyber attacks because they possess valuable, proprietary data on reserves and discoveries. High downtime cost and attack frequency rates necessitate strong cyber-security programs, Deloitte spokesmen said.

A Ponemon Institute last year released a study on annual costs of cyber crime. The study showed energy firms incurred the second-highest cyber-crime costs of surveyed industries. Ponemon polled 45 US firms. Only the defense industry reported cyber crime costs higher than the energy industry.

Both defense and energy reported cyber crime costs of more than $15 billion/year. The energy industry figure includes all types of energy rather than just oil and gas.

NOIA sees positive signs for tapping energy off Massachusetts

The National Ocean Industries Association applauds the US Department of the Interior’s recent Request for Interest concerning renewable leasing off Massachusetts and the availability of the commercial lease for the Cape Wind offshore wind project.

“I applaud Secretary [Ken] Salazar’s forward movement…on offshore renewable energy,” NOIA President Randall Luthi said in a news release. “It is gratifying to see the publication of the commercial lease for the Cape Wind project, which has undergone extensive studies, reviews, and litigation this past decade.”

Luthi sees the Request for Interest “as a positive indicator that there will indeed be more such leases to come. “

Acknowledging that offshore wind energy eventually will be helpful to the overall US energy supply, Luthi noted that analysts and others anticipate that it will be decades before offshore renewables “make a real dent in the domestic energy demand.”

Luithi encourages Salazar to commit himself “equally, if not more so, to the efficient and timely permitting for offshore oil and gas projects that will produce energy now and provide more jobs today.”

In November 2010, Cape Wind announced its first buyer. The Massachusetts Department of Public Utilities approved a contract in which Cape Wind plans to sell half of its power to National Grid, the state's largest electric utility.