[THS] Taxpayers are subsidizing BP disaster through the pentagon.

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http://www.truth-out.org/kick-ass-or-buy-gas60527

Kick Ass or Buy Gas?

Thursday 17 June 2010

by: Nick Turse  |  Tomdispatch.com

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(Image: Jared Rodriguez / t r u t h o u t; Adapted: preshaa, mindfrieze)

How taxpayers are subsidizing BP’s disaster through the pentagon.

Residents of Louisiana, Mississippi, Alabama, and Florida are livid with BP in the wake
of the massive, never-ending oil spill in the Gulf of Mexico -- and Barack Obama says
they ought to be. But there’s one aspect of the BP story that most of those angry
residents of the Gulf states aren’t aware of. And the president hasn’t had a thing to
say about it.

Even as the tar balls hit Gulf beaches, their tax dollars are subsidizing BP and so far,
President Obama has not shown the slightest indication that he plans to stop their
flow into BP coffers, despite the recent call of Public Citizen, a watchdog group, to
end the nation’s business dealings with company. In fact, the Department of
Defense, which has a longstanding, multi-billion dollar business relationship with BP,
tells TomDispatch that it has no plans to sever current business ties or curtail future
contracts with the oil giant.

Talking Tough

In recent weeks, against a news backdrop of oil-soaked pelicans, President Obama
has been talking tough. “We’ve ordered BP to pay economic injury claims, and we
will make sure they deliver,” he announced on June 1st. Days later, he rebuked the
oil giant for considering plans to pay out large dividends to shareholders and for
spending tens of millions of dollars on an advertising campaign to repair the
company’s tarnished image.

"My understanding is that BP had contracted for $50 million worth of TV advertising
to manage their image in the course of this disaster," the president said. "Now, I
don't have a problem with BP fulfilling its legal obligations. What I don't want to hear
is that they're spending that kind of money on shareholders and spending that kind
of money on TV advertising, [but] they're nickel-and-diming fishermen or small
businesses here in the Gulf who are having a hard time."

As part of his ongoing attempt to deal with flak from critics who claim that his
reaction to the disaster in the Gulf of Mexico has been far too measured and that his
administration has mishandled its response to the disaster, Obama told NBC “Today
Show” host Matt Lauer: "I don't sit around just talking to experts because this is a
college seminar. We talk to these folks because they potentially have the best
answers, so I know whose ass to kick.”

While the president has been on the verbal warpath, the U.S. military has -- with little
notice -- continued to carry on a major business partnership with BP, despite the
company’s disastrous environmental record.

Repeat Offenders

As an institution, the Pentagon runs on oil. Its jet fighters, bombers, tanks, Humvees,
and other vehicles burn 75% of the fuel used by the Department of Defense. For
example, B-52 bombers consume 47,000 gallons per mission, and when an F-16
fighter kicks in its afterburners, it burns through $300 worth of fuel a minute. In fact,
according to an article in the April 2010 issue of Energy Source, the official newsletter
of the Pentagon’s fuel-buying component, the DoD purchases three billion gallons of
jet fuel per year.

Thanks to the wars in Iraq and Afghanistan, the Department of Defense has been
consuming vast quantities of fuel. According to 2008 figures, for example, U.S.
military bases in Iraq and Afghanistan used a staggering 90 million gallons per
month. Given the base-building boom that preceded President Obama’s Afghan
surge, the 2010 figures may be significantly higher.

In 2009, according to the Pentagon’s Defense Energy Support Center (DESC), the
military spent $3.8 billion for 31.3 million barrels -- around 1.3 billion gallons -- of oil
consumed at posts, camps, and bases overseas. Moreover, DESC’s bulk-fuels division,
which purchases jet fuel and naval diesel fuel among other petroleum products,
awarded $2.2 billion in contracts to support operations in Iraq and Afghanistan last
year. Another $974 million was reportedly spent by the ground-fuels division, which
awards contracts for diesel fuel, gasoline, and heating oil for ground operations, just
for the war in Afghanistan in 2009.

The Pentagon’s foreign wars have left it particularly heavily dependent on oil services,
energy, and petroleum companies. An analysis published at Foreign Policy in Focus
found that, in 2005, 145 such companies had contracts with the Pentagon. That year,
the Department of Defense paid out more than $1.5 billion to BP alone and a total of
$8 billion taxpayer dollars, in total, to energy-related firms on what is a far-from-
complete list of companies.

In 2009, according to the Defense Energy Support Center, the military awarded
$22.5 billion in energy contracts. More than $16 billion of that went to purchasing
bulk fuel. Some 10 top petroleum suppliers got the lion’s share, more than $11.5
billion, among them big names like Shell, Exxon Mobil and Valero. The largest
contractor, however, was BP, which received more than $2.2 billion -- almost 12% of
all petroleum-contract dollars awarded by the Pentagon for the year.

While one exceptionally powerful department of the federal government has been
feeding money into BP (and other oil giants) with abandon, BP has consistently run
afoul of U.S. government regulators from the Occupational Safety and Health
Administration (OSHA). According to the Center for Public Integrity, “BP account[ed]
for 97 percent of all flagrant violations found in the [oil] refining industry by
government safety inspectors over the past three years.” Records obtained by the
Center demonstrate that between June 2007 and February 2010, BP received a total
of 862 citations, mostly for alleged violations of “OSHA’s process safety management
standard, a sweeping rule governing everything from storage of flammable liquids to
emergency shutdown systems.” Of these citations, 760 were considered “egregious
willful,” which OSHA defines as a violation even more severe than those committed
due to “plain indifference” or evidencing “intentional disregard for employee health
and safety.” As a result, BP faces $90 million in penalties which the company is
currently contesting.

Over those same years, BP received around $5.7 billion in federal contracts,
according to official government data. In fact, the $2.2 billion the Pentagon paid to
the oil giant in 2009 accounted for almost 16% of the company’s nearly $14 billion in
annual profits.

This fiscal year, the U.S. military has already awarded the company more than $837
million, inking its latest deal with BP in March.

The Pentagon’s Green Revolution

In recent years, the gas-guzzling Pentagon has launched a major effort to invest in
developing green technology -- or at least give the appearance of doing so -- with, at
best, mixed results. As defense-tech writer Noah Shachtman has pointed out, the
military is “now focusing on algal feedstock for biofuel and next-generation solar
panels. One of the world's largest solar-power projects is planned for the Army's main
training center, at Fort Irwin, Calif. Billions in stimulus money were spent to green
military facilities.”

But efforts in the Bush years to develop "green" vehicles generally stalled, flopped, or
barely got rolling. Under the Obama administration, more ambitious goals have been
set, but tangible results are still lacking. Last year, the military’s contracts for
renewable fuels derived from algae, according to DESC, added up to less than
22,000 gallons.

One major reason for this, Shachtman writes, is that “the current systems for
delivering power and fuel to war zones are reliable, if inefficient and unsustainable.
Military leaders,” he adds “don't want to jeopardize operations in Afghanistan or Iraq
for something perceived as experimental or risky.” As a result, whatever solar panels
it has installed or renewable jet fuel it has purchased, the Pentagon remains
dependent on buying huge amounts of petroleum products from BP and other large
energy corporations, and when it comes to war-making, any substantive reduction in
oil dependence appears far off indeed.

Nonetheless, the Department of Defense has devoted significant resources to
publicizing its green efforts. The commander-in-chief has even lent a hand. On
March 31st, President Obama stood in front of a “green” F-18 Hornet fighter
designed to run partly on bio-fuels and announced to the nation that he was
proposing to open large new areas off the Atlantic coastline, the eastern Gulf of
Mexico, and the north coast of Alaska to oil and natural gas drilling. Less than a
month later, the Deepwater Horizon oil rig exploded in the Gulf of Mexico.

In the weeks since, despite Obama’s tough talk, his reported “anger and frustration,”
and his efforts to identify the proper “ass to kick,” as well as the Pentagon’s much-
touted green-energy initiative, the U.S. military continues, as Shachtman points out,
to burn “22 gallons of diesel [fuel] per soldier per day in Afghanistan, at a cost of
more than $100,000 a person annually.”

In other words, as a direct result of war-making in distant lands, taxpayer dollars,
including those from Florida, Alabama, Mississippi, and Louisiana, will continue to flow
into BP coffers, even as more wildlife dies, more beaches are fouled, and more
livelihoods are lost in the Gulf of Mexico.

Tough Talk and No Action

In a June 5th email message to supporters, paid for by Organizing for America, a
project of the Democratic National Committee, President Obama again acknowledged
the severity of the BP disaster and validated the anger it has unleashed. “This spill,”
he declared, “has not just damaged livelihoods. It has upended whole communities.
And the fury people feel is not just about the money they have lost. It is about the
wrenching recognition that this time their lives may never be the same.”

“We have,” he continued, “...ordered BP to pay economic injury claims, and this
week, the federal government sent BP a preliminary bill for $69 million to pay back
American taxpayers for some of the costs of the response so far.”

Two days later, Tyson Slocum, the director of the consumer advocacy group Public
Citizen’s energy program, sent a letter to Obama and Secretary of Defense Robert
Gates asking them to go further. He urged them to suspend, and ultimately debar,
BP and its subsidiaries from serving as defense contractors, to terminate six current
federal contracts with the company, and prohibit BP and its subsidiaries from winning
federal contracts for the next three years. He wrote:

    "Given the company's willful transgression of U.S. laws, it can no longer be
presumed that BP will responsibly perform its contractor responsibilities. The
demonstrated disregard for the law means that there is good reason to doubt that
the company will abide by its obligations under its Department of Defense contracts.
Moreover, the company's repeated violation of environmental laws suggests an
unacceptably high likelihood that BP will violate such laws in carrying out its
contractual obligations. BP's aggregate record of wrongdoing -- including but not
limited to causing the ongoing gusher in the Gulf of Mexico -- evidences a lack of
business honesty that seriously and directly affects its ability to perform its contractual
duties."

Public Citizen has yet to receive a response or any indication that the president or the
defense secretary has read the letter, Slocum informed TomDispatch this week.

“I am not aware at this moment of any plans to curtail or cancel any DoD contracts
that may exist at this time,” Department of Defense spokesperson Cheryl Irwin told
TomDispatch. Irwin also stated that she knew of no plans to restrict the awarding of
future contracts to BP.

The president has remained silent on the issue. Repeated requests by TomDispatch
for comment from the White House’s Council on Environmental Quality went
unanswered. In a statement to TomDispatch this week, however, the Environmental
Protection Agency (EPA) said it “is closely monitoring the investigations into the
circumstances leading to the explosion and spill at the Deepwater Horizon facility.
EPA will weigh its options under our debarment authority and take appropriate
actions.” No time frame, however, has been set for any type of decision. “It is really
premature to speculate on the Agency's actions,” an EPA official, who asked not to be
named, told TomDispatch. “We're on hold pending the larger federal investigation.”

Yesterday, the White House and BP agreed that the oil giant would establish a $20
billion escrow account to compensate claims resulting from the Gulf Coast oil spill.
"This should provide some assurance to small business owners that BP is going to
meet its responsibilities," said President Obama following the announcement.

The message is clear. BP will be held accountable -- but only to a point, and not
nearly in strong enough terms, says Public Citizen’s Slocum. The escrow account is “a
no-brainer,” he told TomDispatch. “But that’s just related to the company’s
obligations to pay for a mess it created,” he pointed out, likening the situation to an
individual breaking the law. “If I commit a crime that causes damage, I don’t just pay
restitution. I pay a punitive fine or I’m incarcerated. The question is: What is the
version of incarceration for corporations?”

Slocum sees a 2007 guilty plea by BP Products North America for a felony violation of
the Clean Air Act -- stemming from a 2005 explosion at a BP refinery in Texas that
killed 15 workers -- as evidence that stronger sanctions are now warranted. The fine
resulting from the Texas disaster was just a “blip on their balance sheet,” he says.

“You have to send a clear message to shareholders that committing felonies is not
tolerated in the United States. And the way you do that is through some form of
permanent sanctions.” Barring the company from government contracts, says
Slocum, would be just such a step.

With anger boiling over in the Gulf, there seemingly could be no more egregious
offender or more deserving “ass to kick” than BP’s. “I don’t know of any other oil
companies operating in America that are currently on criminal probation,” says
Slocum. “I don’t know any other oil companies that recently pled guilty to a felony. I
don’t know any other oil companies that appear to have committed numerous acts of
negligence that resulted in the largest industrial environmental disaster in American
history. BP is an outlier, so it needs to be treated as an outlier.”

Somebody should tell the president. Again.

Nick Turse is the associate editor of TomDispatch.com. An award-winning journalist,
his work has appeared in the Los Angeles Times, the Nation, In These Times, and
regularly at TomDispatch. He is the author of The Complex: How the Military Invades
Our Everyday Lives (Metropolitan Books). His website is NickTurse.com.

Copyright 2010 Nick Turse