Showing posts with label power. Show all posts
Showing posts with label power. Show all posts

Wednesday, November 19, 2014

Breakfast with a Lord of War

By David Galland, Partner, Casey Research

For reasons that will become apparent as you read the following article, I was quite reluctant to write it.
Yet, in the end, I decided to do so for a couple of reasons.

The first is that it ties into Marin Katusa’s best selling new book, The Colder War, which I read cover to cover over two days and can recommend warmly and without hesitation. I know that Casey Research has been promoting the book aggressively (in my view, a bit too aggressively), but I exaggerate not at all when I tell you that the book sucked me in from the very beginning and kept me reading right to the end.

The second reason, however, is that I have a story to tell. It’s a true story and one, I believe, which needs to be told. It has to do with a breakfast I had four years ago with a Lord of War.

With that introduction, we begin.

Breakfast with a Lord of War

In late 2010, I was invited to a private breakfast meeting with an individual near the apex of the U.S. military’s strategic planning pyramid. Specifically, the individual we were to breakfast with sits at the side of the long serving head of the department in the Pentagon responsible for identifying and assessing potential threats to national security and devising long term strategies to counter those threats.

The ground rules for the discussion—that certain topics were off limits—were set right up front. Yet, as we warmed up to each other over the course of our meal, the conversation went into directions even I couldn’t have anticipated.

In an earlier mention of this meeting in a Casey Daily Dispatch, I steered clear of much of what was discussed because frankly, it made me nervous. With the passage of time and upon reflection that it was up to my breakfast companion, who spends long days cloaked in secrecy, to know what is allowed in daylight, I have decided to share the entire story.

During our discussion, there were four key revelations, each a bit scarier than the last.

Four Key Revelations


Once we had bonded a bit, the military officer, dressed in his civvies for the meeting, began opening up. As I didn’t record the discussion, the dialogue that follows can only be an approximation. That said, I assure you it is accurate in all the important aspects.

“Which country or countries most concern you?” I asked, not sure if I would get an answer. “China?”
“Well, I’m not going to say too much, but it’s not China. Our analysis tells us the country is too fractured to be a threat. Too many different ethnic and religious groups and competing political factions. So no, it’s not China. Russia, on the other hand…” He left it at that, though Russia would come up again in our conversation on several occasions.

As breakfast was served, the conversation meandered here and there before he volunteered, “There are a couple of things I can discuss that we are working on, one of which won’t surprise you, and one that will.”
“The first is precision guided weaponry.” Simply, the airplane and drone launched weaponry that is deployed so frequently today, four years after our breakfast conversation, that it now barely rates a back-page mention.

“The second,” he continued,” will surprise you. It’s nuclear armaments.”

“Really? I can’t imagine the US would ever consider using nuclear weapons again. Seriously?”

“Yes, there could be instances when using nukes might be advisable,” he answered. “For example, no one would argue that dropping atomic bombs on Japan had been a bad thing.” (I, for one, could have made that argument, but in the interest of harmony didn’t.)

“Even so, I can’t imagine a scenario that would warrant using nukes,” I persisted. “Are there any other countries doing the same sort of research?”

“Absolutely. For example, the Russians would love to drop a bomb that wiped out the people of Chechnya but left the infrastructure intact.”

“So, neutron bombs?”

“Yeah, stuff like that,” he added before turning back to his coffee.

“Okay, well,” I continued, “you at least have to admit that, unlike last century when hundreds of millions of people died directly or indirectly in world wars, pogroms, and so forth—most related to governments—the human race has evolved to the point where death on that scale is a thing of the past. Right?”

I kid you not in the slightest, but at this question the handsome, friendly countenance I had been sitting across from morphed as if literally a mask had been lifted away and was replaced with the emotionless face of a Lord of War.

“That would be a very poor assumption,” he answered coldly before the mask went back on.

I recall a number of thoughts and emotions coursing through my brain at his reply, most prevalently relief that I had moved with my family to La Estancia de Cafayate in a remote corner of Argentina. We didn’t move there to escape war, but after this conversation, I added that to my short list of reasons why the move had been a good idea.

Recapping the conversation later, my associate and I concurred that Russia was in the crosshairs and that if push came to shove, the US was fully prepared to use the new nuclear weapons being worked on.

Four Years Later


As I write, four years after that conversation, it’s worth revisiting just what has transpired.

First, as mentioned, the use of precision-guided weaponry has now firmly entered the vernacular of US warmaking. Point of fact: there are now more pilots being trained to fly drones than airplanes. And the technology has reached the point where there is literally no corner on earth where a strategic hit couldn’t be made. Even more concerning, the political and legal framework that previously caused hesitation before striking against citizens of other countries (outside of an active war zone) has largely been erased. Today Pakistan, tomorrow the world?

Second, instead of winding back the US nuclear program—a firm plank in President Obama’s campaign platform—the Nobel Prize winner and his team have indeed been ramping up and modernizing the US nuclear arsenal. The following is an excerpt from a September 21, 2014 article in the New York Times, titled “U.S. Ramping Up Major Renewal in Nuclear Arms”…,,

KANSAS CITY, Mo. — A sprawling new plant here in a former soybean field makes the mechanical guts of America’s atomic warheads. Bigger than the Pentagon, full of futuristic gear and thousands of workers, the plant, dedicated last month, modernizes the aging weapons that the United States can fire from missiles, bombers and submarines.

It is part of a nationwide wave of atomic revitalization that includes plans for a new generation of weapon carriers. A recent federal study put the collective price tag, over the next three decades, at up to a trillion dollars.

Third, the events unfolding in Ukraine, where the US was caught red handed engineering the regime change that destabilized the country and forced Russia to act, show a clear intent to set the world against Putin’s Russia and in time, neutralize Russia as a strategic threat.

So the only revelation from my breakfast four years ago remaining to be confirmed is for the next big war to envelope the world. Per the events in Ukraine, the foundations of that war have likely already been set. Before I get to that, however, a quick but relevant detour is required.

The Nature of Complex Systems


Last week the semiannual Owner’s & Guests event took place here at La Estancia de Cafayate. As part of the weeklong gathering, a conference was held featuring residents speaking on topics they are experts on.
Among those residents is a nuclear-energy engineer who spoke on the fragility of the US power grid, the most complex energy transmission system in the world.
He went into great detail about the “defense-in-depth” controls, backups, and overrides built into the system to ensure the grid won’t—in fact, can’t—fail. Yet periodically, it still does.

How? First and foremost, the engineer explained, there is a fundamental principle that holds that the more complex a system is, the more likely it is to fail. As a consequence, despite thousands of very bright people armed with massive budgets and a clear mandate to keep the transmission lines humming, there is essentially nothing they can do to actually prevent some unforeseen, and unforeseeable, event from taking the whole complex system down.

Case in point: in 2003 one of the largest power outages in history occurred. 508 large power generators were knocked out, leaving 55 million people in North America without power for upward of 24 hours. The cause? A software defect in an alarm system in an Ohio control center.

I mention this in the context of this article because, as complex as the U.S. power grid is, it is nothing compared to the complexities involved with long-term military strategic planning. This complexity is the result of many factors, including:
  • The challenges of identifying potential adversaries and threats many years, even a decade or more, into the future.
  • New and evolving technologies. It is a truism that the military is always fighting the last war: by the time the military machine spins up to build and deploy a new technology, it is often already obsolete.
  • The entrenched bureaucracies, headed by mere mortals with strong biases. Today’s friend is tomorrow’s enemy and vice versa.
  • The unsteady influences of a political class always quick to react with policy shifts to the latest dire news or purported outrage.
  • The media, a constant source of hysteria making headlines masquerading as news. And let’s not overlook the media’s role as active agents of the entrenched bureaucratic interests. In one now largely forgotten case, Operation Mockingbird, the CIA actually infiltrated the major US media outlets, specifically to influence public opinion.

    All you need to do to understand the bureaucratic agenda is to take a casual glance at the “news” about current events such as those transpiring in the Ukraine.
  • And, most important, human nature. We humans are the ultimate complex system, prone to a literally infinite number of strong opinions, exaggerated fears, mental illnesses, passions, vices, self-destructive tendencies, and stupidity on a biblical scale.
The point is that the average person assumes the powers-that-be actually know what they are doing and would never lead us into disaster, but quoting my breakfast companion, that would be a very poor assumption.

Simply, while mass war on the level of the wholesale slaughter commonplace in the last century is unimaginable to most in the modern context, it is never more than the equivalent of a faulty alarm system away from occurring.

Those history buffs among you will confirm that up until about a week before World War I began, virtually no one in the public, the press, the political class, or even the military had any idea the shooting was about to start. And 99.9% of the people then living had no idea the war was about to begin until after the first shot was fired.

Back to the Present


It is a rare moment in one’s life when the bureaucratic curtain falls away long enough to reveal something approximating The Truth. In my opinion, that’s what I observed over breakfast four years ago. That, right or wrong, the proactive military strategy of the US had been turned toward Russia.
Knowing that and no more, one can only guess what actual measures have been planned and set into motion to defang the Russian bear.

Based on the evidence, however, the events in Ukraine appear to be a bold chess move on the bigger board… and to be fair, a pretty damn effective move at that. The problem for the US and its allies is that on the other side of the table is one Vladimir Putin, self made man, black belt judo master, and former KGB spy master.

And that’s just scratching the surface of this complicated and determined individual. One thing is for sure: if you had to pick your adversary in a global geopolitical contest, you’d probably pick him dead last.
Which brings me to a quick mention of The Colder War, Marin’s book, which was released yesterday.
I mentioned earlier that the book had sucked me in and kept me in pretty much straight through until I finished. One reason is that while you can tell Marin has a great deal of respect for Putin’s capabilities and strategic thinking, he doesn’t shy away from revealing the judo master’s dark side. As you will read (and find quoting to your friends, as I have), it is a very dark side.

But the story is so much bigger than that, and Marin does a very good job of explaining the increasingly hostile competition between the US and Russia and the seismic economic consequences that will affect us all as the “Colder War” heats up.

Before signing off for now, I want to add that it is not Marin’s contention that the Colder War will devolve into an actual shooting war. In my view, however, due to the complexities discussed above, you can’t dismiss a military confrontation, even one involving nukes. Every complex system ultimately fails, and the more the US pushes in on Putin’s Russia, the more likely such a failure is to occur.

I recommend Marin’s book, The Colder War; here is the link.

We’ll leave the lights on down here in Cafayate.

Casey Research partner David Galland lives in La Estancia de Cafayate (www.LaEst.com).
The article Breakfast with a Lord of War was originally published at casey research.com.


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Thursday, July 25, 2013

EIA: By 2040 world energy consumption will rise by 56%

From Robin Dupre at Rigzone.com......

World energy consumption will rise 56 percent in the next three decades, driven by growth in the developing world, noted The Energy Information Administration (EIA) in its International Energy Outlook 2013 report Thursday. China and India’s rising prosperity is a major factor in the outlook for global energy demand, noted EIA Administrator Adam Sieminski in a press conference call.

“These two countries combined account for half the world’s total increase in energy use through 2040. This will have a profound effect on the development of world energy markets.” Energy demand will increase to 820 quadrillion British thermal units (Btu) in 2040, up from 524 quadrillion Btus. By 2040, China’s energy use will double the United States’, according to EIA estimates.

One quadrillion Btu is equal to 172 million barrels of crude oil.

Additionally, renewable energy and nuclear power are the fastest growing source of energy consumption with each increasing by 2.5 percent per year. But fossil fuels, including oil, natural gas and coal will continue to supply almost 80 percent of the world’s energy through 2040, noted Sieminski.

Natural gas is the fastest growing fossil fuel in EIA’s outlook, and will continue to dominate the landscape, increasing by 1.7 percent per year. Swelling supplies of tight gas, shale gas and coalbed methane support growth in projected worldwide gas use with non OECD Europe/Eurasia, Middle East and the United States accounting for the largest increases in natural gas production.

The explosion in supply from unconventional sources will underpin growth of natural gas demand, while high oil prices will encourage countries to focus on liquid fuels “when feasible”, the report stated.

The EIA’s July short term energy outlook projected benchmark Brent crude to average $105 a barrel in 2013 and $100 in 2014.The report projects that prices will increase long term with the world oil price reaching $106 a barrel in 2020 and $163 in 2040 in the Reference case.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Monday, May 13, 2013

America’s Addiction to Foreign Uranium

America’s Addiction to Foreign Uranium

Posted courtesy of our trading partners at Casey Research.........

What most Americans don't realize is that dependence on foreign oil isn't the main obstacle to US energy autonomy. If you think America's energy supply issues begin and end with the Middle East, think again. One of the most critical sources of foreign energy is due to dry up this year, and the results could mean spiking electricity prices across the country.


In 2011, the US used 4,128 billion kilowatt hours (kWh) of electricity. Nuclear power provided 790.2 billion kWh, or 19% of the total electrical output in the US. Few people know that one in five US households is powered by nuclear energy, and that the price of that nuclear power has been artificially stabilized. Unfortunately for us, the vast majority of the fuel used for powering our homes must be imported.
In the chart below, you see where most of our uranium comes from:
The overwhelming majority of that Russian uranium comes from a 20-year-old agreement called "Megatons to Megawatts" that allows weapons-grade, highly enriched uranium (HEU) to be converted to reactor-grade, low enriched uranium (LEU).

By December 2012, "Megatons to Megawatts" had produced 13,603 metric tons of LEU for US consumption and provided the fuel for nearly half of the US electricity generated from nuclear power.
In December 2013, that agreement expires, and Russia will be free to put its uranium out on the open market and demand higher prices. With 17 nuclear reactors in China and 20 in India – not to mention Japan, France, Germany, and others all vying for nuclear fuel – competitive bids are poised to drive prices higher, and early investors stand to make spectacular gains.

If this information is news to you, you are not alone. While the mainstream media focus on the US's "Middle Eastern energy dependence," the real story remains unnoticed. That's why Casey Research invited the field's top experts – including former US Secretary of Energy Spencer Abraham and Chairman Emeritus of the UK Atomic Energy Authority Lady Barbara Judge – for a frank discussion of what we think is America's greatest energy challenge.

Join us on Tuesday, May 21 at 2 p.m. EDT for the premiere of The Myth of American Energy Independence: Is Nuclear the Ultimate Contrarian Investment? to learn how the end of "Megatons to "Megawatts" will affect the US energy sector and how you can position yourself for outsized profits. Attendance is free – click here to register.



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Tuesday, December 15, 2009

Exxon and Nuclear Energy?

A YouTube post early on Monday explains why Exxon Mobil's "Outlook for Energy: A View to 2030" may have inadvertently revealed a future plan to get into the nuclear power business.

Check out the video to see if you're ready to buy into this conspiracy theory.



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