At any given time, the United States has a large portion of its military personnel serving abroad in forward-deployed locations. The forward presence of military forces at overseas locations is critical to supporting U.S. strategic interests. Forward-deployed forces provide the basic building blocks with which to project military power in crises and strengthen U.S. military access. While the numbers of personnel and locations vary with the frequency and types of military operations and deployment demands, military operations in Iraq and Afghanistan have led to the creation of several hundred new locations. Operational control of U.S. military forces at forward-deployed locations is assigned to the nation’s six geographic, unified overseas regional commands, which include Central Command. For current operations, Central Command has identified the need for forward-deployed locations within its area of responsibility to meet mission requirements, and its military service components have been responsible for establishing and maintaining the locations. DOD is likely to continue its use of forward-deployed locations in support of future U.S. defense strategy. In recent years, DOD has been undergoing a transformation to develop a defense strategy and force structure capable of meeting changing global threats. As part of its transformation, DOD has been reexamining overseas basing requirements to allow for greater U.S. military flexibility to combat conventional and asymmetric threats worldwide. U.S. military presence overseas has been converting from a posture established on familiar terrain to counter a known threat to one that is intended to be capable of projecting forces from strategic locations into relatively unknown areas in an uncertain threat environment. In 2008, more than 68 million gallons of fuel, on average, were supplied by DOD each month to support U.S. forces in Iraq and Afghanistan. While DOD’s weapon systems require large amounts of fuel—a B-52H, for example, burns approximately 3,500 gallons per flight hour—the department reports that the single largest battlefield fuel consumer is generators. Generators provide power for base support activities such as air conditioning/heating, lighting, refrigeration, and communications. A 2008 Defense Science Board Task Force report noted that Army generators alone consume about 26 million gallons of fuel annually during peacetime and 357 million gallons annually during wartime. Fuel is delivered to forward-deployed locations in Iraq via three main routes— from Kuwait in the south, Jordan in the west, and Turkey in the north— and to forward-deployed locations in Afghanistan via two main routes— from Central Asian states in the north and from Pakistan in the east. According to the Defense Energy Support Center, an organization within the Defense Logistics Agency that manages contracts for the department’s fuel acquisitions and distribution, approximately 1.7 million gallons of jet fuel are delivered into Iraq and approximately 300,000 gallons of jet fuel are delivered into Afghanistan each day, in addition to other types of fuel, such as diesel, motor gasoline, and aviation gasoline. At one truck fill stand that we visited in Kuwait in June 2008, about 125 trucks, each holding 9,000 gallons of fuel, were loaded daily for delivery to forward- deployed locations in Kuwait and Iraq. High fuel requirements on the battlefield can place a significant logistics burden on military forces, exposing supply convoys to risk. For example, long truck convoys moving fuel to forward-deployed locations have encountered enemy attacks, severe weather, traffic accidents, and pilferage. Army officials have estimated that about 70 percent of the tonnage required to position its forces for battle consists of fuel and water. Most fuel deliveries to forward-deployed locations in Afghanistan are made by commercial contractors, and there is no military-provided protection for the supply convoys other than the protection contractors provide themselves. DOD officials reported that in June 2008, for example, 44 trucks and 220,000 gallons of fuel were lost due to attacks or other events. While fuel delivery issues have not been as severe in Iraq recently, the U.S. military provides force protection to supply convoys in Iraq, increasing the logistics burden. Fuel delivery to locations outside of Iraq and Afghanistan may not be subject to battlefield conditions but is also logistically complex. For example, Camp Lemonier receives its fuel through the Djiboutian port. Fuel is loaded from the port into the storage tanks as it arrives, and trucks also make daily runs to the port to bring fuel to the camp. DOD reported that it consumed almost 4.8 billion gallons of mobility fuel and spent $9.5 billion in fiscal year 2007, in addition to its costs for fuel consumed at fixed U.S. installations. While fuel costs represent less than 3 percent of DOD’s total budget, they can have a significant impact on the department’s operating costs. DOD has estimated that for every $10 increase in the price of a barrel of oil, DOD’s operating costs increase by approximately $1.3 billion. DOD organizations pay a standard price for fuel that differs from the market price. The Office of Management and Budget (OMB) establishes for DOD the price the department will use when constructing its budget for upcoming fiscal years. DOD in turn uses OMB's price in establishing the standard price to be used for a barrel of fuel for budgeting purposes by DOD's customers, such as the military services. Because of the volatility of world petroleum prices, the standard price for a barrel of fuel included in the President's annual budget request for DOD may be lower or higher than the actual price established by the world market at any point in time after DOD's budget request is submitted to the Congress. The fiscal year 2009 President's budget assumed a standard fuel price of $115.50 per barrel. At the time of this report, the price DOD charged its customers was $104.58, or $2.49 per gallon of jet fuel (JP8). In the past, DOD's standard fuel price was typically adjusted annually. However, with rising fuel costs in recent years, the price has been adjusted more frequently. Effective July 1, 2008, for example, DOD raised the standard fuel price per barrel from $127.68 to $170.94; and effective December 1, 2008, DOD lowered the standard fuel price per barrel from $170.94 to $104.58. Because the military services prepare their annual budgets based on the approved fuel price in the President's budget, market volatility resulting in out-of-cycle fuel price increases can be difficult for the services to absorb. DOD has received supplemental appropriations from the Congress in recent years to cover budget shortages associated with rising fuel prices. Moreover, the fully burdened cost of fuel—that is, the total ownership cost of buying, moving, and protecting fuel in systems during combat—can be much greater than the cost of fuel itself. A 2008 Defense Science Board Task Force report noted that preliminary estimates by the OSD Program Analysis and Evaluation office and the Institute of Defense Analyses indicate that the fully burdened cost of a $2.50 gallon of fuel could begin at about $15, assuming no force protection requirements for supply convoys, and increases as the fuel moves further onto the battlefield. Fuel delivered in-flight has been estimated at about $42 gallon, though the report notes that these figures are low. OSD has initiated a pilot program to determine the fully burdened cost of fuel for three mobile defense systems. Concerns about future fuel costs, price volatility, and fuel availability have led the Air Force to undertake an effort to certify its entire aircraft fleet to run on a synthetic blend of alternative and jet fuels by early 2011. The Air Force has established a goal to acquire 50 percent of the aviation fuels it uses within the United States from domestic sources by 2016. Fuel distribution is a complex process involving several DOD offices. Joint Publication 4-03 sets forth principles and establishes doctrine for bulk petroleum and water in support of U.S. military operations. The combatant commander has the predominant responsibility for fuel within a theater, and this responsibility is discharged by its Joint Petroleum Office. The Joint Petroleum Office is responsible for the overall planning of petroleum for operations, and it may establish sub-area petroleum offices as needed to support specific petroleum requirements. The Director, Defense Logistics Agency, as the integrated materiel manager for bulk petroleum, is responsible for meeting the petroleum support requirements of the combatant commands and military services. These functional responsibilities have been delegated to the Director, Defense Energy Support Center, which is responsible for procurement, transportation, ownership, accountability, budgeting, quality assurance, and quality surveillance. It also plans and budgets for the construction and repair of fuel storage and distribution facilities, monitors the petroleum market, and negotiates international agreements for energy commodities. Each military service has responsibilities for providing petroleum support. The Army normally provides management of petroleum support to U.S. land-based forces of all DOD components. However, actual movement of bulk petroleum may include the use of commercial vehicles and associated infrastructure. The Air Force provides distribution of bulk petroleum products by air within a theater where immediate support is needed at remote locations. The Navy provides bulk petroleum products for U.S. sea- and land-based forces. The Marine Corps maintains a capability to provide bulk petroleum support to Marine Corps units. Within Central Command’s area of responsibility, military units communicate their fuel requirements, which are based on historical usage and planned rotations, to the sub-area petroleum offices. The sub-area petroleum offices in turn provide these requirements to Central Command’s Joint Petroleum Office for validation. Once the requirements are validated, the Defense Energy Support Center determines the most appropriate means to support the requirements and provides for the distribution of the fuel up to the “point of sale.” The point of sale is the point at which the customer takes possession of the fuel.