Reducing energy consumption, not buying alterative fuels, is the only way the Pentagon can cut its fuel costs, says a report by think tank Rand Corp.

“Alternative liquid fuels do not offer [the Defense Department] a way to appreciably reduce fuel costs,” concludes the report, prepared for the U.S. Air Force. Instead, says Rand, the Air Force should use its resources to forge international security partnerships that promote the production and protect the supply of petroleum.

The report comes as Congress considers cutting Defense Department funding to kick-start domestic commercial production of biofuels as drop-in alternatives to conventional fuels (Aerospace DAILY, June 15).

Although alternative fuels are touted as improving national security by reducing reliance on imported petroleum, Rand sees “no credible scenario” in which the military would be unable to find the fuel needed to defend the U.S.

The U.S. produces more than 8 billion barrels of oil a day (bpd), and imports another 3 billion from secure supplies in Canada and Mexico, while the Pentagon consumes 340,000 barrels a day, Rand says.

Global oil production will peak between 2030 and 2050, Rand estimates. “Our analyses show that there is no threat on the horizon to the availability of bulk supplies of military fuels,” the report concludes. “With over 11 million bpd of secure petroleum supplies, we find it inconceivable that the U.S. military would not be able to access the fuels it requires to maintain readiness and perform its missions.”

If supplies did get tight, “the Defense Production Act contains provisions that would give the priority to the production and delivery of petroleum products to [the Defense Department] and its contractors.”

But Rand concedes the Pentagon “may have to pay a hefty price” to meet its fuel needs, and says the Air Force’s cost-cutting options are to invest in energy-efficient aircraft and equipment and conserve fuel in training and operations.

Although proponents argue that biofuels will provide price competition, Rand argues energy efficiency and conservation “are the only options that offer appreciable savings in [Defense Department and Air Force] expenditures for liquid fuels.”

Neither the Air Force nor the Pentagon has enough buying power to influence the world oil market. “Their fuel purchases are simply too small,” Rand says. But the armed forces can play a role in the market by assuring access to energy supplies for the U.S. and its allies, according to the report.

“A potential role for the Air Force is in assisting the U.S. Navy in sea-lane protection,” Rand says. “Three quarters of the petroleum passing through the Strait of Hormuz is heading to Asia,” where expanding economies increasingly depend on imported energy.

“A joint approach, in which the Air Force provides meaningful assistance to the Navy, offers a more efficient and effective application of U.S. defense assets” than buying alternative fuels, the report concludes.