DTIC ADA504858: $500 Crude Oil and Its Repressions on Marine Corps TACAIR And the USMC - The Most Energy Dependent Service

United States Marine Corps
School of Advanced Warfighting
Marine Corps University
2076 South Street
Marine Corps Combat Development Command
Quantico, Virginia 22134-5068

FUTURE WAR PAPER

$500 Crude Oil and Its Repressions on Marine Corps TACAIR
And the USMC - The Most Energy Dependent Service

SUBMITTED IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF OPERATION STUDIES

MAJOR CHRIS T. SEVERSON

AY 2007-08

Mentor: Dr. Bradley Meyer

Approved:_

Date:

Report Documentation Page

Form Approved

OMB No. 0704-0188

Public reporting burden for the collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington

VA 22202-4302. Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to a penalty for failing to comply with a collection of information if it
does not display a currently valid OMB control number.

1. REPORT DATE

2QQg 2. REPORT TYPE

3. DATES COVERED

00-00-2008 to 00-00-2008

4. TITLE AND SUBTITLE

$500 Crude Oil and Its Repressions on Marine Corps TACAIR And the
USMC - The Most Energy Dependent Service

5a. CONTRACT NUMBER

5b. GRANT NUMBER

5c. PROGRAM ELEMENT NUMBER

6. AUTHOR(S)

5d. PROJECT NUMBER

5e. TASK NUMBER

5f. WORK UNIT NUMBER

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)

United States Marine Corps,School of Advanced Warfighting, Marine
Corps University,2076 South Street, Marine Corps Combat Development
Command, Quantico,VA,22134-5068

8. PERFORMING ORGANIZATION

REPORT NUMBER

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES)

10. SPONSOR/MONITOR'S ACRONYM(S)

11. SPONSOR/MONITOR'S REPORT
NUMBER(S)

12. DISTRIBUTION/AVAILABILITY STATEMENT

Approved for public release; distribution unlimited

13. SUPPLEMENTARY NOTES

14. ABSTRACT

15. SUBJECT TERMS

16. SECURITY CLASSIFICATION OF: 17. LIMITATION OF

___ ABSTRACT

18. NUMBER 19a. NAME OF

OF PAGES RESPONSIBLE PERSON

a. REPORT b. ABSTRACT c. THIS PAGE Same 3S

unclassified unclassified unclassified Report (SAR)

25

Standard Form 298 (Rev. 8-98)

Prescribed by ANSI Std Z39-18

DISCLAIMER

THE OPINIONS AND CONCLUSIONS EXPRESSED HEREIN ARE THOSE OF THE
INDIVIDUAL STUDENT AUTHOR AND DO NOT NECESSARILY REPRESENT THE
VIEWS OF EITHER THE MARINE CORPS COMMAND AND STAFF COLLEGE OR ANY
OTHER GOVERNMENTAL AGENCY. REFERENCES TO THIS STUDY SHOULD
INCLUDE THE FOREGOING STATEMENT

2

Executive Summary

Title: $500 Crude Oil and Its Repressions on Marine Corps TACAIR and the USMC -
The Most Energy Dependent Service

Author: Major Chris Severson, United States Marine Corps

Thesis: The price of jet fuel has risen dramatically in the past few years as the cost of
crude oil has hit over $ 100 per barrel. In the future there exists the potential for the cost
of crude oil to increase even further, i.e. $500 per barrel. What are the second and third
order effects of $8.00 per gallon jet fuel on Marine Corps tactical aviation?

Discussion: The original purpose of this paper was to explore the second and third order
effects of this dramatic increase in the cost of jet fuel. However, as I began to study this
issue I discovered that not enough scholarship has been done to examine just how closely
jet fuel prices and the Marine Corps’ TACAIR capability is linked. The Marine Corps
has no appreciable way to minimize its reliance on jet fuel, and, in fact, is probably the
most susceptible armed service to increased energy costs. The paper will determine that
there is no appreciable way to improve the efficiency of tactical fighters and with a “zero
sum” budget, any increase in the cost of jet fuel will result in fewer flight hours available.
Since Marine Corps TACAIR is funded to just meet T - 2.0 requirements, any loss if
flight hours will result in a loss of capability.

Recommendation: The Marine Corps’ senior leaders must acknowledge that neither its
current, nor future, TACAIR aircraft are suitable for future fuel efficiencies. The Marine
Corps’ striking power is directly tethered to jet fuel prices and only acknowledging this
very point now will future steps be taken in our training and acquisition programs to
minimize our dependence on jet fuel.

3

The strength of the Marine Corps lies in its ability to fight the Marine
Expeditionary Force (MEF) single battle. The MEF single battle requires the Marine Air
Ground Task Force (MAGTF) to operate with all three functional components; the
ground component element (GCE), air combat element (ACE), and Marine logistics
group (MLG), operating at their maximum potential. For the ACE to operate at its max
potential it requires properly maintained aircraft flown by expertly trained pilots - and
the jet fuel required to fly them. In just the past three years the price of jet fuel has
increased from 87.1 nominal cents per gallon in 2003 to 196.4 nominal cents per gallon
in 2006. 1 The Defense Energy Support Center (DESC), with the responsibility of supply

4

chain management for all Department of Defense (DoD) bulk petroleum purchases,
reported an increase of 95% to $8.5 billion for all DoD jet fuel cost with only a 4%
increase in jet fuel requirements between the years 2004 to 2006." The reality is that
energy requirements are going to be a significant factor in the Marine Corps budget is
undeniable. The Marine Corps, through the Department of the Navy (DoN) and the DoD,
has been able to weather this current dramatic increase in the cost of jet fuel through
OIF/OEF “supplemental” spending bills. However, what about an even more dramatic
increase, on the order of 500% occurring over an even shorter period of time (three
months) and its effects on Marine Corps aviation and its ability to fight as a part of the
MEF single battle?

The original purpose of this paper was to explore the first and second order effects
on Marine Corps tactical aviation due to a very significant increase in the cost of jet fuel
driven by a dramatic increase in the cost of crude oil, i.e. $500 per barrel. However, as
research was conducted it became apparent that very little scholarship has been done to
examine just how closely jet fuel prices and TACAIR capability is li nk ed. The Marine
Corps has no appreciable way to minimize its reliance on jet fuel, and, in fact, is probably
the most susceptible armed service to increased energy costs. When these jet fuel prices
rise in a “zero sum” budget there can only be one result, fewer flight hours, fewer
expertly trained pilots, and therefore an ACE not able to perfonn at its maximum
potential. The most important task now is for Marine Corps’ senior leaders to
acknowledge that neither its current, nor future, TACAIR aircraft are suitable for future
fuel efficiencies. The Marine Corps’ striking power is directly tethered to jet fuel prices

5

and only by acknowledging this very point now will future steps be taken in our training
and acquisition programs to minimize our dependence on jet fuel.

While the current crude oil price is occurring during some global instability due to
current operations in the war on terror and the weakened dollar, the Energy Information
Administration (EIA) in its Annual Energy Outlook 2007 report concluded that the
reference price for crude oil would gradually decline to under $50 per barrel (2005
dollars) by 2014 and return to 2005 prices around 2030. This may seem to be optimistic
as crude oil prices approach $100 per barrel in December 2007, yet the EIA’s best
judgment is that OPEC producing countries will look to manage their production to keep
crude oil at $50 to $60 (2005 dollars) per barrel to discourage more investment in non-
OPEC countries conventional and unconventional supplies and to not discourage
consumption of liquids worldwide. OPEC may desire to keep crude oil prices in the $50
to $60 per barrel range, but if the history of the past 35 years is any indication OPEC
members themselves may be the primary cause of crude oil’s next dramatic crisis.

OPEC was created in 1960 with the main goal of gaining greater control over the
price of oil and coordinating the petroleum policies of its member nations. 4 OPEC was
able to gain greater control, eventually, however, oil prices continued to gradually
decline. Then in October, 1973, OAPEC (Organization of Arab Petroleum Exporting
Countries) placed an embargo against the United States due to its support of Israel during
the Yom Kippur War. 5 Due to this embargo, OPEC was able to raise the price of crude
oil by 268% (200% of it in only two months) and this event would begin the relatively
unstable period of crude oil prices, including three major price spikes, that exists up to
today. 6 In 1979 the Iranian revolution would cause a 128% increase in crude oil prices

6

and the invasion of Kuwait by Iraq in 1990 would cause a 31% increase. Then an
interesting development occurred in a country that isn’t commonly known to be a
member of OPEC.

Venezuela had until 2002 been a very stable oil supplier to the United States.
Venezuela is a non-Arab country and had continued to provide oil to the United States
even during the oil embargo in 1973. 7 In 1998, Hugo Rafael Chavez Frias, more
commonly known as Hugo Chavez, became president of Venezuela and gradually

8

expanded his control of the state oil company Petroleos de Venezuela, S.A. (PDVSA).
Then in 2002, these actions by Hugo Chavez led to two general strikes by oil workers
who included not only the union labor, but the white-collars workers as well, which
resulted in over 200 million barrels of crude oil being kept off the market. 9 Michelle
Billig, writing in Foreign Affairs, makes a compelling argument that this crisis in
Venezuela is the root cause of the dramatic increase in the cost of crude oil that the
United States has felt over the past four years and that this crisis occurred during the
preparations for the war in Iraq when U.S. focus was on a possible disruption in crude oil
flow from the Middle East, not South America. 10

This dramatic increase in the cost of crude oil would not occur according to the
EIA in their Annual Energy Outlook 2007 because as the price of oil increases over $50
to $60 per barrel it will make alternative energy sources economically viable. However,
the current state of unrest in the Middle East due to the war on terror and the
Israel/Palestinian conflict coupled with the United States’ poor relationship with Iran and
Venezuela, to include Hugo Chavez’s flawed oil economic policies, make an alternative
scenario possible.

7

The alternative scenario that would drive crude oil to $500 per barrel in today’s
dollars would begin with a secret agreement between just two OPEC countries. Iran’s
president, Mahmoud Ahmadinejad, and Venezuela’s president, Hugo Chavez, for their
own personal, yet mutually supporting reasons, decide that an oil crisis would be the
solution to each of their countries internal economic affairs and their respective foreign
policy situation with the United States. Ahmadinejad would be feeling very strong
political pressure caused by the severe economic crisis that his country has endured due
to sanctions placed on his county by the United Nations for its nuclear policies. Chavez
would also be feeling political pressure due to his failing economy; however,

Venezuela’s failing economy would be the result of the socialist state that Chavez created
when he nationalized Venezuela’s oil producing, telecommunication and electrical
companies in 2007. Both leaders’ interest intersect when they believe a dramatic increase
in the cost of crude oil would solve their economic situations and allow both of them to
bolster their own popularity, albeit for different reasons. Therefore, Iran closes the Straits
of Hormuz to all oil shipping except for ta nk ers of OPEC nations or those escorted under
the Iranian flag and Venezuela declares an oil embargo against the United States. These
actions immediately send giant waves through the world oil market as the U.S. sees an
immediate loss of 16.6% of its import capability and the world reacts to yet another
energy crisis caused by members of OPEC. 11 With these actions Chavez and
Ahmadinejad have caused the price of crude oil to jump in less than three months to $500
per barrel and instigated a world crisis. The increase in the price of crude oil and the
world crisis are a cause of significant concern as the Marine Corps is forced to come to
terms with a prolonged period of extremely high jet fuel prices and at the same time must

8

be prepared to execute kinetic options in response to this world crisis. These kinetic
options will require expertly trained pilots and unmanned aerial system (UAS) operators.

This training requires flight operations and thus jet fuel, a great deal of jet fuel,
and this fuel cost is a significant portion of the average cost per flight hour (CPFH).

While “a great deal of jet fuel” is not a scientific term, the amount of energy the DoD
consumes is staggering. In 2006, the DoD consumed 843.7 trillion BTU, over 79% of all
energy consumed by the U.S. Government. 12 This energy cost the U.S. $12.8 billion
dollars 13 and $8.5 billion 14 of this total cost was for jet fuel, with the U.S. Navy
accounting for 30% of this $8.5 billion. 15 The figure for the U.S. Navy is important since
all Marine Corps TACAIR aviation is funded from the Navy’s Operation and
Maintenance, Mission and Other Flight Operations (1A1A) budget line as part of overall
DoD budget. In FY 2006 this single budget line had the highest overall cost of any of the
Navy’s budget lines, even exceeding Ship Depot Maintenance. 16 LtCol Kristine
Blackwell found that “for every $10 increase in a barrel of oil, DoD’s operating cost
increase by $1.3 billion” and that this same $10 increase in a barrel of oil results in a
$600 million dollar increase in the Air Force’s annual fuel cost. 17 This same $10 per
barrel would cost the Navy approximately an additional $345 million dollars per year in
fuel cost. 18 If one is able to take a linear progression to crude oil costing $500 per barrel
then jet fuel would cost the Navy approximately $ 16/gallon (eight fold increase) to
purchase and would consume a fuel budget worth $23.7 billion dollars.

The ever increasing cost of jet fuel makes it necessary to examine how this cost is
fed into the Navy’s flight hour program (FHP) budgeting process. Projected fuel cost for
a specific Type/Model/Series (T/M/S) is calculated by multiplying the T/M/S certified

9

fuel consumption data (most recent FY barrel per hour) X projected flight hours (which
includes all training hours and MESH (mission essential support hours)) X OSD
published barrel prices. 19 The DoD gets its published standard price for a barrel of fuel
from the Office of Management and Budget (OMB). This fuel cost is then added to the
maintenance cost (operational (Squadron), intennediate (MALS), and Depot) to get a
total cost and then is broken down to “cost per flight hour (CPFH).” For the FY 2009
proposed DoD budget the Marine Corps TACAIR fuel cost per flight hour represent 26%
of the total CPFH. 20 If fuel cost represents approximately 26% of total CPFH then an
eight fold increase in the cost of jet fuel would approximately equal a 182% increase in
the overall CPFH to operate Marine Corps tactical aircraft.

The DoD provides to the Uniformed Services a “price change memorandum” if
the cost of fuel per barrel during the year of the budget execution increases. During the
past four years these price changes have always been a price increase and with a balanced
budget requirement the Navy has been fortunate to receive “supplemental” budget
increases to cover this increase in fuel cost. These “supplemental” budget increases have
allowed the Navy/Marine Corps TACAIR to continue to fly the flight hours programmed
without having to make the tough decisions that would result from a very dramatic
increase in the CPFH due to a global oil crisis as described earlier.

If all the crude oil imports were suddenly halted there would be no question
regarding crude oil supplies for the DoD. While the DoD does consume 843.7 trillion
BTU’s of energy per year, the entire U.S. Government only consumes 1.9% of all crude

oil consumed by the United States." The DoD consumption in 2006 was

22

135.9MbbFyear or .37Mbbl/day and this crude oil requirement could be covered by

10

“the total annual production of two Gulf of Mexico oil platfonns (Thunderhorse and
Atlantis), or by a small fraction of California and Alaska production.”

If the supply of crude oil for DoD requirements is not in question, how to pay for
it is. During the past few years the President has requested supplemental funding to
cover the increased cost to the DoD to cover operations around the world for the war on
terror. This supplemental funding has allowed the Services to essentially operate at the
current tempo without regard to the cost of oil. While the DoD is certainly interested in
the reduction of energy usage, there have been no draconian steps taken to reduce oil
consumption by limiting the use of jet fuel. However, if the cost of jet fuel were to
increase eight fold as hypothesized earlier then it would be likely that significant changes
in jet fuel usage would have to be considered. Just as the DoD would be dealing with
crude oil prices of $500 dollars per barrel, so would the nation as a whole, and therefore,
unlikely that the President would be able to simply request a “supplemental” budget to
cover these increased costs.

So if the President is unable to get a “supplemental” budget approved then the
Navy/Marine Corps TACAIR would be forced to operate within its allotted budget. As
the “price change memorandums” start coming from the DoD indicating higher jet fuel
prices then the hard decisions would begin. With no top line funding relief provided then

94

this increase in jet fuel cost would have to be funded internally to the Navy’s budget by:

1. Reduced Procurement

2. Reduced Manpower

3. Reduced Maintenance

4. Reduced Flight Hours

11

Each of these options will be looked at in the short and long term to examine its
applicability in providing relief for the increased cost of jet fuel.

The option of reduced aircraft procurement would be very challenging in the near
tenn as contracts have been set and production has begun. However, over the long term
reduced procurement would allow additional funds for jet fuel. The U.S. Navy’s Aircraft
Procurement budget is the 10% of the overall Naval budget and the fourth largest budget
line number behind Operations and Maintenance, Military Personnel, and Research, Test
and Development. " There are significant risks accepted when delaying aircraft
procurement however. As the fleet of aircraft ages they become more obsolete as
technology advances and there remains the inevitable requirement to purchase new
aircraft. The aircraft will also become more expensive to fly as depot level maintenance
requirements increase and the aircraft simply break more often because of their age. The
option to delay the purchase of aircraft to fund additional fuel cost maybe even less of an
option when the Navy has already used this tactic to reduce their overall budget by
significantly reducing aircraft procurement during the DoD budget draw down in the
middle/late 1990s. With these concerns it appears that a reduction in aircraft
procurement would not be an option in the near term and the long term effects of reduced
aircraft procurement would cause problems on an even larger scale that an increase in jet
fuel cost.

The DoD budget draw down post 1991 not only affected aircraft procurement, but
also service manning. The manning reduction in the Marine Corps and Army after the
1991 Gulf War combined with heavy deployments to support the war on terror has made
it essentially impossible to reduce the size of the forces to compensate for any increase in

12

the cost of jet fuel. In fact, both the Marine Corps and the Army have been authorized
end strength increases due to the increase in op-tempo caused by the war on terror. No
increase in personnel comes cheap, as Frederick Kagan writes in Foreign Affairs, where
he finds that the average cost for a service member is $112,000 per year and increasing
every year. 27 The U.S. Air Force is continuing its force drawn down to 326,000 Airmen
by the end of FY ’08 28 to allow it to pay for the 175 F-22’s it desires to buy. For every
3,000 Ainnen the Air Force reduces its end strength by it will be able to buy one
additional F-22. 29 The option to reduce manning to support the increased cost of jet fuel
is not very viable due to the concerns listed above and would also be in direct conflict
with the idea that current and future wars will be manpower intensive.

The remaining two options (reduced maintenance and flight hours) are
interrelated in that by reducing flight hours the Marine Corps would be able to reduce
maintenance cost. Simply reducing maintenance cost by reducing the amount of parts
that are purchased to repair broken aircraft would save money but would also result in
few flyable aircraft and therefore the Marine Corps would see a reduction in flight hours.
Currently maintenance costs consume about 74% of the average CPFH for Navy/USMC
TACAIR. The option of reducing maintenance cost by sliding depot level maintenance
to a later date is also available. This would provide some near term relief if the fuel price
increase was to be short term, but you are essentially just pushing the cost of maintenance
further down the road. Another possible way to reduce maintenance cost would be to
reduce the manning in the squadrons’ maintenance departments. This would have the
essentially the same effect as reducing the number of parts bought, fewer maintainers
equals fewer repaired aircraft and therefore, a reduction in flight hours.

13

What these previous three paragraphs lead to is that realistically the only way to
reduce the cost of aircraft operations in the short term (up to two years) is to reduce flight
operations, therefore, keeping the cost of USMC TACAIR aviation at the same level
(CPFH goes up, however, there is a corresponding reduction in flight hours). The nonnal
budgeting process would hopefully allow the DoD/DON to adjust to the increased cost of
jet fuel and therefore, the increased cost of flight operations in the long term. The
Iran/Venezuelan scenario described earlier that brought us to this situation might resolve
itself. The biggest risk lies with the possibility that kinetic operations might be required
in the near term during a period of possible reduced flight operations. What are the
effects of reduced flight operations on Marine Corps TACAIR squadrons (F/A-18, AV-
8B, and EA-6B) and the 2 nd order effects on the rest of the Marine Corps in general, and
even more important what does this cost the Marine Corps in capability?

Earlier in this paper I determined that the increase in jet fuel cost due to $500
crude oil cost per barrel would result in an eight fold increase in jet fuel cost with 182%
increase in the average CPFH for Marine Corps TACAIR. With this 182% increase in
the cost to continue to fly TACAIR and the requirement to maintain a balanced budget
would require a 54% reduction in flight hours. The Marine Corps is currently funded to
keep their squadrons at a Core Competency Resource Model (CCRM) T-2.0. Per MCO
3125.1 A (Marine Corps Flying Hour Program (FHP) Management) T-2.0 will enable a
“unit to fulfill its unit core capability statement to support a Marine Air Ground Task

■j i

Force or joint force commander.” The 2007 Marine Corps Aviation Plan has the
following flight hours per month required to maintain T-2.0 by T/M/S: (F/A-18A+/C
19.2), (F/A-18D 20.9), (AV-8B 13.9), and (EA6B 21.6). 32 Thus a reduction in the flight

14

hour program below what is required to maintain T-2.0 would directly inhibit the ability
of Marine Corps TACAIR to support the MAGTF.

Marine Corps TACAIR would have to examine ways to minimize the potential
risks that reduced available flight hours would have on TACAIR’s ability to properly
support the MAGTF. The possibility that every TACAIR squadron would be required
during this period of reduced flight hours is very unlikely and so TACAIR leadership
could shift flight hours to ensure a certain percentage of squadrons or pilots remain
properly trained and combat ready. Some flights could be flown with simulators;
however, only two F/A-18 simulators exist in Beaufort for example, and even if these two
simulators operated 24 hrs/day they would not be able to even touch the requirement.

The direct loss of combat capable TACAIR squadrons would be a significant first
order effect due to the loss of flight hours, but the effects don’t end there. How many
FAC’s/JTAC’s would lose Training and Readiness (T&R) currency/proficiency due to
the lack of FW CAS sorties available to train with? There would not be enough FW CAS
sorties to train new FAC’s/JTAC’s so the impacts would not only affect TACAIR but
would begin to affect Marine battalions and regiments as well. What would happen to all
the pilots not flying while the Marine Corps attempts to keep certain pilots combat ready?
These pilots not flying would not be able to simply start flying again when more flight
hours would become available but would have to be retrained and this would eat up a
tremendous amount of available sorties. Imagine trying to adjust squadron deployment
schedules to ensure that you would have the minimum capability forward deployed so
that you could keep that ready reserve available to the MAGTF commander. The flight
hours programmed are essentially the minimum required to maintain T-2.0 for the

15

number of squadrons required to support current and potential OPLAN requirements and
therefore, any loss of flight hours is going to have a negative effect on the ability of
Marine Corps TACAIR to support the MAGTF.

A possible future global oil crisis that causes $500 per barrel crude oil which in
turn causes $16 per gallon jet fuel would result in a reduction in flight hours available to
Marine Corps aviation; therefore, the Marine Corps must examine ways to minimize our
exposure to a dramatic increase in crude oil cost.

The recent increase in the cost of crude oil and its possible effects on national
security and national defense has not been ignored by the DoD. Two recent studies have
been published addressing the DoD’s reliance on fossil fuel and possible alternatives. In
the spring of 2006, the Director of Defense Research and Engineering (DDR&E) led a
task force charted with examining the issue of energy security, devising a plan for
lowering DoD’s fossil fuel requirements, identifying alternate energy sources and
examining past and ongoing studies to help define DoD’s options. The task force
presented the following findings.

1. Increase platform efficiency.

2. Accelerate installations’ initiatives.

3. Establish alternative fuels programs.

In September 2006 the JASONs released their report “Reducing DoD Fossil-Fuel
Dependence.” Due to the increasing U.S. dependence on foreign oil, rising fuel costs,
and national security issues, the JASONs were charged by the DDR&E with assessing
ways to reduce the DoD’s dependence on fossil fuels. The JASONs provided the
following findings and recommendations: 34

16

1. No extended world-wide shortage of fossil-fuel production is reasonably
expected over, approximately, the next 25 years. This finding is premised on the
assumption of no major upheavals in the world, in general, and in the major oil-
producing nations and regions, and oil-transportation corridors, in particular, over
the next 25-year period.

2. The 2006 DoD fossil-fuel budget is approximately 2.5-3% of the national-
defense budget and only recently have fuel costs become noticeable to the DoD.

3. DoD is not a sufficiently large customer to drive the domestic market for
demand and consumption of fossil fuel. Non-fossil-derived fuels are not likely to
play a significant role in the next 25 years. Present fuel-from-biomass processes
do not compete with fossil fuels.

4. The compelling reasons to minimize DoD fuel use:

a. Fuel costs represent a significant portion of the life-cycle costs of
mobility platforms.

b. Fuel use is characterized by large multipliers and co-factors: at the
simplest level, it takes fuel to deliver fuel.

c. Fuel use imposes large logistical burdens.

d. Anticipated and already imposed environmental regulations and
constraints.

e. An unpredictable future makes it advisable for the DoD to minimize its
exposure and vulnerability to potential unforeseen disruptions in crude oil
supply.

The findings and recommendations provided above provide a place to begin to
minimize the Marine Corps’ exposure to a dramatic increase in the cost of crude oil. The
Marine Corps faces significant challenges to reducing the amount of jet fuel consumed by
Marine Corps TACAIR. Unlike mobility aircraft (C-5, C-17, C-130, etc), the option to
re-engine or place winglets on the wings of TACAIR aircraft does not exist. Bio-fuel is
not an option for aviation and the processes Coal-to-Liquid (CTL) fuel and Gas-to-
Liquid (GTL) have significant drawbacks that will be difficult to overcome, particularly
the lack of sulfur which reduces the amount of lubricity in the fuel and sulfur helps the
engine’s seals swell to keep fuel/oil from leaking. Another option may be to look at
how we execute flight training to begin with.

17

An interesting consulting report was completed by Capt Jeremy Howe and Capt
Kevin Dawson, USAF, to evaluate the idea of reducing the average sortie duration (ASD)
of each flight to reduce the number of flying hours accrued, therefore, reducing the
amount total flight hours flown. This report was requested due to F-15C/D
maintenance issues that were causing fewer aircraft to be “up” and not available for pilot
training. When the analysis was complete the report found that “CPFH will increase as
ASD decreases, irrespective of the amount of sorties or hours flown.” Therefore, we
can conclude that if an effort was made to reduce cost by flying shorter flights, yet
attempt to get the same training, it would still cause an increase in the CPFH and
therefore would not help the situation.

The Marine Corps’ TACAIR aircraft can not use alternative fuels, re-engine their
aircraft, install winglets, or adjust their sortie lengths in an effort to reduce jet fuel
consumption. Therefore, the Marine Corps’ hands are tied to the jet fuel requirements of
its current aircraft and to include the JSF, F-35 Lightning II. Again, the Marine Corps’
only future TACAIR aircraft will not be able to take advantage of fuel conservation
practices except for simulation. There has been no information published indicating the
number of flight hours per month F-35 pilots will be required to fly to maintain T-2.0
status and what percentage of them will be simulated hours. Therefore, any disruption in
jet fuel prices that warrant a reduction in flight hours will degrade TACAIR’s ability to
support the MAGTF and another approach is required if the Marine Corps desires to
reduce its risk to jet fuel prices.

The JASON report found that “among the DoD unmanned vehicles, UAV’s
represent the most mature technology, benefiting from decades of development of

18

TQ

autopilot systems in manned aircraft.” The JASON report found that UAS’s can result
in fuel savings of approximately 97%, or a fuel-saving factor of 30. 40 Currently the
Marine Corps is in the process of transitioning from the RQ-2B Pioneer to the RQ-7B
Shadow. 41 The Shadow will provide 16 hours of loiter time while burning only
approximately 15 gallons of jet fuel. The follow UAS to the Shadow is the Vertical
Unmanned Aircraft System (VUAS) and is expected to IOC in 2015. 42 While the VUAS
will be an improvement over the Shadow and will provide excellent battlefield situational
awareness, it still will not be able to replace the striking power of Marine Corps F/A-18’s
or JSF’s.

The Marine Corps does not have any appreciable way to minimize its reliance on
jet fuel if it intends to maintain its striking power. This very point must be acknowledged
so that future steps can be taken in our training and acquisition programs to minimize our
dependence on jet fuel. Tactical aircraft are not suitable for future fuel efficiencies and
UAS’s do not bring the striking power required to replace tactical aircraft. The potential
for a dramatic increase in the cost of jet fuel remains unlikely, but it should be clear that
the Marine Corps truly has no way to avoid the repercussions of such and degradation in
Marine Corps TACAIR should be expected. The Marine Corps must understand and
acknowledge its jet fuel dependence and only then will the emphasis be placed on
reducing this dependence.

19

1 Energy Information Administration, Annual Energy Review 2006 (Washington, D.C.: EIA, 2006), 173

2 Defense Energy Support Center, Fact Book FY 2006 (Washington, D.C.: DESC, 2006), 20-21

3 Energy Information Administration, Annual Energy Outlook 2007 (Washington, D.C.: EIA, 2007), 34

4 Encyclopaedia Britannica Online , Academic Edition, s.v. “OPEC”

5 Encyclopaedia Britannica Online , Academic Edition, s.v. “OPEC”

6 BP Statistical Review of the World Energy June 2007 (United Kingdom, 2007), 16.

7 Michelle Billig, “The Venezuelan Oil Crisis,” Foreign Affairs 83 (2004): 5.

8 Encyclopaedia Britannica Online , Academic Edition, s.v. “Chavez, Hugo”

9 Michelle Billig, “The Venezuelan Oil Crisis,” Foreign Affairs 83 (2004): 5.

10 Michelle Billig, “The Venezuelan Oil Crisis,” Foreign Affairs 83 (2004): 5.

11 Energy Information Administration, Annual Energy Review 2006 (Washington, D.C.: EIA, 2006), 131

12 Energy Information Administration, Annual Energy Review 2006 (Washington, D.C.: EIA, 2006), 25

13 Defense Energy Support Center, Fact Book FY 2006 (Washington, D.C.: DESC, 2006), 14

14 Defense Energy Support Center, Fact Book FY 2006 (Washington, D.C.: DESC, 2006), 20

20

15 Defense Energy Support Center, Fact Book FY 2006 (Washington, D.C.: DESC, 2006), 18

16 Office of the Under Secretary of Defense (Comptroller), Department of Defense Budget Fiscal Year
2008 (Washington. D.C.: OSD, 2007), 26

17 Kristine Blackwell, “Department of Defense and Energy Independence Optimism Meets Reality,”
Unpublished Paper (2007): 3.

18 Energy Information Administration, Annual Energy Review 2006 (Washington, D.C.: EIA, 2006), 173

19 Walter Glenn and Eric Otten, “Commander Naval Air Forces (CNAF) Flight Flour Program: Budgeting
and Execution Response to the Implementation of the Fleet Response Plan and OP-20 Pricing Model
Changes,” Unpublished Paper (2005): 25.

20 Paul Landauer, <paul.landauer@navy.mil> “RE: Help for SAW Future Warfare Paper,” 12 September
2007, personal email (12 September 2007).

21 JASON Report, 13

22 Defense Energy Support Center, Fact Book FY 2006 (Washington, D.C.: DESC, 2006), 21

23 JASON Report, 13

24 Paul Landauer, <paul.landauer@navy.mil> “RE: Help for SAW Future Warfare Paper,” 12 September
2007, personal email (12 September 2007).

25 U.S. Navy, SEA Power for a New Era 2006 A Program Guide to the U.S. Navy (Washington, D.C.:

U.S. Navy, 2007), 181 ' ’ ~ ’ " ..

26 U.S. Navy, SEA Power for a New Era 2006 A Program Guide to the U.S. Navy (Washington, D.C.:

U. S. Navy, 2007), 182

27 Frederick Kagan, “The U.S. Military’s Manpower Crisis,” Foreign Affairs 86 (2006): 97.

28 Amy Butler, “Manpower reductions in USAF to continue,” Aerospace Daily and Defense Report 224
(2007): 2.

29 Frederick Kagan, “The U.S. Military’s Manpower Crisis,” Foreign Affairs 86 (2006): 97.

30 Paul Landauer, <paul.landauer@navy.mil> “RE: Help for SAW Future Warfare Paper,” 12 September
2007, personal email (12 September 2007).

31 United States Marine Corps, MCO 3125,1 A, Marine Corps Flying Hour Program (FHP) Management
(Washington, D.C.: USMC, 2005), Enclosure 4, 1.

32 United States Marine Corps, 2007 Marine Aviation Plan (Washington, D.C.: Deputy Commandant for
Aviation, 2007), 1-7

33 Kristine Blackwell, “Department of Defense and Energy Independence Optimism Meets Reality,”
Unpublished Paper (2007): 12.

34 The MITRE Corporation, JASON Program Office, Reducing DoD Fossil-Fuel Dependence (McLean,

V. A.: Office of the Deputy Under Secretary of Defense (S&T), 2006), iii.

35 Kristine Blackwell, “Department of Defense and Energy Independence Optimism Meets Reality,”
Unpublished Paper (2007): 20.

36 Kristine Blackwell, “Department of Defense and Energy Independence Optimism Meets Reality,”
Unpublished Paper (2007): 18.

37 Kevin Dawson and Jeremy Howe, “Kadena F-15 C/D Cost per Flying Hour Analysis,” Unpublished
Paper (2005): 1.

38 Kevin Dawson and Jeremy Howe, “Kadena F-15 C/D Cost per Flying Hour Analysis,” Unpublished
Paper (2005): 7.

39 The MITRE Corporation, JASON Program Office, Reducing DoD Fossil-Fuel Dependence (McLean,
V.A.: Office of the Deputy Under Secretary of Defense (S&T), 2006), 49.

40 The MITRE Corporation, JASON Program Office, Reducing DoD Fossil-Fuel Dependence (McLean,
V.A.: Office of the Deputy Under Secretary of Defense (S&T), 2006), 49.

41 United States Marine Corps, 2007 Marine Aviation Plan (Washington, D.C.: Deputy Commandant for
Aviation, 2007), 8-2.

42 United States Marine Corps, 2007 Marine Aviation Plan (Washington, D.C.: Deputy Commandant for
Aviation, 2007), 8-2.

21

Bibliography

Billig, Michelle. “The Venezuelan Oil Crisis,” Foreign Affairs 83 (2004) no. 5.

Blackwell, Kristine. “Department of Defense and Energy Independence Optimism Meets
Reality.” Unpublished Paper, USAF Air University, 2007.

BP Statistical Review of the World Energy June 2007 . United Kingdom, 2007.

Burke, Kenneth W. “Building a Consensus Forecast for Crude Oil Prices.” Unpublished
Paper, USAF Air University, 2006.

22

Butler, Amy. “Manpower reductions in USAF to continue,” Aerospace Daily & Defense
Report 224 (2007): 2.

Ciaravino, J.S. “Study of Hydrogen as an Aircraft Fuel,” Unpublished Paper, Naval
Postgraduate School, 2003.

Dawson, Kevin and Jeremy Howe. “Kadena F-15C/D Cost per Flying Hour Analysis,”
Unpublished Paper, Air Force Logistics Management Agency Consulting Report:
Project Number: LM200520700. 2005.

Defense Energy Support Center. Fact Book FY 2006 . Washington, D.C.: DESC, 2006.

Defense Science Board, Office of the Under Secretary of Defense (AT&L). Report of
Defense Science Board on More Capable Warlighting Through Reduced Fuel
Burden . Washington, D.C.: OSD, 2001.

Department of Defense. Annual Energy Management Report Fiscal Year 2006 .
Washington, D.C.: OSD, 2007.

DiPetto, Chris. “Energy Efficiency for Tactical Systems,” 2006 PEO/SYSCOM
Commander’s Conference. Defense Acquisition University.
http://www.dau.mil/conferences/presentations/2006_PEO_SYSCOM/wed/B3-
DiPetto.pdf

Energy Information Administration. “25th Anniversary of the 1973 Oil Embargo,” EIA.
http://www.eia.doe.gov/emeu/25opec/anniversary.html

Energy Information Administration. Annual Energy Outlook 2007 . Washington, D.C.:
EIA, 2007.

Energy Information Administration. Annual Energy Review 2006 . Washington, D.C.:
EIA, 2006.

Ginsburg, Janet. “The Most Fuel-Efficient That You Can Be; A Defense Dept. Report
Says the Military is Wasting Billions,” Business Week no. 3747 (2001): 77.

Glenn, Walter and Otten, Eric. “Commander Naval Air Forces (CNAF) Flight Hour

Program: Budgeting and Execution Response to the Implementation of the Fleet
Response Plan and OP-20 Pricing Model Changes.” Unpublished Paper, Naval
Postgraduate School, 2005.

Government Accountability Office. GAQ-07-283 Peak Oil Production: CRUDE OIL

Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for
Addressing a Peak and Decline in Oil Production . Washington, D.C.: GAO,

2007. ..

23

Government Accountability Office. GAO-Q7-688R Fuel Fluctuations: Defense Budget:
Review of POD’s Report on Budgeting for Fuel Cost Fluctuations . Washington,
D.C.: GAO, 2007.

Homitschek, Michael K. “War Without Oil: A Catalyst For True Transformation,”
Unpublished Paper, USAF Air University, 2006.

Jarvis, David K. “OPNAV N432D Responsibilities and Impact on Budget Formulation
for the Navy Flying Hour Program,” Unpublished Paper, Naval Postgraduate
School, 2006.

Kagan, Frederick W. “The U.S. Military’s Manpower Crisis,” Foreign Affairs 85 (2006):
97.

Kagan, Frederick W., Lawrence J. Korb, and Peter Ogden. “Jets or GIs? How Best to
Address the Military’s Manpower Shortage,” Foreign Affairs 85 (2006): 153.

LMI Government Consulting. Transfonning the Way POD Looks at Energy, an
Approach to Establishing an Energy Strategy . McLean, V.A.: OSD, 2007.

Naval Research Advisory Committee. Future Fuels . Arlington, V.A.: U.S. Navy, 2005.

Office of the Under Secretary of Defense (Comptroller). Department of Defense Budget
Fiscal Year 2008 . Washington, D.C.: OSD, 2007.

The MITRE Corporation, JASON Program Office. Reducing DoD Fossil-Fuel

Dependence . McLean, V. A.: Office of the Deputy Under Secretary of Defense
(S&T), 2006.

U.S. Air Force. The Air Force Energy Strategy for the 21 st Century . Power Point brief
by Mike Aimone, P.E. Washington, D.C.: USAF, 2006.

U.S. Navy. SEA Power for a New Era 2006 A Program Guide to the U.S. Navy .
Washington, D.C.: U.S. Navy, 2006.

United States Air Force Scientific Advisory Board. Report on Technology Options for
Improved Air Vehicle Fuel Efficiency . Washington, D.C.: USAF, 2006

United States Marine Corps. 2007 Marine Corps Aviation Plan . Washington, D.C.:
USMC, 2007.

United States Marine Corps. MCO 3125.1A Marine Corps Flying Hour Program (FHP)
Management . Washington, D.C.: USMC, 2005.

24

25