# Presentation: 036347

## Slide 1

##  Dedication

**Alvin J. Alm**
**President, Chambers Associates**
**Task Force Co-Chairman**

**Al Alm served under five Presidents of both parties in the White House, the Environmental Protection Agency, and the Department of Energy.  **
**He saw immense opportunity for our national defense in the work of this Task Force.  **
**Al’s grand sense of humor, friendship and intellect are sorely missed and his loss is deeply felt.**

## Task Force Membership

_**Members**_
**Mr. Alvin Alm****	****	****	****	****   Chambers Associates, Inc****	****	****(Co-Chair)**
**Gen. (USAF, Ret) Mike Carns****	****	****   Center for International Political Economy **
**Ms. Leslie Carothers****	****	****	****	****   United Technologies **
**Dr. Robert Cooper****	****	****	****	****   Atlantic Aerospace Electronics**
**Dr. Susan Coughlin****	****	****	****	****   American Trucking Association Foundation**
**Lt. Gen. (USA, Ret) Jerome Granrud   ****	****   Spectrum Group**
**Dr. Amory Lovins****	****	****	****	****   Rocky Mountain Institute**
**Dr. Paul MacCready****	****	****	****	****   AeroVironment Inc. **
**Dr. Edward Reedy****	****	****	****	****   Georgia Tech Research Institute**
**Dr. Jefferson Tester****	****	****	****	****   Massachusetts Institute of Technology**
**VADM (USN, Ret) Richard Truly****	****   ****	****   National Renewable Energy Laboratory (Co-Chair)**
_**Sponsors**_**	****	****	****	****   **_**Government Advisors**_
**Dr. Jacques Gansler****	****USD (AT&L)****	****   Dr. Stephen Andersen****	****EPA**
**Ms. Sherri W. Goodman****	****DUSD(ES)****	****   Mr. Tom Gross****	****	****DoE**
**Dr. Delores Etter****	****DUSD(S&T)****	****   Dr. Lourdes Maurice****	****SAF/AQRT**
**	****	****	****	****	****   ****Mr. Paul Piscopo and****	****ODUSD(S&T)**
**	****	****	****	****	****       ****Mr. Jack Taylor**
**	****	****	****	****	****   ****Dr. Alan Roberts****	****	****OPNAV**
_**Executive Secretary**_
**Mr. Kevin Doxey****	****	****	****	****   ODUSD(ES)**
_**Analytical Support**_
**Mr. Tom Morehouse****	****	****	****	****   Institute for Defense Analyses**

## Terms of Reference

- Task Force chartered to:
- Identify technologies to improve weapons platform fuel efficiency (land, sea & air)
- Assess their impact on military capability, operating costs, logistics burden and the environment

***The task force identified many fuel efficient technologies and benefits...***
***but also found important institutional barriers that prevent the benefits from being factors in key investment decision points.***

## Fuel Efficiency Task Force Report

- Executive Summary
*National Security Fuel Use and Global Supply*
- Global Trends and DoD Consumption Patterns
*Linking Efficiency to Military Capability and Security*
- Improvement a critical enabler to agile forces
- Fuel True Cost Much Higher than DoD Standard Price
- Improving Efficiency Addresses Environmental Security
*Improving Platform Efficiency Through Technology*
- Army, Navy, Air Force Technology Opportunities
- Need for Focused S&T
- Findings and Recommendations

**Notes:**
Four major sections to the report that explain how we arrived at our findings and recommendations:  

National Security Fuel Use and Global Supply:
DoD Consumption Patterns – DoD largest single user – unlikely that DoD would be unable to obtain fuel it needs in future, but at what cost and what impact to others in the economy who may be competing for fuel
Global Trends and Future Fuel Prices
fuel dependence is a national vulnerability and balance of trade issue

Linking Fuel Efficiency to Military Capability, National Security and Environmental Security:
Improving efficiency is a Critical Enabler to achieving the objectives of JV2010/2020
The True Cost of Fuel Much Higher than the price charged by DESC, which is the figure used to make investment decisions in the DoD 
Fuel Efficiency Addresses Environmental Issues

Finally, in the section on Improving Platform Efficiency Through Technology, we identified examples from each Service where technology is available to significantly improve the efficiency of both legacy platforms and those under development.  We’ve tried to quantify the improvements where possible, show how implementation would enable reductions in logistics force structure, and describe how the decision making process ultimately makes decisions to invest or not to invest in these improvements.   We discovered that all the Services evaluate fuel in about the same way – by undervaluing its benefits financially as well as in terms of capability.

Implementing our 5 recommendations will strengthen the linkage between fuel efficiency and capability and produce different decisions on these matters through the requirements determination and acquisition processes, and the PPBS.

## U.S. Petroleum Consumption and Imports

- Source:  EIA Annual Energy Review 1997 Tbls 2.1, 5.1 and Annual Energy Outlook 1999 Tbl 11

**1970 to 2020**

## U.S. Dependence on Foreign Oil

- Saudi Arabia	  25%
- Iraq		  10%
- UAE		  9%
- Kuwait	  9%
- Iran		  9%
- Venezuela	  6%
- Russia	  5%
- Mexico	  5%
- Libya	  3%
- China	  3%
- Nigeria	  2%
- U.S.		  2%

- U.S.		26%
- Japan	8%
- China	6%
- Germany	4%
- Russia	3%
- Italy		3%
- France	3%
- S. Korea	3%
- Canada	3%
- England	3%
- Brazil	3%
- India		3%

- Source:  International Energy Annual 1998 (EIA), Tables 1.2 and 8.1.

- Have Oil

- Use Oil

**The U.S. uses more than the next 5 highest consuming nations combined.**

## National Security Events Related toMajor Disruptions in Fuel Supply

- Barrels of oil per day removed from world markets as a result of conflicts.

- National Security Events Related toMajor Disruptions in Fuel Supply

## National Security Fuel UseDoD Consumption Patterns

- DoD is the world’s largest single user
- DoD user data to enable meaningful analysis difficult to obtain
- Analytical tools not available

- Air Force largest user, followed by Navy then Army, but over 60% of AF fuel for lift
- Army contribution to airlift and sealift consumption unknown

## Fuel Efficiency - Logistics Links

- Fuel comprises 70% of Army tonnage shipped
- Armored division: ~600,000 gal/day
- Air Assault division: ~300,000 gal/day

- Analytical tools unavailable for rapid fuel assessment of forces
- Future battlefield scenarios may impose severe fuel availability constraints
- Global geopolitical environment
- Short deployment lead times
- Vulnerability of fuel marshalling points

- Dramatic improvements in fuel efficiency will enable Joint Vision 2010 / 2020 and Army Transformation
- All explicitly require more efficient platforms/systems

## The True Cost of Provision Fuel is Much Higher than the DoD Standard Price

- Standard price is paid by Services to cover Defense Energy Center (DESC) costs
- - FY99 - $0.87/gallon
- - FY00 - $0.62/gallon
- - FY01 - $1.01/gallon
- - FY02 - $1.34/gallon
- Simplifies accounting and standardizes cost-benefit analyses
- Analytical tools unavailable to easily determine the true cost to provision fuel

-    True cost of fuel invisible to leaders, comptrollers, decision makers
-     DoD decisions ignore true cost

## Improving Platform Fuel Efficiency Through Technology

- Many technologies are available to make platforms more efficient
- For retrofits and new acquisitions
- For land, sea and air platforms
- A good example is the Integrated High Performance Turbine Engine Technology Program (IHPTET)
- Joint DoD, NASA and industry with AF lead
- Program highly leveraged – 50% industry cost
- Suite of technologies focused on gas turbines

**Advanced Cargo Aircraft**
- +42% payload (@ constant range)
- +82% range (@ constant payload)
**Tactical Fighter (Combat Air Patrol)**
- 36% TOGW reduction (@ constant mission)
- 44% reduced fuel burn (@ constant mission)
**Anti-Submarine Warfare - Rotary Wing**
- +430% radius (@constant payload and loiter)
- +80% payload (@ constant radius and loiter)
**Supersonic ASTOVL Fighter**
- 36% TOGW reduction (@ constant radius)
- 42% reduced fuel burn (@ constant radius)
** ****Close Air Support**
- 62% TOGW reduction (@ constant mission)
- 75% reduced fuel burn (@ constant mission)
**Other Payoff Studies Underway:**
- F-22 & JSF growth versions
- UAVs of various classes

**Notes:**
The IHPTET program is a three-phased national (DoD, NASA and industry) effort to double the 1987 state-of-the-art turbine engine thrust to weight ratio by 2005.  The Air Force is the DoD lead and the program is highly leveraged, with industry contributing 50 percent of the total cost.  IHPTET is not a single technology, but is a suite of technologies focused on all facets of gas turbine propulsion:  turbofan/turbojet, turboprop/turboshaft, and expendable engines.  Its goals are ambitious but rigorously established.  

IHPTET targets the following discrete components of the turbine engine:
·	Compression Systems
·	Combustion Systems
·	Turbine Systems
·	Exhaust Systems
·	Mechanical Systems
·	Controls & Accessories
Examples of the specific technologies being developed and demonstrated under the IHPTET umbrella include:

·	Turbine blades that use double wall, “supercooling” concept to operate at gas path conditions over 600oF higher than the baseline F-22 engine
·	Advanced damping technologies and enhanced manufacturing methods (such as Laser Shock Peening) to increase high cycle fatigue resistance of critical engine hardware. 
·	Advanced intermetallic refractory alloys (Molybdenum or Niobium based) for turbine blades that can operate up to 900o higher than the baseline F-22 engine for greater thrust per pound of airflow, or double (to 4000 hours) turbine blade life. 

As a joint program, the IHPTET and its successor the VAATE initiative, benefit platforms for other Services also.  The chart shows examples of the benefits to Air Force and Navy platforms, and there are studies underway to determine applicability to other platforms.  

## Barriers To Fuel Efficient Technology Insertion

- The requirements process does not require efficiency
- The acquisition process does not evaluate opportunities or the total force structure benefits of efficiency
- The benefits are calculated and investment decisions are based on the platform level view
- Logistics and support force structure implications not determined or considered
- The Programming, Planning and Budgeting System does not consider the total force benefits of improved efficiency
- Few Science & Technology investments focus on fuel efficiency
- Laboratories not asked to determine total contributions to capability, cost or environmental issues

## Improving Efficiency Through Technology

- AF - B-52
- Re-engining analysis showed modest economic benefit
- More comprehensive analysis revealed significantly reduced tanker requirement
- Army - M1/A1
- Auxiliary Power Unit retrofit analysis assumed dollar per gallon fuel
- Impact on logistics force structure and manpower requirements not determined
- Navy - Stern Flap
- Appendage to ship hull redirects wake energy
- Pays back in two years, often in one
- Not programmed to go on all ships that would benefit

**Notes:**
The stern flap is one of a family of hull modifications that improves the hydrodynamics of ships.  As with many of the technologies the task force reviewed, it offers incremental fuel efficiency improvements of a few percent.  Stern flaps are extremely inexpensive and the ship does not have to be in dry dock for the retrofit.  However, funding comes from maintenance budgets while benefits accrue to readiness accounts, a classic example of split incentives.

A stern flap is an appendage attached at the transom that redirects the wake energy in a way that reduces drag and improves top speed by varying amounts, depending on hull design.  The cost of installing stern flaps varies depending on ship size and design, but tends to be in the range of a few hundred thousand dollars or less.  The Navy is also constructing cofferdams for the purpose of installing stern flaps without having to place the ship in dry dock.  
The cost of installation is extremely low compared to typical ship modifications, and the payback is very fast, even using the standard price of fuel for the cost benefit calculations.  This is one of the easiest to implement, highest economic return and lowest first cost retrofits the task force found during this study.  Moving out quickly with the implementation of stern flaps on all Navy hulls should be an easy decision.

## Significant warfighting, logistics and cost benefits occur when weapons systems are made more fuel-efficient, but the benefits are not valued or emphasized in the requirements and acquisition processes.
Operational and logistics wargaming of fuel requirements are not cross-linked to the Service requirements development or acquisition program processes.

- Recommendation

**Significant warfighting, logistics and cost benefits occur when weapons systems are made more fuel-efficient, but the benefits are not valued or emphasized in the requirements and acquisition processes.**
**Operational and logistics wargaming of fuel requirements are not cross-linked to the Service requirements development or acquisition program processes.**

**Strengthen linkage between warfighting capability and fuel logistics requirements through wargaming and new analytical tools.**

- USD (AT&L) and Joint Requirements Oversight Council develop analytical tools to model the warfighting “multiplier” effect of increased platform fuel efficiency.

**Notes:**
If I had to give a principal finding, it would be this first statement.  The inefficiencies affect the DoD operationally, financially and organizationally.  

The task force believes one of the major reasons for this is because the process by which DoD provisions energy to combat forces is never assessed end-to-end (source to use).  If you look for the cause for this, you discover the process has no single accountable owner; most participants do not finance their consumption, especially combat consumers; neither the requirements nor the acquisition process honors platform fuel efficiency to the extent that it honors performance (KPPs), and cost analyses highly subsidize the price for fuel thereby obscuring the benefits of efficiency. 

As a result, the weapons and support platforms consume whatever is necessary, with the logistics system subsequently sized and driven to meet the resultant energy demand.  These and other deficiencies result in significant process and resource inefficiencies during all phases of the cycle, from requirement through acquisition, to purchasing, storing and provisioning.

The findings and recommendations that follow are designed to prod DoD’s institutional processes to view fuel provisioning from end-to-end, and integrate these results into its decision making processes. Our charter was to look for technologies that improve efficiency and evaluate their benefits.  What we quickly discovered was there are many technologies are available for more efficient, higher performance platforms.  They would require less logistics and reduce many environmental problems.

By including efficiency in requirements and acquisition, could include making it a Key Performance Parameters (KPPs).  KPPs  typically include range and payload, which often can be achieved without focusing on improved efficiency.  Acquisition processes do not explore trade-off opportunities using efficiency as an independent variable.  For example, when you hear that acquisition programs have determined the logistics requirements for a platform, it’s done at a very aggregated level (e.g., C-17 equivalents) and does not include fuel.  We should be able to determine to a high degree of fidelity the logistics required to deploy forces as called for in the Defense Planning Guidance, but the analytical tools to do this are not well developed.  

In addition, Tactical wargames focus on force-on-force outcome, usually assuming perfect logistics.
Logistics wargames focus on pipeline adequacy to meet operational needs, not on fuel requirements reduction.
Analytical models are weak or non-existent to determine warfight benefits and logistics reductions possible through efficiency improvement options.

To address these findings, we recommend:
Play realistic fuel logistics in tactical wargames – if logistics runs short, don’t assume problem away – develop appropriate battlefield responses.
Develop analytical models to quantify the warfight benefit and logistics reduction enabled by more efficient weapons platforms.
Use end-to-end wargaming to validate improved combat capability and establish future platform requirements.

## DoD currently prices fuel based on wholesale refinery price and does not include the cost of delivery.  This method avoids an end-to-end view of fuel utilization in decision making and masks energy efficiency benefits.

- Finding

- Recommendation

**Base investment decisions on the true cost of delivered fuel and warfighting and environmental benefits.**** **

- USD (C/CFO) (1) revise Program Objective Memorandum exhibits to focus on reducing future fuel logistics, (2) change standard cost factors to include the cost to provision fuel.

**Notes:**
DoD standard price of fuel reimburses DLA for operating costs, but ignores logistics burden of delivery from storage to end user.

Cost-benefit analysis rules require use of standard price, making important benefits of efficiency invisible.
Although this approach simplifies accounting, it obscures opportunity to reduce logistics and operating costs over time through important platform improvements.

To address this finding, we recommend:
Using activity-based cost accounting to routinely determine true cost of providing fuel.
Using the true cost, rather than the “standard price” to
make retrofit decisions that improve platform efficiency
make S&T investment decisions
conduct Assessments of Alternatives (AoAs) for new platforms
determine total ownership costs for retrofits to legacy systems and for new platforms.
Routinely determine the environmental benefits of fuel efficient technologies and incorporate them into investment decisions.

## The DoD resource allocation and accounting processes (PPBS, DoD Comptroller) do not reward fuel efficiency or penalize inefficiency.

- Finding

- Recommendation

**Provide leadership to incentivize fuel efficiency throughout DoD.**

- USD (Policy) include minimizing logistics and support burden in national military strategy and issue implementing capstone requirements document.
- USD (C/CFO)
- 	(1) revise Program Memorandum exhibits to focus on reducing future fuel logistics, and
- 	(2) incentivize fuel efficiency.

**Notes:**
All successful platforms must compete in this budget process, but this absence of effective incentives obscures significant opportunities to invest in fuel efficient technologies.

Investments to improve efficiency come from acquisition programs, but benefits accrue to operations accounts.
Mission needs statements for acquisition programs do not explicitly include efficiency, so efficiency investments do not compete well (at all?) in the PPBS system for resources.

To link the capability benefits to efficiency improvements in the PPBS will change the way efficiency is valued.  To correct the current disconnect, we recommend leadership:
Emphasize a strategy to make front line systems more efficient as the preferred means to reduce logistics requirements. 
Make efficiency a leadership focus to:
emphasize the importance of efficiency to achieving JV 2010 / 2020 and Army Transformation
make the requirements determination processes (e.g., JROC and Services requirements processes) recognize their contribution to the size of the current logistics infrastructure

In addition, there are things operators can sometimes do to improve efficiency.  For example, the commander of a ship had a significant impact on the amount of fuel used to steam between two points.  The Navy is incentivizing commanders to operate at higher efficiencies by sharing the savings.  Under this program, called “ENCON” the commander can keep a percentage of the fuel cost savings and invest it in quality of life amenities for the sailors.   

## High payoff, fuel-efficient technologies are available now to improve warfighting effectiveness in current weapon systems through retrofit and in new systems acquisition. 

- Finding

- Recommendations

**Specifically target fuel efficiency improvements through investments in science, technology and systems designs.**

**Explicitly include fuel efficiency in requirements and acquisition processes.**** **

- USD (AT&L) and Service Acquisition Executives review their Science and Technology portfolios to assure a strong focus on efficiency technologies.

- USD (AT&L) and Joint Requirements Oversight Council make fuel efficiency a key performance parameter for all acquisition programs, including retrofits and modifications.
- Service Acquisition Executives specifically include fuel logistics in “Analysis of Alternatives” life cycle cost studies.

**Notes:**
Many technologies are available at all stages of maturity for air, land and sea platforms.
Most available technologies offer incremental efficiency improvements, but are undervalued because of current cost-benefit rules.
Most S&T laboratories have not previously been asked to focus on efficiency benefits.
Laboratories describe technology benefits on the basis of a single platform, rather than overall warfight impact, or logistics and operating cost reduction – mainly due to lack of analytical tools.

However, if their real contribution to warfighting capability were realized, they would become a focus area for the labs, their development would be on a faster track, there would be more of them, and more of them would be pulled onto platforms.  To make this a reality, we recommend:

Direct and support the S&T organizations to specifically focus on fuel efficient propulsion systems, moldline shaping and lessened ancillary loads for
technology insertion opportunities for legacy battlefield systems 
acquisition of more efficient new platforms
enabling revolutionary efficiency improvement through fundamental research.
Support fundamental science investments that will lead to revolutionary improvements in over-the-horizon weapon platforms.

One of the keys is the requirements process.  If efficiency is not an explicit requirement, and acquisition does not factor it as an independent variable in its assessments of alternatives studies, and the PPBS system does not value it, then it does not get implemented.  To improve this situation, we recommend:

Translate the emphasis on efficiency stated in JV 2010 / 2020 and Army Transformation into specific platform requirements.
Develop platform efficiency metrics for use in:
technology insertion decisions for legacy systems
acquisition of highly efficient new weapons platforms.
Make efficiency a key performance parameter (KPP) in mission needs statements and operational requirements documents.

## Assumptions for Battlefield Fuel Demand

- This analysis uses the same fuel consumption data as submitted by CASCOM for use in TAA-2007.
- The end-state force list for SWA (based on the FASTALS Deployment Report) was used as the force structure.
- Data for fuel consumption is typically developed by Posture (Attack, Defend, Delay, Static, Reserve) by Phase (Denial, Buildup, Counteroffensive, Exploitation) yielding 20 fuel consumption estimates per LIN per unit.
- A weighted average was derived applying the theater average for percent time spent in posture by phase.
- Within FASTALS, the resolution of this time-in-posture/phase data was available by "Sector".
- Weighting was based on number of units in the theater (FASTALS end-state) and number of LINs within each unit.
- Fuel consumption numbers are based on current Equipment Usage Profile data and represent fuel consumption by LIN by Unit when the unit is performing its mission role.