The Toxic Relationship between Oil and the Military
Katya Forsyth and
Frederick Kerr
March 22, 2022

“We can’t address a problem that requires global cooperation by continuing down the destructive path of U.S. militarism.” - Medea Benjamin, longtime social justice advocate and co-founder of CODEPINK

In the urgency of the existential crisis that is climate change, the climate justice movement is elevating the call for institutions such as banks, universities, and governments to divest from fossil fuels. Divestment entails not only the shift of investments away from fossil fuel industries, but also a re-investment of those funds into more sustainable, climate-friendly industries. The city and state level are especially promising locales for the divestment movement because municipal and state governments act as managers of significant collective investments, such as city employee pension and retirement funds that are cumulatively worth trillions of dollars. 

Divestment campaigns have a long history, going back to divestment efforts in 1960-80s when activists in the US and beyond pressured companies and governments to divest from any investments linked to South Africa as a public signal of opposition to apartheid. Today, there are many targets for the divestment movement: the oil and gas industry, private prisons, fast food chains, tobacco companies, gun manufacturers, and the military industrial complex. The ultimate aim of these divestment strategies is the same: to remove financial support for those industries and corporate practices that are harmful to communities and the environment. In the past decade, the climate-related divestment movement has again been gathering momentum. A recent win for the movement came in December 2020 when the State of New York announced plans to “eject oil and gas stocks from its $226 billion financial portfolio, becoming the first U.S. state and the biggest pension fund anywhere to divest from fossil fuels.” 

Currently, coalitions are being built between environmental divestment activists and key allies in the peace movement to simultaneously advocate for divestment from the polluter industrial complex and the military industrial complex. The military industrial complex refers to the alarmingly close relationship between private defense contractors and the federal military. This is an industry that is gargantuan in size, a product of its unchecked growth since President Eisenhower first warned of its existence. How gargantuan? The US military budget is currently more than $716 billion dollars a year — that’s 54 cents of every dollar of the US discretionary budget

According to a study released in 2018, the US military spends $81 billion a year defending global oil supplies. This translates to a subsidy of about $30 a barrel or $0.70 per gallon of oil for US consumers, who pay for this subsidy through their taxes. This subsidy maintains an artificial demand for oil domestically, obscures the urgency of a clean energy transition, and hinders climate progress by continuing to prop up high-emitting fossil fuel corporations with the illusion of secured future profits.

From a climate justice perspective, it is unconscionable for the military to be dominating the funding that we desperately need to set aside to avoid climate destruction in the next two decades. This irony is only embittered by the fact that the Pentagon is the world’s largest institutional emitter and consumer of fossil fuels; they are responsible for five percent of global carbon emissions, and are the 47th largest greenhouse gas emitter in the world. These statistics serve as valuable clues into the heart of the issue — the interdependent relationships between fossil fuels, climate change, and the military.

When governments hold investments in extractive industries (e.g. oil), the state often works to increase the profits of that industry through policy choices (e.g. supporting war to access oil) in order to maintain tax revenues, royalty income, etc. These same defense industries and corporate polluters shower government officials with campaign donations and lucrative job offers. This creates an opportunity for government officials to profit directly from warmongering and pro-oil policies. This results in an ongoing revolving door between corporate polluters, the defense industry, and federal government positions. The graph below illustrates this “revolving door,” in which Pentagon contractors use public funding to hire former government officials to lobby for their respective political interests. 

Figure 1

In 2018, a report from the Project on Government Oversight found that the top 20 Pentagon contractors have hired at least 645 individuals formerly on the federal payroll — 90% of whom were hired to be lobbyists. Graph from Project on Government Oversight

Still, a large amount of support for fossil fuels and the military industrial complex is less theatrical, such as those in the form of municipal investments of pension funds. If a government’s pension funds are invested in fossil fuel industries, there is the additional incentive on behalf of the state to insure the continued profitability and growth of these industries. The security of their workers' dignified retirement is at stake. One example of the government using policy to protect investments is the Pentagon supplying military contracts to Saudi Arabia, facilitating Saudi’s war on Yemen, in order to maintain a positive relationship (and low prices) with Saudi oil companies. 

The funding can also go the other way. In Minnesota, on the frontlines of the fight to Stop Line 3, Canadian oil company Enbridge gave $2 million to state law enforcement to attack the Indigenous water protectors protesting the construction of this pipeline. 

In both of these situations, the profit imperative for oil companies supersedes the state’s commitment to human rights and environmental integrity. From a climate justice perspective, we can recognize that both the war in Yemen and the violence against water protectors in Minnesota disproportionately harm civilians who are already living on the frontlines of the climate disaster.  

Medea Benjamin, founder of peace organization CODEPINK, emphasizes that:

“U.S. military operations are one way to open new markets for the extractive fossil fuel corporations across the globe. For those reasons, it’s clear that we can’t meaningfully address climate change without, at minimum, significantly reducing the size and budget of the United States military.”

Organizations like CODEPINK have been working to end US wars and militarism by linking military divestment to the environmental movement. They have an extensive list of resources, some of which are linked in the conclusion of this article. 

Oiling the War Machine: The Close Relationship Between Fossil Fuels and the Military 

Fossil fuels and the military industrial complex have long had a symbiotic relationship, in which the military acts as the violent arm to secure the interests of major oil and gas companies. Wars have always been fought over natural resources, especially oil. According to the Belfer Center, between a quarter and third of interstate conflicts since 1973 have had oil-related causes. In the US, approximately 16 percent of the defense budget is dedicated to protecting global oil interests.

Military intervention to protect oil can take a variety of forms. In 1953, the CIA coordinated with the British government to overthrow Iran's democratically elected Prime Minister Mohammad Mossadegh. Mossadegh was working to nationalize Iran’s oil industry that had been under the control of Great Britain for decades through the Anglo-Iranian Oil Co. The goal was for Iranians to benefit more directly from the profits of its own oil industry, rather than exporting these profits to Great Britain. Worried about their control of the country’s vast oil reserves, the British government asked the CIA for help staging a coup to overthrow Mossadegh. The CIA obliged. The nationalization of Iran’s resources was considered a threat to the interests of US corporations in keeping Iranian oil under private ownership and control.

Fifty years later, the US invaded Iraq and pursued a similar agenda. Once Saddam Hussein was removed from power, the United States set up a provisional US-led government called the Coalition of Provisional Authority (CPA), which quietly passed laws in the midst of chaos to allow for the privatization of the Iraqi oil industry. This privatization benefitted Anglo-American oil companies like Shell and BP, granting them 30-year contracts that allowed them keep most of the profits from Iraq’s oil extractions and export them abroad. In a country like Iraq, where 95 percent of government funding had come from the oil industry, this proved economically and politically devastating.   

Privatization: Increasing Profit at all Costs/The Wars for Profit

At the turn of the century as the US went about privatizing other countries’ oil industries, Donald Rumsfeld (then Secretary of Defense) was busy privatizing the Pentagon itself. In line with the ideology of neoliberal capitalism, he hoped to replace the functions of state with more “efficient” third-party contractors, and reimagined the government as one of “private contracts manager”. 

The Pentagon has long had weapons contractors, but starting in 2003, it began to hire contractors such as Halliburton to carry out what it referred to as military logistics. This included anything from building military bases to constructing maximum security prisons or providing interrogation services. Instead of offering fixed amounts of money, these contracts were (and continue to be) awarded on a “cost-plus” basis: permission to spend as much as necessary, plus a profit guarantee. Despite relying on taxpayer dollars, these contractors have defended their fraudulent spending in court, claiming that they are not beholden to the same fraud laws as the US government because of their status as private companies. This lack of accountability in the military industrial complex is a direct threat to democracy.

In order to finance all of these private contracts, the Pentagon budget has to grow every year. According to the Congressional Research Service, non-base military spending has increased by hundreds of billions of dollars over the last twenty years. Domestically, the US military has long been upheld as a bastion of patriotism, freedom and democracy — even as the Pentagon directly works against the interests of US civilians and even their own troops. According to Jacobin:

“Thousands of active-duty service people and their families qualify for food stamps because military pay is so low; forty-five percent of children in Department of Defense schools qualify for free or reduced-cost lunch. Most of the military budget goes instead to the major military contractors, whose CEOs’ salaries average almost $20 million.”

In this sense, the Pentagon acts as a conduit for defense contractors to siphon endless taxpayer dollars into the private sector, and away from important and life-giving social projects like healthcare, education, housing, climate change and environmental protection, and rebuilding America. 

Figure 2

This graph depicts historical Department of Defense funding by base and non-base budget funding. Since the beginning of Rumsfeld’s neoliberalization of the military, non-base spending has skyrocketed. Graph from the Congressional Research Service.

But the damage goes far beyond moral righteousness. Increased military spending and privatization directly fuel climate change and injustice by perpetuating a damaging positive environmental feedback loop. When the military budget increases, the Pentagon increases contractor budgets, which are often spent on hiring former federal officials to lobby for expanding military action, especially when opportunities to protect fossil fuel interests emerge. Under this protection, fossil fuels have continued to dominate, accounting for 79 percent of the world’s energy production in 2020, even as solar power becomes a cheaper energy source

Military Bases: Adding Insult to Injury

As part of the so-called “resource curse,” military intervention for oil in the global South inevitably destroys environments and livelihoods for millions, worsens poverty, undermines democracy, and often leads to a rise in political extremism. This then serves as an excuse for the US military to intervene again to “stabilize” the region by establishing and maintaining foreign bases. This pattern of interventionism, that has been ongoing since the end of World War II, is used as rationale for expanding the military industrial complex. It leaves a trail of destruction both from warfare and the US military bases themselves.

Most US military bases were built at least 50 years ago and were accompanied by Status of Forces  Agreements that allowed the US to legally pollute military base land. For instance, Article IV of the US-Japan Status of Forces, signed in 1960, states that:

“The United States is not obliged, when it returns facilities and areas to Japan on the expiration of this Agreement or at an earlier date, to restore the facilities and areas to the condition in which they were at the time they became available to the United States armed forces, or to compensate Japan in lieu of such restoration.”

In 2015, the US and Japan signed a new Status of Forces Agreement, with environmental stipulations designed to protect Japanese land. However, the US has military bases in over 100 countries, and many old base agreements are still in place that shield the military from accountability. A report by the Institute for Policy Studies notes that the Pentagon is directly responsible for 141, or 10% percent of all Superfund sites, while “760 or so additional Superfund sites are abandoned military facilities or sites that otherwise support military needs.”

Base pollution renders nearby land unusable and creates pollution that devastates local communities. In Iraq, living near a US military base is associated with significant thorium exposure, a radioactive chemical that causes birth defects. Not only is this unequal exposure a severe climate injustice, but it also has ripple effects. This damage leads to the displacement and degradation of local communities — only one of the many ways that climate change and wars over natural resources exacerbate the global refugee crisis. To put it bluntly, the US military perpetuates fossil fuel consumption, pollutes local communities, and destabilizes entire regions. 

Why an Effective Green New Deal must include Divestment:

The profound power of today is that the science around climate change is irrefutable, and citizens know it. A new study found that 73 percent of people living in the top 20 world economies believe that the world is approaching tipping points, meaning large-scale changes that signal major (if not irreversible) consequences for the planet. A scientific and citizen consensus means that divestment can be an active, effective, and powerful aspect of climate justice policy and movement politics.  

Governments (especially at the city level) tend to hold their wealth as investments through asset managers, such as BlackRock, and “divesting” simply consists of governments screening out unwanted investment opportunities. Many of these investments are part of government pension plans, tying taxpayer money and worker security directly to the expansion and proliferation of fossil fuels and the war machine. 

Emerging local Green New Deal (GND) strategies are ideal policy interventions to initiate this double divestment process because they focus on shifting city governments towards climate justice goals. To dissociate taxpayer dollars from needless wars, funding for the Green New Deal should come straight from the coffers of the Pentagon. Opponents of the GND tend to decry the cost of suggested programs, but military divestment could open up funds that can be reinvested in programs that actually serve local communities. While $1 billion in military spending creates approximately 11,200 jobs, the same amount of money would create 26,700 jobs if invested in education, 16,800 jobs in clean energy, or 17,200 in health care. 

Many GNDs focus on shifting the ideological values of cities or regions. Although these ideological goals are important, divestment and reinvestment in sustainable or regenerative industries offer a more concrete, actionable, and material redirection of government interests. Divestment is an opportunity for taxpayers to exercise democratic power outside of the ballot box, and can be especially effective at the city level because collective funds are significantly more powerful than individual action in signalling to federal policymakers that the people demand a material reorientation of political goals and values.

Resources and Strategies for Military Divestment

Successful divestment movements such as the Sudan Campaign (divestment from companies supporting the Sudanese Government’s human rights abuses) all have a common theme: extensive media coverage. In fact, in the Sudan case, an increase of just ten articles covering the story per quarter brought the targeted companies share price down another 1.7-2.3 percent. The first step to attaining media coverage is grassroots mobilization. Citizens should advocate for a Green New Deal at a local and state level, with a primary action item being divestment from fossil fuels and weapons manufacturers, and reinvestment in the companies and institutions that will help create a better future. Investments can then be directed into projects like clean energy funds and/or ESG (Environmental, Social and Governance criteria) companies

So, how can cities successfully divest? To learn more about next steps, visit CODEPINK’s website. This women-led grassroots organization is working to end US wars and militarism by linking military divestment to the environmental movement. CODEPINK has joined the call for a Green New Deal that fights militarism and its website has extensive resources on city-level divestment, which will soon be featured on the Center’s Green New Deal Resource Hub. CODEPINK lists examples of activists in municipalities, universities, and at the state level that have been working to divest using CODEPINK’s resources, helping individuals come together and be successful in their calls for divestment. 

At the Global Center for Climate Justice, we are always working to reveal the deep connections between the destructive industries, practices, and politics which create climate injustice and social injustice. If your organization works in social justice and is looking for ways to connect your issues to the climate justice movement or get involved in Green New Deal implementation, please visit our website or reach out to us! We are only as strong as our partners, and we are so lucky that the world is full of so many people doing good work. 

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