Defense Management: Overarching Organizational Framework Needed
to Guide and Oversee Energy Reduction Efforts for Military
Operations (13-MAR-08, GAO-08-426).
The Department of Defense (DOD) relies heavily on petroleum-based
fuel for mobility energy--the energy required for moving and
sustaining its forces and weapons platforms for military
operations. Dependence on foreign oil, projected increases in
worldwide demand, and rising oil costs, as well as the
significant logistics burden associated with moving fuel on the
battlefield, will likely require DOD to address its mobility
energy demand. GAO was asked to (1) identify key efforts under
way to reduce mobility energy demand and (2) assess the extent to
which DOD has established an overarching organizational framework
to guide and oversee these efforts. GAO reviewed DOD documents,
policies, and studies, and interviewed agency officials.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-426
ACCNO: A81291
TITLE: Defense Management: Overarching Organizational Framework
Needed to Guide and Oversee Energy Reduction Efforts for Military
Operations
DATE: 03/13/2008
SUBJECT: Alternative energy sources
Alternative fuels
Defense capabilities
Energy conservation
Energy demand
Energy efficiency
Energy management
Energy planning
Fuel conservation
Fuel consumption
Logistics
Military forces
Military operations
Military research and development
Performance measures
Petroleum products
Policy evaluation
Program evaluation
Strategic planning
Weapons
Weapons systems
Energy sources
Policies and procedures
Program goals or objectives
Program implementation
Standards (energy efficiency)
Supply and demand
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GAO-08-426
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Report to the Subcommittee on Readiness, Committee on Armed Services,
House of Representatives:
United States Government Accountability Office:
GAO:
March 2008:
Defense Management:
Overarching Organizational Framework Needed to Guide and Oversee Energy
Reduction Efforts for Military Operations:
Defense Energy Management:
GAO-08-426:
GAO Highlights:
Highlights of GAO-08-426, a report to the Subcommittee on Readiness,
Committee on Armed Services, House of Representatives.
Why GAO Did This Study:
The Department of Defense (DOD) relies heavily on petroleum-based fuel
for mobility energy�the energy required for moving and sustaining its
forces and weapons platforms for military operations. Dependence on
foreign oil, projected increases in worldwide demand, and rising oil
costs, as well as the significant logistics burden associated with
moving fuel on the battlefield, will likely require DOD to address its
mobility energy demand. GAO was asked to (1) identify key efforts under
way to reduce mobility energy demand and (2) assess the extent to which
DOD has established an overarching organizational framework to guide
and oversee these efforts. GAO reviewed DOD documents, policies, and
studies, and interviewed agency officials.
What GAO Found:
OSD, the Joint Staff, and the military services have undertaken efforts
to reduce mobility energy demand in weapons platforms and other mobile
defense systems. For example, OSD created a departmentwide Energy
Security Task Force in 2006 that is monitoring the progress of selected
energy-related research and development projects. The Joint Staff
updated its policy governing the development of capability requirements
for new weapons systems to selectively consider energy efficiency as a
key performance parameter�a characteristic of a system that is
considered critical to the development of an effective military
capability. The Army is addressing fuel consumption at forward-deployed
locations by developing foam-insulated tents and temporary dome
structures that are more efficient to heat and cool, reducing the
demand for fuel-powered generators. The Navy has established an energy
conservation program to encourage ships to reduce energy consumption.
The Air Force has developed an energy strategy and undertaken
initiatives to determine fuel-efficient flight routes, reduce the
weight on aircraft, optimize air refueling, and improve the efficiency
of ground operations. The Marine Corps has initiated research and
development efforts to develop alternative power sources and improve
fuel management.
While these and other efforts are under way and DOD has identified
energy as one of its transformational priorities, DOD lacks elements of
an overarching organizational framework to guide and oversee mobility
energy reduction efforts. In the absence of an overarching
organizational framework for mobility energy, DOD cannot be assured
that its current efforts will be fully implemented and will
significantly reduce its reliance on petroleum-based fuel. GAO found
that DOD�s current approach to mobility energy lacks (1) a single
executive-level OSD official who is accountable for mobility energy
matters; sets the direction, pace, and tone to reduce mobility energy
demand across DOD; and can serve as a mobility energy focal point
within the department and with Congress and interagency partners; (2) a
comprehensive strategic plan for mobility energy that aligns individual
efforts with DOD-wide goals and priorities, establishes time frames for
implementation, and uses performance metrics to evaluate progress; and
(3) an effective mechanism to provide for communication and
coordination of mobility energy efforts among OSD and the military
services as well as leadership and accountability over each military
service�s efforts. GAO also found that DOD has made limited progress in
incorporating fuel efficiency as a consideration in its key business
processes�which include developing requirements for and acquiring new
weapons systems. DOD has established new organizational frameworks to
address other crosscutting issues, such as business systems
modernization and corrosion control and prevention. Establishing an
overarching organizational framework for mobility energy could provide
greater assurance that DOD�s efforts to reduce its reliance on
petroleum-based fuel will succeed and that DOD is better positioned to
address future mobility energy challenges�both within the department
and as a stakeholder in national energy security dialogues.
What GAO Recommends:
GAO is recommending that DOD establish an overarching organizational
framework for mobility energy to improve the department�s ability to
guide and oversee mobility energy reduction efforts. To establish such
a framework, DOD should designate an executive-level Office of the
Secretary of Defense (OSD) official to be accountable for mobility
energy matters, develop a comprehensive strategic plan, and improve
DOD�s business processes. In addition, the military services should
designate executive-level focal points to establish effective
communication and coordination among OSD and the military services. DOD
partially concurred with the recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-426]. For more information, contact
William M. Solis at (202) 512-8365 or [email protected].
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Departmental and Military Service Efforts Are Under Way to Reduce
Mobility Energy Demand:
DOD Has Not Established an Overarching Organizational Framework to
Guide and Oversee Mobility Energy Reduction Efforts:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Select Recommendations from DOD-Sponsored Studies on
Mobility Energy Reduction:
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Selected Energy-Related Research and Development Projects
Being Monitored by DOD's Energy Security Task Force:
Table 2: DOD Energy/Fuel Roles and Responsibilities:
Table 3: Actions DOD Has Taken to Address Selected Recommendations from
DOD-Sponsored Studies on Mobility Energy Reduction:
Figures:
Figure 1: Three-Mile Backup of Fuel Delivery Trucks and Other Supply
Vehicles Inside Afghanistan along the Northern Passage from Pakistan
(February 2007):
Figure 2: A Line of Tanker Trucks Loading Fuel in Kuwait:
United States Government Accountability Office:
Washington, DC 20548:
March 13, 2008:
The Honorable Solomon P. Ortiz:
Chairman:
The Honorable J. Randy Forbes:
Ranking Member:
Subcommittee on Readiness:
Committee on Armed Services:
House of Representatives:
The Department of Defense (DOD) is the nation's single largest consumer
of energy and relies heavily on petroleum-based fuel for mobility
energy--that is, the energy required for moving and sustaining its
forces and weapons platforms for military operations. U.S. military
forces, for example, require vast quantities of fuel to operate combat
and support vehicles; generate power at forward-deployed locations; and
move troops, equipment, and supplies. In 2007, more than 55 million
gallons of fuel, on average, were supplied by DOD each month to support
the U.S. forces in Iraq and Afghanistan. Mobility energy accounts for
about three-fourths of DOD's total energy consumption.[Footnote 1] DOD
incurs billions of dollars each year in fuel costs, and these costs
have been rising in recent years as oil prices have increased.
Moreover, high fuel requirements on the battlefield can place a
significant logistics burden on military forces; limit the range and
pace of operations; and add to mission risks, including exposing
convoys to attack.
This report responds to a request by the Subcommittee on Readiness,
House Committee on Armed Services, that we assess DOD's efforts to
reduce its reliance on petroleum-based fuel. Specifically, the
objectives of this review were to (1) identify key departmental and
military service efforts that have been undertaken to reduce demand for
mobility energy and (2) assess the extent to which DOD has established
an overarching organizational framework to guide and oversee these
efforts.
We conducted work at the Office of the Secretary of Defense (OSD); the
Joint Staff; the headquarters of the Army, Air Force, Navy, and Marine
Corps; and the Defense Logistics Agency. To identify key departmental
and military service efforts to reduce mobility energy demand, we
reviewed documentation on the objectives and status of ongoing
initiatives. In assessing the extent to which DOD has established an
overarching organizational framework for mobility energy, we analyzed
DOD and military service policies and other documents and reviewed
relevant DOD-sponsored studies. We also discussed mobility energy
issues with agency officials to gain their perspectives. We conducted
our review from September 2007 through March 2008 in accordance with
generally accepted government auditing standards. Details on our scope
and methodology are contained in appendix I.
Results in Brief:
OSD, the Joint Staff, and the military services have undertaken a
number of efforts to reduce mobility energy demand. For example:
* OSD established a departmentwide Energy Security Task Force that,
among other things, is monitoring the progress of selected energy-
related research and development projects. OSD also has begun a pilot
program for assessing the full energy costs of new weapons systems
rather than just the cost of the fuel itself as part of the acquisition
process.[Footnote 2] Moreover, 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.
* The Joint Staff updated its policy governing the development of
capability requirements for new weapons systems to require that energy
efficiency be selectively considered as a key performance
parameter.[Footnote 3]
* The Army is addressing fuel consumption at forward-deployed locations
by developing foam-insulated tents and temporary dome structures that
are more efficient to heat and cool and therefore could reduce the
demand for fuel-powered generators at these locations.
* The Navy has established an energy conservation program aimed at
encouraging ships to reduce energy consumption. It has also made ship
design alterations to reduce fuel demand.
* The Air Force has developed an energy strategy and undertaken
initiatives to determine fuel-efficient flight routes, reduce the
weight on aircraft, optimize air refueling, and improve the efficiency
of ground operations. In addition, it is testing synthetic fuels in its
aircraft that could partly displace the use of petroleum-based fuel.
* The Marine Corps has initiated efforts to develop alternative power
sources and improve fuel management. For example, it is testing the use
of hybrid power--by combining solar panel, generator, and battery
energy sources--at remote sites to lessen its fuel transportation
demands to forward-deployed locations.
While these and other individual efforts are under way to reduce
mobility energy demand and DOD has identified energy as one of its
transformational priorities, DOD lacks key elements of an overarching
organizational framework to guide and oversee these efforts. Our prior
work has shown that such a framework is critical to successful
transformation in both public and private organizations. In the absence
of an overarching organizational framework for mobility energy, DOD
cannot be assured that its current efforts will be fully implemented
and will significantly reduce its reliance on petroleum-based fuel.
More specifically, we found that DOD's current approach to mobility
energy lacks (1) top leadership, with a single executive-level OSD
official--supported by an implementation team--who is accountable for
mobility energy matters; (2) a comprehensive strategic plan for
mobility energy that aligns individual efforts with DOD-wide goals and
priorities, establishes approaches or strategies to achieve goals, and
evaluates progress through performance metrics; and (3) an effective
mechanism to provide for communication and coordination of mobility
energy efforts among OSD and the military services as well as
leadership and accountability over each military service's efforts. We
also found that DOD has made limited progress in incorporating fuel
efficiency as a consideration in key business processes--which include
developing requirements for and acquiring new weapons systems.
According to OSD and military service officials, DOD has not
established an overarching organizational framework for mobility energy
in part because of concerns regarding how such a framework would be
implemented, how it would integrate with other existing organizational
responsibilities, and how it would affect ongoing efforts to reduce
mobility energy demand. However, DOD has created a management framework
to oversee facility energy, which accounts for about 25 percent of the
department's energy use, and has established new organizational
frameworks to address other crosscutting issues, such as business
systems modernization, corrosion control and prevention, contractors on
the battlefield, and the defeat of improvised explosive devices. The
establishment of such a framework for mobility energy could provide
greater assurance that DOD's efforts to reduce its reliance on
petroleum-based fuel will succeed without degrading its operational
capabilities and that DOD is better positioned to address future
mobility energy challenges--both within the department and as a
stakeholder in national energy security dialogues.
We are recommending that DOD establish an overarching organizational
framework for mobility energy to improve the department's ability to
guide and oversee mobility energy reduction efforts. To establish such
a framework, DOD should designate an executive-level OSD official--with
an implementation team--who is accountable for mobility energy matters;
develop a comprehensive, departmentwide strategic plan; and improve
DOD's business processes to fully incorporate energy efficiency
considerations. In addition, we are recommending that the military
services designate executive-level focal points to establish effective
communication and coordination among OSD and the military services on
departmentwide mobility energy efforts as well as provide leadership
and accountability over their own efforts. In commenting on a draft of
this report, DOD partially concurred with our recommendations. DOD's
comments are reprinted in appendix III.
Background:
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.[Footnote 4] 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.[Footnote 5] 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.[Footnote 6]
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.
Figure 1: Three-Mile Backup of Fuel Delivery Trucks and Other Supply
Vehicles Inside Afghanistan along the Northern Passage from Pakistan
(February 2007):
This figure is a photograph of a three-mile backup of fuel delivery
trucks and other supply vehicles inside Afghanistan along the northern
passage from Pakistan.
[See PDF for image]
Source: Headquarters, Marine Corps.
[End of figure]
Figure 2: A Line of Tanker Trucks Loading Fuel in Kuwait:
This figure is a photograph of a line of tanker trucks loading fuel in
Kuwait.
[See PDF for image]
Source: DOD.
[End of figure]
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.[Footnote 7] 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.[Footnote 8] 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.[Footnote 9] 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.[Footnote 10] 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.[Footnote 11] 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.
Departmental and Military Service Efforts Are Under Way to Reduce
Mobility Energy Demand:
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.
OSD and the Joint Staff Have Begun to Address Mobility Energy Demand:
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).
Table 1: Selected Energy-Related Research and Development Projects
Being Monitored by DOD's Energy Security Task Force:
Category: Air platforms;
Project name: Highly Efficient Embedded Turbine Engine; Description:
Develop a variable core engine to reduce fuel consumption in unmanned
aerial vehicles, transport aircraft, and other aircraft.
Category: Air platforms;
Project name: Category: Small Heavy Fueled Engine; Description:
Category: Extend the duration of unmanned aerial vehicle engines from 3-
4 to 6-8 hours to increase fuel efficiency and reduce the logistics
tail by using a single battlefield fuel; plan to apply to mobile ground
power generators.
Category: Ground vehicles;
Project name: Long-Range Unmanned Aerial Vehicles; Description: Extend
flight time of unmanned aerial vehicles for up to 6- 7 days for
increased fuel efficiency and savings over conventional surveillance
and reconnaissance platforms.
Category: Ground vehicles;
Project name: Fuel-Efficient Ground Vehicle Demonstrator; Description:
Identify opportunities in fuel-efficient technologies to build a
virtual vehicle that will demonstrate decreased fuel consumption in a
tactical vehicle without decreasing performance or capability.
Category: Power systems;
Project name: Fuel Cell Research;
Description: Develop and demonstrate compact and mobile fuel cell
systems to provide onboard power generation for increasing power
demands and to reduce battery weight.
Category: Power systems;
Project name: Transportable Hybrid Electric Power Supply; Description:
Provide hybrid electric power generators to reduce diesel fuel usage
and resupply requirements.
Category: Power systems;
Project name: Hybrid Intelligent Power; Description: Automate
generators on the battlefield to turn on and off as needed to minimize
fuel use and reduce maintenance needs, personnel requirements, and
power interruptions.
Source: DOD.
[End of table]
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.[Footnote 12] 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.[Footnote 13] 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. This effort is
expected to analyze whether the increased use of simulators could
substitute for live training without degrading operational capability.
The study will also identify barriers to implementation and needed
policy changes.
Army Is Examining Ways to Reduce In-Theater Fuel Demand:
The Army has begun a number of efforts to reduce mobility energy
demand. These activities include undertaking initiatives to reduce fuel
consumption in theater, determining the total costs of delivering fuel,
and developing an Army energy strategy. The Army, through the office of
the Army Rapid Equipping Force, created the Power Surety Task Force in
2006 to address a joint urgent operational needs statement from a U.S.
commander in Iraq that called for alternative energy sources to reduce
the amount of fuel transported to supply power generation systems at
forward-deployed locations. The Power Surety Task Force aims to foster
the development of projects and programs that are deployable within 18
months. Two of the Power Surety Task Force's initiatives--foam-
insulated tents and temporary biodegradable dome structures that are
more efficient to heat and cool--are expected to reduce the number of
generators required to produce power at forward-deployed locations.
Another initiative is the development of a transportable hybrid
electric power station, which uses wind, solar energy, a diesel
generator, and storage batteries to provide reliable power with fewer
fuel requirements. According to Army Rapid Equipping Force officials,
the power station could potentially replace about half of the current
generators at forward-deployed locations. Moreover, they estimated that
annual savings in Iraq from some of these initiatives could be at least
$1.7 billion, and that other benefits could include a reduction in the
number of trucks required in supply convoys, potentially saving lives
and reducing vehicle maintenance requirements. We did not validate the
Army Rapid Equipping Force's cost savings estimate.
Another ongoing Army activity is its effort to determine the total
costs of delivered energy for Army systems. The Army's "Sustain the
Mission Project" was started in 2004 to institutionalize a fully
burdened cost methodology in the Army. The methodology uses existing
Army and DOD databases, metrics, and processes to calculate the fully
burdened cost of fuel and to facilitate "what if" analyses for
different assumptions and scenarios. It is also aimed at enabling
decision makers to perform cost-benefit analyses of investments in
alternative energy and weapons systems technologies. The Army has
scheduled a demonstration of this tool in late March 2008.
The Army will also sponsor a study that officials expect will lead to
the development of a tactical fuel and energy strategy for the future
modular force. The contract for the 1-year study was expected to be
awarded in 2008. Army officials told us that they plan to update the
Army's energy regulation following completion of the study. The current
regulation focuses on facility energy, but according to Army officials,
the updated version is expected to include mobility fuel as well.
Navy Has Established an Energy Conservation Program and Other Mobility
Energy Reduction Initiatives:
The Navy has established a shipboard energy conservation program and
has undertaken other initiatives to save fuel on ships. The energy
conservation program has both training and award components to
encourage ships to reduce energy consumption. Training materials and
activities include a shipboard energy conservation manual, a pocket
guide to assist commanders with energy-saving activities, energy audits
of ships to show commanders how energy can be saved, and energy
conservation seminars and workshops. Awards are given quarterly to
ships that use less than the Navy's established baseline amount of
fuel, and fuel savings achieved during the quarter are reallocated to
the ship for the purchase of items such as paint, coveralls, and
firefighting gear. The ship energy conservation program receives $4
million in funding annually, and Navy officials told us that they
achieved $124.6 million in cost avoidance in fiscal year 2006. They
said that some other benefits of this program include more available
steaming hours, additional training for ships, improved ship
performance, reduced ship maintenance, and conservation of resources.
The Navy has undertaken other mobility energy reduction efforts as part
of its ship energy conservation program, such as ship alterations. Two
key ship alterations are the use of stern flaps and the modification of
boiler boxes. A stern flap alters the water flow at the stern to reduce
a ship's resistance and increase fuel efficiency. According to Navy
officials, preliminary tests of stern flaps on guided missile
destroyers showed an annual fuel reduction of 3,800 to 4,700 barrels,
or about 6 to 7.5 percent per ship, which DOD estimated would result in
potential savings of almost $195,000 per year per ship. Boiler box
modifications for amphibious assault ships, one of the Navy's largest
fuel-consuming ships, are expected to decrease the amount of fuel
expended by 2 percent per ship. Navy officials told us that this
alteration has been approved and that most alterations would be
completed in fiscal year 2009. According to Navy officials, once all
alterations are completed in fiscal year 2011, this effort could
potentially save approximately $30 million per year, depending on the
price of fuel. We did not validate these potential savings.
Air Force Has Implemented an Energy Strategy and Begun Mobility Energy
Reduction Initiatives:
In 2005, the Air Force implemented an energy strategy that consists of
three components: reducing demand, increasing supply, and changing the
culture. At the time of our report, the Air Force was in the process of
updating its instructions and directives to reflect its energy strategy
and to establish an overarching Air Force energy policy. In addition,
the Air Force has identified and begun to implement initiatives aimed
at reducing mobility energy demand and increasing fuel efficiency,
aligning these initiatives with its energy strategy. Four key
initiatives are as follows:
* Direct routing. This initiative intends to reduce flight time and
fuel consumption by flying the most fuel-efficient flight routes and
altitudes.
* Weight reduction. This initiative intends to decrease excess weight
on an aircraft without adversely affecting mission capability. Three
categories that are being considered are taking unused items off the
aircraft, taking fewer of the items that are needed, and looking at
mission-critical items that could be designed differently, for example,
with lighter materials. According to Air Force officials, every 100
pounds of weight equate to 1.6 million pounds of fuel, or $686,000 per
year across its fleet of mobility aircraft.
* Air refueling optimization. With this initiative, the Air Force
intends to change the flight planning process to limit air refueling to
only when it is mission essential.
* Efficient ground operations. This initiative intends to reduce fuel
burn during ground operations. Some actions include reducing warm-up
time and taxiing on fewer engines.
In addition to these demand-reduction initiatives, the Air Force is
pursuing efforts to increase supply through the research and testing of
new technologies, as well as renewable and sustainable resources.
Through the Air Force's synthetic fuel initiative, jet fuels made from
alternative energy sources, such as coal, natural gas, and biomass, are
being evaluated for use in military aircraft with the goal of reducing
future fuel costs and ensuring fuel availability. The Air Force
completed initial testing of a synthetic blend of fuel in the B-52H
bomber and certified the use of this fuel blend for this aircraft in
August 2007. The service has begun testing on the C-17 cargo aircraft,
the B-1 bomber, and the F-22 fighter, with certification expected in
2008. Air Force officials said that they expect the entire fleet to be
certified to fly on the synthetic blend of fuel by 2011. However, our
prior work has highlighted challenges associated with the development
and adoption of alternative energy sources.[Footnote 14]
Finally, the Air Force aims to create a culture that emphasizes energy
considerations in all of its operations. Air Force officials told us
that this component of their strategy has multiple elements, including
focused leadership, training, educational curricula, and communication.
Marine Corps Is Studying Technologies to Reduce Fuel Consumption:
The Marine Corps has taken steps to reduce its fuel usage by initiating
research and development efforts to develop alternative power sources
and improve fuel management. For example, it is testing the use of
additional alternators in certain vehicles to provide onboard power
capabilities, which could reduce the use of petroleum-based fuel and
the number of generators needed on the battlefield. Another initiative
involves providing hybrid power--by combining solar panel, generator,
and battery energy sources--at remote sites to lessen fuel
transportation demands to forward-deployed locations. The Marine Corps
expects to begin testing this initiative in October 2008.
In addition, the Office of Naval Research is leading efforts for the
Marine Corps to develop decision support tools that process and analyze
data and improve fuel management in combat. Examples include sensors
for fuel containers to measure the amount of remaining fuel and onboard
vehicle sensors that automatically generate a requirement when
additional fuel is needed.
DOD Has Not Established an Overarching Organizational Framework to
Guide and Oversee Mobility Energy Reduction Efforts:
While DOD and the military services have several efforts under way to
reduce mobility energy demand, DOD lacks key elements of an overarching
organizational framework to guide and oversee these efforts. As a
result, DOD cannot be assured that its current efforts will be fully
implemented and will significantly reduce its reliance on petroleum-
based fuel. While DOD has identified energy as one of its
transformational priorities, DOD's current approach to mobility energy
lacks (1) top leadership, with a single executive-level OSD official--
supported by an implementation team with dedicated resources and
funding--who is accountable for mobility energy matters; (2) a
comprehensive strategic plan for mobility energy; and (3) an effective
mechanism to provide for communication and coordination of mobility
energy efforts among OSD and the military services as well as
leadership and accountability over each military service's efforts. In
the absence of a framework for mobility energy that includes these
elements, DOD has made limited progress in incorporating fuel
efficiency as a consideration in its key business processes--which
include developing requirements for and acquiring new weapons systems-
-and in implementing recommendations made in department-sponsored
studies.
DOD's Current Management Approach to Mobility Energy Lacks Key Elements
of an Overarching Organizational Framework:
DOD's current approach to mobility energy is decentralized, with fuel
oversight and management responsibilities diffused among several OSD
and military service offices as well as working groups. More
specifically, we found its approach lacks key elements of an
overarching organizational framework, including a single executive-
level OSD official--supported by an implementation team--who is
accountable for mobility energy matters, a comprehensive strategic
plan, and an effective mechanism for departmentwide communication and
coordination. Our prior work on organizational transformations has
found such a framework to be critical to successful transformation in
both public and private organizations.[Footnote 15] In addition, it is
important to note that DOD has a history of creating organizational
frameworks to address other crosscutting issues.
Responsibilities for Fuel Oversight and Management Are Diffused
throughout Various DOD Offices and Working Groups:
DOD's policies for energy management assign oversight and management
responsibilities to several different offices without providing a
single focal point with total visibility of, or accountability for,
mobility energy reduction efforts across the department. Table 2
outlines various roles and responsibilities for fuel management and
oversight.
Table 2: DOD Energy/Fuel Roles and Responsibilities:
Office: Under Secretary of Defense for Acquisition, Technology, and
Logistics;
Responsibilities: Serve as the DOD senior energy official. Establish
policies, grant waivers, and approve changes in the management of
energy commodities.
Office: Deputy Under Secretary of Defense (Logistics and Materiel
Readiness);
Responsibilities: Serve as the DOD central administrator for mobility
energy policy with overall management responsibility for petroleum and
other commodities.
Office: Deputy Under Secretary of Defense (Installations and
Environment);
Responsibilities: Serve as the DOD central manager for facility energy
policy on DOD installations.
Office: Director, Defense Research and Engineering; Responsibilities:
Lead the DOD Energy Security Task Force.
Office: DOD Comptroller;
Responsibilities: Establish financial policies and guidance for the
management of energy commodities and related services, in coordination
with the Under Secretary of Defense for Acquisition, Technology, and
Logistics.
Office: Defense Logistics Agency/Defense Energy Support Center;
Responsibilities: Serve as the executive agent for bulk petroleum and
execute fuel-related materiel management responsibilities.
Office: Chairman, Joint Chiefs of Staff; Responsibilities: Review
operations plans and contingency plans to ensure that fuel requirements
are addressed; identify fuel reporting requirements and other
information for theater contingency requirements.
Office: Combatant commanders' joint petroleum offices;
Responsibilities: Carry out combatant commander responsibilities for
fuel distribution within a theater of operations.
Office: Secretaries of the military departments; Responsibilities:
Operate the petroleum facilities under their cognizance, control fuel
stocks in coordination with the Defense Logistics Agency, compute
wartime fuel demands based on combatant commanders' operational and
contingency plans.
Source: GAO analysis of DOD policies.
[End of table]
As table 2 shows, DOD policies do not assign responsibility for fuel
reduction considerations--either singly or jointly--to any of the
various offices involved in fuel management. While DOD directives
designate the Under Secretary of Defense for Acquisition, Technology,
and Logistics as the department's senior energy official, with
responsibility for establishing policies, granting waivers, and
approving changes in the management of energy commodities, including
petroleum, the extent to which this official provides comprehensive
guidance and oversight of fuel reduction efforts across the department
is unclear.[Footnote 16] Moreover, DOD has charged the Office of the
Deputy Under Secretary of Defense (Logistics and Materiel Readiness) to
serve as the DOD central administrator for mobility energy policy with
overall management responsibility for petroleum and other commodities.
We found that although this office plays an active role in maintaining
DOD policy on energy supply issues and participates in other
department- level fuel-related activities, its primary focus has not
been on departmentwide fuel reduction efforts.
At the military service level, we found that the Air Force and the Army
have established working groups to address fuel reduction and other
energy issues. For example, the Air Force has established a senior
focus group of high-level Air Force officials to address both mobility
and facility energy issues. The senior focus group has created several
working groups to address specific energy issues, such as aviation
operations, acquisitions and technology, and synthetic fuels, as well
as advisory groups on strategic communication, critical infrastructure
protection, and financing. The Army also has established an energy
working group to facilitate the discussion of energy issues across the
service, including how to address rising fuel costs. The group meets
each month to share information and identify issues across the Army. At
the time of our review, the Army was in the process of establishing a
senior steering group of high-level Army officials that would meet to
discuss mutual energy concerns. While the Navy and Marine Corps have
not established similar formal working groups, officials from both
military services told us that they participate in internal meetings on
fuel reduction issues.
DOD Has Not Designated a Single Executive-Level Official for Mobility
Energy:
While DOD has begun to increase management attention and has identified
energy as a transformational priority, it has not designated a single
executive-level OSD official--supported by an implementation team--who
is accountable for mobility energy matters across the department. Our
prior work has shown that top-level leadership and an implementation
team with dedicated resources and funding are key elements of an
overarching organizational framework. Furthermore, leadership must set
the direction, pace, and tone and provide a clear, consistent rationale
that brings everyone together behind a single mission.[Footnote 17] The
Under Secretary of Defense for Acquisition, Technology, and Logistics,
as the senior DOD energy official, is responsible for management of
energy commodities, but this individual also has a broad range of other
responsibilities that include, among other things, matters relating to
the DOD acquisition system, research and development, systems
engineering, logistics, installation management, and business
management modernization. Therefore, this individual's primary focus
has not been on the management of mobility energy efforts. Moreover,
from a broader perspective, the extent to which the Under Secretary of
Defense for Acquisition, Technology, and Logistics has set a direction
for the various OSD and military service offices involved in mobility
energy is unclear.
In addition, DOD's Energy Security Task Force was formed in 2006 to
address long-term departmental energy security requirements, such as
DOD's reliance on fossil fuels, but we found that the task force has
been unable to develop policy or provide guidance and oversight of
mobility energy issues across the department. As indicated in its
charter, the task force's integrated product team is required to
develop a comprehensive DOD energy strategy and an implementation plan.
Among other deliverables, the team's charter also requires it to define
DOD's energy challenge, create a compendium of energy-related works,
and perform a strategic assessment of energy. While the task force has
taken steps to identify and monitor the progress of selected mobility
energy reduction projects across the department, it has not yet
completed an energy strategy or implementation plan, as well as other
responsibilities. Furthermore, OSD officials told us that while the
task force has briefed the Deputy Secretary of Defense's advisory group
on its recommended projects, it does not have a "seat at the table" in
departmental discussions at the Deputy Secretary of Defense level or at
other executive levels, such as the Joint Requirements Oversight
Council, the Defense Acquisition Boards, or the 3-Star Group within
DOD's Planning, Programming, Budgeting, and Execution process.[Footnote
18]
DOD also does not have an implementation team in place, with dedicated
resources and funding, for mobility energy issues. For example, the
officials who lead DOD's Energy Security Task Force's integrated
product team do so as an extra responsibility outside of their normal
work duties. Other DOD officials said that the task force provides a
good forum for sharing energy ideas across the department, but lacks
adequate staff to carry out specific actions. Furthermore, a task force
participant told us that it can be difficult to find time to attend
meetings while balancing other duties. The task force also does not
receive any dedicated funding to pursue department-level energy
priorities. Our prior work on the Government Performance and Results
Act of 1993 (GPRA)[Footnote 19] emphasizes the importance of relating
funding to performance goals. The establishment of a dedicated funding
mechanism for corrosion, for example, enabled DOD to fund high-priority
corrosion reduction projects, which resulted in savings of more than
$753 million during a 5-year period.[Footnote 20] Without a long-term
funding mechanism, DOD may not be able to ensure that mobility energy
reduction efforts receive sustained funding over a period of years.
Moreover, DOD may not be well positioned to serve as a focal point on
mobility energy within the department, with Congress, and with the
Department of Energy or other interagency partners. During a military
energy security forum held at the National Defense University in
November 2007, representatives from various DOD offices presented
energy as an area that is significant to a breadth of issues ranging
from force protection to global stability to the security of DOD's
critical infrastructure. They also noted that DOD has the potential to
play multiple roles with respect to energy, including consumer, market
leader, educator/motivator, oil infrastructure protector, and
warfighter supporter. These concerns, coupled with an increased
national and congressional interest in reducing fossil fuel dependence
and exploring alternative energies, will likely necessitate an
increased leadership focus on long-term energy issues, both within DOD
and in its role as a stakeholder in interagency and national dialogues.
The Energy Independence and Security Act of 2007,[Footnote 21] for
example, requires a variety of national-level actions, including that
the President submit to Congress an annual report on the national
energy security of the United States. It also requires DOD to examine
energy and cost savings in nonbuilding applications, including an
examination of savings associated with reducing the need for fuel
delivery and logistical support. In addition, the John Warner National
Defense Authorization Act for Fiscal Year 2007 directs DOD to improve
the fuel efficiency of weapons platforms.[Footnote 22]
DOD Has Not Yet Developed a Comprehensive Mobility Energy Strategic
Plan:
DOD has not yet developed a comprehensive strategic plan for mobility
energy. Our prior work has found that strategic planning is a key
element of an overarching organizational framework.[Footnote 23]
According to GPRA, key elements of a strategic plan include a
comprehensive mission statement, goals and objectives, approaches or
strategies to achieve those goals and objectives, and methods and
timelines for evaluating progress. In addition, we have previously
identified other elements that would enhance the usefulness of a
strategic plan, including the development of outcome-oriented
performance metrics and an alignment of activities, core processes, and
resources to support mission-related outcomes.
DOD has taken some steps to lay the foundation for mobility energy
strategic planning. According to OSD officials, DOD has begun to
incorporate mobility energy issues into its Guidance on the Development
of the Force, a department-level strategic planning document. In
addition, the Office of the Deputy Assistant Secretary of Defense for
Policy Planning, within the Office of the Under Secretary of Defense
for Policy, is analyzing future energy concerns for the United States
and the international security environment and highlighting their
implications for the department. DOD officials said that the analysis
is expected to provide information for consideration in the development
of future strategic planning documents. We also observed that the DOD
Energy Security Task Force has begun efforts to define goals that
eventually may be incorporated into a DOD energy security strategic
plan. OSD officials told us that the task force's intent is to complete
this strategic plan by May 2008. However, current DOD strategic
planning documents, such as the National Military Strategy and the most
recent Quadrennial Defense Review,[Footnote 24] do not address mobility
energy reduction. Furthermore, until DOD fully develops and implements
a comprehensive strategic plan for mobility energy, it cannot be
certain that mobility energy reduction efforts align with the
department's energy mission or strategic goals to ensure that they are
appropriately prioritized, or know whether critical gaps or duplication
of efforts exist.
DOD Does Not Have an Effective Mechanism for Communication and Cross-
Service Coordination of Mobility Energy Reduction Efforts:
DOD does not have an effective mechanism to facilitate communication
and coordination of mobility energy reduction efforts among OSD and the
military services. Our prior work has shown that a communication
strategy involves creating shared expectations and reporting related
progress.[Footnote 25] While DOD's Energy Security Task Force aims to
identify key players within the energy field, its current structure
does not ensure departmentwide communication of fuel reduction efforts,
particularly among the military services, which are responsible for
most of these efforts. More specifically, during our observation of a
task force monthly meeting, we found that although this venue provides
for some sharing of information, the generally less than 2 hours
allotted for each monthly meeting does not allow for effective coverage
of the spectrum of DOD's mobility energy issues. Moreover, we noted
that although the task force's senior steering group includes, among
others, the service under secretaries and assistant secretaries; the
Director, Defense Research and Engineering; and several principal
deputy under secretaries of defense, it only meets two to three times a
year. Furthermore, with the exception of the Air Force, none of the
other military service members on the senior steering group have
primary responsibility for mobility energy reduction efforts within
their services. Without executive-level focal points, the military
services may not be well positioned to effectively coordinate on
mobility energy reduction efforts across the department or provide
leadership or accountability for efforts within their services.
In addition, we found a lack of cross-service coordination concerning
mobility energy reduction initiatives. Army officials told us that they
were unaware of Navy research on fuel reduction metrics, while Air
Force officials said that they do not routinely discuss aviation fuel
reduction initiatives with their Army counterparts, even though both
military services are concerned about aircraft fuel consumption. OSD
officials said that while several separate groups are making efforts to
reduce fuel consumption, the efforts are often not shared or
integrated. Moreover, OSD officials told us that DOD generally lacks
incentives to reward the military services for reducing fuel
consumption and faces challenges in addressing departmental cultural
barriers--such as the traditional view that fuel is simply a commodity
and that energy efficiency is not an important consideration for
warfighting. Without an effective mechanism to facilitate communication
of mobility energy reduction efforts between OSD and the military
services, DOD cannot be certain that these efforts are effectively
coordinated throughout the department or consistent with DOD's energy
priorities and goals. On a broader level, DOD may not be well
positioned to respond to congressional or other agencies' requests for
information on mobility energy.
DOD Has a History of Creating Organizational Frameworks to Address
Other Crosscutting Issues:
Many OSD, military service, and other DOD officials with whom we spoke
expressed the need for an overarching organizational framework to
address mobility energy throughout the department. Some officials from
OSD suggested that an ideal organizational framework would bring
together the various offices within OSD and the military services
involved in fuel reduction efforts and establish business practices,
analytic methods, and technology investments that take into account
strategic risks associated with energy. Some military service officials
acknowledged that departmental oversight is needed but told us that
they fear such oversight might take resources away from their own
mobility energy reduction initiatives. Similarly, some OSD officials
said they are concerned that establishing a permanent mobility energy
office or similar framework could impose additional bureaucratic layers
and slow progress on mobility energy reduction initiatives.
We noted that DOD has established new organizational frameworks to
address other crosscutting issues, such as business systems
modernization, corrosion control and prevention, contractors on the
battlefield, and the defeat of improvised explosive devices. While we
did not evaluate the strengths or weaknesses of these organizational
frameworks as part of this review, they nonetheless provide DOD
examples to consider in determining how best to establish an
overarching organizational framework for mobility energy. For example,
the Business Transformation Agency, which addresses business systems
modernization, involves top DOD leadership by operating under the
Office of the Under Secretary of Defense for Acquisition, Technology,
and Logistics but reporting directly to the Deputy Under Secretary of
Defense for Business Transformation. DOD has also created a management
framework to oversee facility energy, which accounts for about 25
percent of the department's energy use. Specifically, it has designated
a senior agency official, the Deputy Under Secretary of Defense for
Installations and Environment, with the responsibilities for meeting
federal mandates regarding energy reduction at installations. The
department has also created a working group charged with implementing
the mandates.
In addition, DOD established an Energy Policy Council in 1985 to
provide coordinated review of DOD energy policies, issues, systems, and
programs.[Footnote 26] In the instruction outlining the requirements of
this council, DOD assigned responsibilities to various departmental
offices and designated the then Deputy Assistant Secretary of Defense
(Logistics and Materiel Management) as council chair. DOD also called
for clearly identified focal points to address energy matters within
each military department. When we asked about the status of the
council, OSD officials said that they did not believe it still existed.
This now-defunct Energy Policy Council could also serve as an example
of an organizational framework for mobility energy that provides for
sharing of information among the military services.
Absence of an Overarching Organizational Framework Does Not Position
DOD to Effectively Address Mobility Energy:
In the absence of an overarching organizational framework, DOD is not
well positioned to fully incorporate fuel efficiency considerations
into its key business processes or to fully implement recommendations
from DOD-sponsored studies on fuel reduction.
DOD Has Not Yet Fully Incorporated Fuel Efficiency Considerations into
Its Key Business Processes:
DOD has not yet fully incorporated fuel efficiency considerations into
key departmental business processes, such as its requirements
development and acquisition processes for new weapons platforms and
other mobile defense systems. DOD's process to develop requirements,
known as the Joint Capabilities Integration and Development System, is
a multistep process that involves identifying what military
capabilities the department needs to accomplish its tasks. Once the
capabilities are identified, DOD's acquisition process produces
equipment that can meet those requirements. DOD-sponsored studies on
fuel reduction, such as the 2007 LMI report, note that the requirements
development and acquisition processes provide opportunities for DOD to
consider energy efficiencies while considering capabilities. Moreover,
the 2001 Defense Science Board report noted that fuel efficiency
benefits are not currently valued or emphasized in DOD's requirements
development and acquisition processes. While DOD has recently begun to
take some steps to integrate fuel considerations into these processes,
these considerations are not factored in a systematic manner and cannot
be fully applied.
For example, DOD's requirements development process does not
systematically include energy efficiency considerations, and the
capability gap assessments associated with the process do not include
fuel-related logistics, thus leaving these types of issues to be
resolved after systems are fielded. As described earlier, in May 2007,
the Joint Staff established an energy efficiency key performance
parameter that would require fuel considerations during capabilities
development. However, because DOD has not developed a methodology to
determine how best to employ the energy efficiency key performance
parameter, implementation of this key performance parameter remains
uncertain.
DOD has also taken steps to inform its acquisition process with its
pilot program to determine the fully burdened cost of fuel for three
mobile defense systems. While the pilot program represents a step
toward providing visibility over the total logistics costs associated
with delivered fuel and DOD has set a fall 2008 deadline to issue
guidance for applying the fully burdened cost of fuel in acquisition
programs, DOD has not yet developed an approach for determining how it
would incorporate this information into its acquisition decision-making
process. Moreover, the 2008 Defense Science Board report presented some
concerns about how fully burdened costs are being calculated.
Specifically, the report cited a concern that the analysis focused on
peacetime costs and did not adequately consider wartime costs, even
though the fully burdened cost analysis is intended to be a wartime
capability planning factor. Until the pilot program is completed and
the results are assessed, DOD is not in a position to apply a fully
burdened cost analysis to its acquisition process. Thus, the department
is unable to promote greater visibility over its acquisition decisions
or more fully consider the operational and cost consequences of the
fuel burden on the logistics infrastructure.
Other key DOD business processes, such as those that address repair,
recapitalization, and replacement of mobile defense systems also
present opportunities to incorporate fuel efficiency measures during
system upgrades. However, OSD officials told us that the department
generally makes decisions about system upgrades without regard to fuel
efficiency, including the fully burdened cost, in part because such
decisions require greater up-front costs. Although DOD recognizes that
by reducing energy demand it can provide its forces greater flexibility
and reduce their dependence on the logistics infrastructure, some OSD
officials told us that DOD's budget process promotes a short-term
outlook and does not encourage the purchase of fuel-efficient systems
or upgrades that may initially cost more but could reduce life cycle
and logistics costs over the long term. Moreover, the 2008 Defense
Science Board report noted that DOD's lack of tools to assess the
operational and economic benefits of fuel efficiency technologies is a
major reason why DOD underinvests in the development and deployment of
these technologies. In addition, OSD officials told us that DOD does
not systematically assess how making fuel efficiency upgrades to
systems would affect other logistics issues--for example, how reducing
the weight of an Army vehicle would affect the amount of fuel the Air
Force transports to the battlefield for that vehicle. Such assessments,
they said, may reveal further enhancements in warfighting capabilities.
DOD Has Been Slow to Implement Recommendations from Department-
Sponsored Studies on Fuel Reduction:
In the absence of an overarching organizational framework, DOD has made
limited progress in implementing recommendations from department-
sponsored studies by organizations such as the Defense Science Board,
The JASONs, and LMI that have urged an expansion of efforts to reduce
dependency on petroleum-based fuel. These studies confirmed that, for
many reasons, continued heavy reliance on petroleum-based fuel poses a
significant problem for DOD. For example, LMI reported that DOD's
increasing fuel demand furthers the nation's reliance on foreign energy
sources and limits the department's ability to establish a more mobile
and agile force. The studies found a need to focus more DOD management
attention on mobility energy matters and recommended actions aimed at,
among other things, improving the fuel efficiency of weapons platforms,
eliminating institutional barriers that bear upon the department's
decisions regarding fuel efficiency, and developing a long-term
mobility energy strategy that would lead to reduced consumption of
petroleum-based fuel.
DOD has not taken a formal position on these recommendations, and
implementation, in some cases, would require significant changes
throughout the department that could generate institutional resistance.
One study, for example, called for creating a unified energy governance
structure in order to alter DOD's "energy culture." During our review,
we found that DOD had taken some steps toward implementing some of the
recommendations, such as initiating a pilot program for determining the
fully burdened cost of delivered fuel and adding a requirement for an
energy efficiency key performance parameter in its Joint Staff policy
manual. However, other recommendations, such as establishing a
governance structure for mobility energy, have not been implemented
(see app. II for our summary of the recommendations in DOD-sponsored
studies and the actions DOD has taken on those recommendations). The
2008 Defense Science Board report noted that the recommendations made
by the 2001 Defense Science Board report are still open and remain
viable. An overarching organizational framework could better position
DOD to address these and other fuel reduction recommendations in a more
timely and effective manner. Moreover, a framework for mobility energy
could provide greater assurance that DOD's efforts to reduce its
reliance on petroleum-based fuel will succeed without degrading its
operational capabilities and that DOD is better positioned to address
future mobility energy challenges.
Conclusions:
DOD continues to face rapidly increasing fuel costs and high fuel
requirements that have placed a significant logistics burden on its
forces. In light of these and other challenges associated with mobility
energy, DOD has begun to increase its management attention on reducing
its reliance on petroleum-based fuel. Increased national focus on the
United States' dependence on foreign oil, projected increases in the
worldwide demand for oil, and uncertainties about world oil supplies
will likely require DOD to further increase its focus on long-term
energy issues, both within the department and as a stakeholder in
interagency and national dialogues. However, DOD will have difficulty
addressing mobility energy challenges in the absence of an overarching
organizational framework. Without such a framework, DOD is not well
positioned to effectively guide and oversee mobility energy reduction
efforts from a departmentwide perspective to ensure that efforts are
appropriately prioritized; identify critical gaps or duplication of
efforts; and address long-term, large-scale energy issues. In
particular, no individual at the executive level within OSD has been
designated to be accountable for mobility energy and set the direction,
pace, and tone to reduce mobility energy demand across the department.
Other elements of an overarching organizational framework include a
comprehensive strategic plan and executive-level focal points at the
military services to provide for effective coordination. In addition,
until DOD takes steps to further incorporate energy efficiency
considerations into its business processes, the department is unable to
promote greater visibility in its decision making or fully consider the
effects of fuel on the logistics infrastructure. With a mobility energy
overarching organizational framework in place, DOD would be better
positioned to reduce its significant reliance on petroleum-based fuel
and to address the energy challenges of the 21st century.
Recommendations for Executive Action:
To improve DOD's ability to guide and oversee mobility energy reduction
efforts, we recommend that the Secretary of Defense direct the Deputy
Secretary of Defense to establish an overarching organizational
framework by taking the following three actions:
* Designate an executive-level OSD official who is accountable for
mobility energy matters and sets the direction, pace, and tone to
reduce mobility energy demand across the department; improve business
processes to incorporate energy efficiency considerations as a factor
in DOD decision making; coordinate on energy issues with facility
energy officials; act as DOD's focal point in interagency deliberations
about national energy concerns; and lead the department's potential
transition from petroleum-based fuel to alternative fuel sources. This
official should be supported by an implementation team with dedicated
resources and funding.
* Direct the executive-level mobility energy official to lead the
development and implementation of a comprehensive departmentwide
strategic plan for mobility energy. At a minimum, this strategic plan
should set forth mobility energy goals and objectives, time frames for
implementation, and performance metrics to track and evaluate progress.
* Ensure that OSD takes the following steps to fully incorporate energy
efficiency considerations into DOD's requirements development and
acquisition processes:
- Develop a methodology to enable the full implementation of an energy
efficiency key performance parameter in DOD's requirements development
process.
- As part of its efforts to complete DOD's fully burdened cost of fuel
pilot program, develop an approach for incorporating this cost
information into the acquisition decision making process.
Furthermore, to establish effective communication and coordination
among the executive-level OSD mobility energy official and the military
services, we recommend that the Secretary of Defense direct the
Secretaries of the Army, Navy, and Air Force and the Commandant of the
Marine Corps to designate an executive-level official within each of
their military services to act as a focal point on departmentwide
mobility energy efforts as well as provide leadership and
accountability over their own efforts.
Agency Comments and Our Evaluation:
In its written comments on a draft of this report, DOD partially
concurred with all of our recommendations. Based on DOD's comments to
our draft report, we made minor modifications to our report, including
our first recommendation. Technical comments were provided separately
and incorporated as appropriate. The department's written comments are
reprinted in appendix III.
In response to our recommendation that the Secretary of Defense direct
the Deputy Secretary of Defense to designate an executive-level OSD
official who is accountable for mobility energy matters across the
department, DOD acknowledged that there is a need to view and manage
its energy challenges in a new, more systematic manner. DOD's response
stated that DOD Directive 5134.01 (Dec. 9, 2005) provides the Under
Secretary of Defense for Acquisition, Technology, and Logistics
oversight and policy-making authority on DOD energy matters. However,
it is clear from our review, including discussions with department
officials, that neither the Under Secretary nor any official from this
office is providing comprehensive oversight and policy guidance for
mobility energy across the department. Instead, we found that DOD's
current approach to mobility energy is decentralized, with fuel
oversight and management responsibilities diffused among several OSD
and military service offices (see table 2 of this report) as well as
working groups. DOD does not assign responsibility for fuel reduction
considerations--either singly or jointly--to any of the various offices
involved in fuel management. DOD's response stated that its authorities
and responsibilities are consistent with those used for overseeing
other significant crosscutting issues. However, as we noted in our
report, DOD has established new organizational frameworks to address
other crosscutting issues, such as business systems modernization,
corrosion control and prevention, contractors on the battlefield, and
the defeat of improvised explosive devices. Moreover, DOD has
established a focal point for facility energy, the Deputy Under
Secretary of Defense for Installations and Environment, within the
Office of the Under Secretary of Defense for Acquisition, Technology,
and Logistics, even though facility energy accounts for about 25
percent of DOD's total energy consumption. Mobility energy accounts for
about three-fourths of its total energy consumption, but there is not
an equivalent focal point. Key energy issues--including rising fuel
costs, worldwide energy demand, and the high fuel burden during
operations--underscore the importance of energy to DOD and will likely
require sustained top leadership attention. DOD stated that significant
mobility energy efforts are currently under way that will provide for
better management of mobility energy. While we acknowledge that DOD has
begun to increase management attention on mobility energy issues by
creating the DOD Energy Security Task Force, the department does not
have an implementation team, with dedicated resources and funding, for
mobility energy issues. As we noted in our report, the task force's
current structure does not ensure departmentwide communication of fuel-
reduction efforts, particularly among the military services, which are
responsible for most of these efforts. Based on DOD's response to our
first recommendation, we made minor modifications to the recommendation
to emphasize that DOD should designate an executive-level OSD mobility
energy official--supported by an implementation team--who is
accountable for mobility energy matters and who sets the direction,
pace, and tone to reduce mobility energy demand across the department.
This official should also improve business practices to incorporate
energy considerations as a factor in DOD decision making; coordinate on
energy issues with facility energy officials; act as DOD's focal point
in interagency deliberations about national energy concerns; and lead
the department's potential transition from petroleum-based fuel to
alternative fuel sources. Without such an official to provide this
leadership, DOD is not well positioned to address mobility energy
challenges.
In response to our recommendation that the Secretary of Defense direct
the Deputy Secretary of Defense to direct the executive-level mobility
energy official to lead the development and implementation of a
comprehensive departmentwide strategic plan for mobility energy, DOD
indicated that the Under Secretary of Defense for Acquisition,
Technology, and Logistics is overseeing the development of a DOD energy
security strategic plan which will be reported to the Deputy's Advisory
Working Group in May 2008. We believe that this is a step in the right
direction. As we noted in this report, until DOD fully develops and
implements a comprehensive strategic plan for mobility energy--that
sets forth mobility energy goals and objectives, time frames for
implementation, and performance metrics to track and evaluate progress-
-DOD will not be able to ensure that mobility energy reduction efforts
align with the department's energy mission or strategic goals to ensure
that they are appropriately prioritized, or to know whether critical
gaps or duplication of efforts exist.
In response to our recommendation that the Deputy Secretary of Defense
ensure that OSD takes steps to fully incorporate energy efficiency
considerations into DOD's requirements development process by
developing a methodology to enable the full implementation of an energy
efficiency key performance parameter, DOD stated that it plans to
address how and when it will implement such a methodology in its
forthcoming DOD energy security strategic plan. However, this plan does
not yet exist. Because DOD is linking the development of a methodology
for an energy efficiency key performance parameter to this plan, the
implementation of the key performance parameter remains uncertain. Thus
DOD cannot ensure that energy efficiency considerations are factored
into its requirements development process in a systematic manner. In
addition, in response to our recommendation that DOD develop an
approach for incorporating the information from its fully burdened cost
of fuel pilot program into its acquisition process, DOD stated that it
is developing a plan on how best to assess fuel efficiency relative to
the costs and operational capabilities of its weapons systems. Again,
until this plan is completed, DOD is not in a position to apply a fully
burdened cost analysis to its acquisition process. Thus, the department
is unable to promote greater visibility over its acquisition decisions
or more fully consider the operational and cost consequences of the
fuel burden on the logistics infrastructure.
In response to our recommendation that the Secretary of Defense direct
the Secretaries of the Army, Navy, and Air Force and the Commandant of
the Marine Corps to designate an executive-level official within each
of their military services to act as a focal point on departmentwide
mobility energy efforts as well as provide leadership and
accountability over their own efforts, DOD stated that it will address
this issue after it has briefed the DOD energy security strategic plan
to DOD senior leaders in May 2008. However, as we noted in this report,
a lack of cross-service coordination concerning mobility energy
reduction initiatives currently exists. By waiting to address this
issue, the department cannot be certain that the mobility energy
efforts of the military services are consistent with the department's
energy priorities and goals. Designating executive-level military
service focal points would provide improved leadership and
accountability over their own efforts as well as increased coordination
across the department.
We are sending copies of this report to the Secretary of Defense; the
Deputy Secretary of Defense; the Under Secretary of Defense for
Acquisition, Technology, and Logistics; the Secretaries of the Army,
Navy, and Air Force; the Commandant of the Marine Corps; and the
Director, Office of Management and Budget. We will also make copies
available to others on request. In addition, the report will be
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
Should you or your staff have any questions concerning this report,
please contact me at (202) 512-8365 or [email protected]. Contact points
for our:
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Key contributors to this report are
listed in appendix IV.
Signed by:
William M. Solis:
Director Defense Capabilities and Management:
[End of section]
Appendix I: Scope and Methodology:
To address our objectives, we focused our work on the Department of
Defense's (DOD) mobility energy issues related to fuel demand for
operations. We did not address supply issues, fuel for nontactical
vehicles, or DOD facility energy management, except to briefly describe
the organizational structure DOD employs to manage energy issues at its
fixed installations.
To identify key departmental and military service efforts that have
been undertaken to reduce demand for mobility energy, we obtained and
reviewed documentation from the Office of the Secretary of Defense
(OSD), the Joint Staff, and the military services on their key mobility
energy reduction efforts. These documents included briefings, policies,
directives, military service studies, and associated paperwork on the
specific efforts. We also interviewed cognizant departmental and
military service officials who identified and provided the
documentation for key efforts. At the department level, we spoke with
officials involved with the DOD Energy Security Task Force, including
members of the integrated product team and working groups, to obtain
information about the task force's goals, accomplishments, and
challenges as well as the specific service mobility energy initiatives
it has chosen to monitor. We also interviewed OSD and Joint Staff
officials to obtain information on their efforts to incorporate energy
efficiency considerations into DOD's requirements development and
acquisition processes. At the military service level, we interviewed
officials to determine how each military service is approaching its
specific mobility energy reduction efforts, its progress to date, and
what challenges it faces in reducing mobility energy demand. We did not
validate the cost estimates provided by the services for their
initiatives. To obtain a broad perspective of the energy issues, we
attended two defense-related conferences that focused on national
security energy concerns and their potential implications for DOD.
To assess the extent to which DOD has established an overarching
organizational framework to guide and oversee mobility energy efforts,
we reviewed and analyzed DOD documentation, such as policies and
directives, DOD-sponsored fuel-related studies, and legislation, and
interviewed officials from OSD, the Joint Staff, and the military
services. In doing so, we examined DOD's key business processes, such
as its requirements development and acquisition processes, and
determined the extent to which fuel efficiency is systematically
considered in these processes. We also identified key elements of an
overarching organizational framework based on our prior work and the
Government Performance and Results Act of 1993 to determine the extent
to which DOD's current structure incorporated or lacked these key
elements. We interviewed officials at OSD and the military services to
obtain their perspectives on DOD's current approach to mobility energy,
including the extent to which the DOD Energy Security Task Force is
developing policy and providing guidance and oversight of mobility
energy issues across DOD. We also attended a meeting of the Energy
Security Task Force's integrated product team to observe the format,
content, participants, and dialogue of a typical meeting. In addition,
we asked the officials about what benefits and consequences they saw
with the existing department-level involvement (or lack thereof) in
mobility energy issues. We also identified management frameworks DOD
has created to address other crosscutting issues, such as business
systems modernization, corrosion control and prevention, contractors on
the battlefield, the defeat of improvised explosive devices, and
facility energy. We did not evaluate the strengths or weaknesses of
these organizational frameworks or their specific applicability to
mobility energy. We also reviewed DOD-sponsored studies published since
2000 on reducing fuel demand in DOD's mobile defense systems, focusing
on studies that made recommendations specific to departmentwide
mobility energy issues. After an initial literature search and
discussions with DOD officials and other researchers, independent of
DOD, we ultimately selected four studies to include in our review. We
interviewed coauthors from each of these studies to gain a better
understanding of their objectives, scopes, and methodologies and their
perspectives on the issues covered in their reports as well as other
department-level mobility energy concerns. Two team members
consolidated the recommendations related to mobility energy from these
studies and analyzed them for similarities. They combined those that
were similar, rephrased the wording while keeping the intent, and
categorized the recommendations into common themes. Through their
review of documentation and interviews with DOD officials, they then
summarized the actions taken on each of the recommendations. A third
team member independently reviewed the results, and discussed any
discrepancies with the other team members to reach agreement on the
appropriate themes and actions taken.
We coordinated our work at the following DOD offices:
Office of the Secretary of Defense:
* Office of the Under Secretary of Defense for Acquisition, Technology,
and Logistics:
- Systems Engineering and Developmental Test and Evaluation:
- Office of the Director, Defense Research and Engineering:
- Office of the Deputy Under Secretary of Defense, Logistics and
Materiel Readiness:
* Office of the Under Secretary of Defense Comptroller/Chief Financial
Officer:
* Office of the Under Secretary of Defense for Policy:
- Office of the Deputy Assistant Secretary of Defense for Policy
Planning:
- Office of the Deputy Assistant Secretary of Defense for Forces
Transformation and Resources:
* Director of Program Analysis and Evaluation:
Chairman, Joint Chiefs of Staff:
* Logistics (J4):
* Operational Plans and Joint Force Development (J7):
* Force Structure, Resources, and Assessment (J8):
Department of the Army:
* Army Deputy Chief of Staff (G4):
* Assistant Secretary of the Army for Acquisition, Logistics, and
Technology:
* U.S. Army Combined Arms Support Command:
* Army Rapid Equipping Force:
Department of the Navy:
* Office of the Chief of Naval Operations:
* Naval Sea Systems Command:
* Office of Naval Research:
* Headquarters, Marine Corps:
Department of the Air Force:
* Office of the Deputy Assistant Secretary of the Air Force for
Environment, Safety and Occupational Health:
* Logistics, Installations and Mission Support (A4/7):
* Strategic Plans and Programs (A8):
* Conduct Air, Space, and Cyber Operations:
Other DOD Components:
* United States Joint Forces Command:
* Defense Logistics Agency/Defense Energy Support Center:
We conducted our review from September 2007 through March 2008 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Select Recommendations from DOD-Sponsored Studies on
Mobility Energy Reduction:
Over the past 7 years, DOD has commissioned several studies to explore
ways to reduce its fuel consumption. We reviewed recommendations
applicable to mobility energy in the following three DOD-sponsored
studies:
* Defense Science Board, More Capable Warfighting Through Reduced Fuel
Burden, January 2001:
* The JASONs/The MITRE Corporation, Reducing DOD Fossil-Fuel
Dependence, September 2006:
* LMI, Transforming the Way DOD Looks at Energy: An Approach to
Establishing an Energy Strategy, April 2007:
We also reviewed the recommendations from the 2008 Defense Science
Board report on DOD's energy strategy. However, we did not include
those recommendations in our analysis because the report was issued in
February 2008, and the department could not be expected to have taken
action on the recommendations at the time we issued this report.
We summarized the recommendations, grouped them into common topics, and
obtained information on DOD actions taken on each of them. Table 3
presents a summary of our analysis.
Table 3: Actions DOD Has Taken to Address Selected Recommendations from
DOD-Sponsored Studies on Mobility Energy Reduction:
Topic/recommendation: Technology upgrades/system redesigns: Consider
fuel efficiency when making science and technology and system design
investments;
Source: Technology upgrades/ system redesigns: More Capable Warfighting
Through Reduced Fuel Burden by the Defense Science Board; DOD action
taken: Technology upgrades/ system redesigns: The Office of the Under
Secretary of Defense for Acquisition, Technology, and Logistics
initiated a pilot program to assess the fully burdened cost of fuel in
three mobile defense systems, and the Joint Staff established an energy
efficiency key performance parameter. Full implementation of both
efforts could provide insight on how to include energy considerations
in system design. Moreover, according to OSD officials, DOD's
acquisition process currently undervalues energy efficiencies. Thus,
investments may not be adequate.
Topic/recommendation: Technology upgrades/system redesigns: Upgrade the
engines of the M1-Abrams tank, the B- 52 bomber, and other applicable
systems with modern fuel-efficient engine technology; Source:
Technology upgrades/system redesigns: Reducing DOD Fossil-Fuel
Dependence by The JASONs/The MITRE Corporation; DOD action taken:
Technology upgrades/system redesigns: DOD provided recommendations to
the military services for consideration and implementation.
Topic/recommendation: Technology upgrades/system redesigns: Reduce
weight of armored and tactical vehicles, with modern vehicle designs,
structures, and materials;
Source: Technology upgrades/system redesigns: Reducing DOD Fossil-Fuel
Dependence by The JASONs/The MITRE Corporation; DOD action taken:
Technology upgrades/system redesigns: The Ground Fuel- Efficient
Vehicle Demonstrator, an initiative funded in fiscal year 2008, will
examine fuel-efficient technologies and equipment for ground vehicle
programs.
Topic/recommendation: Technology upgrades/system redesigns: Develop a
DOD-wide system to track vehicle and fuel use patterns. Use the data to
develop DOD-wide fuel efficiency metrics in decisions to upgrade system
designs;
Source: Technology upgrades/system redesigns: Reducing DOD Fossil-Fuel
Dependence by The JASONs/The MITRE Corporation; DOD action taken:
Technology upgrades/ system redesigns: The military services have some
systems or reporting mechanisms for capturing fuel consumption.
However, as a department, DOD has not developed metrics for fuel
consumption.
Topic/recommendation: Technology upgrades/system redesigns: Assess
options for expanding the use of unmanned vehicles by considering more
fuel-efficient designs;
Source: Technology upgrades/system redesigns: Reducing DOD Fossil-Fuel
Dependence by The JASONs/The MITRE Corporation; DOD action taken:
Technology upgrades/system redesigns: In fiscal year 2007, the Office
of the Director, Defense Research and Engineering, initiated the Long
Endurance Unmanned Aerial Vehicle program, which is intended to
increase the amount of time an unmanned aerial vehicle could stay in
the air without refueling.
Topic/recommendation: Strategic planning: Develop tools to track and
account for the total costs of fuel, including delivery and logistics
costs;
Source: Strategic planning: More Capable Warfighting Through Reduced
Fuel Burden by the Defense Science Board; Reducing DOD Fossil- Fuel
Dependence by The JASONs/The MITRE Corporation; DOD action taken:
Strategic planning: The Office of the Under Secretary of Defense for
Acquisition, Technology, and Logistics initiated a pilot program to
assess the fully burdened cost of fuel in three mobile defense systems.
However, the program has not been implemented for all systems.
Topic/recommendation: Strategic planning: Increase simulator use;
Source: Strategic planning: Reducing DOD Fossil-Fuel Dependence by The
JASONs/The MITRE Corporation;
DOD action taken: Technology upgrades/ system redesigns: In August
2007, the Office of the Under Secretary of Defense for Acquisition,
Technology, and Logistics directed a study to assess whether the
increased use of simulators could substitute for live training without
degrading operational capability. An implementation plan has been
drafted and a working group has been established.
Topic/recommendation: Strategic planning: Integrate the military
services' fuel requirements into logistics war games and analytic tools
instead of assuming that fuel supplies will be adequate; Source:
Strategic planning: More Capable Warfighting Through Reduced Fuel
Burden by the Defense Science Board; Reducing DOD Fossil-Fuel
Dependence by The JASONs/The MITRE Corporation; DOD action taken:
Strategic planning: DOD incorporated energy considerations into the
annual Unified Engagement exercise, but it is not a standard
consideration in DOD's war-gaming processes.
Topic/recommendation: Strategic planning: Include fuel efficiency as a
key performance parameter in DOD's requirements process; Source:
Technology upgrades/ system redesigns: More Capable Warfighting Through
Reduced Fuel Burden by the Defense Science Board; DOD action taken:
Technology upgrades/ system redesigns: The Joint Staff has established
an energy efficiency key performance parameter. However, DOD has not
developed a methodology to fully implement this requirement.
Topic/recommendation: Strategic planning: Engage in long-term planning
for future fuel sources, production, and use; Source: Strategic
planning: Reducing DOD Fossil-Fuel Dependence by The JASONs/The MITRE
Corporation;
DOD action taken: Strategic planning: DOD has not developed a
comprehensive strategic plan for mobility energy.
Topic/recommendation: Strategic planning: Increase the use of
commercial aviation fuels; consider the local production of military
fuels from commercial aviation fuels outside of the United States;
Source: Strategic planning: Reducing DOD Fossil-Fuel Dependence by The
JASONs/The MITRE Corporation;
DOD action taken: Technology upgrades/ system redesigns: The Air Force
has conducted one study examining this issue, and the Defense Energy
Support Center is proposing an additional study to better understand
the logistical impacts of using commercial aviation fuels.
Topic/recommendation: Strategic planning: Incorporate energy
considerations (use and logistics requirements) into DOD's key
corporate decision making processes: strategic planning; analytic
agenda; joint concept and joint capability development; acquisition;
and planning, programming, budgeting, and execution; Source: Strategic
planning: Transforming the Way DOD Looks at Energy: An Approach to
Establishing an Energy Strategy by LMI; DOD action taken: Strategic
planning: While DOD has made some efforts to address energy efficiency
in its requirements development and acquisition processes, these
efforts are in the early stages.
Topic/recommendation: Leadership and oversight: Adopt a new framework
to promote energy efficiency, including alternate energy sources, to
those areas (1) consuming the most fuel (aviation forces), (2)
requiring the most logistics support, or (3) having the most negative
effect on the warfighter;
Source: Leadership and oversight: Transforming the Way DOD Looks at
Energy: An Approach to Establishing an Energy Strategy by LMI; DOD
action taken: Leadership and oversight: The DOD Energy Security Task
Force has selected military service initiatives to monitor that address
energy efficiency in selected areas, but DOD has not developed an
overarching organizational framework for mobility energy.
Topic/recommendation: Provide leadership that incentivizes fuel
efficiency throughout DOD;
Source: Leadership and oversight: More Capable Warfighting Through
Reduced Fuel Burden by the Defense Science Board; DOD action taken:
Leadership and oversight: OSD officials told us that DOD generally
lacks incentives to reward the military services for reducing fuel
consumption and faces challenges in addressing departmental cultural
barriers--such as the traditional view that fuel is simply a commodity
and that energy efficiency is not important to warfighting.
Topic/recommendation: Establish a governance structure with policy and
resource oversight to focus DOD's energy efforts; Source: Leadership
and oversight: Transforming the Way DOD Looks at Energy: An Approach to
Establishing an Energy Strategy by LMI; DOD action taken: Leadership
and oversight: DOD has not established an overarching organizational
framework to provide oversight for mobility energy.
[End of table]
Source: GAO analysis of DOD information.
[End of section]
Appendix III: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
3000 Defense Pentagon:
Washington, DC 20301-3000:
February 20, 2008:
Mr. William M. Solis:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, DC 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-08- 426, "Defense Management: Overarching Organizational
Framework Needed to Guide and Oversee Energy Reduction Efforts for
Military Operations," dated February 5, 2008 (GAO Code 351082).
Detailed comments on the report recommendations are enclosed.
The Department of Defense partially concurs on the GAO's findings and
recommendations. In principle, the Department agrees there is a need to
view and manage DoD energy supply and demand challenges in a new, more
systemic manner. However, current DoD Directives are clear on where the
authority and responsibility lie on the issues surrounding mobility
energy. DoD Directive 5134.01 (Dec 9, 2005) puts oversight and
policymaking authority on the DoD energy matters the GAO raised under
the authority of the Under Secretary of Defense for Acquisition,
Technology and Logistics. The Under Secretary's staff is leading a
Department-wide effort to develop a comprehensive DoD Energy Security
Strategic Plan ready to be delivered to senior DoD leaders this May.
Further, the Department has dedicated resources and senior-level
attention to implementing an Energy Efficiency Key Performance
Parameter, underpinned by maturing and applying the Fully Burdened Cost
of Fuel construct to its requirements and acquisition tradespace
analysis and decision-making.
The Department appreciates this opportunity to comment on this draft
report.
Sincerely,
Signed by:
Kristen J. Baldwin:
Acting Director:
Systems and Software Engineering:
Enclosure:
As stated:
GAO Draft Report - Dated February 5, 2008 GAO Code 351082/GAO-08-426:
"Defense Management: Overarching Organizational Framework Needed to
Guide and Oversee Energy Reduction Efforts for Military Operations":
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Deputy Secretary of Defense to establish an overarching
organizational framework by designating an executive-level OSD official
with the responsibility and authority to guide and oversee efforts and
develop policy, among other things, to reduce mobility energy demand
across the Department; improve business processes to incorporate energy
considerations as a factor in DoD decision making; coordinate on energy
issues with facility energy officials; act as DoD's focal point in
interagency deliberations about national energy concerns; and lead the
Department's potential transition from petroleum-based fuel sources to
alternative fuel sources. This official should be supported by an
implementation team with dedicated resources and funding.
DOD Response: Partially concur. In principle, the Department concurs
that there is a need to view and manage DoD energy supply and demand
challenges in a new, more systematic manner. The direct cost of
mobility fuels, the indirect (yet substantial) cost of our fuel
delivery logistics, the operational vulnerability of our logistics
forces to insurgent forces and other threats, and our prioritization of
science and technology (S&T) and acquisition investments seeking
greater energy efficiency are issues of increasing importance. However,
significant efforts are currently underway that will provide the
Department's senior leaders new analytic tools, business process
changes and S&T energy efficiency investments recommendations for
better managing DoD mobility energy across the enterprise.
These efforts, particularly those of the DoD Energy Security Task Force
(ESTF), which is now developing a comprehensive Energy Security
Strategic Plan for the DoD, will be delivered to the Deputy Secretary's
Advisory Working Group in May 2008. The work of the ESTF will provide
new insights and recommendations to DoD's decision-makers for the
governance of mobility energy issues across the Department. This work
is informed by operational experience in the field, including from
Operations Enduring Freedom and Iraqi Freedom, as well as the
independent analysis and perspective of the 2008 Defense Science Board
(DSB) Task Force on Energy Security. This task force, which contained a
strong balance of seasoned former national security leaders, including
a former Secretary of Defense and of Energy, a former CIA Director, and
retired senior flag officers, as well as professional energy and energy
efficiency experts, took a hard look at DoD risks and possible
solutions related to energy. The 2008 DSB Task Force on Energy Security
was a consensus document and identified the many and difficult
challenges the Department must now take on. In this case, consensus was
not the result of watering down the findings, but rather, solid
agreement on the risks and underappreciated factors that go into
planning for DoD energy supply and demand. Further, addressing the
governance issues the GAO report raises, current DoD Directives are
clear on where the authority and responsibility lie on the issues
surrounding mobility energy. DoD Directive 5134.01 (Dec 9, 2005) puts
oversight and policymaking authority on DoD energy matters under the
authority of the Under Secretary of Defense for Acquisition, Technology
and Logistics, particularly in sections 3, 3.24, 3.26, E2.1.1.7,
E2.1.1.8, E2.1.1.28, E2.1.1.29 and E2.1.1.30. These authorities and
responsibilities are consistent with those used for overseeing many
other significant cross-cutting DoD capability development and
management issues.
The Under Secretary of Defense (AT&L) oversees three senior executives
with policy-making and oversight roles on different aspects of mobility
energy. The Deputy Under Secretary of Defense for Acquisition and
Technology (DUSD (A&T)) oversees the system acquisition process, and
has the authority to provide guidance, as needed, to the Components on
how the acquisition tradespace is considered, both from a platform and
capability perspective. The DUSD (A&T) organization is working within
the OSD staff, Joint Staff and Service force planning and requirements
communities to ensure fuel demand, fuel logistics and all related
matters are given more appropriate consideration in the acquisition
tradespace to reduce energy demand. This includes maturing a construct
known as the "Fully Burdened Cost of Fuel (FBCF)" and applying the FBCF
principles and methodology to the current Energy Efficiency Key
Performance Parameter (KPP) in the Joint Capabilities Integration and
Development System. This is the process by which materiel and non-
materiel solutions to documented capability gaps are identified and
framed for the acquisition and other communities to solve. This work
will serve as a basis for the Department's senior leaders to assess DoD
mobility fuel demand from a portfolio perspective (force application,
force protection, etc.) and not just from a platform perspective. This
approach is consistent with and supportive of the Deputy Secretary's
management agenda. Taking a portfolio perspective will better inform
risk analysis within the Defense program and raise the understanding of
the value of energy efficiency investments relative to DoD mission
success.
The Deputy Under Secretary of Defense for Logistics and Materiel
Readiness (DUSD (L&MR), has the authority to serve as the central
administrator of the policies that govern how fuel is supplied to our
operational forces, as well as the planning and purchase of all
varieties of operational fuel, through the Defense Energy Support
Center, a Defense Logistics Agency (DLA) field activity. The DUSD
(L&MR) and DLA are beginning to look at the defense logistics
implications of biofuels and other synfuels to the force on behalf of
the Under Secretary.
The Director, Defense Research and Engineering has responsibility for
managing the entire defense science and technology budget and its
priorities, including the oversight of Service investments. Significant
basic science and applied science work is going into mobile power
generation, more efficient materials and engines, light-weight
structural materials and alternative operational fuels. While these
investments are focused on their potential benefits to DoD operational
capability, there is strong historical precedent for DoD science and
technology investments advancing the state of the art and sparking
commercial innovation.
Finally, the Under Secretary of Defense (AT&L) chairs the DoD Energy
Security Task Force. This broadly based group is supported from
membership from across the DoD. While this group initially focused on
sharing energy-related information within the Department, it's mandate
has expanded as its staff and members craft the DoD Energy Security
Strategic Plan that has been directed through Deputy Secretary-level
guidance for May 2008 completion. Consistent with the Department's own
assessments and the DSB Task Force findings, the ESTF is leading and
building the proper teams of OSD, Joint staff and Component
stakeholders to address DoD processes and practice shortfalls that have
created some gaps cited by the GAO. Energy-related technology
priorities are also considered by the group and given additional
resources based on the ESTF endorsement. Through monthly meetings, the
ESTF website and a monthly speaker series, the group has widened the
circle of interest in energy issues in DoD and its related interagency,
industry and policy communities. The leadership of the ESTF also
coordinates its efforts with the wider DoD Installation and Environment
community implementing Executive Order 13423, "Strengthening Federal
Environmental, Energy, and Transportation Management". At the current
state of understanding of DoD's mobility fuel challenges, this outreach
approach is adequate for fostering the right discussions and
identification of solutions to DoD leaders and staff.
As relevant technology ideas, needed process changes, operational
vulnerability concerns or commercial fuel price growth arise from our
on-going analysis and interaction, the Office of the Under Secretary of
Defense (AT&L) will serve as both a clearinghouse for addressing the
issues, and as the Departmental leader in implementing actionable
solutions.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Deputy Secretary of Defense to establish an overarching
organizational framework by directing the executive-level mobility
energy official to lead the development and implementation of a
comprehensive Department-wide strategic plan for mobility energy. At a
minimum, this strategic plan should set forth mobility energy goals and
objectives, time frames for implementation, and performance metrics to
track and evaluate progress.
DOD Response: Partially concur. The USD (AT&L), as the DoD executive
lead for energy and as supported by the DoD Energy Security Task Force,
is overseeing development of a DoD Energy Security Strategic Plan which
will be reported out to the Deputy's Advisory Working Group in May of
2008. This plan will provide a DoD-wide strategic construct for
considering mobility energy challenges and inefficiencies, as well as
for setting goals, objectives, analytic frameworks, actionable metrics
and implementation timing for further assessments and execution. The
plan is described in context to the management framework described in
the DoD Response to Recommendation 1.
Recommendation 3: The GAO recommends that the Secretary of Defense
direct the Deputy Secretary of Defense to establish an overarching
organizational framework by ensuring that OSD develop a methodology to
enable the full implementation of an energy efficiency key performance
parameter in DoD's requirements development process.
DOD Response: Partially concur. The Department agrees that further
clarification of roles and targets may be needed, but the authorities
and responsibility to do so already exist under the Under Secretary of
Defense (Acquisition, Technology and Logistics) explained in the DoD
response to Recommendation 1. Further, the Department will address the
pace and required steps for maturing and then implementing the fully
burdened cost of fuel analytic methodology currently under development,
within the DoD Energy Security Strategic Plan. This foundational
analytic work has received significantly more attention over the past
six months, and its broader inclusion within the major strategic
processes of the Department is indeed a Top 25 Transformational
priority for the Department. By taking this methodology through the
standard DoD vetting processes, we can ensure the rigor needed to
formally implement this is present. After this vetting, it will
underpin the Energy Efficiency Key Performance Parameter within the
Joint Capabilities Integration and Development System. RECOMMENDATION
4: The GAO recommends that the Secretary of Defense direct the Deputy
Secretary of Defense to establish an overarching organizational
framework by ensuring that, as part of its efforts to complete DoD's
fully burdened costs of fuel, pilot program, OSD develop an approach
for incorporating this cost information into the acquisition decision
making process.
DOD Response: Partially concur. As the report states, efforts are
underway to look at the implications of the fully burdened cost of fuel
and the logistics implications of delivering fuel for DoD operations in
the force planning, requirements generation and acquisition processes.
It is ill-advised to focus on the acquisition process alone, as the
force planning and requirements processes inform the acquisition
process on the value of various qualities desired, which add up to
provide, along with well trained personnel, a capability. This
capability is provided at an agreed cost and within a certain schedule.
Hence, a prioritization towards fuel efficiency must be addressed
within certain constraints. Lacking a clearer demand signal, there is
little analytical basis for making trades between various qualities,
technologies or design options at the acquisition phase. As it is
stated in the Department's response to Recommendations 1, a work plan
is in development on how best to assess the value of greater fuel
efficiency from the operational capability and cost perspectives in DoD
equipment and platforms.
That said, significant science and technology investments have also
been made, partially directed from the inputs of the Energy Security
Task Force, to address the energy efficiency of platforms and hence,
operational units.
Recommendation 5: The GAO recommends that the Secretary of Defense
direct the Secretaries of the Army, Navy and Air Force and the
Commandant of the Marine Corps to designate an executive-level official
within each of their Services to act as a focal point on Department-
wide mobility energy efforts as well as provide leadership and
accountability over their own efforts.
DOD Response: Partially concur. The issue of governance and oversight
of energy matters within the Military Departments will be raised once
the DoD Energy Security Strategic Plan is briefed to DoD senior leaders
in May 2008. Until that time, it is inappropriate to pre-judge the
deliberative work currently going into that Plan.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
William M. Solis, (202) 512-8365 or [email protected]:
Acknowledgments:
In addition to the contact named above, Thomas Gosling, Assistant
Director; Karyn Angulo; Alissa Czyz; and Marie Mak made major
contributions to this report.
[End of section]
Footnotes:
[1] Energy consumed at fixed installations, referred to as facility
energy, accounts for most of DOD's remaining energy use.
[2] This concept is known as fully burdened cost, which DOD defines as
the total ownership cost of buying, moving, and protecting fuel in
systems during combat.
[3] A key performance parameter is an attribute or characteristic of a
system that is considered critical or essential to the development of
an effective military capability.
[4] GAO, Department of Energy: Oil and Natural Gas Research and
Development Activities, GAO-08-190R (Washington, D.C.: Nov. 6, 2007).
[5] For a discussion of issues surrounding peak oil production, see
GAO, Crude Oil: Uncertainty about Future Oil Supply Makes It Important
to Develop a Strategy for Addressing a Peak and Decline in Oil
Production, GAO-07-283 (Washington, D.C.: Feb. 28, 2007).
[6] For a more complete overview of U.S. energy challenges, see GAO,
21st Century Challenges: Reexamining the Base of the Federal
Government, GAO-05-325SP (Washington, D.C.: February 2005), and Meeting
Energy Demand in the 21st Century: Many Challenges and Key Questions,
GAO-05-414T (Washington, D.C.: Mar. 16, 2005).
[7] DOD Directive 4140.25, DOD Management Policy for Energy Commodities
and Related Services (Apr. 12, 2004). Other fuel-related policy
documents include DOD Directive 5101.8, DOD Executive Agent for Bulk
Petroleum (Aug. 11, 2004); DOD Manual 4140.25-M, DOD Management of Bulk
Petroleum Products, Natural Gas and Coal (Jun. 12, 2002); and Joint
Chiefs of Staff, Joint Pub. 4-03, Joint Bulk Petroleum and Water
Doctrine (May 23, 2003).
[8] Defense Science Board Task Force on Improving Fuel Efficiency of
Weapons Platforms, More Capable Warfighting Through Reduced Fuel Burden
(January 2001).
[9] The JASONs, Reducing DOD Fossil-Fuel Dependence, JSR-06-135
(September 2006).
[10] LMI, Transforming the Way DOD Looks at Energy: An Approach to
Establishing an Energy Strategy, Report FT602T1 (April 2007).
[11] Defense Science Board Task Force on DOD Energy Strategy, More
Fight--Less Fuel (February 2008).
[12] Office of the Under Secretary of Defense for Acquisition,
Technology, and Logistics Memorandum, "Fully Burdened Cost of Fuel
Pilot Program," April 10, 2007.
[13] Joint Chiefs of Staff Instruction 3170.01F, Joint Capabilities
Integration and Development System (May 1, 2007), and Joint Chiefs of
Staff Manual 3170.01C, Operation of the Joint Capabilities Integration
and Development System (May 1, 2007).
[14] GAO-07-283.
[15] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, GAO-03-669 (Washington,
D.C.: July 2, 2003).
[16] DOD Directive 4140.25, and DOD Directive 5134.01, Under Secretary
of Defense for Acquisition, Technology, and Logistics (Dec. 9, 2005).
[17] GAO-03-669.
[18] The 3-Star Group within DOD's Planning, Programming, Budgeting,
and Execution process includes members from OSD's Director of Program
Analysis and Evaluation; OSD's under secretaries of defense; the Joint
Staff Director for Structure, Resources, and Assessment; and the
military services' 3-Star programmers. This group addresses major
issues and presents decision options to the Secretary of Defense.
[19] GPRA (Pub. L. No. 103-62, (1993)) is the centerpiece of a
statutory framework that Congress put in place during the 1990s to help
resolve the long-standing management problems that have undermined the
federal government's efficiency and effectiveness and to provide
greater accountability for results. For additional information, see
GAO, Agency Performance Plans: Examples of Practices That Can Improve
Usefulness to Decisionmakers, GAO/GGD/AIMD-99-69 (Washington, D.C.:
Feb. 26, 1999).
[20] GAO, Defense Management: Opportunities Exist to Improve
Implementation of DOD's Long-Term Corrosion Strategy, GAO-04-640
(Washington, D.C.: June 23, 2004).
[21] Energy Independence and Security Act of 2007, Pub. L. No. 110-140,
� 933 (2007).
[22] Pub. L. No. 109-364, � 360 (2006), states that it shall be DOD's
policy to improve fuel efficiency of weapons platforms, consistent with
mission requirements, in order to enhance platform performance, reduce
the size of fuel logistics systems, reduce the burden high consumption
places on agility, reduce operating costs, and dampen the financial
impact of volatile oil prices.
[23] GAO, Agencies' Strategic Plans Under GPRA: Key Questions to
Facilitate Congressional Review, GAO/GGD-l0.l.16 (Washington, D.C.: May
1997).
[24] The National Military Strategy, signed by the Chairman of the
Joint Chiefs of Staff, is guided by the goals and objectives contained
in the present National Security Strategy and serves to implement the
Secretary of Defense's National Defense Strategy. The Quadrennial
Defense Review, prepared by the Secretary of Defense every 4 years,
assesses the nature and magnitude of the political, strategic, and
military risks associated with executing the missions called for under
the National Defense Strategy.
[25] GAO-03-669.
[26] DOD Instruction 5126.47, Department of Defense Energy Policy
Council, Under Secretary of Defense for Acquisition, Technology, and
Logistics (Dec. 2, 1985).
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