Price of oil, price of freedom

Alex Beehler Contributor
Font Size:

It was two years ago, the first week of July, 2008, where a symbolic seminal confluence of energy and national security concerns may have occurred. For that week, the wholesale price of crude oil reached an all-time high of over $141/barrel.

A few months earlier, the Defense Science Board, an arm of the Department of Defense (DoD), issued a long-anticipated report on the military’s vulnerabilities related to energy security—from exposed, single-file, mile-long fuel supply convoys snaking their way to the Afghan front lines to the near total dependence on the domestic commercial grid back home. The report led the Office of the Secretary of Defense (OSD) to convene a group of Pentagon senior executives to commence development of a Department wide energy security policy.

Not to be outdone, the Services during the summer of 2008 created and made formal policy decision making processes for energy-related matters. Naturally, their respective approaches were influenced by the irrespective mission operations. For instance, the Air Force, DoD’s largest user of fuel, focused funding and leadership on certifying an acceptable synthetic jet fuel blend. The Navy, led its operations side, established two task forces on climate and energy, each headed by a two-star admiral; chief strategic concerns included the effects of rising sea levels and the expanded navigation of the Arctic Ocean. The Army and the Marines concentrated on forward operating bases, given their current involvement in Iraq and Afghanistan, addressing challenges such as insulating tents and lightening the weight of individual battery packs.

Perhaps the most significant development at this time inside the Pentagon with regard to energy was the collective realization that the military could no longer ignore the costs and sources of fuel it used to carry out national security. For the largest single user of energy in our country, by the end of FY 2008, had a twelve-month fuel bill, mostly unfunded, of $20 billion. Missions were planned and executed without factoring in the cost, including delivery, and source of supply, subsequently estimated to be as high as $400/gal. for the Afghanistan front. Moreover, much of the fuel for the front cam from Russia, a less than benign supplier. Even fundamental acquisition decisions were made without fuel cost and source supply considerations. All such activities were unsustainable.

The Pentagon’s unfocused approach to energy strategic issues began to be flagged at this time by Washington policy thinkers and makers. Think-tanks such as CNA (formerly the Center for Naval Analysis) and Brookings Institution convened committees of high-ranking retired military leaders to opine about their concerns and issue in-depth reports linking climate change with energy security. Congress commenced regular hearings on military and energy security and added in the National Defense Authorization Act passed in 2008 a requirement for DoD to establish a new, high-level office, headed by a Senate confirmed director, to focus on energy planning and policy.

The Department began to implement fundamental changes to address their former laissez-faire attitude about energy. For the first time in the acquisition process and throughout mission operations, the fully burdened fuel cost would be calculated and factored into decision-making. Given that much of the fuel used by the military was imported, the Department loosened its long-standing, iron clad opposition to offshore drilling in the eastern Gulf of Mexico and along the Atlantic seaboard to one of general scepticism, tempered by a case-by-case review.

Fast forward two years. On the macro level, conflicting events have occurred. On the one hand, due to economic slowdown, the wholesale price of oil is slightly more than half the $1414/barrel price of early July, 2008. On the other hand, the United States for the past two months with no immediate end in sight is facing the worst offshore spill in its history in the Deepwater Rig disaster. On a DoD policy level, the Obama Administration, in power for the last eighteen months, has made energy sustainability a significant policy initiative, as manifested by the President’s October 5, 2009 Executive Order on energy, environment, and economic development, further requiring the Department to follow suit.

An assessment of DoD’s progress related to energy will be addressed in the next post.

Alex Beehler is the Assistant Deputy Under Secretary of Defense (Environment, Safety & Occupational Health) at the United States Department of Defense.