A New Culture: Energy as an Operations Enabler

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As many of you know, I'm new to this job and I still marvel at how multi-faceted it is. At least, that's what I tell myself most mornings to keep from being daunted by the sheer number of hats that I wear in this position! But one of the most critical roles Secretary Donley has assigned me is to be the Senior Energy Official for the Department of the Air Force. Fortunately, I don't have to wear that hat alone ─ I'm aided by a tremendous team led by Assistant Secretary Terry Yonkers and his deputy, Debra Tune.
 
I've spent the last few months trying to understand how the Air Force is approaching energy questions ─ for example, I wanted to know, "How are we considering energy in the context of operational effectiveness, and how much progress have we made so far on our goals." I then asked, "What are our next steps?" And finally, "What measures are in place to gauge our progress along the way?"

You probably won't be shocked to hear that I haven't figured out all the answers to these questions yet. But the Air Force does have a strategic starting point--The Air Force Energy Plan--which Secretary Donley signed in December 2009. The Plan focuses on three pillars--Reduce Demand, Increase Supply and Change the Culture--that set the stage for how we'll achieve our energy goals in the days, months and years to come. I'll touch on each of those areas today, and talk about implementing this plan. But then I'll return to our overarching theme of making energy a consideration in all we do. It's an important phrase and one with significant implementation challenges in an organization as big and complex as the Air Force.

Any organization must ask itself why energy is important. As I think about this from the Air Force's perspective, there are several reasons. First, the President and the Secretary of Defense have noted that American dependence on fossil fuels is a national security issue - that is, we have a strategic rationale for both decreasing demand and diversifying sources of supply.

The Air Force also has an operational imperative to address energy questions. We have a sizeable fleet that consumes lots of fuel. And over the decades, our demand for fuel has only grown. Since the Vietnam conflict, there's been a 175 percent increase in the number of gallons of fuel per day consumed by each deployed service member. In 2008, the DoD purchased 120 million barrels of petroleum. And the Air Force itself accounts for over half the consumption of oil by all government agencies.

With the need to deliver fuel, supplies, and warfighting capability to remote, austere, and land-locked places like Afghanistan, reducing the amount of energy our force requires becomes even more important. Delivering fuel is increasingly expensive and dangerous, with IEDs and ambushes disrupting our supply lines, impacting our operations. In a single month of combat - June 2008 - 44 vehicles and 220,000 gallons of fuel were lost in attacks or other events. As a result, we've necessarily diverted combat power to protect our logistics tail at increased cost, and with growing concern for operational effectiveness and the safety of our troops.

Not only does the Air Force consume a lot of energy, the reality is that we spend a lot of money to buy it. We spend billions of dollars every year on energy - nearly 8.5 billion dollars in the last fiscal year alone - mostly on fuel that powers aircraft.

This spending pattern is cause for concern. First, we live in a fiscal environment where, at best, the military is looking at a flat topline. This means that every dollar we spend on energy is one less dollar we can spend on our Airmen, their readiness, or our weapons systems. Second, all of us in the government are charged with being good stewards of taxpayer dollars. We need to demonstrate that our energy dollars are spent in the most effective manner possible.

Finally, I'm struck that even with significant reductions in demand the Air Force's overall spending on energy has not substantially decreased. As a result, any conversation about costs must contemplate the market dynamics that affect energy prices. All of these reasons -- strategic, operational and fiscal -- argue for a concerted effort in the energy plan pillars.

So I want to start by first telling you about how the Air Force has been reducing demand and increasing supply at both our installations and in our fuel for aviation operations. Although we've made progress, we must go further. And I want to talk about what I hope we can all accomplish ─ starting with this forum ─ to help the Air Force and the Department of Defense reach its energy goals.

This year, the Air Force will spend about 6.7 billion dollars on aviation fuel and about 1.4 billion on installation support.

Although we're spending a lot of money on our installations, we've made progress in reducing demand. So far, we've reduced overall installation energy intensity - that is, the energy consumption per square foot of building space ─ nearly 15 percent since FY03. In one notable example, the base leadership at Elmendorf AFB (Alaska) replaced an old heating system, reducing the Air Force's total installation energy consumption by nearly two percent.

For the second pillar ─ increasing supply ─ we've partnered with local communities to build large solar arrays and wind turbines on installations, saving hundreds of thousands of dollars each year in electricity costs. In fact, 37 of Air Force bases have met some portion of their electrical needs with renewable sources of energy. All of these projects are helping us meet our goal of reducing energy intensity 30 percent by 2015.

And while these are good steps, more must be taken. For example, we need to ensure the availability of energy to our installations at all times to secure continuity of mission. Just like every organization or company, Air Force assets are susceptible to disruptions in electrical power supplies from the national grid. Thus, increasing the resiliency of electrical power at bases through back-up power supplies, improved base grid architectures, and partnering with industry is critical to the operations of the Air Force. One installation that's increasing resiliency is Tinker AFB (Okla.), where we've partnered with a local electricity provider who owns, operates and maintains generators on base that ordinarily operate on natural gas, but can also operate on jet fuel! In the event the grid is disrupted, the dual-fueled generators can still operate to continuously sustain the mission.

As you can see, we're off to a great start on installation energy initiatives, but we're conscious that there's more to be done. The group here today - particularly Mr. Conger and others who provide leadership in energy - is well qualified to help us think about next steps.

With energy in operations, we've encountered greater challenges in reducing demand. We've taken the first steps by reducing fossil fuel usage by almost nine percent since 2005. However, we have more steps to take and we need ways of measuring our progress as we go - not just in aggregate terms after the fact.

To further reduce our aviation fuel demand in the near-term, we need the concerted effort of our major commands. In fact, I want to mention a few things that just one of our commands ─ Air Mobility Command ─ has done to focus on achieving our operational energy goals now. Mobility Air Forces are the largest consumer of Air Force aviation fuel, accounting for more than 50 percent of the fuel used by the Air Force. AMC has implemented demand reduction practices to increase operational effectiveness by incorporating proven commercial industry best practices into their operations. Several initiatives already put into practice include: reducing aircraft weight by removing non-mission essential items; decreasing Auxiliary Power Unit (APU) use during pre- and post-flight operations; and coordinating with foreign countries to fly more fuel-efficient routings. Smart...simple... and effective steps to conserve energy.

AMC expects to save nearly 70 million gallons of fuel annually from the initiatives they've already implemented. Other initiatives under consideration, like real-time optimization of flight profiles, and upgraded C-130 and KC-135R engines, could result in even more savings.

I applaud the AMC commander, General Johns, and his fuel efficiency team for providing critical capability to the Joint effort while also pursuing creative and urgent methods to boost fuel efficiency. Other commanders are taking innovative steps as well. I look forward to hearing more from them tomorrow.

In the mid-term, we need to develop ways to upgrade our legacy systems to reduce fuel consumption. Our Science and Technology community is researching and developing energy-impacting technology for our legacy fleet ─ like drag reducing measures, fuel efficient and adaptive engines, and improved low-power electronics.

Over the long-term, we need to develop force planning tools that help us understand how energy performance contributes to force effectiveness, capability, and operational risk. Considering energy in the acquisition of our systems is as important as any other key performance parameter we appreciate today, such as speed, range, persistence and stealth. In updating our systems, the Air Force is managing operational energy demand by using energy KPPs in acquiring new systems and making investment decisions using the fully burdened cost of fuel.

When it comes to increasing supply in operations, we're working to incorporate the use of alternative fuels in aircraft. Back in 2006, we took the first step toward certifying our fleet for synthetic fuel use when we flew a B-52 using a 50/50 blend of JP-8 and synthetic fuel. Since then we've certified at least eight aircraft for unrestricted operations using this synthetic fuel blend, and by the first quarter of 2011, the remaining aircraft in the Air Force inventory should be certified.

The next step in diversifying aviation fuels is to certify aircraft for biomass fuel use. To that end, just this past March we flew an A-10 Thunderbolt II powered by a blend of biomass-derived and conventional JP-8 fuel. We are quite proud of this accomplishment. In fact, President Obama highlighted this first-ever successful biofuel-powered test flight during his speech on Energy Security at Joint Base Andrews. And as we certify the A-10 to use the biofuel blend, we are also beginning the process for certifying other aircraft, such as the F-22 and C-17.

These alternative fuel certifications are a necessary step in diversifying supply, but as we found in our installation conservation measures, the way we make the next leap is by partnering with industry. Real progress means being able to make large-scale, cost-effective purchases of alternative fuels. We need help from you industry leaders so that by our 2016 goal year, we can competitively acquire half of our domestic aviation fuel requirement via an alternative fuel blend.

The Air Force isn't alone here. Our sister services, who are also working to certify aircraft for alternative fuel use, will buy these alternative fuels if we can do so at competitive rates.

Our commercial aviation partners are in the game too. As part of the Commercial Aviation Alternative Fuels Initiative, we're working with the FAA, airlines, aircraft and engine manufacturers, energy producers, researchers, and other U.S. government agencies to encourage the development of alternative aviation fuels. Late last year, 15 airlines from North America and Germany signed memoranda of understanding agreeing to buy alternative aviation fuels from two U.S.-based producers. And earlier this month, a major U.S. airline conducted a test flight using synthetic fuel. As the alternative aviation fuels market begins to grow, we encourage private sector investment in alternative fuel production so alternative fuels will become available in a cost-effective manner. Bringing industry, the interagency and the military services together is a great way to accomplish this, and I look forward to hearing what comes of the panel discussions today.

Ladies and gentlemen, although the Air Force has made considerable progress in the first two pillars of the energy plan, we need a change in our culture when thinking about energy. This is perhaps the most important ─ and most challenging ─ element in meeting our energy goals. How we use and consider energy has moved beyond being a problem for logisticians and engineers alone. Energy is an enterprise-wide consideration ─ it must involve everyone!

There is no doubt that a change in culture needs leadership at the top. I can think of no better way to illustrate the Air Force's commitment to our energy efforts than the leadership presence at this Forum - from General Schwartz through our major command commanders.

Changing the culture also means that all of us, from the Air Staff to Airmen at home or deployed, must learn to think of energy as part of maximizing mission effectiveness. As one example, we have Airmen at Camp Bastion in Afghanistan doing just this. In transporting cargo to Bastion, our aircraft had to carry enough fuel for the return flight, which limited their amount of cargo. Our Airmen found that with a limited upload of local fuel, they could carry additional cargo ─ 126.5 tons more ─ without adding missions.

We need more innovative Airman like the ones in Bastion who found a way to optimize combat capability through improved fuel management. Here's where I am counting on all of you. In your discussions and break-out groups, please offer creative ideas and solutions about what our next steps, incentives, and measures of effectiveness should be. Right now, we're investing hundreds of millions of dollars a year in energy conservation programs and other initiatives to increase sustainability. To receive these incentive monies, bases compete for and are awarded funding based on the savings to investment ratio calculated for the projects they propose. We expect that these projects will result in a substantial return of the investment in future utility costs.

In operations, the Air Staff is currently developing an incentive program that rewards reduction in aviation fuel consumption. I applaud these incentive efforts. The next steps are to put them into action and consider whether there are other actions that would better motivate change.

But incentives can only do so much ─ which is why accountability for efficient and effective energy use is crucial. We have well defined goals and objectives, like the goal to reduce aviation fuel use 10 percent by 2015, but we don't yet have robust metrics that measure how much progress we are making toward our goals. Because we're aware of this shortcoming, we're working to put new analytical programs in place and we welcome any ideas you may all suggest this week.

The Headquarters Air Force Energy Senior Focus Group, which I co-chair, is focused on developing the metrics and analytical systems that will help implement the Air Force energy plan. And we are also reviewing our organizational structure at Air Force Headquarters to see if we need changes to better highlight energy and ensure the achievement of our energy goals.

In closing, completing the paradigm shift of considering energy first in all we do requires continuous, dedicated leadership. I hope you see the Air Force's commitment over the next two days as the Chief and other senior leaders provide their perspectives and endorsement of this very important issue.
 
Having our industry partners here is important to us and essential for America's energy progression. You are doing substantial work in fostering energy efficiency across the nation. And as I said earlier, we can't create large-scale access to alternative fuels without you.

As we continue down the path of reducing demand, increasing supply and changing the culture, my priorities are measuring our progress in meeting our energy goals across the enterprise, partnering with industry and other federal government agencies to reduce demand and increase supply, and making sure the Air Force has the right organizational structure for energy.
We know we don't have the corner market on creative solutions so as you listen to the speakers and participate in the sessions today and tomorrow, I encourage you to give us your ideas on how to meet these priorities and better the operational capabilities of the Air Force and our Joint partners. In this incredibly challenging time for the Air Force, the Department of Defense, and indeed the nation, this is a critical undertaking. I thank you for your efforts and your service.