Gas prices continue to be a central focus on the presidential campaign trail, as demonstrated by last month’s posturing over oil subsidies. Regardless of your politics, however, the taxpayer dollars at stake pale in comparison to the benefits of energy policy choices now being made by our military leadership.
The U.S. military is the world’s largest industrial consumer of oil, so a major shift in its energy policies would have an impact not only on the amount of oil consumed today but also on technologies that could begin to replace fossil fuels tomorrow.
Story Continued Below
Each military service has now set ambitious goals for decreasing fossil fuel consumption in the years ahead.
The Army is focusing on getting to net-zero energy use at its military bases, with a goal of 25 such installations by 2030. The Navy is aiming for 50 percent of total energy consumption from alternative sources by 2020. The Marine Corps plans to reduce liquid fuel use by 50 percent by 2025. The Air Force is working toward blending 50 percent of its aviation fuel with alternative fuel sources by 2016.
The military is especially well-suited to lead the charge for decreased oil consumption, as my colleagues Janelle Heslop and Mahima Sukhdev wrote, because it has a mission-critical imperative to do so: By reducing reliance on oil, it can reduce costs, save lives and become more agile in the long term.
Philip Grone, the deputy under secretary of defense for installation and environment, talked about the effect of fuel prices in 2006 congressional testimonytestimony . “For every $10 per barrel increase in the cost of fuel,” Grone said, “DoD operating costs increase by roughly $1.3 billion in the year of execution.”
During the recent oil subsidies debate, the Joint Committee on Taxation estimated that eliminating the subsidies would yield $24 billion over 10 years. An average of $2.4 billion per year is not trivial. But it cannot solve our deficit woes—nor propel a step change in renewable energy investment and technology development.
The increase in oil prices from 2010 to 2011 cost the military–and by extension all taxpayers – two times the yearly average revenue that would have been raised by eliminating the oil subsidies. These numbers are based on the average price of oil in 2011 versus 2010 using both the Brent and West Texas Intermediate benchmarks (a $32 and $15 dollar year-on-year average increase, respectively).
This isn’t just conjecture. The Marine Corps commandant stated in his introduction to the Corps’s Expeditionary Energy Strategy and Implementation Plan, “an increase of $10 per barrel for the Department of Defense, at today’s consumption levels, is an increase equivalent to the entire Marine Corps’ procurement budget.”
As the armed services realize their alternative energy goals, they will greatly reduce the military’s reliance on fossil fuel, at significant tactical benefit and cost savings. Moreover, the shift in energy-related investment–which could amount to $10 billion per year by 2030 according to a recent Pike Research report–could have a transformational impact.
Leveraging the U.S. armed forces’ tremendous buying power and research and development clout could not only revolutionize how the military operates, but accelerate clean technology adoption more broadly. With the military consuming 1 to 2 percent of all energy used in the U.S., this shift in how the military derives and uses energy, as Brad Carson, National Energy Policy Institute director at the University of Tulsa in Oklahoma, notes could “help spur the entire [renewable energy] industry.”
Yet this is not a zero-sum game. Why shouldn’t we have a serious policy discussion about the merits of oil tax subsidies while also making forward-thinking decisions that benefit our troops and national security, and reduce our national deficit and greenhouse gas emissions?
The real point is that in the midst of this political gamesmanship—which will only intensify as we enter the presidential election’s maelstrom—some significant decisions are being made by our military leadership, from which our politicians could learn.
Dan Saccardi is a senior associate with GreenOrder, an LRN Advisory Group. GreenOrder is a strategy and management consulting firm for environmental innovation.