Defense Department Announces up to $5 Billion in Jet Fuel Contracts

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http://breakingenergy.com/2013/12/12/defense-department-announces-up-to-5-billion-in-jet-fuel-contracts/



Defense Department Announces up to $5 Billion in Jet Fuel Contracts
By Jared Anderson
on December 12, 2013 at 4:00 PM

The US Defense Logistics Agency yesterday announced a slew of major contracts for the purchase of jet fuel. The contracts are valid through April 30th 2015 and the money will come from fiscal 2014 defense working capital funds.

Fifteen different companies – ranging from the world’s largest international oil companies including supermajors ExxonMobil and Shell to firms DOD considers small businesses – won the fuel contracts on the basis of competitive bids. Royal Dutch Shell subsidiary Shell Oil Products won the lion’s share of the awards totaling over $1.6 billion.

The fuel supply agreements were granted on an “indefinite-delivery/indefinite-quantity” basis, meaning DOD agrees to purchase jet fuel from each company for up to the individually settled totals, which collectively add up to over $5 billion.



The fact that the Pentagon plans to spend billions on jet fuel next year is not, in and of itself important, but indicates the strategic value energy plays in US military operations. And this is just aviation fuel, the military also requires billions of dollars’ worth of diesel, gasoline, electricity, etc.