Oil Prices Squeeze Pentagon's Budget The Department of Defense's budget is heavily affected by rising gas prices, especially when it comes to fueling Air Force jets. Some even say that Iraq's oil reserves should help pay the costs.
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Oil Prices Squeeze Pentagon's Budget

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Oil Prices Squeeze Pentagon's Budget

Oil Prices Squeeze Pentagon's Budget

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Here in the U.S. The Department of Defense is the government's largest consumer of petroleum products like gas, diesel and jet fuel, so if it costs $100 to fill up an SUV, just imagine what it takes to gas up a stealth bomber. NPR's John McChesney reports on how the Pentagon is handling the run-up in fuel prices.

JOHN McCHESNEY: The biggest user of fuel in the military is the Air Force. It consumes 71 percent of the military's gallons. Those huge aircraft that transport military personnel and equipment all over the world are not economy boxes. Take the C-5 Galaxy, which can carry 135 tons. It gets .07 miles per gallon. And the armies on the ground in Iraq and Afghanistan aren't driving hybrids. In Iraq alone, the military burns over a million-and-a-half gallons a day.

Lieutenant Colonel Brian Maka puts the Pentagon's fuel expenses in perspective.

Lieutenant Colonel BRIAN MAKA (Pentagon Spokesman): Well generally, a one-dollar increase in the price of a barrel of oil on the open market translates into an increase for the whole department of $130 million.

McCHESNEY: Over the last six months, oil prices have increased by roughly $50 a barrel. Do the math. That translates into an increase of well over half a billion dollars for just six months. [POST-BROADCAST CORRECTION: In fact, if a $1 increase in a barrel of oil translates into $130 million in additional costs, then an immediate $50 increase would translate into $6.5 billion in costs. However, since the price of oil rose $50 a barrel over a period of months, the Pentagon's actual cost increases are likely to fall somewhere between the two extremes.]

The Defense Department prepares its budget 18 months in advance and had no way of predicting that oil prices would increase this much in such a short period of time. Dov Zakheim is a former controller for the Department of Defense.

Mr. DOV ZAKHEIM (Former Controller, Department of Defense): The implication of that is since these fuel costs go into what are called our operations and maintenance budgets, those are going to be the budgets that are hit the hardest. The problem is that those are the very same budgets that are fueling, that are paying, rather, for our operations in places like Iraq and Afghanistan. So it's kind of a vicious circle and a very, very difficult one to deal with.

McCHESNEY: And it's probably not going to get any better any time soon. Again, Pentagon spokesman Lieutenant Colonel Maka.

Lt. Col. MAKA: We anticipate over the next three months that the increase in fuel costs for the department of $1.2 billion.

McCHESNEY: That money has to come from somewhere. I mean, do you get a supplemental to cover that, or do you take it out of somebody else's hide?

Lt. Col. MAKA: Well a little bit of both, but we'll likely have to go back and ask Congress for additional funding for it.

McCHESNEY: In Congress, several senators have proposed that Iraq should start paying for some of the military's fuel costs because of its large oil reserves. Former Defense Department controller Dov Zakheim doesn't think that's going anywhere.

Mr. ZAKHEIM: I'm just not sure that the Iraqi government would respond the way we might hope them to.

McCHESNEY: Instead, Zakheim thinks the Pentagon will throw its considerable research and development resources into finding alternative fuels.

Mr. ZAKHEIM: My guess is that we're going to see something like other cases in the past, where the Pentagon forged ahead in the science and technology world because it was impelled to do so. After all, the Internet did start with the Pentagon.

McCHESNEY: But that kind of research and development takes time, and meanwhile, the meter is still running faster and faster. John McChesney, NPR News.

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