At $4M per year, if this program reduces fuel use just by just 1% they produce a net savings of $20M for a whopping 500% ROI. Hit double the percentage, achieve double the ROI, etc. More detail here. Of course, all this figuring uses $50 per barrel (keeps it simple). In reality, avg price per year has been:
2002 - $26.1, 2003 - $31.2, 2004 - $41.7, 2005 - $56.6, 2006 - $66.1, 2007 - $72.2 (source: Guiness Atkinson Energy Brief, Sep 2008)
It's $95 today and falling ... who can say where it will be in a year? But most experts predict a price range of $80-100 in the near term. I'd say that's plenty high to keep rewarding the Navy handsomely for its retrofit actions.
Photo courtesy of Tina McEvoy @ Flickr
Photo courtesy of Tina McEvoy @ Flickr
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