Kick Ass or Buy Gas? 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 contractsto 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 billionto 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.