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The 2010 ASPO conference: national security aspects

The Association for the Study of Peak Oil and Gas (ASPO) held its annual conference in Washington on October 7-9, 2010. The theme of this year’s conference was “The Future of Oil, Energy and the Economy.”

This review summarizes what transpired at the conference with respect to national security concerns, including not only military aspects but related issues such as energy security, financial & economic stability and food security.

1. Panel on National Security

This year ASPO included a 90-minute session entitled “Energy and National Security” which was held on the first evening, Oct. 7th.

a. Rep. Roscoe Bartlett

The keynote speaker was Rep. Roscoe Bartlett (R-Maryland) who heads the Congressional Peak Oil Caucus. He reminded the audience of the warning issued by the US Joint Forces Command: “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD” (Joint Operating Environment, p. 29).

Bartlett then pointed out that the Secretary of Defense intends to eliminate the Joint Forces Command. More information on the termination of JFC is available here:
http://www.stripes.com/news/is-jfcom-really-expendable-1.114103?localLin...

Rep. Bartlett’s slide deck is available here:
http://www.aspousa.org/2010presentationfiles/10-7-2010_aspousa_KeynoteEn...

Bartlett concluded his presentation by quoting from Admiral Hyman Rickover’s prescient speech (May, 1957):

“In the face of the basic fact that fossil fuel reserves are finite, the exact length of time these reserves will last is important in only one respect: the longer they last, the more time do we have, to invent ways of living off renewable or substitute energy sources and to adjust our economy to the vast changes which we can expect from such a shift.

Fossil fuels resemble capital in the bank. A prudent and responsible parent will use his capital sparingly in order to pass on to his children as much as possible of his inheritance. A selfish and irresponsible parent will squander it in riotous living and care not one whit how his offspring will fare.”

b. Rear Admiral Lawrence Rice, USN

RADM Rice recently served as Director of Strategy and Policy in Joint Forces Command. He said that they received ‘push-back’ on their analysis of peak oil, climate change, China and Russia. Rice pointed out that reliance on fossil fuels not only presents operational risks, but also constitutes a strategic risk to the nation.

He touched on fiscal aspects, reminding the audience of Adm. Mullen’s warning that the greatest security threat is the national debt. He also mentioned James Woolsey’s observation that through its purchases of foreign oil, the US is funding both sides of the war with radical Islam.

Rice provided examples of progressive work by the various US armed services with respect to energy conservation, “untethering” & “islanding”/self-sufficiency of bases, reducing the fuel supply tail, etc.
He concluded by pointing out the need for civilian sectors to demonstrate similar progress, asking “What’s it going to take to get the rest of the country to act?”

c. Michael T. Klare

Dr. Klare is the Five College Professor of Peace and World Security Studies, based at Amherst College, and is also the author of several books on geopolitical aspects of energy security.

He began by highlighting an overlooked milestone which occurred this year: China has become the world’s number-one consumer of energy. This is a position which was held by the USA for over a century, and Klare regards this transition as highly significant. China’s use of coal will increasingly be a driver of climate change, which Klare views as a major threat to international security. He pointed out that both China and the USA will both be seeking to import about 10 mbd of oil, just as global export capacity shrinks. China is now the dominant manufacturer of photovoltaic and wind.

Klare stressed the importance of cooperation between the US and China on these various aspects of energy security.

d. Lt. Col Danny Davis, US Army

LTC Davis was scheduled to present during this session, but is serving in Afghanistan and circumstances prevented his return to Washington. This was most unfortunate, as Davis has done some excellent work on peak oil in the past including his 2007 paper, “On the Precipice:”
http://www.aspo-usa.com/assets/documents/Danny_Davis_On_the_Precipice.pd...

Davis also contributed this article to Armed Forces Journal:
http://www.afji.com/2008/05/3466428/

During the questions which followed the presentations by Bartlett, Rice and Klare, Bartlett made an observation on why government remains so inactive on the issue of peak oil. With characteristic wit, he responded to a question with these two observations:

  1. Most Americans are unaware and unconcerned

  2. We have government which is truly representative…

2. James R. Schlesinger

The following morning’s keynote address was given by Dr. Schlesinger, entitled “The Peak Oil Debate is Over.” Although the primary focus of his address was not on security aspects, Schlesinger’s service as Chairman of the Atomic Energy Commission (1971-73), Secretary of Defense (1973-75) and CIA Director (as well as his later service as first Secretary of Energy, 1977-79) make him well qualified to comment on the interface between energy security and national security.

Dr. Schlesinger is now in his 83rd year, and the years have enhanced his wisdom and sharpened his wit. He warned against the Keynesian interpretation of Say’s Law, which asserts that supply creates its own demand. Schlesinger warned against the popular belief that demand can create its own supply (especially regarding finite resources).

He recounted the American consideration of military force during the early stages of the 1973 Arab oil embargo. He recalled President Carter’s suggestion that it might make better long-term strategic sense to leave American oil in the ground and draw from the reserves of others, and how the response to Carter’s proposal was ridicule and anger, especially from the southwestern states.

It should be noted that Harvard professor Jeffrey Frankel recently argued against popular policies which would effectively “drain America first,” saying that the US should instead save its Gulf oil for an emergency:
http://www.forbes.com/2010/05/26/gulf-of-mexico-oil-spill-energy-securit...

Schlesinger concluded by repeating his earlier quote from Christ’s Sermon on the Mount (Matthew 6:34)

“Sufficient unto the day is the evil thereof.”

I presume Schlesinger intended the audience to depart from the usual interpretation of that line (“Let the day’s own trouble be sufficient for the day”) . (A more contemporary translation might read, “I’ve got enough on my plate without worrying about long-term problems which may or may not happen.”)

Schlesinger’s context implied that the quote might better be interpreted as a prudent warning that we need to plan ahead, and that there are dangers in blindly trusting that requirements will somehow appear on their own.

3. Economic analysts

In keeping with the theme of the conference, there was plenty of analysis offered by many presenters on economic & fiscal aspects. Several presenters warned of triple-digit oil prices, inflation, recession and unemployment. Nicole Foss warned of the power of financial markets to aggravate downward tendencies, “cascading movements” and the specter of deflation. Whether the eventual convergence of problems results in inflation or deflation, the pressures on government budgets (which are fundamental to military capabilities) may be extreme.

In short, the various analyses indicate that military analysts must look beyond the practicalities of “fueling the troops” in an energy-constrained world. Military and security analysts need to expand their focus to include the complexities of fueling the economy and sustaining the tax base, upon which the military and other essential public services are utterly dependent.

4. The emerging liquid fuel crisis: military concerns versus civilian inaction

This was the title of my own 20-minute presentation, which touched on recent warnings from the IEA’s 2008 World Energy Outlook before moving onto concerns expressed in the military literature.

In April 2009 the IEA’s own Deputy Director implied that only a fool would think that six Saudi Arabias can be found and developed in the next 22 years. Despite the fact that the IEA’s Deputy Director expressed great skepticism about the world being able to obtain the volumes which his own Agency says are required, this stunning statement was not reported in the media. That the statement was made at a war college, presumably to a primarily military audience, is also interesting (slide 4, link below).

Mention was made of an excellent 2008 paper from the US Army War College which pointed out that strategic shocks are often predictable (and predicted), but that long-term trends (which ought to be taken as warnings) are ignored (slide 5).

A review of this study is available here:
http://www.energybulletin.net/node/49779

Slides 6 and 7 provide a “bullet list” of current oil supply trends, and the point was made that a strong cluster of such trends ought to lend additional credibility to each individual trend.

The recent Bundeswehr study on peak oil was then introduced, leading to the point that the German analysis is unprecedented within the military literature for three reasons (slide 14). In particular, its focus on the potential for internal disorder on the German home front is most striking: the report warns of a domino effect which could lead to the collapse of such vital systems as the food supply chain. The point was made that the new German study should be highly relevant to emergency planners in all countries.
A review of the Bundeswehr study is available here:
http://www.energybulletin.net/stories/2010-09-28/review-putting-bundeswe...

The Oil Shockwave was summarized, thus leading into the second half of the presentation (regarding civilian inaction). Following the 2005 Shockwave exercise, Robert Gates described the threat of oil supply disruption as “real and urgent, requiring immediate and sustained attention at the highest levels of government” (slide 19). Evidence of the ongoing inattention to future oil supply was provided from Natural Resources Canada, Agriculture & Agri-Food Canada, USDA, DHS and Public Safety Canada (slides 20-32).

The point was made that DHS’s fifteen priority scenarios are all high-impact threats, but some may not be high-probability, whereas a major oil supply disruption ought to be regarded as an eventuality which is both high-impact and high-probability, especially in light of the ongoing trends (many of which are accelerating).

Both the GAO and the IEA itself have pointed out the inadequacy of the international emergency response plan to deal with a truly major liquid fuel emergency (slides 34 &35).

The presentation concluded with observations on our human tendency to avoid dealing with issues which are overly complex.

In summary, we have seen a surge of interest and concern from military analysts on the issue of future oil supply, especially during the past five years. Unfortunately, there is very little evidence of concern about peak oil (and therefore no action) from civilian authorities, despite the accelerating trends and increasing warnings from credible military researchers.

The slide-deck of this presentation is available here:
http://www.aspousa.org/2010presentationfiles/10-9-2010_aspousa_FuelCrisi...

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