Lethal Trajectories (60 page)

U.S.S
Gerald R. Ford:
Construction of this new nuclear-powered aircraft carrier began on 13 November 2009. Scheduled to be commissioned in 2015, it will replace the U.S.S
Enterprise.
Aircraft carriers are typically deployed as part of a carrier strike or battle group. In addition to the fighter-bomber squadrons and missile defense systems it carries, a carrier strike force has an impressive array of escorts that typically includes a guided missile cruiser, a squadron of several destroyers, frigate support units, and two or more nuclear-powered attack submarines. There are currently twelve carrier battle groups in the U.S. Navy, making it the most formidable blue-water navy in the world.

DEFCON alerts:
The Joint Chiefs of Staff created the DEFCON alert system in 1959 to provide a more uniform defense readiness alert condition for all military commands. It features five levels of alert, with DEFCON 5 being least severe and DEFCON 1 being the most severe. The highest confirmed DEFCON was the level-2 alert of the Strategic Air Command in the Cuban Missile Crisis in 1962. ICBM missile sites were at DEFCON 4 throughout much of the Cold War. DEFCON 3 was in force shortly after the 9/11 attacks.

Walter Reed National Military Medical Center:
In the summer of 2011, the old Walter Reed Hospital was shut down. Many of its functions were consolidated with the Naval Medical Center—commonly called Bethesda Naval Hospital—and the new combined operation renamed Walter Reed National Military Medical Center. For brevity, it is referred to throughout the book as “Walter Reed.”

Number One Observatory Circle:
The official residence of the Vice President of the United States is located on these grounds. The three-story Victorian-style mansion was built in 1893 as the home of the superintendent of the U.S. Naval Observatory. Located at 34th Street and Massachusetts Avenue NW, near Georgetown, it was the official residence of the Chief of Naval Operations from 1923 to 1974. In 1974 it was made available for use by the vice president.

Constitutional succession:
The Twenty-Fifth Amendment to the U.S. Constitution was ratified in 1967 and provides for the succession to the presidency and filling of the vacancy in the office of the vice-president. It replaced the ambiguous wording of Article II, Section I, Clause 6 of the Constitution and has been used six times since its ratification: 1) Gerald Ford’s appointment to fill the vacancy of Spiro Agnew as vice president; 2) Ford’s succession to the presidency vacated by Richard M. Nixon; 3) Nelson Rockefeller’s appointment to replace Ford as vice president; and on three separate occasions when presidents were temporarily incapacitated by surgery. The nomination of a vice president to succeed the previous one requires majority approval from both houses of Congress before becoming effective.

Organization for Economic Co-operation and Development (OECD):
The Organization for Economic Co-operation and Development was established in 1961 to bring together countries committed to democracy and the market economy. Its mission is primarily economic in nature, promoting trade, good living standards, financial stability, employment, and data sharing, to name a few. There are currently thirty-three member countries in the OECD, among them the United States and other Western powers, as well as several nations with an “enhanced engagement” status—not full members—including China, India, and Brazil. OECD nations are often combined as a category of measurement: for example, oil production and consumption is often categorized by OECD nations and non-OECD nations. The International Energy Agency is embedded in the OECD and is a major source for global energy and climate information.

Ambassador’s residence in Riyadh:
The official U.S. ambassador’s residence in Riyadh is the Quincy House, located in the Diplomatic Quarter. The Quincy House was named after the historic meeting between President Franklin D. Roosevelt and King Abdul-Aziz aboard the U.S.S.
Quincy
on February 14, 1945. Roosevelt made the trip after the Yalta Conference; the visit helped open the door to Saudi Arabia. In addition to the embassy in Riyadh, the U.S. ambassador has offices in Jeddah and Dhahran.

Mossad:
The Mossad—the Hebrew word for
institute or institution
—is known in full as the Institute for Intelligence and Special Operations. Formed in 1949 under another name, it gained operational traction under Prime Minister David Ben-Gurion in 1951. Ben-Gurion saw it as Israel’s first line of defense: it was built to do whatever it had to do to protect Israel, functioning and fighting in asymmetric ways. Its operational effectiveness and reputation for ruthlessness is well earned. Engaged in underground operations, paramilitary activities, technology and resource acquisition—including nuclear advancement—and working against nuclear proliferation by those not friendly to Israel, its covert methodologies, determination, and effectiveness are legendary.

The motto of Mossad, taken from Proverbs 11:14, is roughly translated as, “For lack of guidance a nation falls; but many advisors make victory sure.” Imbued with an almost fanatical passion to see the state of Israel survive, the Mossad has taught many adversaries the hard lesson that it is not an organization to be trifled with.

Royal palace in Riyadh:
While the official residence of a head of state may often be the same location at which they conduct their official duties, as with the White House, several official sites are listed for King Abdullah. In a rare televised address on March 18, 2011, King Abdullah addressed the nation from his “official office” at the royal palace in Riyadh, though it is unclear whether it is also his official residence. Leaders like Saddam Hussein were known, in fact, to change residences often for security purposes. For purposes of this book, the official office and residence of the Saudi king in 2017 is assumed to be the royal palace.

Détente and treaties of convenience:
Détente involves easing strained geopolitical relations between adversaries. It is often a surprising development, as it means breaking down barriers and opening doors with former adversaries. The Cold War thaw between the Soviet Union and United States in the 1970s was a classic example of détente. There are many examples in the twentieth century of traditional adversaries getting together in an alliance of convenience for a cause greater than the barriers that kept them apart. In 1939, for example, Stalin and Hitler signed a nonaggression pact that stunned the world and sharpened knives for carving up Eastern Europe. Later, Great Britain and the United States formed a “grand alliance” with the Soviet Union to defeat Nazi Germany. President Nixon broke the Cold War ice with the People’s Republic of China in his 1972 visit with Mao Zedong, inaugurating a longstanding economic relationship with China. Given the above examples, it is not inconceivable that two adversaries would unite in a common alliance if their geopolitical survival was threatened by an outside force, as China and the United States are in this book.

Israeli war cabinet:
During the Yom Kippur War, a small group of ministers was formed to make a number of fundamental decisions on the war. Known as the war cabinet, the concept was later used to make emergency decisions subsequently approved by the full government. Now known as the Political Security Cabinet, it is an inner cabinet of the Israeli Cabinet. It is led by the prime minister, who takes a leading decision-making and oversight role, particularly in wartime. In some respects, it is similar to the U.S. National Security Team. The Knesset, by comparison, is the broader unicameral parliament of Israel.

Significance of the petrodollar:
The fifth of Mustafa’s Five Demands in the book calls for the abolition of the petrodollar oil transactional system. It is worth noting why this would be such a crucial issue to the United States. Following the Bretton Woods meeting in 1971, the gold standard was discontinued. Without gold or silver to back the currency, the American dollar became, in essence, the international reserve currency of choice, in effect a fiat currency not backed by a precious metal. In addition, OPEC in 1973 agreed that oil transactions should be made in dollars, which came to be called petrodollars. The fiat currency reserve and petrodollar status conferred upon the American dollar provides an enormous financial advantage to the United States. Among other things, central banks throughout the world prop up the American dollar as a transactional reserve, and the lower cost of capital and reduced debt-servicing charges accruing to the United States as a result of the dollar’s special status are of great financial advantage.

Unfortunately, the United States has not fully protected the cherished position of the dollar through prudent fiscal and monetary policy management. The continued devaluation of the dollar has had a serious impact on the price of commodities—particularly oil. Recent Federal Reserve policies, called
quantitative easement,
have appeared to critics as little more than a policy to print money and monetize debt. However that move is interpreted, the salient point to remember is that any loss in the currency’s petrodollar or fiat currency reserve status could be a devastating blow to America’s financial position and, therefore, greatly resisted by the United States.

Camp David:
Built as the Naval Support Facility Thurmont in 1935, this military camp in Catoctin Mountain Park in Frederick County, Maryland, was converted into a presidential retreat by President Franklin D. Roosevelt in 1942 and renamed Shangri-La. It was later named Camp David by President Eisenhower after his grandson, David.

Alleged to be one of the most secure facilities in the world, guarded by elite U.S. Marine units, it has often been the host site for historic meetings. With a helipad, state-of-the-art communications systems, eleven residential cabins within the compound, a main lodge, swimming pool, bowling alley, and scenic walkways, it has all the amenities of an upscale resort. It has hosted such world leaders as Nikita Khrushchev and Winston Churchill, and it was the site of the now-famous Camp David Accords in which Egyptian president Anwar Sadat and Israeli prime minister Menachem Begin met to arrange an Egyptian–Israeli peace.

Several key assumptions and concepts outlined in this chapter’s Camp David dialogue and CIA report are noteworthy:

CIA supply-and-demand scenario:
The CIA report, supposedly written in 2017 to summarize the Saudi oil crisis, represents the author’s projection of the future oil situation. It was developed after extensive research and represents a composite of estimates from various sources. Many believe it will be a critical decade in which the demand for oil exceeds the available supply.

From a supply-side perspective, most of new growth projected in oil supply is expected to come from either OPEC countries or what are generally categorized as “unidentified” or “undiscovered” sources. The latter is particularly disconcerting because it assumes the scope of new oil discoveries will somehow match future demand. With respect to OPEC, it begs the twofold question: Does OPEC have the reserves it claims to have? and if so, are they willing to invest the huge amount of capital needed to ramp up production when their revenue can grow by virtue of the ever-increasing price of oil?

With respect to demand, the demand growth rates projected—on a nominal or business-as-usual basis—suggest a per annum growth rate of 1 percent per year. OECD nations are projected to have a flat rate of growth with real growth in demand coming from emerging and developing nations. One need only look at the economic growth rates of China and India—with a third of the world’s population—to see what will happen as their standards of living rise and per capita consumption of oil increases. While the precise price point needed to curtail demand and act as a drag on the economy is unclear, pump prices of $4 or more per gallon have made at least marginal differences in American driving behaviors in the past. An aggregated oil expenditure exceeding 4 percent of GDP has also been correlated with downturns in the economy.

The CIA report suggests that all excess capacity was taken out of the system by year-end 2012 as a supply/demand equilibrium level of 87 to 88 MB/D was reached. Subsequent shortfalls were then shown to reach levels of -7.7 MB/D by 2015 and -11.7 MB/D by 2017. (Interestingly, the JOE-10 Report prepared by the military for military planners suggested the supply/demand equilibrium could even be reached by 2012 with a shortfall of as much as -10 MB/D by 2015.)

Access and affordability of oil:
The global oil markets will ultimately determine the price of oil. As supply shrinks, demand increases, and the cost of production rises, the price point will ultimately reach a level at which less-well-off consumers and nations can no longer buy or use oil in the quantities they would like. They will, in effect, be denied access to oil by virtue of its unaffordability. Access to oil will also be constrained by the whims of OPEC and whatever amount of oil they choose to produce. With control of over 80 percent of the world’s proven oil reserves, OPEC nations will hold all the cards. Because energy equals economic growth, a deficiency of oil, for whatever the reason, will impose a serious economic hardship on individuals and nations.

Strategic petroleum reserves (SPR):
Oil reserves are held by countries in many forms including inventories and private and public stocks. The SPR refers to the strategic reserve available to a nation for dire emergencies—such as a sudden cutoff of oil imports. The United States has a current SPR of about 725 million barrels. With daily imports of about 12 MB/D, the SPR would provide America with about a sixty-day reserve. China has embarked on a program to build an SPR aimed at a ninety-day reserve by 2020.

For purposes of the CIA report, I assumed the SPR reserves for China and the United States in 2017 would be 525 and 422 million barrels respectively. The United States had a huge head start on China, but I attribute the disparity to an assumption that China would stay the course in building their reserve while America would draw down its SPR to stabilize prices or to satisfy some political purpose. The call to use the SPR for nonstrategic purposes has been made several times in the past, but most presidents have resisted such cries. The importance of not using the SPR to meet a short-term expedient is evident throughout the book.

The price of a gallon of gas:
It is impossible to predict the pump price of gasoline without knowledge of the price per barrel of oil. The crude price per barrel will vary for a host of reasons, including the transactional value of the petrodollar. For purposes of this book, I assumed a baseline price of $3.89 per gallon in 2012—though it could be far higher based on 2011 prices—with increases of 7 percent thereafter in the per barrel price of crude oil for every million barrels of incremental shortages. I then established the per-gallon price for crude oil by dividing the cost per barrel by 42 gallons of gas—the standard contents of a barrel. With a raw price per gallon established, I added a 17 percent upcharge for refining, distribution, and marketing and another $0.184 and $0.217 per gallon for federal and state taxes respectively. The actual cost of gas would of course vary by state, octane levels, market conditions, and so forth.

Saudi oil production:
Saudi Arabia has been called the gas station of the world mainly because of its surplus oil production capacity and access to proven reserves—estimated to be over 20 percent of total global reserves—at marketable prices. Questions have been raised as to whether or not the Saudis have the reserves they claim to have (a concern oil markets have for OPEC nations in general because its members do not allow outside audits of their reserves) and whether or not they could pump what they claim they can. For purposes of the CIA report, an aggressive assumption was made that they could and would pump 12.9 MB/D by 2017.

Asymmetric warfare:
In comparison to
symmetric warfare,
where two powers have similar military power, resources, tactics, and strategies,
asymmetric warfare
describes a conflict in which two belligerents differ greatly in power, resources, and tactics. In such cases, unconventional means are used to offset the advantages of one adversary over the other. The means used are not always military, and operations may be carried out covertly or by a proxy force not necessarily identified with a host government. While not a new concept, it has been sharpened and refined—particularly in the Middle East—and significant efforts are now made to identify and respond to asymmetric threats throughout the world. In this book, the Saudi regime’s use of dirty bombs is a classic example of asymmetric warfare designed to prevent an invasion by a vastly superior allied force.