A silicone modified lubricant includes a Group I, II, III, IV or V base oil in combination with a minor amount of a silicone oil. Further, the lubricant includes a dispersant such as a dispersant olefin copolymer which maintains the silicone oil dispersed in the base oil. The silicone oil reduces the surface tension of the lubricant thereby reducing power loss. Preferably the lubricant formation has a surface tension less than 28 mN/m, making it particularly suitable for dip lubrication systems.
STATEMENT REGARDING FEDERALLY SPONSORED RESEARCH OR DEVELOPMENT
 The present invention was made with government support under Contract No. DE EE0006427, awarded by the Department of Energy. The U.S. Government has certain rights in the present invention.