- How might developments in the world oil market affect supplies of jet fuel?
- What measures can the Air Force take to protect itself against high fuel prices and supply disruptions?
This volume briefly examines the world oil market, how developments in that market might affect "wholesale" supplies of jet fuel, and what measures the Air Force might take to protect itself against high fuel prices and supply disruptions. To facilitate this examination, the authors conducted three exploratory studies, which are reported in the companion volumes and are summarized here. In general, the Air Force and the Department of Defense in general lack the economic clout to influence the market, simply because they do not buy a large enough amount of fuel. Furthermore, alternative fuels have limited, if any value. As a result, the only effective option for reducing fuel expenditures is to use less fuel. But the security of the supply is another matter. For a variety of reasons, the Air Force is not, by itself, able to ensure the worldwide energy supply. It can, however, contribute to its security through its relationships with and assistance to other nations, both direct and indirect. For example, partnerships with oil-producing nations can help them improve their internal security, which affect supplies.
Neither the U.S. Air Force nor DoD Has Enough Purchasing Power to Affect the world oil market
- The services require considerable amounts of fuel to function, but the amounts are not significant in terms of the overall market. This limits their influence on such matters as price and supply.
- Potential alternative fuels are of limited, if any value.
- Thus, the only effective option for reducing fuel expenditures is to use less fuel.
The U.S. Air Force Can Help Oil-Producing Nations Whose Security Shortfalls Interfere with Production Improve Security
- In some nations, security and instability are fundamental issues that can interfere with the production or transport of energy.
- Air Force partnership-building activities can assist with security improvements
- However, some nations have concerns about U.S. infringement on their sovereignty, and the U.S. government itself has concerns about human rights violations and corruption.
Efforts to Alleviate Supply-Chain Vulnerability Can Be Leveraged to Achieve Broader U.S. objectives
- One example would be diffusion of tensions along the Asian sea-lanes, where our primary concern is the potential for conflict between the two regional pillars, India and China.
- Energy security concerns also may help strengthen existing partnerships (e.g., Turkey) or building new partnerships (e.g., India) with current and prospective allies.
The research described in this report was sponsored by the United States Air Force and conducted by RAND Project AIR FORCE.
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