Congressman Michael C. Burgess, M.D. (R-TX) today offered an amendment that provides $400 million in federal money to build refineries on military bases as part of the Military Construction and Veterans Affairs FY09 Appropriations bill.

“If we want access to American energy, we need to drill domestically and refine domestically too.  We can start by providing our Nation’s largest energy consumer – the military – with the money and infrastructure to do just that,” said Rep. Burgess.

In 2007, with operations in Iraq and Afghanistan, the United States Armed Services consumed 16 gallons of fuel per soldier every day, or, about $3 million worth of fuel a day.   All military planes, vehicles, and heavy equipment use jet petroleum to avoid carrying different fuel grades or accidentally putting the wrong kind of fuel in equipment. This specialized fuel is produced in the same refineries that produce fuel for commercial sale, many of which are located in foreign countries because domestic refinery infrastructure is not adequate to meet supply demands.  Four out of five of the top suppliers of military fuel are foreign companies.  

Additionally, global refineries are currently operating at tight capacity, which limits output and drives up production costs.  The problem is particularly acute in America, where domestic refining capacity has declined as a result of the industry operating with lower inventories of both crude oil and gasoline, as well as the lack of new or modified facilities.  These constraints mean a greater proportion of gasoline demand has to be met with imported products.  Because refining makes up between 10 and 20 percent of the cost of gasoline and other fuels, this capacity shortage is contributing to rising fuel prices.   

“We haven’t built a new refinery since the 1970’s, and lawsuits and red tape have made it prohibitively expensive to expand or enhance existing refineries.  The result is America is importing millions of barrels of fully-refined gasoline from abroad. This causes higher prices for consumers, costs jobs, makes us vulnerable to man-made and natural disasters – and it must change,” continued the Congressman.

Experts maintain that building new oil refineries or expanding existing ones is among the most affordable, effective and reliable ways to increase supplies of gasoline and diesel fuels and to lower prices. The Burgess amendment provides $400 million to build four new refineries to produce the specialized types and grades of fuel used by each branch of the Armed Services for their equipment.  The refineries will be located on existing or former bases under the control of the Department of Defense.

These military-specific refineries could produce and protect specialized military fuels from capacity limitations that squeeze supply and increase prices.  They would free up commercial refining capacity so the country is not forced to outsource a significant portion of refining needs to foreign countries.  They would also help ensure supply chain disruptions, whether man-made or natural disasters like hurricanes, do not stop the flow of fuel to the troops.

“Investing in critical infrastructure and protecting the Nation are some of the federal government’s top responsibilities.  This amendment combines these critical roles for the public good,” Burgess said.

Unfortunately, the amendment was brought down by an arcane procedural matter raised by the democratic majority. However, Congressman Burgess will continue to push HR 6125, which will help accomplish the goals of this amendment.