Wednesday, August 11, 2004

Fuels for Wartime
With so much attention focused on the attractiveness of alternative fuels for industry and consumers, the energy needs of the military are easy to ignore. But with increasingly sophisticated combat hardware deployed in multiple theaters of war, this is an issue in which the Pentagon is keenly interested. As this article on possible battlefield applications of gas-to-liquids technology indicates, it is also an area with no shortage of R&D money.

As we have seen in Iraq, the high fuel consumption of modern tanks, infantry fighting vehicles, and attack and transport helicopters requires a large, expensive and vulnerable fuel supply chain. The military and its civilian partners are pursuing both the application of advanced technology to reduce fuel consumption, including hybridization and fuel cells, as well as efforts such as the Syntroleum approach to produce fuel closer to where it is needed.

While it is possible that one or the other avenue will produce useful spinoffs for domestic applications, the history of military procurement cycles suggests that it is equally likely that technology will flow in the opposite direction.

Nevertheless, military applications of advanced vehicle technology and alternative fuels represent an important early market for both. Because the cost of fuel delivered to the battlefield is so much higher than for any other application you can think of, short of spaceflight, this market will be less price-sensitive and more focused on performance. This could give developers a chance to move down the experience curve with fewer of the usual commercial pressures, and that might mean a greater variety of viable alternatives showing up in the marketplace in a few years. Ultimately, that could be very positive for improving energy security and possibly even lowering energy costs.

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