Oil and the Pentagon

by RYAN MCMAKEN
Mises Institute
Mar. 09, 2012

Late last month, Bloomberg reported that British Petroleum continues to experience substantial growth in the amount of money it receives from the Pentagon for its oil services. From 2010 to 2011, Pentagon contracts with BP increased by one-third from about 1 billion to 1.35 billion.

This was presented by some in the media as a scandal, since presumably, BP should be punished by the Pentagon for it’s massive 2010 oil spill in the Gulf of Mexico. The larger story, however, should be about just how much the Pentagon spends on oil every year.

The BP contracts are just one small portion of total Pentagon spending on oil, and as Bloomberg reported earlier in February, Pentagon spending on oil surged 26 percent from 2010 to 2011, rising from $13.7 billion to $17.3 billion during that period. That’s about 117 million barrels of oil.

Indeed, the U.S. Department of Defense is the largest purchaser of oil on earth, and reportedly consumes more than any other governmental department or body worldwide. Obviously, the effect of such a huge driver of global demand on the global oil price certainly isn’t zero.

There have been talks in Washington of cutting the military’s budget by about 500 billion over the next ten years. In spite of the fact that this amount is laughably small, the military is claiming that the global oil price, which the military itself is pushing up, will make even a tiny reduction difficult.

We can consider this along side the much ballyhooed effort by the Pentagon to “go green” and slash its use of fossil fuels. It also promises to cut greenhouse gas emissions by ten percent. This cut, however,

exempts the military's bases in Iraq and Afghanistan, as well as the jets, ships, and ground vehicles that swallow up 75 percent of the military's fuel supply.

So, the Pentagon will be cutting emissions except when it’s not. And by cutting its reliance on fossil fuels, it can presumably get to work driving up the price of non-fossil fuels. Whether or not the reduction of fossil fuel use and greenhouse gas emissions should be a goal of public policy is debatable, but in typical fashion, the reality of the effort to “go green” hardly matches the PR.

The idea of the Pentagon becoming environmentally conscious is itself somewhat ridiculous. Governments worldwide have committed some of the worst environmental disasters in history, and government militaries tend to be among the worst perpetrators. Civilian functions of government can be environmentally disastrous, as in the case of the Soviets and the Aral Sea, but governmental war efforts seem to produce the lion’s share of the damage done. Even leaving aside all the fire bombing and the nuclear bombs and the depleted uranium bombs still being used by the Pentagon, we’re left with nuclear test sites, the myriad of polluted weapons production sites, such as Rocky Flats and the non-stop use of oil that is necessary to move around machines of war day in and day out across the globe. The U.S., for example, has essentially been at war nonstop since 1990. That sort of thing gets expensive in both budgetary outlays and in environmental impact.

American taxpayers aren’t just paying once for the Pentagon’s spending spree on oil. They’re also paying through higher prices at the pump. Worldwide, private citizens continue to pay for government militaries through lost limbs thanks to leftover land mines, or polluted soil and groundwater due to depleted uranium, through unexploded munitions, or through just old-fashioned air pollution.

Yet governments continue to lecture private citizens for the crime of driving an automobile to the grocery store or failing to recycle a few aluminum cans.

Note: See Rothbard on air pollution.