Blue Mass Group

Reality-based commentary on politics.

Senator Warren – the DoD just had a huge cut in expenses- who benefits?

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“the U.S. military is the single largest consumer of energy in the world.”

the price of oil is down 40-50% – where are all the those savings going ? is the Dept of Defense going to give the money back to the rest of us or pay for some more useful programs ?

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  1. The US military is the single largest consumer of an awful lot of things. As a result, a 50% savings on the purchase of any one thing isn’t likely to impact their overall budget by very much.

    According to this article, the US military uses 100 million barrels of oil a year. Oil had been about $110/barrel for most of the past five years; it’s recently fallen to ~$45.

    So let’s assume that the DOD has no long term procurement contracts that are paying out at close to $110 (a very unlikely presumption). The DOD is saving $65/barrel times 100 million. That’s $6.5 billion. That’s a lot of scratch, right? The DOD budget is $500 billion plus another $80 billion for overseas contingency(pdf), and that doesn’t include all the other ways we manage to squirrel money to military affairs (DOE for nuclear research and handling, treasury department’s payments for military pensions, interest on debt from past wars, State Dept’s funding for arms sales etc., Homeland Security, counter-terrorism by FBI, and NSA.

    The savings in oil amount to about 1 percent of the DOD budget, well less than 1 percent of all military spending. Instead of suggesting that the DOD should give the money back (which opens up the door for them to ask for more when oil gets expensive again), why not ask the military to specifically invest (some) of that savings into additional procurement of renewable energy and energy efficiency. The US Military is way out in front on both of these initiatives, but with more specific funding for these goals, they could go even further.

    Doing so makes lots of folks happy. It reduces climate change impacts both directly (burn less oil, coal, nat gas, etc) and indirectly (keeps pushing technology forward), it reduces risk to soldiers (more efficient use of energy in forward initiatives means running fuel tanker supply runs less often, putting soldiers at less risk), it helps the military save money in the future in both fuel and staffing necessary to manage the fuel, it reduces risk of supply chain interruption, and so forth.

    Investing even more on the RE/EE DOD strategy should make enviros, hawks, and budgetary observers happy. Push the DOD to spend the money there (and maybe, just maybe, on better health care for soldiers and vets, hmmm?)

    • I agree and like this analysis.

      I want to build on one point, regarding long-term procurement contracts. I agree that it is very unlikely to assume that there are none of them. I think it’s worth noting the close ties between the US defense budget and the fossil-fuel industry. There is a reason why President Eisenhower identified “The Military-Industrial Complex” more than fifty years ago (emphasis mine):

      A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

      Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

      Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

      This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

      In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

      We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

      Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

      In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

      Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

      The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.

      Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific technological elite.

      It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system — ever aiming toward the supreme goals of our free society.

      Dwight Eisenhower was no left-leaning communist crazy threatening to destroy America. He was a Republican war hero and two-term President, revered during his administration by enormous swaths of America. He would be a formidable opponent in the 2016 election — except he would NEVER be nominated by either major party today because of his “radical leftist” views.

      Long-term procurement contracts exemplify the way that public funds are used to cover risk for the already-wealth handful of individuals who profit enormously from fossil fuel industry.

      Let’s stipulate, for discussion, that those contracts account for 50% of the $6.5 B savings this year. While $3.25 B is a vanishingly small portion of US defense spending, I suspect that when split three or four ways (that’s what I mean by “handful of individuals”, it works out to about a billion dollars each.

      Again, not a big number in comparison to their existing portfolio.

      Still — that $3.5 B might do a LOT for the US economy if it were recaptured through increased taxes on the wealthy and redistributed to the 99.9% as, for example, some mix of the following:

      1. Increase unemployment compensation rates
      2. Significantly increased minimum wage (immediate, not phased in over a lengthy period)
      3. Increased infrastructure spending, especially on passenger rail.

      • the price of oil is down 40-50% – where are all the those savings going ? is the Dept of Defense going to give the money back to the rest of us or pay for some more useful programs ?

        …Something like a transit system (MBTA for example) uses a relatively fixed amount of fuel and so a decrease in price would, indeed, represent ‘savings’. The military, it seems to me, might not be constrained in this manner: if fuel costs less they might fly more patrols; or train more pilots; or train more with tanks, or … whatever. Or they could move the ‘surplus’ to stockpiles… which, logistics being what it is to the military, would be something they would be expected to do. Or maybe move it to R & D to prevent asking Congress for more. There’s a bunch of things they can do that are, at least from their point of view, justified by the mandate.

        There was talk of a “peace dividend” after the collapse of the Soviet Union that, at least for the US, never really materialized. I’m not sure this discussion is all that different, more of a ‘cheap fuel dividend’ but whatever… the military is flexible and adaptable and will probably grow or shrink according to the actual physical resources available to it and not according to a fixed cost regime. Maybe that’s a good thing. Maybe not. But it is what it is.

        • … this was supposed to be response to the diary and not, as it ended up, nested under S’omervilletoms comments. i deliberately clicked on “Post a comment” but it ended up nested…

          • I’ve had the same issue. The software seems confused about the difference between “Post a comment” and “Reply” for the last comment.

            One workaround, though I often forget, is to click on “Post a comment” button AFTER composing the new text. It turns out that, whether intentional or not, clicking any “Reply” button or the “Post a comment” button will re-bind a currently-open text widget to whatever button was clicked. When you’re working on a new comment, it will say “POST A COMMENT” at the top of the edit pane.

            • I think this happens if you move around in the middle of typing the comment. I use the same fix that you suggest, which seems to work, so long as I remember.

              • …if page loading is a bit slow and you don’t wait for it to finish, you can click one link, but end up opening another once the page jumps a bit.

        • Can be found here (pdf).

          First thing, MBTA consumes lots of electricity. The subways and trolleys, some buses, and of course buildings and infrastructure. 453 GWh in 2013 (~42,000 homes).

          Diesel: 2,365,619 mmBtu == 17 million gallons. That’s only about $34 – $40M per year in savings, spread out over multiple years assuming the MBTA has long term contracts.

          Gasoline: 430,042 mmBtu == 3.4 million gallons. That’s another $7 – $10M in savings.

          So the MBTA will save as much as $50M on an FY14 operating budget of $1867M; capital expenses in addition.

          The $50M helps, but it’s not the end-all be all, especially because the T also purchases a significant amount of electricity and a not-insignificant amount of natural gas, and those commodities moved out-of-synch with the falling oil prices.

          -=-

          Or they could move the ‘surplus’ to stockpiles

          Why would we stockpile the fuel? Why not just simply not buy it in the first place, thereby not having to pay to build the storage, the ongoing costs of storing it, and the costs of moving it twice instead of once, not to mention lose the time-value of money. It’s true, oil price may go up faster than inflation, but if DOD thinks that is likely, it should simply buy petroleum futures to hedge that change in value, not the actual petroleum.

          • Why would we stockpile the fuel?

            .. we might want to stockpile the bullets. Waiting to fight a war when the price is right isn’t really an option. The MBTA can only exist in a stable world where petroleum futures have a reasonable expectation of being honored. The DOD doesn’t live in that world.

            A more mundane illustration to answer your question, “Why would we stockpile the fuel”, would be to ask why fire departments keep full engine fuel tanks? Couldn’t they, after all, just get a tankful on their way to the fire??

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