DoD Has Enough Petroleum Products for Anti-Terror War
By Gerry J. Gilmore
American Forces Press Service
That hydrocarbon-based commodity, created under the earth's surface over eons by the pressurized remains of prehistoric animals and plant life, is petroleum. It is a word derived from the Latin petra - rock, and oleum - oil. Also known as crude oil, petroleum is pumped to the surface from underground deposits and is transformed via distillation into gasoline, diesel, and jet fuels, fuel oil for everything the military uses in peace and wartime.
And, "yes, DoD has enough petroleum products" on hand to supply U.S. military forces prosecuting the global war against terrorism in far-flung locales like Afghanistan and Iraq, Defense Logistics Agency spokeswoman Lana Hampton said.
The Defense Energy Support Center, a DLA component with headquarters at Fort Belvoir, Va., buys fuel for defense department needs, Hampton explained. In fiscal 2005, DESC will buy about 128 million barrels of fuel -- 42 gallons make a barrel -- at a cost of $8.5 billion, she said. Jet fuel constitutes nearly 70 percent of DoD's petroleum product purchases, she added.
DESC strives to save taxpayer dollars and does "a good job" of negotiating fair market prices for the high-quality petroleum products used by the military today, Hampton pointed out. The center mainly accomplishes this "by seeking competitive bidding by suppliers and through efforts to streamline the acquisition process," she said.
The prices DoD components are charged for petroleum products normally are established in advance, and are generally in effect for an entire fiscal year, Lawrence Ervin, chief of market research, explained. However, the prices DoD pays for petroleum products fluctuate with market levels. The Defense Working Capital Fund performs the function of smoothing out these price fluctuations for DoD customers. Escalating world petroleum demand and concerns about adequacy of global supplies recently pushed the market price of a barrel of crude oil to $65, more than 68 percent higher than the average over fiscal 2004, he said. As a result, DoD's internal "standard prices" for petroleum products this fiscal year "had to be changed effective June 1 due to that dramatic rise in oil prices," Ervin noted.
Prices for crude oil have shot up "because world demand has been growing faster than world supply capability during the last few years," Hampton explained. And global demand for petroleum products used in automobiles, airliners, power plants and the manufacture of fertilizers and plastics has continued to rise to fuel the expanding economies of the United States and other large countries like India and China.
Hampton said the U.S. military is using between 10 million and 11 million barrels of fuel each month to sustain operations in Afghanistan, Iraq and elsewhere. Most of that fuel is dedicated to transportation needs to power military aircraft, ground vehicles and ships, she said.
Scientists' opinions differ as to when the world's petroleum deposits -- a finite natural resource -- will be depleted. Some experts say world oil production will peak sometime in the first half of this century, while others believe the discovery of new oil fields and increased use of technology will provide enough oil to meet global needs for another hundred years or more.
With an eye to the future, DESC has been "an active participant" in DoD's future fuels initiative, Pam Serino, chief of product technology and standardization, said. She noted DESC is the U.S. single largest purchaser of biodiesel, which is composed of 20 percent vegetable oil and 80 percent diesel fuel. The center also supplies E85, a blend of 85 percent ethanol and 15 percent gasoline, to the armed forces. Serino said DESC also coordinates with the military to obtain nonpetroleum-based energy-producing technologies such as solar and wind power.
Serino said DESC also is a member of DoD's Synthetic Fuels Task Force that's working on developing nonpetroleum-based fuels.
In 2004, Congress tasked DESC to do a report that explored using hydrogen as a fuel for the defense logistics system, Hampton said. After receiving that initial report, the Senate Armed Services Committee requested "a more detailed look into several of our suggested recommendations," Serino said, noting DESC's follow-on report to the committee is now being drafted.
DoD also works closely with other federal organizations, such as the Department of Energy, "to develop technologies that use alternate means of energy in order to decrease the amount of petroleum imports to the United States, and ultimately, DoD," Hampton said.
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