Energy Tribune
As an energy outfit, it’s bigger than Unocal, Murphy Oil, or Anadarko Petroleum. Over the past six years or so, its budget has nearly quadrupled. Thanks to the current demand for its services, its business is expanding rapidly, particularly in the energy-rich provinces of the Persian Gulf, the Caspian, and Africa. And federal legislators, eager to curry favor with various lobbying groups, are trying to funnel more money to this entity so that it can stimulate the market for ethanol and bio fuels.
But the Defense Energy Support Center is the red-headed stepchild of the energy media. Despite the fact that the agency, an arm of the U.S. Department of Defense, is the single biggest fuel buyer in the world (it bought $8.8 billion worth of refined products last year) its biennial convention, held just outside Washington, D.C. in April, was not covered by any major media outlet. In fact and I’m not bragging or complaining here it appears that I was the only journalist in attendance. That’s rather sobering, considering that in the month prior to the DESC conference, the agency granted about 40 contracts almost all of them for motor fuel with a total value of $6 billion. Some 1,500 people attended the DESC conference and they came from all over the world. Nearly 100 exhibitors particularly companies that offered aircraft refueling gear, pumping equipment, and fuel storage tanks displayed their wares.
The DESC may be the most influential energy buyer in the global market. It purchases about 350,000 barrels of refined oil products per day. And the number of products it purchases are staggering. The agency buys more than 50 different types of refined petroleum products from jet fuel and diesel fuel to high-octane aviation gasoline and JPTS, a fuel with extremely high thermal stability that was designed specifically for the Lockheed U-2 spy plane.[1]
The point here is not to bash the DESC. It’s a well-run agency. And it is doing a good job of supplying fuel to the American soldiers deployed in Iraq and Afghanistan. Rather, the point is to underscore this fact: America’s military spending is completely out of control. At the risk of boring readers with another statistic, here’s one that is absolutely stunning: This year, America will spend more on its military on an inflation-adjusted basis than at any time since 1945. The U.S. is now spending more than it did in 1968 when the U.S. had 500,000 troops in South Vietnam. According to data published by the DOD, its budget for 2006 not counting the costs of the wars in Iraq and Afghanistan is $443 billion. In 1968, the military’s budget was $420 billion. (Both figures are measured in year-2000 dollars.)
Although the fuel slice of that budget appears to be small, it must be considered in the proper context. Right now in Iraq, every soldier is burning about 20 gallons of fuel per day. Thus, each American soldier is using about 40 times more fuel than the average Iraqi.
There is a deep irony (or perhaps deep tragedy) about America’s predicament in Iraq. It has invaded a country with some of the world’s biggest oil reserves, yet to maintain its presence there, it must burn unprecedented amounts of fuel all of which must be imported from other countries. Further, while American troops can get all the fuel they need, average Iraqis are forced to pay black-market prices for energy if they can get it at all. The country continues to suffer from critical shortages of motor fuel, cooking fuel, and electricity.
Meanwhile, the American military’s hunger for fuel on the battlefield continues to grow. In response to the rash of killer roadside bombs in Iraq, the U.S. has added armor to its vast fleet of motor vehicles in the country. That armor helps protect troops. It also increases fuel use.
At the DESC conference, there was a great deal of talk about how the agency is pushing for more alternative fuels like ethanol and biodiesel. Another focus: coal-to-liquids and gas-to-liquids. This year, the agency plans to buy about 100,000 gallons of GTL fuel. Those new fuels may offer additional capacity to the U.S. military. But the underlying question is a simple one: Exactly how much military can we afford?
