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The Ministry of Oil Defense


It's not polite to say so, but if Americans understood just how many trillions their military was really spending on protecting oil, they wouldn't stand for it.

August 5, 2010
By Peter Maass
Foreign Policy

Shortly after the Marines rolled into Baghdad and tore down a statue of Saddam Hussein, I visited the Ministry of Oil. American troops surrounded the sand-colored building, protecting it like a strategic jewel. But not far away, looters were relieving the National Museum of its actual jewels. Baghdad had become a carnival of looting. A few dozen Iraqis who worked at the Oil Ministry were gathered outside the American cordon, and one of them, noting the protection afforded his workplace and the lack of protection everywhere else, remarked to me, "It is all about oil."

The issue he raised is central to figuring out what we truly pay for a gallon of gas. The BP spill in the Gulf of Mexico has reminded Americans that the price at the pump is only a down payment; an honest calculation must include the contamination of our waters, land, and air. Yet the calculation remains incomplete if we don't consider other factors too, especially what might be the largest externalized cost of all: the military one. To what extent is oil linked to the wars we fight and the more than half-trillion dollars we spend on our military every year? We are in an era of massive deficits, so it pays to know what we are paying for and how much it costs.

The debate often hovers at a sandbox level of did-so/did-not. Donald Rumsfeld, the former defense secretary, insisted the invasion of Iraq had "nothing to do with oil." But even Alan Greenspan, the former Federal Reserve chairman, rejected that line. "It is politically inconvenient to acknowledge what everyone knows," Greenspan wrote in his memoir. "The Iraq war is largely about oil." If it is even partly true that we invade for oil and maintain a navy and army for oil, how much is that costing? This is one of the tricky things about oil, the hidden costs, and one of the reasons we are addicted to the substance -- we don't acknowledge its full price.

If we wish to know, we can. An innovative approach comes from Roger Stern, an economic geographer at Princeton University who in April published a peer-reviewed study on the cost of keeping aircraft carriers in the Persian Gulf from 1976 to 2007. Because carriers patrol the gulf for the explicit mission of securing oil shipments, Stern was on solid ground in attributing that cost to oil. He had found an excellent metric. He combed through the Defense Department's data -- which is not easy to do because the Pentagon does not disaggregate its expenditures by region or mission -- and came up with a total, over three decades, of $7.3 trillion. Yes, trillion.

And that's just a partial accounting of peacetime spending. It's far trickier to figure out the extent to which America's wars are linked to oil and then put a price tag on it. But let's assume that Rumsfeld, in an off-the-record moment of retirement candor, might be persuaded to acknowledge that the invasion of Iraq was somewhat related to oil. A 2008 study by Nobel Prize-winner Joseph Stiglitz and Harvard University budget expert Linda Bilmes put the cost of that war -- everything spent up to that point and likely to be spent in the years ahead -- at a minimum of $3 trillion (and probably much more). Again, trillion.

Of course we would have to wait a long time before finding a PowerPoint presentation in the Pentagon or White House (no matter the party in power) on defense spending for oil. Just as cuts to Social Security are a third rail, an accounting of oil-related military spending is nearly unheard of in the halls of power. For politicians and generals, it is a slippery slope: Speak too loudly on the subject, and they risk undercutting the we-only-want-to-make-the-world-a-better-place notion of U.S. foreign policy. It's easier to let the debate idle at vague rhetoric rather than hard numbers.

You would have to go back nearly 20 years to get anything on the subject from the Government Accountability Office (GAO), the investigative arm of the U.S. government that in 1991 estimated that between 1980 and 1990 the United States spent a total of $366 billion to defend oil supplies in the Middle East. The GAO report was just a snapshot of one region in a limited time frame a long time ago when America was not fighting a major war there or elsewhere. The study would have been a good start if it had been followed by other studies that went deeper and further, but that didn't happen (see Hot Potato, Department of).

So it has fallen to a cottage industry of out-of-government experts like Stiglitz and Stern to examine metrics that measure oil's connections to not just war but corruption and poverty. These experts include Paul Collier of Oxford University, who wrote The Bottom Billion, as well as Michael Ross at UCLA, Michael Watts at UC Berkeley, Ian Gary at Oxfam, and Sarah Wykes, formerly with the NGO Global Witness. Their areas of expertise -- economics, geography, political science, corruption -- as well as the metrics on which they focus, are similar to the unconventional backgrounds and ideas of the experts whom Gen. David Petraeus called on to rethink the metrics and practice of counterinsurgency.

Oil has yet to find its Petraeus; it remains a badly quantified problem. The abstraction of global warming, the pity of oil-soaked pelicans, even battlefield deaths in Iraq -- these have not occasioned real changes in our addiction to all things petroleum. The United States consumes more gasoline today than on the day Iraq was invaded and the day of the BP accident. If I had a dollar for every time a politician said, as President Barack Obama did in his Oval Office energy speech in June, "The time to embrace a clean energy future is now," I could build a wind farm. An honest accounting would do a lot more than tired platitudes because it would force us to confront the hidden costs that we don't see at the pump. And after all, the best way to get the attention of consumers is through their pocketbooks.

http://www.foreignpolicy.com/articles/2010/08/05/the_ministry_of_oil_defense