Defense Management: Overarching Organizational Framework Could
Improve DOD's Management of Energy Reduction Efforts for Military
Operations (13-MAR-08, GAO-08-523T).
The Department of Defense (DOD) is the single largest U.S. energy
consumer. About three-fourths of its total consumption consists
of mobility energy--the energy required for moving and sustaining
its forces and weapons platforms for military operations. GAO was
asked to discuss DOD's efforts to manage and reduce its mobility
energy demand. This testimony addresses (1) energy issues that
are likely to affect DOD in the future, (2) key departmental and
military service efforts to reduce demand for mobility energy,
and (3) DOD's management approach to guide and oversee these
efforts. This testimony is based primarily on work conducted for
a report that GAO issued today (GAO-08-426) on DOD's management
of mobility energy.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-523T
ACCNO: A81292
TITLE: Defense Management: Overarching Organizational Framework
Could Improve DOD's Management of Energy Reduction Efforts for
Military Operations
DATE: 03/13/2008
SUBJECT: Alternative energy sources
Alternative fuels
Defense capabilities
Energy conservation
Energy consumption
Energy demand
Energy management
Energy planning
Fuel conservation
Fuel consumption
Logistics
Military forces
Military operations
Military research and development
Performance measures
Petroleum products
Program evaluation
Strategic planning
Weapons
Weapons systems
Energy sources
Policies and procedures
Program goals or objectives
Program implementation
Standards (energy efficiency)
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GAO-08-523T
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Testimony:
Before the Subcommittee on Readiness, Committee on Armed Services,
House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 10:00 a.m. EDT:
Thursday, March 13, 2008:
Defense Management:
Overarching Organizational Framework Could Improve DOD's Management of
Energy Reduction Efforts for Military Operations:
Statement of William M. Solis, Director: Defense Capabilities and
Management:
GAO-08-523T:
GAO Highlights:
Highlights of GAO-08-523T, a testimony before the Subcommittee on
Readiness, Committee on Armed Services, House of Representatives.
Why GAO Did This Study:
The Department of Defense (DOD) is the single largest U.S. energy
consumer. About three-fourths of its total consumption consists of
mobility energy�the energy required for moving and sustaining its
forces and weapons platforms for military operations.
GAO was asked to discuss DOD�s efforts to manage and reduce its
mobility energy demand. This testimony addresses (1) energy issues that
are likely to affect DOD in the future, (2) key departmental and
military service efforts to reduce demand for mobility energy, and (3)
DOD�s management approach to guide and oversee these efforts. This
testimony is based primarily on work conducted for a report that GAO
issued today (GAO-08-426) on DOD�s management of mobility energy.
What GAO Found:
Several issues, such as rising fuel costs, worldwide energy demand, and
the high fuel burden during operations, underscore the importance of
energy to DOD. Fuel costs for DOD are substantial and the volatility of
world oil prices will likely continue to affect the department�which
may require DOD to make difficult trade-offs such as redirecting funds
from ongoing programs to pay for needed fuel. Other energy issues that
are likely to affect DOD in the future are the increased U.S.
dependence on foreign oil, projected increases in the worldwide demand
for oil, and uncertainties about world oil supplies. Furthermore, DOD�s
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 supply convoys
to attack. Given these issues, DOD must be well positioned to
effectively manage energy demands for military operations.
DOD has initiatives under way to reduce mobility energy demand. At the
department level, OSD created a task force to address energy security
concerns. In addition, 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. Each of the military services also has its own initiatives
under way. 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, such as
hybrid power, and improve fuel management.
While these and other mobility energy reduction efforts are under way,
DOD lacks elements of an overarching organizational framework to guide
and oversee these efforts. Specifically, 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, (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. GAO
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. 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.
What GAO Recommends:
In the report GAO issued today, GAO recommended that DOD establish an
overarching organizational framework to improve the department�s
ability to address mobility energy challenges. The framework should
include an executive-level Office of the Secretary of Defense (OSD)
official accountable for mobility energy matters, a comprehensive
strategic plan, and improvements to DOD�s business processes. 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, click on [hyperlink, http://www.GAO-08-523T].
For more information, contact William M. Solis at (202) 512-8365 or
[email protected].
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the Department of Defense's
(DOD) efforts to manage and reduce its demand for mobility energy--that
is, the energy required for moving and sustaining its forces and
weapons platforms for military operations. Mobility energy accounts for
about three-fourths of DOD's total energy consumption.[Footnote 1] 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. As the single
largest energy consumer in the United States, DOD incurs billions of
dollars each year in fuel costs, and these costs have been rising in
recent years as oil prices have increased. DOD recognizes that its high
energy demand presents significant risks to its military forces.
Moreover, a February 2008 Defense Science Board report concluded that
DOD's high fuel demand compromises operational capability and mission
success, requires an excessive logistics infrastructure, creates more
risk for support operations than necessary, and increases life cycle
operations and support costs.[Footnote 2] In addition, the report notes
that changing a culture that considers energy cheap and abundant is one
of the most difficult challenges facing the department and the nation.
Today I would like to provide our perspectives on (1) energy issues
that are likely to affect DOD in the future, (2) key departmental and
military service efforts to reduce demand for mobility energy, and (3)
DOD's management approach to guide and oversee these efforts. This
statement is based primarily on the work we conducted for a report that
we issued today that addresses DOD's management of energy reduction
efforts for military operations.[Footnote 3] As part of this work, we
reviewed several DOD-sponsored studies that have recommended actions
DOD could take to better manage its mobility energy
challenges.[Footnote 4] We have also had an opportunity to review the
February 2008 Defense Science Board report. We conducted this
performance audit from September 2007 through March 2008 in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.
Summary:
Several issues, such as rising fuel costs, worldwide energy demand, and
the high fuel burden during operations, underscore the importance of
energy to DOD. Fuel costs for DOD are substantial and the volatility of
world oil prices will likely continue to affect the department--which
may require DOD to make difficult trade-offs, such as redirecting funds
from ongoing programs to pay for needed fuel. In addition, both the
Army and Marine Corps have plans to grow their forces over the next
several years, which will inevitably require larger amounts of fuel to
sustain these forces and their weapons systems. Other energy issues
that are likely to affect DOD in the future are the increased U.S.
dependence on foreign oil, projected increases in the worldwide demand
for oil, and uncertainties about world oil supplies. Furthermore, DOD's
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 supply convoys
to attack. Given these issues, DOD must be well positioned to
effectively manage energy demands for military operations.
DOD and the military services have several initiatives under way to
reduce demand for mobility energy. At the department level, the Office
of the Secretary of Defense (OSD) created a task force in 2006 to
address energy security concerns. 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. Each of the military
services also has its own initiatives under way to reduce mobility
energy demand. 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, such as
hybrid power, and improve fuel management.
While these and other individual efforts are under way to reduce
mobility energy demand, we found that DOD does not have an overarching
organizational framework to guide and oversee these efforts. Our prior
work has shown that an overarching organizational framework is critical
to successful transformation in both public and private organizations.
Key elements of such a framework include (1) top-level leadership and
an implementation team with dedicated resources and funding; (2) a
comprehensive strategic plan that includes goals, objectives, methods,
timelines, and outcome-oriented performance metrics; and (3) a
communication strategy that provides shared expectations and reports
related progress. We found that DOD's current approach to mobility
energy lacks these elements. For example, while DOD has begun to
increase management attention on energy issues, 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, who participates in top policy-making decisions as an
advocate for reducing mobility energy demand, and who serves as a
stakeholder in interagency discussions about national energy concerns.
Currently, DOD's 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. In
addition, 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 to
know whether critical gaps or duplication of efforts exist. Finally,
without an effective mechanism to facilitate communication of mobility
energy reduction efforts among OSD and the military services, DOD
cannot be assured that these efforts are consistent with DOD's energy
priorities and goals. 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--and in implementing recommendations from department-
sponsored studies on fuel reduction. 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.
Several Issues Underscore Importance of Energy to DOD:
Several issues, such as rising fuel costs, worldwide energy demand, and
the high fuel burden during operations, underscore the importance of
energy to DOD. Fuel costs for DOD are substantial and the volatility of
world oil prices will likely continue to affect the department. For
example, in fiscal year 2007, DOD reported that it 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.
Furthermore, during a 2007 military energy security forum, DOD
officials discussed the possibility of oil prices rising to as much as
$200 a barrel if a major disruption were to occur. Rising fuel costs
may require DOD to make difficult trade-offs, such as redirecting funds
from ongoing programs to pay for needed fuel. In addition, both the
Army and Marine Corps have plans to grow their forces over the next
several years, which will inevitably require larger amounts of fuel to
sustain these forces and their weapons systems.
Other energy issues that are likely to affect DOD in the future are the
increased U.S. dependence on foreign oil, projected increases in the
worldwide demand for oil, and uncertainties about world oil supplies.
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 instability in the Middle East and elsewhere.[Footnote 5]
In addition, 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.
Moreover, more than 60 percent of world oil reserves are in countries
where relatively unstable political conditions could constrain oil
exploration and production. Furthermore, 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, most
studies estimate that oil production will peak sometime between now and
2040.[Footnote 6] These issues, as well as the increasing threat of
climate change, may lead to global instabilities that could require DOD
to conduct operations in some of these regions and protect oil supply
routes and critical infrastructure--all of which would ultimately lead
to increased fuel requirements for the department.
In addition, DOD's 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. For example, for current
operations, the fuel logistics infrastructure requires, among other
things, long truck convoys that move fuel to forward-deployed locations
while being exposed to potential enemy attacks. Combatant commanders
may also face additional risks related to fuel disruptions in
operations. For instance, according to a U.S. Central Command official,
changes in customs procedures, truck driver strikes, refinery
maintenance, road construction, and holiday periods may close border
crossings for long periods of time, possibly resulting in the
interruption of fuel supplies to forward-deployed locations. Moreover,
a 2007 LMI report stated that the department's increasing fuel demand
limits its ability to establish a more mobile and agile force.
DOD and the Military Services Have Made Efforts to Reduce Mobility
Energy Demand:
DOD and the military services have made efforts to reduce mobility
energy demand for their forces and in their weapons systems. At the
department level, OSD created the DOD Energy Security Task Force in
2006--consisting of an integrated product team, several working groups,
and a senior steering group--to address long-term energy security
concerns. Among other activities, the task force is monitoring the
progress of selected military service-led research and development
projects (see table 1) that have the potential for reducing mobility
energy demand.
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: Small Heavy Fueled Engine;
Description: 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: Air platforms;
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 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 7] 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.
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
needs for new systems.[Footnote 8] 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.
In addition, each of the military services has its own initiatives
under way to reduce mobility energy demand. The following highlights
several key efforts and is not intended to be a comprehensive listing
of all fuel reduction efforts.
Army: 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.
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.
Navy: The Navy has established an energy conservation program aimed at
encouraging ships to reduce energy consumption. The energy conservation
program provides training materials, such as a shipboard energy
conservation manual and a pocket guide to assist commanders with energy-
saving activities. The program also gives quarterly awards to ships
that use less than the Navy's established baseline amount of fuel. The
Navy has also made ship design alterations to reduce fuel demand.
Air Force: 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.
These initiatives include determining fuel-efficient flight routes,
reducing the weight on aircraft, optimizing air refueling, and
improving 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.
Marine Corps: 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. 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.
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 has not established an overarching
organizational framework to guide and oversee these efforts. In the
absence of a framework for mobility energy, we also found that DOD has
made limited progress in incorporating fuel efficiency considerations
into its key business processes and in implementing recommendations
from department-sponsored studies on fuel reduction. In the report that
we issued today, we made recommendations that DOD establish an
overarching organizational framework for mobility energy. Without such
a framework, DOD cannot be assured that its current mobility energy
reduction efforts will be fully implemented and will significantly
reduce its reliance on petroleum-based fuel.
DOD Lacks Key Elements of an Overarching Organizational Framework:
Our prior work has shown that an overarching organizational framework
is critical to successful transformation in both public and private
organizations. The key elements of such a framework include (1) top-
level leadership and an implementation team with dedicated resources
and funding; (2) a comprehensive strategic plan, including goals and
objectives, methods and timelines for evaluating progress, and outcome-
oriented performance metrics; and (3) a communication strategy that
involves creating shared expectations and reporting related
progress.[Footnote 9] We found that DOD's current approach to mobility
energy lacks these elements.
Top-Level Leadership and Implementation Team:
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 whose primary focus is on mobility energy
and who is accountable for these matters across the department. Our
prior work has stated that leadership must set the direction, pace, and
tone and provide a clear, consistent rationale that brings everyone
together behind a single mission.[Footnote 10] Currently, DOD's
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. 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.[Footnote 11]
However, it is unclear the extent to which the Under Secretary or any
official from this office provides comprehensive guidance and oversight
and sets a direction for mobility energy reduction efforts across the
department. In addition, the Under Secretary 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, the Under Secretary's primary
focus has not been on the management of mobility energy.
In addition, DOD's Energy Security Task Force was formed to address
long-term energy security concerns, 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 is
required to develop a comprehensive DOD energy strategy and an
implementation plan. Among other deliverables, the 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, as an advocate for reducing mobility
energy demand.[Footnote 12]
DOD also does not have an implementation team in place, with dedicated
resources and funding, to address 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. 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.
Comprehensive Strategic Plan:
DOD has not yet developed a comprehensive strategic plan for mobility
energy, although it 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, do not address
mobility energy reduction.[Footnote 13] 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, ensure
that they are appropriately prioritized, or know whether critical gaps
or duplication of efforts exist.
Communication Strategy:
DOD does not have an effective mechanism to facilitate communication
and coordination of mobility energy reduction efforts among OSD and the
military services. In addition, we found a lack of cross-service
coordination concerning mobility energy reduction initiatives. 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 in our report 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.
Additionally, 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 efforts within their services.
Without executive-level focal points, the military services may not be
well positioned to effectively coordinate on mobility energy efforts
across the department or provide leadership or accountability for
efforts within their services. Furthermore, DOD cannot be assured that
energy reduction efforts are consistent with DOD's energy priorities
and goals.
DOD Has Made Limited Progress in Incorporating Fuel Efficiency into Key
Business Processes and in Implementing Recommendations from Department-
Sponsored Studies:
In the absence of an overarching organizational framework, 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--and in implementing recommendations made
in department-sponsored studies on fuel reduction.
DOD Has Not Yet Fully Incorporated Fuel Efficiency Considerations into
Its Key Business Processes:
While DOD has recently begun to take some steps to integrate fuel
considerations into its key departmental business processes, such as
its requirements development and acquisition processes for new weapons
platforms and other mobile defense systems, 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. 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, its implementation 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. 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 of fuel, 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 dependency 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 under invests in the
development and deployment of these technologies.
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, as we mentioned previously, 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 a
fuel 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.
Furthermore, the 2008 Defense Science Board report noted that the
recommendations made by the 2001 Defense Science Board report are still
open and remain viable. Our report, which was issued today, presented
the recommendations from these department-sponsored studies and actions
DOD has taken in more detail. We also concluded that an overarching
organizational framework could better position DOD to address these and
other fuel reduction recommendations in a more timely and effective
manner.
Overarching Organizational Framework Needed to Better Position DOD to
Address Mobility Energy Challenges:
In the report we issued today, we recommended that DOD establish an
overarching organizational framework for mobility energy to improve the
department's ability to guide and oversee mobility energy reduction
efforts.[Footnote 14] To establish such a framework, DOD should
designate an executive-level OSD official who is accountable for
mobility energy matters; develop a comprehensive, departmentwide
strategic plan; and improve DOD's business processes to incorporate
energy efficiency considerations. In addition, we recommended 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 reduction efforts as well as
to provide leadership and accountability over their own efforts. 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. In commenting on a draft of our report, DOD partially
concurred with our recommendations.
Mr. Chairman and Members of the Subcommittee, this concludes my
prepared statement. I would be happy to answer any questions that you
may have at this time.
Contact and Acknowledgments:
For further information regarding this testimony, please contact
William Solis at (202) 512-8365 or [email protected]. In addition, contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this statement. Individuals who made
key contributions to this testimony are Thomas Gosling, Assistant
Director; Karyn Angulo; Alissa Czyz; and Marie Mak.
[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] Defense Science Board Task Force on DOD Energy Strategy, More
Fight--Less Fuel (February 2008).
[3] GAO, Defense Management: Overarching Organizational Framework
Needed to Guide and Oversee Energy Reduction Efforts for Military
Operations, GAO-08-426 (Washington, D.C.: Mar. 13, 2008).
[4] Defense Science Board Task Force on Improving Fuel Efficiency of
Weapons Platforms, More Capable Warfighting Through Reduced Fuel Burden
(January 2001). The JASONs, Reducing DOD Fossil-Fuel Dependence, JSR-
06-135 (September 2006). LMI, Transforming the Way DOD Looks at Energy:
An Approach to Establishing an Energy Strategy, Report FT602T1 (April
2007).
[5] GAO, Department of Energy: Oil and Natural Gas Research and
Development Activities, GAO-08-190R (Washington, D.C.: Nov. 6, 2007).
[6] 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).
[7] Office of the Under Secretary of Defense for Acquisition,
Technology, and Logistics Memorandum, "Fully Burdened Cost of Fuel
Pilot Program," April 10, 2007.
[8] 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).
[9] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, GAO-03-669 (Washington,
D.C.: July 2, 2003), and Agencies' Strategic Plans Under GPRA: Key
Questions to Facilitate Congressional Review, GAO/GGD-l0.l.16
(Washington, D.C.: May 1997).
[10] GAO-03-669.
[11] DOD Directive 4140.25, DOD Management Policy for Energy
Commodities and Related Services (Apr. 12, 2004), and DOD Directive
5134.01, Under Secretary of Defense for Acquisition, Technology, and
Logistics (Dec. 9, 2005).
[12] 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.
[13] 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.
[14] GAO-08-426.
[End of section]
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