By Andrea Shalal-Esa

CHESAPEAKE, Virginia (Reuters) - Shells fly and firing range instructors yell at the young Marines who are in their second day of security forces training at the edge of the Great Dismal Swamp that straddles the border between Virginia and North Carolina.

"Look what you just did. Hurry up! Let's go. Do it all over," barks one instructor who is helping prepare Marine security forces like those called to protect the U.S. Embassy in Tripoli after an attack on the U.S. Consulate in the Libyan city of Benghazi killed the U.S. ambassador and three other Americans.

The goal, says Gunnery Sergeant Todd Leahey, is to create exactly the kind of frantic environment the 19- and 20-year-old Marines would face if they were called in to liberate a U.S. embassy or ship that had been taken over by militants.

"Obviously they're going to go in there and it's going to be very stressful," he told reporters as the next round of firing drills continued. "They've got to be able to differentiate between the enemy combatants and the non-hostile occupants."

Marine Corps officials say the intense training done at this site in Chesapeake, Virginia is imperative to ensure the young Marines will be ready to respond to threats against U.S. facilities on a moment's notice. But, they say, looming budget cuts may threaten the pace and realism of the training.

The men who serve in the Marine Corps Fleet Anti-terrorism Security Teams (FAST) sign up for an extra, fifth year of service to get a spot on the high-speed force, then spend nearly four weeks of 10-hour days training at this Cold War-era Navy listening station. There are no women on the teams since they are drawn from the infantry, which is still off limits to women.

During training, the future security force Marines face off against angry rioters played by fellow Marines shouting "Go back to your country. We don't want you here." They get hit in the face with pepper spray, and their thighs are whacked by batons.

They learn to stay calm while rapidly firing shotguns, rifles, pistols and machine guns -- even when their weapons jam -- and when to swap rubber bullets for the real thing.

And when they are done, they spend seven months guarding the U.S. naval base in Guantanamo, Cuba, or waiting at one of three overseas U.S. bases in Spain, Bahrain and Japan to respond to events just like the attack on the U.S. consulate in Benghazi. A separate platoon was also dispatched to the U.S. Embassy in Yemen.

TRAINING MAY BE ON CHOPPING BLOCK

The FAST companies are largely defensive forces created in 1987 and have been used regularly to provide a quick response to incidents such as the Liberian civil war in the 1990s, embassy bombings in Kenya and Tanzania in 1998 and the attack on the USS Cole in Yemen in 2000. Once in place, they augment or complement the efforts of special operations forces.

But officials say the live-fire exercises and other training that get the FAST Marines ready for overseas assignments may be cut if U.S. lawmakers do not act in time to avert $500 billion in across-the-board budget cuts due to start taking effect in January -- on top of $487 billion in reductions already planned.

The Marine Corps has 18 50-man FAST platoons, of which eight are stationed overseas at any given time, and there are no current plans to reduce the number.

That could change if the extra budget cuts required under a process called sequestration take effect, and funds for training with real ammunition will almost certainly be curtailed.

Marine Corps Commandant General James Amos told Reuters earlier this month that the Marines would protect funding for troops deployed overseas, but the cuts would have a significant effect on procurement, training and the ability of the service to respond to multiple crises at once.

"Sequestration would severely impact our ability to maintain the same level of readiness," said Lieutenant Colonel Matt Morgan, spokesman for U.S. Marine Corps Forces Command, which oversees the training of the FAST teams and Marines that will guard nuclear weapons sites.

"If we have fewer platoons then we have less capacity to respond, and commanders would have to look at where they would accept risks," he said.

At the moment, the young Marines training to become security forces get lots of practice, first with "simunition" -- a kind of sophisticated paintball -- and then real ammunition. They run through hundreds of scenarios they might encounter in the field.

MORE DRY RUNS?

Captain Michael Jevons, a former FAST platoon commander who now serves as the executive officer for security forces training at the Virginia facility, said leaders at the site were keeping a close eye on the budget debates in Washington.

He said officials would have to get more creative about the training techniques they used if their funding was cut, including limiting the amount of training with real ammunition. "If we don't get ammo, we'll do more dry runs."

Todd Harrison, an analyst with the Center for Strategic and Budgetary Assessments in Washington, said sequestration is expected to have a big impact on training and equipment maintenance, needed to maintain military readiness.

"Readiness is operation of the equipment, actual training, live fire exercises," he said. "It's how ready you are to go into combat."

Lance Corporal Seth Morgan, 19, is only on his second day of training at the Chesapeake site, but says the repetition is exactly what helps get the men ready for their jobs.

"It's pretty stressful. But once you get used to it and you get it down, it gets easier from there," said Morgan, who hails from Ridgeway, Virginia and has two brothers who also serve in the Marines.

(Editing by Warren Strobel and Cynthia Osterman)