Also, I meant to say: You have to differentiate between the early fasting state (i.e., the first 24-40 hours) and the starvation mode (prolonged fasting) as the fuel sources are different.
From http://www.ncbi.nlm.nih.gov/books/NBK22414/
The early fasting state. The blood-glucose level begins to drop several hours after a meal, leading to a decrease in insulin secretion and a rise in glucagon secretion; glucagon is secreted by the α cells of the pancreas in response to a low blood-sugar level in the fasting state. Just as insulin signals the fed state, glucagon signals the starved state. It serves to mobilize glycogen stores when there is no dietary intake of glucose. The main target organ of glucagon is the liver. Glucagon stimulates glycogen breakdown and inhibits glycogen synthesis by triggering the cyclic AMP cascade leading to the phosphorylation and activation of phosphorylase and the inhibition of glycogen synthase. Glucagon also inhibits fatty acid synthesis by diminishing the production of pyruvate and by lowering the activity of acetyl CoA carboxylase by maintaining it in an unphosphorylated state. In addition, glucagon stimulates gluconeogenesis in the liver and blocks glycolysis by lowering the level of F-2,6-BP.
All known actions of glucagon are mediated by protein kinases that are activated by cyclic AMP. The activation of the cyclic AMP cascade results in a higher level of phosphorylase a activity and a lower level of glycogen synthase a activity. Glucagon's effect on this cascade is reinforced by the diminished binding of glucose to phosphorylase a, which makes the enzyme less susceptible to the hydrolytic action of the phosphatase. Instead, the phosphatase remains bound to phosphorylase a, and so the synthase stays in the in-active phosphorylated form. Consequently, there is a rapid mobilization of glycogen.
The large amount of glucose formed by the hydrolysis of glucose 6-phosphate derived from glycogen is then released from the liver into the blood. The entry of glucose into muscle and adipose tissue decreases in response to a low insulin level. The diminished utilization of glucose by muscle and adipose tissue also contributes to the maintenance of the bloodglucose level. The net result of these actions of glucagon is to markedly increase the release of glucose by the liver.
Both muscle and liver use fatty acids as fuel when the blood-glucose level drops. Thus, the blood-glucose level is kept at or above 80 mg/dl by three major factors: (1) the mobilization of glycogen and the release of glucose by the liver, (2) the release of fatty acids by adipose tissue, and (3) the shift in the fuel used from glucose to fatty acids by muscle and the liver.
What is the result of depletion of the liver's glycogen stores? Gluconeogenesis from lactate and alanine continues, but this process merely replaces glucose that had already been converted into lactate and alanine by the peripheral tissues. Moreover, the brain oxidizes glucose completely to CO2 and H2O. Thus, for the net synthesis of glucose to occur, another source of carbons is required. Glycerol released from adipose tissue on lipolysis provides some of the carbons, with the remaining carbons coming from the hydrolysis of muscle proteins.
The metabolic changes on the first day of starvation are like those after an overnight fast. The low blood-sugar level leads to decreased secretion of insulin and increased secretion of glucagon. The dominant metabolic processes are the mobilization of triacylglycerols in adipose tissue and gluconeogenesis by the liver. The liver obtains energy for its own needs by oxidizing fatty acids released from adipose tissue. The concentrations of acetyl CoA and citrate consequently increase, which switches off glycolysis. The uptake of glucose by muscle is markedly diminished because of the low insulin level, whereas fatty acids enter freely. Consequently, muscle shifts almost entirely from glucose to fatty acids for fuel. The β-oxidation of fatty acids by muscle halts the conversion of pyruvate into acetyl CoA, because acetyl CoA stimulates the phosphorylation of the pyruvate dehydrogenase complex, which renders it inactive. Hence, pyruvate, lactate, and alanine are exported to the liver for conversion into glucose. Glycerol derived from the cleavage of triacylglycerols is another raw material for the synthesis of glucose by the liver.
Proteolysis also provides carbon skeletons for gluconeogenesis. During starvation, degraded proteins are not replenished and serve as carbon sources for glucose synthesis. Initial sources of protein are those that turn over rapidly, such as proteins of the intestinal epithelium and the secretions of the pancreas. Proteolysis of muscle protein provides some of three-carbon precursors of glucose. However, survival for most animals depends on being able to move rapidly, which requires a large muscle mass, and so muscle loss must be minimized.
How is the loss of muscle curtailed? After about 3 days of starvation, the liver forms large amounts of acetoacetate and d-3-hydroxybutyrate (ketone bodies). Their synthesis from acetyl CoA increases markedly because the citric acid cycle is unable to oxidize all the acetyl units generated by the degradation of fatty acids. Gluconeogenesis depletes the supply of oxaloacetate, which is essential for the entry of acetyl CoA into the citric acid cycle. Consequently, the liver produces large quantities of ketone bodies, which are released into the blood. At this time, the brain begins to consume appreciable amounts of acetoacetate in place of glucose. After 3 days of starvation, about a third of the energy needs of the brain are met by ketone bodies. The heart also uses ketone bodies as fuel.