Tuesday :: Apr 1, 2008

The Business of War


by Turkana

No one will be surprised to read the Washington Post report about Pentagon cost overruns:

Government auditors issued a scathing review yesterday of dozens of the Pentagon's biggest weapons systems, saying ships, aircraft and satellites are billions of dollars over budget and years behind schedule.

The Government Accountability Office found that 95 major systems have exceeded their original budgets by a total of $295 billion, bringing their total cost to $1.6 trillion, and are delivered almost two years late on average. In addition, none of the systems that the GAO looked at had met all of the standards for best management practices during their development stages.

Auditors said the Defense Department showed few signs of improvement since the GAO began issuing its annual assessments of selected weapons systems six years ago. "It's not getting any better by any means," said Michael Sullivan, director of the GAO's acquisition and sourcing team. "It's taking longer and costing more."

Anyone paying attention understands that the United States is little more than a corporate welfare state, and that enriching military contractors is one of the U.S. government's primary purposes.

The Pentagon has doubled the amount it has committed to new systems, from $790 billion in 2000 to $1.6 trillion last year, according to the 205-page GAO report. Total acquisition costs in 2007 for major defense programs increased 26 percent from first estimates. In 2000, 75 programs had cost increases totaling 6 percent. Development costs in 2007 for the systems rose 40 percent from initial projections, compared with 27 percent in 2000. Current programs are delivered 21 months late on average, five months later than in 2000.

"In most cases, programs also failed to deliver capabilities when promised -- often forcing war fighters to spend additional funds on maintaining" existing weapons systems, the report says.

But who cares if there are some cost overruns, or if the weapons systems don't actually work? To care about such presumes that the purpose is to build functional weapons systems at reasonable prices. As if the Department of Defense has anything to do with defense!

The U.S. spends more on the military than the rest of the world combined. We all know that. Because if the rest of the world ever declares war on the U.S., they'd better know they'll be in for a fight! But it's even worse than that. Because we all talk about the oil wars, yet few understand what they mean. It is assumed that the U.S. invades and occupies and destroys various nations to control their oil resources; but there's another aspect that goes largely unnoticed. As Nick Turse, the author of The Complex: How the Military Invades Our Everyday Lives, just wrote in Foreign Policy in Focus:

In his book Blood and Oil, Michael Klare laid out the little-acknowledged facts about the Pentagon’s oil obsession:
The American military relies more than that of any other nation on oil-powered ships, planes, helicopters, and armored vehicles to transport troops into battle and rain down weapons on its foes. Although the Pentagon may boast of its ever-advancing use of computers and other high-tech devices, the fighting machines that form the backbone of the U.S. military are entirely dependent on petroleum. Without an abundant and reliable supply of oil, the Department of Defense could neither rush its forces to distant battlefields nor keep them supplied once deployed there.

And the deployments DoD has “rushed its forces” to in recent years – in Afghanistan and Iraq – have sucked up massive quantities of oil. According to Fuel Line, the official newsletter of the Pentagon’s fuel-buying component, the Defense Energy Support Center (DESC), from October 1, 2001, to August 9, 2004, the DESC supplied 1,897,272,714 gallons of jet fuel, alone, for military operations in Afghanistan. Similarly, in less than a year and a half, from March 19, 2003, to August 9, 2004, the DESC provided U.S. forces with 1,109,795,046 gallons of jet fuel for operations in Iraq. In 2005, Lana Hampton of the DoD’s Defense Logistics Agency revealed that the military’s aircraft, ships, and ground vehicles were guzzling 10 to 11 million barrels of fuel each month in Afghanistan, Iraq, and elsewhere. Yet, while the Pentagon reportedly burns through an astounding 365,000 barrels of oil every day (the equivalent of the entire nation of Sweden’s daily consumption), Sohbet Karbuz, an expert on global oil markets, estimates that the number is really closer to 500,000 barrels.

Bush's War on Terra has seen the admitted consumption of oil by the Pentagon rise from 4.62 billion gallons of oil a year to 5.46 billion gallons a year. And that assumes that the Pentagon is being honest.

As a result, the DoD had some of the planet’s biggest petroleum dealers, and masters of the corporate universe, on its payroll. In 2005, alone, the Pentagon paid out more than $1.5 billion to BP PLC – the company formerly known as Anglo-Iranian Oil Company (on whose behalf the CIA and its British counterpart covertly overthrew the Iranian government back in 1953) and then British Petroleum. In 2005, the Pentagon also paid out over $1 billion to N. V. Koninklijke Nederlandsche Petroleum Maatschappij -- also known as the Royal Dutch Petroleum Company (and best known in the United States for its Shell brand gasoline) – and in excess of $1 billion to oil titan ExxonMobil.

From 2005 to 2006, ExxonMobil, Royal Dutch Petroleum, and BP jumped from being the sixth, seventh and eighth largest corporations in the world to numbers one, three, and four. They were also the 29th, 30th, and 31st largest Pentagon contractors, with tax dollars filling their coffers with $3,500,000,000. Other industry companies raking in huge profits at Pentagon expense included Halliburton, at number six, with $6,059,726,743; Kuwait Petroleum, at number 34, with $ 1,011,270,194; Valero Energy, at number 45, with $661,171,541; Refinery Associates of Texas, at 55, with $576,557,185; Abu Dhabi National Oil at 66, with $494,286,000; Bahrain Petroleum at 70, with $477,535,378; CS Caltex at 83, with $356,313,452; and Tesoro Petroleum, at 94, with $310,564,052. Oil wars, indeed!

It’s almost impossible to catalog all the companies with at least some ties to the oil game that are doing business with the Department of Defense, but if just the most obvious names on DoD’s payroll are any indication, the U.S. military is mainlining petroleum from a remarkable assortment of places. For instance, in 2005 alone, the Pentagon payroll listed 145 companies (from A & M Oil to Wyandotte Tribal petroleum).

That partial list received more than $8,000,000,000 in 2005. Taxpayer dollars. Your dollars.

To put that figure in perspective, that was more than the army paid out in the same year to the military-corporate powerhouses Lockheed Martin, Boeing, Northrop Grumman, General Electric, and the Bechtel Corporation, combined. Or over $2.7 billion more than it spent in 2005 on bombs, grenades, guided missiles, guided missile launchers, unmanned aerial vehicles, bulk explosives, all guns, rockets, rocket launchers, and helicopters.

Of course, the Pentagon has begun touting its plans to use more alternative energy sources. The Pentagon even published a grand claim that hydrogen fuel cells may eventually cut its gas usage. Eventually. Maybe by the time the U.S. leaves Iraq? 100 years? 10,000 years?

In fact, on March 23, 2006, the day before that article was published, the Pentagon quietly announced a series of DoD contracts that demonstrated the degree of its continuing addiction to oil: a $241,265,176 deal with Valero Energy; a $171,409,329 agreement with Shell Oil; separate contracts of $156,616,405 and $23,923,354 with ConocoPhillips; a $124,152,364 agreement with Refinery Associates of Texas; a $121,053,450 deal with Calumet Shreveport Fuels; a $118,374,201 jet fuel contract with Gary-Williams Energy Corporation; a $75,094,613 agreement with AGE Refining; a $43,994,360 deal with Tesoro Refining; and a $29,524,800 contract with Western Petroleum – all of which had a completion date of April 30, 2007.

Meanwhile, the EPA granted an emissions exemption for military trucks that fail to meet current standards, the army cancelled plans to introduce hybrid humvees and to retrofit Abrams tanks with a more efficient engine, and the air force killed tentative plans to replace various aging aircraft engines. In other words, with the oil and energy industries raking it in, why mess with a good thing? Just over a year ago, the Pentagon announced deals worth another $4,000,000,000, for ExxonMobil, Shell, ConocoPhillips, Valero, Refinery Associates of Texas, and ten other oil companies, and around last Labor Day signed off on another $1,400,000,000 with BP, Chevron, Tesoro, and four others.

The Pentagon needs two things to survive: war and oil. And it can’t make the first if it doesn’t have the second. In fact, the Pentagon’s methods of mass destruction -- fighters, bombers, tanks, Humvees, and other vehicles -- burn 75 percent of the fuel used by the DoD.

You knew this was a war for oil, but I'm guessing you had no idea it was also a war for buying and burning oil.

According to retired lieutenant general Lawrence P. Farrell Jr., the president of the National Defense Industrial Association (“America’s leading Defense Industry association promoting National Security”), the Pentagon is “the single largest consumer of petroleum fuels in the United States.” In fact, it’s the world’s largest energy consumer, according to Shachtman.

And not that it particularly matters to anyone, but would it even be possible to calculate the Pentagon's carbon footprint? The world's largest energy consumer? Creating the very crises that will justify even more military expenditures. On weapons and oil. It's not about politics, it's just business.

Turkana :: 10:46 AM :: Comments (10) :: Digg It!