Strategic Shocks: Review & Application
Review and application of SSI study, “Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development” (Nathan Freier, Nov. 2008).
The Strategic Studies Institute (SSI) at the US Army War College has issued many stimulating research papers in recent years, several of which deal with energy security issues.
Nathan Freier’s recent SSI paper does not focus on energy issues.
Rather, the central purpose of his study is to present a paradigm for the examination of potential strategic shocks.
I recently summarized the key points of Nathan Freier’s “Known Unknowns” and then applied his paradigm to emerging energy security issues, primarily the phenomenon known as “peak oil” and its corollary, export decline.
The central point of my application of Freier’s paradigm to the issue of peak oil may be summed up thus: there are well-established trend-lines which point to impending energy security concerns (witness yesterday's warning from the IEA, #40 above).
Meanwhile, industry and government officials largely deny these concerns.
This ongoing situation provides a classic and real-time illustration of an evolving potential shock.
It is precisely the sort of situation which Freier says needs to be noted and scrutinized by military analysts.
This analysis was posted at Energy Bulletin this morning:
http://www.energybulletin.net/node/49779
'The Global Security Implications of Climate Change'
Rick and others here,
Not my subject, although I do try to follow some of this thread. The link is to an IISS conference on 'The Global Security Implications of Climate Change' http://www.iiss.org/about-us/offices...he-21-century/ You may find the linked blog of value, even if little populated.
davidbfpo
Security Implications of Climate Change
Thanks, David
I will try to learn more about the IISS conference.
The blog entries were interesting, esp the Himalayan water issue.
The (glacier-fed) Athabaska River is vital for tar sands production, so there are long-term concerns on that one as well.
Water may be a limiting factor for oil shale production also.
Meanwhile, CNA did a fairly thorough analysis on CC two years ago (around 65 pgs):
http://securityandclimate.cna.org/report/
Media coverage of Peak Oil
An article appeared yesterday which examines media coverage of Peak Oil (including this week’s exchange in the New York Times).
The author’s central point is:
"The fact is that if the Peak Oil proponents are correct, it amounts to one of the biggest stories of our time, right up there with global warming."
As the link below indicates, some of the most progressive mainstream coverage of PO is coming from the UK.
Brits are now awakening to the brevity of oil, having gone from importers to major suppliers and now to net importers, all within 40 years, half a human lifetime.
Same with natural gas, I believe.
http://www.huffingtonpost.com/gabrie..._b_270347.html
New Brookings study on Defense Energy
This 10-page analysis is entitled “Fueling the Balance: A Defense Energy Strategy Primer” and is authored by two members of the Obama ’08 defense policy task force.
This report builds on concerns which are increasingly being expressed about the vulnerabilities which are inherent in current energy consumption patterns (both in terms of physical supply and affordability).
Although this study focuses almost exclusively on DoD consumption, many of its concerns apply to the civilian sector as well, and of course it is the productivity of the domestic economy which funds DoD and other government services.
Clearly, our reliance on petroleum is suddenly emerging as an urgent issue.
Its bibliography reflects the incorporation into this study of the recent concerns of Col. Gregory Lengyel, the Defense Science Board, Cdr. Jeffrey Eggers, and the recent CNA study.
This study points to the upcoming Quadrennial Defense Review and states that “a closing window of opportunity must not be missed…. the energy nexus…. cannot be deferred again” (p. 1).
This is a concise and highly relevant study, well worth reading.
Thanks to Lisa Wright at Congressman Roscoe Bartlett’s office for passing along the link:
http://www.brookings.edu/~/media/Fil...egy_singer.pdf
Solid points, but more to consider
Quote:
I also think there will be a whole raft of new technologies emerging for getting more oil out of existing deposits. Right now the rule of thumb is that only 20-30% of a given deposit is recoverable, and I think that's going to change. Again, there was little incentive to develop those technologies in the face of a glut and perceived glut that persisted up until a very few years ago, but if the price of oil stays high, that changes the incentives radically. You put a few hundred billion dollars underground, there's going to be some real effort put into getting it out.
No disagreement on the political and financial being the primary long poles in this tent, but I'm not as confident as you are that the technology currently exists, and this is not a financing friendly economy at the moment. However, let's assume energy demands overweigh political and financial issues and that the technology is developed. We still live a world where we have "the rise of the rest", and that means India, China and a lot of other nations will have an increased demand to sustain their growth. Not sure punching a few more soda straws seven or more miles deep into the ocean will meet that demand.
Other issues, if oil prospects for the U.S. look better in our backyard, why would western oil companies invest in places like Nigeria? What impact will that have on their economy and subsequently their security and our security interests?
Latest warning re. oil supply crunch
This appeared today in the The National (out of the UAE).
It provides the latest warning of an imminent supply crunch if serious investment does not kick in.
The author warns that "$147 a barrel oil [will] seem like a blessing" compared to what's coming if we can't get our collective act together.
This is a sensible article which links the concerns of peak oil, depletion rates and the urgent need for investment:
http://www.thenational.ae/apps/pbcs....ate=columnists
Surely it would be prudent for North Americans authorities to dust off & review our fuel emergency plans (at every level: federal, state/provincial and local).
It's possible to have a serious fuel emergency without physical shortages: all it would require is widespread unaffordability (which would almost certainly lead to public unrest).
Consistent warnings are being issued on this impending supply crunch, but there is little public awareness, no political or media interest, and therefore no observable action.
Warnings re oil supply crunch (2011-2015)
As for other evidence on the imminency of the expected "supply crunch" and price spike, I would point to several documents:
1. last summer's Chatham House report: "The Coming Oil Supply Crunch."
This report by Paul Stevens was written in Aug.08 and updated in May 09.
His 40 page analysis warns that "a supply crunch appears likely around 2013" (p.8).
In his May 09 update, Stevens stands by this prediction: "the developments since publication of the report in August 2008 have done little to change its original
conclusions" (p. 37).
This link provides an intro and link to the complete study:
http://www.chathamhouse.org.uk/publi...view/-/id/652/
2. last summer's Chatham House report on oil exporters
In July 08 a 40-page study was released by Chatham House in the UK.
Entitled "Ending Dependence: Hard Choices for Oil Exporting States", their assessment is stark:
"Of the twelve countries in this study, oil production is in decline or at a plateau in three: Indonesia, Malaysia and Norway.
In a further seven countries, the plateau will be reached around 2010.
Saudi Arabia and Kazakhstan will reach a plateau before 2020" (p. 35).
Clearly, if export capacity is headed for such near-term limitations, a supply crunch should be on everyone's radar.
The study is available here:
http://www.chathamhouse.org.uk/news/view/-/id/457/
3. the IEA's most recent World Energy Outlook
The Nov. 08 WEO is striking in its tone, warning that "global trends in energy supply and consumption are patently unsustainable" (p. 37) and that "time is running out" (p. 49).
It states, "Some 30 mb/d of new capacity is needed by 2015. There remains a real risk that under-investment will cause an oil supply crunch in that timeframe" (p. 41).
Paul Stevens (#1 above) has a concise analysis of the WEO in his May 09 update (p. 35).
4. public statements by Fatih Birol
Mr. Birol is the Chief Economist of the International Energy Agency.
He has provided several presentations and interviews since the release of last year's WEO and has repeatedly warned of the dangers of under-investment and of a potential supply gap "after 2010."
His recent interview with Steve Connor of The Independent (UK) is cited here:
http://www.independent.co.uk/news/sc...t-1766585.html
Mr. Birol is further quoted as saying, "the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted."
My concern is that despite this credible information, the potential for a near-term oil supply crunch & price spike does not seem to be on the radar of our policy-makers or the public.
Whether a crunch occurs in 2015, "after 2010" or somewhere in between, the time-frame is very tight when we are looking at something as colossal as the global supply of affordable liquid fuel.
This urgency is greatly compounded by our reluctance to acknowledge that a problem even exists.
Surely we need to prepare for such a situation.
I have several questions which I hope this group can assist with:
Can anyone shed light on the status of US plans for liquid fuel emergencies (LFE)?
Has anyone seen a written LFE plan at any level?
Does anyone know anyone who has?
Has anyone examined the recent LFE work in Australia and the UK?
Should we not be conducting similar reviews of our fuel emergency plans here in North America?
Since the military and National Guard are often called upon when domestic emergencies are beyond the capabilities of local authorities, this information and the the subsequent questions should be of some relevance to this audience.
Thanks very much for considering this, all of you.
Other views are welcome.
Rick, relax it isn't a crisis yet.....
Posted by Rick M,
Quote:
Surely it would be prudent for North Americans authorities to dust off & review our fuel emergency plans (at every level: federal, state/provincial and local).
It's possible to have a serious fuel emergency without physical shortages: all it would require is widespread unaffordability (which would almost certainly lead to public unrest).
Consistent warnings are being issued on this impending supply crunch, but there is little public awareness, no political or media interest, and therefore no observable action.
Rick, you know how we are, we like to admire and discuss problems and potential crisises, but we don't solve them until they are a crisis.
North American responses (or lack there-of)
Hi, Bill
You are correct, it isn't a crisis yet, and maybe it won't be a crisis for several years (though it is unlikely that we can carry on for many decades).
But you are also correct in noting that we tend not to address things until a crisis hits.
That is my central fear... despite the evidence that oil production must eventually peak, that exports will be curtailed first, and that a near-term supply crunch (because of under-investment, not below-ground reserves) appears increasingly likely, we still carry on our merry way.
There is something almost Shakespearean about all this... human hubris... we attribute so much of our modern achievements to human ingenuity, when in fact much of it was the result of our ingenuity at getting this energy-packed liquid to do fantastic work for us.
We conveniently overlooked the fact that the stuff is finite, and we have made no provision for that unhappy fact.
Admiral Rickover was right a half-century ago... we have been "selfish and irresponsible" in squandering this one-time bonanza and putting our kids at increasing risk.
When it comes to petroleum supply, this issue is so complex and of such a scale that a major supply problem won't simply be a matter of fine tuning at the last minute.
We could easily get caught, but most North Americans appear to have no clue that such an event is even possible.
That is not an encouraging starting point, and we may actually find ourselves up against something (even though "that something" was reasonably predictable) which we cannot solve in a safe & orderly manner.
Pride goes before a fall, as they say, though I certainly hope that we can prevent a recurrence of this timeless human pattern.