Monthly Archives: May 2012

The Rio+20 Earth Summit on the Sidelines

The United Nations chief, Ban Ki-moon, held out little hope on Thursday May 24, 2012) of an historic outcome at the Rio global development summit, now less than a month away, admitting negotiations had been “painfully slow”. …  The pace was so sluggish, in fact, that Ban prevailed on the international community to agree to an extra five days of talks, from 29 May to 2 June. The last-minute talks were aimed at getting at producing a face-saving outcome for a summit, which so far has failed to engage world leaders.  With Barack Obama focused on his re-election, and European leaders focused on the financial crisis, the advance work for Rio has been left to bureaucrats who do not have the political clout to make the kind of bold decisions that would allow a breakthrough.  Negotiations were bogged down on minor details and narrow national interests which, Ban said, had overwhelmed far more important issue of setting the world on the right track for sustainable growth.  At one point, the negotiating text ballooned to an impossibly unwieldy 6,000 pages Ban said. It was currently about 80 pages.  Other UN officials involved in Rio preparations have also rued the failure of world leaders to fully engage with the summit. But Ban added urgency to their concerns on Thursday.  “My message is that this is not the time to argue against any small, small items. Please do not lose (sight of the) bigger picture,” Ban said. “This is not the end. Rio+20 is just the beginning of many processes so they should be flexible. They should rise above national interests or specific group interests.”  He admitted the lack of urgency in the negotiations had drastically lowered expectations for Rio. “There is some scepticism about whether this conference will be a success,” Ban said. But he added that he remained optimistic.

Ban’s remarks mark the second time since mid-April in which he has tried to get world leaders to focus on the Rio+20 summit. For Obama, attendance at the summit would be politically toxic in an election year.  Nancy Sutley, a White House environmental advisor, on Wednesday said the administration had yet to decide which officials to send to Rio.

In his remarks, Ban said the summit had identified five main areas of concern including developing a global strategy for developing a green economy to putting in place the institutions that would encourage social development, such as improvements in health and education, along with economic growth.  But he indicated that the most progress could happen outside the government negotiations, with ten of thousands of business leaders, activists, and environmentalists descending on Rio to make their case for a greener and more equitable model of development

Ban Ki-moon calls Rio Earth summit negotiations ‘painfully slow’, Guardian, May 24, 2012

Battlespace: the Space-Based Infrared System and Missile Defense

The Space-Based Infrared System (SBIRS) is a consolidated system intended to meet the United States’ infrared space surveillance needs through the first two to three decades of the 21st century. The SBIRS program is designed to provide key capabilities the areas of missile warning  (MW), missile defense (MD) and battlespace characterization.

SBIRS is an integrated “system of systems” that will include satellites in geosynchronous orbit (GEO), sensors hosted on satellites in highly elliptical orbit (HEO), and ground-based data processing and control. SBIRS ground software integrates infrared sensor programs of the U.S. Air Force (USAF) with new IR sensors. SBIRS continues to struggle with cost overruns…. By September 2007, the expected project cost had increased to $10.4 billion

The original contract consisted of 2 HEO satellite sensors and 2-3 GEO sensors (and satellites) with an option to buy a total of 5 GEOs.

Exceprts from Wikipedia, SBIRS

Lockheed Martin’s SBIRS contracts include four highly elliptical orbiting (HEO) payloads, four GEO satellites, and ground assets to receive, process, and disseminate the infrared mission data. Lockheed Martin expects to receive funding to begin long lead parts procurement for the fifth and sixth GEO satellite by the end of the year (2012).

Lockheed Martin has received the GEO-4 (May 2012).   The GEO-4 structure, identical to the previous three SBIRS GEO spacecraft, is made from lightweight, high-strength composite materials designed to withstand the accelerations and vibrations generated during launch and support the spacecraft throughout on-orbit operations.  According to Lockheed Martin “Delivery of the SBIRS GEO-4 core structure is a major milestone indicating the program is continuing to meet its commitments….Based on lessons learned from the first two SBIRS geosynchronous satellites, production of GEO-3 and GEO-4 is proceeding very well. In addition, we have a number of affordability initiatives in place jointly with the Air Force to continually reduce the cost of each follow-on SBIRS satellite.”

Excerpts, Lockheed Martin Delivers Core Structure for Fourth SBIRS Satellite, Press Release Lockheed Martin, May 24, 2012

See also US Air Force

The Belo Monte Hydroelectric Dam in Brazil: the need for a social pact

These dams [like the Belo Monte] harness the natural flow of the river to drive the turbines, so they do not require large reservoirs, and as a result, less land needs to be flooded – which means less of an impact on the environment and surrounding communities. However, it also means that during dry spells, they do not have the water reserves needed to continue generating electricity at a reasonable capacity.   “We are increasing the installed generating capacity, but water storage capacity has not grown since the 1980s,” which is a cause for concern, said Nelson Hubner, general director of the Brazilian Electricity Regulatory Agency.  The “stored energy” represented by the country’s reservoirs has not kept up with demand, which will make it impossible to maintain the necessary supply of hydroelectricity during a drought year, warned Hubner at the Second Hydropower Summit Latin America, held May 9-10 in São Paulo.  The summit, organised by Business News Americas (BNamericas), a business and economy news service based in Santiago, Chile, brought together dozens of executives from both public and private companies in the sector. Many were highly critical of the model chosen for the country’s new hydroelectric power plants, which they believe will result in greater energy insecurity in Brazil.  “Future generations will demand compensation for the fact that biodiversity was decreased and reservoirs were not created” in current hydropower projects, predicted Jose Marques Filho, assistant director of environment and corporate citizenship at Companhia Paranaense de Energia, a power company run by the government of the southern Brazilian state of Paraná.

By renouncing the use of this “long-life battery”, as another summit participant described reservoirs, Brazil will need to build more fossil fuel-powered thermoelectric plants, which are more polluting but “are not under attack from environmentalists,” complained the hydroelectric dam constructors and their supporters.

Construction began in 2011 on the Belo Monte hydroelectric dam on the Xingú River in Brazil’s Amazon basin. A total of 516 sq km of land will be flooded for the project, but this is only 42 percent of the area that would have been flooded for the reservoir planned in the original version of the project, drawn up in the 1980s.  However, because of this smaller reservoir, the plant will only reach its total generation capacity of 11,233 megawatts during the brief rainy season when the river is swollen to its highest level. During dry spells, output will decrease significantly, since the flow of the Xingú can drop from 30,000 cubic metres a second in March and April to less than 500 cubic meters in a dry month like October.

“We have to get used to hydroelectric dams without large reservoirs because the environment demands it,” said Mauricio Tolmasquim, president of the Energy Research Corporation, which provides advisory services to the Ministry of Mines and Energy. The Amazon region, where most of Brazil’s hydropower potential is concentrated, is primarily flat, which means there are few sites where water can be accumulated and stored without flooding large areas of forest, he explained.  Belo Monte, located at the end of a canyon, is one of these sites. A large reservoir there would flood two indigenous territories which are home to over 200 people. “That was a determining factor” for modifying its design and adopting run-of-the-river technology, Tolmasquim told Tierramérica.  This decision, however, did not spare Belo Monte from becoming the target of the most widespread opposition ever against an energy project in Brazil, with environmentalists, civil society activists, indigenous communities and even local soap opera stars and international celebrities joining forces to denounce its environmental and social impacts.

Tapping the rivers of the Amazon basin for energy production should begin “with smaller hydroelectric dams, with an output of around 500 megawatts,” said Goldemberg, a University of São Paulo professor who has headed a number of state-owned energy companies and was the national secretary of environment when the city of Rio de Janeiro hosted the Earth Summit in 1992…..

The conflicts that sometimes halt the construction of hydropower plants in Brazil pit a small local population of perhaps a few thousand people against a million people who will benefit from the electricity produced, but are far away and geographically scattered, commented Goldemberg.  What are needed are “good projects” that are transparent and attend to the potential social and environmental impacts. In addition, it is up to the government to “mediate and explain” to settle these conflicts, given the disproportionate ratio of opponents to beneficiaries of roughly “one per one hundred,” he said.

There are much more complex situations in Asia, where enormous numbers of people are affected because of the population density of countries like India, he added. Goldemberg learned a good deal about numerous cases like these as a member of the World Commission on Dams, which produced a report in 2000 detailing the damages caused by these projects and the requirements for their construction.

For those in the hydroelectric dam construction industry, the issue of the environment has become an obstacle to the expansion of hydropower in Brazil.  In the meantime, the wind power industry has experienced a significant boost, largely because their competitors in the hydropower sector have been unable to obtain permits from the environmental authorities for years, he observed.  According to Marques Filho of the Companhia Paranaense de Energia, overcoming this impasse will require a “social pact”, based on “a dialogue among all the stakeholders” that cannot be limited to environmentalists on one side and hydroelectric dam constructors on the other.

Excerpts, Mario Osava, Belo Monte Dam Hit by Friendly Fire, Inter Press Service, May 22, 2012

How Easy it is to Kill: the Anonymous Drone Politics

White House counterterror chief John Brennan has seized the lead in guiding the debate on which terror leaders will be targeted for drone attacks or raids, establishing a new procedure to vet both military and CIA targets.  The move concentrates power over the use of lethal U.S. force outside war zones at the White House.

The process, which is about a month old, means Brennan’s staff consults the Pentagon, the State Department and other agencies as to who should go on the list, making a previous military-run review process in place since 2009 less relevant, according to two current and three former U.S. officials aware of the evolution in how the government targets terrorists.  In describing Brennan’s arrangement to The Associated Press, the officials provided the first detailed description of the military’s previous review process that set a schedule for killing or capturing terror leaders around the Arab world and beyond. They spoke on condition of anonymity because U.S. officials are not allowed to publicly describe the classified targeting program.

One senior administration official argues that Brennan’s move adds another layer of review that augments rather than detracts from the Pentagon’s role. The official says that in fact there will be more people at the table making the decisions, including representatives from every agency involved in counterterrorism, before they are reviewed by senior officials and ultimately the president.  The CIA’s process remains unchanged, but never included the large number of interagency players the Pentagon brought to the table for its debates.  And the move gives Brennan greater input earlier in the process, before senior officials make the final recommendation to President Barack Obama. Officials outside the White House expressed concern that drawing more of the decision-making process to Brennan’s office could turn it into a pseudo military headquarters, entrusting the fate of al-Qaida targets to a small number of senior officials.

Previously, targets were first discussed in meetings run by the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen at the time, with Brennan being just one of the voices in the debate.  The new Joint Chiefs chairman, Gen. Martin Dempsey, has been more focused on shrinking the U.S. military as the Afghan war winds down and less on the covert wars overseas.  With Dempsey less involved, Brennan believed there was an even greater need to draw together different agencies’ viewpoints, showing the American public that al-Qaida targets are chosen only after painstaking and exhaustive debate, the senior administration official said.

But some of the officials carrying out the policy are equally leery of “how easy it has become to kill someone,” one said. The U.S. is targeting al-Qaida operatives for reasons such as being heard in an intercepted conversation plotting to attack a U.S. ambassador overseas, the official said. Stateside, that conversation could trigger an investigation by the Secret Service or FBI.  Defense Department spokesman George Little said the department was “entirely comfortable with the process by which American counterterrorism operations are managed.  The CIA did not respond to a request for comment….

An example of a recent Pentagon-led drone strike was the fatal attack in January on al-Qaida commander Bilal al-Berjawi in Somalia. U.S. intelligence and military forces had been watching him for days. When his car reached the outskirts of Mogadishu, the drones fired a volley of missiles, obliterating his vehicle and killing him instantly. The drones belonged to the elite U.S. Joint Special Operations Command. The British-Lebanese citizen al-Berjawi ended up on the JSOC list after a studied debate run by the Pentagon.

The Defense Department’s list of potential drone or raid targets is about two dozen names long, the officials said. The previous process for vetting them, now mostly defunct, was established by Mullen early in the Obama administration, with a major revamp in the spring of 2011, two officials said.  Drone attacks were split between JSOC and the CIA, which keeps a separate list of targets, though it overlaps with the Pentagon list. By law, the CIA can target only al-Qaida operatives or affiliates who directly threaten the U.S. JSOC has a little more leeway, allowed by statue to target members of the larger al-Qaida network.

Under the old Pentagon-run review, the first step was to gather evidence on a potential target. That person’s case would be discussed over an interagency secure video teleconference, involving the National Counterterrorism Center and the State Department, among other agencies. Among the data taken into consideration: Is the target a member of al-Qaida or its affiliates; is he engaged in activities aimed at the U.S. overseas or at home?  If a target isn’t captured or killed within 30 days after he is chosen, his case must be reviewed to see if he’s still a threat.

The CIA’s process is more insular. Only a select number of high-ranking staff can preside over the debates run by the agency’s Covert Action Review Group, which then passes the list to the CIA’s Counterterrorism Center to carry out the drone strikes. The Director of National Intelligence, Jim Clapper, is briefed on those actions, one official said.

Al-Berjawi’s name was technically on both lists — the Pentagon’s and the CIA’s. In areas where both JSOC and the CIA operate, the military task force commander and CIA chief of station confer, together with representatives of U.S. law enforcement, on how best to hit the target. If it’s deemed possible to grab the target, for interrogation or simply to gather DNA to prove the identity of a deceased person, a special operations team is sent, as in the case of the 2009 Navy SEAL raid against al-Qaida commander Saleh Ali Saleh Nabhan. Nabhan’s convoy was attacked by helicopter gunships, after which the raiders landed and took his body for identification, before burying him at sea.

But if the al-Qaida operative is in transit from Somalia to Yemen by boat, for instance, U.S. security officials might opt to use the Navy to intercept and the FBI to arrest him, officials said.

KIMBERLY DOZIER, Who will drones target? Who in the US will decide?, Associated Press, May 22, 2012

System F6: DARPA and Fractionated Satellites

System F6 seeks to demonstrate the feasibility and benefits of a satellite architecture wherein the functionality of a traditional “monolithic” spacecraft is delivered by a cluster of wirelessly-interconnected satellite modules capable of sharing their resources and utilizing resources found elsewhere in the cluster. Such architecture enhances the adaptability and survivability of space systems, while shortening development timelines and reducing the barrier-to-entry for participation in the national security space industry.

The program is predicated on the development of open interface standards—from the physical wireless link layer through the network protocol stack, including the real-time resource sharing middleware and cluster flight logic—to enable the emergence of a space “global commons” which would enhance the mutual security posture of all participants through interdependence. A key program goal is the industry-wide promulgation of these open interface standards for the sustainment and development of future fractionated systems and low-cost commercial hardware for the sustained development of future fractionated satellite systems beyond the System F6 demonstration.

See DARPA

Contractors include:  Boeing, Lockheed Martin, Northrop Grumman, and Orbital Sciences

Polluting the Rivers: Mobil Oil and the Yarra

Mobil Oil has been ordered to stop polluting the Yarra River (Victoria, Australia) with industrial discharge in a historic deal to improve the health of the waterway.  The deal to be announced by the state government today will end decades of companies being allowed to pour contaminated water into the Yarra, which environmentalists fear is already over-polluted.

Mobil has been pumping waste water into the Yarra for 40 years. It was the last remaining corporation allowed to do so, after the Environment Protection Authority (EPA) last year granted it a licence to continue the discharges, a move widely condemned at the time.  Under a new agreement with the EPA, the company will now be required to divert the waste water from its oil refinery at Yarraville to City West Water’s sewerage system.  It has been given until June next year to make the infrastructure upgrades necessary to comply with the arrangement – meaning up to 25 kilolitres of waste water will go into the river every day until then.  Environment Minister Ryan Smith said the deal would nonetheless see an end to ”yesteryear practices” that were ”completely inconsistent with community expectations”.  ”Improving the health of the river and bay is a job for all of us in the community and it is good to see industry playing their part,” he said.  But while the minister hopes the river will eventually be safe for swimming, EPA chief John Merritt said this was unlikely. ”If you look at the health of every river that flows through every major city, none of them are swimming pools,” he said.  E. coli bacteria readings taken by the EPA on Wednesday show pollution remains a big problem, with low water quality around the Princes Bridge and medium quality around Docklands, Abbotsford and South Yarra.

Over the years, businesses along the Yarra – including the Port of Melbourne, Orica and Sugar Australia – were allowed to discharge waste water into the river, but the EPA has been phasing this out gradually. Mobil has had a licence to pump waste water into the river since 1973. Spokesman Alan Bailey said Mobil discharged about 25 kilolitres of waste water a day, far less than the maximum permitted under the licence.

Environmentalists and lobby groups have welcomed the shift, but say a lot more needs to be done to improve the Yarra’s health.  Ian Penrose, for the Yarra Riverkeepers Association, said greater priority must be given to finding alternative water sources – such as stormwater and recycled water – to safeguard the river from ”over-extraction”.  But a major problem, he said, was the river being ”constantly degraded by encroaching urban development”.

Mobil told to stop polluting Yarra, http://www.theage.com.au, May 20, 2012

Ecological Restoration Alliance to Save Threatened Habitats

Botanic gardens around the world will sign an historic agreement on 23 May 2012 to restore the world’s damaged ecosystems.  Responding to a United Nations target to restore at least 15 percent of the world’s damaged ecosystems by 2020, the following institutions have agreed to work together to form a new Ecological Restoration Alliance:

•Royal Botanic Gardens, Kew, UK

•Royal Botanic Garden Edinburgh, UK

•Missouri Botanical Garden, USA

•Brackenhurst Botanic Garden, Kenya

•Kings Park and Botanic Garden, Australia

•National Tropical Botanical Garden, USA

•Rio de Janeiro Botanic Garden, Brazil

•Instituto de Ecología, A.C. “Francisco Javier Clavijero Botanic Garden”, Mexico

•Royal Botanical Gardens, Canada

The Alliance has ambitious aims, with a plan to restore 100 damaged, degraded or destroyed ecosystems. Restoration projects will be conducted on six continents, drawing on the proven restoration knowledge, capacity and experience of the allied botanic gardens, arboreta and seed banks.  The places to be targeted include tropical forests, prairies, wild places within cities, wetlands and coastal sites – ecosystems that are under threat and are no longer able to provide essential services and resources for sustaining human livelihoods and biodiversity.

Other botanic gardens in China, South Africa, UK, USA and Venezuela are committed to joining or supporting the Alliance. The combined expertise of members will be drawn together to build global capacity for pragmatic yet well-informed ecological restoration. The lessons learned from the initial flagship projects will be applied to other places, enhancing the contribution of restoration to achieving a healthy and sustainable planet. A new generation of practitioners will be trained and guidance provided to industry and governments toward best practices for land restoration. This ambitious 20 year initiative, developed by botanic gardens and facilitated by Botanic Gardens Conservation International (BGCI), responds to urgent global needs expressed in both the UN’s Convention on Biological Diversity and the Millennium Development Goals.

For  more info see Ecological Restoration Alliance 

The Virgin Digital Land and the Google Monopoly

Online Africa is developing even faster than the new highways of offline Africa. Undersea cables reaching Africa on the Atlantic and Indian Ocean coasts, plus innovative mobile-phone providers, have raised internet speeds and slashed prices. In some African markets you can buy a daily dose of internet on a mobile phone for about the cost of a banana (ie, less than ten American cents). This burgeoning connectivity is making Africa faster, cleverer and more transparent in almost everything that it does.

Google can take a lot of the credit. The American search-and-advertising colossus may even be the single biggest private-sector influence on Africa. It is not just that its internet-search and e-mail are transforming Africa. Take maps. Before Google, ordinary Africans struggled to find maps. Military and civilian mapping offices hoarded rolls of colonial-era relics and sold them at inflated prices. By contrast, Google encourages African developers to layer maps with ever more data. In Kenya 31,000 primary schools and 6,900 secondary schools are marked on Google maps. Satellite views even let users see if the schools have built promised new classrooms or water points. Similar initiatives let voters verify local voting figures at election time. Satellite views of traffic jams have also shamed some African cabinets into spending more on city infrastructure.

Google has also pepped up Africa’s media, enabling Africans to read each other’s newspapers. Google is improving translation software to bring more Africans who speak only local languages online. As well as English, French, Portuguese and Arabic, it offers Zulu, Afrikaans, Amharic and Swahili. Languages like Wolof, Hausa, Tswana and Somali are set to follow.

Faster downloading speeds have helped make Google’s YouTube video-viewing more popular. Young urban Africans organise YouTube parties. The company is also trying to help African governments digitise information and make it freely available to their citizens. Many rulings in the higher courts of Ghana, for instance, are going online.

Yet critics complain that Google is buying up enormous amounts of virgin digital land in Africa at virtually no cost. Within a couple of decades, without the regulatory oversight of the African Union or African governments, they say, Africa’s internet life will be almost entirely in hock to the Google giant. Even the company’s decision to go slow on seeking profits from Africa by offering cheap deals has been attacked by African would-be rivals, which say that such tactics are only extending Google’s unfair advantage.

Google says its recent effort to best a rival South African firm, Mocality, was an embarrassing aberration. Google’s top man in Africa, Joe Mucheru, brushes aside fears of a monopoly. The company’s advertising model, he says, helps African business. “The more Google grows, the more the entire ecosystem grows.” He is especially keen on Google+, a service that seeks to provide an even more useful online community than Facebook

Google in Africa: It’s a hit, Economist, May 12,2012, at 57

The Disposal of Nuclear Waste in the UK: the policy of voluntarism

Romney Marsh in Kent, one of England’s most peaceful areas and most wildlife-rich wetlands, has been suggested as a site for Britain’s future nuclear waste dump.  Ten thousand letters have been sent to residents of the area by the local district council, Folkestone-based Shepway, canvassing their views about siting the proposed Nuclear Research and Disposal Facility in the geological strata deep beneath the marsh.  The council, which does not yet have a formal position on the idea, thinks that hosting the dump could be a way of replacing up to 1,000 jobs likely to be lost from the closure of the two local nuclear power stations, Dungeness A and B, and wants to know what local people think.

After decades of uncertainty about what to do with Britain’s 60-year legacy of dangerous radioactive waste – which is mainly spent fuel from atomic power stations, scattered across the country at numerous sites – the Government decided in 2006 that it would all be brought together and held in a “geological disposal facility” – a repository deep underground.

Finding a site acceptable to local people was always going to be the major difficulty, and in a White Paper published in 2008 the Government decided on an approach of “voluntarism” – inviting all local authorities to express an interest themselves in hosting the dump. It was understood that the Government would provide substantial economic benefits in return.  So far, only three local authorities have expressed interest, all of them in the area of the Sellafield nuclear site in Cumbria – Allerdale and Copeland Borough Councils, and Cumbria County Council.

The fact that solidly-Tory Shepway – Tory majority, 44 out of 46 council seats, with two independents – is now showing stirrings of interest is something of a breakthrough, and was specifically welcomed yesterday by the Energy Minister, Charles Hendry. “This is potentially a multi-billion pound development that could guarantee high quality employment and the retention of nuclear industry skills in the area for many decades,” he said.  However, not all local people are so keen. “This is an entirely ludicrous proposal,” said retired businessman Peter Morris, who lives on the edge of the marsh.  “This is an area of rich agricultural land with diverse protected habitats and unique species. It is simply the wrong place to store nuclear waste. It would mean bringing the waste from right across Britain, probably through London.”  He added: “Most of Romney Marsh is either at sea level or below sea level. With global warming it seems likely it would be extremely vulnerable to coastal flooding and I’m not aware of any studies which have shown otherwise.”   In a statement yesterday, Shepway said that a waste store “would place nuclear waste in secure containers deep underground in vaults and tunnels. At ground level there would be buildings housing research, office, transport and other facilities.”

Shepway councillor David Godfrey, who was raised on Romney Marsh and whose first job was surveying the Dungeness A Construction, said. “The council does not have a formal view about whether the Marsh should host a Nuclear Research and Disposal Facility. Our only view is that local people should be given the opportunity to decide for themselves if it is worth discussing the idea further. If the people of the Marsh do not support an Expression of Interest, things will end there.”  He added: “If the community does support an Expression of Interest, [the Department of energy and Climate Change] will commission experts to see whether the geology accessible from the Marsh is potentially suitable.

Michael McCarthy, Romney Marsh set to become nuclear dump, the Independent, May 17, 2012

Nuclear Waste and Scotland

The Military-Industrial Complex: aerospace and defense industry

The U.S. is the world’s largest aerospace and defense market, and also home to the world’s largest military budget. The growth of the Aerospace and Defense industry depends largely on the spending outlook of government departments, with the U.S. defense budget being the primary driver. The industry largely depends on U.S. government contracts….

Defense spending is the major source of revenue for the top nine global aerospace and defense companies, with the US accounting for more than 40% of total global defense spending. However, with the U.S. government expected to institute greater austerity in its defense budget going forward, defense companies will need to source more orders from global clients. The geostrategic significance of the industry and the related heavy export restrictions will come in the way, to some extent, of those marketing efforts by U.S.-based operators.

The U.S. defense budget for 2012 was $645.7 billion, with the base budget at $530.6 billion and $115.1 billion approved for Overseas Contingency Operations (“OCO”) as supplementary defense spending, mainly to fund ongoing wars.  In February this year (2012), the Department of Defense (DoD) requested a Pentagon base budget of $525.4 billion for 2013, which is approximately $5.1 billion or 1% less than what is approved for fiscal 2012, with $88.5 billion earmarked for OCO spending. The significant reduction in OCO funding is mainly due to the decline of U.S. military operations in Iraq in 2011. Going forward, OCO funding is expected to continue to decline as troops redeploy out of Afghanistan.  Since the September 2001 attacks, the U.S. government has spent significant amounts on military campaigns overseas. The country has already decided to gradually move out of Afghanistan, and the war in Iraq has finally ended, which is expected to lower its expenditure on foreign campaigns. However, its clandestine military operations in other nations as part of anti-terrorism operations will continue to add to foreign war expenses. However, the overall trend in overseas military spending is unmistakably on the downtrend.

The big defense operators armed with a strong balance sheets are expanding their operations inorganically through acquisitions. The U.S. Defense department also endorses mergers among U.S. defense companies, provided they don’t involve the top five or six suppliers acquiring each other.

Lockheed Martin Corporation bolstered its product portfolio by acquiring Procerus Technologies, a company specializing in autopilot and other avionics for micro unmanned aerial systems. In November 2011, it had acquired Sim-Industries B.V., a commercial aviation simulation company located in the Netherlands. This acquisition would expand both companies’ closely related markets and expand the customer base.

Another defense major, L-3 Communications Holdings Inc., acquired the Kollmorgen Electro-Optical (“KEO”) unit of of Danaher Corporation This unit will improve L-3’s product suite with products like submarine photonics systems and periscopes, ship fire control systems, visual landing aids, ground electro-optical and sensor-cueing systems.

In December 2011, General Dynamics Corporation completed the acquisition of Force Protection, Inc. The latter provides blast- and ballistic-protected platforms that support the armed forces of the U.S. and its allies.

In December 2011, Raytheon Company announced that it has acquired Pikewerks Corporation, a privately held company, to further extend Raytheon’s capabilities to defend against sophisticated cyber-security threats facing customers in the intelligence community, the DoD and commercial organizations.=

Excerpts, Zacks Industry Outlook Highlights: Lockheed Martin, L-3 Communications, Danaher, General Dynamics and Raytheon, PRNewswire, May 15, 2012