Lethal Trajectories (57 page)
Indeed, the American Dream has been exported to other nations. The people of China and India, for example, are now experiencing rapid growth and upward mobility. As they do, they are driving more cars, building new highways and infrastructure, using more energy, and changing their lifestyles and consumption patterns to require more of everything. The global hunger for finite resources is insatiable. In the process, we have pushed our planet to its limits and altered its climate.
The dream is now on a collision course with the immutable laws of supply and demand. And, as the dream enablers—cheap energy and abundant resources—disappear, the dream we knew is no longer sustainable. The things we once took for granted, such as agricultural abundance, fresh water, clean air, and a robust global economy, are no longer givens; the times are changing.
Caught in the blur of a paradigm shift we don’t understand—a shift from the sunlit dream into the harsh winds of the perfect storm—we are uneasy about the future. We respond ineffectively by applying old-paradigm solutions to new-paradigm challenges, or we simply dismiss our feelings of uneasiness as something that modern technology will somehow resolve. Perhaps our transitional journey can only be achieved through the painful cycle of denial, anger, bargaining, depression, and finally acceptance, but one thing is clear: until we recognize the disconnect between our expectations and the new reality, we can do little to address the coming crisis. The challenge is daunting, and time is working against us.
It must start with building a better understanding of the perfect storm and the threat it poses. It means identifying the threats, connecting the dots, plotting trajectories, and initiating proactive solutions. Broadly speaking, the major threats—detailed in chapter 50 of my research notes—can be summed up as follows.
Energy threats: As the oil supply-and-demand curve tightens, we will increasingly look to OPEC countries to feed the hungry beast. But, due to constraints of geology and national policy, they are unlikely to meet future demand. As access to oil dwindles and prices skyrocket, the economic engines of the world will sputter. Nations will realize how ill prepared they are to replace their oil-based energy systems with renewable and alternative energy models. They will rue the time wasted in not developing new energy infrastructures, given the long timeframes required for such efforts, and pay a fearful price in the economic stagnation that will follow. Ironically, the favorable cost structures of oil have long deterred those nations from committing the time and capital required to develop new—albeit costlier—energy models. Perhaps higher energy prices will now spur their growth, but it may be too late.
Economic threats: The global addiction to
debt
will intensify as the energy crisis worsens. The United States, with its crushing and unsustainable debt loads, future entitlement obligations that can’t be met, and debt-servicing charges now exceeding $200 billion per annum and climbing rapidly, will be further hampered by its massive transfer of wealth to foreign oil exporters. As the GDP stagnates, any opportunity we had to grow our way out of debt will vanish. The temptation to print money and monetize debt will be irresistible, causing our balance sheets to deteriorate even further. A recent S&P review lowering the outlook on U.S. government debt from “stable” to “negative” reflects an uneasy concern with long-term debt; clearly a major issue in the next presidential campaign.
As a debtor nation relying on foreign governments to finance its deficits, the United States’ financial picture will grow murkier. The need to raise interest rates to attract and retain foreign capital—and avoid any form of disintermediation—will hamper growth still more. Of perhaps greater potential concern is the risk of losing the fiat reserve currency position or the petrodollar status now held by the American dollar; the loss of either could have a catastrophic effect on America’s financial position. Sound impossible? The Roman and British empires were probably equally complacent at the height of their global economic power.
Climate and ecology threats: While we endlessly debate the validity and causes of climate-change, the signs of its effects are showing everywhere. Its insidious creep obfuscates the threats to Earth’s finite ability to support a growing population. With continued desertification of cropland, severe water shortages, aberrant weather patterns, and rising energy and agricultural production costs, the ensuing threat of major famines, droughts, and widespread population migrations is high. Military and intelligence agencies, in fact, refer to climate-change as a
threat multiplier
affecting a wide array of global challenges.
It is a gruesome picture. What, if anything, can we do about it?
We can start by acknowledging two very important things: First, we are not helpless victims; we have choices. And second, with a healthy dose of awareness and engagement, we still have time to make a difference; our choices count.
While it is difficult to predict an exact timeframe for the perfect storm, its treacherous trajectory, like a rising tide, will eventually engulf us. Without the clarion call of a Pearl Harbor-like disaster to galvanize the nation, the incremental—but inexorable—nature of the storm will weaken the political will needed for resolute action. Who, then, do we turn to for direction?
We look in the mirror. This is where the great paradigm shift has to start. Instead of waiting helplessly for our government to recognize the dangers and respond, we will need to engage instead as individuals, families, and communities, using whatever time we have remaining to prepare for the storm. It will mean digging deep within ourselves and finding those dormant strains of self-reliance that enabled our ancestors to survive in hostile lands.
It is a formidable journey with few roadmaps, and getting started may well be the hardest part. Recognizing this, I have prepared a guide titled
Weathering the Storm.
It provides a blueprint for engagement and will help you chart a personal course of action. It is available to you free of charge on my website at the following address:
www.weatheringthestorm.net.
A message of hope: Great challenges produce great opportunities. Imagine what could happen if Americans confronted the challenge of the perfect storm with the same grit and determination as they did in mobilizing for World War II, completing the Manhattan Project, putting a man on the moon, and winning the first Cold War.
Imagine the transformational effect of creating new economic engines of growth to address the challenge. Imagine the creation of new renewable and alternative energy systems, smart-grid power infrastructures, and transportation systems that would end our dependence on foreign oil while reducing our carbon footprint. Imagine focusing our technological and financial core competencies toward demand reduction and the development of conservation innovations exportable to other nations. Imagine having worker shortages and not unemployment as a pressing economic challenge.
Are these new opportunities achievable in America?
They could be if we learned to set aside our short-term fixation on quarterly earnings, winning the next election, vacuous sound-bite solutions, and other quick-fix schemes. By engaging and empowering the American people in a cause greater then themselves and igniting the entrepreneurial spirit that made America great, we could transform the peril we face into a dramatic new beginning. In the process, we might even rekindle a long-lost sense of patriotism, taking heart in our resilience in the face of adversity. Most of all, we would leave for future generations a world that more closely approximates the one we inherited.
We are not helpless victims. Bring up my website, and let’s get started.
Mike Conley
Chapter 1:
East China Sea:
The ownership of the Diaoyu Islands (called Senkaku by Japan) has been contested by Japan and China for decades. The islands lie approximately 120 nautical miles northeast of Taiwan, 200 nautical miles east of the Chinese mainland, and 200 nautical miles southwest of Okinawa. The eight uninhabited islands of barren rock have a land area of only 6.3 square kilometers.
The complex ownership disputes intensified when a 1969 UN Economic Commission report indicated the possibility of large oil and natural gas reserves in the Diaoyutai Archipelago. The reserves, subsequently developed as the Chunxiao Field, became the flashpoint for a number of conflicts between the two nations, the most recent being the arrest by the Japanese of a Chinese fishing-boat captain in September 2010. The Chunxiao Field will surely be an area of increased conflict as future energy supply tightens.
Weaponry:
The weapon systems and tactics used throughout the book are based on weapons in use in 2010 or scheduled to go into production after 2010. The Japanese destroyer
Harakazi
is modeled after the
Hatakaze
class destroyer. The Chinese vessels used in the Chunxiao Incident are current ships of the fleet. American aircraft described in future chapters, namely F-22s and F-35s, are currently in different stages of development and deployment.
The naval maneuver known as water-buzzing is not an actual tactic, but rather a fictitious maneuver resembling the deadly cat-and-mouse games played between Soviet and American aircraft and submarines in the heat of the Cold War. The use of aggressive tactics to test the response of an adversary is likely to continue based on previous Cold War tactics.
Deepwater oil platforms:
As conventional dry-land oil becomes harder to find, new oil will be increasingly sought in deepwater basins at depths of ten thousand feet or more. The size, technology, and transportability of deepwater platforms will escalate to accommodate such needs. A self-propelled circular rig called
Sevan Driller II,
which began development in 2009 for drilling in up to 12,500 feet of water, is the latest sixth-generation platform being built by the Cosco Shipyard in Nantung, China. The
Dragon II
platform used in the Chunxiao area in this book is a fictitious megaplatform of this type.
Because of the new platforms’ cost, vulnerability, and exposure to terrorists, platform security measures will be ramped up. Security firms are now offering specialized rig security, including protection against boat-ramming incidents; the level of defensive capability suggested for the
Dragon II
platform is not improbable. The ultradeep sea mines deployed around the
Dragon II
are not known to be in the PLAN arsenal at this time, but the need for increased deepwater security would seem to make such developments feasible by 2017.
Climate satellites and exploration:
The proposed NASA budget for fiscal years 2011 through 2015 suggests major initiatives geared toward building and launching robust climate-monitoring and research satellites. The intent is to provide a greater understanding of and confidence in the future course of climate-change. Working with organizations such as the National Oceanic and Atmospheric Administration (NOAA), and supported by climate-research satellites scheduled for launch between 2011 and 2017, the intent is to provide more accurate climate predictions and a better foundation for future mitigation and adaptation strategies.
Economic malaise:
An underlying theme of this book is the close correlation between the global economy and the accessibility and affordability of oil. In this context, it is assumed that by year-end 2012, surplus oil capacity will all but disappear and oil supply will fail to keep up with nominal demand thereafter. Unfortunately, alternative energy systems will not be in place to replace oil supply deficiencies. A 2010 Department of Defense strategic-planning report suggested that “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MB/D [million barrels of oil per day].” (Source: The Joint Operating Environment 2010 [“JOE-10 Report”], p. 29.)
With an inverse supply-and-demand curve, oil prices will increase. A disproportionately higher percentage of GDP will be allocated for oil, creating an economic drag that diminishes GDP growth rates. Some energy analysts have observed strong correlations between rising oil prices and subsequent recessions. One such metric suggests danger whenever the aggregated cost of oil exceeds 4 percent of GDP. A cocktail-napkin calculation using an assumed American GDP of $15 trillion and oil consumption of seven billion barrels per year suggests a potential economic problem when the sustained price of oil exceeds $90 per barrel: greater than 4 percent of GDP.
While rising oil prices can be a significant drag on the economy, the fiscal and monetary policies of nations—including crushing debt loads, unfunded entitlement liabilities, devalued currencies, and a tendency to monetize debt via the printing press—will also make significant contributions to the global economic malaise, triggering high unemployment rates and semipermanent recessions.
Saudi Arabian government and succession:
The modern nation of Saudi Arabia was established in 1931. Led by the House of Saud, a monarchy founded by Abdul Aziz ibn Saud, it shares power, in theory, with the religious elite. Sons of Abdul Aziz have thus far been the only men to serve as king or crown prince. However, as the sons of Abdul Aziz age, succession issues will become increasingly problematic.
The Basic Law, adopted in 1992, codified several elements of government and succession. The candidate pool was expanded to include all male descendants of Abdul Aziz ibn Saud—not just his sons—and established the Qur’an as the constitution of the country and Shari’a law as the basis for government. In October 2006 a committee of princes was established to vote on the eligibility of future kings and crown princes. Known as the Allegiance Institution, it further defined the covenants of succession.
Succession is very much in the Saudi Arabian picture today, as King Abdullah Abdul Aziz is eighty-seven years old, and all other likely successors are elderly as well. If the succession skips a generation and moves to a grandson of the founder, the field will widen and competition for the throne will intensify. The current House of Saud is estimated to include more than five thousand princes and princesses, and the future leadership of Saudi Arabia is an open question. Close ties between the Saudi government and the ulema (the clerical establishment) will also influence the future direction of Saudi Arabia.