Energy, and specifically petroleum-based fuel, will be a key issue facing the nation during the 21st century. The United States accounts for only 5 percent of the world’s population but about 25 percent of the world’s oil demand. The Department of Energy projects that worldwide oil demand will continue to grow, reaching 118 million barrels per day in 2030, up from 84 million barrels per day in 2005. Although countries such as China and India will generate much of this increased demand, the United States will remain the world’s largest oil consumer. World oil production has been running at near capacity in recent years to meet rising consumption, putting upward pressure on oil prices. The potential for disruptions in key oil-producing regions of the world, such as the Middle East, and the yearly threat of hurricanes in the Gulf of Mexico have also exerted upward pressure on oil prices. Crude oil prices almost tripled from 2003 through the beginning of 2008, rising from $36 a barrel to as high as $100 a barrel. In 2007, about 67 percent of the oil consumed in the United States was imported, and the increased energy dependence on other countries raises concern about international turmoil in the Middle East and elsewhere. In addition, worldwide supplies of oil from conventional sources remain uncertain. U.S. oil production peaked around 1970, and worldwide production could peak and begin to decline, although there is great uncertainty about when this might happen. Moreover, there are differences of opinion as to how long the nation can rely on petroleum- based fuel to meet the majority of its energy needs. As a result, we have previously reported that, in addition to expanding production, the United States may need to place more emphasis on demand reduction strategies as well as developing alternative or renewable energy supplies and technologies. DOD is the single largest energy consumer in the United States, and it consumes about 90 percent of the petroleum-based fuel used by the U.S. government. Jet fuel constitutes more than half of DOD’s total energy consumption. Other types of petroleum-based fuels used by DOD include marine and auto diesel. According to the Department of Defense Annual Energy Management Report for fiscal year 2006, DOD consumed approximately 4.6 billion gallons of mobility fuels in fiscal year 2006, down from 5.17 billion gallons in fiscal year 2005. However, spending on mobility fuels increased 26.5 percent, from $7.95 billion in fiscal year 2005 to $10.06 billion in fiscal year 2006. DOD attributed this cost increase to the rise in fuel prices. For example, the price of jet fuel increased from $1.70 per gallon in fiscal year 2005 to $2.34 per gallon in fiscal year 2006. Congress, in fiscal year 2006, provided DOD more than $2 billion in supplemental funds to cover increased fuel costs. In fiscal year 2007, DOD reported that the department consumed almost 4.8 billion gallons of mobility fuel and spent $9.5 billion. Although fuel costs represent less than 3 percent of the total DOD budget, they 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. Fuel presents an enormous logistical burden for DOD when planning and conducting military combat operations. For current operations, the fuel logistics infrastructure requires, among other things, long truck convoys that move fuel to forward-deployed locations while exposed to the vulnerabilities of operations, such as enemy attacks (see figs. 1 and 2). Army officials have estimated that about 70 percent of the tonnage required to position its forces for battle consists of fuel and water. An armored division can use 600,000 gallons of fuel a day, and an air assault division can use 300,000 gallons a day. In addition, combat support units consume more than half of the fuel the Army uses on the battlefield. Aircraft also burn through fuel at rapid rates; a B-52H, for example, burns approximately 3,500 gallons per flight hour. Of the four military services, the Air Force consumes the greatest amount of petroleum-based fuels. DOD has existing policies and organizational responsibilities for managing energy commodities, including petroleum, natural gas, coal, and electricity, to support peacetime and wartime missions and to permit successful and efficient deployment and employment of forces. Its overarching policy directive on managing energy commodities and related services establishes policy on standardizing fuels, minimizing inventory levels, maximizing use of alternative fuel sources from host nations and commercial sources, and privatizing energy infrastructure at military installations. The Defense Energy Support Center, within the Defense Logistics Agency, finances fuel purchases through a defense working capital fund. The military services purchase fuel from the Defense Energy Support Center using funds appropriated for their operation and maintenance accounts. Various DOD components have a role in planning for fuel demand and managing fuel storage and delivery. DOD has been exploring issues surrounding its reliance on petroleum through a number of studies sponsored by various offices within OSD. In 2001, the Defense Science Board issued the results of its study on improving the fuel efficiency of weapons platforms, in response to a tasking from the Under Secretary of Defense for Acquisition, Technology, and Logistics. In 2006, the Office of the Director, Defense Research and Engineering, sponsored a study by The JASONs, an independent defense advisory group under The MITRE Corporation, to assess ways to reduce DOD’s dependence on fossil fuels. Under the sponsorship of the Office of Force Transformation and Resources, within the Office of the Under Secretary of Defense for Policy, LMI issued a 2007 report on an approach to establishing a DOD energy strategy. During the period in which we were conducting our review, the Defense Science Board, at the direction of the Under Secretary of Defense for Acquisition, Technology, and Logistics, issued a new report on DOD’s energy strategy. These studies have been supplemented by internal DOD reviews and other efforts, such as informational forums at the National Defense University, to explore fuel reduction strategies. OSD, the Joint Staff, and the military services have made efforts to reduce mobility energy demand for DOD’s forces and in weapons platforms. At the department level, OSD and the Joint Staff have several efforts under way to begin to incorporate fuel efficiency considerations in DOD’s requirements development and acquisition processes. In addition, each of the military services has its own initiatives under way to reduce mobility energy demand. The discussion that follows highlights several key efforts and is not intended to be a comprehensive listing of all fuel reduction efforts. Department officials from several offices within OSD and the Joint Staff have initiated efforts to address mobility energy demand. In 2006, OSD created the DOD Energy Security Task Force to address energy security concerns. The task force’s integrated product team, which includes representatives from the military services; defense agencies; the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics; the Office of the Under Secretary of Defense for Policy; the Office of the Principal Deputy Under Secretary of Defense (Comptroller); the Joint Staff; and OSD’s Program Analysis and Evaluation office, typically meets each month and has formed several working groups to share information and ideas on efforts to reduce fuel demand in current and future weapons platforms. The integrated product team reports to a senior steering group, consisting of principal deputy secretaries of defense and service under secretaries and assistant secretaries. Among other activities, the task force recommended funding in fiscal year 2008 for several military service-led energy-related research and development projects, and it is monitoring their progress (see table 1). In addition to focusing on research and development initiatives, DOD has recognized a need to factor energy efficiency considerations into its acquisition process. In 2007, the Deputy Secretary of Defense included energy in DOD’s list of the top 25 transformational priorities for the department, as part of its initiative to pursue targeted acquisition reforms. Also, in April 2007, the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics established a DOD policy to include the fully burdened cost of fuel—that is, the total ownership cost of buying, moving, and protecting fuel in systems during combat—for the acquisition of all tactical systems that create a demand for energy. To incorporate the fully burdened cost of energy into acquisition decisions, OSD initiated a pilot program that includes three systems: the Army and Marine Corps’ Joint Light Tactical Vehicle, the Navy’s new CG(X) cruiser, and the Air Force’s Next-Generation Long-Range Strike aircraft. To further facilitate the implementation of this policy, OSD’s Program Analysis and Evaluation office developed a methodology for assessing the fully burdened cost of fuel and completed its initial analyses of the first system, the Joint Light Tactical Vehicle, last fall. According to the DOD policy, the results of the pilot program are expected to be used as the basis for implementation across all relevant acquisition programs. In another initiative, the Joint Staff added language to its guidance in May 2007 requiring that an energy efficiency key performance parameter be selectively considered in the development of capability requirements for new systems. The guidance defines a key performance parameter as an attribute or characteristic of a system that is considered critical or essential to the development of an effective military capability. For example, a survivability key performance parameter is applicable for manned systems designed to enhance personnel survival when employed in an asymmetric threat environment. In general, a key performance parameter represents a system attribute that is so significant that failure to meet its minimum threshold could be a reason for DOD or the military services to reevaluate the concept or system or terminate the program. In response to the work conducted by the DOD Energy Security Task Force, the Joint Staff has also been directed to lead an assessment of simulator capability and capacity across the department.