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Department of Defense Fuel Spending, Supply, Acquisition, and Policy

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Congressional rept.

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Department of Defense DOD fuel consumption varies from year to year in response to changes in mission and the tempo of operations. DOD may consume upwards of 1 of the petroleum products refined in the United States annually. Petroleum products purchased and consumed overseas may double DODs consumption. The majority of DODs bulk fuel purchases are for jet fuel, which has ranged as high as 101 million barrels annually in the past decade. The U.S. refining industry has been supplying 50 of the jet fuel demand. DOD has consumed as much as 145 million barrels in overall petroleum products annually. In FY2000, fuel costs represented 1.2 of the total DOD spending, but by FY2008 fuel costs had risen to 3.0. Over the same time, total defense spending had more than doubled, but fuel costs increased nearly 500. Prices paid for military specification JP-8 and JP-5 jet fuel have exceeded the price of commercial equivalent fuel. In a recent move to contain fuel costs, DOD has begun substituting commercial grade jet fuel for some of its purchases, and upgraded the fuel to military-specification. Currently, 141 refineries operate in the United States. DODs top four fuel suppliers operate a combined 31 refineries in the United States, which represents nearly 6 million barrels per day of crude oil distillation capacity. A typical U.S. refinery yields a limited supply of jet and diesel fuel depending on the type of crude oil processed. Gulf Coast Texas and Louisiana refineries yield up to 8 jet fuel. Generally, refineries are set up to run specific grades of crude oil, for example light sweet crude or heavy sour crude. Light sweet crude is particularly desirable as a feedstock for gasoline refining because its lighter-weight hydrocarbons make it easier to refine. Heavier crude oils require more complex processing than light crudes, and sour crudes require desulfurization.

Subject Categories:

  • Economics and Cost Analysis
  • Fuels
  • Jet and Gas Turbine Engines

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