Editor's note: The following article is part of HP's July issue, which is the 90th anniversary of the magazine. As part of the anniversary, HP reflects on the evolution of the industry over the past 90 years to see what clues history may offer to its future. The full issue, both digital and print, will be released next week.
The relationship between the military and the petroleum industry dates back to the years before World War I (WWI), when the US and British navies started to switch from coal to oil as a fuel source. Military dependence on oil only increased as WWI progressed, since the military innovations of the time (airplane, tank, submarine) all needed oil to run. By World War II (WWII), militaries around the world were hooked on the hydrocarbon.
The intertwined relationship between oil and military is not just a story of gasoline and jet fuel, though. Other uses of the hydrocarbon molecule were parsed by military men in the 20th century, leading to rapid innovation in chemicals, explosives and rubber.
Militaries in the modern era are still vast consumers of oil and a variety of refined products, although there has been increased military investment and interest in the possibilities of biofuels and alternative fuel sources like wind, solar and tidal power.
An example of a military with a thirst for fuel is the US defense forces. The US Department of Defense (DOD) consumes upward of 1% of the petroleum products refined in the US annually. The majority of the DODs bulk fuel purchases are for jet fuel, which averages about 100 million bpy.
The DODs top four fuel suppliers operate a combined 31 refineries in the US, representing 6 million bpd of refining capacity. The Defense Energy Support Center (DESC) purchases fuel for all DOD services and agencies, using fixed-price contracts with economic price adjustments. DESC typically awards fuel contracts based on the lowest cost to the point of delivery, typically for lengths of one year. DESCs fuel procurement categories include bulk petroleum products, ship bunker fuel, into-plane (refueling at commercial airports) and post camp and station. Although DOD may represent the largest US consumer of refined products, its primary fuels are Jet Propellant 8 (JP-8), Jet Propellant 5 (JP-5) and diesel.
Oil became important for militaries in the years before WWI, as many of the leading navies of the time began switching from coal to oil to power their ships. During WWI and pretty much ever since, having access to large amounts of oil resources was a key indicator of a countrys and a militarys power.
Once again, WWI offered a key indicator, in that Britain and France could depend on oil supplies from the Middle East and North America, while Germany was solely reliant on Romania. This caused the Germans to suffer oil shortages at inopportune moments during the war, and these shortages should certainly be considered contributing factors to their eventual surrender.
The end of WWI did not cause Germany to stop obsessing over oil. When Adolf Hitler took control of the country in the 1930s, he was keen to develop a domestic synthetic fuel industry. When WWII started, synfuels refined from coal were a significant contributor to Germanys energy needs. The one problem with this was that getting oil from coal requires a complicated, expensive and labor-intensive process. The process also needed large steel structures, which then made these synfuel refineries susceptible to air raids.
Hitler was undeterred, though. Under an agreement in 1939, Germany began receiving big shipments of oil from Russia. This wasnt enough for the German industrys (military and otherwise) thirst for oil, so Hitler had to look to exotic lands (like the Caucasus) to get his oil fix. Once Hitler found out about the vast oil reserves in the Caucasus, he decided to show what a swell guy he was, and commenced with an invasion of Russia in 1941, a mere two years after the Russians began generously allocating oil to him.
Post WWII, one of the often overlooked reasons for the Soviet Unions lack of saber rattling and belligerence was the simple fact that it did not have access to enough oil to fight another war. The US worked hard to keep the Soviet Union out of the Middle East, and, for the most part, the scheme worked. Not only did this allow the US and its allies access to the oil reserves of countries like Saudi Arabia (thus preventing the Soviets from doing so), but it also gave the US and the West a strategic boost in global positioning, should another conflict break out.
During WWII, US Chief of Naval Operations Ernest King uttered a succinct order that became a rallying cry for the Allies. Oil is ammunition, Admiral King said. The propaganda arm of the US military ended up using this statement for promotional posters as you can see in Figs. 1 and 2.
Fig. 1. US Chief of Naval Operations Ernest
King uttered a succinct order that became a
rallying cry for the Allies.
Fig. 2. A US military promotional poster from
One way that ammunition was distributed was via an explosive chemical compound by the name of trinitrotoluene (TNT).
TNT. Invented by a German in 1863, TNT was used by Germany and other militaries starting in the early 1900s. The breakthrough in source material for the explosive in the US did not happen, though, until 1933. Thats when the researchers at Standard Oil Development (the company that later became Esso and then Exxon) told the US Army about the detection of toluene in product streams from thermal reforming experiments on a petroleum-based naphtha. This first discovery later led to a significant new source of pure toluene, something that would help the Allies immensely when they were looking to blow things up.
These samples did not come up to the nitration-grade requirements, but Esso continued the research. Eventually, the scientists decided to give catalytic reforming a try. This process gave much improved results over the thermal route, and a pilot plant was built in 1938. Ultimately, a 99+% toluene stream was produced that could be nitrated.
With war pending, the Armys interest in toluene became grave and they ordered a first batch amounting to 20,000 gallons, said G. T. Westbrook, an expert on the subject of petroleum refining during the WWII time period. A logistics nightmare existed at that time, as seen in the steps taken to fill this contract. The naphtha feedstocks were refined in Texas. They were then shipped to New Jersey for reforming. This reformate stream was returned to Texas in 22 tank cars for aromatics recovery. Next, the aromatics (benzene, toluene and xylene) were shipped to Louisiana for recovery and purification of toluene. Finally, the toluene was shipped to Maryland for nitration.
Such a far-flung production network meant that Esso did not make not make any money on its 1940 contract with the US military. Business did improve dramatically after that, and Humble Oil ended up building the Baytown Ordinance Works, a plant that, during WWII, produced more than half of the total toluene supply extracted from oil.
Aviation gasoline. The Allies aviation gasoline (AGN) program was tasked with producing a rather complex mix of fuels. AGN is a high-octane, controlled-vapor-pressure fuel for propeller-based planes. In 1939, with motor gasoline at about 75 octane, AGN requirements would range from as low as 87 for a simple reconnaissance plane to 100 octane for high performance fighters and bombers.
According to Mr. Westbrook, in 1939 the US AGN capacity was about 17,000 bpd. Early in 1941, forecasts were at 35,000 bpd, but, after Pearl Harbor, those jumped to 190,000 bpd. AGN capacity finally crested at over 600,000 bpd in 1945.
To produce the right fuel at the right octane for military planes, it was decided that a major refining construction initiative would be accompanied by tweaking existing refineries. Over 300 refineries were targeted for this effort, which consisted of implementing blending policy and operational changes.
As Mr. Westbrook was keen to point out, operational changes included searching refineries for high-octane, straight-run blendstocks; coordinating interplant blendstock moves; maximizing cracked gasoline output for an AGN base, and allocating more feedstock to alkylation units for more alkylate output.
SBR. Along with fuel, WWII created a vast demand for styrene-butadiene rubber (SBR). When the natural rubber supply from Southeast Asia was cut off at the beginning of WWII, the US and its allies faced the loss of a strategic material. With US government sponsorship, a consortium of companies involved in rubber research and production united to produce a general purpose SBR on a commercial scale. These companies, in collaboration with a network of researchers in government, academic and industrial laboratories, developed and manufactured, in record time, enough synthetic rubber to meet the needs of the US and its allies during WWII.
Rubber was a commodity of great military importance. The construction of a military airplane used half a ton of rubber; a tank needed about one ton. Each person in the military required 32 pounds of rubber. Tires were needed for all kinds of vehicles and aircraft.
By the late 1930s, the US rubber industry became the largest and most technologically advanced in the world. During this time, the industry was using half the worlds supply of natural rubber, most of it coming from Southeast Asia.
Shortages of natural rubber caused by the advent of WWII led the US government to embark on a program to produce a substitute for this essential material quickly and on a very large scale. There was a real danger the war would be lost unless US scientists could replace almost a million tons of natural rubber with a synthetic substitute within 18 months.
To work this industrial and scientific miracle, the US government joined forces with rubber companies, the young petrochemicals industry and university research laboratories. The resulting synthetic rubber program was a remarkable scientific and engineering achievement. The partnership expanded the US synthetic rubber industry from an output of 231 tpy in 1941 to an output of 70,000 tons per month in 1945.
Onto the future. While the relationship between the military and the hydrocarbon has been a good one, there are some military folks out there advocating for dialing down the militarys reliance on oil. A group of retired US generals recently put out a report (issued by CNA Analysis and Solutions) in which they advocated for a 30% reduction in the US use of petroleum.
A 30% reduction in our use of petroleum would significantly improve our national security, the report said. We chose our reduction target based on a specific military challenge. CNA analysis shows that if America used 30% less oil, our economy would have enough resilience to sustain the effects of a complete shutdown of the Strait of Hormuz, or any other major shipping choke point, with little effect.
The report argues that if the US achieves this 30% reduction, any terrorist attack or action by a rogue nation that would significantly disrupt the global flow of oil would cause little, if any, first order economic impact to the US.
The US spends billions of dollars each year on military operations in the Persian Gulf region. In a 2010 CNA report, the organization noted that the average estimate for the annual military cost of protecting oil traffic in the Arabian Gulf was $74 billion.
It is our view that there are several other strategically important reasons for maintaining a significant military presence in the Middle East beyond protecting oil routes, the report said. However, it is clear that by reducing US demand for oil, and thereby reducing US economic vulnerability to supply and price shocks, the US would increase its options in military presence, operations and costs in that region.
The retired generals believe that making the US less sensitive to interruptions from overseas oil supplies also reduces the potential urgency of a military response to closures of critical ocean chokepoints. For example, projections indicate that, in the next 15 years, China and India will be increasingly reliant on oil imports, including imports from the Persian Gulf region.
If we begin to act now to make the US economy less sensitive to turbulent oil prices, our leverage will increase when asking other countries to supplement, or cooperate with, US forces in assuring the flow of oil through the region, the report said. The US will, in our view, be relieved of some of the military and economic burden of protecting those sea lanes, and be able to focus resources elsewhere.
So if the US economy and military are to reduce reliance on oil, how will they do it? The answer could be biofuels.
Ethanol and biodiesel have, for years, been produced and consumed around the world as fuel additives and, less often, as stand-alone fuels. In the US today, most light duty vehicles are burning gasoline blended with up to 10% ethanol.
At present, the US and Brazil lead the world in the manufacture and use of ethanol. France, Sweden and Germany are major producers of biodiesel. These technologies continue to advance in efficiency, raising the possibility of future mass production of fuel from cellulose (like grasses, wood and sawdust), algae, manure and municipal or industrial waste.
In 2008, biofuels accounted for less than 2% of the worlds transportation fuels, but their use is growing dramatically. Part of their attractiveness is that the processes of their conversion into portable forms of energy generally emit much lower levels of CO2 and other greenhouse gases than result from the conversion of gasoline. The other key aspect in the growing use of biofuels is government mandates and subsidies.
Under the US Energy Independence and Security Act of 2007, the US government has defined a Renewable Fuel Standard (RFS) that mandates, out to 2022, the increasing use of renewable fuels as gasoline additives in the US. The trend in these standards is to keep the volumes of corn-based ethanol and biodiesel roughly constant, while increasing the level of cellulosic ethanol and, more slowly, advanced non-cellulosic ethanol.
Complicating factors. There are many variables to consider when advocating one alternative fuel over another. Are there economic or geopolitical security issues to consider? Are there unforeseen consequences to the environment? What are the military implications? Even if a replacement fuel is found that addresses all of these concerns in a satisfactory manner, technical or economic challenges to the full ramp up of the fuel source must be considered. Table 1 presents the pluses and minuses of an assortment of alternative fuels.
Crude oil and the refined products derived from it has been a key cog in military operations from the years before WWI all the way to present day. Finding, defending and maintaining access to oil supplies has also been a key military activity during the last 100 years and one that promises to continue.
However, there is the possibility of change on the horizon, as arguments are growing in volume that such reliance on the hydrocarbon is unhealthy and unsustainable. A variety of biofuels exist in all forms of development, but it remains unclear if any of them have the staying power or the energy dependability to replace the hydrocarbon and take militaries and the globe on which they reside into the next century. HP