Fuel, Titanium Blues:

Recent increases in the price of fuel have cost the Air Force $1.3 billion, said Sue Payton, the service’s top acquisition official. That money is unbudgeted and comes straight off the service topline. Speaking with defense reporters Nov. 20, Payton noted that it is true that an increase of $10 in the price of a barrel of oil translates into an Air Force bill for $600 million in JP-8 jet fuel expenses—but oil costs have already spiked by far more than $10 a barrel. The situation with titanium is even worse. Part of the reason the price estimate for C-5 re-engining has surged so high is the use of titanium to build the engines. The price of titanium has increased by a shocking 503 percent on the world market since 2005, Payton said. That doubled the cost of new C-5 engines. Of course, the titanium increase applies to new C-17 engines, as well, further complicating the Air Force attempts to sort out its strategic airlift plan for the future. Incidentally, Russia is the world’s foremost titanium supplier.