[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                         [H.A.S.C. No. 112-128]

                      WHAT IS THE PRICE OF ENERGY

                      SECURITY: FROM BATTLEFIELDS

                                TO BASES

                               __________

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON READINESS

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             MARCH 29, 2012


                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     



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                       SUBCOMMITTEE ON READINESS

                  J. RANDY FORBES, Virginia, Chairman
MIKE ROGERS, Alabama                 MADELEINE Z. BORDALLO, Guam
JOE HECK, Nevada                     SILVESTRE REYES, Texas
AUSTIN SCOTT, Georgia                JOE COURTNEY, Connecticut
FRANK A. LoBIONDO, New Jersey        DAVE LOEBSACK, Iowa
CHRIS GIBSON, New York               LARRY KISSELL, North Carolina
VICKY HARTZLER, Missouri             BILL OWENS, New York
BOBBY SCHILLING, Illinois            TIM RYAN, Ohio
JON RUNYAN, New Jersey               COLLEEN HANABUSA, Hawaii
TIM GRIFFIN, Arkansas                JACKIE SPEIER, California
STEVEN PALAZZO, Mississippi
MARTHA ROBY, Alabama
                 Jamie Lynch, Professional Staff Member
                 Debra Wada, Professional Staff Member
                    Nicholas Rodman, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2012

                                                                   Page

Hearing:

Thursday, March 29, 2012, What Is the Price of Energy Security: 
  From Battlefields to Bases.....................................     1

Appendix:

Thursday, March 29, 2012.........................................    43
                              ----------                              

                        THURSDAY, MARCH 29, 2012
    WHAT IS THE PRICE OF ENERGY SECURITY: FROM BATTLEFIELDS TO BASES
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Bordallo, Hon. Madeleine Z., a Delegate from Guam, Ranking 
  Member, Subcommittee on Readiness..............................     4
Forbes, Hon. J. Randy, a Representative from Virginia, Chairman, 
  Subcommittee on Readiness......................................     1

                               WITNESSES

Burke, Hon. Sharon, Assistant Secretary of Defense for 
  Operational Energy, U.S. Department of Defense.................     6
Hammack, Hon. Katherine, Assistant Secretary of the Army, 
  Installations, Energy and Environment..........................    11
Pfannenstiel, Hon. Jackalyne, Assistant Secretary of the Navy, 
  Energy, Installations and Environment..........................    13
Robyn, Dr. Dorothy, Deputy Under Secretary of Defense for 
  Installations and Environment, U.S. Department of Defense......     8
Yonkers, Hon. Terry, Assistant Secretary of the Air Force, 
  Installations, Environment and Logistics.......................    14

                                APPENDIX

Prepared Statements:

    Burke, Hon. Sharon...........................................    54
    Forbes, Hon. J. Randy........................................    47
    Hammack, Hon. Katherine......................................    79
    Pfannenstiel, Hon. Jackalyne.................................    97
    Robyn, Dr. Dorothy...........................................    62
    Yonkers, Hon. Terry..........................................   108

Documents Submitted for the Record:

    Letter from Operation Free to Hon. Silvestre Reyes...........   129
    Testimony for the Record of the Hearing Submitted by Senator 
      John Warner................................................   130

Witness Responses to Questions Asked During the Hearing:

    Mr. Forbes...................................................   135

Questions Submitted by Members Post Hearing:

    Mr. Bartlett.................................................   166
    Ms. Bordallo.................................................   148
    Mr. Forbes...................................................   139
    Mr. Kissell..................................................   163
    Mr. Palazzo..................................................   154
    Mr. Reyes....................................................   160
    Mrs. Roby....................................................   162
    WHAT IS THE PRICE OF ENERGY SECURITY: FROM BATTLEFIELDS TO BASES

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                                 Subcommittee on Readiness,
                          Washington, DC, Thursday, March 29, 2012.
    The subcommittee met, pursuant to call, at 12:07 p.m. in 
room 2212, Rayburn House Office Building, Hon. J. Randy Forbes 
(chairman of the subcommittee) presiding.

  OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE 
       FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON READINESS

    Mr. Forbes. We are going to get started. And I want to, 
first of all, thank you for your patience in putting up with us 
through this vote series that we just had, and also any that 
may come up as we go through today. It is a necessary part of 
the process here, and you all are well aware of it.
    I am going to do something a little bit different today. 
Instead of some prepared remarks, I want to start off by 
introducing our panel members.
    We have with us the Honorable Sharon Burke, the first 
Assistant Secretary of Defense for Operational Energy Plans and 
Programs. We also have Dr. Dorothy Robyn, the Deputy Under 
Secretary of Defense for Installations and Environment; the 
Honorable Katherine Hammack, Assistant Secretary of the Army 
for Installations, Energy and the Environment; the Honorable 
Jackalyne Pfannenstiel, Assistant Secretary of the Navy for 
Energy, Installations and Environment; and the Honorable Terry 
Yonkers, Assistant Secretary of the Air Force for 
Installations, Environment and Logistics; Commander, Naval Air 
Systems Command.
    I want to say at the outset, Terry, you are going to have 
to hold up your end because you have got a lot of ladies here 
today that outnumber you on that panel in there.
    But I want to start by thanking each of you, not just for 
being here, but for the service that you give to our country. 
And also something even more. You know, a few years ago it 
seemed like when we would look over at the Department of 
Defense it looked like they had kind of pulled the drapes shut, 
they had disconnected the phones and locked the doors, and we 
couldn't get any information on so many issues.
    And to the person, you all have been so wonderful in being 
willing to come over and talk to us about some very difficult, 
sometime controversial, issues. And I want to just tell you how 
much we appreciate you doing that. And also we know how much 
you have on your plate. You have got a lot to carry. And all of 
you have a great deal to brag about in what you have done in 
terms of energy. And we want to hear some of that from you 
today.
    I told many of you personally I wish that we could have a 
hearing on nothing but all the good things that we could have 
each of you tell because it is a wonderful story. But, you 
know, we don't have that in the amount of time that we have.
    One of the things that I also would like to tell you is 
this. Privately, all of you have shared with us the importance 
of bringing the private sector in as partners in everything 
that you are doing, and I think that is exciting. I think we 
also realize that is important to do.
    We realize also that your biggest investors are the 
taxpayers across the Commonwealth of Virginia. And like it or 
not--or not Virginia, but the country--for me it is Virginia, 
for Madeleine it is Guam, and other different localities--but 
corporately, the country.
    And one of the things that we try to do in this hearing is, 
like any other good investor, we try to justify why we are 
investing in the things that we do. And sometimes it is just a 
matter of scratching our head and say, ``What are the facts, 
and how we can get those facts?''
    And just because one investment is good doesn't mean they 
are all good. And so we have to constantly do that due 
diligence role, and we appreciate you helping us do that today.
    The other thing I realize is that a lot of these things you 
just happen to be the card holder. You didn't get to dictate 
the cards you have to play with. You come in here and you have 
got a lot on your plate to have to deal with.
    So I want to, if I can, also put up a couple of charts and 
kind of tell you where I think we are today.
    And, Nicholas, can we get those put up, when you can?
    [Start slideshow.]
    Mr. Forbes. The first thing is, why are we here? A lot of 
different reasons. But the big thing are these two gaps. And 
the only thing these numbers represent, it shows how volatile 
energy prices are. We see back in I think it is 2005, you know, 
what a gallon of gas was. We know it spiked up in June of 2008, 
and we see where they are today. And also what electricity 
costs are. And you guys have to live with that.
    And, you know, that is a big thing. And that is something 
that anybody watching this hearing at home understands and 
knows.
    And Nicholas, if we could go to the next chart.
    This is the other big reason we are here. You guys jointly 
sit on a lot of expenditures for energy, about $19.4 billion. 
Seventy-nine percent of that, or $15.3 billion of it, is 
operational; and 21 percent of it, 4.1 percent of it, is 
facilities energy. We tend to sometimes blend them all 
together. We know they are two different stacks. We want to 
look at them. But corporately, they come together. That is the 
big-picture item that we are looking at.
    Then if we could flip to this next chart. As I mentioned 
earlier, we are representatives of the investors across 
America, hardworking taxpayers. And our role is to do due 
diligence. And when we look across the spectrum of not what we 
are consuming, but what we are investing in, in the Department 
of Energy, that chart looks a little confusing to anybody that 
looks at it. It is confusing. It is so many different things we 
are investing in.
    And it is very difficult for us, as a Congress, to get our 
hands around how much we are investing in all these programs 
and where they are. So part of what we have to do--we won't do 
all that today--but through our written questions to you and 
your continued dialogue with us, is finding out what that 
dollar amount is so that we can justify that to the true 
investors, the taxpayers across America.
    And then one last chart. When we talk about energy, we 
sometimes tend to be like a ``Casablanca'' movie, where at the 
end we say, ``Round up all the usual suspects.''
    We bring in a number of different things, and it is kind of 
rotational. If you say, ``Why are we doing this investment?'' 
first thing we do is round up all the usual suspects. But if 
one of those don't justify the investment, we kind of spin off 
to the other one.
    But as I have listed to you and pulled off these 
justifications, they normally come down to about four. And if 
you want to add another one to it, you are the experts. We 
would love to hear from you.
    [End slideshow.]
    But the first one and the top one of all them is this 
volatility of fuel prices. I mean, they are going up and down 
and all over. And somehow or other we have to get a peg on 
that. The second one is the safety of the warfighter. And by 
that we mean--and I think some of you have correctly said 
that--if we are having to logistically carry fuel, that puts 
somebody at risk. And Secretary Hammack, you have talked about 
that quite a bit.
    And so one of the things we look at is safety to the 
warfighter by having less fuel consumption so they have less 
that they have to distribute. Third thing is being just good 
environmental stewards, and we all certainly want to do that. 
And then the final thing is the flexibility of the warfighter. 
And by that, I mean can they fight an extra month with the 
resources they have, can they fight an extra hour in the air. 
All that is important.
    And so today, as we look at these investments, one of the 
things we will try to do is peg which one of these categories 
we are trying to accomplish by the investment and what is the 
premium we are willing to pay to get that.
    I would like to ask unanimous consent for me to put my 
written comments in the record. And without objection, we will 
so order that. In addition to that, we had a request by Senator 
John Warner, former Senator John Warner, a member of the 
Senate, chairman of the Senate Armed Services Committee.
    [The information referred to can be found in the Appendix 
on page 130.]
    Mr. Forbes. And one of the things, Senator Warner has 
always been a great friend of mine. He is an icon. We all 
respect him tremendously. And when Senator Warner wants 
anything put in the record, I am willing to put it in the 
record. So I just want to make sure we have no objection to 
that and, without objection, we are going to put that in the 
record, as well.
    And now I would like to turn to my good friend, Ms. 
Bordallo from Guam, for any comments that she might have.
    [The prepared statement of Mr. Forbes can be found in the 
Appendix on page 47.]

STATEMENT OF HON. MADELEINE Z. BORDALLO, A DELEGATE FROM GUAM, 
           RANKING MEMBER, SUBCOMMITTEE ON READINESS

    Ms. Bordallo. Thank you very much, Mr. Chairman, and to all 
our witnesses I thank you for your testimony. And welcome back, 
Ms. Burke--a special welcome--as I think this is the first time 
you have testified before our committee. And Mr. Chairman, I 
think we are in good shape with all the women as witnesses 
today. Of course, I know that the Honorable Yonkers will hold 
his own. Yes.
    I appreciate that Chairman Forbes has called the hearing on 
this important topic. Energy security is critical to the future 
of our military and our economy in the long run. Over the next 
three decades, the United States Department of Energy expects 
energy consumption to increase by 53 percent, which will create 
additional challenges and concerns to our economy and 
especially to our military.
    The Department of Defense accounts for approximately 80 
percent of all Federal energy consumption, including both 
installation and operational energy needs. For example, energy 
costs increased about 25 percent from fiscal year 2010 to 
fiscal year 2011, yet consumption has declined. A significant 
factor in this increase was due to fuel costs.
    At a time of austere budgets, we need to make important 
investments in energy so that we can stabilize energy costs 
within the Department of Defense and allow those savings to be 
put back to supporting our warfighter in modernization, 
training, or other priorities.
    It is important that we manage this endeavor for energy 
security wisely. We must be careful in how and where we invest 
the taxpayers dollars to ensure that our investments in energy 
security pay dividends in the long run. I do appreciate that in 
this fiscally constrained time that the Department of Defense 
is going to rely heavily on third-party financing for a lot of 
these energy investments over the coming years.
    Over the next 5 years, there will be $2.4 billion in third-
party investments for facility energy programs. Without 
significant third-party investment, it would be difficult for 
the Department of Defense to achieve the fiscal year 2015 goal 
of a 30-percent reduction in energy intensity. So I do hope our 
witnesses today will elaborate on the nature of these third-
party investments and outline what authorities may be necessary 
to ensure the third-party investments are successful.
    The Department of Defense recently issued an operational 
energy implementation plan. The plan will focus on three core 
priorities. And part of achieving these core priorities will 
require better measurement of consumption. Further, meeting 
these core priorities will also require tremendous coordination 
within the Department of Defense.
    While I appreciate that each individual Service has unique 
requirements and different ways of supporting the warfight, it 
is imperative that implementation of this operational energy 
plan is done so effectively. Unlike operational energy, there 
is no comprehensive plan for reducing energy intensity to meet 
statutory requirements in a reduction of energy consumption by 
30 percent in 2015 from the baseline energy consumption in 
2003.
    However, I do hope our witnesses can elaborate on how 
installation energy demand will be reduced across the 
Department of Defense in a coordinated fashion. While the goals 
are clear, the most efficient way to reach that goal is through 
a coordinated effort amongst all of the Services and 
installation commands.
    In particular, I would like to highlight the Navy's 
approach to these energy matters. In approaching energy 
investments, the Navy looks at the full spectrum of potential 
benefits from energy programs, to include meeting certain other 
regulatory requirements or the sale of energy to the civilian 
power grid. I believe this type of holistic approach is the 
type of out-of-the-box thinking that will help the Department 
in a variety of ways in the long run.
    In assessing where to put investment in energy, it is 
important to look at the matter as more than just a simple 
equation. While it is important to quantify the monetary 
benefit of certain investments, there are also other tangible 
benefits of certain investments. For example, if a certain 
energy project helps the Navy meet EPA [U.S. Environmental 
Protection Agency] regulations, the monetary benefit may be 
hard to quantify. But compliance is a significant value added 
to the project. So I do hope that this type of thinking can be 
looked at as a model for implementation Department-wide.
    This hearing comes at an important time. We must continue 
to make smart investments to reduce our energy consumption 
because it is a matter of national security. Stabilizing energy 
costs will help us invest in necessary modernization, training 
and sustainment of assets. We must have a coordinated strategy 
so we make smart investments. But these investments must be 
made, or we will fall behind in this important endeavor.
    So, Mr. Chairman, I again thank you for holding this 
hearing. And I look forward to our witnesses' testimony and to 
our question-and-answer period. Thank you.
    Mr. Forbes. Well, thank you, Madeleine. Thank you for your 
hard work and those remarks.
    And as we discussed prior to the hearing, I ask unanimous 
consent that it be made an order to depart from regular order 
so that members may ask questions that follow train of thought 
from the proceeding member. I think this will provide a 
roundtable-type forum and will enhance the dialogue on these 
very important issues. So without objection, that is so 
ordered.
    As we turn to the witnesses for their opening remarks, I 
would like to ask each of you to take this opportunity to 
highlight the good things you have done in the energy arena. 
And as I mentioned, you can't do that in a few minutes. We know 
that. So that is why we say highlight.
    But I also welcome you to put anything else in the record 
you want, and certainly your written statements will be made a 
part of the record. So I want you to realize that is going to 
happen.
    And also to talk about any of the good work that needs to 
be done in the future. But then we look forward into delving 
into some of the more detailed discussions and specific areas 
we would like to scrutinize for the proposed investments the 
Department of Energy seeks to make.
    Ms. Burke, I would ask that you lead and follow in the 
order that you are in, but if you have any additional order 
that is up to you. And as I have mentioned to each of you 
outside of the hearing, if you need to clarify any of your 
comments, statements, just let me know. We want to give you 
time to do that. In the end, I am going to come back and ask if 
there is anything you want to get into the record.
    Final thing I am going to tell you as we start, oftentimes 
we will submit written questions that members have. This is one 
of those hearings. Those written questions are very important 
because we just don't have the time to get all the questions 
in. We will be submitting those to you, and if you don't mind 
try to get back to us so we can make those a part of the 
record.
    And with that, Ms. Burke, we will look forward to your 
comments.

STATEMENT OF HON. SHARON BURKE, ASSISTANT SECRETARY OF DEFENSE 
       FOR OPERATIONAL ENERGY, U.S. DEPARTMENT OF DEFENSE

    Secretary Burke. Well, thank you, Chairman Forbes and 
Ranking Member Bordallo, members of the subcommittee. I really 
appreciate the opportunity to discuss the President's fiscal 
year 2013 request for operational energy initiatives for the 
Department of Defense, and to be here with my colleagues to 
discuss all the energy initiatives in the Department.
    And I can assure you that Secretary Yonkers does hold his 
own, and he is not a token male.
    [Laughter.]
    Now, you have my statement for the record, so I am not 
going to read it to you. But you are correct, Representative 
Bordallo, this is the first time I have appeared before you, 
but it is also the first time an assistant secretary of defense 
for operational energy has appeared before this committee. So I 
do want to spend a few minutes talking about the office, since 
Congress created it, and what we have accomplished to date.
    Just recently, I traveled to Pacific Command for a workshop 
on how to implement the Department's operational energy 
strategy. And while I was there, they took me to see Red Hill. 
And I don't know if you are familiar with that facility, but it 
is an extraordinary engineering feat. It is a 242-million 
gallon fuel storage facility that has been tunneled into solid 
volcanic rock. It is an amazing thing to see.
    And if you have questions about why we would do that, all 
you need to know is when we did that. It was completed in 1943, 
so it was initiated even before Pearl Harbor. And that was 
because we had to have a steady, reliable source of energy for 
our planes, our ships, and our troops on the ground who were so 
far away from home in order to prevail in the Second World War.
    And that is true today, too. Every military mission today 
requires a steady, reliable supply of energy. And, in fact, 
General Petraeus, when he was still commanding in Afghanistan, 
wrote that energy is the lifeblood of our warfighting 
capability. That is why the Department of Defense in fiscal 
year 2013 is requesting $16.3 billion for petroleum to support 
military operations around the world.
    Now, in World War II, our ability to protect those supply 
lines and to interdict those of our foes was an important 
comparative advantage in that war that contributed to our 
victory. Today, however, our operational energy posture is 
imposing costs at all levels--strategic, operational and 
tactical and, of course, financial. And that is why Congress 
created this office in the first place in the 2009 Defense 
Authorization Act.
    It is also why the Department is requesting $1.4 billion 
for fiscal year 2013 for initiatives to improve the 
Department's operational energy use. We want to recapture that 
strategic advantage.
    Now, my written statement details how I built up the office 
and our progress to date, especially on rapid fielding of 
energy innovations to deployed forces. And my colleagues here 
have been instrumental in those efforts, so I expect that they 
will tell you more about some of those efforts and what they 
have done.
    For this morning, what I would like to focus on is one 
specific area of activity for my office--and that is the 
release you mentioned, Congresswoman--the operational energy 
strategy and also the implementation plan that Secretary 
Panetta released earlier this month. Because this is the 
framework that we have established for improving operational 
energy use across the Department.
    Now, the goal of that strategy is to improve energy 
security for the warfighter, meaning we want to ensure that 
U.S. military forces have that steady, reliable supply of 
energy for that full range of 21st century military missions.
    And there are three ways the Department is going to meet 
this goal. First and foremost, by reducing our demand for 
energy. Second, we want to diversify and secure our supplies of 
energy. And finally, we want to build energy security into the 
future force.
    So about 90 percent of our fiscal year 2013 budget request 
is for initiatives that reduce our demand for energy. And that 
is very important because we have seen in Iraq and Afghanistan 
that with distributed operations, asymmetric threats and 
attacks, and modern military capabilities that are terrific--
but also very fuel-intensive, very energy-intensive--that we 
need a great deal of fuel, and our supply line has been 
vulnerable. It is in the battle space, and the opportunity cost 
in lives and in dollars and in capability has been much too 
high.
    We believe that will continue to be a concern going forward 
as we project presence and power elsewhere in the world, 
particularly in a time when there is an increasing prevalence 
of precision-guided missions.
    Now, the other 10 percent of our budget request for fiscal 
year 2013 is for supply diversification, and that is the second 
objective of the strategy. So this means we want better energy 
options that serve the mission. So, for example, we have been 
using solar in Afghanistan for our forces who are out at the 
tactical edge. This gives them better range, endurance, 
resilience, independence from the supply line. It helps them do 
their jobs.
    Now, of course, the Department also has a significant 
reliance on liquid fuels, and that will continue for the 
foreseeable future. And you have directed my office to take a 
lead role in setting a coherent and consistent policy for the 
Department on the use of alternative fuels. We are doing that 
now.
    But I do want to clarify that the Department of Defense's 
investments to date have been in research, development, testing 
and evaluation. And also that all of the Services currently 
have a policy that they will only purchase operational 
quantities of alternative fuels at a time when they become 
price-competitive.
    So the final element of the operational energy strategy is 
to build energy security into the future force. And we are 
doing that by incorporating energy into the Department's 
planning, into our strategic documents, our war-gaming, our 
requirements generation, and our acquisition process. And, in 
fact, that is why I was at Pacific Command. We were looking at 
how to bring the lessons of the past, from Red Hill, to the 
Northern Distribution Network into our future capabilities and 
our future missions.
    And in my mission, Congress, and this committee in 
particular, have been very supportive of our work--and I would 
like to single out your staffs as well who have been very 
supportive of establishing this new office and this new 
function--and supportive of our efforts to harness better 
energy performance and better energy technologies for the 
warfighter to make them more agile, lethal and adaptable.
    So on behalf of the men and women in uniform, thank you 
very much for that support and I look forward to your 
questions.
    [The prepared statement of Secretary Burke can be found in 
the Appendix on page 54.]
    Mr. Forbes. Thank you.

   STATEMENT OF DR. DOROTHY ROBYN, DEPUTY UNDER SECRETARY OF 
 DEFENSE FOR INSTALLATIONS AND ENVIRONMENT, U.S. DEPARTMENT OF 
                            DEFENSE

    Dr. Robyn. Good morning. Thank you, Chairman Forbes, 
Ranking Member Bordallo, distinguished members of the 
subcommittee. Thank you for the opportunity to testify about 
what the Department of Defense is doing to promote energy 
security in the area of facility energy.
    I want to address three questions this morning. First, why 
does the Department of Defense care about facility energy? 
``Why are we here?'' to use your question, Chairman Forbes. 
Second, what are we doing about it? What is our facility energy 
strategy? And third, what are the major challenges we face?
    First of all, why are we here? We care about facility 
energy for two key reasons. The first is cost--your second 
chart. With over 300,000 buildings, 2.2 billion square feet of 
space, we have a footprint six times that of the General 
Services Administration and three times that of Wal-Mart. Our 
energy bills are correspondingly large--$4 billion a year.
    The second reason we care about facility energy is mission 
assurance. Our installations support combat operations more 
directly than ever before. We pilot UAVs [Unmanned Aerial 
Vehicles]. We fly long-range bombers from our installations 
here at home. These bases, in turn, rely almost entirely on a 
commercial power grid that is increasingly fragile and 
vulnerable to disruption.
    With an eye to lowering that $4 billion a year energy bill 
and to improving the energy security of our fixed 
installations, we have been pursuing a three-part strategy. The 
first and most important, reduce demand. We are using our 
MILCON [Military Construction] and our sustainment budget, 
supplemented by third-party financing, to make our buildings 
more energy efficient.
    Specifically, we have, in the fiscal year 2013 budget, $1.1 
billion direct funding, largely for, almost entirely for, 
energy efficiency retrofits of existing buildings. In addition, 
we have a commitment outside of the budget, a commitment to do 
more than $1 billion over the next 2 years of performance 
contracts--energy savings, performance contracts, utility 
energy-savings contracts--so the third-party financing of 
similar energy efficiency retrofits of our buildings.
    We address new construction through requirements; 
requirements for LEED [Leadership in Energy and Environmental 
Design] Silver, 30 percent above ASHRAE [American Society of 
Heating, Refrigerating and Air-Conditioning Engineers]. And my 
office will be issuing a new code, a unified facilities code, 
for sustainable high-performance buildings later this year.
    And then finally, an absolutely critical piece--and I will 
return to this later--is metering and measurement. And my 
office will be issuing an updated policy, a more ambitious 
policy, on which and how many buildings we need to meter, and 
laying the framework for an enterprise energy information 
system that allows us to more systematically collect and 
analyze data.
    Second element of the strategy, expand the supply of 
renewable and other forms of distributed, or on-site, energy. 
Together with microgrid and storage technologies, on-base 
energy generation can make our installations more secure in the 
event of a major disruption to the electric grid. Many of our 
bases are well suited for renewable energy. And the Services 
are all pursuing this aggressively, and largely with third-
party financing.
    The key issue that I want to flag here has to do with 
withdrawn lands. Many of the best sites on our installations 
for solar, wind, and geothermal are on land that we have 
withdrawn from the Department of Interior for military use. 
There are some impediments to us using these withdrawn lands 
for large-scale renewable energy products. We are working 
closely with the Department of Interior to overcome those 
impediments. That is a key issue.
    The third element of our strategy, facility energy 
strategy, is to leverage advanced technology coming out of 
industry and Department of Energy labs, principally by using 
our installations as a distributed test bed to do demonstration 
and validation of next-generation energy technologies that have 
the potential to reduce our energy consumption or improve our 
energy security significantly.
    Emerging technologies offer a way to significantly improve 
our performance and reduce our costs, but there are significant 
impediments to the commercialization of these technologies; 
primarily the fact that the first user bears significant costs 
and risks, but does not gain any additional benefit from those 
that follow.
    As the owner of 300,000 buildings, we look at risk 
differently. It is in our direct self-interest to help firms 
overcome the barriers that inhibit innovative technologies from 
being commercialized and/or deployed on our installations. And 
we do this by using our installations as a distributed test bed 
to demonstrate and validate the technologies in a real world.
    A major focus of this demonstration and validation effort--
or Dem/Val, as we call it--is advanced microgrid technology. 
Microgrids are small-scale versions of the commercial power 
grid that allow for local control of supply and demand. 
Combined with on-site distribution and storage technology, an 
advanced microgrid system will allow an installation to 
maintain critical functions on a base if the commercial power 
grid goes down and stays down for some length of time.
    Another major focus of our test bed activity is emerging 
technologies that will significantly reduce the consumption of 
energy in our buildings. And I will just give one example. At 
Watervliet Arsenal in New York, the Army is testing an advanced 
control system, developed by United Technologies, that could 
increase boiler efficiency by 5 percent. Only 5 percent, but 
when you think about how many thousands of boilers that we have 
on which we could deploy this technology the savings are 
meaningful.
    I love to go through examples of what we are doing on our 
test bed. I will refrain from doing that, but I will just say 
that yesterday Sharon and I went to the rollout of a report by 
two nonprofit groups called Energy Innovation at the Department 
of Defense. And we were on a panel with Norm Augustine and 
retired general Ron Keys.
    And this report is a wonderful report. And it focuses, it 
really focuses, on what this installation energy test bed is 
doing. There is a chapter, a paper by the guy who runs that 
program. And they flag this model as being one of the most 
innovative approaches that the Department has, certainly in the 
energy space.
    Finally, what are the major challenges we face? Let me just 
point out two. First, we do a lousy job of measuring the energy 
performance of our buildings. Most of our buildings aren't 
metered, and we don't have a standardized way of collecting and 
analyzing the data. I will be, as I say, putting out a more 
ambitious policy on metering and data collection analysis. But 
we need to implement it more aggressively. The Navy is showing 
us the way, in that regard.
    Second, although, as I have said, our strategy calls for 
heavy reliance on private financing both to retrofit our 
buildings and to develop renewable energy on our bases, our 
acquisition process is extremely cumbersome. We need to improve 
that if we want to attract the best private firms. And here, I 
would say Army is showing us the way, having taken the first 
steps toward streamlining the process for energy savings 
performance contracts.
    In sum, facility energy is a very important issue. We have 
a good strategy for improving it. We face some challenges. I 
look forward to working with you in the months ahead to tackle 
these and other challenges so that our investments in facility 
energy are as productive and high-leverage as possible.
    Thank you.
    [The prepared statement of Dr. Robyn can be found in the 
Appendix on page 62.]
    Mr. Forbes. Thank you, Dr. Robyn.
    Secretary Hammack.

STATEMENT OF HON. KATHERINE HAMMACK, ASSISTANT SECRETARY OF THE 
          ARMY, INSTALLATIONS, ENERGY AND ENVIRONMENT

    Secretary Hammack. Thank you, Chairman Forbes, Ranking 
Member Bordallo and distinguished members of the subcommittee. 
On behalf of Army soldiers, families, and civilians, I want to 
thank you for your support of Army programs overall and Army 
energy programs.
    In fiscal year 2013 our energy budget is $4.5 billion. And 
of that, $2.5 billion is for operational energy. And that is 
the energy we use in war, like in Afghanistan. There is a lot 
that we are doing in energy to improve. We have energy 
efficiency programs. That is a billion dollars of the budget. 
Another billion is for our installation energy.
    So overall it is a large budget. We have a lot of programs, 
though, to work to manage our costs and reduce our consumption. 
But what I want to talk about here is a little bit of show and 
tell. But you said brag, so I am bragging about the great 
things that our teams are doing in the Army.
    First of all, our energy strategy is broken into three 
parts. The first part is soldier power, the second is basing 
power, and the third is vehicle power. For the Army, soldiers 
are our platform. Soldiers are what we are about. We are a 
ground force, and our soldiers carry power with them.
    A soldier on patrol can carry as many as--a 3-day patrol--
as many as 70 batteries weighing about 16 pounds. And so one of 
our focuses has been to reduce that. One of the ways is through 
rechargeable batteries, which I can't unplug from this 
recharging device. But we have rechargeable batteries. But if 
you have rechargeable batteries, then you have charging 
devices.
    So a soldier who might have multiple kinds of batteries 
might have multiple recharging devices. So we came up with a 
universal charger that you can plug different kinds of 
batteries into.
    We followed that by having the charger able to be powered 
from multiple sources, whether it is solar power, whether it is 
vehicle power, or whether it is plugging into an electric 
outlet. So we are empowering the soldier, increasing their 
capability so that they are able to fight longer and go 
further.
    Our second pillar is basing power. And in basing power, 
again, operational energy and installation energy. Operational 
energy, what we use in theater, 40 percent of that is in 
generators to generate electricity. So one of our focuses is to 
have more efficient generators.
    Another focus is microgrids, like Dr. Robyn talked about. 
We have installed, in the last 12 months, 28 microgrids that 
are saving 50 million gallons of fuel a year. That means 
convoys not on the road. And we are finding one in every 46 
convoys suffers a casualty, whether it is a wounded in action 
or killed in action.
    If our soldiers, instead of guarding convoys, are out 
fighting, then we have increased the capabilities of our 
warfighting force. And that is what energy security means to 
the Army.
    In our basing energy, as Dr. Robyn talked about, again we 
have a focus on energy-saving performance contracts. And in 
fiscal year 2012, we are quadrupling the number of energy-
saving performance contracts. In all of fiscal year 2011, we 
executed $73 million. In just the first quarter of fiscal year 
2012 we executed $93 million in contracts, and are on the path 
to execute at least $400 million in energy-saving performance 
contracts in fiscal year 2012.
    We believe that partnering with the private sector is the 
appropriate way to steward the installations that we have and 
reduce our installation energy consumption. And since 2003 we 
have reduced our energy consumption on installations by 13 
percent where, at the same time, we have increased the size of 
our force and those using Army installations.
    We are leveraging the private sector in using alternative 
energy on Army installations by standing up an Energy 
Initiatives Task Force to work on partnering with the private 
sector to bring alternative energy projects onto Army 
installations, and to reduce our consumption and increase our 
energy security.
    Our third pillar is vehicle power, and on that we are 
taking a look at vehicles. This is a fuel-efficient 
demonstrator. I could have brought a big one in, but it would 
take up the whole hearing room here. So I brought a small model 
instead.
    But what we did on the FEDs [Fuel-Efficient Demonstrators] 
is, we took a look at how energy is used throughout the vehicle 
and where heat is generated. You have heat in braking, you have 
heat in engine systems, you have heat generated by the various 
equipment on it. And heat is energy. And by studying the 
various systems in the vehicle, we are able to make the 
vehicles more efficient so that we can reduce the operational 
energy in-theater.
    I will challenge you, though, on measuring operational 
energy because we always say the enemy has a vote. The amount 
of operational energy we use is dependent upon the fight that 
we are in.
    So although I can look at systems--whether they are battery 
systems, whether they are power systems, or vehicle systems--
and make those systems more efficient, I cannot guarantee to 
you the amount of fuel I will use because it depends upon the 
warfight. And I do not want the warfighter hampered by 
restricting their access to and availability of energy.
    What I want to say, in conclusion, is that I invite you to 
come visit our installations where we are working on these 
systems--whether it is the tank and automotive division that is 
out in Detroit, where they are working on vehicles and they are 
opening up a ground systems power and energy development lab 
next month which is focused on hybrid technologies, thermal 
technologies and battery technologies, and acts as a resource 
to the entire design community in the Detroit area--or Fort 
Devens, Massachusetts, where we are working on basing power for 
contingency operations, where our base camps are testing 
technologies, whether it is solar, whether it is microgrids or 
other systems that are more efficient.
    Or even out at Fort Leonard Wood, where our engineers are 
working on how you put together those technologies that have 
proven themselves out into a deployable force; out at Fort 
Bliss, where we have the network integration event where our 
soldiers are testing and training on these systems prior to 
deployment.
    So in conclusion, I want to thank you for your support of 
the Army. I want to thank you for everything you are doing for 
the Army. And I want to tell you that the Army is onboard with 
energy because it increases capabilities for the warfighter.
    [The prepared statement of Secretary Hammack can be found 
in the Appendix on page 79.]
    Mr. Forbes. Thank you, Secretary Hammack.
    Secretary Pfannenstiel.

 STATEMENT OF HON. JACKALYNE PFANNENSTIEL, ASSISTANT SECRETARY 
       OF THE NAVY, ENERGY, INSTALLATIONS AND ENVIRONMENT

    Secretary Pfannenstiel. Thank you, Mr. Chairman, 
Congresswoman Bordallo, distinguished members of this 
committee. I appreciate the opportunity to appear before you 
today to describe the Department of the Navy's energy programs.
    The fundamental premise of our programs is that our energy 
investment will improve our combat capabilities, increase our 
mission effectiveness, reduce our vulnerability to foreign 
sources of fossil fuel, and stabilize energy costs. This is not 
part of an environmental or green agenda. Rather, its purpose 
is to impose improvements, investments, to maintain America's 
military leadership.
    Without investments in alternative fuels--without 
investments in alternatives to conventional fuels--the Navy 
will continue to be subject to market volatility. The 
volatility is caused by threats of conflict and rapid demands 
from other countries. Since the beginning of this fiscal year, 
political unrest has increased the per price of a barrel of oil 
by $38. That is an increase of the Navy's fuel bill of a 
billion dollars.
    So our budget request in fiscal year 2013 is for a billion 
dollars for energy investments. This will promote energy 
independence and security, provide tactical benefits, and 
provide for facility maintenance. Of that $1 billion, about 
$600 million will go into the shore investments, which will 
provide savings back to the Department through efficiencies.
    It will be, as Dr. Robyn mentioned, 27,000 advanced meters, 
such that we are moving towards a day when almost of all our 
usage in both the Navy and Marine Corps will be metered on 
advance meters. We will provide for energy audits, which then 
give back a stream off of efficient investments that we can be 
making in energy. And it will support less sexy kinds of 
features as improved HVAC [heating, ventilation, and air 
conditioning] systems and lighting, and energy management 
systems.
    Of the $1 billion, $400 million will go to operational 
investments, which will directly enhance combat capabilities 
through increasing the range, reducing down times, improving 
the resilience of the forces. Such improvements will be the 
propeller coatings on the ships and shelter liners for the 
Marines, more hybrid electric drives for our destroyers, and 
tests and certification of alternative fuels.
    We are on track to meet our shore goals that were set by 
Congress and the Department. We are applying new and existing 
technologies to our shore installations, of which there are 
about 100. We are increasing the diversity of power sources. We 
are improving the security of the grid. And we are looking for 
cost stability.
    We are developing a strategy such that 50 percent of our 
energy onshore will come from alternative sources, and that 
will be about a gigawatt of power. This will be done through 
third-party investments, and over the life of these contracts 
it will be less expensive than buying conventional sources of 
power.
    Some examples of how we are doing this, we have done at 
Twentynine Palms, China Lake and Barstow. Those three examples 
will save $20 million over the life of those contracts.
    We are also developing regional smart grids. And we are 
having a pilot in the San Diego area which will combine some 
bases so that we have the ability to use power most efficiently 
among the bases that use power there such that we can reduce 
our costs and provide for more secure installations.
    Our operational goals will be supporting both advanced 
technologies and alternative fuels. The expeditionary forward 
operating bases that the Marines have been developing have used 
advanced technologies in-theater already; solar generators, LED 
[light-emitting diode] lights, tent liners. They have cut the 
cost of fuel on base by 25 percent, and at the combat outposts 
by 90 percent.
    There are fewer vulnerabilities. I think Katherine 
mentioned the vulnerability of transporting fuel and water. Our 
figures say that for every 50 fuel-water convoys we have one 
Marine casualty. That is much too high a price to pay for 
moving fuel in-theater.
    The Marines have recently modeled what they might be able 
to achieve from using these advanced technologies, and they 
have determined that by 2017 they would be able to go an 
additional month of operations with no additional fuel. Our 
investments in biofuels will reduce our dependence on foreign 
oil and will help stabilize our energy costs. We have, so far, 
tested all of our aircraft and most of our surface ships on 
alternate fuels.
    So I will summarize by saying that these goals--our goals, 
your goals--reflect energy as a strategic and tactical 
capability. We can't wait until fuel is unaffordable or not 
available to pursue these alternatives.
    Thank you for your support, and I look forward to your 
questions.
    [The prepared statement of Secretary Pfannenstiel can be 
found in the Appendix on page 97.]
    Mr. Forbes. Thank you for your comments. Secretary Yonkers.

STATEMENT OF HON. TERRY YONKERS, ASSISTANT SECRETARY OF THE AIR 
        FORCE, INSTALLATIONS, ENVIRONMENT AND LOGISTICS

    Secretary Yonkers. Well, good afternoon, Chairman Forbes, 
Congresswoman Bordallo, and the members of the committee.
    First of all, let me say thank you for your service to our 
country and to the tremendous support that I know you give our 
Air Force, our airmen, civilian military, and their families 
every day. It is very important to us.
    And I want to say that it is a pleasure to be here today 
and talk about what the Air Force is doing to reduce our energy 
demand, increase the energy supply, and create that energy 
security that, as all of my colleagues have talked about, 
enables us to do our mission. And that is, first and foremost, 
in our Air Force, fly, fight, win--air, space and cyberspace. 
And we are not going to deviate from that goal.
    Let me give you some statistics to kind of set the stage 
here, if I may. Unfortunately--or perhaps fortunately, I am not 
sure which--the Air Force is the biggest consumer of energy in 
the Department of Defense, clearly 60 percent of everything 
that the DOD [Department of Defense] uses. Most of that comes 
in the form of jet fuel. It is more expensive to fly aircraft 
than it is to run tanks or ships.
    Last year--excuse me, in fiscal year 2011--we spent $9.7 
billion, with a ``B,'' for fuel and electricity. And that is 
$1.5 billion from what we spent in 2010. And, Mr. Chairman, you 
showed some statistics in your first chart and that is exactly 
what is happening here. These cost growths are a direct result 
of the fluctuation of price in the marketplace for jet fuel and 
aviation fuel.
    And over that period of time, between 2010 and 2011, that 
was a 90-cent per gallon increase. And ironically, during the 
same period of time, we saved--through operational efficiencies 
and other methods--nearly 75 million gallons of fuel. So in 
contrast to the aviation side of the Air Force, our 
installation energy expenditures are relatively stable at about 
$1.1 billion a year.
    A lot of that has to do with the investments that we have 
made over the years in the kinds of things that my colleagues 
have talked about. And that is, upgrading our HVAC systems and 
these other high-energy use systems, putting in more efficient 
lighting, insulation, roofs, et cetera, et cetera that help 
drive down the costs of our energy expenses on our 
installations. And we made an $800 million investment over the 
course of the last few years in doing these kinds of things.
    Concurrently with that, in our demolition program we have 
demolished almost 17 million square feet of old buildings and 
replaced those buildings with new facilities that are 30 
percent more energy-efficient. As my colleagues have talked 
about, we are also aggressively pursuing things like energy-
savings performance contracts and energy conservation 
investment programs, or ECIPs.
    And we have invested $143 million over the last 5 years on 
70 ECIP [Energy Conservation Investment Program] projects that 
are now returning $27 million a year on an annual basis.
    Moreover, we are aggressively pursuing the public-private 
partnerships that we have already talking about. And that is to 
take, truly, advantage of these third-party investors to 
construct primarily renewable energy projects such as solar, 
wind and waste-to-energy to reduce the costs of grid-provided 
electricity. So far we have 131 of these ECIPs in place, 
generating about 80 megawatts of energy.
    And we continue to look at the future, and have Air Force 
goals to reduce total consumption of our jet fuel and our 
facility energy. For 2013, we are focusing investments to 
reduce our consumption in jet fuel by 10 percent. And when you 
look at what we spend, that equates to about $2.5 billion. So 
it is real money. And to, of course, hit our installation 
energy objectives of 30 percent.
    And specifically in 2013, we are requesting, as I think 
both Dr. Robyn and Ms. Burke have talked about, specific 
investments in reducing energy operationally--primarily, $530 
million--invest in solutions to reduce energy demand, improve 
energy efficiency, diversify the supply, and improve our 
mission effectiveness.
    That includes $215 million in the kinds of things that we 
have talked about; on energy upgrades and HVAC systems and so 
forth. Thirty-two million dollars million is going to go into 
aviation efficiencies, particularly KC-135 engine upgrades and 
some drag reduction on our KC-10s. And the remainder of that 
money, about $330 million, will go into ADVENT [Adaptive 
Versatile Engine Technology], or those things that are going to 
give us much greater longevity and efficiency and 
sustainability in the jet engines of the future.
    And some of these kinds of investments are looking at 
energy efficiency and new jet engines, or upgraded jet engines 
of 30 percent. So again, monumental if we achieve those 
objectives. And just like the Navy, by the end of this year we 
will have all our aircraft certified to fly on alternative 
fuels, particularly the Fischer-Tropsch and HRJs [Hydrotreated 
Renewable Jet fuel].
    Later this year, we are also going to introduce a net zero 
policy, similar to what the Army has put into place, to change 
the way we think and the way that we use energy. This is really 
part of our cultural change in the Air Force. And our 
expectations are to create as much energy as we use, manage our 
waste resources and the way we work our water resources, and 
reduce the amount of waste that we generate to near zero, as 
well as benefit from reduction in greenhouse gases.
    So, Mr. Chairman, across the board--and if I can leave you 
with one thought today--we are looking at energy as a multi-
dimensional program. We are trying to take advantage of third-
party financing. We are making strategic investments from the 
appropriated dollars that you give us. And we are doing this in 
a business arrangement.
    As Jackie mentioned, this is not about being green, it is 
not about pursuing goals for the sake of pursuing goals. These 
are business-driven decisions for us.
    And I look forward to the debate and the discussions.
    [The prepared statement of Secretary Yonkers can be found 
in the Appendix on page 108.]
    Mr. Forbes. Thank you, Mr. Secretary. And all of you have 
heard the bells going off. If you will bear with us, we are 
going to go over. I don't know if we have one or two votes.
    We just have one vote, so it won't take us very long. We 
will be right back and start some questions and discussion. 
Thank you.
    [Recess.]
    Mr. Forbes. Once again I want to thank you all for your 
comments, thank you for your service, thank you for putting up 
with us today and being a little bit flexible. As I alluded to 
in my opening comments, we want this to be a good dialogue. We 
view most of what we are doing here as trying to do due 
diligence to make sure that we are representing your largest 
investors, the taxpayers of the United States.
    And sometimes, when we do that with a limited amount of 
time, it looks like we are emphasizing one thing over another. 
We are really not. It is just a matter of they are the things 
we are trying to delve into that particular point and time. And 
secondly, because we don't talk more about particular things 
sometimes it would lead one to conclude that we don't 
appreciate the great work that is being done in those areas. 
But I want to assure you that is not the case either.
    I want to start, Secretary Hammack, with telling you how 
much we appreciate all that the Army has done. I mean they 
really are making differences in protecting our warfighters. We 
understand that, and we know that. And thank you for your toys 
that you brought in to show us today because we enjoy seeing 
that. A picture is worth a thousand words and a model is, too.
    And Secretary Yonkers, you did a good job in balancing this 
show out okay. And also we appreciate what the Air Force is 
doing, especially when it comes to some discussions you and I 
have had outside of here, with the possibility of at least 
looking into maybe some longer-term contracts for fuel 
purchases which would help stabilize, I think, some of that 
volatility.
    And we want to try, as a committee, to try to help you and 
support you in that because I think that makes really good 
sense. Also, I am excited because we have got a great team here 
today. I don't say that just to lift you up, but it is true. So 
much talent sitting over there, and one of the things that is 
great is we are trying to move to a coordinated effort when we 
are dealing with energy and looking at our goals and our 
policies.
    And so we have got experts in operations and in facilities 
in each of our Services. And what we tried to do today, or at 
least I did, is to look back not at what I thought was a 
priority, but what some of the folks that might be associated 
with you look at as a priority.
    And Secretary Pfannenstiel, I look at the Department of the 
Navy's goals that the Secretary has picked; not me, but the one 
that he has picked and highlighted and put most of his time and 
effort towards. And so I thought I would ask some questions 
about that if it is okay with you guys, and begin by saying we 
really support alternative energy, we support biofuels. It is 
just we want to make sure we have got the right business model 
and business case for doing it.
    On the questions that I am going to offer today, though, I 
don't want to put any one person on the spot. So with this 
great talented team, I want to tell you you can use a team 
effort. You know, anybody that wants to answer it can answer 
it. You can get together, you know, on your answers. And you 
can look back at the talented people behind you and get the 
answers.
    We just want to get the answers. But I start with what the 
Secretary has put out in the Department of Navy, and I look at 
one of the goals he has put out. He says by 2020, 50 percent of 
the total Department of Navy energy consumption will come from 
alternative sources.
    And I am sure all of you are familiar with that goal. The 
President emphasized it in the State of the Union address. And 
so my first question to you is this. How do we get 50 percent? 
Why not 60 percent, why not 30 percent, why not 20 percent? 
Where did the 50 percent come from? How did we get that?
    And anybody that has that can give it to us. All eyes are 
looking at you, of course, Secretary.
    Secretary Pfannenstiel. Well let me start, Mr. Chairman, by 
suggesting that 50 percent is both enormously aggressive and, 
in our view, is achievable. It it recognizes the amount of 
alternative fuel that we need to obtain by that time, the time 
being 2020.
    We have set ourselves strict criteria for what this 
alternative fuel--certain criteria it must need. And those 
criteria are it must be domestically produced. It must be drop-
in fuel. In other words, it needs to be a fuel that doesn't 
require us changing the platforms in which it will be used. And 
it must meet a price threshold. In other words, it must be at a 
price that is competitive with the more conventional fuels.
    Fuels that meet that--and in addition, we do not want a 
fuel that is going to interfere with the food chain. So the 
question really is, can we get to there? Can we achieve enough 
fuel, sufficient quantity, at that price, in this timeframe? 
And our way of achieving that is through the process that we 
have laid out and we have worked with Congress on.
    And using two parts of what we have going for us. One is 
the ability, as a consumer, to offer to the marketplace the 
quantity that we would offtake of the fuel that is available. 
And then how do we get the fuel available? Well our second 
strategy is using the Defense Production Act, which allows us 
with partners in this case. But it is an act that allows us to 
help create the market, to help start the market.
    To put in some funding from the public side to be matched 
by private business funding, such that those businesses out 
there, those businesses around America that believe that they 
can provide the fuel that meets our criteria at the price that 
we need, can get a start in funding their refineries, their 
businesses, their business models. And then bring to the market 
the quantity of product that we need.
    Mr. Forbes. And bear with me if you would. I normally defer 
all my questions until the end, but today is a little different 
because this is an important hearing to get this, I believe, at 
the outset. And I want to make sure that I am very patient in 
making sure we get to the answers, but I want to try to keep 
coming back to the questions.
    And the question is not what we are doing to get there, but 
how did we get the goal of 50 percent, as opposed to 60 
percent, 25 percent, 10 percent?
    Secretary Pfannenstiel. And I will have to indicate that 
when that goal was laid out, my understanding--and I wasn't 
part of the team that developed that goal, but my understanding 
of the goal--was that, in fact, it was as I said. It was a 
number that was thought to be, and estimated to be, achievable, 
but truly a stretch call.
    We knew how many gallons, how many barrels of alternative 
fuel we would need, and can we get there. Yes. Could it have 
been 55 percent or 45 percent or 60 percent or 40 percent? I 
suppose it could have been, but it would have been, again, 
along the path that would force us to look at things 
differently, to develop this new technology differently, to be 
able to reach out there and have, at the end of the day, a 
product that was going to help us protect price stability, to 
balance and diversify our fuel resource, and those criteria.
    Mr. Forbes. And all of you helped. So I am--this is open-
ended questions, but this is hugely important.
    Help me with that concept of stretch goal that you just 
said. What exactly is a stretch goal? And here is why I am 
asking. Because, you know, I view this kind of like a 
prospectus. I am coming back to the people I represent and 
people that all my committee people represent. And we have to 
say, ``Here are our goals. We are going to attain it, we are 
not going to attain it.'' And it is like a prospectus that you 
have.
    What is a stretch goal? I heard that concept used by the 
Department, but what is it?
    Secretary Pfannenstiel. Well, I have used the concept in a 
corporation. And in a corporation, it would be a goal that is 
not easily attainable but is reasonably attainable.
    Mr. Forbes. So it is not easily attainable. Do we have any 
independently verifiable analysis that I could take to the full 
committee that would say that 50 percent is the right number 
for the stretch goal, one? And two, any independently 
verifiable data that would say we have a ghost of a chance of 
reaching that?
    Secretary Pfannenstiel. Yes, Mr. Chairman. There is, in 
fact, a report by LMI [Logistics Management Institute], a 
nonprofit organization, within the last year--I don't know 
exactly the publication date--which looks at the feasibility of 
providing alternative fuels, in quantity, at a price that is 
competitive with conventional fuels. And determines that 
without any public sector intervention, that would probably 
take a decade for something like that to happen.
    But with public sector intervention, and it specifically 
calls out like the DPA [Defense Production Act] authority, that 
could be accelerated into the timeframe, into this decade.
    Mr. Forbes. Okay. Thank you for your patience. It says that 
it could be, but is there any independently verifiable study 
that says 50 percent is the amount we should have, and that we 
will attain that by 2020?
    Secretary Pfannenstiel. I have to say I don't know of any 
study that would say 50 percent is the amount that is 
absolutely needed. I do go back to the LMI study in terms of 
the viability of attaining that, though.
    Mr. Forbes. Can you tell me from your information--or 
anybody else on the panel--who came up with the 50 percent? Was 
there analysis done? And if so, can we see the metrics that 
were used in that analysis to show that 50 percent was the 
right figure?
    Secretary Pfannenstiel. Well, I can certainly offer to get 
back to you, Mr. Chairman, on any analysis that led to the 50 
percent.
    [The information referred to can be found in the Appendix 
on page 135.]
    Mr. Forbes. As the current assistant secretary for energy 
policy for the Navy, are you aware of any such analysis?
    Secretary Pfannenstiel. I believe the question on 
analysis--I know I have been involved in many such analytical 
discussions of how much fuel do we need to achieve the 50 
percent and where are we going to get it. So yes, I have taken 
part in many discussions of that----
    Mr. Forbes. But there is a difference----
    Secretary Pfannenstiel [continuing]. In the analytical 
sense.
    Mr. Forbes. In all due respect, there is a difference 
between discussions and between reading an analysis that shows 
a), this is the right percentage, and b) that it is attainable. 
And I don't argue that you have been in a lot of discussions, 
but have you read any such analysis that shows that 50 percent 
was the right figure, or that it is attainable by 2020?
    Secretary Pfannenstiel. Well, the attainability, I again 
refer back to the LMI study that would point out that it would 
be attainable. Whether 50 percent as a point number, I have not 
seen anything that said it had to be exactly 50 percent, and 
not 45 percent and not 55 percent or not 40 percent or 60 
percent.
    But 50 percent, that number of barrels of oil at that 
point, is, you know, really what we are working off of. And----
    Mr. Forbes. Can you tell me, on that study, how much it 
would cost? What was the estimated cost of reaching that goal, 
whether it was the LMI study or any other study that you might 
not be aware of now? When we put those kind of studies, if we 
are looking at shipbuilding costs, there are goals that we 
have. We always look not just at the goal, but at the price tag 
of achieving that goal.
    Can you tell me what the analysis says the price tag is of 
achieving that goal would be?
    Secretary Pfannenstiel. The price tag that we have put 
towards achieving that goal----
    Mr. Forbes. No, I am sorry. What I would like to know is 
the price tag that the analysis says we would have to put 
forward to reach that goal.
    Secretary Pfannenstiel. Well, the LMI analysis said that 
using our DPA, our Defense Production Act authority, can get us 
to that goal.
    Mr. Forbes. Again, and please, thank you for your patience 
with me because I don't want to interrogate you. Just the 
problem is--we put up the chart earlier--we have got to get our 
hands around facts. And if I set a goal of building 10 ships, I 
have got to come in and say, ``This is what it costs to build 
10 ships.''
    We are looking at a goal that the Department of Navy, the 
Secretary of Navy has said, ``This is my big flagship.'' I 
mean, he is the one that has put this up, and we don't know 
where he came up with 50 percent. If he did it on the way to 
work one day, if he did it talking around the water fountain. 
Or if there is a study, if there is an independently verifiable 
study, I need to see it.
    Secondly, he says this is a goal. But it may not be a 
realistic goal. It might be a stretch goal, whatever that goal 
would be. And then the third thing is, we as a committee have 
no idea what that will cost. In other words, saying that is a 
goal without knowing the price tag for the taxpayers of the 
United States doesn't make sense to me.
    So my question, as humbly as I can ask it, is do we have 
any independently-verified analysis, LMI or any other, that 
says this is the price tag it would take to achieve that goal 
by 2020?
    Secretary Pfannenstiel. Mr. Chairman, if I might, it seems 
like there are three questions there. One is whether there is 
any analysis that said 50 percent is the exact----
    Mr. Forbes. And I understand you have said you are not 
aware of that.
    Secretary Pfannenstiel. But I will certainly get you any 
analysis that led to the number of 50 percent. The second is 
whether this is, in fact, an achievable goal. And that, again, 
is the LMI analysis which I will provide to you, which says 
that.
    And then the third part is, well, what would it cost to get 
there. And what we have put forward here, and it is part of our 
statement, is that it will cost the Department of the Navy $170 
million. And because that $170 million will be leveraged six 
times----
    Mr. Forbes. But do you have for us to review--I don't doubt 
your word, I am just saying do you have an independently 
verifiable metric analysis that shows that that investment will 
get us to that goal by 2020?
    Secretary Pfannenstiel. The LMI analysis said that by using 
the DPA----
    Mr. Forbes. No, no. But you said it didn't say the dollar 
figure. And what I am looking at is, how do we know that this 
investment gets us to that goal by 2020 versus being a down 
payment on more that we are going to have to expend?
    Secretary Pfannenstiel. I think, from the committee's 
standpoint, there is a wait-and-see, that is perfectly 
legitimate, of saying the $170 million investment that we are 
making, watching how that is leveraged with other departments 
and then private sector money, and that, then, pool of 
dollars----
    Mr. Forbes. But let me--if I can, again, respectfully--just 
say we are not in the business of spending that kind of money 
and just waiting and seeing. You know, I don't think it is 
unreasonable that we would ask could you just give us some sort 
of independently verifiable study that says if we pay these 
millions of dollars out of the taxpayers' money, we are going 
to reach the goal.
    And what I am hearing you say is that, at least to your 
knowledge as the person that would know that, you are not aware 
of any such study right now that would show if we spend this 
money we are going to attain this goal.
    Secretary Pfannenstiel. I am sorry. I must not have been 
clear. I do believe that the LMI study does say that.
    Mr. Forbes. It says that if we spend this amount of money 
we are going to reach that goal?
    Secretary Pfannenstiel. It says if we use our abilities 
under the Defense Production Act----
    Mr. Forbes. No, no. No, that is not what I am asking. And 
again, thank you for being patient with me. I don't want to be 
argumentative, and I may just not be understanding. You may be 
articulating it very well.
    What I am trying to say is--from what I heard you say with 
the LMI study--it says if we come together we might be able to 
attain this goal. But there was nothing in the study that said 
X number of dollars needs to be invested by the Department of 
Defense or by the Government to reach this goal. And if it does 
say that, how much money does it say needs to be invested.
    Secretary Pfannenstiel. Well, to the extent we were relying 
on the information in that study that would lead us to the $170 
million. I would suggest that perhaps we will share the study 
with you, and if there are further questions----
    Mr. Forbes. But as assistant secretary for energy for the 
Navy, are you aware of the dollar figure that that study says 
we would have to invest on behalf of the Government to reach 
that goal?
    Secretary Pfannenstiel. Mr. Chairman, other than the $170 
million that we have put forward, I am not sure how else to 
answer the question.
    Mr. Forbes. And thank you for that.
    Secretary Burke, could I ask you something? You said in 
your statement, ``We will only purchase alternative energy when 
it becomes price competitive.'' Did I misinterpret that, or was 
that a fair----
    Secretary Burke. At operational quantities, yes.
    Mr. Forbes. In operational quantities. Have you seen--
because, again, I come back to what the Secretary of the Navy 
has put out, and I know that you have looked at his goals and 
all, too, and especially in relationship to his concern with 
biofuels--have you seen an independently verifiable study that 
shows the time period when biofuels will become price 
competitive with non-biofuels?
    Secretary Burke. Sir, the LMI study that Secretary 
Pfannenstiel was referencing was, of course, a study that you 
required us to submit. And additionally, you required us to 
submit two different studies; one that was authored by the RAND 
[Research and Development] Corporation and one by LMI. And LMI 
looked at a variety of possibilities and questions.
    And, of course, it is very difficult to speculate in this 
area what is going to become available when. There are a lot of 
open questions. And I think one of the things that we are 
looking at, you know, all the Services have a variety of 
targets and goals. And my office is looking to build a better 
baseline and to collect better data so that we can have 
overarching goals that are more data- and analytically-based. 
And we will certainly be looking at this as we establish our--
--
    Mr. Forbes. And I give you a compliment. I have bragged 
about you for all that you have done. And I know you are 
looking at that going forward. That is not my question.
    Secretary Burke. I think you know the answer.
    Mr. Forbes. But I need to get it on the record. And if I am 
wrong on that--because I am not the one testifying--my concern 
is this. We are asking the taxpayers of the United States of 
America to pay millions of dollars. Now, that may be small in 
terms of $19 billion, but it is still important.
    And my question is not whether we are going to develop 
metrics that may later sustain----
    Secretary Burke. No, you are right, sir. The LMI study----
    Mr. Forbes. My question is, do we have any independently 
verifiable studies that say if we spend this money we are going 
to attain this goal? And if so, when do those curves cross?
    Secretary Burke. The LMI study did have a dollar figure in 
there, and I believe it was $2.2 billion. So they made some 
estimates about what they thought would be required as far as 
public investment. And it did not look specifically at what 
kind of dollar investment would be required through the Defense 
Production Act, which is DOD--but also Department of 
Agriculture, DOE [Department of Energy]--and private sector 
match. So----
    Mr. Forbes. Did, in that study, it say when it would become 
competitive with non-biofuels?
    Secretary Burke. I believe--and it has been awhile since I 
have read their study--but I believe that was the basis for 
that number, was meeting the targets of both the Air Force and 
the Navy by date certain that that is what----
    Mr. Forbes. So then it is your understanding that it will 
be 2020 before the biofuels become a competitive price point 
with non----
    Secretary Burke. Sir, I don't know at this time. And I have 
seen a lot of studies in this area, and I don't think anybody 
knows exactly since we are still in a research, development and 
demonstration phase with these alternative fuels. I think there 
are a lot of very promising technologies.
    And I do believe that the Defense Production Act 
Investment, which is run out of Acquisition, Technology and 
Logistics, will give us an opportunity to get a better feel for 
these promising technologies and what their potential 
trajectory----
    Mr. Forbes. And if I can just tell you why this is so 
important and why I am taking this time, I come back to the 
concept of a stretch goal, whatever that might be. You know, 
but I take it that is a huge goal and you may not be able to 
get to it.
    But we are willing to take a stretch goal that we cannot 
justify where we come up with the figure 50 percent. I am not 
saying it is not the right figure. I am saying we don't have 
any independently verifiably analysis that this is the right 
figure. We can't come up with the total dollar outlay it is 
going to take to get there by any metrics that proves it. We 
can't come up with any pricelines.
    And yet when I look at shipbuilding, I see the Secretary 
coming over here with a shipbuilding plan. And he won't take a 
stretch goal on shipbuilding, you know, but we are coming down, 
and cutting down the goal that we have had of 313 ships and 
saying, ``No, 300 is enough.''
    And I am just looking at the Navy and saying why in the 
world, if we are going to have a stretch goal on alternative 
energy, shouldn't we have a stretch goal on shipbuilding. But 
let me then come back to this point. I want to come back to the 
biofuels thing. Why the Navy?
    I mean, the Air Force--and I am not going to get you in 
this, Mr. Secretary. You can say it, but I think the Air Force 
has taken a pretty good stand. They have said, ``We are going 
to sit back, and if this is there we are going to be a customer 
and we are going to buy it. Week are going to buy lots of it,'' 
you know.
    Why the Navy? What makes the Navy in a better role to spend 
this money than the Air Force? After all, the Air Force is the 
biggest consumer of energy we have.
    Secretary Burke. Well, I think the Navy should, Secretary 
Pfannenstiel, should speak specifically to that. But I would 
like to say that all of the Services have different roles and 
missions, and they all calculate how to meet them differently. 
And I would say that in my space a stretch goal is in terms of 
capability, and that the Department last year used 5 billion 
gallons of petroleum. And we are going to be depending on 
liquid fuels for the foreseeable future.
    And that in the timeframe of many of the platforms and the 
capabilities that the Navy has, and that the Air Force has and 
the Army has, we are going to have a problem with the 
petroleum, with the volatility of the price----
    Mr. Forbes. Okay, let me take you there, then. Let us look 
up at this chart on volatility.
    Secretary Burke. Right.
    Mr. Forbes. And if we wanted to look at volatility, and we 
really were concerned about that, why not do fixed-price 
contracts like the Air Force has talked about? That would have 
locked it in and you would have known right there. Why not do 
that?
    Secretary Burke. Are you talking about fixed-price 
contracts for petroleum, or for----
    Mr. Forbes. For fuel. Yes, for petroleum.
    Secretary Burke. Actually, I would like to take that 
question for the record because I have been talking to the 
comptroller and to DLA [Defense Logistics Agency] Energy about 
the way they manage fuels contracts. And we do try to follow 
industry best practices, and it is not an industry best 
practice to set a price more than, you know, 5 years in 
advance, which----
    [The information referred to can be found in the Appendix 
on page 135.]
    Mr. Forbes. But if you were talking about volatility, that 
would do a better job.
    Secretary Burke. Not necessarily. So that is what we are--
we are looking at that now.
    Mr. Forbes. If I have a fixed contract for $4 a gallon and 
it is for 5 years, why wouldn't that lock it into $4 a gallon?
    Secretary Burke. When you have a fixed price on something 
as volatile as fuel markets you can win or lose. And also 
suppliers have a vote in that in whether or not they will take 
those kinds of contracts. As I said, I would like to take that 
question for the record because the comptroller and DLA Energy 
are the experts in how we manage those contracts, so I would 
like to get you a better answer on that.
    Mr. Forbes. That is good.
    Secretary Pfannenstiel, why Navy? Why are they better off 
spending this money than one of the other Services?
    Secretary Pfannenstiel. I wouldn't say we are better off 
spending this money than the other Services, but it is our very 
firm belief that by spending this money we will provide the 
advantages that I have talked about in terms of reducing the 
price volatility and----
    Mr. Forbes. Okay, just a couple more questions, then I want 
to go to other members. But let me come back to your volatility 
issue. Because it is fair to say that with the biofuels aspect 
we are not doing anything with the safety of the warfighter 
differently. I mean, a gallon of biofuels is a gallon--it is 
the same as a gallon of non-biofuels, correct?
    Secretary Pfannenstiel. In terms of delivering fuel----
    Mr. Forbes. In terms of delivery. And we are not 
necessarily doing anything with flexibility. Could be, but we 
don't have the studies to really verify that right now, do we? 
We might find that to be the case. We don't know now.
    Secretary Pfannenstiel. Flexibility for the warfighter.
    Mr. Forbes. So we are really looking primarily at 
volatility. Ninety percent of all the fuel consumed by the 
Navy, with its ships and its planes in a deployed status, is 
purchased overseas. Is that correct?
    Secretary Pfannenstiel. Ninety percent that is used 
overseas, is purchased overseas?
    Mr. Forbes. No, no. All of our deployed ships and planes, 
90 percent of it is purchased in foreign markets.
    Secretary Pfannenstiel. I don't know that the number is 90 
percent, but I will certainly take that for the record.
    [The information referred to can be found in the Appendix 
on page 135.]
    Mr. Forbes. What do you think the number is?
    Secretary Pfannenstiel. Ninety percent could be fine, but I 
just don't know that personally so I have to take that for the 
record.
    Secretary Burke. Sir, I can tell you that a little more 
than 50 percent of the fuel we consume is OCONUS [Outside of 
Contiguous United States]. But----
    Mr. Forbes. So that is 50 percent of----
    Secretary Burke. Right.
    Mr. Forbes [continuing]. All of our fuel across the board. 
I am talking about deployed ships and planes.
    Secretary Burke. Right. But we do consume a considerable 
fuel at home for readiness----
    Mr. Forbes. I understand. But of the deployed ships, 
because we are talking about warfighters now----
    Secretary Burke. Absolutely.
    Mr. Forbes. Of deployed ships and planes, isn't it true 
that 90 percent of our fuel is purchased overseas?
    Secretary Burke. Yes, sir, we fuel where we fight.
    Mr. Forbes. Okay. Now if that is the case, what kind of 
investments are we going to make in biofuels overseas? Because 
we are talking about, really, 10 percent of the fuel that we 
are buying here on deployed vessels. So we are really not 
talking about having much of a measurable impact on our 
warfighter, are we?
    Secretary Pfannenstiel. Well, we are. In fact, we will be 
able to move a large chunk. And again, once we are buying in 
operational quantities----
    Mr. Forbes. No, no. I am saying, let us say you hit home 
runs on everything you are talking about in the Navy. You fill 
up your ship here, that is it. Because once that ship leaves, 
90 percent of everything it is going to buy is going to be 
overseas. Are we going to make any investment in biofuels 
overseas?
    Secretary Pfannenstiel. I am not suggesting that we are. I 
would suggest two things. One is that once the biofuels market 
has developed and has demonstrated itself through not just our 
purchases, but through our purchases and commercial purchases, 
there is no reason that there would not be biofuels overseas. 
So that would be one----
    Mr. Forbes. But we are not trying to build up biofuel 
markets overseas, are we?
    Secretary Pfannenstiel. We are not in that----
    Mr. Forbes. Okay. And then when we talk--let me ask you 
this last question. For our biofuels, we are talking about 
cutting our costs down. But if biofuels are competitive at some 
particular point in time, what lock-ins do you have to the 
industry? Why won't the people who are producing the biofuels 
raise their price if the competitive fossil fuels go up, as 
well? How are you going to stop them from raising their prices?
    Secretary Pfannenstiel. Those prices may track fuel prices 
but, in fact, if we have a domestic supply----
    Mr. Forbes. But couldn't we have a domestic supply equally 
by having the Keystone pipeline, having additional drilling 
that would take place? Or maybe changing 526 so we can use--
there are a lot of other ways we can get supply, I guess is 
what I am saying. And all this is another method of supply.
    Secretary Burke. Look, sir. If I may add, I would just like 
to say I think we all agree. I think there is a very strong 
bipartisan consensus that we need alternatives to foreign oil. 
And the Department is certainly looking for our long-term 
interests here as a major user of liquid fuels.
    So we are looking to see, to develop the alternatives, and 
to have an insurance policy to be ready. Most of our 
investments have been in testing and certifying to be able to 
use alternative fuels. There are plenty of studies in the 
commercial sector about biofuels--not specific to the Navy's 
goals, but generally--that predict the possibility of 
competitiveness in 8 to 10 years. It is very difficult to say 
how you are going to get there from here.
    What we are looking for at a departmental level and OSD 
[Office of the Secretary of Defense] level is an insurance 
policy, and making sure that everyone here wants to make sure 
that we have alternatives when we need them. So that is our 
departmental priority that you will see reflected in the policy 
that we are developing, that you directed us to develop.
    Mr. Forbes. And just in my response on that, I absolutely 
agree. But an insurance policy requires that we be able to come 
back and say, we are going to get A when we need A. And 
basically, what I am hearing at this hearing is this. We came 
up with a 50 percent goal that the Secretary of the Navy 
developed and there is no independent analysis, at least that 
anybody can give to me today that says 50 percent was the right 
number. I would like to see that if you have it.
    The second thing is that we don't have a clue right now of 
how much it is going to cost to reach that 50 percent goal. And 
taxpayers at least need to know because there are other options 
out on the table and they need to explore both. When we are 
talking about capacity, I want to know is it going to cost me a 
submarine, is it going to cost me a carrier. What is it going 
to cost me to get there? And we don't know that.
    Third is, that insurance policy is going to tell us if 
particular thing happens we know we are going to get paid. But 
in this particular situation, there is no independent analysis 
that tells us, at this point, this is where we project these 
curves to come. And then the final thing I would just share 
with you, there are a lot of options for increasing supply. Why 
not put all those options on the table?
    And in addition to that, the bottom line is if we increase 
it over here we shouldn't be kidding ourselves. Ninety percent 
of what we are going to be buying is going to be overseas that 
we are not going to be controlling anyway.
    And so with that, I want to yield to the ranking member for 
any questions she might have.
    Ms. Bordallo. Thank you very much, Mr. Chairman. Again, 
thank all of our witnesses.
    Dr. Robyn, as you know, the President's budget anticipates 
utilizing $2.4 billion in third-party energy investments over 
the next 5 years to meet the mandated 30 percent decrease in 
energy intensity for 2015. Now, what type of third-party 
investments are we looking at, and does the Department of 
Defense need authority to achieve this goal?
    Dr. Robyn. Thank you for the question. And let me just 
start by saying achieving a 30-percent reduction in energy 
intensity by 2015 and 37.5 percent by 2020, that is a stretch 
goal. So we don't have to look at biofuels to find it is a 
stretch goal. And we need third-party financing to get there.
    I will let Katherine talk about what the Army is doing 
because they have really gotten out ahead on this. I will say a 
couple of things. As I said in my opening statement, the 
acquisition process is way too cumbersome. We can't get there 
unless we do streamlining. Army has done a better job than 
anybody--including FEMP [Federal Energy Management Program], 
the DOE's Federal Energy Management Program--of streamlining 
the process. But we have a ways to go.
    Internally, we need to resolve some minor issues between 
the Services over what can be done through an ESPC [Energy 
Savings Performance Contracts]. Can you use appropriated funds? 
OMB [Office of Management and Budget], I think, will give us 
good guidance. We haven't seen it yet, but in terms--for 
example, Army is using ESPCs to do small-scale renewable 
projects, in addition to O&M [Operations and Maintenance] kinds 
of retrofits.
    I don't believe we need any additional authority at this 
point. I think, a year from now, I may give you a different 
answer. But I think it is helpful that the President made a 
commitment on this because you now have OMB engaged in giving 
us guidance. And they will be giving us a stoplight chart, they 
will be tracking our performance on this.
    So I think we are good. I think we have just got to fix the 
acquisition process so companies will work with us.
    Ms. Bordallo. Okay.
    Could we hear from the Army how you have streamlined it, 
sort of?
    Secretary Hammack. Absolutely. Taking a look at the 
processes, first of all there is an acquisition process that 
Congress has given us as to how to appropriately contract. And 
so we have to follow that, which is more lengthy than that in 
the private sector.
    That being said, working with our own terms and 
conditions--having what we call MATOCs [Multiple Award Task 
Order Contracts], which are master contracts where someone bids 
in and we get them qualified like a multiple award task order 
contract--and then by working to educate and train our 
installations on how to use the contracts. What kind of 
projects are appropriate for that versus going and asking for 
MILCON dollars?
    It is an educational process. It is an educational process 
from the installation level, through contracting, through 
attorneys, and through our own agency to ensure that we are all 
appropriately tracking, monitoring, supervising, and we don't 
let something linger on our desk.
    We are hosting a forum next week with all of the MATOC 
orders--I think there are 18 of them that are on the Army 
contract--to ask them where they see challenges in working with 
the Federal Government, how can we be a better partner in the 
acquisition process, where they see challenges, and if they see 
need for changes.
    Again, by looking at ourselves and how we are managing the 
process and ensuring we are educating people, we can improve 
the process.
    Ms. Bordallo. Great. I have a follow-up along these same 
lines, and this is for any of our witnesses. Over the past 
several years, to what extent has your office used appropriated 
monies versus energy savings performance contracts for funding 
energy efficiency projects to reduce installation energy 
consumption?
    And what changes in funding sources do you anticipate in 
future years? To what extent is the expedited contractor 
selection process being used? And what is the average length of 
time for DOD's contractor selection process?
    Anybody can jump in.
    Secretary Hammack. There are about six questions there, so 
I am going to try and----
    Ms. Bordallo. Well, yes.
    Secretary Hammack. Right now, it is taking us 12 to 15 
months in the contracting process. It used to take 2 to 3 
years. So that is an improvement in the process.
    We use the multiple award task order process. We feel that 
that helps to streamline things so we feel that that is 
appropriate. When we do a MILCON project and use appropriated 
funds for a MILCON project, quite often there is more than just 
energy in that project. Energy efficiency might be part of it. 
It could be part of a new building. It could be part of 
replacing a failing infrastructure and putting in one that is 
more energy efficient.
    We are not doing it for energy efficiency reasons only. We 
are doing it because we need that new infrastructure to support 
current operations and potential expansions.
    What we look at ESPCs for are those efforts that are truly 
focused on energy efficiency as the primary driver. And it is 
the ability to do things without having to go to appropriated 
funds, that we have the resources in the local community. That 
can be anywhere from lighting to boiler replacement to controls 
technology that help us better manage our installations and 
reduce our consumption.
    One of the challenges, I will tell you, is that as we 
reduce our consumption our focus is on reducing costs at the 
same time. But we are finding that, at best, we are reducing 
consumption as the cost of energy goes up. So if we are able to 
maintain our utility costs, that is a good news story as we 
reduce our consumption.
    Ms. Bordallo. Very good. Anybody else want to jump in on 
that? Pretty much you all agree? All right.
    For Secretary Pfannenstiel, I know that Secretary Mabus has 
set forth very aggressive energy goals and the intent to sail 
the Great Green Fleet. However, can you talk about the payback 
and the long-term benefits of this upfront investment? What is 
the risk to the Navy and the Department broadly if we don't 
make these investments now? And also how critical is biofuel in 
these investments?
    Secretary Pfannenstiel. Thank you, Congresswoman Bordallo. 
Let me start with the end, and biofuels are critical. And they 
are critical because they are an opportunity to pursue a 
domestic industry with domestic American jobs and investment. 
And they are also a new source, if you will, of supply that 
will enable us to move forward, that will help us mitigate some 
of the price volatility of the dependence that we have on 
imported fuels.
    The great green fleet is, in fact, a symbol. It is the 
opportunity to demonstrate that, in fact, these fuels are 
operationally capable. The full sailing of it is not intended 
to be a commercialization, but rather it is part of our 
evaluation and certification program to demonstrate that these 
fuels are, in fact, capable of being operational.
    And let me just point out, because I think there is some 
misunderstanding about the Great Green Fleet, it is called the 
Great Green Fleet to denote, to compare it to, the Great White 
Fleet, which President Roosevelt sent around the world in the 
early part of the 20th century to demonstrate America's 
achievements and technological prowess. And that is sort of how 
we are thinking about that. That is where that came from.
    Did that answer all of your questions?
    Ms. Bordallo. I think so. I think so, yes. And I have one 
for Secretary Burke.
    Can you discuss how your office and the Department is going 
to ensure the operational energy plan is executed uniformly 
throughout the Department? And further, how is the Department 
incentivizing contractors in contingency operations to find 
innovative technological solutions to reduce demand for energy 
in forward locations?
    Secretary Burke. Thank you, Congresswoman. First, the 
operational energy strategy and the implementation plan are 
both required by law. They are both new instruments. And they 
do give, at the Department level, guidance and direction and 
targets for the Department to meet. So they are in of 
themselves one way to streamline how the Department, at the 
departmental level, is making these investments.
    Also, the Secretary of Defense has established the Defense 
Operational Energy Board, which is co-chaired by me and also by 
the Joint Staff director of logistics. The chairman put him in 
charge for the Joint Staff. And we will be overseeing the 
implementation of the strategy and the plan, and with all of my 
colleagues here participating in that board. So that will give 
us a way to improve the coordination and the tracking of the 
implementation of that plan.
    And then finally, I have an unusual legal authority that 
you gave me, which is I have budget certification authority. I 
do, every year, provide a report to the Secretary of Defense on 
whether or not I can certify how well the Department, how well 
the Services, are programming and budgeting to the operational 
energy strategy. And so that also gives me a powerful tool for 
keeping on track with those goals.
    Ms. Bordallo. Yes.
    Secretary Burke. As for the incentivization, I would 
actually like to turn this over to my Army colleague, but I 
just want to say that the Army has taken the lead in their 
logistics civil augmentation--is the right plan--for logistics. 
It is the LOGCAP [Logistics Civil Augmentation Program], LOGCAP 
contracts in Afghanistan, in changing the incentive structure 
in those contracts so that the contractors are looking at 
energy efficiency and at better energy performance for military 
operations.
    So it changes the bias against energy performance. And we 
are looking at that and watching the progress on that as the 
potential for important precedent for the Department.
    Ms. Bordallo. Thank you.
    Secretary Hammack.
    Secretary Hammack. Certainly. And it is an incentive for 
the LOGCAP contractors to bring us ideas in their day-to-day 
operations, ideas to reduce the amount of energy that they are 
using, whether it is electricity, whether it is water or 
whether it is straight fuel consumption.
    And since we implemented it in the last 6 months, we have 
seen 133 proposals come forward. We have implemented 40 of 
those proposals. Eighteen of them were not approved because of 
payback, or they were asking for improvement on a base that we 
had in closing status. And we have 75 in process of evaluation.
    Last summer I was over in Afghanistan. I met with them, and 
we walked around and we talked about what they are doing. And 
they are setting up teams with a focus on energy efficiency in 
their contracting operations.
    Ms. Bordallo. Are you referring to the Net Zero policy?
    Secretary Hammack. No, ma'am, I am not. This is LOGCAP 
contracts in-theater.
    Ms. Bordallo. Can you talk on that a minute? Just how does 
the Net Zero water contribute to energy security?
    Secretary Hammack. Certainly. The Net Zero program is 
focusing on using the amount of energy on the base that you are 
able to produce on the base, and also reducing the amount of 
water consumption and returning that back to the local aquifer 
so that you are not depleting your groundwater aquifers.
    Our primary net zero focus is in the United States on our 
permanent installations, to ensure we are managing the 
resources that are available. But we also have a net zero at 
the edge, and that is for our forward operating bases. Some of 
it is utilization of this kind of technology that you see 
before here, whether it is solar or other renewable energy.
    But on water security, if you think of a forward operating 
base we have to get water to them. We have to pump the water, 
we have to treat the water. Water uses energy in everything 
that it does. We are working with technologies, one of which is 
water from air. And you might find that difficult to think 
about, but in the D.C. [District of Columbia] area, we have 
dehumidifiers, which is water from air.
    So if you take that and purify it, you can go for a period 
of time without having another water supply.
    We are also looking at water from vehicles. I mean, again, 
you park a vehicle and you can see water running out from 
underneath it, and that is condensation. There is water that is 
available, and we can empower our force to fight longer or go 
out further if we have alternate ways of finding water and we 
use less water in our operations.
    And so that is a critical focus for empowering the 
warfighter.
    Ms. Bordallo. Thank you. I just have one question more, Mr. 
Chairman.
    I don't want to leave Secretary Yonkers out of this. He has 
been so silent here. No questions for him, but now I have one. 
The Air Force aviation accounts for half of the U.S. 
Government's total fuel consumption. Now, what steps is the Air 
Force taking to reduce this demand and to look toward 
alternative sources of energy?
    I understand that, in the fuel market, it is a major factor 
driving increased costs. So what could Congress do, or what 
further can the Department do, to provide greater stability to 
the market?
    Secretary Yonkers. Well, again, several questions, ma'am. 
And let me see if I can kind of answer them. First of all, I 
think Congress as well as this president and past presidents 
have done quite a lot in terms of setting the goals and 
expectations.
    So, right off the top of my head, I am not sure what more 
could be done. We are driving towards achieving those kinds of 
objectives right now for the reasons that I talked about in my 
opening statement. It is the right thing to do, it enables our 
mission, and it is, you know, looking at the business case 
analysis and these things.
    So what are we doing in the Air Force to try and reduce 
that cost? And again, I sort of addressed that in the opening 
remarks. But we have established a goal--and again, it is one 
of those stretch goals--10 percent of reducing our jet aviation 
use over the course of the next 6 or 8 years will give us 
about--well, it will give us about $2 billion worth of cost 
savings, based on today's fuel prices.
    So what are we doing and how are we going to get there? 
Well, we are looking at it from a number of different ways. We 
are looking at some of our research and development dollars 
going into those kinds of engines that I talked about, where we 
can, you know, create a better engine, a more sustainable 
engine, that gives us not only fuel efficiency on the order of 
30 percent, another stretch goal, but also looking at how long 
those engines might last.
    So we get sort of a double bang for the buck. If we don't 
have to sustain engines because they are more effective and 
efficient, if we don't have to sustain them as often, we are 
also looking at cost savings in our maintenance and 
sustainability costs.
    We are also looking at simple things like how we optimize 
weight on aircraft. And right now, just from the last few 
months, we have been able to achieve greater ton mile per 
gallon efficiencies, on the order of 27 percent, by optimizing 
how we load and the kind of things that we put on aircraft, 
with only a 3 percent cost growth in that arena.
    So we are looking at it from research and development, we 
are looking at it from a pragmatic how do we fly differently 
and better and be more conscious about the way we use energy, 
and we are developing these independent stretch goals to help 
us get there.
    Ms. Bordallo. Thank you, Secretary.
    Mr. Chairman, I yield back.
    Mr. Forbes. Thank you, Madeleine. Dr. Heck is recognized 
for 5 minutes.
    Dr. Heck. Thank you, Mr. Chair. I want to thank all of you 
for being here today and for providing the information that you 
did. And at the installation level, what you are doing to make 
the lives of our service men and women better at the 
operational and tactical level, making our war fighters safer. 
And at the strategic level, increasing our national security 
from an energy perspective.
    Now, Dr. Robyn, you mentioned the importance of alternative 
fuels to facility security, especially in continuity of 
operations and grid disruptions. And so in that regard, I want 
to give a shout-out to Secretary Yonkers and the Air Force, for 
Nellis Air Force Base, that has a 70,000-panel photovoltaic, 
14-megawatt solar field that provides 25 percent of their base 
power. I think it is a prime example of what can be done if we 
put our minds to it.
    Secretaries Hammack and Pfannenstiel, you both mentioned 
the casualties associated with convoys and moving fuel. And I 
can tell you firsthand, when I was chief of emergency services 
in aeromedical evacuation at Al Asad I took care of more than 
my fair share of casualties from convoy operations, 
specifically moving fuel. So I appreciate that point.
    Yet we know that as we continue to move technology out to 
the forward edge of the battlefield there are going to be 
increasing demands for more power, and with that more fuel. So, 
Secretary Burke, you talked about supply diversification. We 
use solar as an example in Afghanistan.
    What is the penetration of alternative fuels out at the FOB 
[forward operating base] and COP [combat outpost] level 
currently, and how much of the budget? And what are the plans 
for increased research and development for more man-portable 
alternative generators?
    Secretary Burke. Thank you, Congressman.
    The penetration right now, we do have a number of efforts 
to try to rapidly field. But as you know, when you are talking 
about an ongoing operation, those things, you have to be 
careful about how you are folding in new capabilities.
    And they are not all innovations in materiel means, in 
technology. There are also a lot of process innovations. And 
the Army's rapid equipping force has done some very interesting 
work in this area, in that they have gone out to some of the 
farthest-flung patrol bases and forward points and looked more 
carefully at how they are using energy and where there are 
opportunities to improve.
    And one of the things they found is that a lot of the 
service members at those remote bases don't actually know how 
to use their generators very well and don't have a good laydown 
for the distribution. So the rapid equipping force has been 
rapidly fielding information and also just distribution. And 
that, in of itself, is taking a lot of fuel out of the 
equation.
    So we are looking for where the opportunities are. And I 
think what has really been helpful in that is that General 
Petraeus, and now General Allen, have both put out memos to the 
forces that this is an important area of activity. They have 
set up an office in U.S. Forces Afghanistan to manage it and to 
look for what are the best ways to effect change in this area.
    And they have begun to put into place a number of things, 
including centralized power, better distribution. And, you 
know, I think that the Army can talk to that. And also the 
Marine Corps did a great job. They did their experimental 
forward operating base, figured out what was going to work best 
to give soldiers, to give marines, at the tactical edge a 
capability. And then they made a program of record, and we are 
fielding it to 25 battalions.
    Of course, they are coming down now in their force levels 
in the southwestern part of Afghanistan. So they won't be 
fielding it as much as they had planned because they are coming 
out. So there have been a variety of ways that we have 
addressed this, and we are seeing it increasingly brought into 
training.
    So that is some of the ways that we are getting that done 
right now in the field. And going forward, what we really want 
to do is get into the requirements and acquisition process. So 
not so much having projects that are put on afterwards, but 
rather that are built into the system and how we actually 
create a demand signal for energy.
    Because you mentioned that the power and the fuel 
requirements are going up. We need to get in early into how we 
actually require and acquire systems, equipment, platforms, and 
put these kinds of considerations in up front. So that is what 
we are really aiming at here is how to make this part of how we 
do business and not projects that we have to retrofit or figure 
out how to get into the field.
    Dr. Heck. Great. Thank you.
    Thank you all very much. And again, I appreciate what you 
are trying to do and I thank you for being here and bearing 
with us during this hearing process.
    I yield back, Mr. Chair.
    Mr. Forbes. Jack, we thank you. And thank you for your 
service to our country.
    And the gentleman from North Carolina is now recognized for 
5 minutes.
    Mr. Kissell. Thank you, Mr. Chairman. And I appreciate our 
witnesses being here today, so it is an opportunity to say 
welcome ladies and gentleman. So we don't get that opportunity 
very often.
    And we know we have got votes coming up again in just a 
couple minutes. So rather than ask a lot of questions, I really 
just want to make a couple statements and maybe finish up with 
a question. The chairman mentioned early on that Senator Warner 
was adding something to our record. I know that Senator Warner 
took a tour of a lot of our bases, with energy being 
specifically what he was looking at.
    I had the opportunity to join him down at Fort Bragg, and I 
would like to say specifically--and I forgot to mention this--
Secretary Burke, we appreciate the position you are in. This is 
a position I supported very strongly. And, Dr. Robyn and 
Secretary Hammack, I appreciate the opportunity to see you guys 
again, and appreciate the work that you all do and the 
interaction that our offices have had.
    When Secretary Warner came, we got the usual suspects 
together down at Fort Bragg to talk about energy. And it 
started out being one of those usual tours, where you get, you 
know, the slides being shown and talking about the number of 
this and number of that. And fairly quickly, the senator and I 
said, ``That is not what we are here for. We want to talk about 
energy. We don't want a base tour. We want to know what is 
going on.''
    And so we quickly got into conversations. And a young lady 
there who was really heading up the energy plan, doing a great 
job, got down to two things. She said it is not sexy, but 
retrofitting is the best way to save energy. Even to the 
percentages of, like, 30 percent of the energy can be saved. 
And the best energy, we don't have to worry about new ways of 
generating if we don't use it.
    The other thing that was brought up that really caught me a 
little bit by surprise was building maintenance. That while we 
are going out and building new buildings, it was suggested that 
we are not putting the amount of money into maintenance of our 
buildings that we should to keep those buildings in as good a 
shape as they should be. And we have seen evidence of that from 
time to time in different places.
    So I would encourage us to make sure that, as we are 
building, that we maintain those buildings so that the energy 
advantages we build in we can keep. The metering that was 
mentioned. I know in one hearing once before it said about the 
Navy, when they bring their ships into port they are now 
putting meters on the energy being brought in. And it has 
reduced the amount of energy for a ship at dock as versus not 
being measured.
    So I think that is very important. We talked about that at 
Fort Bragg quite a bit, too, the importance of putting a meter 
on.
    Now, I also had some soldiers suggest to me that soldiers 
like nothing better than to work around a meter. So I have an 
idea that as we do this we will have to keep an eye out to make 
sure that the ingenuity of our troops is kept, you know, in the 
right ways.
    But these are very important areas. And once again, I have 
sent letters about this trip and about these concerns. And this 
is an ongoing conversation we are having so I am really not 
looking for an answer to this.
    But one thing I want to bring up, I know at Fort Bragg they 
just recently set up a third source of energy coming into the 
base. We had a tornado last year that temporarily knocked the 
power out to Fort Bragg. And I think at that point in time we 
only had two ways in, and now a third one has been set up.
    But what about cybersecurity? That is one thing that, you 
know, I know that we are hearing a lot more about, you know, 
not only on our base, but the surrounding sources of energy. 
How well are outreach utility grids prepared to handle a cyber 
attack, and how well are our bases prepared to handle a cyber 
attack in terms of energy?
    Obviously, other things are important, too, but 
specifically today about energy. And I would leave that for 
whoever would like to answer.
    Dr. Robyn. I will start, and then maybe Katherine will pick 
up. I think there are a lot of threats to the grid, to the 
commercial power grid. And you can put a lot of them in one 
category, and then cyber is in another category because it is a 
harder problem. And I think there is a lot of effort going into 
it. And I can't really speak to--I don't want to try to 
characterize how vulnerable our grid is to cyber attack.
    I think we, as a department, have concluded that there are 
a number of vulnerabilities to the grid and that it is 
desirable for us to gain the capability to go off the grid if 
the grid goes down for a prolonged period of time. We don't 
envision operating off the grid permanently. We envision 
continuing to use the local commercial power grid, but we want 
the ability to be able to go off the grid and maintain critical 
operations off the grid if the grid goes down.
    Mr. Kissell. And Dr. Robyn, my time is out. And I can 
appreciate your not wanting to talk some specifics. I guess I 
rest assured knowing you guys are aware of it and working on 
it.
    And I yield back, Mr. Chairman. Thank you so much. Good to 
see you all.
    Mr. Forbes. Thank you, Larry.
    The gentleman from Georgia is recognized for 5 minutes.
    Mr. Scott. Dr. Robyn, in a recent hearing with Secretary 
Mabus I asked him some very specific questions with regard to 
the one gigabyte of power that the Navy was going to deliver 
for shore power. He assured me that that was going to be a 
public-private sector initiative and that there was going to be 
no taxpayer dollar initiatives in that.
    Yet as I read some of the other testimony, it says that it 
may be a joint venture or enhanced-use leases. Can you explain 
to me the difference in what I was told and what I am reading?
    Dr. Robyn. Did you mean to direct that to me or to 
Jackalyne Pfannenstiel?
    Mr. Scott. I meant to direct it to you. I know what--I have 
met with her already.
    Dr. Robyn. Oh, okay. Okay. Well, Navy, my understanding of 
their plan and what they have done so far is to use third-party 
financing to achieve the large-scale renewable energy projects. 
And the Navy has been the first to use what we call 2922(a) 
authority. That is a power purchase agreement authority that we 
have. That is different than an enhanced-use lease.
    Mr. Scott. Just to make it clear, it is not going to be an 
enhanced-use lease and it is not going to be a joint venture by 
the Navy.
    Dr. Robyn. Well, the term ``joint venture'' can mean a lot 
of different things.
    Mr. Scott. Yes, ma'am. It can.
    Dr. Robyn. But a power purchase agreement is basically an 
arrangement where an outside entity, a private entity, finances 
a project. We provide the land, and we say we will be a 
customer for the power that is produced. And in exchange, they 
pay to build it. They can take advantage of tax incentives that 
are not available to the Federal Government. So it is the 
logical way for all of the Services to do large-scale renewable 
energy projects.
    Mr. Scott. Okay. So they will be taking advantage, then, of 
tax incentives that would be taxpayer funds.
    Dr. Robyn. Developers will. The developers will, sure. I 
mean, we----
    Mr. Scott. So the taxpayers will have paid----
    Dr. Robyn. Well, these are decisions by the Federal 
Government and by the Congress to provide tax incentives to 
develop alternative forms of energy. The Federal Government, 
Federal agencies, are doing power-purchase agreements that take 
advantage of that. We would be crazy not to.
    Mr. Scott. We are getting very short on time. Can you tell 
me, though, as I looked through all the things that you have 
presented to us it is very apparent, very apparent that there 
is an anti-fossil fuel attitude with the Department of Defense. 
We have abundant supplies of natural gas and many other 
reserves that we could tap that this Administration will not 
allow us to tap.
    But with all of the cuts that are coming to the military, 
132,000 uniformed personnel, why is the DOD taking an anti-
fossil fuel position when you could clearly, clearly save a 
tremendous amount cost on the energy if you used things that 
were readily available, the technology was already there like 
natural gas.
    Can you explain that to me?
    Dr. Robyn. Let me start by saying I don't agree with the 
premise. One of the first things that I did when I got there--
--
    Mr. Scott. Ma'am, I asked you a question, so it is my turn 
to ask the questions.
    Dr. Robyn. Okay, but I----
    Mr. Scott. What are you doing to expand the use of natural 
gas in your----
    Dr. Robyn. Okay, let me--great, I will. I will tell you 
what we are doing to expand offshore drilling. We had 
historically--the Department of Defense, every 5 years, would 
tell the Department of Interior where drilling was compatible 
and where it was not with Department of Defense activities. And 
it was either yes or no, and most of the land was off the 
table.
    When we came in, we took another look at it. We did a more 
sophisticated analysis. That is what allowed President Obama to 
announce, on March 31, 2010, drilling in the eastern Gulf of 
Mexico. That was not a popular decision with some members of 
Congress, but this was drilling in the eastern Gulf of Mexico 
where we have operations, conditional on certain things.
    We are all for drilling in the outer continental shelf if 
it is compatible with our activities. We are all for--we have 
peaking plants at Robins. Well, you know. You are familiar 
with--you represent Robins, so you are familiar with that.
    Mr. Scott. Absolutely.
    Dr. Robyn. That is a terrific solution. We would like to--
--
    Mr. Scott. I am familiar with what your energy mandates are 
doing with increasing the cost of operating the bases. And I am 
just saying that right now, in the budget times that we are in, 
when you are going to eliminate 132,000 soldiers from having a 
position--a position that they and their families have paid a 
very dear price for--why are you embarking on such extremely 
costly measures which you have no guarantee of a return?
    Secretary Burke. Congressman, if I may say, the Department, 
over the future-year defense program, will be purchasing $52 
billion worth of petroleum, and it is absolutely essential to 
our military operations. We are not anti-fossil fuel. We can't 
operate without it. Ninety percent of our investment over that 
time in energy initiatives in the operational space is to 
reduce our consumption of fuel so that we have tactical 
benefits for it.
    So I would disagree with your characterization. That that 
is not why we are investing in efficiency measures and 
performance improvements, or in alternatives. We are looking 
for operational benefits and mission capabilities.
    Mr. Scott. Ma'am, you can disagree with it all you want. 
But people testified here that you all were working to help 
create another domestic energy through the Department; that if 
you go back and listen to the tape, that was mentioned. And if 
you read some of the testimony, every time the cost of a barrel 
of oil goes up a dollar it costs the Department, the U.S. 
taxpayer, an additional $30 million in fuel cost.
    There are things that we could be doing right now, like the 
Keystone pipeline, that would help reduce the cost of a barrel 
of oil----
    Secretary Burke. Congressman, most of our energy----
    Mr. Scott. We could be drilling in ANWR [Arctic National 
Wildlife Refuge], we could be drilling in----
    Secretary Burke. In most of our--operations, that won't 
help us. So we are looking for tactical benefits----
    Mr. Scott. Ma'am, you are wrong.
    Secretary Burke [continuing]. And for military 
capabilities.
    Mr. Scott. You are wrong. Reducing the price of a barrel of 
oil will help every American out there.
    Secretary Burke. Absolutely. And the President has put a 
high premium on that. So the Department of Defense, we are 
particularly interested in capabilities----
    Mr. Scott. Ma'am, that is simply not true. This President 
has done absolutely nothing to reduce the cost of a barrel of 
oil or the cost of a gallon of gasoline. And I would challenge 
you to go fill up your tank this weekend and feel the pain that 
every American is feeling that they were not feeling before he 
became the President.
    Secretary Burke. Sir. I was going to say that for the first 
time in 13 years we are importing less energy, under 50 
percent. We have seen our production rise. These are all 
important. But for the Department of Defense, what we are 
looking at is defense capabilities and defense missions, and 
how energy supports them or undermines them. That is our 
concern. That is what we are going for. That is what we are 
looking to enforce.
    So for me, you know, when the President says ``all of the 
above,'' for the Department of Defense that really is true. Our 
number one criteria in the operational energy space, which is 
where most of our energy consumption is, is the mission and the 
capability. And anything that gets us mission and capability is 
what we are investing in. And you will see that when you get 
the budget certification report.
    Mr. Scott. I look forward to you investing in fossil fuels.
    Mr. Forbes. Let me say this. I appreciate all of you being 
here. Thank you for what you have done. And as I began at the 
beginning, or said at the beginning, I want to thank you for 
all the wonderful things you are doing. And you have done a lot 
of great things, and we certainly appreciate them.
    I think the basic thing we want to do is to make sure that 
we are doing what you said, Secretary Burke. And that is that 
we are looking at capability. The bottom line, it is not the 
great green fleet that matters to us, it is the great fleet 
that matters. And what we don't want to do is to be making 
investments that are coming out of the hide of numbers of ships 
or our capability in some other area.
    And we simply need facts to get our hands around that. And 
so when we look at some of the goals, they are wonderful and 
you have done great jobs in them. But we have to also be good 
stewards of the taxpayer money, and it does bother us when we 
hear about stretch goals in this regard.
    I understand the concept of stretch goals. But when we 
bring them to the taxpayer and say, ``This is what you are 
going to get, so invest these millions of dollars,'' but then 
we don't have any independently verifiable matrix to really 
say, ``this is how much it's going to cost, this is the 
timeline when it's going to happen,'' that does concern us, you 
know.
    And so I want to do this. We have got a vote that is called 
now. Do any of you have anything else you would like to say on 
the record? If you do, then would you just sit here? I am going 
to go cast this one vote, I will come back. Think about what 
you want to say. I am going to give you all the time you need 
to say it.
    Secretary Burke. Congressman, we can enter it for the 
record.
    [Recess.]
    Mr. Forbes. First of all, I just want to make sure that 
everybody isn't mad at Secretary Burke for wanting to say a few 
more things.
    Let me just emphasize something. The first chart that we 
put up, we are spending $19 billion, you know. And this is 
important. As tiring as it is, frustrating as it is, it is 
important we get these things right, you know, to do it. So I 
appreciate you wanting to say something else, and it is well 
worth it for us to stay in.
    And as I told all of you, this is your time. If there is 
something that hasn't been clarified that you needed clarify, a 
question that was unfair, tell us now at this particular point 
in time. And if you don't think of it now, you can submit it 
later for the record, too, because we want to get it correct.
    Secretary Burke?
    Secretary Burke. It was very short point. But now, yes, 
drinks are on me tonight. So I was doing fine before that, but 
it was actually about your last chart that you put up because 
you had asked us what we think. And, you know, I think it is a 
great chart, and an important one.
    And I would just urge you to put one more flag on it at the 
top, which is that for us this is really about capability. It 
is about defense capability and the return on our capability, 
and whether or not we are giving our men and women in the field 
the best that they can have to get the job done.
    And we believe really strongly that in doing that we are 
also going to save money. But our number one goal is to serve 
the mission and to advance our capabilities. So I just wanted 
to urge you to put that at the top, as a banner, that whether 
it is the security of our installations or the security of our 
operations that that is really what we are aiming for.
    Mr. Forbes. And, Madam Secretary, let me just say that I 
agree with you. The one thing we emphasize, too, is just 
because 80 percent of our programs are good, that doesn't mean 
that all of them are. And the second thing is, saying it helps 
capability doesn't mean it always helps capability. Because for 
this reason--we always have to ask questions.
    Everything here is a zero sum game. It is if we spend $10 
million over here, it is less money we can spend over here. So 
we sometimes are making choices between an aircraft carrier, 
another submarine, helmets that we can get for our soldiers. 
Those kind of tradeoffs we have to make.
    So when we are looking at capability, the thing that 
frustrates me, I have to say, is when I hear the Secretary of 
the Navy saying, ``I am going to have a big stretch goal when 
it comes to creating a particular energy source that I might 
like,'' but then he can't document that with independently 
verifiable facts. And he comes in with a shipbuilding plan that 
says, ``I am not only not going to have a stretch goal here, I 
am going to have a shrink goal here when it comes to ships. I 
am going to have a shrink goal when it comes to our planes.''
    And all we are saying is not that he is right or wrong. It 
is just the thing we need to do is ask the questions and get 
the facts out, you know. So I agree with you. And we will put 
that up there. We will change that chart and put it up there.
    Secretary Robyn?.
    Dr. Robyn. Very quickly, while you are changing your 
charts----
    Mr. Forbes. Are you going to mess up all of my charts or 
just the----
    [Laughter.]
    Dr. Robyn. Just one.
    Mr. Forbes. Okay.
    Dr. Robyn. Just this one. I would add cost. It isn't just 
fuel price----
    Mr. Forbes. I was thinking that was in volatility of fuel 
prices----
    Dr. Robyn. Right. This is operational-oriented slide, so if 
you want to expand it to include facility energy you really 
need to say cost. That is----
    Mr. Forbes. Can I ask you two questions? When you are 
talking talk about cost, you mean cost of the investment, cost 
of the fuel?
    Dr. Robyn. The amount of money we spend powering 300,000 
buildings. We spend way too much. We are not investing enough 
to bring that cost around. The only other thing, just to end on 
a high note. I think you heard from all of us, what we are 
doing is infused with technology in an innovative approach----
    Mr. Forbes. And, Doctor, I am going to ask you if you could 
say--because you made a comment to me about DOD and the role 
technology plays there--could you repeat that for us?
    Dr. Robyn. Yes. I mean, DOD is the most potent engine of 
technological innovation in human history. And that innovation 
has historically, and typically, focused on combat operations 
and the warfighter, as it should. But there is no reason that 
should not apply equally to our effort to improve our facility 
energy performance.
    I think the key role there--300,000 buildings and millions 
of acres of land that are a phenomenal test bed, demonstration 
and validation of next generation technology--that is a classic 
role that the Department has played in the operational setting 
here is a natural. It is just a natural end.
    You know, the president of MIT [Massachusetts Institute of 
Technology] talked about it at the ARPA-E [Advanced Research 
Projects Agency-Energy] conference. She said wow, you have got 
this amazing infrastructure. It is just made to be a test bed 
for next-generation energy technology. You can't underestimate 
the power of that for solving our problem, and then solving the 
country's problem more generally.
    Mr. Forbes. Secretary Hammack, anything?
    Secretary Hammack. Certainly. There are just three things I 
want to talk about. The first is partnerships, and I hope you 
have heard here today that the Services are working together. 
We are very closely working together. We share the same Army 
Corps of Engineer energy-saving performance contracting 
methodology.
    Although it is led by the Army, we share that and we use it 
together. So the military services are working very closely in 
lock step. Secondarily, we work with other Federal agencies. We 
work closely with the Department of Energy, we work closely 
with the EPA [Environmental Protection Agency], we work closely 
with the GSA [General Services Administration] to share ideas, 
to share technologies.
    We have memorandums on understanding on how we can work 
closer together to better leverage limited taxpayer dollars 
that are coming to the Federal Government. And third, we have 
talked about the private sector and leveraging the private 
sector, whether it is power purchase agreements, energy-saving 
performance contracting, or other mechanisms.
    One of those which the Army used is ASHRAE standard 189.1, 
which is development of an energy proficiency high-performance 
building standard in the private sector. That instead of the 
Federal Government developing our own high-performance building 
standard, we are utilizing that. That was developed by the 
private sector, and it is guidelines and directions on how to 
make a LEED building when prioritizing energy and water 
efficiency.
    So our goal is still to LEED-certify our buildings at the 
Silver level or higher. And what we are finding is that as we 
incorporate technology and strategies, as we learn better, as 
the private sector learns better, we are able to get LEED Gold 
or even LEED Platinum at no incremental cost because we planned 
well up front.
    And by integrating technologies and strategies, you can 
have a very high-performance building in new construction.
    Mr. Forbes. Well, we applaud you for working so closely 
together. And I just want to say the Army is doing good. So 
when Secretary Burke takes you out to dinner tonight do not let 
her get you off track of what you are doing.
    Secretary Pfannenstiel.
    Secretary Pfannenstiel. Thank you Mr. Chairman. I just 
wanted to make sure that in our discussion about biofuels we 
didn't lose sight of two things. One is, first of all, why the 
Navy is investing as it is in energy. And it is about our 
combat effectiveness. Fundamentally, that is what we are trying 
to improve. That is where I started today, and I just wanted to 
reinforce that.
    Second thing I would say on our energy programs themselves 
is that most of the dollars--at least 75 percent, maybe 90 
percent of the dollars--that we are budgeting for energy really 
are directed toward reducing our demand, reducing the amount of 
energy we are going to need in the future. And again, some of 
those are building retrofits and improving the kind of 
facilities that we use.
    Some are shipboard, some are on planes. But we are trying 
to reduce our need to buy more energy. I would also highlight--
and I think I didn't get a chance to do it, and I like to brag 
on the Marines--their ability to take the kinds of new 
technologies into theater and make a real difference is very 
important. I think it is important for the Marines, for the 
Army. We have worked together on this, and for current 
operations and for future operations we have a lot of 
technologies being applied.
    And the last point that I would make is where we are 
looking at new supplies of energy. And again, whether it is 
renewable energy for our bases or future alternative fuels, we 
are very conscious of making sure that, in long run, that we 
will do so at prices that will be competitive with what is 
available out in the marketplace.
    So with that, I kind of go back to Dorothy Robyn's 
comment--which I heartily endorse and think is a theme for 
this--which is that DOD is the most potent engine for 
technological innovation. I think we are implying that both to 
demand reductions and to future supply capability.
    Mr. Forbes. And we wholeheartedly agree with you on that 
and thank you for the good work you are doing. The only thing 
we will say is that when we need to spend millions of dollars 
of taxpayers' money we just need some facts. You know, just a 
few facts. And so if you get back to the office tonight, and 
you find a study or any metrics that justify, you know, some of 
what the Secretary--send it to us and we will put it in the 
record and we will review it.
    Secretary Yonkers, you get cleanup.
    Secretary Yonkers. Well first, let me say how humble I am 
by being here with all of these ladies.
    Mr. Forbes. You are a good politician.
    Secretary Yonkers. They really are great. And it has been a 
lot of fun these last couple years to be working with them, and 
we are moving around some pretty big rocks.
    I would just make an observation. You know, when you look 
at this from the 375 million of us that are make up the 
constituency of this entire Nation, I don't think we are too 
far apart. Certainly we are not too far apart on where we want 
to try to get to and what the end game is going to be.
    We can debate forever, perhaps, how we can get there. But 
we are looking for energy security, we are looking for national 
security, we are looking for economic security. And frankly, we 
are looking at environmental security. They are not necessarily 
mutually exclusive.
    In fact, they tie together in my mind. So as we move down 
that path, I think there are tremendous opportunities here for 
us to pull these things together and integrate them in a 
multidimensional point of view, that I talked a little bit 
about, in our specific energy arenas to hit all of those high 
notes and move down that path collectively.
    The one thing I want to say about, I think, all of our 
energy programs is that we are approaching this pretty 
pragmatically, in my view. We are looking at third-party 
investments. Because we know that the dollars aren't going to 
be there to hit renewable energy, and why not develop that win-
win with the private sector? We can do that, we are committed 
to it, and we are going to move aggressively in that direction.
    And one final point--and I think, Mr. Chairman, it gets 
right to you and the discussions we have had here today--
efficiency does equal effectiveness. So the more that we can 
become efficient in our operations, and reduce our energy 
footprint and reduce our energy costs by the research and 
development and the other kinds of strategic investments that 
we are looking at, the more dollars are available to become 
effective; to buy more airplanes, to buy more bullets, to buy 
whatever it is that we need that really gets to the heart of 
the national security mission of the Department of Defense.
    Mr. Forbes. And, Mr. Secretary, I agree with you. The only 
little caveat I will put there is, every time I hear that 
statement made, when they cut out the Joint Forces Command, 
they use the same rationale. They say, ``We are going to use 
this to buy more ships and do more repairs. That's why we are 
saving it.'' It didn't happen. Four months later that money was 
gone.
    And then we have to go again by the facts. And when I see a 
shipbuilding plan that comes in that doesn't increase our 
ships, that reduces it, you start saying, ``Well, where is that 
money going?'' You know, that is the only thing. We agree with 
the premise. We just want to make sure that we are making that 
in the implementation stage, too.
    Let me look at my partner in all of this and see if she has 
any additional questions that she has.
    Ms. Bordallo. Mr. Chairman, I couldn't possibly have any 
further questions. But I want to thank the witnesses again. I 
think they did extremely well. And I think it has been a very 
interesting public hearing, and I thank you for calling it.
    Mr. Forbes. Well, thank you all. And, Secretary Burke, we 
will let you know where dinner is going to be tonight. You guys 
have a great day. We are adjourned.
    [Whereupon, at 2:50 p.m., the subcommittee was adjourned.]



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                            A P P E N D I X

                             March 29, 2012

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             March 29, 2012

=======================================================================

      
                   Statement of Hon. J. Randy Forbes

               Chairman, House Subcommittee on Readiness

                               Hearing on

                 What Is the Price of Energy Security:

                       From Battlefields to Bases

                             March 29, 2012

    I want to welcome all of our members and our distinguished 
panel of experts to today's hearing that will focus on ``What 
Is the Price of Energy Security: From Battlefields to Bases.''
    I welcome this discussion and the opportunity to dive into 
the details across some of the Department of Defense's energy 
priorities and investments.
    Energy security is one of my top priorities, and while one 
of the greatest challenges for the Department of Defense, it is 
also an area for enormous potential. The term ``energy 
security'' as defined in the FY12 National Defense 
Authorization Act means ``having assured access to reliable 
supplies of energy and the ability to protect and deliver 
sufficient energy to meet mission essential requirements.''
    DOD is the single largest consumer of energy in the Nation 
at a cost of $19.4 billion in FY11. Approximately 79% of this 
cost, which equates to roughly $15.3 billion, is for 
operational energy, that is, the energy required to train, 
move, and sustain military operations. The remaining 21% or 
$4.1 billion is for installation energy which is the energy 
required to run the installations predominantly comprised of 
electricity, natural gas, fuel, steam, and coal.
    In an era of declining budgets and increased costs, I want 
to take a moment to reflect on two graphs--historical petroleum 
prices and electricity prices. These charts are from the U.S. 
Energy Information Administration, the DOE's statistical and 
analytical agency, from February 2012. This is why we are here 
today. No one can debate the fact that costs are increasing. 
The question is, What are we doing to reduce consumption, and 
make wise choices with taxpayer investments without 
compromising warfighter capability?
    I am deeply concerned by fuel price fluctuations. In FY12, 
the current execution year, there have already been two price 
adjustments that have resulted in a DOD shortfall of $3.5 
billion. I would like to discuss what options are available to 
mitigate this in the future. And, why has DOD not considered 
longer term contracting with the private sector to lock in 
rates similar to the commercial aviation industry?
    I fully support any initiatives that will help diversify 
the options for fuel supply and reduce the DOD's consumption. 
This includes offshore drilling, oil sands, and biofuels among 
others. And, I believe that all of these tools should be 
available to the DOD, and that Section 526 of the Energy 
Independence and Security Act currently precludes the full 
availability of all options for the DOD. However, I want to 
clearly state that I have serious concerns about DOD 
investments that seek to advance markets and develop 
technologies that are not a core defense competency and may not 
demonstrate a reasonable rate of return. Specifically, I am 
referring to the Navy's proposed $70 million investment for 
biofuel through the Defense Production Act. And, while I do not 
disagree with the promise of biofuel and the industrial 
innovation, DOD has not adequately justified the budget 
request, especially in an era where DOD does not have 
sufficient funds to support the size of its fleet let alone 
make money available to promote an energy industry which should 
otherwise be the focus of the Department of Energy. I look 
forward to discussing this in the context of the hearing.
    There are many great accomplishments the DOD has made with 
its investments. We have an operational energy strategy and the 
fully burdened cost of energy has become central to the 
acquisition and requirements process. The Army has reduced 
demand through modifications to contingency contracts and rapid 
fielding of more efficient technologies. The Air Force and Navy 
are looking at route optimization and platform modifications to 
reduce demand for fuel. And, the Marine Corps is deploying 
capabilities through its Experimental Forward Operating Base 
that will extend combat reach by one additional month in a 365-
day period. These are huge wins in an area of greatest demand, 
which represents almost $15.3 billion of consumption in FY11.
    On the installation energy side, all of the Services are 
forging ahead to meet the targets and goals for energy 
reductions and renewable energy generation. There is a lot of 
innovative work being done, and while the DOD is being 
proactive about meeting its goals, I want to be sure that it is 
not moving too quickly.
    There are multiple different policies driving the 
installations to improve their energy efficiency and 
sustainable design standards. I am troubled by the diversity of 
guidance and the incongruous standards across the Services. I 
want to fully understand the analysis that was conducted that 
demonstrates the savings associated with those decisions. Of 
note, I want to understand why the Navy would elect LEED Gold 
as its standard, and the Army has determined that Net Zero 
Waste, Water, and Energy is the best way to go. How do you 
reconcile this? If there are savings associated with particular 
policies, why are all of the Services not adopting them 
consistently? And, how much are we paying to get a plaque, or 
to reach that final target of Net Zero? Does it make sense and 
where is the Return on Investment--or the cost curve--that 
demonstrates that we are saving money by becoming fully net 
zero?
    I would be remiss if I did not mention energy encroachment 
issues on military installations and their potential to impact 
military readiness. The renewable energy market continues to 
rapidly expand and provide an alternative means for domestic 
energy generation. I am fully supportive of renewable energy 
and the value it provides to the DOD and to the Nation. 
However, let me be very clear--I do not support renewable 
energy development at the expense of military readiness.
    I believe there is a lot of merit in many of the 
investments that are being made. The level of sustained 
leadership attention on the issue, the progress that has been 
made, the innovation that is reflected, and the hard work being 
done across the DOD to reduce consumption is all commendable. 
That being said, I want to ensure that we as Congress receive 
an accurate assessment of how the DOD is currently investing in 
energy, and the analysis that underpins some of the decisions 
that have been made to date in order that we can exercise our 
role in an oversight capacity. I would like to reflect on the 
graphs that I projected at the start, coupled with the $3.5 
billion shortfall for fuel and use those as the basis for why 
we are having this discussion today.
    Joining us today to discuss the DOD's Energy Security 
investments are five distinguished witnesses:
         LThe Honorable Sharon Burke, the first 
        Assistant Secretary of Defense for Operational Energy 
        Plans and Programs;
         LDr. Dorothy Robyn, Deputy Under Secretary of 
        Defense for Installations and Environment;
         LThe Honorable Katherine Hammack, Assistant 
        Secretary of the Army for Installations, Energy, and 
        the Environment;
         LThe Honorable Jackalyne Pfannestiel, 
        Assistant Secretary of the Navy for Energy, 
        Installations and Environment; and
         LThe Honorable Terry Yonkers, Assistant 
        Secretary of the Air Force for Installations, 
        Environment and Logistics and Commander, Naval Air 
        Systems Command.
    Ladies and Gentleman, thank you all for being here.
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                             March 29, 2012

=======================================================================

      
      
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=======================================================================


              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                             March 29, 2012

=======================================================================

      
             RESPONSES TO QUESTIONS SUBMITTED BY MR. FORBES

    Secretary Burke. The primary means the Department currently uses 
for managing fuel price volatility is the Defense Working Capital Fund 
(DWCF). On February 1 of each year, the Office of Management and 
Budget, (OMB) in consultation with the Department, projects the per 
gallon fuel cost the Department will pay in the following fiscal year. 
When market prices increase during the fiscal year, funds are drawn 
from the DWCF to cover the increase and provide year-of-execution 
budget stability for the Services. Conversely, when market prices fall 
below the projection, customer payments in excess of the cost of the 
fuel are used to replenish the fund. Until 2004, the DWCF cash balance 
was sufficient to sustain budgeted fuel prices in the execution year. 
Since 2004, market conditions have driven price changes in every 
execution year, and the Department currently anticipates an unfunded 
requirement for fuel in FY12.
    It is clear the Department could benefit from additional capacity 
to absorb short term fuel price volatility and there are a number of 
options that may be worth pursuing. In January, the Department 
submitted a congressionally-requested report describing the 
relationship of fuel volatility, cash balances, and price 
stabilization, and how that relationship affects the Services.
    The report included three recommendations:

    1.   Increase the ceiling allowed in the DWCF: Allow the Department 
to reserve cash beyond current levels to mitigate the impact of market 
volatility.
    2.   Expand funding sources for DWCF: Allow the Department to 
transfer expiring unobligated balances from appropriated accounts to 
fund the DWCF.
    3.   The Department proposed legislation in previous years that 
would allow Treasury to provide the difference between the budgeted 
amount for fuel and the actual cost of fuel for a fiscal year, to be 
paid back in the budget year by the Department setting its standard 
price to generate the necessary funds.

    The Defense Business Board (DBB) also recently recommended the 
Department utilize techniques that involve market-based financial 
instruments, which would be a departure from a long-standing Government 
policy of self insurance. I believe it is in the Department's best 
interests to consider a range of approaches to this challenge and that 
the best approach at this time is (3) above. [See page 24.]

    Secretary Pfannenstiel. In consideration of the fact that 17% of 
DON's energy use is nuclear based, which DON considers alternative 
energy, and in consultation with the CNO and Commandant, the SECNAV 
established a challenging, but achievable goal that by 2020, 50% of 
DON's energy to power the Fleet would come from alternative sources. In 
light of the increasing volatility of conventional fossil fuels, which 
have resulted in a $1.2B additional bill in FY12 on top of a $300M 
additional bill in the last quarter of FY11, the need to secure more 
domestically produced, renewable sourced fuels is imperative. Without 
more domestically produced fuels, the DON will continue to be subjected 
to fuel price volatility and be compelled to trade training, facility 
sustainment, and needed programs to pay for unplanned bills. [See page 
19.]
    Secretary Pfannenstiel. Deployed U.S. Navy warships and aircraft 
receive fuel from two general sources, directly from barges and trucks 
in foreign ports and airfields and from Fleet Oilers operated by the 
Military Sealift Command (MSC). Deployed MSC Fleet Oilers obtain fuel 
from the following ports:

    Seventh Fleet: Singapore, Guam, Sasebo
    Fifth Fleet: Jebel Ali, Fujairah, Djibouti
    Sixth Fleet: Rota, Souda Bay, Augusta Bay

    With the exception of Guam, all could be characterized as ``foreign 
sources'' since they are delivered to the U.S. Navy in a foreign 
location, however fuel oil is a global commodity and the point of 
origin (extraction and/or refinement) is unknown.
    U.S. Navy warships and tactical aircraft burn an average of 18 
million barrels of fuel per year. 50% of that fuel is burned while 
deployed. 95% of the fuel burned while deployed is received from 
foreign fuel sources therefore 48% of all fuel burned by U.S. Navy 
warships and tactical aircraft is received from foreign fuel sources.

    Deployed: 9,000,000 Bbls; Foreign Sourced 95%
    Non-Deployed: 9,000,000 Bbls; Foreign Sourced 0%
    Total Average Annual Fuel: 18,000,000 Bbls; Foreign Sourced 48% 
[See page 25.]
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=======================================================================


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 29, 2012

=======================================================================

      
                   QUESTIONS SUBMITTED BY MR. FORBES

    Mr. Forbes. 1) What is DOD's position on supporting Lattice 
Assisted Nuclear Reactions as a fuel additive and alternative, safe 
nuclear reactor technology for solving DOD's energy challenges?
    Secretary Burke. I think the Department should be open to 
investigating a wide variety of technologies to address its energy 
challenges. The question in all cases should be, ``What are the 
advantages and disadvantages, costs and benefits of a specific 
technology in specific circumstances?'' While there has been scientific 
controversy around Lattice Assisted Nuclear Reactions, one of the 
reasons DOD has a large technical community is to help resolve such 
controversies over time. I trust they will do so, leveraging the 
expertise of the Department of Energy, which is the primary steward and 
arbiter of such technologies. And the idea of small modular reactors 
for use in deployed locations has been suggested--an idea that presents 
some interesting opportunities but also poses significant challenges 
and key questions, particularly given the large capital costs required. 
Before deciding to acquire or deploy any such reactors we'd need to 
take a close look at all the issues involved, but I don't think we 
should prejudge the answers.
    Mr. Forbes. 2) How much are the DOD and each military service 
spending on energy in Fiscal Year 2013 and across the FYDP? How does 
the Department of Defense define and track its energy investments? And 
where are the investments made--across what funding lines and types of 
activities?
    Secretary Burke. In regards to operational energy, the Department's 
FY13 request includes $16.3B in FY13 and approximately $52B across the 
FYDP for petroleum for operational purposes. For the FY13 request, 
$11.9B is requested in the base budget and $4.4B is requested in 
Overseas Contingency Operations (OCO) funds. No OCO funding for 
petroleum is requested past FY 2013.
    Operational energy investments reduce demand for energy in military 
operations and training, expand and secure energy supplies for military 
operations and training, and build energy security into the future 
force. DOD requests approximately $1.6B for FY13 and $9.0B over the 
FYDP for these initiatives. These investments include improvements that 
lessen weight, improve thermal dynamics, or decrease volume, all which 
result in energy efficiencies. Although there is no single operational 
energy program element, DOD tracks operational energy investments with 
a Select & Native Programming (SNaP) Operational Energy Resources 
exhibit. The soon to be published FY 2013 Operational Energy Budget 
Certification, which Congress assigned to my office in the FY 2009 
NDAA, will provide detailed information on DOD's requested FY13 
operational energy investments.
    Mr. Forbes. 3) How will energy reductions in contingency operations 
lead to increased readiness? How does the Department plan to track the 
energy consumption to accurately account for reductions? What 
innovative technologies are being pursued, and how quickly can they be 
fielded in order to provide maximum impact?
    Secretary Burke. Energy demand reductions in military operations 
increase readiness through improved range, endurance, and reliability 
of air, ground and naval forces.
    The Department of Defense has established the Defense Operational 
Energy Board (DOEB), which is co-chaired by the Assistant Secretary of 
Defense for Operational Energy Plans and Programs and the Joint Staff 
Director for Logistics. The DOEB has chartered a task group to develop 
a baseline of operational energy consumption to inform energy 
performance metrics. Once developed, DOD will apply these metrics to 
measure and manage improvements in energy security for the warfighter.
    The Department's innovation efforts include technologies that 
improve power generation and distribution, batteries and battery 
charging, building materials and design, and shelter systems (lighting, 
heating, ventilation, air conditioning). To rapidly field these 
technologies, the Services have a variety of mechanisms, such as Army's 
Rapid Equipping Force (REF). The REF strives to field equipping 
solutions to operational commanders within 180 days of a validated 
requirement.
    Mr. Forbes. 4) What action is the Department of Defense taking to 
reduce energy consumption at ``Enduring Locations''?
    Secretary Burke. DOD is employing several different methods to 
reduce energy consumption at ``Enduring Locations.'' The 2012 U.S. 
Global Defense Posture Report to Congress describes these installations 
as ones ``where DOD intends to maintain access and/or use of that 
location for the foreseeable future.'' Because these locations will be 
used by U.S. military forces over a longer period of time, we are able 
to plan for and employ more effective energy solutions.
    One of the most effective ways to reduce energy consumption is to 
improve the quality of facility construction. DOD is pursuing this at 
many of enduring locations, which in many cases is most effectively 
done by upgrading the structures from expeditionary tents to better-
insulated modular or temporary buildings. DOD is also reducing fuel 
consumption by being more efficient in the way we generate electricity 
at these locations. This typically involves converting the electricity 
generation systems from individual spot generation to a more efficient 
centralized electrical generation and distribution grid.
    Mr. Forbes. 5) How is the Department of Defense incentivizing 
contractors in contingency operations to employ innovative processes 
and technology solutions to reduce their demand for energy?
    Secretary Burke. In May 2011, my office partnered with U.S. Central 
Command to identify the best near-term opportunities to reduce 
battlefield fuel demand through changes in operational contract 
support. In June 2011, the Army launched the Logistics Civil 
Augmentation Program (LOGCAP) Energy Savings Initiative (ESI), which 
uses the prospect of increased award fees to incentivize power 
optimization assessments for over 6,500 spot generators located on more 
than 119 bases in Afghanistan. In response, LOGCAP contactors in 
Afghanistan have completed or started 78 initiatives to date, which are 
estimated to save over five million gallons of fuel through 
optimization of spot power generation and the use of centralized 
utilities power generators. The number and status of these contractor 
recommendations for optimized power generation will be tracked and 
subsequently used in contractor performance evaluation boards to 
determine award fees. The Department also is working to adapt its 
broader range of operational contract support agreements to employ 
similar incentives and initiatives.

    Mr. Forbes. 6) In Section 2841 of the FY 2010 National Defense 
Authorization Act (NDAA), the Department of Defense (DOD) was directed 
to develop and adopt a ``Unified Energy Monitoring and Utility Control 
System Specification for Military Construction and Military Family 
Housing Activities.'' What progress has been made in the past 2 years 
to develop and adopt a single, DOD unified specification for energy 
monitoring and utility control systems?
    Dr. Robyn. The Department of Defense has made significant progress 
in developing and adopting a single unified specification for energy 
monitoring and utility control systems. The Unified Facility Guide 
Specification (UFGS) 25-10-10, Utility Monitoring and Control System 
(UMCS) was sent for stakeholder review in late 2011. It is currently 
being revised to include an additional protocol, which will ensure that 
all Services have a total solution. The revised draft is expected to be 
released in late October 2012.
    The protocol is being developed in conjunction with Unified 
Facilities Criteria (UFC) documents. The UFC's tells the designers what 
to do, and the UFGS tells them how they must do it. The first UFC (UFC 
3-470-01) was issued in May 2012 and additional UFC's for the other 
protocols are in development. The UFC's and UFGS are being closely 
coordinated with National Institute of Standards and Department of 
Homeland Security to ensure the documents contain the most current 
guidance for cyber and operations security.
    Mr. Forbes. 7) How much is the DOD and each military service 
spending on energy in Fiscal Year 2013 and across the FYDP? How does 
the Department of Defense define and track its energy investments? And 
where are the investments made--across what funding lines and types of 
activities?
    Dr. Robyn. With respect to facility energy, the Department's FY13 
budget request includes more than $1.1 billion for investments in 
conservation and energy efficiency, and almost all of that is directed 
to existing buildings. The majority of this funding is in the Military 
Services operations and maintenance accounts, to be used for 
sustainment and recapitalization projects. Such projects typically 
involve retrofits to incorporate improved lighting, high-efficiency 
HVAC systems, double-pane windows, energy management control systems 
and new roofs. DOD tracks facility energy investments through budget 
exhibits required by the Department's Financial Management Regulation.
    Mr. Forbes. 8) In Fiscal Year 2013, how much is the Department of 
Defense investing in installation energy programs, and what is the 
payback associated with those investments? How are these savings 
manifested in the Fiscal Year 2013 budget request and in future years?
    Dr. Robyn. The Department is reducing its demand for traditional 
forms of facility energy through conservation and improved energy 
efficiency. The Department's FY13 budget includes more than $1.1 
billion for investments in conservation and energy efficiency, and 
almost all of that is directed to existing buildings. The lion's share 
($968 million) is in the Military Components' operations and 
maintenance accounts, to be used for sustainment and recapitalization 
projects. Such projects typically involve retrofits to incorporate 
improved lighting, high-efficiency HVAC systems, double-pane windows, 
energy management control systems and new roofs. The remainder ($150 
million) is for the Energy Conservation Investment Program (ECIP), a 
flexible Military Construction account that my office allocates to the 
Services for energy infrastructure construction, improvements, and 
repairs.
    Although the return on investment varies with the nature of the 
project, we estimate the average payback is 7-8 years. For ECIP-funded 
investments, for which we have the best historical record, every dollar 
invested typically saves about two dollars over the lifetime of the 
project. These savings take the form of reduced utility bills.
    Mr. Forbes. 9) How does a fragile domestic electric grid impact 
decisions for energy investments in the Department of Defense?
    Dr. Robyn. Our entire strategy for facility energy is designed to 
reduce the vulnerability of military installations to potential outages 
of the commercial electric power grid. But we are addressing that 
problem most directly through our investments in advanced, or 
``smart,'' microgrid technology. Smart microgrids--combined with on-
site energy generation--and energy storage offer a more robust and cost 
effective approach to ensuring installation energy security than the 
current one--namely, back-up generators and (limited) supplies of on-
site fuel. Although microgrid systems are in use today, they are 
relatively unsophisticated, with limited ability to integrate renewable 
and other distributed energy sources, little or no energy storage 
capability, uncontrolled load demands, and ``dumb'' distribution that 
is subject to excessive losses. By contrast, we envision microgrids as 
local power networks that can utilize distributed energy, manage local 
energy supply and demand, and operate seamlessly both in parallel to 
the grid and in ``island'' mode.
    Advanced microgrids are a ``triple play'' for DOD's installations. 
First, they will facilitate the incorporation of renewable and other 
on-site energy generation. Second, they will reduce installation energy 
costs on a day-to-day basis by allowing for load balancing and demand 
response--i.e., the ability to curtail load or increase on-site 
generation in response to a request from the grid operator. Most 
important, the combination of on-site energy and storage, together with 
the microgrid's ability to manage local energy supply and demand, will 
allow an installation to shed non-essential loads and maintain mission-
critical loads if the grid goes down.
    DOD's Installation Energy Test Bed has funded ten demonstrations of 
microgrid and storage technologies to evaluate the benefits and risks 
of alternative approaches and configurations. We are working with 
multiple vendors so as to ensure that we can capture the benefits of 
competition. Demonstrations are underway at Twentynine Palms, CA 
(General Electric's advanced microgrid system); Fort Bliss, TX 
(Lockheed Martin); Joint Base McGuire-Dix-Lakehurst, NJ (United 
Technologies); Fort Sill, OK (Eaton); and several other installations.
    In addition to funding technology demonstrations, my office has 
commissioned two studies from outside experts. First, MIT's Lincoln Lab 
just completed a technical review of the Department's work on 
microgrids. In addition to describing the range of ongoing activity, 
the Lincoln Lab report classifies different microgrid architectures and 
characteristics and compares their relative cost-effectiveness. (For a 
summary of the study, see: http://www.serdp.org/News-and-Events/News-
Announcements/Program-News/DOD-study-finds-microgrids-offer-improved-
energy-security-for-DOD-installations.) Second, ICF, Inc. is just 
beginning a financial analysis of the opportunities for installations 
to use intelligent microgrids and other energy security technologies 
(on-site generation, load management, stationary energy storage and 
electric vehicle-to-grid) to generate revenue. In addition, Business 
Executives for National Security (BENS), a non-profit, is analyzing 
alternative business models for the deployment of microgrids on 
military installations. As part of that analysis, which will be 
completed this fall, BENS is looking at the appropriate scale and scope 
for an installation microgrid (e.g., Should it stop at the fence or 
include critical activities in the adjacent community?) and at the 
impediments to widespread deployment.
    Mr. Forbes. 10) What is the impact of encroachment from renewable 
energy projects outside of installations, is encroachment a serious 
concern, and what is the Department doing to mitigate the impacts? 
Also, are there any specific locations/installations that are of 
particular concern based on possible degradation of military readiness?
    Dr. Robyn. Expanding renewable energy infrastructure can have an 
impact on DOD's use of air, land, and sea space for operations, 
readiness, training, and testing missions. DOD has multiple equities 
that must be considered with regard to site selection and the 
development of our national renewable energy infrastructure. Over the 
last 18 months, DOD has aggressively reformed its processes and 
increased outreach to the industry. We established a Siting 
Clearinghouse to evaluate new projects. When a new project appears to 
be incompatible with military missions, we work with industry to find 
possible mitigation solutions. To date, 657 proposed renewable energy 
projects have undergone evaluation, and 633 of those, or 96%, have 
resulted in no DOD objection.
    The remaining 4% of projects with significant impact are clustered 
around a few critical, unique test and training facilities. To date, 
our most serious concerns involve the Nevada Test and Training Range; 
R-2508 (the airspace surrounding Edwards AFB and the Navy's China Lake 
facility); the White Sands Missile Range; Fort Huachuca's Buffalo 
Soldier Electronic Testing Range; the Boardman Range area; and Naval 
Air Station Patuxent River.
    Mr. Forbes. 11) As offshore energy development continues to 
increase, are there any concerns for impact to military readiness? If 
so, what action is the Department of Defense taking to proactively 
engage on this issue? And, what leverage does the Department have, if 
any, to veto projects that would severely degrade military capability?
    Dr. Robyn. The Department of Defense uses extensive areas above the 
Outer Continental Shelf for military training, testing and operations, 
and there is significant potential for offshore energy development to 
have an impact on these activities. The DOD works closely with the 
Department of the Interior's Bureau of Ocean Energy Management (BOEM) 
on renewable and conventional energy issues and with BOEM led coastal 
state task forces on renewable energy to ensure that offshore energy 
development does not have an adverse impact on military activities in 
the OCS areas. DOD has no direct veto authority regarding energy 
development on the OCS, but BOEM can either deny a lease or place 
stipulations on it at DOD request. Our ongoing collaborative work with 
BOEM and the coastal state task forces is preventing any severe 
degradation to our military capabilities.
    Mr. Forbes. 12) The Department of Defense has an increased emphasis 
on leveraging third-party investments for installation energy projects. 
What is the total value of private sector financing that the Department 
is leveraging? What liabilities does the Department assume by entering 
into these contracts, and what flexibility is there to terminate these 
contracts if conditions change?
    Dr. Robyn. In FY 2011, the Department entered into $405 million 
worth of facility energy efficiency performance contracts. These 
include both Energy Savings Performance Contracts (ESPCs) and Utility 
Energy Service Contracts (UESCs) and depend on private, third-party 
capital.
    The Services are using these third-party financing tools to improve 
the energy efficiency of their existing buildings. In response to the 
President's memorandum of 2 December, 2011, calling on the Federal 
Government to initiate $2 billion worth of these performance-based 
contracts over the next two years, the Department has a goal to execute 
roughly $465 million in ESPCs and UESCs in FY12 and another $718 
million in FY13.
    The nature of the liabilities the Department assumes with a project 
will depend on the terms of the individual project. The consistent 
major requirement, a liability to some, is that the Department enters 
into a contract for a fixed term. This includes both the requirement to 
have land encumbered and to purchase power at set rates for a set 
period of time. The Department cannot cancel these obligations without 
assuming termination costs. A benefit of this is that it also means 
that the Department can reliably plan and lock in its energy rates for 
the same period of time as the contract.
    To the extent that the Department is not actually purchasing any 
energy from the project but is simply a passive lessor, the liability 
is that the land is encumbered for the period of the lease. If the 
Department wants to take the property back before the lease has 
expired, it would have to pay the value of the leasehold plus 
improvements. There is generally no provision for changed economic or 
technological conditions. If the price of energy fluctuates, the 
Department will still pay the contract rate, whether higher or lower 
than the current commercial rate. If technological changes result in 
obsolescence of the equipment, as is likely given the nature of 
renewable energy, the Department would have no option to demand changes 
unless it was willing to pay for them. That, however, is the case with 
any contract that is not simply set at the market rate.
    Mr. Forbes. 13) How does the Department of Defense apply and 
incorporate LEED silver, ASHRAE and other building standards into its 
Unified Facilities Criteria and policies to ensure maximum return on 
investment while precluding investments in unnecessary building 
features that provide no utility and result in no savings?
    Dr. Robyn. The current DOD sustainable buildings policy (Oct 2010) 
requires all Components to do four things with respect to new 
construction and major renovation projects:
    Comply with the Guiding Principles for High Performance Sustainable 
Buildings referenced in E.O. 13514 and E.O. 13423; Achieve a LEED 
Silver (or equivalent) certification; Earn at least 40% of the points 
toward certification from energy and water savings measures; and 
Incorporate a life-cycle cost/benefit analysis.
    In addition to the existing policy, the Department is developing a 
new Unified Facilities Criteria (UFC) document for high performance 
buildings that will establish the minimum requirements for all new 
buildings and renovations of existing buildings. The document, which 
has been through a rigorous technical review process, blends aspects of 
ASHRAE 189.1, references to other UFC documents, and new content to 
achieve the best balance of cost-effectiveness, safety, security, and 
mission harmony. In order to comply with the new UFC, projects will 
have to complete a whole building life-cycle cost analysis using the 
National Institute of Standards and Technology Handbook 135.

    Mr. Forbes. 14) How much are the DOD and each military service 
spending on energy in Fiscal Year 2013 and across the FYDP? How does 
the Department of Defense define and track its energy investments? And 
where are the investments made--across what funding lines and types of 
activities?
    Secretary Hammack. In the FY13 budget request the Army plans to 
spend $4.5 billion on its energy program. This sum includes $2.5 
billion for liquid fuel and $1.05 billion for utility services such as 
electricity and natural gas. The Army will also invest $960 million to 
reduce future energy consumption ($560 million in our operational 
forces and $400 million for installations). We also anticipate 
attracting well over $500 million in private sector investment through 
performance contracting and power purchase agreements.
    The $560 million in Operational Energy Investment includes $406 
million in energy related acquisition programs and $154 million in 
science and technology research. The $400 million in Installation 
Energy Investment includes $343 million in the Army's Energy Program/
Utilities Modernization account, $50 million in the Department of 
Defense (DOD) ``Defense-Wide'' appropriation for the Energy 
Conservation Investment Program (ECIP) and $7 million of installation 
related science and technology research.
    Mr. Forbes. 15) What is the funding shortfall in Fiscal Year 2012 
for the price of fuel, and how does each Service expect to pay for that 
shortfall?
    Secretary Hammack. The Army has a potential FY 2012 Operation and 
Maintenance, Army (OMA) fuel shortfall of up to $630M, $219M in the 
base budget and $411M in Overseas Contingency Operations.
    Since the FY 2012 President's Budget (PB) submission, the 
forecasted composite price increased from $131.04 per barrel in the FY 
2012 PB to $161.70 per barrel, a 23% increase. The Army is closely 
monitoring execution and will address any issues during its Mid-year 
Review.
    Mr. Forbes. 16) What is the cost savings associated with the Army's 
Net Zero program, and how will the Army reach its goals and in what 
timeframe?
    Secretary Hammack. The Army anticipates that its Net Zero 
Initiative, by taking a holistic look at energy, water and waste 
systems, will result in significant savings as compared to examining 
each of the systems in isolation. The pilot installations aim to 
consume only as much energy as they produce, use as much water as they 
collect or treat on site, and eliminate solid waste disposal in 
landfills by the year 2020. While all Army installations are permitted 
and encouraged to strive to achieve Net Zero, the pilot installations 
are being studied to provide valuable information for other 
installations to follow.
    The Army does not view Net Zero as a stand-alone program. The pilot 
installations will leverage existing resources and collaborations with 
the private sector to strive towards the energy, water, and waste 
reduction goals of Net Zero. Cost savings from Net Zero-associated 
projects and efforts at the 17 pilot installations will vary based on 
local utility rates, existing installation energy and water 
efficiencies, and the specific projects that the pilot installations 
identify. The Net Zero Initiative allows for lower installation and 
facility utilities costs because of increases in efficiency that reduce 
the amount of energy and water needed to provide the same level of 
service while also reducing waste streams.
    Mr. Forbes. 17) The Army adopted a new sustainable building 
standard, ASHRAE 189.1 which prescribes standards for sustainability, 
water and energy efficiency among other attributes. What cost benefit 
analysis was undertaken before adopting that new standard? And, was 
that validated by a third party to ensure that there is a return on 
investment?
    Secretary Hammack. Adoption of ASHRAE Standard 189.1 occurred 
following a rigorous and peer reviewed Energy and Sustainable Design 
study led by the U.S. Army Corps of Engineers to determine a life-cycle 
cost-effective path for the Energy Independence and Security Act (2007) 
compliance. The Department of Energy's Pacific Northwest National 
Laboratory, National Renewable Energy Laboratory and select industry 
leaders collaborated in the study, which the Rocky Mountain Institute 
peer reviewed. The study's results found that compliance with the 
ASHRAE Standard 189.1 yields an energy savings of approximately 30 
percent without any additional cost.

    Mr. Forbes. 18) What is DOD's position on supporting Lattice 
Assisted Nuclear Reactions as a fuel additive and alternative, safe 
nuclear reactor technology for solving DOD's energy challenges?
    Secretary Pfannenstiel. The Department does not currently have a 
specific program supporting lattice assisted nuclear reactions but is 
open to investigating a wide variety of technologies that will address 
energy challenges. While there has been some scientific controversy 
around Lattice Assisted Nuclear Reactions, one of the reasons that DOD 
has a large technical community is to help resolve such controversies 
over time, leveraging the expertise of the Department of Energy. 
Additionally, the use of small modular reactors for use in deployed 
locations has been suggested but the idea presents some interesting 
opportunities and also poses significant challenges. One of the key 
concerns would be the large capital costs required. Before deciding to 
acquire or deploy any such reactors the Department would need to take a 
close look at all the issues involved.
    Mr. Forbes. 19) How much is the DOD and each military service 
spending on energy in Fiscal Year 2013 and across the FYDP? How does 
the Department of Defense define and track its energy investments? And 
where are the investments made--across what funding lines and types of 
activities?
    Secretary Pfannenstiel. The Department of Navy has budgeted $1B on 
energy for FY2013:

          $338M for Navy tactical energy requirements. $438M for Navy 
        shore energy requirements. $64M for Marine Corps tactical 
        energy requirements. $161M for Marine Corps shore energy 
        requirements.

    Across the FYDP the Department has budgeted:

          $1.9B for Navy tactical energy requirements. $1.7B for Navy 
        shore energy requirements. $.4B for Marine Corps tactical 
        energy requirements. $.4B for Marine Corps shore energy 
        requirements.

    Investments are made across all ship, aviation and shore 
procurement, O&M, and RDT&E accounts.
    DON energy goals and statutory requirements define the Department's 
energy investments and are tracked using Navy systems Claimant 
Financial Management System (CFMS) and Program Budget Information 
System (PBIS).
    Navy and Marine tactical energy initiatives include:

          Aviation simulator upgrades (to reduce aircraft flying hours 
        needed). Advanced propulsion and power efforts, such as 
        variable cycle engines, hybrid electric drives for destroyers, 
        and alternative fuels testing and certification. Increased 
        efficiency measures, including stern flaps on ships, propeller 
        coatings, shipboard solid state lighting, waterwash of ships' 
        gas turbines. Energy management systems such as the energy 
        dashboard for ships. Cultural change efforts such as Air ENCON 
        and i-ENCON. Advanced energy sources for ground troops, 
        including solar energy devices to reduce the fuel reliance of 
        deployed Marines and its logistical tail. More fuel efficient 
        medium tactical vehicle replacement for ground troops.

    Navy and Marine shore initiatives include:

          Efficiency upgrades such as lighting and HVAC improvements, 
        roof retrofits, and efficient window film installation. 
        Advanced metering and energy management. Non-tactical vehicle 
        efforts, to include implementing relevant technologies and 
        alternative fuel vehicles. Renewable energy projects such as 
        landfill gas, solar, and wind energy projects.
    Mr. Forbes. 20) What is the funding shortfall in Fiscal Year 2012 
for the price of fuel, and how does each Service expect to pay for that 
shortfall?
    Secretary Pfannenstiel. At PB12, the budgeted fuel rate was $131.04 
per barrel, but this was subsequently increased to $165.90 on 1 October 
and reduced to $160.44 on 1 January. The result is an average fuel rate 
of $161.70 for FY12, and this creates an overall fuel price shortfall 
of $908 million for Operation & Maintenance, Navy (OMN) and $61 million 
for Operation & Maintenance, Navy Reserve (OMNR). This shortfall will 
be funded through anticipated reprogramming actions, below threshold 
realignments, or curtailment of operations.
    Mr. Forbes. 21) How much will it cost the Navy to achieve the 
President's recently announced goal of one gigawatt of power by 2020?
    Secretary Pfannenstiel. The Department of the Navy expects no new 
capital outlays to meet the President's renewable energy goal. The 
majority of projects undertaken will be executed using existing third-
party mechanisms such as power purchase agreements, enhanced use 
leases, joint ventures, energy savings performance contracts and 
utility energy savings contracts wherein developers bear construction 
costs and risks for individual projects. The cost of energy from these 
projects must be equal to or less than, on a life cycle basis, the cost 
of conventional power. As an example, recently DON has executed three 
power purchase agreements: a 13.8 MW solar project at NAWS China Lake, 
a 1.5 MW solar project at MCLB Barstow, and a 1.2 MW solar project at 
MCAGCC Twentynine Palms. The power produced by each of these three 
projects will be cheaper than available conventional power and will 
save DON approximately $20M over the 20-year life of the contracts.
    Administrative costs to develop DON's renewable energy strategy 
will include fees associated with hosting a small number of industry 
forums, soliciting studies, and possibly contractor/staff support. DON 
has funds available to cover these costs.
    Mr. Forbes. 22) How much has the Navy spent on the purchase of 
biofuel to date? And, how has the price changed over that period? What 
are the biofuel requirements (in quantities and cost) in order for the 
Navy to sail the Great Green Fleet in 2016?
    Secretary Pfannenstiel. The table below contains contracts awarded 
for hydrotreated renewable (HR) fuel that have been procured for use in 
Navy's alternative fuel test and certification program which amounts to 
a total of $30.37M.


----------------------------------------------------------------------------------------------------------------
                                                           50/50 Blended Biofuel Cost
         Product                  Date of Contract                 per Gallon                Quantity (gal)
----------------------------------------------------------------------------------------------------------------
HRJ5                       8/31/2009                      $34.03                        80,000
----------------------------------------------------------------------------------------------------------------
HRJ5                       9/1/2009                       $75.58                        3,000
----------------------------------------------------------------------------------------------------------------
HRJ5                       6/29/2010                      $18.65                        300,000
----------------------------------------------------------------------------------------------------------------
HRD76                      8/30/2010                      $35.44                        300,000
----------------------------------------------------------------------------------------------------------------
HRJ5                       11/30/2011                     $15.36                        200,000
----------------------------------------------------------------------------------------------------------------
HRD76                      11/30/2011                     $15.35                        700,000
----------------------------------------------------------------------------------------------------------------


    In order to perform the test and evaluation event over a week's 
time period in the Great Green Fleet demonstration in July 2012, and 
gather the appropriate performance data, Navy determined that 700,000 
gallons of 50/50 blended marine biofuel/petroleum and 200,000 gallons 
of 50/50 blended aviation biofuel/petroleum would provide the 
sufficient volumes for this process. For the Great Green Fleet 
deployment in 2016, Navy anticipates it will need approximately 
3,360,000 gallons of 50/50 blended marine biofuel/petroleum and 
3,360,000 gallons of 50/50 blended aviation biofuel/petroleum. For 
future operational purchases of advanced biofuels, the Navy anticipates 
buying those that are cost competitive with conventional fuels. 
[GRAPHIC] [TIFF OMITTED] 73800.080

    As the above chart indicates, biofuel prices have decreased 
significantly from when Navy first started its test and certification 
process. Navy anticipates that as demand increases and the supply base 
expands further reductions in biofuel prices will occur.
    Further, when looking at the alternative fuel purchases over the 
past three years, the Navy has spent approximately 0.17% of their 
entire fuel budget for those three years.
    There are a number of studies that state the case that biofuels 
will be cost competitive in the 2018-2025 timeframe without Government 
investment. These studies are from LMI, MIT, and Bloomberg New Energy 
Finance. The LMI report also states that authorities like the Defense 
Production Act Title III, could accelerate the development of a mature 
alternative fuel market.
    Mr. Forbes. 23) How will the market be affected with the 
Government's $1 billion proposed investment in biofuels through the 
Defense Production Act? And, what would be the implications if the 
Department of Defense does not make that investment? How does the Navy 
balance this proposed investment against shortfalls and decrements in 
other key accounts such as Operation & Maintenance and Procurement?
    Secretary Pfannenstiel. The Navy does not plan to invest $1 billion 
into the Defense Production Act (DPA) Title III effort. The Navy plans 
only to invest $170 million, which is to be matched by $170 million 
from both the Department of Energy and the Department of Agriculture. 
This total planned investment is $510 million, which would be required 
to be matched at least 50:50 by private industry to make a minimum 
project value of in excess of $1 billion.
    The uncertainty in fuel prices and their continued volatility makes 
this investment crucial to ensuring accounts such as O&M can pay for 
the activities for which they were programmed, rather than being forced 
to reprogram funds mid-year from O&M accounts to cover budget 
shortfalls due to unforecasted rises in fuel prices. Alternative fuels 
investment is a method for obtaining an assured, secure, domestic 
energy source that is not wholly subject to the vagaries of the 
international petroleum markets and thus will eventually allow for more 
certainty in budgetary planning.

    Mr. Forbes. 24) How much is the DOD and each military service 
spending on energy in Fiscal Year 2013 and across the FYDP? How does 
the Department of Defense define and track its energy investments? And 
where are the investments made--across what funding lines and types of 
activities?
    Secretary Yonkers. The Air Force expects to spend over $10 billion 
to purchase electricity and fuel in Fiscal Year 2013 (FY13), and 
anticipates that expenditure to increase in the future. To reduce its 
energy consumption, the Air Force is investing in both material and 
non-material solutions in infrastructure and aviation, as well as 
conducting RDT&E where appropriate. Given the critical role of energy 
in Air Force operations, the benefits of energy investments are 
carefully weighed against the initial and recurring costs, enabling 
energy initiatives to be evaluated and appropriately funded along with 
other Air Force priorities in order to maximize the use of Air Force 
resources. Energy investments, as well as all other initiatives, are 
evaluated by the Air Force Corporate Structure (AFCS), which makes 
decisions based on the needs of the Air Force with the support of 
business case analyses. The Air Force identifies projects that have 
significant impacts on energy use and tracks them throughout the AFCS 
process by assigning an energy tag to the appropriate line item.
    The Air Force is requesting more than $530 million in Fiscal Year 
(FY) 2013 for aviation, infrastructure, and research, development, test 
and evaluation (RDT&E) energy initiatives to reduce demand, improve 
efficiency, diversify supply, and enhance mission effectiveness. The 
majority of these funds would be executed to improve the energy 
efficiency of Air Force installations and RDT&E projects.
    Included in the FY13 budget request is $215 million for energy 
conservation projects on Air Force installations, a continuation of the 
nearly $800 million the Air Force has invested in such projects over 
the last four years. As a result of those energy conservation efforts, 
the Air Force has cumulatively avoided $1.1 billion in facility energy 
costs since 2003. FY12 investments to improve facility energy 
efficiency and reduce energy requirements are expected to start 
generating savings in FY14, and the majority is expected to payback 
before or just shortly after the FYDP.
    From an RDT&E perspective, the Air Force is taking a lead, follow, 
and watch approach, where the Air Force is a lead investor and creates 
or invents novel technologies in areas that are critical enablers of 
Air Force core missions and associated platforms, such as aircraft 
engines. In the follower role, the Air Force rapidly adopts and/or, as 
needed, adapts or accelerates technologies originating from external 
organizations who are leaders and primary investors in focused S&T 
areas as part of their core mission, while in the watcher role, the Air 
Force uses and leverages others` S&T investments in areas that are not 
primary or core missions. In FY13, the Air Force is requesting more 
than $300 million in energy RDT&E.
    Mr. Forbes. 25) What is the funding shortfall in Fiscal Year 2012 
for the price of fuel, and how does each Service expect to pay for that 
shortfall?
    Secretary Yonkers. The Air Force projects a shortfall of 
approximately $1.4 billion due to the increased price of fuel from the 
FY12 budgeted rate of $131.04 per barrel ($3.12 per gallon) to $161.70 
per barrel ($3.82 per gallon). This shortfall will be funded through 
below threshold realignments, anticipated reprogramming actions, or 
curtailment of operations.
    Mr. Forbes. 26) Since Air Force aviation accounts for half of the 
total U.S. Government's fuel consumption, what are you doing to become 
more efficient, change the culture, and integrate technology to reduce 
the demand for fuel, particularly with the volatility in the fuel 
market?
    Secretary Yonkers. Broadly speaking, the Air Force is seeking to 
reduce aviation fuel demand and change the culture through material and 
non-material, or policy, solutions. This includes investing in 
research, development, test and evaluation (RDT&E) opportunities and 
include energy as a factor in the acquisition process.
    From a material solutions perspective, the Air Force has several 
initiatives underway or in development that will reduce the demand for 
aviation fuel. For example, in the FY13 budget request, the Air Force 
is requesting funding for the KC-135 tanker CFM engine Propulsion 
Upgrade Program, which seeks to upgrade the engine's high-pressure 
components. These components improve each engine's efficiency, 
reliability, and maintainability. It requires a total investment of 
$278 million through FY28, starting with an investment in the 
President's budget of $29 million. The investment is expected to yield 
a reduction of 1.5% in fuel consumption, or around 56 million gallons 
($150 million), through FY46. The maintenance savings are not expected 
until FY25 and should save an additional $1.3 billion.
    Another example is the KC-10 drag cleanup initiative, which will 
modify wing and fuselage components to reduce their resistance to the 
airflow in flight. A total investment of $28.1 million, starting with 
$2.1 million in FY13, will buy the complete drag cleanup of all 59 KC-
10s in the inventory. The investment yields a fuel reduction of 1.4% or 
about $5 million per year. This is a low risk venture as these 
modifications have already been made in the commercial MD-11, a similar 
aircraft to the KC-10.
    The Air Force is focusing its RDT&E efforts primarily to meet 
unique aviation, space, and cyberspace missions, as opposed to areas 
where there is significant overlap with its Sister Services or private 
industry. For example, in FY13 the Air Force is requesting more than 
$300 million in energy RDT&E, which includes $214 million for the 
Adaptive Engine Technology Development (AETD) initiative. This 
initiative will build upon the Adaptive Versatile Engine Technology 
(ADVENT) effort to reduce energy consumption and improve efficiency and 
reliability of future and legacy aircraft, and current estimates are 
that it will be as much as 25% more fuel efficient than current 
technology.
    From a policy solutions perspective, the Air Force has introduced 
multiple no- or low-cost initiatives that helped avoid 54.5 million 
gallons in fuel consumption, or $208.1 million in fuel costs, in FY13 
alone. For example, in October 2011, Air Mobility Command eliminated 
the extra fuel carried while still maintaining safety standards. 
Category 1 fuel requirements existed for decades as an added amount of 
reserve fuel equal to 10% of the time over water (outside of ground-
based navigation systems) to account for inaccurate navigation systems. 
With technological advances and current on-board navigation systems 
requirements, this additional fuel is unnecessary, and by eliminating 
the requirement (and associated excess weight), the Air Force estimates 
it saves 5 million gallons in fuel annually.
    Mr. Forbes. 27) If the Air Force is, in essence, taking a strategic 
pause in its Military Construction account in Fiscal Year 2013, why 
would there be continued investment in installation energy projects 
through both appropriated funds and commitments to leverage third-party 
financing?
    Secretary Yonkers. The Air Force took a deliberate pause in MILCON 
to ensure the right capital investment decisions were made while 
adjusting force structure in line with the emerging defense strategy. 
10 USC Sec. 2915 requires the military services to consider renewable 
energy as a source of energy during the design phase of construction, 
repair, or renovation if the renewable energy is cost effective. There 
are no military construction projects exclusively for renewable energy. 
This funding pause does not impact facilities sustainment, restoration, 
and modernization (SRM) funding, which can be use to improve energy 
security and avoid future costs. The Air Force needs to continue to 
make the right investment, in the right asset, at the right time to 
meet the challenges of a complex global environment.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MS. BORDALLO
    Ms. Bordallo. 28) It is my understanding that among the biggest 
challenges we face in achieving greater energy security is the 
Department's procurement process, which may sometimes preclude or, at a 
minimum, doesn't consider better integration of energy saving equipment 
and products when procuring expeditionary infrastructure for deployed 
forces or forward operating bases that could ultimately achieve more 
significant savings and efficiencies. DOD's procurement officers lack 
any meaningful coordination or incentives to achieve better energy 
savings in their purchases or to consider how integration of a number 
of energy enhancing products can make a sizeable difference in a unit, 
battalion or forward operating base energy footprint.
    Question: What efforts are you undertaking to encourage or even 
require that, in addition to procurement costs, energy efficiency and 
logistics efficiencies are factors when purchasing equipment and 
products that support the Department's and the warfighter's mission and 
operational readiness posture?
    What can your offices and the services do to ensure that a systems-
level procurement approach is taken to capitalize on the synergies of 
various energy-saving components and products, rather than procuring 
items separately?
    Secretary Burke. Formal revisions to DOD policy emphasizing the 
need to procure more energy efficient materiel for deployments are in 
coordination, but actions to deploy more energy efficient equipment are 
already underway. My office is supporting Army and Joint Staff efforts 
to reform requirements guidance on temporary base camp design and 
related policies including procurement of fuel for power-demanding 
equipment. The Army Operational Energy Initial Capability Document 
(ICD), which will be released imminently, will provide the first 
``military requirement'' to help inform decision-making on the 
procurement of such items for operational forces. Similar efforts are 
underway with the U.S. Marine Corps and the Joint Chiefs of Staff.
    My office is also supporting Army planning for improved modeling 
and simulation tools and data sets to assess the impact of different 
levels of energy demand and logistics supply on the capability of a 
military unit or vehicle. This will help the Army take energy 
performance into account in force development.
    Finally, under the Operational Energy Implementation Plan, a 
Department-wide working group is identifying key energy-related 
policies and guidelines that need updating, to include procurement 
policies.
    Ms. Bordallo. 29) Can you provide examples of Operational Energy 
programs which support the current fight?
    Secretary Burke. The Department has several operational programs 
that support the current fight. For example, the U.S. Marine Corps, 
through their Experimental Forward Operating Base (or ExFOB) program, 
has equipped several battalions in southern Afghanistan with improved 
tent insulation, LED lighting packages, and portable solar energy 
devices. In the Army, the Rapid Equipping Force's ``Energy to the 
Edge'' program is improving soldier power by fielding a range of 
materiel and non-materiel energy improvements, including the Soldier-
Worn Integrated Power Equipment System, a system designed to reduce an 
infantry platoon's need for batteries while on patrol. The Rapid 
Equipping Force (REF), Project Manager Mobile Electric Power (PM MEP), 
and Project Manager Soldier Warrior (PM SWAR) are collaborating to 
train, equip, and sustain several Brigades deploying to Afghanistan 
with energy-improved equipment, techniques, tactics, and procedures, 
including more efficient generators. The U.S. Air Force has deployed 
energy improved equipment to Central Command (CENTCOM), including solar 
lighting, improved tent liners and flies, and LED (light-emitting 
diode) lighting. Lastly, the Army's Research, Development and 
Engineering Command's Field Assistance in Science and Technology Center 
has established an ``Energy Initiatives Proving Ground'' to assess 
performance and facilitate deployment of advanced shelter system 
technologies. Collectively these programs and others like them 
contribute to the Department's top mission priority today of supporting 
our current operations.
    Ms. Bordallo. 30) What are the Services doing to address fuel 
consumption in its tactical vehicle fleet?
    Secretary Burke. Tactical vehicles are clearly a key driver of 
operational energy use and we are making progress increasing efficiency 
in this area. To improve fuel efficiency of current combat vehicles, 
the Army is executing engineering change proposals to add an auxiliary 
power unit (APU) to the Abrams Main Battle Tank and a transmission 
which provides about a three percent fuel efficiency improvement to the 
Bradley Infantry Fighting Vehicle. For the on-going up-armor High 
Mobility Multipurpose Wheeled Vehicle (HMMWV) recapitalization, the 
Army has designed armor kits that can be removed during peacetime to 
improve fuel economy and reliability.
    For the future fleet of combat vehicles, the Army's Tank Automotive 
Research Development and Engineering Center (TARDEC) has been quite 
active in this area. They have been working on improvements such as 
APUs to allow main engines to be turned off while not moving, hybrid 
engines, and fuel efficient demonstrators to identify key fuel 
efficiency technologies in HMMWV size vehicles. TARDEC's new Ground 
Systems Power and Energy Laboratory, which will open in April 2012, 
clearly demonstrates their strong commitment to this area.

    Ms. Bordallo. 31) What are the Services doing to address fuel 
consumption in its non-tactical vehicle fleet?
    Dr. Robyn. Tactical vehicles are clearly a key driver of 
operational energy use and we are making progress increasing efficiency 
in this area. To improve fuel efficiency of current combat vehicles, 
the Army is executing engineering change proposals to add an auxiliary 
power unit (APU) to the Abrams Main Battle Tank and a transmission 
which provides about a three percent fuel efficiency improvement to the 
Bradley Infantry Fighting Vehicle. For the on-going up-armor High 
Mobility Multipurpose Wheeled Vehicle (HMMWV) recapitalization, the 
Army has designed armor kits that can be removed during peacetime to 
improve fuel economy and reliability.
    For the future fleet of combat vehicles, the Army's Tank Automotive 
Research Development and Engineering Center (TARDEC) has been quite 
active in this area. They have been working on improvements such as 
APUs to allow main engines to be turned off while not moving, hybrid 
engines, and fuel efficient demonstrators to identify key fuel 
efficiency technologies in HMMWV size vehicles. TARDEC's new Ground 
Systems Power and Energy Laboratory, which will open in April 2012, 
clearly demonstrates their strong commitment to this area.
    Ms. Bordallo. 32) How does LEED offer any concrete energy savings?
    Dr. Robyn. LEED provides an easily accessible, uniform, and 
commercially applied process for achieving the energy goals Congress 
has set for DOD facilities. The LEED rating system requires every 
building to meet the minimum statutory energy conservation requirements 
of the Energy Independence and Security Act (EISA) of 2007. This pre-
requisite alone ensures the project will be designed to use 30% less 
energy than typical buildings. In addition to the energy pre-requisite, 
the mandatory integrated design process and optional credits of the 
LEED system incentivize multi-disciplinary teams to save even more 
energy by taking advantage of synergistic effects inherent in 
complementary building systems like the HVAC system, lighting system, 
and building envelope. For example, a tighter envelope that also offers 
more daylighting can, in some climates, allow the team to reduce the 
size of the HVAC system--a major cost driver in buildings.

    Ms. Bordallo. 33) Can you provide examples of Operational Energy 
programs which support the current fight?
    Secretary Hammack. The Army has developed and deployed a range of 
energy-related solutions to support the current operations. These 
efforts are reducing fuel and water usage in theater as well as 
lightening soldier loads. One example is the Army Corps of Engineers 
work to replace individual spot generators with mini-grids to support 
USFOR-A. These mini-grids are expected to save 50 million gallons of 
fuel per year. Another example is the work of the Army Sustainment 
Command and its LOGCAP contractors which have identified solutions for 
USFOR-A bases that, when complete, will save 5 million gallons of fuel 
per year. Finally, the Army is developing and deploying alternative 
energy sources for dismounted Soldiers that reduce the numbers of 
batteries Soldiers must carry through rechargeable batteries and 
renewable energy recharging systems, thereby extending their mission 
endurance. For example, through the Rapid Equipping Force, two Brigade 
Combat Teams have received a suite of equipment such as the Rucksack 
Enhanced Portable Power System (REPPS), the Soldier Worn Integrated 
Power Equipment System (SWIPES) to increase unit endurance and 
flexibility while performing operations in Afghanistan.
    Ms. Bordallo. 34) The Army has a number of operational energy 
related activities ongoing and the number of these activities is likely 
to grow. Are there plans to synchronize these efforts?
    Secretary Hammack. Yes. The Army designated the Office of the 
Deputy Chief of Staff, G-4, as the Army Staff lead for Operational 
Energy. That agency has the mission to integrate and synchronize 
Operational Energy related programs across the Army and other military 
services. It is currently drafting an annex to the Army Campaign Plan 
that will provide direction and guidance to the Army as it moves to 
achieve its operation energy goals.
    Ms. Bordallo. 35) What is the Army doing to address fuel 
consumption in its tactical and non-tactical vehicle fleet?
    Secretary Hammack. The Army has the second largest fleet of Non-
Tactical Vehicles (NTVs) in the Federal Government consisting of over 
76,000 vehicles. In FY11 the Army reduced its petroleum consumption in 
its NTV fleet by more than 8 percent. The Army accomplished this 
reduction by downsizing the total number of vehicles, right-sizing 
vehicles with more fuel efficient models, aligning Alternative Fueled 
Vehicles (AFV) to alternative fuel sources, and converting to hybrid or 
electric vehicles wherever possible.
    To address fuel consumption in its tactical vehicle fleet the Army 
is investing in research to improve fuel efficiency in a variety of 
ways. These efforts are being spearheaded by the United States Army 
Tank Automotive Research, Development and Engineering Center (TARDEC), 
which opened a new Ground Systems Power and Energy Laboratory in April. 
These efforts include hybrid technology and fuel cell research, low 
rolling resistance tires and more. In addition the Army is working to 
certify its engines to burn alternative fuels.
    Ms. Bordallo. 36) How do LEED and ASHRAE 189.1 offer any concrete 
energy savings?
    Secretary Hammack. Both the American Society of Heating, 
Refrigeration and Air-Conditioning Engineers (ASHRAE) Standard 189.1 
and elements of Leadership in Energy and Environmental Design (LEED) 
offer concrete energy savings. Energy savings are achieved by increased 
insulation values, improved window specifications, improved efficiency 
of building equipment, improved lighting and energy efficiency building 
system controls.
    A study completed by the Pacific Northwest National Lab (PNNL) 
found that Federal LEED-certified buildings cost less to operate and 
used 25 percent less energy than the national average. Army analysis, 
verified by the Department of Energy and reviewed by an independent 
third party indicates that ASHRAE 189.1 can save up to 30 percent of 
energy costs compared to current designs with little to no additional 
upfront cost.
    LEED is a rating tool that awards a level of certification based on 
achieving certain criteria. Achieving LEED Certification requires at 
least 10 percent energy savings over the baseline standard established 
in energy performance tables found in ASHRAE 90.1-2007. LEED offers 
additional credits for project performance when achieving higher levels 
of energy savings. For example, by designer choice, LEED Optimize 
Energy Performance credit (EA1), when achieved, may result in 25-30 
percent energy savings over ASHRAE Standard 90.1-2007. Nearly all Army 
projects achieve this credit.
    ASHRAE Standard 189.1 differs from LEED in that it is an industry 
building standard and compliance is achieved by meeting the minimum 
performance requirements of the Standard. Within ASHRAE 189.1 there is 
no requirement or credit given to exceed the specified criteria. The 
level of required energy savings in ASHRAE Standard 189.1 is 
approximately 30 percent below a baseline building meeting ASHRAE 90.1-
2007. The energy savings of ASHRAE Standard 189.1 was confirmed by an 
independent evaluation conducted by the Pacific Northwest National 
Laboratory. Starting in fiscal year 2013, all Army project will meet 
the energy performance requirements of ASHRAE Standard 189.1.
    Ms. Bordallo. 37) Does the Army plan to continue certifying to LEED 
Silver standards?
    Secretary Hammack. Yes. The Army requires certification to LEED 
Silver as a third-party verification, which is consistent with Energy 
Independence and Security Act of 2007 (EISA 2007) section 433. The Army 
also has adopted ASHRAE Standard 189.1 starting with the FY13 military 
construction programs as a minimum standard of building performance 
from which energy systems are adjusted, based on life cycle cost 
analysis to meet the energy efficiency requirements of EISA 2007. LEED 
is a rating tool that awards a level of certification based on 
achieving certain criteria. When the ASHRAE Standard 189.1 is met, the 
building energy requirement savings is approximately 30 percent below a 
baseline building meeting ASHRAE 90.1-2007. This equates to the credit 
under LEED Optimized Energy Performance credit (EA1). Nearly all Army 
projects achieve this credit from past experience as LEED Silver.

    Ms. Bordallo. 38) Can you provide examples of Operational Energy 
programs which support the current fight?
    Secretary Pfannenstiel. The Experimental Forward Operating Base 
(ExFOB) capabilities we have evaluated in CONUS and Afghanistan have 
helped our Marines operate lighter, with less reliance on resupply. Our 
forces today are widely dispersed across the battle space: a Company 
today may cover an area of 50 square miles or more, manning multiple 
outposts, and executing extensive dismounted operations. Our Marines 
depend on communications gear and equipment, and rely on frequent 
resupply to support fuel and battery, as well as water and food needs. 
By providing a new source of power--solar and hybrid solar energy--and 
reducing the power demand of equipment, we have reduced mission risk, 
and increased our commanders' options. Ultimately, our goal is fewer 
Marines at risk on the road hauling fuel and protecting fuel convoys.
    In less than a year, through our Experimental Forward Operating 
Base process, we have twice evaluated capabilities at Twenty-nine Palms 
and deployed them to Afghanistan. In 2010, while engaged in nearly 
constant combat, Marines of India Co. 3rd Battalion, 5th Marine 
Regiment used small scale solar power, man portable solar battery 
rechargers, hybrid-solar generators, plus energy efficient lighting and 
shelters, with positive results:
    Two patrol bases operated entirely on expeditionary solar power 
generators.
    Another patrol base reduced its fossil fuel need by approximately 
90%--from 20 gallons of fuel a day to 2.5 gallons a day.
    Using the SPACES back pack portable solar power system to recharge 
their radio batteries they were able to patrol for three weeks with no 
battery resupply. Typical battery resupply is every 2-3 days.
    As a result of this feedback, four of these capabilities were 
acquired and 5 BN sets were accelerated to Marine units in Operation 
Enduring Freedom (OEF). This equipment is now Program of Record and 
part of the Marine Corps equipment kit.
    In fall 2011 the Marine Corps deployed hybrid power systems and 
direct current powered air conditioners for evaluation at Patrol Base 
Boldak. The hybrid system demonstrated an 80% reduction in generator 
run time, and 55% reduction in fuel consumed. Insights from this 
evaluation are being used to inform the Marine Expeditionary Energy 
Hybrid Systems Analysis of Alternatives initiated in spring 2012.
    The deployment of renewable energy on the battlefield has had 
benefits at small and remote patrol bases where power demands are low, 
usually where total power required is below 10kW. Specifically, the 
challenge of larger bases is the refrigeration required for food stores 
and environmental control for personnel comfort and sensitive 
electronic equipment. At these larger bases, today's renewable energy 
technology will have minimal impact. The Marine Corps is addressing 
these challenges by investigating new environmental control 
technologies.
    Ms. Bordallo. 39) What are the Services doing to address fuel 
consumption in its tactical and non-tactical vehicle fleet?
    Secretary Pfannenstiel. The Navy and Marine Corps are pursuing 
near- and long-term solutions to reduce fuel consumption in the 
tactical vehicle fleet.
    The Marine Corps and the Office of Naval Research are investigating 
efficiency improvements for the Medium Tactical Vehicle Replacement 
(MTVR) through a suite of affordable fuel efficiency enabling 
technologies estimated to provide 15% fuel efficiency improvement to 
the existing platform. This Future Naval Capability project is under 
development, and slated for transition in FY15.
    Originally funded by the Navy as part of a Research & Development 
initiative for the 2009 ARRA, On-Board Vehicle Power (OBVP) is a key 
initiative to reduce fuel used by the Naval tactical fleet of HMMWVs 
and a select number of MTVRs. This Future Naval Capability product 
provides vehicle-integrated, utility quality, 60 Hz electric power for 
mobile command and control, radar, air defense sensors, and operations 
centers. It replaces towed systems and reduces the logistical 
footprint, improving power mobility and saving fuel. The Marine Corps 
Systems Command is currently conducting final testing of this product 
at the Aberdeen Test Center. The Initial Operational Capability is 
scheduled for FY12.
    The Department of the Navy (DON) is also taking steps to reduce 
fuel consumption in the non-tactical vehicle fleet. From 2005 to 2010, 
by updating our non-tactical vehicle inventory, DON reduced its 
petroleum consumption by 14% and increased the percentage of 
alternative fuel vehicles in the fleet to 42%. DON's FY13 budget 
includes funding for the purchase of alternative fuel vehicles and 
construction of alternative fuel stations.
    Ms. Bordallo. 40) How does LEED offer any concrete energy savings?
    Secretary Pfannenstiel. The LEED certification process provides an 
objective third-party method of ensuring design compliance over a range 
of factors such as energy efficiency, water efficiency, and indoor 
environmental quality. LEED certification alone is not sufficient to 
ensure compliance with energy saving goals. Navy facility energy 
savings are achieved through use of a combination of proper operation 
and maintenance, accepted building codes, industry standards, DOD 
criteria (incorporating lessons learned), Navy guidance, in conjunction 
with green building certification processes.
    Ms. Bordallo. 41) In this environment of increasingly constrained 
budgets, why is the Navy investing advanced biofuels? How much will the 
Government's investment, including the Navy's portion, accelerate the 
production and reduce the cost of biofuels?
    Secretary Pfannenstiel. The volatility and rapidly increasing 
demand growth outside the U.S., primarily China and India, clearly 
illustrate the need for more domestic alternatives such as advanced 
drop in alternative fuels that enhances our energy security and energy 
independence. In this constrained budget environment, the uncertainty 
of petroleum prices has created a nearly $1B fuel budget shortfall in 
FY12 for the Navy. This $1B will largely be funded out of operational 
and maintenance activities, reducing flying hours, steaming hours, and 
sustainment. Assured domestic supplies of alternative fuels offer the 
potential to mitigate uncertainty around our fuel budgets.
    The Government's planned investment in the DPA Title III Advanced 
Biofuels Production Project is intended to be the catalyst that allows 
first-in-kind commercial scale advanced biorefinery production chains 
to be constructed and become operational. The LMI study, 
``Opportunities for DOD Use of Alternative and Renewable Fuels: FY10 
NDAA Section 334 Congressional Study,'' clearly stated that the DPA 
Title III authority was a potential method for accelerating development 
of the alternative fuels industry. As part of this DPA effort, 
alternative fuels will be required to be cost competitive with 
conventional fuels.
    Ms. Bordallo. 42) If the Navy investment in biofuels is successful, 
when will the Navy expect advanced biofuels for military use to start 
decreasing the Navy's fuel budget?
    Secretary Pfannenstiel. If DPA Title III Advanced Biofuel 
Production Project efforts can be implemented on the planned timing and 
funding levels, commercial scale delivery at cost competitive prices 
could start as early as 2016, perhaps even earlier in limited 
circumstances. One of the objectives of this effort is to rapidly 
accelerate the cost competitiveness of alternative fuels as compared to 
conventional fuel. Thus, the Navy does not expect advanced biofuels to 
decrease Navy's fuel
budget.

    Ms. Bordallo. 43) Can you provide examples of Operational Energy 
programs which support the current fight?
    Secretary Yonkers. The Air Force's mission is to fly, fight, and 
win in air, space, and cyberspace, and decreasing fuel demand by 
maximizing efficiencies will increase Air Force combat capability and 
enhance energy security. Despite the Air Force's operational tempo over 
the last 21 years, the Air Force has emphasized and improved energy 
consumption and efficiency. Our primary goal for aviation energy has 
been to reduce fuel consumption 10% by 2015 against a 2006 baseline. To 
date, the Air Force has reduced fuel consumption 4% since FY06. Broadly 
speaking, the Air Force is seeking to reduce aviation fuel demand and 
change the culture through material and non-material, or policy, 
solutions. Examples include implementation of Mission Index Flying, an 
ongoing initiative to upgrade aircraft flight management systems to 
enable real-time route and altitude optimization based on temperatures, 
winds, aircraft weight, and other factors; replacing C-5Bs with the 
more fuel efficient C-5Ms; and implementing policy changes to reduce 
aircraft flying weights and optimize dip clearance routing.
    The Air Force is also implementing initiatives to reduce energy 
consumption, help reduce energy logistics tail, and contribute to 
untethering operations from Forward Operating Bases, such as improving 
energy efficiency at bases in contingency environments. In partnership 
with the other Services, the Air Force is evaluating the Basic 
Expeditionary Airfield Resources (BEAR) System for Load and 
Installation Management, which will integrate renewable energy into the 
BEAR grid and enable centralized load management to reduce energy 
demands.
    Ms. Bordallo. 44) What are the Services doing to address fuel 
consumption in its tactical and non-tactical vehicle fleet?
    Secretary Yonkers. The Air Force is leading an initiative to deploy 
Automated Inventory technology on our non-tactical vehicle fleet. The 
objective of this project is to upgrade radio frequency identification 
technology at Air Force sites worldwide using existing infrastructure 
to facilitate data collection and minimize costs for Air Force vehicle 
refueling. The Automated Inventory Manager automates the collection of 
fuel sales transaction data for Air Force owned and General Services 
Administration (GSA)/Commercially leased vehicles. The implementation 
plan is underway on 30,000 stateside vehicles. This new technology will 
provide more accurate odometer readings, and improved fuel consumption 
accountability and data integrity. It will also help monitor and 
enforce vehicle idling policy that was just recently approved to allow 
passive capture of current mileage, date, time, fuel quantity, fuel 
type and engine hours.
    Additionally, the Air Force is pursuing conversion of its general 
purpose fleet at Los Angeles Air Force Base to all plug-in electric. 
This will be the first Federal facility with an all-electric vehicle 
fleet. The Air Force is working with the GSA to pilot plug-in electric 
vehicles at other stateside bases as well.
    The Air Force is a strong proponent of alternative fuel and across 
its vehicle fleet has replaced more than 1.7 million gasoline gallon 
equivalents of petroleum with alternative fuel (E85, Biodiesel, and 
Compressed Natural Gas). To the greatest extent possible, the Air Force 
uses alternative fuels in non-tactical and tactical assets.
    With regard to tactical vehicles, the Air Force has a limited 
number of military design vehicles, relying predominately on 
commercial-off-the-shelf vehicles to meet mission requirements across 
the globe. The Air Force reduced fuel consumption by more than 700,000 
gasoline gallon equivalents of petroleum between fiscal years 2008-
2012. Where commercial-off-the-shelf vehicles are used for tactical 
purposes, the Air Force adheres to the acquisition principle to procure 
the most fuel efficient and fit-for-purpose vehicles.
    Ms. Bordallo. 45) How does LEED offer any concrete energy savings?
    Secretary Yonkers. Leadership in Energy and Environmental Design 
(LEED) is a tool used to verify that energy conservation goals have 
been met and does not replace the requirement to make sound energy and 
water conservation decisions. By setting sustainable goals based on 
Federal requirements and the LEED rating system, the Air Force Military 
Construction (MILCON) program was able to report in the FY11 Annual 
Energy Management Report 100% compliance with EPAct 05. Every project 
exceeded the 30% reduction in energy intensity set by the baseline in 
American Society of Heating, Refrigerating and Air Conditioning 
Engineers (ASHRAE) standard 90.1. Also, 6% of the projects exceeded a 
50% reduction in energy intensity, which translates into energy 
savings.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. PALAZZO
    Mr. Palazzo. 46) Over the past 4 years, to what extent has DOD used 
appropriated monies vs. ESPCs for funding energy efficiency projects to 
reduce installation energy consumption, and what changes in funding 
sources do you anticipate in future years? To what extent are all 
projects you fund by appropriations accompanied by performance 
guarantees, as is the case with ESPCs?
    Secretary Burke. Over the past four years DOD has spent 
approximately $1.5B in direct appropriations for energy efficiency 
projects. Separately, it has awarded approximately $782M in ESPCs. In 
the near term, to respond to the President's memo of 2 Dec 11, DOD will 
significantly increase its reliance on ESPCs, with a target of $1.2B 
combined in FY12 and FY13. This trend will continue beyond the timeline 
defined in the President's memo as DOD leverages the power of ESPCs to 
reduce our energy use without an outlay of appropriated funds. Given 
the limited availability of appropriated funds in today's budget 
environment and the large number of deserving projects in need of 
funding, the DOD services and agencies select the biggest impact 
projects--i.e., those with meaningful returns-on-investment and 
reasonable payback periods. Thus, although these projects are not 
accompanied by the same type of performance guarantees associated with 
ESPCs, we know from careful analysis that they will generate a good 
return on our investment.

    Mr. Palazzo. 47) As you may know, the LEED green building system 
discourages the use of wood products, thus greatly disadvantaging our 
home state of Mississippi and the countless forest jobs and forest 
landowners that rely on this industry in the state. It was one of the 
reasons my colleagues and I included a provision in the FY12 NDAA that 
required a cost based study on LEED and other rating systems.
    Recently, you said that your office plans to change the 
Department's green building policy. And, this new policy will be based 
heavily on ASHRAE 189.1.
    What elements of ASHRAE 189.1 will be included? What elements will 
be excluded? Will all wood standards be able to compete for 
construction projects? Regarding the study, will you solicit input from 
outside organizations? If so, when and how?
    Dr. Robyn. The Department of Defense embraces sustainable building 
practices inasmuch as they reduce the total cost of ownership of DOD 
facilities and enhance the resiliency of our installations. To that 
end, the Department is currently drafting a new DOD-specific set of 
criteria for high-performance buildings that will apply to new 
buildings, major renovations, and leases. The new criteria are 
anticipated to be based on American Society of Heating Refrigeration 
and Air Conditioning Engineers (ASHRAE) 189.1, which treats all 
sustainable forestry standards equally. While the new Unified 
Facilities Criteria for High Performance Buildings will make reference 
to ASHRAE 189.1, there are some elements of the standard that may not 
be cost effective for application in the DOD and therefore will not be 
incorporated in the new UFC. In a parallel effort, the Department has 
partnered with the National Research Council to study the cost-
effectiveness of ASHRAE, LEED, and Green Globes as required by 2012 
NDAA, Section 2830. The results of the study will be used to assess the 
cost effectiveness of future capital investments.
    Mr. Palazzo. 48) Over the past four years, to what extent has DOD 
used appropriated monies vs. ESPCs for funding energy efficiency 
projects to reduce installation energy consumption, and what changes in 
funding sources do you anticipate in future years? To what extent are 
all projects you fund by appropriations accompanied by performance 
guarantees, as is the case with ESPCs?
    Dr. Robyn. Over the past four years DOD has spent approximately 
$1.5B in direct appropriations for energy efficiency projects. 
Separately, it has awarded approximately $782M in ESPCs. In the near 
term, to respond to the President's memo of 2 Dec 11, DOD will 
significantly increase its reliance on ESPCs, with a target of $1.2B 
combined in FY12 and FY13. This trend will continue beyond the timeline 
defined in the President's memo as DOD leverages the power of ESPCs to 
reduce our energy use without an outlay of appropriated funds. Given 
the limited availability of appropriated funds in today's budget 
environment and the large number of deserving projects in need of 
funding, the DOD services and agencies select the biggest impact 
projects--i.e., those with meaningful returns-on-investment and 
reasonable payback periods. Thus, although these projects are not 
accompanied by the same type of performance guarantees associated with 
ESPCs, we know from careful analysis that they will generate a good 
return on our investment.
    Mr. Palazzo. 49) To what extent is the expedited contractor 
selection process being used at DOD and what is the average length of 
time for your contractor selection process for ESPC projects?
    Dr. Robyn. The expedited contractor selection process is being used 
for all DOD Energy Savings Performance Contracts (ESPCs), under both 
the Department of Energy Super ESPC contract and the Army Corps of 
Engineers Huntsville contract.
    The DOD's average length of time for contractor selection for its 
nine most recent ESPC awards has been 91 days. This includes two Navy 
projects which averaged 120 days, five Army projects which averaged 77 
days, and two Air Force projects which averaged 90 days.
    Mr. Palazzo. 50) Are you confident that DOD has access to a 
sufficient number of contracting officers, appropriately trained in the 
ESPC contracting process, to successfully meet your goal in new ESPC 
project investment over the next 24 months?
    Dr. Robyn. While all three Military Departments believe they have 
access to a sufficient number of appropriately trained contracting 
officers to meet DOD's goal in Energy Savings Performance Contract 
(ESPC) project investments by the end of 2013, this is based on the 
currently accepted process time of 12-18 months to contract award. 
Process improvement initiatives underway could reduce process time and 
increase throughput in a way that could invalidate the above statement. 
ESPC contracting officer expertise will be a topic of discussion during 
our process improvement initiative to ensure this is not a limiting 
factor in our ability to quickly process ESPC contracts.
    Mr. Palazzo. 51) What is the specific nature and frequency of 
reports and/or progress updates your office is required to provide up 
the chain for command that identify delays or barriers to expeditiously 
implementing ESPC projects?
    Dr. Robyn. DOD is required to report monthly to OMB and DOE on 
progress toward achievement of the President's goal for performance-
based contracts. While Military Services plan and execute their own 
ESPC projects without approval from OSD or higher authority, the OMB 
reporting process allows identification of issues that may delay a 
project. In recognizing that all Services approach ESPCs differently, I 
have formed a working group with stakeholders from across the 
Department to identify opportunities for standardization and process 
improvement with the goal of reducing the time needed to execute ESPC 
projects and improving the quality of the projects.
    Mr. Palazzo. 52) To what extent has the DOD completed its required 
energy and water evaluations? What is the number and profile of 
potential energy conservations measures (ECM) the audits have 
identified to date? How many of these audit identified ECMs do you 
anticipate being implemented in your effort to comply with the 
President's December 2, 2011, directive?
    Dr. Robyn. The Department has completed about 40% of its required 
energy and water evaluations, as reported in the Federal Energy 
Management Program's (FEMP) Energy Independence and Security Act (EISA) 
of 2007 Section 432 Compliance Tracking System (CTS). More than 27,000 
potential ECMs were identified during these audits. The total estimated 
cost to implement these ECMs, as reported by the Defense Components, is 
approximately $2.7 billion. The ECMs identified in CTS are a result of 
initial audits. Prior to implementation (either through appropriated 
funding or Energy Savings Performance Contracts (ESPC)), a more in-
depth investment-grade audit is typically conducted, where a more 
refined list of ECMs is developed. Therefore, the ECM listing in CTS is 
preliminary and does not directly track to the ECMs in the President's 
performance contracting initiative.

    Mr. Palazzo. 53) Over the past four years, to what extent has the 
Army used appropriated monies vs. ESPCs for funding energy efficiency 
projects to reduce installation energy consumption, and what changes in 
funding sources do you anticipate in future years? To what extent are 
all projects you fund by appropriations accompanied by performance 
guarantees, as is the case with ESPCs?
    Secretary Hammack. Over the last four years (FY08-FY11) Army has 
used $398.3M in appropriated funds (including ECIP) and $540.9M in 
alternatively financed investment (ESPC and UESC) to implement energy 
projects on installations. The Army's current plan for FY13-17 includes 
more than $1.3B in appropriated funding dedicated for energy projects 
plus undetermined amounts for the ECIP program. The Army expects 
funding sources through alternatively financed projects will also 
increase. Use of alternative financing is increasing rapidly over 
historic levels, with at least $200M of investment through ESPC's and 
UESC's expected in FY12. Army is already the largest user of ESPC's in 
Federal Government and second largest user of UESC.
    Appropriated funds projects are typically not structured to include 
performance guarantees, however, they may include performance 
assurances, Measurement and Verification, and/or commissioning. UESCs 
also include performance assurances rather than performance guarantees 
since many state public utility commissions do not allow utilities to 
provide guarantees.
    Mr. Palazzo. 54) To what extent is the expedited contractor 
selection process being used in the Army and what is the average length 
of time for your contractor selection process for ESPC projects?
    Secretary Hammack. The Army executes its ESPC Task Orders through 
both the U.S. Army Corps of Engineers and Defense Logistics Agency--
Energy (DLA-Energy). The U.S. Army Corps of Engineers--Engineering and 
Support Center, Huntsville (USACE-HNC) utilizes an expedited approach 
to all ESPC new start activities by using a Multiple Award Task Order 
Contract (MATOC) with 15 pre-qualified ESCOs and down selects to one 
ESCO based on responses to the task order RFP. DLA-Energy now uses a 
similar expedited process for task orders on the Department of Energy 
MATOC to down-select to one contractor. That was enabled by the 2011 
contract modification in response to NDAA11, section 828, which 
clarified how the competition requirements for MATOCs apply to ESPCs.
    Huntsville Center routinely completes ESCO selection in 90 days or 
less (average over last seven selections was 80 days). While the ESPC 
Task Order award schedule allowed for a large, fairly complex ESPC 
under the USACE-HNC MATOC is up 480 days (16 months), the typical time 
to award is 12-14 months.
    DLA--Energy has recently instituted changes to their acquisition 
process under the DOE ESPC MATOC that will shorten their award cycle 
time including adopting the new expedited down-select process and 
eliminating some redundant internal reviews. No projects have moved all 
the way through to award under this new process so we cannot yet give 
data on cycle time to award for this new process improvement, but it is 
expected to be in the 14 month timeframe.
    Five of the last eight ESPC Task Order awards done for Army were 
completed or executed in less than 12 months.
    Mr. Palazzo. 55) Are you confident that the Army has access to a 
sufficient number of contracting officers, appropriately trained in the 
ESPC contracting process, to successfully meet your goal in new ESPC 
project investment over the next 24 months?
    Secretary Hammack. Army is confident that it has access to a 
sufficient number of contracting staff to successfully meet goals under 
the Better Buildings Initiative. Army uses multiple contracting 
vehicles, including the U.S. Army Corps of Engineers--Huntsville Center 
(USACE-HNC) and Department of Energy (DOE) MATOCs, to ensure execution 
of our program. Both USACE-HNC and Defense Logistics Agency-Energy 
(DLA-Energy--used for DOE MATOC Task Orders) currently have a 
sufficient number of contracting officers for the projects already in 
the pipeline and have already begun adding contracting support staff to 
meet future demand growth. While demand for ESPC's is not yet expected 
to exceed availability of contracting personnel trained in ESPC's, 
plans are also underway to expand the number of interdisciplinary teams 
from related programs capable of awarding and administering an ESPC, if 
necessary to meet higher than expected increased demand.
    Mr. Palazzo. 56) What is the specific nature and frequency of 
reports and/or progress updates your office is required to provide up 
the chain for command that identify delays or barriers to expeditiously 
implementing ESPC projects?
    Secretary Hammack. As per guidance issued by OSD in response to the 
Better Buildings Initiative, Army provides monthly ESPC & UESC project 
pipeline milestone progress reports to OSD for consolidation with other 
DOD elements and submission to OMB. Monthly reporting started in April 
2012. The Army is using this report internally to ensure that projects 
remain on track. If projects slip behind on milestone attainment, the 
reports will flag this slippage, prompting oversight activity to 
determine what the situation is and how it can be remediated.
    Mr. Palazzo. 57) To what extent has the Army completed its required 
energy and water evaluations? What is the number and profile of 
potential energy conservations measures (ECM) the audits have 
identified to date? How many of these audit identified ECMs do you 
anticipate being implemented in your effort to comply with the 
President's December 2, 2011, directive?
    Secretary Hammack. The Energy Security and Independence Act of 2007 
require the Army to complete annual energy and water evaluations of 25% 
of covered facilities. Covered facilities include those which 
constitute 75% of the agencies' total energy use, so that an evaluation 
of each covered facility is completed at least once every four years. 
In FY 11 the Army performed energy and water audits on approximately 
30% of its total square footage covering more than 34% of its energy 
usage. These audits identify potential ECMs which are incorporated into 
ESPC/UESC task orders or undertaken using appropriated funds, where 
life cycle cost effective. There currently is no process to count the 
number of ECM's identified and implemented, nor is a profile of the 
ECMs tabulated. Additionally, ESPC/UESC task orders often include 
building audits that identify additional ECMs, which are then 
incorporated into the contract.

    Mr. Palazzo. 58) Over the past four years, to what extent have the 
Navy and Marine Corps used appropriated monies vs. ESPCs for funding 
energy efficiency projects to reduce installation energy consumption, 
and what changes in funding sources do you anticipate in future years? 
To what extent are all projects you fund by appropriations accompanied 
by performance guarantees, as is the case with ESPCs?
    Secretary Pfannenstiel. Navy investment in energy efficiency 
projects has been supported with a mixture of funding sources. Navy 
uses appropriated funds (Operations & Maintenance, Navy (OM,N), 
Military Construction (MILCON), Energy Conservation Investment Program 
(ECIP), and Navy Working Capital Fund (NWCF)) as well as leverages 
privately-financed projects such as Energy Savings Performance 
Contracts (ESPC) and Utilities Energy Savings Performance Contracts 
(UESC).
    A funding comparison between financed energy projects (ESCP and 
UESC) and all other appropriated funding profiles is provided below:


----------------------------------------------------------------------------------------------------------------
       Investment              FY09              FY10              FY11              FY12              PB13
----------------------------------------------------------------------------------------------------------------
Appropriated             $221.3M           $46.6M            $58.6             $441.4M           $343.0M
Energy Efficiency
Investments
----------------------------------------------------------------------------------------------------------------
ESPC Investment*         $71.5M            $107.8M           $12.3M             --               $82.0M
----------------------------------------------------------------------------------------------------------------
UESC Investment*         $72.5M            $29.4M            $46.1M            $33.2M            $9.0M
----------------------------------------------------------------------------------------------------------------


    *The ESPC and UESC funding amounts listed represent the financed 
investment that will be paid with energy savings over the course of the 
contractual agreement.
    Similar to a performance guarantee, identified appropriated shore 
energy efficiency investments shall undergo the same measurement and 
validation process using the methodologies of the Federal Energy 
Management Program (FEMP) M&V guidelines (Options A, B, C and D) that 
are presently being performed for ESPC projects.
    The Navy remains committed to utilizing ESPCs and UESCs to leverage 
the high-level of expertise of Energy Savings Companies.
    Mr. Palazzo. 59) To what extent is the expedited contractor 
selection process being used in the Navy and Marine Corps and what is 
the average length of time for your contractor selection process for 
ESPC projects?
    Secretary Pfannenstiel. The expedited contractor selection process 
is being used for 100% of all Navy ESPC efforts under the Department of 
Energy (DOE) Super ESPC contract. The ESPC contractor selection 
process, incorporated into the NAVFAC Business Management System allows 
for contractor selection based on contractor statement of 
qualifications (fair opportunity assessment) and a down selection to 
one or more energy services contractors to perform the preliminary 
assessment in accordance with the DOE contracts.
    Two projects have been initiated since the process has been enacted 
and the time to down selection has been five months for one project and 
three months for the second. Two new fair opportunity assessments are 
about to be issued. Goal moving forward is to decrease the original 
down-select timeframe to about two months to include any headquarters 
or legal reviews.
    Mr. Palazzo. 60) Are you confident that the Navy and Marine Corps 
have access to a sufficient number of contracting officers, 
appropriately trained in the ESPC contracting process, to successfully 
meet your goal in new ESPC project investment over the next 24 months?
    Secretary Pfannenstiel. Depending on the number of new contract 
actions over the next 24 months, there may be a need for more 
contracting officers trained in ESPC to expedite contract awards. 
Currently navy contracting for ESPC is centralized in one location. 
There are sufficient contracting personnel to handle the current ESPC 
contract actions projected through FY-13.
    Mr. Palazzo. 61) What is the specific nature and frequency of 
reports and/or progress updates your office is required to provide up 
the chain for command that identify delays or barriers to expeditiously 
implementing ESPC projects?
    Secretary Pfannenstiel. Navy is compliant with 10 U.S.C. Sec. 2925 
which requires all services to report annually the performance of 
installations energy management through the Secretary of Defense to the 
congressional defense committees. As such, the Annual Energy Managers 
Report (AEMR) is the vehicle utilized to collect and report the 
Department's energy performance.
    Section 8.1 of the AEMR Reporting Guidance directs Navy to, ``list 
all projects funded through third-party financing to include energy 
savings performance contracts (ESPC), enhanced use leases (EUL), 
utility energy service contracts (UESC), utility privatization (UP) 
agreements, and power purchase agreements (PPA). Appropriated projects 
should include all projects funded through military construction 
(MILCON), the Energy Conservation and Investment Program (ECIP), 
operations and maintenance (O&M), sustainment, restoration and 
modernization (SRM), and working capital funds.''
    There is no requirement to identify delays or barriers to 
expeditiously implementing ESPC contracts.
    Mr. Palazzo. 62) To what extent have the Navy and Marine Corps 
completed their required energy and water evaluations? What is the 
number and profile of potential energy conservations measures (ECM) the 
audits have identified to date? How many of these audit identified ECMs 
do you anticipate being implemented in your effort to comply with the 
President's December 2, 2011, directive?
    Secretary Pfannenstiel. The Navy has consistently met the EISA 2007 
requirement for comprehensive energy and water auditing 25% of covered 
facilities annually. Audits have resulted in recommended energy and 
water ECMs inside the covered facility envelope. The energy audits 
completed to date report over 70 types of ECM's. The most frequently 
reported ECM's fall into the following categories:
     1. Retro-commissioning
     2. Energy Management Control Systems
     3. Temperature Setbacks
     4. Boiler Replacement
     5. Chiller Replacement
     6. Insulate Roofs, Walls, Attics, Piping
     7. HVAC Controls Upgrades
     8. Lighting Upgrades
     9. Lighting Controls and Occupancy Sensors
    10. High Efficiency DX Heat Pumps
    11. Solar Domestic Hot Water
    12. Water Conservation Improvements
    13. Weatherization
    14. High Efficiency Motors, Fans and Condensing Units
    15. Convert Constant Volume Air Handling Units to Variable Air 
Volume (VAV)
    The ECM's identified in the energy audits will be used to inform 
DON investment strategy to meet energy consumption reduction and 
renewable energy goals across all available funding mechanisms (i.e. 
Energy Savings Performance Contracts (ESPC), Utility Energy Savings 
Contracts (UESC), Restoration and Modernization (RM energy), Energy 
Conservation Incentive Program (ECIP), etc.). The Installation Planners 
and Installation Energy Managers responsible for using the audit 
results for future project development have to consider a wide variety 
of installation specific factors such as local facility condition and 
utility costs, as well as previous implementation of ECMs and approved 
energy projects. It is difficult to anticipate the decisions being made 
in the field for which ECMs will be included in performance based 
contracts and which ECMs will be included in other project types. 
Furthermore, performance based contract development is an interactive 
process which includes input from both contractors and installation 
personnel. Performance-based contracts currently in development include 
the following ECM categories in the scope of work:
      HVAC Controls Upgrades
      Lighting Upgrades
      Lighting Controls and Occupancy Sensors
      Data Center Upgrades and Controls
      Chiller Replacement
      Insulate Roofs, Walls, Attics
      Building Envelope Weatherization
      Energy Management System
      Biomass (landfill gas)
      Boiler Replacement
      Backwash Water Recycling in Waste Water Plant
      Install Direct Digital Control (DDC) Systems
      Temperature Set Backs
      Water Conservation Measures

    Mr. Palazzo. 63) Over the past four years, to what extent has the 
Air Force used appropriated monies vs. ESPCs for funding energy 
efficiency projects to reduce installation energy consumption, and what 
changes in funding sources do you anticipate in future years? To what 
extent are all projects you fund by appropriations accompanied by 
performance guarantees, as is the case with ESPCs?
    Secretary Yonkers. Over the past four years, the Air Force spent 
more than $500 million in appropriated dollars compared to an 
investment cost of $59 million in Energy Savings Performance Contracts 
(ESPC) for funding energy efficiency projects to reduce installation 
energy consumption.
    The Air Force has budgeted approximately $200 million per year for 
FY12-15 for appropriated energy conservation projects but is also 
increasing emphasis on the use of ESPC and Utility Energy Service 
Contracts (UESC) authorities. We anticipate awarding ESPC and UESC 
contracts valued at approximately $300 million over the next 2 years 
and are escalating our capability to identify and develop more projects 
in future years.
    Although our appropriated projects do not normally include 
performance guarantees in the contracts, the Air Force has instituted a 
policy to measure and verify energy savings on those projects. The 
AFCESA Capital Investment Project Measurement and Verification (M&V) 
program is designed to provide feedback and validity to these projects. 
Data collected will be used to document energy and financial savings, 
support future energy programs funding, improve engineering efforts 
(design, operations, maintenance), and aid in future financial 
budgeting and energy forecasting.
    Mr. Palazzo. 64) To what extent is the expedited contractor 
selection process being used in the Air Force and what is the average 
length of time for your contractor selection process for ESPC projects?
    Secretary Yonkers. The Air Force plans to execute all future Energy 
Savings Performance Contracts (ESPC) projects via the Department of 
Energy's Federal Energy Management Program (DoE-FEMP) Super ESPC 
Indefinite Delivery Indefinite Quantity (IDIQ). This IDIQ contract 
provides competition and streamlines the process. The Air Force follows 
the DoE-FEMP timeline for ESPC development and reviews, and took 
approximately 90 days to select the first two contractors using the 
DoE-FEMP Super ESPC IDIQ.
    Mr. Palazzo. 65) Are you confident that DOD (or substitute military 
service) has access to a sufficient number of contracting officers, 
appropriately trained in the ESPC contracting process, to successfully 
meet your goal in new ESPC project investment over the next 24 months?
    Secretary Yonkers. Yes, the Air Force has access to a sufficient 
number of contracting officers. The Air Force uses installation 
contracting officers, trained by the Federal Energy Management Program 
(FEMP), to award our Energy Savings Performance Contracts (ESPC) Task 
Orders.
    Mr. Palazzo. 66) What is the specific nature and frequency of 
reports and/or progress updates your office is required to provide up 
the chain for command that identify delays or barriers to expeditiously 
implementing ESPC projects?
    Secretary Yonkers. In April 2012, the Department of Defense 
implemented the Department of Energy's ESPC project reporting tool that 
provides a month-by-month view of targets and milestones toward 
achieving performance-based contract goals. Use of the tool tracks the 
progress of projects that will identify changes in the schedule and the 
ability to determine the causes of any delays. Air Force submitted the 
first report to the Office of the Secretary of Defense in May.
    Mr. Palazzo. 67) To what extent has the Air Force completed its 
required energy and water evaluations? What is the number and profile 
of potential energy conservations measures (ECM) the audits have 
identified to date? How many of these audit identified ECMs do you 
anticipate being implemented in your effort to comply with the 
President's December 2, 2011 directive?
    Secretary Yonkers. To date, the Air Force is approximately 50% 
complete with energy audits for covered facilities as defined by the 
Energy Independence and Security Act of 2007 (EISA07). In 2010, forty 
installations covering 84 million square feet identified 15,000 energy 
and water conservation opportunities. Potentially these ECMs can save 
six trillion BTUs of energy. The 2011 energy audits are nearly complete 
and these audits will identify similar quantities of ECMs.
    To comply with the President's December 2, 2011 directive, the Air 
Force validates and prioritizes all potential ECMs, evaluates them for 
the most effective contracting method and executes them as quickly and 
efficiently as possible. The Air Force anticipates entering into Energy 
Savings Performance Contracts (ESPC) and Utility Energy Service 
Contracts (UESC) valued around $300 million over the next two years 
with an additional $400 million identified for evaluation over the next 
five years. In addition to third-party funding, the Air Force is 
committing approximately $200 million in appropriated funding annually 
in FY10-15 to execute identified energy conservation measures.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. REYES
    Mr. Reyes. 68) Energy security is an increasingly complex and 
pressing issue. How does energy security affect military readiness, and 
what new solutions are you developing to meet those challenges?
    Secretary Burke. The 2010 Quadrennial Defense Review and FY 2011 
NDAA define energy security as ``assured access to reliable supplies of 
energy and the ability to protect and deliver sufficient energy to meet 
operational needs.'' Operational energy is an essential enabler of 
military operations, so it is an integral part of military readiness. 
Threats to our ability to provide operational energy undermine our 
ability to deploy, sustain, and employ military forces around the 
globe. In an era of growing irregular and anti-access/area denial 
threats, the size and scale of our fuel storage, transportation, and 
distribution networks raise risks to our military operations and 
readiness.
    The Department's Operational Energy Strategy and supporting 
Implementation Plan provide a framework for reducing these risks, 
improving warfighting capability, and enhancing military energy 
security. The Department has initiated a series of initiatives to 
reduce the demand for energy in military operations, assure the supply 
of energy, and adapt our future force development.

    Mr. Reyes. 69) Energy security is an increasingly complex and 
pressing issue. How does energy security affect military readiness, and 
what new solutions are you developing to meet those challenges?
    Dr. Robyn. The 2010 Quadrennial Defense Review and FY 2011 NDAA 
define energy security as ``assured access to reliable supplies of 
energy and the ability to protect and deliver sufficient energy to meet 
operational needs.'' Operational energy is an essential enabler of 
military operations, so it is an integral part of military readiness. 
Threats to our ability to provide operational energy undermine our 
ability to deploy, sustain, and employ military forces around the 
globe. In an era of growing irregular and anti-access/area denial 
threats, the size and scale of our fuel storage, transportation, and 
distribution networks raise risks to our military operations and 
readiness.
    The Department's Operational Energy Strategy and supporting 
Implementation Plan provide a framework for reducing these risks, 
improving warfighting capability, and enhancing military energy 
security. The Department has initiated a series of initiatives to 
reduce the demand for energy in military operations, assure the supply 
of energy, and adapt our future force development.

    Mr. Reyes. 70) Energy security is an increasingly complex and 
pressing issue. How does energy security affect military readiness, and 
what new solutions are you developing to meet those challenges?
    Secretary Hammack. Energy is fundamental to Army capabilities and 
performance, over reliance on fossil fuels and connection to a 
vulnerable electrical power grid jeopardize the security of Army 
installations and mission capabilities. To meet these challenges the 
Army is developing solutions in three areas; basing power, soldier 
power and vehicle power.
    On its permanent installations, the Army is working to improve 
energy efficiency, install alternative energy sources and develop grid 
security projects. On its contingency bases, the Army is implementing 
efficient grid technologies and deploying more efficient generators and 
alternative energy technologies. In the area of Soldier power, the Army 
is deploying advanced Soldier power capabilities such as power 
management devices, fuel cells, and renewable energy alternatives that 
helped to reduce the volume and weight of Soldier's energy loads. 
Finally, to address vehicle power in its tactical fleet the Army focus 
is on better fuel consumption management, thermal systems management 
and materials development that will help to improve fuel efficiency.
    Mr. Reyes. 71) The Army Improved Turbine Engine Program (ITEP) 
envisions a significantly more fuel efficient and powerful engine for 
the Black Hawk and Apache helicopter fleet as well as the next 
generation Joint Multi-Role helicopter. Bringing 25% more fuel 
efficiency and 50% more power to the fleet is a has enormous 
operational and energy benefit throughout the DOD. Can you please 
elaborate on the benefits you see and the importance of the ITEP 
program within the Department of Defense?
    Secretary Hammack. The increased power of the ITEP engine will 
allow the Black Hawk and Apache helicopters to carry more payload and 
fly faster across a wider range of environmental conditions that 
currently limit these helicopters with their currently installed 
engines. In some combinations of pressure and temperature, the same 
mission may take multiple aircraft or multiple lifts or both to 
accomplish the mission in the conditions and time required. These 
aircraft with an ITEP installed, will more often be able to accomplish 
those missions with fewer aircraft in fewer lifts. At the same time, 
with the engine being more fuel efficient, it will dramatically 
decrease the fuel requirement across these fleets. The ITEP is 
tremendously important to the Department of Defense, not only does it 
increase the capability of the Black Hawk and Apache helicopters to 
provide the war fighter with rotary wing support, it does so while 
requiring less fuel per engine.

    Mr. Reyes. 72) Energy security is an increasingly complex and 
pressing issue. How does energy security affect military readiness, and 
what new solutions are you developing to meet those challenges?
    Secretary Pfannenstiel. There is an undeniable link between energy 
security and military readiness. For the Navy, energy security means 
having assured access to a reliable, secure, and affordable supply of 
energy for Navy missions, both today and in the future. The Navy's 
efforts to reduce energy consumption and improve the energy efficiency 
of our platforms/installations, in concert with increased use of non-
petroleum sources, turn our energy usage from a vulnerability into a 
combat multiplier.
    Afloat, testing and evaluation of numerous technologies to improve 
fuel economy and reduce maintenance requirements for existing ships and 
aircraft is complete, and we continue to make targeted investments for 
the future. We are developing best practices for reducing fuel 
consumption by ships and aircraft, as well as investing in simulator 
upgrades.
    Navy's small investment in biofuel `fit-for-use' testing provides 
an off-ramp from conventional fuel sources when those fuels are 
competitively priced, while buffering our fuel accounts from future 
price volatility when these biofuels are competitively priced. This 
advanced biofuel requires no modification to the engines in our current 
inventory or changes to our fuels distribution or logistics resupply 
networks.
    Ashore, Navy is working to ensure reliable, resilient, redundant 
power for our critical assets, improve the energy efficiency of our 
buildings, reduce petroleum consumption from non-tactical vehicles, and 
incorporate renewable and alternative energy technologies where 
economically viable. Advanced metering and microgrid technologies will 
enable better energy management and improve resiliency in emergencies.
    For the Marine Corps, increased energy efficiency and performance 
will enhance readiness by providing Marines more time to focus on the 
mission, and less time focused on logistics and sustainment. Lower 
requirements for fuel translate to reduce requirements for resupply and 
sustainment missions.
    The Marine Corps is developing models to understand demand, and the 
impact of equipment investments on the force. Initial findings indicate 
that with our $350M investment over the FYDP we estimate this 
investment will improve the energy efficiency of our Marine 
Expeditionary Brigades (MEB) by nine percent, enabling our forces to 
sustain longer and go further, incurring less risk. The MEB of 2017 
will be able to operate an estimated one month longer on the same 
amount of fuel that we plan to use today, and it will need 208 fewer 
fuel trucks, thereby saving seven million gallons of fuel per year.
    The Marine Corps has deployed energy efficient and renewable energy 
systems to five Battalion-equivalents in the Helmand Province of 
Afghanistan: energy efficient shelter liners, low power LED lights, 
plus the GREENS and SPACES renewable energy power systems for 
recharging batteries and running equipment at small outposts at the 
forward edge. At remote locations these systems eliminate the need for 
fuel or battery resupply. Proven through the USMC Experimental Forward 
Base process, this gear is now `program of record' and integrated into 
the Marine Corps kit.
    The Marine Corps FY13 plan includes additional investment in 
renewable energy systems GREENS and SPACES, as well as investment in 
energy efficient generators and environmental control units, the two 
largest ground users for power, and efficiency improvements to the 
MTVR.
    Mr. Reyes. 73) Navy/Air Force related: I understand that there is 
approximately $1 billion budgeted for FY13 for energy efficiency and 
renewable energy acquisition. I also am aware of the private financing 
vehicles available to you for both upgrading the energy efficiency and 
installing renewable capacity. Why then is the Department using 
appropriated dollars for short payback energy efficiency measures when 
you could leverage more energy efficiency by including these in an 
Energy Savings Performance Contract (ESPC)? Would appropriated dollars 
be more wisely used as a part of an ESPC?
    Secretary Pfannenstiel. Navy invests in energy efficiency through a 
mixture of funding sources to optimize our shore energy investment 
portfolio and provide maximum return-on-investment. We use appropriated 
funds--such as Operations & Maintenance, Navy (OM,N), Military 
Construction (MILCON), Energy Conservation Investment Program (ECIP), 
and Navy Working Capital Fund (NWCF))--as well as leverage privately-
financed projects such as Energy Savings Performance Contracts (ESPC) 
and Utilities Energy Savings Performance Contracts (UESC). The decision 
to use appropriated or financed funding is based upon availability of 
funds, and technical complexity of the project.
    The Navy remains committed to utilizing ESPCs and UESCs to leverage 
the high-level of expertise of Energy Savings Companies.

    Mr. Reyes. 74) Energy security is an increasingly complex and 
pressing issue. How does energy security affect military readiness, and 
what new solutions are you developing to meet those challenges?
    Secretary Yonkers. From aviation operations to installations, both 
within the homeland and abroad, energy is a strategic imperative for 
Air Force operations and is key to our national and economic security. 
Every aspect of our mission--ISR, communications, space, medevac, air 
defense, mobility operations--is dependent on access to reliable 
sources of energy. We realize that access to energy can come at great 
cost in treasure and lives; therefore, the Air Force strives to reduce 
consumption and increase our preparedness to exploit available 
alternatives. Through improvements in our weapon systems (e.g., drag 
reduction) and by changes in our techniques, tactics, and procedures 
(e.g., cargo loads, flight approach profiles, etc.), we are reducing 
our demand. Through activities such as our alternative fuels 
certification program--aviation and vehicle--and our 1000 megawatt 
renewable energy initiatives, we are increasing our preparedness to 
exploit available alternatives. Thus reducing our dependence on fossil 
fuels and enhancing our energy security posture.
    Mr. Reyes. 75) Navy/Air Force related: I understand that there is 
approximately $1 billion budgeted for FY13 for energy efficiency and 
renewable energy acquisition. I also am aware of the private financing 
vehicles available to you for both upgrading the energy efficiency and 
installing renewable capacity. Why then is the Department using 
appropriated dollars for short payback energy efficiency measures when 
you could leverage more energy efficiency by including these in an 
Energy Savings Performance Contract (ESPC)? Would appropriated dollars 
be more wisely used as a part of an ESPC?
    Secretary Yonkers. The Air Force is currently developing an energy 
investment strategy that will emphasize the combined use of funding 
streams to maximize Air Force appropriations and provide the best value 
for the Department. As part of this strategy, the Air Force is 
requesting more than $530 million in Fiscal Year (FY) 2013 for 
aviation, infrastructure, and research, development, test and 
evaluation (RDT&E) energy initiatives to reduce demand, improve 
efficiency, diversify supply, and enhance mission effectiveness. This 
includes over $215 million specifically to reduce facility energy 
consumption. As the Department of Energy found, using ESPCs to fund 
energy conservation measures (ECMs) with shorter payback while using 
appropriated dollars as part of an ESPC to fund ECMs with longer 
payback resulted in 22% more value in facility improvements.
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MRS. ROBY
    Mrs. Roby. 76) As you may know, the LEED green building system 
discourages the use of wood products, thus greatly disadvantaging my 
home state of Alabama and the countless forest jobs and forest 
landowners that rely on this industry in the state. It was one of the 
reasons my colleagues and I included a provision in the FY12 NDAA that 
required a cost based study on LEED and other rating systems.
    Recently, you said that your office plans to change the 
Department's green building policy. And, this new policy will be based 
heavily on ASHRAE 189.1.
    What elements of ASHRAE 189.1 will be included and excluded?
    Dr. Robyn. The Department of Defense embraces sustainable building 
practices inasmuch as they reduce the total cost of ownership of DOD 
facilities and enhance the resiliency of our installations. To that 
end, the Department is currently drafting a new DOD-specific set of 
criteria for high-performance buildings that will apply to new 
buildings, major renovations, and leases. The new criteria are 
anticipated to be based on American Society of Heating Refrigeration 
and Air Conditioning Engineers (ASHRAE) 189.1, which treats all 
sustainable forestry standards equally. While the new Unified 
Facilities Criteria for High Performance Buildings will make reference 
to ASHRAE 189.1, there are some elements of the standard that may not 
be cost effective for application in the DOD and therefore will not be 
incorporated in the new UFC. In a parallel effort, the Department has 
partnered with the National Research Council to study the cost-
effectiveness of ASHRAE, LEED, and Green Globes as required by 2012 
NDAA, Section 2830. The results of the study will be used to assess the 
cost effectiveness of future capital investments.
    Mrs. Roby. 77) Will all wood standards be able to compete for 
construction projects?
    Dr. Robyn. The Department of Defense embraces sustainable building 
practices inasmuch as they reduce the total cost of ownership of DOD 
facilities and enhance the resiliency of our installations. To that 
end, the Department is currently drafting a new DOD-specific set of 
criteria for high-performance buildings that will apply to new 
buildings, major renovations, and leases. The new criteria are 
anticipated to be based on American Society of Heating Refrigeration 
and Air Conditioning Engineers (ASHRAE) 189.1, which treats all 
sustainable forestry standards equally. While the new Unified 
Facilities Criteria for High Performance Buildings will make reference 
to ASHRAE 189.1, there are some elements of the standard that may not 
be cost effective for application in the DOD and therefore will not be 
incorporated in the new UFC. In a parallel effort, the Department has 
partnered with the National Research Council to study the cost-
effectiveness of ASHRAE, LEED, and Green Globes as required by 2012 
NDAA, Section 2830. The results of the study will be used to assess the 
cost effectiveness of future capital investments.
    Mrs. Roby. 78) Regarding the study, will you solicit input from 
outside organizations? If so, when and how?
    Dr. Robyn. In preparing the report on the energy-efficiency and 
sustainability standards utilized by the Department of Defense (DOD) 
for military construction and repair, required by section 2830 of the 
National Defense Authorization Act for Fiscal Year 2012, the DOD has 
partnered with the National Research Council (NRC). The study from this 
partnership will evaluate the cost-effectiveness of American Society of 
Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), 
Leadership in Energy and Environmental Design (LEED), and Green Globes 
standards. The DOD chose to partner with the NRC to ensure the study is 
conducted in the most transparent, objective, and unbiased manner. The 
public was invited to come and speak or provide written input to the 
NRC committee at its first meeting on June 28th and 29th. There will be 
an additional call for public input prior to the second meeting of the 
committee in mid-September.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. KISSELL
    Mr. Kissell. 79) What are some of the most effective measures to 
make DOD installations more efficient? And, efficiency is critical not 
just to reducing electricity consumption but also oil consumption. What 
impact do the rising petroleum prices have on each branch of the 
military?
    Secretary Burke. In regards to the impact of the rising petroleum 
prices on each branch of the military, higher fuel bills have on 
opportunity cost for DOD in two ways. In the long term, without growth 
in the defense budget, the DOD will have to shift funds from other 
priorities to meet high and rising fuel bills. This opportunity cost is 
one reason DOD's Operational Energy Strategy emphasizes the importance 
of reducing the demand for fuel (the primary reason is to improve 
military effectiveness). In the near term, volatile oil prices with the 
year of execution have become a challenge to DOD, with the potential to 
affect training and readiness. In the past, DOD has asked Congress for 
new authorities to better manage this price volatility.

    Mr. Kissell. 80) The wood products industry is extremely important 
to my home state, supporting thousands of rural jobs and encouraging 
strong investments in my state's forests, to keep them healthy and 
intact. This is why I was pleased to hear you recently say, ``This year 
my office will issue a new construction code for high-performance, 
sustainable buildings, which will govern all new construction, major 
renovations and leased space acquisition. This new code, based heavily 
on ASHRAE 189.1 . . . ''
    I'd be interested to know exactly what parts of ASHRAE 189.1 will 
be incorporated? Will the new policy continue to certify buildings 
through rating systems that discourage the use of wood produced in my 
state? Will all wood products from my state be able to compete in RFP 
bids?
    Dr. Robyn. The Department of Defense embraces sustainable building 
practices inasmuch as they reduce the total cost of ownership of DOD 
facilities and enhance the resiliency of our installations. To that 
end, the Department is currently drafting a new DOD-specific set of 
criteria for high-performance buildings that will apply to new 
buildings, major renovations, and leases. The new criteria are 
anticipated to be based on American Society of Heating Refrigeration 
and Air Conditioning Engineers (ASHRAE) 189.1, which treats all 
sustainable forestry standards equally. While the new Unified 
Facilities Criteria for High Performance Buildings will make reference 
to ASHRAE 189.1, there are some elements of the standard that may not 
be cost effective for application in the DOD and therefore will not be 
incorporated in the new UFC. In a parallel effort, the Department has 
partnered with the National Research Council to study the cost-
effectiveness of ASHRAE, LEED, and Green Globes as required by 2012 
NDAA, Section 2830. The results of the study will be used to assess the 
cost effectiveness of future capital investments.
    Mr. Kissell. 81) What are some of the most effective measures to 
make DOD installations more efficient? And, efficiency is critical not 
just to reducing electricity consumption but also oil consumption. What 
impact do the rising petroleum prices have on each branch of the 
military?
    Dr. Robyn. The Department's facility energy strategy, designed to 
reduce the energy costs and improve the energy security of our fixed 
installations, has four inter-related elements. The first element of 
the facility energy strategy, reducing the demand for traditional 
energy through conservation and energy efficiency, is critical to 
reduce electricity consumption and to make DOD installations more 
energy efficient.
    The Department continues to reduce its demand for traditional forms 
of facility energy through conservation and improved energy efficiency. 
Its Fiscal Year (FY) 2013 budget includes more than $1.1 billion for 
investments in conservation and energy efficiency, and almost all of 
that is directed to existing buildings. The majority of this funding is 
in the Military Services operations and maintenance accounts, to be 
used for sustainment and recapitalization projects. Such projects 
typically involve retrofits to incorporate improved lighting, high-
efficiency HVAC systems, double-pane windows, energy management control 
systems and new roofs. As DOD strives to improve its energy efficiency, 
accurate, real-time facility energy information is becoming essential. 
Therefore, metering a larger fraction of the Department's buildings to 
standardize processes and integrate systems will be needed to 
systematically track, analyze and benchmark our facility energy and 
water use and the related costs.

    Mr. Kissell. 82) What are some of the most effective measures to 
make DOD installations more efficient? And, efficiency is critical not 
just to reducing electricity consumption but also oil consumption. What 
impact do the rising petroleum prices have on each branch of the 
military?
    Secretary Hammack. The Army is taking several measures to improve 
the energy efficiency of its facilities. The Army is investing in 
improving all aspects of its buildings from more efficient heating and 
cooling units to energy efficient lighting. The Army has the most 
robust energy savings performance contract (ESPC) program in the 
Federal Government. To Date, the Army has secured more than $1.5B in 
ESPC and Utilities Energy Savings Contracts (UESC) investment. These 
past investments have resulted in annual cost avoidance to the Army of 
$148 million and an energy savings of 7.986 trillion British thermal 
units (Btu).
    Over the past several years the Army has made significant 
improvement in energy efficiency. Since 2003 the Army has decreased its 
facility energy usage by 13%, while at the same time its energy costs 
have increased by more than 50%. In addition, the Army reduced its 
petroleum usage in its non-tactical vehicle fleet by 8% in FY11.
    Rising petroleum costs and rising energy costs in general are 
squeezing Army budgets. As both fuel and electricity costs continue to 
increase, it is critical that the Army invest in energy efficiency in 
its buildings and vehicle fleet and continue investment in renewable 
energy projects to lower costs over the long-term.

    Mr. Kissell. 83) What are some of the most effective measures to 
make DOD installations more efficient? And, efficiency is critical not 
just to reducing electricity consumption but also oil consumption. What 
impact do the rising petroleum prices have on each branch of the 
military?
    Secretary Pfannenstiel. The Department of the Navy is investing 
aggressively in energy efficiency to reduce total energy consumption 
afloat and ashore. We are conducting facility energy audits while 
completing installation of advanced meters to implement a wide range of 
facility energy efficiency measures. By the end of this year, over 
27,000 meters will be installed in existing facilities to provide the 
means to better measure the amount of energy we are consuming. We will 
continue to invest in energy-efficient building upgrades and cost-
effective renewable systems; install advanced meters and energy 
management systems; procure alternative fuel vehicles; achieve 
sustainable building standards; and transform our energy culture and 
behavior for long-term sustainability.
    In FY11, the price of petroleum went up by $38/bbls, an increase of 
30%. Already in this fiscal year, fuel price increases present a $900M 
bill to Navy's operational accounts that we must resolve within our 
operating budget. This extreme price volatility and upward trend of 
fuel prices significantly impacts our readiness in execution years.

    Mr. Kissell. 84) What are some of the most effective measures to 
make DOD installations more efficient? And, efficiency is critical not 
just to reducing electricity consumption but also oil consumption. What 
impact do the rising petroleum prices have on each branch of the 
military?
    Secretary Yonkers. Overall, the Air Force's focus is to reduce our 
energy footprint across all operations, including installations and 
aviation operations. The Air Force has reduced its overall facility 
energy consumption by nearly 20% and reduced energy intensity by more 
than 16% since FY03. Included in the FY13 budget request is $215 
million for energy conservation projects on our installations, a 
continuation of the nearly $800 million the Air Force has invested in 
such projects over the last four years. As a result of the initiatives 
put in place over the last eight years, the Air Force has cumulatively 
avoided $1.1 billion in facility energy costs since FY03.
    One example of the Air Force efforts is the heat plant 
decentralization project at Dover Air Force Base, Delaware. This 
project, which replaces a 1950's era system with natural gas fired 
boilers and electric water heaters, is estimated to save about $2 
million a year by reducing energy use by more than 15% per year. All 
new building projects on base are also having new boilers installed, so 
no new specialized training will be required. The project is scheduled 
to be completed in December 2012, and the Air Force anticipates 
recovering its costs in 12 years. Additionally, the Energy Conservation 
Investment Program (ECIP) is a critical element of the Air Force's 
strategy to improve the energy performance of its permanent 
installations. In FY11, the Air Force completed 17 ECIP projects at a 
cost of under $30 million. The Air Force estimates these projects will 
save more than 253 billion BTUs annually and nearly $54 million over 
the life of the projects.
    Efficiency is not just about aircraft improvements, but also 
changing how we fly. The Air Force aviation efficiency goal is to 
improve aviation energy efficiency 10% by 2020, based on a 2011 
baseline. To address this, the Air Force is looking at policy changes 
across our mobility, combat, and training aircraft, in addition to 
investments in equipment. The Mobility Air Forces account for 64% of 
aviation fuel consumption within the Air Force, and as their mission 
lends itself to capturing lessons from industry, these aircraft have 
been our primary focus for energy savings. For example, Air Mobility 
Command (AMC) updated their policies to eliminate any extra fuel 
carried, while still maintaining safety standards. Category 1 fuel 
requirements existed for decades as an added amount of reserve fuel 
equal to 10% of the time over water (outside of ground-based navigation 
systems) to account for inaccurate navigation systems. With 
technological advances and current on-board navigation systems 
requirements, this additional fuel is unnecessary, and by eliminating 
the requirement (and associated excess weight) the Air Force estimates 
an annual savings of 5 million gallons in fuel, or more than $19 
million a year based on today's fuel prices. While each one of these 
policy changes is small, together they add up to 19.5 million gallons 
of fuel, or $75 million, in FY11, with an expected savings of $325 
million over the Future Years Defense Program (FYDP). With these 
efficiencies put into practice, the cost for AMC to move 1 ton of cargo 
1 mile by air is down by 21% and the Air Force was able to move 27% 
more cargo on just 3% more fuel last year.
    The Air Force is the largest single consumer of energy in the 
Federal Government. Energy is becoming a larger share of the Air Force 
budget, going from 3% of the Air Force budget in 2003 to over 8% in 
2011, and it is becoming more difficult for the Air Force to forecast 
and plan for volatile prices. Last year, the Air Force spent $9.7 
billion on fuel and electricity, up $1.5 billion from FY10. While long-
term energy cost increases are a significant concern, short-term 
fluctuations in energy prices can critically impact the budget in the 
year of execution. For example, in June 2011, the price for a gallon of 
JP-8 jumped 30% from $3.03 to $3.93 a gallon, and today the price is at 
$3.82. The Air Force is anticipating a shortfall of approximately $1.3 
billion this year due to the increased price of fuel from the FY12 
budgeted rate.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. BARTLETT
    Mr. Bartlett. 85) After consulting with the Services, please 
identify the viable work-arounds for the assurance of JP-5, F-76, JP-8 
and diesel for mobile platforms as well as to generate electricity for 
critical missions in the Indian Ocean and in the Pacific Ocean--
specifically at Diego Garcia, Guam, Korea, Japan, and Hawaii in the 
event that supplies and delivery of crude oil originating from the 
Persian Gulf are disrupted for a period of 2 weeks to 2 months or no 
longer available to the U.S. and allied militaries in those locations? 
Please provide an answer for each location. Please only include work 
arounds that do not rely on (a) competing with the Chinese for crude 
oil or fuel; (B) That don't increase U.S. Military reliance on crude 
oil or fuel from Russia; and (c) that don't rely on purchasing fuel or 
oil from a secondary source that gets it from the Persian Gulf, such as 
India, which gets crude oil from Iran. Please provide answers and 
estimates of additional cost and impacts upon PACOM and CENTCOM 
readiness compared with current operations for both short-term work 
arounds (e.g. 1-3 months) and for long-term work arounds (e.g. 6 months 
to 2 years.) Please include estimates of impacts upon PACOM and CENTCOM 
readiness compared with current operations and the earliest year of 
potential availability of access to supplies of certified, milspec JP-
5, F-76 and JP-8 that would displace 50% of crude oil feedstock with 
bio-based feedstocks as a result of the proposed USN/DOE/USDA biofuels 
and biorefinery initiatives utilizing DPA authority.
    Secretary Burke. Historically, the Defense Logistics Agency's (DLA) 
sources of JP5, F76 and JP8 for DOD customers in Guam, South Korea and 
Japan are refiners located in South Korea and Singapore. DOD customers 
for those products in Diego Garcia are served by refiners located in 
South Korea, Singapore, Greece, Bahrain, Kuwait, and the United Arab 
Emirates. Alternative sources for these areas could include refiners 
located on the U.S. West Coast or in Malaysia, Greece, Spain, Ruwais 
and Yanbu in Saudi Arabia, and Fujairah in the United Arab Emirates, 
which is located outside the Strait of Hormuz. DOD customers in Hawaii 
have traditionally procured refined products on island or from U.S. 
West Coast refiners. Alternative sources for Hawaii would be refiners 
located primarily on the U.S. West Coast.
    The impact to CENTCOM or PACOM readiness of a disruption of oil 
shipments from the Persian Gulf would depend upon the extent of the 
disruption. At this point, DLA sees little impact on CENTCOM or PACOM 
readiness compared to current operations for short term disruptions; 
however, CENTCOM and PACOM would face increasing constraints after 8-12 
months. Note that the refiners we work with buy crude oil on the global 
market; although we can choose where we make purchases from, it would 
be difficult to determine the effects on Chinese demand or that of 
other nations. DOD's total product demand is 300,000 barrels out of 89 
million barrels of daily global demand.
    Regarding costs, in late December 2011 Iran threatened to close the 
Strait of Hormuz. While most of the oil leaving the Strait goes to 
Asia, the world oil market is interconnected. Following that threat, 
Brent crude oil prices increased roughly 20% through early March 2012, 
though how much of that price increase can be directly attributed to 
the threat is difficult to say. Since then, Brent crude oil prices have 
declined from their peak of more than $128/bbl.
    Based on the above, one might project the minimum increase in crude 
oil prices would be $20/bbl as an immediate reaction to any closing of 
the Strait. Several analysts have publicly predicted increases between 
$20/bbl and $100/bbl. If such a disruption lasted several days and even 
weeks, the higher end cost increases would be possible. However, the 
range of such estimates suggests how difficult it is to predict oil 
prices with any precision given the many factors that can either 
mitigate or exacerbate any price increase. Sustained for a year, an 
increase in crude oil prices of $20/bbl would cost DOD $2.6B.
    The U.S. Navy/DOE/USDA DPA authority may result in the construction 
of relatively small (approximately 10 million gallons/year) domestic 
bio-refineries with production capacity available in the late 2015/2016 
timeframe. None of this domestic production would be expected to offset 
fuel requirements for Diego Garcia, Guam, South Korea and Japan. If one 
of the bio-refineries was constructed in Hawaii, the potential for a 
small offset of conventional petroleum products in Hawaii exists. The 
goal of the DPA is to help create U.S. industrial capacity, however, so 
we anticipate the ability to increase output when the goals of this 
project are met.

    Mr. Bartlett. 86) The Congress last year authorized a new DOE 
program for Small Modular Reactors (SMRs) which included $67M for 
FY2012 ($452M over 5 years) for design and licensing of two LWR designs 
of SMRs. After consulting with the Services, please provide details 
about current or proposed plans at DOD to consider development and 
deployment of Small Modular Reactor (SMR) at military installations. 
What actions has DOD undertaken to date independently or in conjunction 
with the Department of Energy (DOE), Nuclear Regulatory Commission or 
the National Nuclear Labs to consider development and deployment of 
SMRs at military installations? What is the budget and please identify 
the personnel assigned to this effort going forward? Has DOD approved 
consideration of SMRs for 30-year power purchase agreements at military 
installations? If not, what are the obstacles to using this authority 
for SMRs?
    Dr. Robyn. The Department of Defense (DOD) continues to collaborate 
with the Department of Energy (DoE) and its associated National Labs as 
they investigate the potential of small modulator reactors (SMRs). 
Initial meetings with DoE identified a wide variation (relative to 
normal base demand) in power output among the four technologies under 
consideration. DoE expects to select two primary technologies by the 
end of 2012. Further meetings with DoE are planned once the 
technologies are identified. At that time, DOD needs can be better 
matched with SMR capabilities. Since DoE does not expect the first SMR 
plant to be in commercial operation until 2022, further exploration of 
possible siting locations is premature at this time.
    The DOD's authority to enter into up to 30-year agreements for 
energy production facilities on lands under its jurisdiction, 10 U.S.C. 
2922a, would apply to an SMR the same as to any other energy production 
facility. Although there are clearly issues that would have to be dealt 
with because of the special considerations surrounding SMRs, section 
2922a is available to use for contracting for provision of such a 
facility.

    Mr. Bartlett. 87) Please explain obstacles, including CBO scoring, 
to DOD authority to approve long-term contracts for acquisition and 
procurement of drop-in 50/50 crude oil/biofeedstock blend milspec JP-5, 
F-76, and JP-8. Are there any other alternatives besides authority 
under the Defense Production Act Title III Program for DOD to approve 
long-term contracts for acquisition and procurement of drop-in 50/50 
crude oil/biofeedstock blend milspec JP-5, F-76, and JP-8?
    Secretary Pfannenstiel. As the biofuel industry is still relatively 
immature, the new capital costs for large-scale production are 
significant, and industry needs longer contractual terms so that those 
costs can be amortized over a longer period of time. Accordingly, DON 
believes that it would be beneficial to DOD to have the ability to 
enter into long-term contracts for biofuels. DOD has general multiyear 
contracting authority under 10 USC Sec. 2306. DOD has historically not 
utilized this authority for the acquisition of fuels. Obstacles to 
exercising this authority generally include OMB scoring and resulting 
fiscal law concerns and budget implications.
    DON and DOD have supported legislation to specifically provide 
long-term contracting authority to DOD for the acquisition of 
alternative fuels. DON does not have any information regarding the 
methodology used by CBO to address scoring for these legislative 
proposals. It is DON's opinion that longer contracts will result in 
lower operating costs for suppliers and ultimately lower prices for 
DOD, in which case CBO pay-go concerns should be allayed.

                                  
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