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Contents 4
The Fight Against Climate Change – A Future History By Nick Cook
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Informing Our Future Decisions By Dr Ronald D. Sugar, Chairman and CEO, Northrop Grumman
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Innovation For A Secure Future By Dr Ray O. Johnson, Senior VP and Chief Technology Officer, Lockheed Martin
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Lockheed Martin’s Approach To Alternative Energy By Dave Malloy Ph.D, Chief Engineer, New Ventures, Lockheed Martin
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Rolls-Royce Spins Engineering Into Energy And Marine Sectors By Ric Parker, Director of Research and Technology, Rolls-Royce
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Aerospace, Defence And Climate Change: The Risk Dimension By John Scott and Adam Piper
Published by Dynamixx Ltd If you have a story or contribution for the E2DI Journal, please contact: Nick Cook, Editor nick@dynamixx.co.uk; Tel: (+44) 20 7198 8425 For General Enquiries, please contact: Roz Littlewood roz@dynamixx.co.uk; Tel: (+44) 20 7198 8425 For Advertising, Event Sponsorship and Exhibiting, please contact: Julian Jackson jjackson@esolint.com; Tel: (+44) 20 7372 9127 or (+44) 7773 800073 Editor: Nick Cook Editorial Manager: Roz Littlewood Production Manager: James Lamont Dynamixx Limited One Hardwicks Square London SW18 4AW United Kingdom Tel: (+44) 20 7198 8425 Web: www.dynamixx.co.uk; www.e2dinternational.co.uk © 2009 Dynamixx Ltd.
E2DI: Riding The Boundary Layer Welcome to the launch edition of The E2DI Journal, a publication dedicated to the ‘boundary layer’, as we call it, between aerospace and defence (A&D) and energy and the environment.
2DI – the Journal of Energy and Environmental Defence International - and its sister activities, our www.e2dinternational.co.uk news portal and E2DS (Energy, Environmental Defence and Security) series of conferences, have been established to provide a ‘forum of engagement’ between the A&D sector, the energy and environment arenas, as well as government and academia, in the fight against climate change. Everyone now knows that climate change is a reality. What is missing is an ‘action component’ – an international coalition of government, industry and academia - that can align with science to map and understand the vast quantity of data on climate change. Once the problem has been understood, the coalition should be able to act concertedly, and globally, to implement a solution. This is what the aerospace and defence industry does; it works with governments and armed forces - to identify and map ‘threats’. Then, through the rigorous discipline of systemsengineering, it arrives at solutions. Scale has never bothered the defence industry – witness the size and complexity, for example, of a ballistic missile defence shield. It is simply a question of attitude and orientation. Is saving the planet ‘core’ defence industry business? We believe it should be and so do a growing number of A&D industry insiders: Threats do not come any bigger than climate change. Action is needed now. A 20-year career at Jane’s Defence Weekly has given me a privileged insight into the science and technology base of the A&D industry – a base that is replete with many of the skills that are needed to combat global warming. A round-up of those skills are described in the feature starting on Page 4. On Page 5,
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we have an exclusive article by Dr Ronald Sugar, Chairman and CEO of Northrop Grumman, on how the defence industry does have the wherewithal to tame the ‘ocean of data’ that climate change represents – a necessary first step to working on an antidote to the problem. On Page 11, Dr Ray Johnson, Senior Vice President and Chief Technology Officer of Lockheed Martin, offers insights into how the defence industry can and should work with global governments to identify the energy and environmental problems at the root of climate change and how innovation is the key to a solution. On pages 14-19, we read how two A&D companies, Lockheed Martin and RollsRoyce, are actively working on technology to mitigate the effects of climate change; whilst our last feature, on page 20, describes how cooperation between the insurance industry – a sector at the sharp end of climate change effects – together with the A&D sector, could act as a catalyst in reducing emitted carbon dioxide as well as counteracting other effects of global warming. This issue represents a modest beginning, but, like the ‘forum of engagement’ itself, the Journal is growing and I invite your contributions and ideas for future issues. Our next edition will appear in November; our E2DS 2009 Conference will be held in London on 5th/6th November and ways to register can be found within these pages or on our website: www.e2dinternational.co.uk. On behalf of the entire Dynamixx team I look forward to seeing you there.
Nick Cook Dynamixx; Editor, E2DI Journal
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The Fight Against Climate Change – A Future History As recently as 18 months ago, if you asked a senior executive of an aerospace and defence company if they had any commercial interest in combating climate change, chances are they would have told you one of two things: either that their company was deeply engaged already in energy and environmental business – witness what Airbus, Boeing and any of the aero-engine manufacturers are doing as they battle to make their products ever more CO2 friendly – or, conversely, that they had little, perhaps zero interest in an activity that was ‘non-core’ and with no discernible market. Nick Cook reports.
ince then, there has been a remarkable departure from this stock response as A&D companies grow steadily more aware of their existing capabilities - as well as their potential - in the energy and environmental arenas and the opportunities that await them; opportunities now championed by US president Barack Obama after eight years of effective climate change denial by the Bush Administration. A senior strategist for a major US defence corporation told E2DI that it had gone from apathy to a considerable expansion of its corporate investment in the energy and environmental fields in a matter of months. “We see both the environmental and renewable energy markets as opportunities to spread our systems integration skills and knowledge,” the official said. “The focus that we have maintained on the mission string from sensing to decision-support has started gaining more traction in these areas, too. Additionally, the idea that these engineering emphasis areas will help attract the next generation workforce has gained prominence as well.” On the face of it, for a pure defence company to be thinking this way is extraordinary. What on earth should make defence companies want to dip their noses into ‘green business’, beyond
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commitments to good stewardship – meeting carbon emission and efficiency targets? Something, however, clearly does. Lockheed Martin, Northrop Grumman and Raytheon – US giants with most of their revenues coming from military as opposed to commercial activity – are all preparing to engage in the fight against climate change via what they see as emerging business opportunities in the energy and environmental arenas.
he wrote last November. “It is an endeavour greater than any one company or country. Competition and cooperation can fuel the innovation needed. It will take cooperation between industry, government, the science community and concerned citizens worldwide to find the solutions.” The last time the aerospace and defence community came together to talk in such idealistic terms was probably 50 years ago, at the dawn
and defence industry, along “withThetheaerospace Department of Defense, must take the challenges of climate change seriously ”
Dr Ray Johnson, Chief Technology Officer of Lockheed Martin
“The aerospace and defence industry, along with the Department of Defense, must take the challenges of climate change seriously,” Dr Ray Johnson Senior Vice President and Chief Technology Officer of Lockheed Martin, told the E2DI Journal last year. “We must understand the relationship between climate change, energy and transportation and we must immediately start working solutions to these problems.” His counterpart at Northrop Grumman, Dr Alexis Livanos, agrees. “Climate change is a global problem demanding a global solution,”
of the Apollo Moon landing programme. And this certainly touches on one of the reasons why some strategists in the aerospace and defence sector see ‘green’ as the next gold-rush – not just in terms of the revenues it will bring in, but, as importantly, the stimulus it will bring to innovation. In January 2005, Jim Albaugh, President and CEO of Boeing Integrated Defense Systems, at a speech to his peers in London, questioned the aerospace and defence industry’s continued ability to innovate on a grand
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www.e2dinternational.co.uk scale – something for which it had long been recognised. “Any honest assessment of aerospace will conclude that ours is a static industry,” he said. “It took us only 66 years (from the Wright Brothers’ first manned flight in an aircraft in 1903) to go to the moon. By 2035, yet another 66 years will have passed. What is the next ‘giant leap for mankind’? Where is the innovation? Why aren’t we forging ahead into high-risk, high-payoff research?” Innovation, Albaugh said, was alive and well in other industries, especially IT, and it showed; not only in the products emerging onto the market, but in where engineering graduates were voting with their feet. Now that the post-war ‘babyboomer’ generation is retiring, the average of a US aerospace engineer is a lamentable 55 years and the industry continues to face enormous challenges recruiting fresh talent. One of the reasons for this is that the pace of change in the industry has slowed dramatically. In the 1950s, a young aerospace engineer might have expected to work on around a dozen aircraft projects from inception to production during the course of a 40
year career. Today, he or she will be lucky to work on one or two - such is the pace at which combat aircraft and commercial airliner projects transition from the drawing board to market. The long term market itself doesn’t look any better. Whilst air passenger markets are expected to continue to grow steadily, defence markets, after almost a decade of growth, are now predicted to contract markedly – from 4.2% of US GDP to perhaps as little as 3.2% - and the difference, according to analysts, will be “billions and billions” to an industry that is already beginning to exhibit significant overcapacity. There are approximately ten aerospace and defence companies worldwide – so called lead systems integrators (LSIs) – capable of meeting a full spectrum of
needs in defence markets, from the provision of fully integrated ship, land system and aircraft ‘platforms’ to the command, control, communications, computing and intelligence (C4I) infrastructures that underpin them. As these LSIs all operate globally, and the market is poised to contract at a pace not witnessed since the end of the Cold War, it is clear that another big shakeout of the industry is looming. The search for new sources of revenue, therefore, becomes paramount. The global defence market is worth approximately a trillion US dollars annually; the energy market approximately $4 trillion. One of these markets is contracting, the other is growing – and predicted to continue doing so. There are also demands on the energy industry to provide clean, green energy solutions that it is struggling, or perhaps unwilling, to provide. When, after 9/11, the aerospace and defence industry entered the civil or homeland security market – every LSI is now engaged in the field – it made its first effective leap into a sizeable new ‘adjacent market’. Does energy and environment represent the next leap? Saab, Sweden’s aerospace and defence champion, certainly thinks it could. Via its civil security business, Saab is already involved in monitoring what it calls data ‘flows’ – primarily of potential terrorist
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What is the next giant leap for mankind?
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Jim Albaugh, President and CEO of Boeing Integrated Defense Systems
threats (i.e. through flows of people at airports, stations and other urban environments). ‘Green Tech’ technologies, underpinned by IT skills it has already mastered, will be the key, the company believes, to managing future flows of energy, goods and people – all of which will be affected by climate. In 2006, Sir Nicholas Stern, now Lord Stern, delivered a widely acclaimed report to the UK government on the economic fall-out of climate change. If no action was taken, Stern said, the concentration of greenhouse gases in the atmosphere could double its preindustrial level as early as 2035, pushing parts of southern Europe three degrees C above pre-industrial temperatures. The impact, his report went on, could be substantially reduced if greenhouse gas levels could be stabilised between 450 and 550 parts per million (ppm) CO2 equivalent (CO2e). The current level is 430 ppm CO2e, rising at greater than 2ppm each year. Delay was not an option, Stern warned – the opportunity to stabilise at less than 550 ppm CO2e was “about to slip away”. Deep emissions
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www.e2dinternational.co.uk cuts were required in the transport sector and the power sector had to be at least 60% decarbonised by 2050 for atmospheric concentrations to stabilise. Clearly, there is an ‘innovation gap’ here; one that should, rightly, be of interest to any sector involved in energy and environmental business. New markets for ‘low-carbon technologies’, Stern said, could be worth ‘hundreds of billions of dollars’ annually. Which sector is naturally best-placed to play in these markets? The obvious answer is the energy sector, but the energy sector is conflicted. In March, Shell announced that it was suspending
negotiations in Copenhagen this December that are aimed to result in a ‘post-Kyoto’ protocol, effective from 2012, that will wean the world off dirty fuels and limit dangerous climate change. But perhaps the biggest factor of all behind the aerospace and defence sector’s emerging view that it can, and indeed should, play a role in pro-actively combating climate change is a growing recognition by industry insiders that the sector possesses largely untapped knowledge and skills in the energy and environmental arenas – skills forged over decades.
New markets for ‘low-carbon technologies’ could “be worth ‘hundreds of billions of dollars’ annually ” Lord Nicholas Stern
funds for research into solar and wind alternatives to fossil fuel, that it didn’t see hydrogen as a credible alternative, but that it would continue its work on biofuels. In a period of downturn, analysts agreed, it had simply elected to concentrate on bread and butter business – oil and gas. In the meantime, the march towards atmospheric tipping-points in greenhouse gas levels continue, governments appear ineffective in their ability to respond and people feel disenfranchised – powerless in the face of a threat that remains largely invisible and too big to understand, let alone address. Whilst these factors provide clues to the surge of interest by aerospace and defence companies in the business of climate change, other dynamics are at work, too. President Obama is pressing not just for legislation by Congress that will force American companies to implement emissions cuts, but also for huge sums of money to be invested in renewable energy – this, despite a rearguard action by the US oil, gas and coal industry to cut off legislative support for Obama’s plan to build a clean energy economy. The legislation – the US is the world’s biggest per capita polluter - is needed in the run-up to crucial UN
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Take, for example, the vast reservoirs of data amassed by US, UK and Russian submariners on ocean temperature and polar ice-thickness patterns during the Cold War. Or the knowledge amassed by Raytheon, on behalf of the Brazilian Government, in its role as prime contractor for SIVAM (System for the Vigilance of the Amazon), a sprawling network, spanning satellite surveillance platforms to ground-level sensors, for monitoring the Brazilian rainforest in the face of numerous threats, including deforestation and narcotics production. Or, for that matter, the knowledge Lockheed Martin has amassed, with NASA, on an atmosphere that has already gone catastrophically wrong - as prime contractor on the Mars Exploration Rover vehicles, which have been returning data from the Red Planet since 2004. In December last year, this untapped knowledge pool was brought sharply into focus by Dr Ron Sugar, Chairman and CEO of Northrop Grumman, in a speech at the Center for Strategic and International Studies in Washington DC. With a few exceptions, he said, when it came to our understanding of climate change and its causes, the scientific community suffered from “an excess of data and a deficit of knowledge”.
Whilst duplicating existing work into data-integration would be wasteful, Dr Sugar did call for the incoming Obama administration to “undertake a national initiative to leverage (existing) investments to provide broad access to decision-quality climate knowledge.” He went on to say that “many of the tools and techniques” required had already been developed by the defence and IT industries (see next article, page 8). This, of course, is what the aerospace and defence industry does - and has done for two generations: amassed data on threats and challenges, modelled them and then come up with systemsengineered solutions. The US nuclear deterrent was one such example. Apollo was another. Systems-engineering on a giant scale is A&D industry bread and butter. The climate change threat, some say, is no different. Indeed, it is the interlocking nature of eco-systems, and the fact that the planet is one giant system-of-systems, that plays to this core skill. Like other threats before it, climate change first has to be understood before it can be tackled – which is why an axis of scientists, government and industry, with the aerospace and defence sector at its hub, may just be the vital missing component in an effective antidote to the problem. And it would tick a number of other boxes, too, in the challenges that face the sector: the innovation gap, the skills shortage – the current school-age generation engages with the environment like no other – and the predicted shortfall in revenue as defence markets slide. The arguments are compelling. What is needed for the sector to fully engage is government direction.
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Informing Our Future Decisions Those who have worked for so long to build awareness of the issue of global climate change can take justified pride in their years of effort. The world well understands the scope of the problem, as well as the possible implications of ignoring it. Unfortunately a similar consensus on the subject of solutions has yet to be reached. Is it possible that a focus on large scale, macro-solutions has been at the expense of more readily available but smaller-scale mitigation measures? Dr. Ronald D. Sugar, Chairman of the Board & CEO, Northrop Grumman Corporation, offers a personal view.
Dr. Ronald D. Sugar, Chairman of the Board and CEO, Northrop Grumman Corporation
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www.e2dinternational.co.uk ith regard to the question of how best to react to the coming implications of global climate change, have we been making the perfect the enemy of the good? To answer that question, we must first understand what kinds of smaller-scale climate change mitigation measures are currently available, the problems these measures might be employed to solve, and just how effective those measures might prove in doing so. The current state of technology certainly gives us reason for optimism. Northrop Grumman, a leader in global security, possesses a core of technical capabilities and expertise, developed over many years, that could be leveraged and applied to the challenges of climate change. But to realize the benefits of doing so, something will have to be built that currently does not exist: a bridge between the mass of abundant scientific data on one hand, and our ability to translate that data into practical, decision-quality knowledge on the other. A parallel exists in mankind's millennia-long struggle to understand our oceans. Ship captains of centuries past spent their lives learning to navigate their local waters. Over years of trial and error, the best of them learned where to find the most favorable winds, where to avoid contrary currents, and other data that made the difference between safety and disaster and between profit and loss. Because they, and their nations, hoarded their hard-won information like treasure, few felt knowledgeable enough to venture out of familiar waters. For all but the most dauntless explorers, ocean navigation was more an oral tradition than scientific method. The data points they sought comprised the sum total of understanding they thought available. Everything else, they believed, was unpredictable, and randomness was the natural order of the seas. But there was order in that randomness. Unbeknownst to them, useful information about wind directions and storm patterns was predictable years in advance, even in waters they had never sailed. They knew that the limited information they spent their careers seeking would be useful. But it was the information they were unaware of that would have induced a new evolution in their understanding of the oceans they plied, and would have thus introduced them to a new world of navigational solutions, capabilities and unimagined opportunities. We are in a similar state of understanding about climate change,
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and we now stand on the cusp of a new evolution in our climate understanding that could deliver enormous societal benefits. Scientists now record a tremendous amount of Earth-monitoring data; from satellites; from sensors on aircraft and balloons; and from sensors deep in the oceans or buried underground. These sensors are found all over the globe. They might belong to any number of nations and their voluminous data is analyzed by many international scientific institutions. In the United States, such organizations as NASA, NOAA (National Oceanic and Atmospheric Administration), the U.S. Geological Survey office, the Environmental Protection Agency, the Department of Energy, universities, and others, have been performing an incredible service to the progress of climate science by collecting and analyzing this data. Most other developed nations have counterpart organizations performing similar tasks. The environmental data they have been producing is largely the reason we can even foresee the next
the ocean of sensor data makes for good science, but its benefits outside that realm remain limited. What if all that raw environmental data could be turned into practical decision-quality knowledge for use by the greater society? What if the products from all those many sensors and information sources could be integrated and consolidated to provide the next evolution of our climate understanding? What if that could open up a level of understanding leading to a new world of benefits and opportunities we might not now even imagine? What if that new understanding of our climate was networked beyond the scientific community to help inform public policy and business decisions at a regional or even local level? In the United States, this is currently being done on a macro level with NOAA's Global Earth Observing Systems of Systems, or GEOSS. GEOSS will eventually integrate the world's Earth-observing systems on a global basis and make Earth information universally available for the benefit of society. Clearly, the
Scientists now record a tremendous amount of Earth-monitoring data; from satellites; from sensors on aircraft and balloons; and from sensors deep in the oceans or buried underground. evolution of climate understanding - an evolution that must occur if our efforts to create practical mitigation and adaptation options are to be anything more than an aspiration. With a few worthy exceptions, that evolution has not yet happened. Why not? Rather than a dearth of data, we have an excess of data but a deficit of knowledge. Currently, too much of the data generated by these many sensors are segregated from each other, as are too many of the world's institutions that operate them. That is not the only issue. For understandable reasons, these data are highly scientific in nature. They are used to feed the many climate models so indispensible to the progress of climate science. These models are complex and are the province of scientific and academic communities. For the most part, they produce exactly what they were designed to do - illustrations of climate on a global scale and to a generalized timeline. In addition, these models are in their infancy relative to what is yet to come, and relative to what is needed for practical uses. All in all,
private sector should take care not be duplicative of the work of GEOSS, or any other government agency or office trying to solve the problem of data integration. Nor is it necessarily true that the private sector could do it better on its own. It may simply be time to take the next step - to create a higher-level structural mechanism under government leadership, which builds on our scientific successes to date. There are any number of ways this vision might manifest itself. One way could be through the establishment of what might be called Climate Knowledge Integration Centers. Think of these as the information portals - broadly accessible to national, regional, local and private decision makers - which would provide decision support. One could foresee such centers being staffed with their own analysts and experts, and equipped with their own high-powered computer infrastructure. The professional staffs, the operational processes, and even the broadband networks of these centers could be closely interfaced with other federal agencies, state, local, as
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well as international and public institutions. In this way, these centers could access GEOSS and other data, and integrate it into useable information relevant to a specific problem or required decision in a particular region. New generations of technology would not be necessary for this purpose. It would, however, require the United States government undertake a national initiative to leverage investments it has already made in the areas of data integration, which would provide broad access to decision-quality climate knowledge. Those extant investments exist in the forms of some of the many tools and techniques developed by the defence and information technology industries for national security applications. The need of military
mountain of data - and quickly. What they needed was the ability to access and integrate their data, make sense of it, and share it on a network among their forces. The solution was a combination of computing power and expertise that allowed the different categories of intelligence - imagery, communications intercepts, and others to be combined and correlated into a massive body of data. The breakthrough was the ability of the commander to tailor his information search by time and map coordinates. All the while, other commanders in other places were able to do the same thing at the same time for their specific needs. This ability to turn oceans of data into shared knowledge
Today, it falls to the developed world to adapt its current technologies to the next evolution of climate understanding. commanders for enhanced situational awareness of the battle-space offers one such example. The astonishing pace of data-gathering technology was initially a double edged sword for those commanders - offering unprecedented situational awareness of the battle space on one hand, but severe information overload on the other. Commanders who needed to forward specific information relevant to a unit as small as an infantry squad or a pair of attack jets were required to "sip water from a fire hose," as they put it. They had to be able to pull out that tiny thread of relevant information from a
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will pay ever-increasing dividends as these technologies continue to progress and improve. For thousands of years man sailed the seas convinced that an unknowable randomness dominated his ocean environment. It was a mere century and a half ago - a comparative blink of an eye - that order and predictability was first exposed and made available to the seafarer. That order and predictability was first uncovered through the efforts of one innovative spirit who sought to tame a wild ocean of scientific data for the benefit of the world. In 1842, an obscure U.S. Navy
Lieutenant named Matthew Fontaine Maury was placed in charge of the collection of ship's logs dating back to the birth of our Navy. Regulations required that the log of every U.S. Navy ship be sent to Maury's depot after each voyage. Within each log were recorded daily measurements of position, wind velocity and direction, ocean temperature, and the speed and direction of ocean currents. These dusty, neglected logs would change the world's understanding of its oceans for Maury saw in them a way to turn data into shared knowledge and in the process, to evolve the understanding of our oceans to a higher level. Maury assigned himself the enormous task of integrating all their data into a new type of chart - a chart that predicted wind direction and ocean conditions for any time of year. He also managed to globalize his data-gathering through a set of international recording and reporting standards. Henceforth, each of an enormous number of ships from many countries sailing in every ocean became, "a temple of science." Maury's new charts were revolutionary. They allowed ship captains to shave weeks and months from their voyages and helped transform ocean navigation from art to science. Here was a new level of understanding that seafarers did not even know existed. As one grateful captain wrote him, "Until I took up your charts, I had been traversing the oceans blindfolded." In turning data into shared knowledge, Maury invented the discipline of oceanography and the practical implications were immense. Safer and more efficient sea travel was now available to any captain anywhere in the world who chose to use the new charts. The expenses of ocean commerce - from shipping costs and insurance to the prices of seaborne products and commodities - were all reduced and the nation's economy benefited accordingly. Today, it falls to the developed world to adapt its current technologies to the next evolution of climate understanding. The world may still debate the larger questions of how best to arrest or reverse climate change, but we cannot allow that debate to prevent us from acting to mitigate the effects. It is within our grasp to construct a bridge between the mass of abundant scientific climate data on one hand, and our ability to translate that data into practical, decision-quality knowledge on the other. The climate changes that crest the horizon may be beyond our immediate control. How we choose to meet them is not.
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Innovation for a Secure Future In this feature exclusive, Dr Ray O. Johnson, Senior Vice President and Chief Technology Officer of Lockheed Martin, gives a strategic overview of energy and climate change and discusses how the defence industry can work with governments to solve these global problems. As an attendee of recent world summits on energy and economics, Dr Johnson provides a unique perspective on the ‘boundary layer’ where energy, the environment and the unique capabilities of the A&D sector collide.
llow me to provide a national security perspective regarding energy and climate change. When I used to think about climate change, I primarily thought about radical environmental groups and possibly Al Gore, but my view has changed. I have had the opportunity over the last year to meet with some of the best minds in the world on climate change. Energy and climate change are national security issues for the United States and they represent global security concerns to the world’s nations. Our understanding of energy and climate change is growing rapidly, and the science of climate change is improving. The measurements of CO2 are improving and becoming more consistent, and the climate change models are converging. The MIT Energy Institute has a model called the Integrated Global System Model that integrates climate science and human activity into forecasts of the pressing issues of global change science and climate policy. The model informs on technology and policy issues. This model and others like it are refining our understanding of climate change, the impact on global temperature, and the resulting effects that may occur. MIT also has the distinction of being a
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Masdar: Abu Dhabi Future Energy City.
partner with Abu Dhabi, in the United Arab Emirates, to create the green city of Masdar. It is noteworthy that a country that contains 10% of the world’s oil reserves and 5% of the world’s natural gas reserves is making this kind of investment; they are using today’s wealth to invest in tomorrow’s future, and MIT is fortunate enough to be their technical partner. Today about 85% of the energy used in the United States comes from fossil fuel. In fact, about 85% of the world’s energy comes from fossil fuels. It is believed that prior to the Industrial Revolution there was a CO2 balance. That is, the CO2 created was essentially balanced by the amount that was absorbed by all
processes and mechanisms. Current measurements indicate that CO2 is at its highest level in roughly 650,000 years, and that the levels continue to increase. The natural ice age cycles, which show increases and decreases in CO2 about every 100,000 years, are recurring events, but the high levels seen today are not explained by these recurring cycles. The levels of CO2 have increased dramatically since the industrial revolution, which provides additional evidence that the increases may be related to human activities. The wellknown Keeling curve, which shows data consistently collected since 1958, clearly illustrates the increasing levels of atmospheric CO2 at Mouna Loa, Hawaii. Climate change is a complex problem involving three key issues. First, there are billions of individuals, businesses, and governments creating CO2. The effort to phase out CFCs during the 1990s was, in part, successful because there were a limited number of CFC producers, which could be regulated. In contrast, CO2 emissions come from billions of sources, and its production is therefore very difficult to control. The second issue is scale. Clean, affordable, and sustainable energy sources that can scale to the required levels to power the world are not yet obvious, readily
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Oil has become a key source of power and influence in the world.
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www.e2dinternational.co.uk available, or in many instances, technically feasible. The third issue is infrastructure. Gasoline and electricity are distributed using large infrastructures that are currently in place, not only in the United States, but also around the world. A new infrastructure is estimated to take up to 50 years to be designed and implemented. To achieve the levels of green house gas emissions required to reduce climate change, it is estimated that the world must achieve a 50% reduction in CO2 emissions by 2050 relative to a 1990 baseline. That goal correlates to 2 tons of CO2 emissions per person per year. Where are we today? The United States emits approximately 20 tons per capita annually, Western Europe and Japan emit 12 tons, China emits 5 tons, and only India is achieving the goal of 2 tons. What does that mean for India? It means that India must grow an economy for a population of over a billion people while keeping their CO2 and other greenhouse gas emissions constant. They must maintain this level of emission as the India economy continues to grow, as the middle class develops, and as they begin to use automobiles, air-conditioners, and other conveniences used by people in developed nations. This goal will be difficult to achieve since CO2 emissions have historically scaled with economic development. All of these issues make the world sound like a challenging place to live – a place of scarcity. The world can instead be a place of abundance. A world where we can do all of the things that we do today. We can take airplane trips, drive cars, and use modern appliances, but we have to think and act differently. We have to think about the entire supply chain related to the activities in our life – how products are designed, how they are manufactured, how they are used, and how they are discarded. In the future, people will look back and see a world that was frivolous with resources. Similar to the way we look back at medical treatments that were used which seem barbaric compared to current standards of care. By changing the way we design, build, and use products, we can create a sustainable world for the future and enjoy a lifestyle like the one we have today. Imagine a world where we stop sending hundreds of billions of dollars to people who do not share our values, where national security policy is not dictated by oil interests, where the United States moves from being an oil importer to an energy exporter, and
Energy and climate change are national security issues, and the Lockheed Martin Corporation is a global leader in security. where nations like China become dependent on US innovations to fuel their manufacturing economy. Energy and climate change are national security issues, and the Lockheed Martin Corporation is a global leader in security. So how are energy and climate change national security issues? Regarding energy: Oil has become a key source of power and influence in the world. Although the price of oil is relatively low today, it is clear that as we recover from the current economic situation, the demand for oil will increase, and the price will rise according to supply and demand. The United States has about 5% of the world’s population and uses about 23% of the world’s energy, and the nation has a huge dependence on foreign oil – currently about 60%. The department of Defense is the largest single consumer of energy in the United States and accounts for about 1.5% of the energy consumption. Regarding climate change: Climate change is expected to create instability in some of the most volatile regions of the world and increase tensions even in the stable regions. Climate change will cause increases in regional conflicts over scarce resources like energy, food, and water.
The increasing size and scope of natural disasters will increase creating a greater need for military action. The United States will likely be called upon to support these global security issues around the world. The aerospace and defense industry, along with the Department of Defense, must take the challenges of energy and climate change seriously. We must understand the relationship between energy and climate change, and we must start working on these problems. Innovation is vital to creating solutions to these problems. Interdisciplinary research involving people with different perspectives supports the needed innovation. Social sciences as well as technology are required to develop solutions to the energy and climate change problems. Technologies, policies and behaviors must be changed. There are many technologies being developed today: solar, wind, ocean, bio, waste, geo-thermal, and greater energy efficiency. Many of these technologies are ready to be implemented at some scale, but we do not know which ones can be scaled to the systems level required to replace the current infrastructure. Scale is the problem,
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Lockheed Martin’s Approach to Alternative Energy
Technologies, policies and behaviours must be changed. and we do not know the solution. We are taking a two-pronged approach – an evolutionary and a revolutionary approach. We will continue to develop evolutionary technologies while concurrently looking for the revolutionary technologies that will scale to the systems level. Lockheed Martin is engaged in multiple initiatives in energy and climate change. As we develop these solutions, we consider the entire energy and climate change cycle – production, storage, distribution, and efficiency. To that end, some of our current projects include improved energy storage, smart grids, ocean thermal, and concentrated solar energy. We live in a very scary world where national security includes both military and economic security. Military security is complex, spanning near-peer warfare to asymmetric terror threats. Economic security adds additional complexity and involves issues such as energy, climate change, cyber security, and health care. Lockheed Martin is committed to working energy and climate change as national security issues with our customers while supporting global security goals.
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Lockheed Martin is leveraging its experience with key energy technologies and complex systems development to help lead the United States towards energy independence. The corporation has a range of ongoing renewable energy projects including solar power plants, Ocean Thermal Energy Conversion (OTEC), fuel cells, synthetic fuels and utility-scale energy storage. These projects draw upon the talents and enthusiasm of the employees of Lockheed Martin and its partners to develop alternative energy solutions that will enable reduced dependence on imported sources of energy. David Malloy Ph. D, Chief Engineer, New Ventures, Lockheed Martin, explains how and why.
Solar One of the largest energy opportunities underway at Lockheed Martin involves designing and building concentrated solar thermal power plants. These plants harness the sun’s energy to produce up to 290 MW of power, enough for about 65,000 homes. Parabolic mirrors focus the sun on heat collector elements containing oil. The hot oil is circulated through heat exchangers to create steam, which in turn drives turbine generators to produce electricity. A molten-salt energy storage system could be used to capture the sun’s energy during daylight hours via a hot oil to salt heat exchanger. Then, at night, hot salt can be used to create steam to drive the turbine generators, thus increasing the dispatch capability of the solar power plant. Lockheed Martin has constructed a test solar thermal facility in Moorestown, N.J. The Solar System Test and Engineering Site (SolSTES) enables engineers to evaluate components and prove design and assembly approaches. SolSTES was dedicated on April 28, Earth Day 2009, and includes one solar collector assembly, about 100 meters
long, complete with sun tracking sensing, actuation and control. SolSTES also will include a thermal storage system testbed. SolSTES, while quite valuable from an engineering perspective, is small relative to Lockheed Martin plans for a 290 MW plant that will cover more than 1700 acres. Lockheed Martin has teamed with Starwood Energy Group, a seasoned utility system developer, to address the solar thermal market. Several promising projects are currently under consideration. In addition to solar thermal, the corporation is also poised to enter the utility-scale solar photovoltaic market,, drawing upon its experience with solar photovoltaic systems developed to support long range and endurance high altitude airships. Using a technologyagnostic approach driven by sound system engineering, the team selects the best components to meet the cost and power requirements of a particular project. Potential projects include utility and military installations. Recognizing the variable nature of solar photovoltaics and the adverse impact on the power grid, Lockheed Martin is investigating suitable energy storage technologies.
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www.e2dinternational.co.uk In another project to harness the energy of the ocean, Lockheed Martin is working closely with Ocean Power Technologies (OPT), a small company with a unique approach to generate electricity from wave motion. Lockheed Martin is assisting OPT in deploying its proven Power Buoy [TM] technology to build a utility-scale project. Like OTEC, wave energy produces base load power, without the associated variability of other renewables, such as solar or wind.
Fuel Cells and Synthetic Fuels
Ocean Energy Lockheed Martin built the first floating platform Ocean Thermal Energy Conversion (OTEC) system in the late 1970s, demonstrating an ability to generate 50 kW of power from the temperature gradients in ocean water. Today, the team and its partners carry on that tradition, working on designs for 10 MW and larger plants, targeted for warm waters off Hawaii, and other temperate regions. The OTEC basics remain the same today. Warm surface sea water passes through a heat exchanger, vaporizing a low boiling point working fluid to drive a turbine generator, producing electricity. The vapor is condensed back to liquid after passing through a second heat exchanger that connects with large amounts of cold ocean water pumped from deep below the surface. Today however, critical advances in the technologies related to the system’s cold water pipe and heat exchanges will allow OTEC to serve as an economically viable energy source. Today’s materials technologies promise to dramatically improve the expected performance of the OTEC system at reduced capital expense. Options under consideration for the cold water pipe include in situ fabrication using fiberglass based composites. For the heat exchangers, special alloys constructed with friction stir welding are being traded against more exotic configurations, including graphite foam. Hydrophobic and special coating combinations are being developed to address biofouling and corrosion concerns. Through all these investigations, the team is tapping into the expertise of its teammates from across Lockheed Martin and outside the Corporation, as well.
Fuel cells are an important energy storage technology with applications ranging from utility-scale storage to portable generator sets to auxiliary power units. Lockheed Martin has decades of experience with fuel cells, gained from programs to improve its unmanned vehicles, and often aligned with its space programs. Synthetic fuels is another area in which the corporation is collaborating with small companies to help mature and scale their technologies. For example, Lockheed Martin is serving as a trusted Engineering, Procurement and Construction (EPC) contractor, enabling our partner to further develop the process to produce high-octane synthetic fuels from non-food source biomass in a pilot production plant. Upon proving the process, the team will be the EPC contractor to build industrial scale production facilities. Based on results to date, the underlying proprietary technology holds great potential for commercial and defense synthetic fuel markets.
characterization of geologic densities, thereby increasing likelihood of successful drilling. Now, the team is exploiting optical interferometric devices designed at Lockheed Martin Space Systems to develop gravimeter systems that will enable significantly improved yields for proven oil reserves. This system promises to provide oil producers enhanced operational insight of their working fields.
A Legacy of System Engineering Rigorous systems engineering underpins Lockheed Martin’s approach to these exciting energy opportunities. The team strives to understand their customer’s energy issues, capture the key requirements, and develop a system comprised of appropriate technologies that meets the critical needs. Lockheed Martin relies on modeling and simulation to provide an end-to-end system view and minimize integration surprises. This rigour and analysis is tailored to drive down capital and operating costs, while meeting the aggressive timelines and commercial nature of the competitive renewable energy markets. Lockheed Martin’s system engineering approach and its ability to draw upon a network of partners inside and outside of the entire corporation, will enable it to establish a leading position in the emerging alternative energy market.
Exploration Sensors For years, Lockheed Martin has provided gravity gradiometer technology to oil and mineral exploration companies to allow more precise
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Rolls-Royce Spins Aerospace Engineering Into Energy and Marine Sectors In today’s marketplace it is essential that we address issues of global concern alongside a broad portfolio of products and services. By using our engineering expertise and knowledge we can help to achieve both of these goals. Ric Parker, Director of Research and Technology, Rolls-Royce, sets out his company’s energy and environmental Vision strategy. s a global power systems company, Rolls-Royce must be at the cutting edge of technology in order to keep ahead of the competition and deliver products and services that add real value to customers now and in the future. The group’s broad portfolio of products and services has grown exponentially in the last decade and since 2001 the order book has more than tripled. This growth is underpinned by technological superiority and our deep knowledge of customer requirements. Research and technology lie at the heart of the company and we have a guiding philosophy of “design once, use many times” which means that in practice our core gas turbine technology developed and proven in the civil aerospace sector, is applied in marine and energy as well.
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We plan our technology development against three Visions or time horizons. Vision5 describes those technologies that will be incorporated into our products within the next five years, and must therefore be ‘off-the-shelf’ - already proven and risk free. Vision10 describes technologies that are today being integrated into expensive demonstrators in order to reduce risk and prove the technology in a representative environment. Most of these will make it into our products in the next five to 10 years. Vision20 captures new and emerging technologies. These may bring step change improvements to existing products, and even take us into exciting, new product areas, within 10 to 20 years. In our Strategic Research Centre we even have people working beyond the 20-year horizon, envisaging products and
systems 30 or more years into the future. This coordinated approach ensures that technologies address real business requirements. This means they can find applications across more than one business sector, allowing design and manufacturing engineers to share new and emerging developments in a competitive and cost-effective manner. A core part of our business is using our expertise and knowledge to continuously develop technologies that will not only meet the business requirements of our customers but will also help to address issues of wider concern, such as climate change. In 2008, Rolls-Royce invested £885 million on research and development, a fairly typical sum. Two thirds of that annual investment has the objective of further improving the environmental aspects of our products.
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www.e2dinternational.co.uk Trent 1000 Fan
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www.e2dinternational.co.uk The Group pursues an environmental strategy which has three essential elements: - Maintaining our drive to reduce the environmental impact of all our business activities by building new, modern factories and improving others. - Further reducing the environmental impact of our mainstream products. - Developing entirely new, low-emission and renewable energy products. The aerospace industry has made remarkable progress since the first jet airliners were introduced 50 years ago. Aircraft now use 70 per cent less fuel per passenger mile and are 75 per cent quieter. Aircraft engine manufacturers, including Rolls-Royce, have been the driving force behind the most significant contributions towards this. For instance, since the first Rolls-Royce Trent engine entered service 14 years ago, there have been five additional members of the Trent family, each more efficient than the last. The latest variant, the Trent XWB will be over 15 per cent more efficient than
and power generation industries. As new technologies become available they have been integrated into the Avon industrial gas turbines, with the most recent advances increasing the power output by almost nine per cent, whilst improving efficiency by over four per cent. Our latest industrial gas turbine, based on the latest aerospace Trent family of engines, the Trent 60, is the most powerful and efficient aeroderivative gas turbine on the market. Low emission versions of the Trent 60 are also available, with powers up to 64MW at ISO conditions. The Marine Trent engines have relatively little technological change from their aero-engine cousins. The Marine Trent 30 has been selected to power the US Littoral Combat Ship and the DDG 1000, the latest US warship. These engines bring the same low fuel burn (low CO2) and low NOx to marine engines that they achieve in the air. The WR-21 engine for the UK Type 45 destroyer is based on components from current Rolls-Royce RB211 and Trent
a 500kW tidal turbine demonstrator at the European Marine Energy Centre in Orkney, Scotland, which will be followed by a 1MW demonstrator in the next few years. For over 50 years, we have developed and supported the nuclear plant for the Royal Navy’s nuclear submarine fleet. As a result, we have gained technical skills and knowledge that have allowed us to establish a new civil nuclear business in response to renewed global demand for nuclear power. Rolls-Royce currently has the largest nuclear skills base of any UK company, with around 2,000 specialist nuclearfocused employees in the UK, France and the US. We also have the UK’s most substantial nuclear supply chain, comprising around 260 proven suppliers. The civil nuclear unit will provide services to support many phases of the
Our technology enables us to innovate across a wide range of industry sectors, transferring expertise and skills to develop cutting edge solutions. the first Trent 700 and almost 30 per cent more efficient than its 1970s predecessors. The latest generation Trent engines will be the lead engines on the two latest wide-body commercial aircraft - the Trent 1000 on the Boeing 787 Dreamliner and the Trent XWB on the Airbus A350 XWB. Both engines are designed and built with technology insertion options throughout their life. Both the Trent 1000 and XWB have already benefited from emerging technology that will improve both performance and environmental impact even before they have entered service. We are now using the technologies we have developed during this time in the marine and energy sectors to great effect. One particularly effective example of this transfer of technology from aerospace is the Avon industrial gas turbine. The Avon is one of the most successful industrial aero-derivative gas turbines ever built, accumulating more than 60 million operating hours. It has established an unparalleled record for reliability and availability in the oil, gas
aero-engines. Enhanced by the use of advanced thermal management and equipped with an intercooler and a recuperator, it creates the world’s most efficient marine gas-turbine engine. The WR-21 offers a 25-27 per cent fuel saving and associated reduction in CO2 compared to current simple cycle marine gas turbines. This improvement is an important factor in the development of new vessels for the armed forces as they are increasingly tasked with reducing their carbon footprint along with other public sector bodies. We are also investigating how best to apply our engineering knowledge and skills to address low carbon technologies. A key area of our research and development is tidal power generation. One of the largest issues with any offshore power generation is how to overcome the harsh marine environment and the combination of experience we have gained from our marine and aerospace businesses is helping to develop reliable, affordable tidal turbines. Testing begins this year with our partner Tidal Generation Limited on
civil nuclear programmes which are gaining support globally, including providing advice to governments and operators, technical engineering support and safety assessments, manufacturing, procurement and through-life support. Our technology enables us to innovate across a wide range of industry sectors, transferring expertise and skills to develop cutting edge solutions. Our extensive programme of research and development ensures that we maintain our competitive advantage. By developing these innovative, transferable technologies which can be used in multiple applications across our market sectors we can continue not only to exceed our customers’ expectations, but we are also able to contribute significantly towards solutions that address important societal issues such as climate change.
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Aerospace, Defence and Climate Change: The Risk Dimension One of the biggest challenges of tackling issues related to climate change is the global nature of the problem. Many different public and private agencies have a role to play in managing and mitigating the problem. However, the many different interests, motivations and methodologies can create confusion and delay in implementing the best solutions. John Scott and Adam Piper* describe how the insurance and A & D sectors can work together to fight climate change. he aerospace and defence industry has been active in developing new technologies that either have a role in reducing emitted carbon dioxide (CO2e) or improving resilience and adaptation to climate change. Similarly, the insurance industry has been active in addressing the challenges of climate change, working with customers from various industries, including aerospace and defence, to create risk transfer products and provide risk management advice. Working together could be a catalyst for both industries to play a significant role in reducing CO2e and the potential impacts of ongoing climate change. This article discusses some of those approaches for joint working, using a threefold classification: (1) Encouraging the development of new technologies that reduce greenhouse gas emissions, (2) Developing adaptations to the consequences of climate change and (3) Influencing public policy that encourages behaviour change.
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New Technologies The aerospace and defence industry has been a powerhouse of technology R&D in the search for ever more powerful and power-efficient systems for military use. Harnessing this activity to meet the challenges of climate change could bring significant advances to reducing CO2e. The products available from the
insurance industry have been designed to protect private assets, whereas the climate is a public good. Despite this limitation, there are many examples where insurance has been used to encourage the use of new carbon reducing technologies and the adoption of adaptive behaviours. This is especially so in the areas of power generation and transportation, but also in energy efficiency and building resilience. Examples include insurance covers for solar and wind power generation, as well as liability cover for carbon capture and sequestration (CCS) and insurance covers for ‘green’ and weather resilient construction. The majority of anthropogenic CO2e comes from burning fossil fuels for power generation - roughly 50% (gas, coal and oil) - and from land transportation (car, truck, bus) or sea transport (ship), around 20%. A relatively small amount of anthropogenic CO2e comes from air transport. Technologies that significantly reduce greenhouse gas (GHG) emissions from these activities are imperative if Intergovernmental Panel on Climate Change (IPCC) GHG reduction targets are to be met. In power generation, a move to a mix of nuclear, renewable and CCS coal- or gas-fired power stations would help meet GHG reduction commitments and improve fuel security (i.e. make western economies less reliant on Middle Eastern and Russian oil and gas). The defence
industry has experience of working with nuclear power for military use and has developed a range of technologies to improve the efficiency and viability of renewable energy sources (hydro, solar, wind, wave, tidal). It has even developed technologies that can improve the low carbon fossil fuel efficiency of power generation (especially coal and gas). Examples of this type of R&D include stealth technology to reduce the radar impact of wind turbines, thereby allowing them to be used near air traffic control radars (QinetiQ and Lockheed Martin). Similarly, research on the sonar impact of wind turbines on marine wildlife has led to changes in turbine construction offshore. In the CCS arena, improvements in CO2 compression using supersonic combustion ramjet engine technology have significantly reduced the costs and power requirements of compression, one of many key areas of risk in the successful commercial implementation of CCS. This is also an area where the insurance industry has begun to address the operating liability risks of CO2 injection as well as the cost uncertainties associated with long term storage and sequestration. In particular, the insurance industry has been informing policymakers on the best approaches to managing long-term storage and sequestration risks based on the lessons and experiences of running different types of funding and risk
*John Scott is Head of Risk Insight at Zurich Global Corporate UK, a part of Zurich Financial Services Group, an insurance-based financial services provider. Adam Piper is Director, Corporate Risks UK & Europe at Miller Insurance Services Limited, an independent specialist insurance and reinsurance broker. Both are based in London. The views presented in the article are the personal views of the authors and do not necessarily reflect the views of any other person or entity.
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transfer mechanisms – for example, in the flood defence, oil pollution and nuclear arenas. In solar panels, there has been considerable research interest in improving the performance of these for military and civilian use. One example is barrier film technology which improves protection of photovoltaic cells and can improve performance over their lifetime. Lifecycle operating and risk issues are also areas that have been addressed by the insurance industry which has been active in developing insurance covering the cost uncertainties associated with recovery, buyback and disposal of solar panels, so that manufacturers can comply with the requirements of the EU Waste from Electronic and Electrical Equipment (WEEE) Directive. Linked to this is the risk of distributed power systems failing and not providing power, or the potential loss of income from that power to the owner-operators. There is increasing appetite to develop new and emerging insurance products that cover off-grid power business interruption caused by equipment failure or property damage. The other big new technology opportunity to reduce CO2e lies in the development of alternative engines and fuels for cars. The aerospace and defence industry has multiple opportunities and incentives to develop technologies in this area. If nothing else, military planners now have different asset requirements for forces fighting regional conflicts and anti-terrorist actions than
they did in the past. In contrast to Cold War requirements for heavily armoured vehicles, the emphasis is now on more highly mobile forces, using fuel-efficient ‘platforms’. Fuel efficiency and reduced GHG emissions go hand-in-hand with high-efficiency. Diesel engines, hybrid electric/petrol or plug-in hybrid or electric-powered vehicles are becoming increasingly common. To help manage the risks of these new fuels and engine technologies, the insurance industry has been developing products and services that either reward use of new technology, for example insurance premium discounts for hybrid vehicles, or encourage driving smarter – either by driving fewer miles or using less fuel such as pay-as-you-drive auto insurance or telematics-enhanced systems that improve safety and efficiency. The main technological barriers for electric or hybrid vehicles are around battery technology. Significant efforts have been made in defence research establishments to develop, smaller, lighter, more powerful and longer-lasting batteries. Nanotechnology has been used to achieve battery performance improvements. Good risk management practices, a core insurance industry activity, should be implemented with nanotechnology deployment to mitigate potential future liabilities. Examples of some mitigative techniques available from the industry to apply to deployment of nanotechnology include: • Adoption of a ‘life cycle management approach’ to nano-materials
• Manufacturing within the confines of the ‘precautionary principle’, i.e. for the manufacturer to establish reasonable proof that the use of nano-materials in products will not cause significant harm. • Implementing a ‘post marketing surveillance’ regime that includes an ‘adverse event’ reporting system • Consideration of an ‘employee baseline testing protocol’, i.e. to ensure that employees are regularly tested and monitored to assess exposure impacts, if any • Institution of aggressive worker protection techniques to minimize inhalation, ingestion and dermatological exposure to hazardous substances Alternative fuels such as biofuels and hydrogen are also areas of research by the aerospace and defence industry. Hydrogen requires a more fundamental range of new technologies for it to be widely adopted as a fuel, including costeffective hydrogen fuel cells, a safe distribution network of hydrogen filling stations and a low carbon source of hydrogen production. Hydrogen production could be closely linked to CCS projects, where CO2 stored in nearly depleted oil and gas reservoirs could displace hydrocarbons which could be transformed (e.g. steam-methane reforming) into hydrogen for use in power generation or as an alternative fuel for vehicles. The insurance industry has been looking at the entire hydrogen supply chain and the insurable risk implications of running hydrogenpowered vehicles.
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Adaptation On the adaptation to climate change issue, a lot of effort has gone into modelling the potential consequences of changing climate, for example flooding from changing sea levels, or fluvial and pluvial flooding and damage from increasingly intense and frequent storms. The insurance industry is motivated to understand the changing nature of these risks with respect to exposure to existing insurance products. Insurers are evaluating and offering coverage to make existing building stock more weatherevent resilient in some cases, but without mandatory building code changes, so the impacts of this voluntary insurance industry effort may be minimal. There are also potential liability consequences of climate change and some insurers are now offering liability cover for climate change related risk for directors and officers, political risk, professional liability, and environmental liability. In developing economies where insurance is not so well developed, micro-insurance schemes have
flooding or increased intensity and frequency of storms and continuing sea level rise, all contribute to increased losses suffered by insurers. Well publicised examples of major city flooding such as in New Orleans during Hurricane Katrina in 2005 are likely to be repeated, unless significant adaptation occurs - either by building away from flood-prone areas or by building flood defences. The risk-based pricing signal of insurance premiums, or indeed, in some cases, the lack of insurers willing to provide cover, can help encourage developers to build away from flood-prone areas, or to design flood-resilient buildings. Of course it isn’t just flooding that is an increasing risk related to climate change, but the damaging affects of windstorms, drought-stricken areas and wildfires (for example in Southern California and Victoria, Australia). All of the impacts of these events are felt by insurers in increased losses and these require changes to risk models and pricing for insurers to still be able to offer insurance cover that is commercially viable. These risk models can be informed by data from earth
gains could come from reducing CO2e through better insulation and more efficient heat, light and power consumption, with associated cost savings. Insurable risk covers are now available such as a ‘Green Wrap’, which incorporates general liability/workers compensation/professional indemnity for ‘green’ building projects.
Behaviour Behaviour of individuals and populations is a difficult area for private industry to have much influence over and is much more the responsibility of policymakers e.g. governments, legislators and regulators. However, the aerospace and insurance industries, working together, can create risk-based pricing signals and influence policymakers to develop policy frameworks that can manage risk and encourage the introduction of new technologies, for example CCS, that reduce reliance on the carbon economy. On behaviour change, the insurance industry has been actively working with public policy-makers to bring specialist risk knowledge. New frameworks of
Adaptation has been an important area of focus for the insurance industry and has military applications too.
been implemented to respond to food and water shortages in rural areas of South America, Africa, and Asia. Adaptation has been an important area of focus for the insurance industry and has military applications too. As the effects of climate change are likely to be felt over a number of decades, practical actions will need to be taken to reduce their impact. The insurance industry has a commercial imperative to encourage mitigation of these impacts and better risk selection to reduce losses. The aerospace and defence industry has the know-how and technology to support predictive modelling, for example satellite remote sensing data being used for meteorological forecasting, or models of potential flooding, or power outages in areas affected by severe storms. These models can and have been used to support emergency civilian and military forces who need to respond to natural catastrophes such as flooding or the effects of serious windstorms. Increased flood risk, related either to changing patterns of fluvial/pluvial
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observation technology provided by the aerospace and defence industry. Traditional insurance products need to be modified to cope with the effects of climate change, but in addition, new products are being developed. For example, there are new risks associated with systems designed for water re-use and increased storm water run-off which can require innovative insurance solutions to address them. Another important angle on adaptation is improving the resilience and insulation qualities of buildings. In many countries there are ‘green’ building codes. Insurers are beginning to offer products that fund rebuilding of damaged properties to these codes and even higher resilience against windstorm damage (stronger roof attachment, armoured glass) and flooding. Technology from the aerospace and defence industry can help in this regard, especially research into green building design and high-tech glazing. For the main customer of the aerospace and defence industry, the military, there is a vast estate of buildings that could benefit from green rebuild technology and insurance cover. Some of the biggest
regulation and legislation are required to encourage decarbonising the existing mix of power generation. Public policy can also work together with insurance to make existing building stock more climate friendly and resilient by establishing building code changes which demand upgrades to a more efficient, green and resilient state after damage – in the same manner that is required to address necessary safety improvement with respect to electrical safety and earthquake resilience.
Working Together to Meet the Challenge of Climate Change In conclusion, via a framework of technology implementation, adaptation and behaviour, there are many common actions that the insurance, aerospace and defence industries can take to reduce the impact of climate change. Further joint work on initiatives should be established in all three areas to encourage new technologies, create further adaptation to change and influence policymakers to create new legislation and regulation that will help mitigate and reduce the potential risks of climate change.
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The Conference Supported by
Energy, Environmental Defence and Security (E2DS) 5th & 6th November 2009 In Association with the Technology Forum 4th November 2009 Royal Society of Arts, London The Aerospace and Defence industry, along with the Department of Defense, must take the challenges of climate change seriously. We must understand the relationship between climate change, energy and transportation and we must Dr Ray O. Johnson, Chief immediately start working solutions to these problems. Technology Officer Lockheed Martin, speaking at EnviroSec’08
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