Saturday, June 07, 2008

DESC Fuel Support to Iraq, Afghanistan and non-DOD customers

In an article appeared in Fuel Line, Major Timoty Haylett states[1] that the enormity of DESC-ME mission is astounding as the sophistication of synchronizing the supply chain on two major war fronts -- Iraq and Afghanistan – continues.

First let me have a look at what he reports about Afghanistan:

"Last year, more than 139 million gallons of fuel (3.3 million barrels) were provided in support of Operation Enduring Freedom. JP8 and ground fuels were provided from Pakistan refineries and delivered to airbases in Bagram and Kandahar until NATO/International Security Assistance Forces assumed the operational responsibility for Kandahar Air Base in July. At Bagram Air Base a new TS1 storage and issue site with a capacity of 420,000 gallon was created. Now, Bagram’s nine-phase fuel military construction project will increase total storage capacity there by 2.6 million gallons (62,000 barrels). Note that Red Start Fuel Services Inc has a reserve storage facility, with a capacity of 3 million gallons (7142 barrels) adjacent to Bagram base. The facility is owned and operated by the company.

Now, Iraqi theater of war:

“A majority of the fuel used to support Operation Iraqi Freedom is provided by the Kuwait Petroleum Company. KPC provided more than 359 million gallons of JP8, 52 million gallons of JP5, 95 million gallons of diesel, and 16 million gallons of gasoline.

With the exception of JP5, all fuel is shipped daily from Kuwait by the Jassim Transport & Stevedoring Company and delivered to Cedar II, Iraq. JTC had an extremely impressive year; they sent out 58,648 tankers and had only 30 safety accidents. Also in October, JTC reached a significant milestone - delivering more than 1 billion gallons of fuel.

When the operation tempo and fuel requirements increased in Iraq, KPC allowed DESC-ME to amend the current contract of a daily maximum for JP8 of 1 million gallons to 1.3 million gallons. KPC also granted an additional 300,000 gallons of JP8 from the Kuwait Aviation Fueling Company, or KAFCO, located at the Kuwait International Airport. In order to accommodate the larger volume, JTC was able to contract an additional 200 tankers to start making deliveries.

The International Oil Trading Company also provides fuel for Iraq via Jordan. In 2007, IOTC shattered previous company records when it delivered more than 125 million gallons of fuel to Coalition Forces in Western Iraq. This equates to 17,500 truckloads of fuel being moved to TQ, Al Assad, and Korean Village. In order to accomplish this mission, IOTC procured Jet-1, diesel, and Mogas fuels from various refineries around the world and received the tanker vessels at its discharge point in Aqaba, Jordan. In fact, 17 vessels were received throughout the year from locations such as Bahrain, Saudi Arabia, Kuwait, and India.”

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In another article, authored by Susan Declereq Brown, non-DOD energy customers of Defense Energy Support Center are talked. This point is important because people who (mis)quote DECS figures think that all fuel sales of DESC goes to DoD.

Here are important points from the article[2] shedding light on that issue.

"The DESC’s primary mission is to provide effective, economical and efficient energy products and solutions to the military services. But, fueling the warfighter is not the only mission DESC takes seriously.

Many DESC customers are not part of the Defense Department. Some are federal civilian agencies, state law enforcement agencies involved in drug interdiction and foreign governments. Moreover, sales to non-DoD customers made up 10 percent of DESC’s sales revenues in fiscal 2007, according to Steven Hurwitz, a financial management advisor in the Financial Operations Office.

DESC’s largest non-DoD customer group last fiscal year was foreign governments, largely because of reciprocating fuel exchange agreements. Foreign governments obtain fuel from DESC through international agreements, on a fuel exchange basis. That means that a foreign government’s military service can go to a U.S. military or a Defense Fuel Support Point and obtain fuel. In exchange, U.S. forces can receive fuel from the foreign government’s fuel locations.

DESC currently has 45 such agreements with 21 countries.Negotiations are underway on another 10 agreements with five more countries. The United Kingdom tops the list of largest foreign fuel exchange partners. Turkey, France, Korea, Spain and Japan round out the top six.

DESC counts the General Services Administration as the largest domestic non-DoD customer. Last fiscal year, DESC supplied the GSA with various grades of gasoline, diesel fuel, gasohol, ethanol, biodiesel, natural gas and jet aviation fuels – 33 item codes in all. GSA purchased through DESC nearly 70.5 million gallons of fuel at a cost of more than $42 million.

The Department of Justice was the third overall largest domestic non-DoD customer last fiscal year.

Non-DoD customers also benefit from four other DESC business lines – natural gas, electricity, coal and renewables. In fact, 20 percent of DESC’s Installation Energy Commodity Business Unit’s business is with non-DoD customers"


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