May 30, 2018 —
The number one priority for Defense Logistics Agency Energy is meeting the warfighters’ competing demands on the battlefield, especially when it comes to providing reliable and high-quality fuel and global relationships.
An operationally vital way of meeting this priority is through the International Agreements program. DLA Energy’s Bulk Petroleum Supply Chain Services International Fuel Agreements team is responsible for establishing and maintaining long-term U.S. Department of Defense fuel agreements with foreign militaries. Synchronized with DLA Energy regional offices, they focus on providing global capability to meet future fuel requirements.
“It takes a very special set of professionals to make international agreements successful,” said Frank Pane, director of DLA Energy Bulk Petroleum Supply Chain Services. “They need to not only have a firm grasp of the operational needs and workings of the Class III [petroleum, oil and lubricants] supply chain but also fully understand the myriad of governing policies, integrate successfully with the regions, and have the tact and diplomacy to conduct face-to-face negotiations with senior military members of partner nations.”
With no less than 25 years of fuel experience for each member, the International Fuel Agreements team provides global expertise while being well-versed in navigating complex strategies.
“We foster strategic international partnerships that provide the capability and availability of fuel before it is even needed,” said Michael Maclean, a logistics management specialist and member of the DLA Energy International Fuel Agreements team. “We have fuel exchange agreements all around the world that provide reciprocal fuel support between the U.S. and partner nations.”
The agreements provide the authority for DLA Energy to obtain fuel services such as pipeline access or product from the foreign country. As of April 2018, DLA Energy has 41 fuel agreements across the world with countries like Honduras, India, Japan, Korea, Spain, Italy, Greece, Argentina, Chile, Indonesia and New Zealand, with ongoing efforts to expand agreement coverage.
“If an agreement authority was not in place and the warfighter needed support, DLA Energy would have to consider other solutions that may take additional time,” Maclean said. “Our agreements provide DLA Energy with options to ensure immediate warfighter support, and that’s why we focus on expanding agreement coverage.”
Collaborative partnerships are key in a global operating environment.
“The agreements play a vital role in any coalition operation, exercise, or humanitarian mission,” said David Alexander, chief of DLA Energy International Agreements. “They are used by our forces anywhere we operate and significantly enhance interoperability.”
Capitalizing on Efficiency
Leveraging global partnerships is mutually beneficial and develops alliances around shared interests and resources that optimize the supply chain.
Alexander said the agreements provide economical, operational and logistical efficiencies between both countries. It’s not just about selling a gallon of fuel, he said.
“We have a variety of different types of agreements, and we create a synergy between them where they complement each other,” he said. “For example, we have an agreement with the Turkish Ministry of Defense for U.S. use of a strategic Turkish pipeline that runs through the country and has been essential to U.S. operations in the area. To expand beyond this capability, we also developed a fuel exchange agreement with the Turkish Navy and Turkish Air Force.”
When it comes time to reconcile financial accounts, the countries are able to use any combination of agreements to streamline settlement, Alexander said. If either party owes the other under the Fuel Exchange Agreement, the debt can be settled by replacement-in-kind, repaid in fuel and delivered into the Turkish-NATO Pipeline System under the provisions of the Fuel Support Agreement.
“It’s about interoperability,” Alexander said. “It creates a single supply chain with partnering countries feeding off it.”
Maclean says there isn’t one agreement that is more important than another, noting they are all valued equally.
“We do business with some countries more than we do with other countries,” he said. “Germany is one of our biggest agreements in terms of dollar value or volume exchanged.”
Scott Stafford, international agreement’s lead negotiator for DLA Energy Europe and Africa, highlighted how price saves money. DLA Energy gives the foreign partner the standard price we charge our military forces and, in turn, the foreign partner charges us the same rate as their own military.
Alexander added that offsetting fuel balances gallon-for-gallon during settlement is a great economic efficiency. Australia is a prime example because their price for fuel is consistently higher than in the U.S, he said.
“If they sold us one million gallons and we sold them two million gallons, the first million is offset gallon for gallon,” he said. “For that first million, we won’t pay more than what we would through the standard price.”
Operationally, fuel agreements allow U.S. forces to strategically plan flight routes and ground movements.
Alexander cited the president of the United States’ trip to South Africa for Nelson Mandela’s funeral in 2013 as an example. He said Air Force One was able to take the most direct route because of DLA Energy’s established partnerships with the United Kingdom in the remote Ascension Island location.
“If we didn’t have fuel support under a fuel exchange agreement there, the president would have had to go a whole different route,” Alexander said.
For DLA Energy, it isn’t only about the exchange of fuel but also about developing interpersonal relationships with partnering countries.
For the past 13 years, Defense Logistics Agency Energy Europe & Africa has hosted an annual Fuel Exchange Agreement Forum for current and potential fuel agreement partners within the Europe and Africa regions. Thirteen countries participated in 2017, and the fall’s 2018 forum is expected to include even more partners.
The event builds interpersonal relationships while providing an opportunity to begin, continue or finalize agreement negotiations; reconcile financial account balances; and open or close Acquisition Cross Servicing Agreement orders to ensure compliance with combatant command ACSA guidance.
“The international agreement program started off some years ago with the service components each having their own agreements,” Alexander said. “When it transitioned to DLA Energy, there were only a handful of countries that participated. Since then, it has now grown to be a key forum, valued by our partnering nations and recognized by senior leaders as a key enabler in developing operational flexibility and ensuring uninterrupted fuel support to our warfighters.”
Whether U.S. forces are conducting coalition exercises, providing humanitarian support or executing a strategic mission, they need to trust that they have fuel available worldwide to perform their duties. DLA Energy prides itself on understanding customer requirements and anticipating future needs to ensure warfighters have reliable and efficient fuel sources across an increasingly complex global environment.