Poor Priorities

I couldn’t help but marvel at the synchronicity of two unrelated events over the past few weeks. The first, on January 12, was the rare cancellation of a major military acquisition program with problems called "too expensive to fix." It takes an Act of Congress to kill most military contracts due to the pork flowing to local communities and businesses. Witness the hand-wringing by legislators when the armed services want to close a base in their district to save a buck.

The second event was President Bush’s promise in his State of the Union address of January 31 to wean the U.S. from its "addict[ion] to oil" by increasing funding of clean-energy research by 22%. I was completely underwhelmed by this proposal. The increase sounds huge but isn’t, considering the current level of investment in alternative energy research.

Hard to kill

The cancellation of the Aerial Common Sensor program on January 12 shouldn’t have come as a surprise to its prime contractor, Lockheed Martin (LM). The system was intended to detect enemy electronic signals and troop movements from 37,000 feet, but LM couldn’t figure out how to pack all the required gear inside a medium-sized jet. So the Army cancelled the $879 million development contract for "convenience" in mid-January and paid LM a termination fee for its trouble. After licking its own wounds and returning to the drawing board, the Army—which still wants to pay $8 billion for 50 planes equipped with the spying system—said it plans to readvertise the project in 2009. This illustrates that most defense procurement programs take on a life of their own and a staff to match.

The list of other major defense programs cancelled over the past four years is short but memorable for the programs’ cost:

  • The United Technologies/Boeing Comanche helicopter program—cancelled in 2004 after spending $6.9 billion over 21 years to develop a helicopter with a sticker price of $60 million.
  • The Army’s Crusader artillery project—cancelled in 2002 after more than $2 billion went down a rat hole. Even after Defense Secretary Donald Rumsfeld killed Crusader, Congress kept the project on life support for a while before finally pulling the plug.

Millions vs. billions

As I tote up how much has been squandered on ill-conceived military hardware projects alone in just the past few years, I get the impression that Washington still is far more interested in defense spending than energy independence. A comparison of the year-on-year figures for energy programs is telling. The president’s FY07 budget calls for spending $44 million on wind energy research and $148 million on an initiative to accelerative the use of solar energy technologies by homes and commercial buildings. The size of the former request is a mere $5 million above the FY06 level; that of the latter is $65 million higher than last year’s.

The FY07 budget also proposes increasing yearly federal funding for FutureGen—the project to develop, build, and deploy the world’s first "zero-emissions" coal plant—from $18 million to $53 million. FutureGen funding requests have gotten a lukewarm reception from lawmakers in the past. Although the Department of Energy received the entire $18 million requested last year, Congress failed to approve the president’s request to pass on to FutureGen another $257 million in "clean-coal technology" money appropriated to—but not spent by—the DOE.

Energy Secretary Samuel Bodman has rejected criticisms from environmental groups and others that the FutureGen effort will yield just one plant in 10 years. I agree with Bodman that the success of the initiative would dramatically change the way energy is used globally. But millions rather than billions to develop one plant in 10 years? Too little, too late, I say.

Walking the talk

In fact, "too little, too late" is a good way to describe the current level of federal support for U.S. energy self-sufficiency. Despite the lip service the issue continues to receive, direct funding for technology development is small compared to the nearly $900 million gambled on the Aerial Common Sensor project and a trifle relative to the $8.9 billion wasted on the Comanche and Crusader programs. Although there’s a fine line between a dead end and a false start, if the money spent on those three projects had instead been spent on FutureGen and similar programs, we might now be looking at years rather than decades to ensure our energy independence.

Secretary Rumsfeld may deserve criticism for his policies in Iraq but not for his ideas on transforming the armed forces. Rumsfeld’s vision is to fund those defense projects involving "leap ahead" technologies that will give the U.S. military an edge on the battlefield. Our battle for energy independence should be given the same priority.

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