The Real Costs of DOD Petroleum Dependence

Natural Security Blog: Post

August 25, 2010 | Posted by Alex Stark, Joseph S. Nye, Jr. Research Intern - 8:49am | 14 Comments

Photo: Navy News Service/Tech Sgt. Cohen A. Young USAF

Yesterday The Washington Post reported that US gasoline prices have hit an 8-month low. The article reports that “the sagging commodity market price for gasoline is good news for American motorists, promising a mild easing in pump prices. It also marks the end of a summer of relative stability for retail gasoline prices, which have fluctuated by about 20 cents per gallon since the beginning of the year and have stayed in an 8-cent range for the past 69 days.” But the drop in oil prices may ultimately prove to be a bad thing for America’s energy policy, and particularly for the way that DOD shapes its energy strategy.

That’s because the high and volatile price of petroleum serves as a major incentive for DOD to switch to a greater use of alternative fuel sources. In 2008, according to the US Department of Energy, about 78 percent of DOD’s total fuel use was petroleum. Since DOD is so reliant on petroleum as a fuel source, even small price fluctuations can have major budget effects: for example, in 2008 Defense Secretary Gates said “every time the price of oil goes up by $1 per barrel, it costs us about $130 million, and frankly, my credit card limit is getting narrow on that.”

However, in the process of helping out with the DOD fuels report, I’ve learned that there are several other reasons that it is vital that DOD begin planning and implementing a transition away from a reliance on petroleum energy resources. Back in June, I attended an event on the future of biofuels, where Rear Admiral Philip Cullom from the Navy Energy Coordination Office referred to the fact that oil cans serve as a “flashpoint” for military intervention. Furthermore, many major suppliers of petroleum fuel, such as Venezuela and Iran, are not regimes that the US necessarily has an interest in supporting by purchasing fuel from them. As I wrote in my previous post, reserves-to-production ratios show us that the future of oil production will be less focused on US allies like Canada and Mexico that are major suppliers of US oil now, who will run out of petroleum at current rates of production within 20 years, and more focused on Venezuela and Iran, who have much longer production horizons. Finally, defending fuel convoys on the ground poses a great cost that can be measured in dollars but also (and more importantly) in lives. Estimates say that there is about one American casualty in Afghanistan for every 24 fuel resupply convoys. Passing these costs on to contractors or local groups can also have a security toll: The New York Times reported in June that a network of warlords in Afghanistan is profiting on the magnitude of millions of dollars from escorting NATO convoys.

Of course, this sets aside the costs that are associated with environmental degradation due to petroleum use. Yet even here there is a direct connection to US national security interests: for example, Rear Admiral Cullom argued in June that global instability due to the effects of climate change, as well the public health and other environmental repercussions of drilling for oil, could have major security implications. And the 2010 QDR also acknowledged that climate change could act as an accelerant of conflict worldwide.

Many branches of the military have done an excellent job of beginning to prepare and plan for an energy transition. The Navy, for example, plans to acquire 50 percent of its energy resources from alternative fuel sources by 2020, and to sail the “Great Green Fleet” by 2016. But a coordinated strategy throughout DOD would be a much more efficient and effective way of planning for DOD’s future energy needs.

Critics sometimes argue that the US military should not focus so intently on reducing energy consumption, saying that the US military’s job is warfighting, not saving the environment. But in my time here at CNAS, I’ve learned that often, the two go hand-in-hand.

U.S. Navy, Climate Change, Energy, Iran

14 comments

Comment by Jon Jeckell on August 25, 2010 - 1:17pm

My own research and your

My own research and your statement about the dangers of shipping fuel in a combat zone shows that it is not enough to develop a "drop-in" replacement fuel, although that will be attractive to the services to preserve investments in infrastructure and equipment. A replacement fuel may address national level issues, but would leave the tactical distribution challenges un-addressed. An ideal source would be distributed as well as renewable, or at least inert or less dangerous to ship than today's fuels (like JP8). This criteria also carries a lot of dimensions besides the obvious hazmat and flammability concerns of JP8. Energy density should be better or equal to JP8 or you could put greater numbers of trucks on the road and at risk for the same energy delivery.

Comment by Alex Stark on August 25, 2010 - 3:54pm

That's a really great point.

That's a really great point. Drop-in fuels are definitely a great step in the right direction for the national reasons that you mentioned, but in tactical terms they would still have to be transported into combat and therefore still incur the same risks and costs in terms of dollars and lives. Your comment really illustrates why developing renewable energy technologies that can be taken into combat (as you mentioned), and increasing energy efficiencies, will be so important. As always, thanks for reading!

Comment by Claudia Vandermilt on December 6, 2010 - 11:02am

It seems as though the

It seems as though the military would be less occupied in places such as the Middle East if we did have alternative fuel sources. How can critics overlook something so obvious?

I suppose, if you don't look at history or read about what's actually going on behind these occupations and strip it down to the most basic concepts, sure, the military is for defense not environmentalism. But that lacks fact and reality at its core.

If fluctuating petroleum prices impact our defense spending so insanely, what's the hold up of seeking out alternative fuels? Money doesn't make sense as an issue since we're dumping billions into defending our oil supplies. Science and technology? If anyone has access to the resources for creating alternative fuel on a mass scale you'd think it'd be the government and military with their top secret defense systems and incredibly technological advances.

It seems like there must be a less public, though perhaps still as glaring, an issue behind the scenes. Politics is my guess. If you don't already have an alternative ready-made you can't afford to upset your allies for your current fuel source. Big oil has it's hands in a lot of pockets and a lot of favors have been done. It's got to be more a personnel issue than a technological or monetary one.

Claudia
Information Security Awareness Training

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Center for a New American Security

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The Real Costs of DOD Petroleum Dependence

14 comments

My own research and your

That's a really great point.

It seems as though the

Thank you for sharing this

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