Fuel & Energy Issues Continue to Get Spotlight in US Military

Sticker shock

Following our reports today covering the USA’s recent purchase of $3.15 billion worth of various fuels and almost $230 million worth of electricity over the past week, it seems like a fuller picture is in order. A CNN online article notes that according to the Defense Energy Support Center, the U.S. military consumed 144.8 million barrels of fuel in 2004, spending $6.7 billion. In 2005, it consumed only 128.3 million barrels, but spent $8.8 billion. For 2006, the energy support center estimates the military will need 130.6 million barrels and pay more than $10 billion.

Fears of shortages after Hurricane Katrina gave the issue even more urgency, and set in motion a cascade of events from Deputy Secretary of Defense Gordon England’s September 2005 fuel conservation memo, to by a December 2005 directive asking all defense facilities to cut their energy consumption and increase the use of renewable energy sources. The goal is reduce energy consumption by 2% each year, while increasing renewable energy use to 7.5% of total demand by 2013 and 25% by 2025.

B-52H: gas guzzler

There are certain to be procurement-related implications from these moves up and down he chain. Re-engining the USA’s 1950s-era B-52 bombers was previously dismissed as not worth it, but odds are pretty good that it will happen in the new climate. DID’s March 17, 2006 “Energy Conservation Moving Up Pentagon’s Agenda” article describes a number of other initiatives that are already underway, excerpts and links to a key report from the US Army Corps of Engineers covering future military sustainability, and offers (updated) information about the Pentagon’s upcoming inter-agency Energy Conversation events at the end. We enjoyed seeing Rep. Bartlett’s [R-MD] office quote and reference that article in the invitation to former CIA director R. James Woolsey’s upcoming talk.

$3.15B in US DESC Fuel Contracts Over the Past Week

As DID noted in its March 17 article “Energy Conservation Moving Up Pentagon’s Agenda,” the truth is that the military can’t live without fuel, but every gallon of it is both a logistics burden and a financial burden.

Over the past week, the US Defense Logistics Agency has announced approximately $3.15 billion worth of fuel contracts for jet fuel, diesel, naval distillate, and turbine fuel via the Defense Energy Support Center (DESC) at Fort Belvoir, VA. The totals include $2.1 billion for diesel and jet fuel, $1.01 billion for turbine fuel, and $35.7 million for naval distillate. DID covers these contracts below:

$228.3M in Electricity Contracts for MD and NJ Facilities

Electricity isn’t often thought of as a major buy item for the US military, but firm-fixed-price contracts for electrical power over the past week have totaled about $228.3 million, and covered only locations in MD and NJ. There were 79 proposals solicited by the Defense Energy Support Center (DESC) in Fort Belvoir, VA, and 15 responded. Customers for these contracts include the US Army, Navy, Air Force, and federal civilian agencies; and the date of performance completion is December 31, 2007.

Contract winners included: