JOSKOW: Good evening. Welcome to today’s Council
on Foreign Relations meeting: “Power, Partnership, and Presence: U.S. Navy Leadership.” We’re
pleased to welcome Secretary of the Navy Ray Mabus to the-to the Council.
This evening’s session will focus on the secretary’s programs to reduce the Navy’s reliance on
fossil fuels, grow its utilization of alternative energy, and to pursue energy security in the-in
the face of global climate change. Secretary Mabus will first make a few brief remarks,
then I’ll ask him some questions, and then we’ll give the members of the Council a chance
to ask questions as well. Mr. Secretary.
MABUS: Great. Doctor, thank you so much, and thank you all for being here.
The two questions I get asked the most are, why does the Navy need as big fleet as we
have, and why in the world is the Navy worried about energy? The answer to both those questions
is the thing that the Navy and Marine Corps uniquely give to this country is presence.
There is no next best thing to being there-being in the right place not just at the right time,
but all the time. So we are growing the Navy fleet after years of decline.
In 2001, there were 316 ships in the U.S. Navy. By 2008, after one of the great military
buildups in our history, we were down to 278 ships. In that period, those seven years,
the Navy put 41 ships under contract-not enough to keep our fleet from declining and not enough
to keep our shipyards in business. As of last week, I’ve been in this job for
seven years, so it’s an exact comparison. I’ve put 85 ships under contract in the same
period with a smaller top line. And so we’re going to grow the fleet. We’ll have 300 ships
again by 2019, and 306-308, which is our demonstrated need-it’s our assessed need-by 2021.
And the second question: Why is the secretary of the Navy, and why is the U.S. Navy, worried
about energy, about power? And one thing is historic. We’ve always been on the cutting
edge of energy change. We went from sail to coal in the middle of the 19th century. We
went from coal to oil in the early 20th century. We pioneered the use of nuclear for propulsion
in the middle of the 20th century. And every single time we did that, there were naysayers.
You’re trading something that’s free, the wind, for something that costs money, coal.
Or, you’re abandoning all those coaling stations around the world for oil. Or, there is no
way that you can make nuclear small enough and safe enough to put in a submarine. Every
single time, the naysayers were wrong. They’re wrong this time.
We’re doing it for several reasons. One is-and the reason we started down this path-is to
be better warfighters. Energy can be used as a weapon, and it is used as a weapon. Look
at what Russia did to Crimea. Look at what Russia did to Ukraine. Look at what Russia
tried to do to Europe before the price of oil bottomed out. I did not want that used
as a weapon against us. Secondly, the cost of both price shocks and
supply shocks in energy. Because oil is a global commodity, we don’t control the price.
It goes up and down. But in the first couple of years that I was there I was presented
with more than $2 billion in unbudgeted price hikes because of energy. And even in the Pentagon,
finding $2 billion that’s unplanned for is not an-not an easy task.
The other thing is, we were losing a Marine killed or wounded for every 50 convoys of
fuel we brought into Afghanistan, and that’s too high a price to pay. So, in 2009, I came
up with some energy goals that by-the biggest of which, by 2020, at least half of all naval
energy afloat and ashore would come from non-fossil fuel sources. We’re there on our bases today.
We got there by the end of 2015. Half of the power that is under contract for our bases-so,
more than a gigawatt we have under contract for our bases. So we’re five years early doing
that. In the fleet, 30 percent now is alternative, and it’s growing. We’ve got the Great Green
Fleet at sea right now, which is-the carrier is nuclear, the surface ships where they’re
sailing on a blend of marine diesel and biofuels. The Marines are making energy where they are
with things like very small solar panels that are rollable-put it in your pack, power your
GPS, power your radios with that. It saves a company of Marines 700 pounds of batteries
that they don’t have to carry. They are also using things like portable solar for their-for
their tents, for where they live, for all their power. Once you turn the generators
off, number one, you can hear if the bad guys are sneaking up on you; and, number two, you
take a target off yourself because everybody knows where you are if you’ve got a generator
going. But the second reason is climate change. As
we move forward, the Navy and the Marine Corps are our first responders. So, as the Arctic
opens up and is ice-free now, and you’ve got shipping lanes, the Navy is going to be the
one to maintain freedom of navigation through that as you get contests for minerals in the
Arctic, in the South China Sea, off the coast of Africa in the Gulf of Gabon. It’s the U.S.
Navy that is the first responder. As sea levels rise and chaos and instability follows, it’s
the Navy and Marine Corps. And the estimates are that in the not-too-distant future, 100
to 200 million people are going to be displaced by this because 70 percent of the world’s
population lives within 60 miles of the ocean. And then we have bases on the ocean. It makes
sense that we do. And they’re going to be threatened with rising sea levels.
And so it’s for a couple of reasons. One is warfighting. Two is just the effects of climate
change and our need to do something about it, because it has a direct impact on our
responsibilities. And the final thing I’ll say is, once you
do the ships and power to drive those ships and to get those ships where they need to
be, and those aircraft, we have to have the sailors and Marines to actually fly them and
sail them. And so the other thing that I’m extremely proud of-and we’ll, I hope, get
into this more-are some of the personnel initiatives that we’ve taken.
We were talking about it backstage. We brought Navy ROTC back to Harvard, Yale, Princeton,
Columbia, after an absence of 40 years. But we also brought it to Rutgers and Arizona
State, the two most diverse campuses in this country.
I opened up submarines and riverines to women, and just opened up all ground combat positions
to women, because if you set standards, if you make those job-related, and you don’t
relax them, then to tell somebody you cannot do it because of the shape of your skin or
because of who you love or because of the color of your skin is just wrong. And we are
a stronger force because we’re a more diverse force, because people with different backgrounds
think differently, they bring different problem-solving skillsets.
I tripled paid maternity leave for sailors and Marines from six weeks to 18 weeks. We’re
opening childcare two hours earlier, leaving them open two hours later. And again, it’s
to make us a better force. And I think that we are much stronger today
than we were a few years ago, when we were excluding people because of their gender,
because of their sexual orientation, and because of the color of their skin.
So, again, thank you all for being here, and I look forward to it.
JOSKOW: Thank you. Thank you, Mr. Secretary. Let’s stay on the personnel side of the equation.
Have the senior military staff embraced your alternative fuels and energy efficiency programs,
or have you encountered resistance from them? MABUS: Well, when we first started-when I
first started, in 2009, we were hard-pressed to find two flag officers that you could get
to endorse this. We just did a conference on alternative energy at National Defense
University, and my energy office did a film of flag officers endorsing this and talking
about why it was important. And we had two single-spaced, typed pages of flag officers
wanting to be on the record for this because they understand-because they’ve seen it in
action-it makes us better. It makes us better warfighters. So you’ve got the chief of naval
operations, you’ve got the commandant of the Marine Corps pushing for this.
And, as important as that is, you’ve also got that third class petty officer and that
lance corporal, because that lance corporal doesn’t have to carry the batteries, suddenly,
and that lance corporal doesn’t have to guard a fuel convoy coming into Afghanistan or Iraq;
and that third class petty officer is figuring out how to save energy on the equipment that
he runs on the ship. And so it’s a culture change, and it’s permeated the fleet. And
it’s because we really are better at our jobs because of this. And they’re the ones that
have to do these jobs, and they’re the ones that are on the tip of the spear doing it.
They’re the ones that see the impact the quickest. JOSKOW: You count nuclear power as an alternative
energy source- MABUS: I do.
JOSKOW: -and that’s not true in all of the U.S. states that have programs in this regard.
How important do you see nuclear energy being in the-in the future, as you make this transition?
MABUS: Well, we are 17 percent nuclear at sea. All our submarines, all our carriers
are nuclear. We tried it on other surface ships in the ’80s-cruisers, in particular.
It’s probably not going back there because it’s just not economically feasible right
now. Oil has to be over about $240 a barrel for an extended period of time to make it
economic. The reason it is feasible for submarines and
carriers is that it’s more expensive, but it gives us a combat edge. The carriers have
to be refueled ever 25 years. The submarines that we’re building today never have to be
refueled, so you never have to take them off the line to do that. Even though it’s more
expensive, it gives us an edge. And I don’t ever want to send sailors or Marines into
a fair fight. I want them to have an edge. And I think nuclear power, particularly at
sea, does that. And, you know, I’ll go one step further. We’re
not looking at it onshore, but I do think we should, at particularly distributed smaller
things that-with some of the new technology that’s coming along, it’s much safer, it produces
far less residue and nuclear waste. And, you know, it is an option that I think we should-we
should explore. JOSKOW: And a second alternative source are
biofuel blends that you’re-have there been any challenges in using the biofuel blends
in ships and other applications? MABUS: No challenge about the fuels. I mean,
we’ve got three requirements for biofuels. Number one, it’s got to be a drop-in fuel.
We’re not changing our engines. We’re not changing how they run. So, for ships and aircraft-and
we’ve certified every single ship and aircraft on biofuels.
Number two, it can’t take any land out of food production. We don’t want to be competing
for that. And, number three, it’s got to be cost competitive.
So we didn’t have any challenges putting it in the fleet. I mean, the engines didn’t notice
the difference. The only difference we can tell is they burn a little cleaner. Engines
last a little bit longer with biofuels than they do.
But the challenge that we had, the first batch we bought, in 2012, was a test batch-you know,
it was very small. We sent it out to proof of concept to make sure we could refuel at
sea, that we could refuel air-to-air, to make sure that we could put it in our misnamed
“oilers” and take it to sea. We paid $25 a gallon for that because it was a small batch
and there was just no scale to it. And so we got hammered for doing that, even though
first of a class, early adapters. I mean, smartphones are way more expensive than rotary
dial. Computers are more expensive than typewriters. So technology sometimes is more expensive.
But, now that we’ve gotten to scale, the fuel that we bought, that’s now being used at sea
in the Stennis Carrier Strike Group and also the carrier strike group that’s in the Mediterranean
right now, we paid less than $2 a gallon for that. So even-and it was just a normal solicitation.
It wasn’t, “Biofuel companies, give us your bid.” It was, “Here’s the fuel we need,” and
biofuels companies bid, a mixture. And they were successful in doing it. So even with
oil at these very low prices, it’s competitive now. And so it’s become the new normal.
JOSKOW: Have our allies’ navies learned lessons from what you’re doing?
MABUS: They have. We’ve got agreements with Australia, with Chile, with Japan. We’re going
to refuel, and we have been refueling-I’m going in two weeks to Italy to-we’re doing
an exercise at sea with the Italians. We’re going to refuel them with biofuels. And they’ve
got a biofuel plant now in Venice. And Rim of the Pacific, the biggest naval
exercise in the world, every two years, we’re refueling the Japanese, we’re refueling the
Chileans, we’re refueling the Singaporeans, we’re refueling the Koreans, we’re refueling
the Australians with biofuels, or with a mixture of biofuels. And the first time we did it,
on the USS Nimitz at RIMPAC in 2012, the vice chief of the Australian Navy came over by
helicopter and we did a big press event, and somebody said-asked him, said, how committed
are you to biofuels? And he said, well, they’re refueling that helicopter I just came over
on, I’m about to get back on it. So I’m pretty committed to this-(laughter, laughs)-to this
whole thing. And the last example I’ll give you is, in
Singapore, there are two refineries. One’s an oil refinery, mostly owned by the Chinese.
Right down the road is a biofuel refinery owned by a Finnish company. I don’t want to
be completely dependent on the Chinese to refuel our ships in that part of the world.
I want choice. I want to be able to go somewhere else to do it.
JOSKOW: It makes a lot of sense. Have you found any partnerships with the private sector
to be useful, or not? MABUS: Well, we’ve invested in three biofuel
plants. They come from-they’ve got completely different feedstocks. And they’re going to
come online by 2017, and they’ll produce about 100 million gallons a year, and they have
to compete in terms of price. But airlines now are-most of them are flying on at least
some biofuels. I mean, United has an investment in a biofuel refinery, FedEx, UPS, Virgin,
Alaska, all are flying on at least a mixture of biofuels. And part of that is just-I mean,
they’re all in the business of making money. Europe has got carbon restrictions now, so
if you’re going to fly into Europe, you better lower your carbon footprint or it’s going
to cost you-cost you some money. But they also sort of see the way the world is going.
And I mean, as I said, these fuels, same chemical composition, and their engines don’t notice
a difference. And if you can create a more stably priced, homegrown source of energy,
and it-you know, it also gives another source of income to people like farmers, which also
is important. JOSKOW: I know your-the size of the fleet’s
going to increase first to 300, and then to 306 surface ships. Is that creating challenges,
or is that an opportunity to design new ships that really accommodate alternative fuels?
MABUS: Well, as I said, we’re not changing our engines at all. Now, what we are doing
is becoming way more fuel efficient. We’re using a lot less oil. We’re using-the Navy’s
using 16 percent less than we were seven years ago. The Marine Corp’s using 60 percent less
than it was seven years ago. And so the-we’ve got two big-deck amphibious ships, the USS
Makin Island and the USS America, that are hybrids, the Prius of the seas. (Laughter.)
They have an electric drive for speeds under 12 knots and regular gas turbines for speeds
over 12 knots. The first time the Makin Island went out on patrol, they brought back 40 percent
of their fuel budget, and they stayed out 44 days longer.
But we’re doing other stuff that’s not nearly as dramatic, but has a big impact. If you
change the lightbulbs on a destroyer to LEDs, you save 20,000 gallons of fuel per year on
that destroyer, and you don’t have to change the lightbulbs but every seven years instead
of every six months, and it’s better light. You can-you can actually see better. We’re
doing stern flaps and hull coatings. We’re doing voyage planning like you did with sailing
ships, go with the-with the currents instead of against them. And so we’re cutting way
back. We’re doing the same thing, but just using much less fuel.
And our ships, while they’re becoming more energy dependent-I mean, they’re energy hogs
now. The Zumwalt, the new destroyer that just launched, is an all-electric ship. Our new
weapons systems-the railgun, the laser weapon-are very energy-intensive. But we’re being able
to have more energy density on these ships using less-using less fuel to do it.
JOSKOW: And if we turn to your fixed installations in the U.S. and abroad, is it the same strategy-renewable
energy, alternative energy, energy efficiency? MABUS: We’re doing all of those things. And,
as I said, we are over a gigawatt. We’re 1.1 gigawatts now. We use about 2 gigawatts a
year on our shore facilities. We’ve got two seagoing services, the Navy
and the Marines. But we also own 3 1/2 million acres of land and 117,000 buildings. So we’re
pretty big onshore too. We’re doing it all through public-private
partnerships. We’re doing it all so that private energy companies can finance this over-that
it’s financeable, that we do offtake contracts. Sometimes it’s on our land, sometimes it’s
not. But we’re doing it on virtually every base. And it’s not just in California, it’s
also in my home state of Mississippi, it’s in Florida, it’s in Georgia, it’s in the Northeast.
It’s all over this country. And public utilities have been some of our best partners in moving
toward alternative energy. And what we’re doing now is we’re moving to
microgrids, so that if something happens to the grid we can keep doing our military business.
We can pull ourselves off the grid and continue to do the defend and protect mission that
we’re supposed to do. JOSKOW: Well, it sounds like you’re real leaders
in this area. I hope others can learn from it.
Let me ask one final question before I open it up to the members. You spoke earlier about
rising seas and-as a result of climate change, and you have bases, obviously, on the ocean.
Are you think about how you’re going to accommodate the changes in sea level in terms of where
your bases are, how they’re structured, and so on?
MABUS: We’re having to. Norfolk is probably the most at risk, and it’s not very far from
having some real problems. We’ve already got the first climate refugees in the United States
now. An island in Louisiana disappeared, and it was a story in The New York Times. They
had to be resettled in this country. And so it’s not a theoretical thing. It’s not something
that may happen. And you look in the Pacific, we’re-you know, the odds are we’re going to
have an existential event there that we’re going to lose a nation. It’s going to go under
and it’s going to disappear. And a nation like Kiribati, which is about a meter above
sea level, you know, average, and one of the things that the president there said is that
one of his main jobs is to convince people to leave, to move somewhere.
This ought to concern us. This ought to-this ought to be a worrisome thing. We ought to
take a lot more action than what we’re doing. I mean, I think the president’s done-has taken
some pretty bold steps here. And one of the things the military brings is we’re big enough;
we can bring a market. And we also have generally been leaders in technology. I mean, the internet,
GPS, flat-screen TVs, most-a lot of our medical advances started in the military for military
reasons, but then migrated out to the civilian world. And I think that that’s happening here,
too. JOSKOW: Let me follow up on that, and then
I’ll open it up for questions. Do you have a dissemination program? Are you trying to
disseminate what you’ve learned from this experience with the private sector-with utilities,
with business, with the residences? MABUS: Yeah, we’re completely, completely
transparent. We’ll share with anybody. And one of the things that happens is, if
you put it on base, it begins to migrate out. If you-if you show it works-like, we just-we
just had the largest solicitation for electric cars in history. We’ve got over 50,000 non-combat
vehicles, and we drive them mostly on our bases, so electric cars are pretty perfect
for that. But once you get charging stations on bases and once you get charging stations
near them, it begins to spread. And so that’s-we’re doing it overtly, but we’re also doing it
just organically as well. JOSKOW: That’s great. I’m sure you don’t want
a headline that says “Navy Brass Buys $125,000 Teslas.” (Laughter.)
MABUS: (Laughs.) Yeah, you’re not going to see that. (Laughs, laughter.)
JOSKOW: OK, very good. Well, let me invite members to join the conversation
and to raise questions. Let me remind everyone this is on the record. And we have a microphone
that will come around, so you raise your hand and I’ll call on you. Wait for the microphone,
tell us your name, your affiliation. And as I’m sure you all know, questions have question
marks at the end of them. MABUS: (Laughs.)
JOSKOW: So questions and not speeches, thank you.
Yes, in the-in the third row. Q: Thank you. Very, very interesting remarks,
Mr. Secretary. You brushed upon it, but almost reluctantly.
I mean, the Navy was the pioneer in nuclear power. My God, it almost invented it.
MABUS: Not reluctantly. If I-if I gave that indication, it was a mistake.
Q: Well, I mean, it’s the one source of non-fossil fuel energy that can really move the needle.
MS. : Can we have your name? JOSKOW: I think-yes.
Q: I beg your pardon. Richard Huber, InVina Wine. We produce a nuclear fuel called wine
in Chile. MABUS: And we need a question.
Q: I said: Would you-would you-why are we unwilling to develop that source? You said
17 percent. It should be 50 percent of the-I mean, the Navy could be the leader in developing
this source of energy. Why aren’t we? MABUS: Well, I would argue that we are, in
terms of we-most of the-of the nuclear technology that comes out and is coming out now, most
of the research comes from ours-comes from our research. Now, there are differences because
ours are 35-year reactors that aren’t refueled. Civilian reactors are refueled, on average,
about every two years. And so you’ve got-you’ve got differences. Also, a submarine doesn’t
take as much power as a-as a community. But some of the technology is-a lot of the technology
is very transferrable. And as I said, one of the things that we are
looking at, but we haven’t gotten there yet, is distributed nuclear on bases and things
like that. Not the huge plants, because in every source of energy, regardless of what
it is-whether it’s solar or conventional energy-it’s becoming much more distributed, much more
making energy exactly where you use it, and storing it where you use it. And so, you know,
we are-we’re definitely not avoiding it. Right now we can get, in terms of alternative
energy for our bases, you know, we are-as I said, we’re past 50 percent and we’re continuing
to go doing stuff like wind and solar and geothermal and hydrothermal, which economically
right now is cheaper. And it’s-and it’s, very frankly, easier, as you know.
JOSKOW: Yes, you were second. Go ahead. Q: I’m Phil Huyck with Encite Corporation.
There is school that suggests that, long term-and we know where we all are in the long term-(laughter)-Keynes
put that very succinctly. JOSKOW: And he was right.
Q: There is a school that suggests that fuel cells, a hydrogen-based economy, is something
that eventually we will come to in a time for another range of fuel cells. As we know,
solid oxide, proton-exchange membrane, there’s a range of technologies. What is your focus
on, and what’s the Navy’s perspective on, fuel cells as an energy source?
MABUS: We’ve got several lines of effort on fuel cells. One is for unmanned underwater
vehicles, so that there is a technology-it’s still in the lab, but it’s going to move out
of the lab I think pretty soon-that you mix organic matter with seawater and you make
hydrogen. And so you can send down an unmanned underwater vehicle; when it needs more power,
it just sinks down to the bottom, scoops up organic material and mixes it with seawater-of
which there is a good bit in the ocean-(laughter)-and it can stay out basically indefinitely. So
we’re looking at that. We have-we have been looking at fuel cells
also as power for our bases and our ships. A little farther away, frankly, than some
of the other technology, but certainly a promising area in the future.
And I have to say, I’m pretty neutral about what sort of alternative energy you do-whether
it’s nuclear, whether it’s fuel cell, whether-whatever feedstock it is for biofuels, whatever-you
know, if it comes from a landfill, if it comes from camelina, if it comes from used cooking
oil, all of which we’ve bought, I don’t really care. I do care about the carbon footprint,
and I care about the-about the fact that it doesn’t take any land out of food production,
and I care about the fact that we can get it easily.
I think fuel cells have a-have a very, very bright future. I’m not sure we’re quite there
in terms of the technology that we need for-particularly to drive things like a naval ship, yet.
JOSKOW: Let me try this side. Yes. Yep, second row.
Q: Hello, Mr. Secretary. I’m George Stamas, old friend.
We’ve spent 40 minutes talking about innovation, extraordinary innovation by the Navy. I might
add this new weapon that you’ve created is also a source of great innovation, that we’ve
all been reading about this weekend. Can you speak to the relationship with the private
sector, this spirit of innovation? And I know you spend a lot of time in Silicon Valley.
How do you keep up that private-that relationship with the private sector? And what role do
they play in all these amazing innovations that we’re hearing about?
MABUS: Well, they play a critical and huge role in a lot of this.
The way we try to keep up is by establishing the connections. It’s also by making governmental
acquisition a little bit easier, a little bit less opaque, and trying to take the fear
factor out of-out of people selling to the military or to the-to the federal government.
That’s not easy. But we’re doing a lot more pilot programs, we’re doing a lot more proof
of concept, so that you don’t have to jump through all the hoops to do a program of record
until you see-so you succeed fast or you fail fast, without dragging on for years and year
and years. And so we do that. We also have great partnerships with universities,
with Applied Physics Lab at Johns Hopkins or Penn State or Purdue or Arizona State or
MIT or-I can, you know, just keep listing them on and on and on-to use some of their
cutting-edge research. And a lot of it’s funded from Naval Research Labs, from other parts
of the Navy or Marine Corps. And finally, the Marine Corps twice a year
has just an open house-one time, once every six months at Quantico, and then the next
time in Twentynine Palms in California. And they say, bring us your alternatives. Bring
us what you’re making. And that’s where we got the little solar panels, the rollable
solar panels. That’s where we got the portable solar generators. There’s a technology that
spray can-you spray something on a rock, put a lead to it, and it becomes a solar panel.
We didn’t know about that, but somebody brought it in. And what the Marines can do is they
can buy it. They can buy it on the spot. Their Expeditionary Energy Office can. And so that’s
one of the ways that we-you know, just show us what you got and maybe we’ll-maybe we’ll
buy it, and maybe, you know, we’ll turn your small company into a-into a much bigger company
if it-if it helps us, if it-if we’ve got a need for it.
And, you know, George, I don’t think anybody in here, when they think of Marines-and we
got two of them on the front row here-they don’t think about ardent environmentalists.
First thing-first thing-actually, we got three of them on the front row here. But they are
leading the pack in terms of that partnership with the private sector in terms of finding
what that new technology is out there. And if that technology is something that we can
use, we’re figuring out ways to get it quick and to keep companies from going under just
trying to get into the federal system, because Lord knows it’s way too complicated.
The last thing I’ll say, at hearings the last couple of years I’ve taken a chart, and it’s
about this big, and it’s our acquisition process. It’s the things you got to go through. It
looks like a plate of spaghetti. And it’s simplified. I mean, I didn’t-I didn’t put
everything on there. I mean, that is nuts that-the way we’re doing it today. We got
to cut out a bunch of this. Congress has tried and, you know, we’re trying.
And as I said, we’re basically trying to bypass a lot of this and do pilot programs or proof
of concept. I mean, the laser weapon, I talked to the reporter who wrote the article about
the railgun. I talked to him this morning. He said that the railgun was the most-viewed
video The Wall Street Journal had done this year. Last year, the laser that we’ve got
out in the Arabian Gulf was the most-viewed video. And the year before that, it was the
X-47B, the unmanned aerial vehicle that we landed on a carrier and catapulted off. He
said, just keep inventing these things; it’s really helping us a publication. (Laughter.)
You know, that laser weapon, we sent it out in 2013 as a demonstration. It’s a 30-kilowatt
laser. It was supposed to be for six months. They just loved the weapon. It’s really valuable.
So we’re learning lessons from that. It’s still a pilot, but now we’re building a much
larger weapon-the private sector is, having learned the lessons of what does it do in
a maritime setting, what does it do in, you know, 120-degree weather, how do you-how do
you keep it when it’s not absolutely level, as ships tend not to be. And so learning those
lessons has allowed us to succeed way faster, and so when we go to a program of record we’ll
have a lot of those questions that that spaghetti chart causes you to answer-we can skip big
chunks of that to get-to get more weapons like that.
Same thing with the railgun. We’re putting it as a test this year out to see it if works,
see how it works, see how it works in different environments.
JOSKOW: I’ll take another question from this side, and then I’ll move back to that side.
Yes? Q: Secretary, thank you. Masazumi Nakayama,
Citigroup. To keep Navy strong and keep seamen highly
motivated, what should U.S. taxpayer should do in terms of investment of their taxpayers’
money? And also, what kind of points that we-American should be careful and sensitive
to the U.S. Navy? MABUS: Well, part of my job, I think, is to
protect taxpayer money. And I’ll give you some examples.
On ships, Littoral Combat Ship was costing about 800 million (dollars) when I came in.
It’s costing 350 million (dollars) a ship today. We’re saving $300 million per destroyer
that we’re building. We bought 10 Virginia-class submarines over a five-year period; we paid
for nine. You know, it’s like having a punch card: “buy nine submarines, get your 10th
one free.” (Laughter.) And it’s because we’re doing stuff like firm fixed-price contracts
and multiyears and stable designs and mature technology. And so those shipyards that are
building the submarines knew how many people they were going to have to hire and have over
the next five years. We gave them some stability. They knew what materials they needed to buy
for 10 submarines, and it’s cheaper to buy them for 10 than it is for one. So we’ve been
driving down the cost. And I go back to-and we haven’t done it at
the expense-we’re building a lot more ships for less money. We haven’t done it at the
expense of aircraft. We’re buying 35 percent more aircraft than we were in the previous
seven years. But I go back, and my father was maybe the
cheapest human being who’s ever lived. (Laughter.) And I ran for-my first public office was state
auditor, and I was campaigning in Wiggins, Mississippi. And I ran into this guy, and
he looked at me and he said, are you Raymond Mabus’s son? And I said, yes, sir, I am. And
he said, well, I’m going to vote for you. If you’re half as cheap with the state’s money
as your father is with his-(laughter)-we’ll be OK. And so I’m just cheap. I mean, I want
to-I want to squeeze every nickel till we get it.
But the reason we need a great Navy, 90 percent of the world’s trade travels by sea-90 percent.
Ninety-five percent of the data-when you’re looking at your smartphone, when you’re on
the internet, 95 percent of the data goes under the sea. The reason the world’s economy
is doing as well as it is today is the United States Navy, because for the first time in
history for the last 70 years we have had a dominant Navy and we’ve kept the sea lanes
open for everybody-not just those flying our flag or the flags of our allies, but for everybody.
That’s the reason the economy of the world is as-is as a strong as it is today.
And so if you live in Iowa or Uganda-you know, you’re completely landlocked-you’re dependent
on the sea, and you’re dependent today on the United States Navy for freedom of navigation,
for freedom of access. And we’re the only people who can do it. And that’s why you need
a great Navy, is that presence. JOSKOW: OK. Yes, young woman right-she’s had
her hand up. Q: Hello, Mr. Secretary. My name is Kassia
Yanosek from McKinsey and Company. My question’s actually about conventional
energy, you know, and particularly natural gas. We actually have seen this huge renaissance
of natural gas. We have decades of it at-you know, that can be developed at quite cheap,
you know, numbers. And further, we’ve seen a globalization of gas, and we keep finding
lots and lots of gas offshore. So I’m wondering where it fits into the Navy’s strategy, particularly
as you think about, you know, electrifying your fleet. Thank you.
MABUS: Well, first, we can’t use natural gas on our ships or our aircraft because we’ve
got the engines. We’ve got most of the fleet we’re going to have, and we’re building to
the-to the fleet size and our aircraft, none of it can use natural gas. I mean, it would
be prohibitively expensive to go back and retrofit it. That’s why we’re looking for
a drop-in fuel instead of something like natural gas.
On our bases, we have moved to natural gas, but I don’t count it as an alternative fuel.
It’s still got carbon. It’s still a non-renewable resource. And we’re finding more, and that’s
great. And we’re-and it’s cheap, and that’s great. But it’s also, as you pointed out,
globalized. It’s a much more global commodity-not as much as oil, but certainly up there. We’re
not now, but could be susceptible to price shocks there, and supply shocks, in the same
way we are with oil. So I think that it is a valuable thing to use, particularly in our
shore establishments. One of the ways we’re using it is we’re taking out some very old,
very inefficient power plants on our bases and replacing them with much smaller distributed
power on those bases, and powering them with natural gas.
But I think long term, if we are going to be better warfighters-you got to-you got to
ship in natural gas. You’ve got to move it from one place to the other. And I think it’s
much more valuable to be able to make energy where you are, and it makes-it’s a military
advantage to being able to make energy where you are instead of having to move it any amount
of distance. JOSKOW: Yes? You’re next.
Q: Thanks, Mr. Secretary. It’s Aryeh Bourkoff from LionTree. Been a fascinating talk so
far, so thank you. There’s a lot of criticism around the dysfunctionality
of government from a management perspective. But given the fact that you’ve been at your
helm for seven years, talk a little bit about not just on the innovation side, but how you
manage the scale of the Navy-the people, the way you structure it, the way you get through
complex issues, problem solving, et cetera, and why it’s different from a lot of other
people’s perspectives of government. Thanks. MABUS: Well, the Navy has about $170 billion
budget, Department of the Navy; 900,000 people. If we were a private company, we’d be second-biggest
in terms of employees only after Walmart. We’d be third-biggest in terms of assets,
between ExxonMobil and Berkshire Hathaway. We’d be fifth-biggest in terms of budget authority.
And so it’s a huge organization. And one of the things I’ve learned in various
jobs-being governor, being an ambassador, being in the private sector, being a CEO-is
that if you try to just dictate, if you try to say we’re doing it this way, nothing much
happens. And so you’ve got to-you’ve got to give people a reason to do it. You’ve got
to show them how it makes their jobs better or their lives better. And you’ve got to get
complete buy-in from the folks that work with you.
And it’s particularly true in government because-you know, I’m a political appointee. I’m going
to be gone, in fact, at the end of this administration. There are not many certainties in politics,
but that’s one of the certainties, is-(laughter). This was the most-requested job in the Obama
administration. Whoever gets elected president next is going to have a line out the door
to take this job, and it’s a great job. But the military in uniform, the civilian workforce,
they’re not political, and they’re going to be there long after you leave. So if you just
try to say do this, do that, nothing much happens. And so you’ve got to-I mean, you
got to show them why it makes a difference. In energy, it makes a difference because it
makes you better warfighters. It affects our responsibilities-climate change affects our
responsibilities. In terms of personnel management, you know,
we’re an all-volunteer force. We’ve got to recruit and we got to keep great people. We
can’t do it unless we-unless we treat them right, unless we make their careers more flexible,
unless we-unless we give them more say, unless we promote more on merit and less on time,
for example. On things like acquisitions, you have to set
up systems so that-we were spending $40 billion a year on contracts. And so we set up a system
called contract courts, that said every contracting officer every year has to bring in all their
contracts and defend them. Do you still need it? Have you bid it out lately? You know,
what are we doing with it? I mean, these are everything from cutting the grass to building
carriers. And so the first couple of years, we saved $4 billion-10 percent-on that just
by asking people, why are you doing this? What does it-what does it bring you? And one
of the results has been that people are now bringing stuff up that they see.
You’ve got to-you’ve got to try to change the culture. You’ve got to try to change the
outlook. And the only way you do that is by having policies or programs that do make a
difference. Not doing too many of them. I mean, the scope of the ability to change is
pretty limited. I mean, I was governor of the poorest state in the nation. Every day
I got up, there were about a thousand things I could do, I think, to make life better.
If I tried all thousand, I was going to fail at each one. You got to-you got to pick three
or four things and just be relentless about that.
And Tom Oppel is sitting here, my chief of staff, who was my communications director
when I was governor. And, you know, just repetition is the key to clear communications. You just
got to just do it over and over and over again, and explain it over and over and over again,
not assume that just because you’re inside it every day that everybody else is paying
attention, or cares, and that you got to do your job and explain.
JOSKOW: Right here, and then I’ll come back to Padma (sp).
Q: You really answered the-you really answered the question about leadership, which I was
going to ask. Thank you. MABUS: Thanks.
JOSKOW: Thank you. Padma (sp)?
Q: Thank you. How does our totally efficient naval fleet
allow us in dealing with antagonistic activities, such as the Chinese building islands in the
waters of South China Sea? Does it help us better to deal with these activities, or does
it involve a military conflict, or? MABUS: Well, the way it helps us deal with
any potential adversary or anything like that is it allows us to be there. And these freedom
of navigation exercises that we’re doing, we’re going to sail where we are allowed to
under international law. We think that the status quo should not be changed unilaterally
or by force. And by being-number one, by having the ships, just having the ships to be everywhere
that we need to be to do these exercises and these demonstrations everywhere, but then
having the power, the energy to keep them at sea, to be everywhere, to be there when
we need them to be there-and we need them to be there all the time-that makes us. It’s
the presence. It’s the presence argument. That’s why, you know, I started out by saying
that’s what we uniquely give the country. So it doesn’t matter what the threat is, or
it doesn’t matter what the issue is. Being there-there’s no second-best thing to being
there. Ships in port in the United States don’t do us much good. You have to have them,
and it can’t just be in one sea or one ocean. We have to have them everywhere, all the time.
We’re the only global navy and we’re the only one who can do this, and we’re the only one-we’re
the ones that people look to. And so that’s why we need the number of ships, and that’s
why they need to be at sea. JOSKOW: Yes?
Q: Me or him? JOSKOW: Yes, him. (Laughter.)
Q: Herbert Levin, Council member. From a standpoint of the national well-being
is it more important that the Navy have more potent guns or that high-school graduates
in Mississippi can go to MIT paid for? MABUS: Well, I don’t think that’s a choice
we ought to make. I think you ought to do both.
Q: Raise taxes. MABUS: Well, let me-let me-let me tell you
something. Let me give you a statistic that’s going to frighten you. It does me. Three out
of four Americans age 18 to 24 do not qualify for the U.S. military-three out of four. Our
recruiting pool is 25 percent of our total population. They don’t qualify because they
didn’t finish high school. They don’t qualify because of health issues, mainly obesity.
They don’t qualify because they’ve got a criminal record. We don’t give any waivers to get into
the military. But that ought to frighten us. We ought to do a better job in terms of health
care. We ought to do a better job in terms of education. I mean, I spent a large part
of my live working on education in Mississippi. And I don’t care if you don’t have children,
I don’t care if you don’t have children in public schools, I don’t care if your children
are out of school, you’ve got a vested interest in making sure that our public schools are
great. You just do. And I went and I made a speech to the Mississippi
legislature in 2011. It’s the first time I talked to them since I left office in 1992.
I made the same speech in 2011 I did in 1992. I mean, I started out by saying, as I was
saying when I got interrupted. (Laughter.) But, you know, every one of those legislators
came up to me and said, what can we do to help the military? We want to help you. And
I said, OK, you want to help us? Do better in education. You want to help us? Do better
in health care. You want to help us? Keep people in school and out of jail. That’s the
way you can help the military. So I just think that’s a false choice. I think
we’ve got to-we’ve got to do both. JOSKOW: Well, on that note, the witching hour
is here. We end our Council meetings on time. I’d like-please give Secretary Mabus a round
of applause for a fascinating discussion. (Applause.) And thank you all for coming.
I’m sorry we couldn’t get to all the questions. (END)