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Generals Warn That US Security Is at Stake In Race for New Energy Superiority

June 7, 2017
The quest for cleaner and more efficient energy systems is already forging new trade ties and, consequently, political relationships, according to a report by former high-ranking military officials.

Failure to adopt new energy technologies will hurt America’s chances to help slow climate change. It may also jeopardize U.S. global power and security.

“If we don’t want to necessarily repeat a lot of the tough lessons of the last 40 to 50 years,” said retired Marine Corps Lieutenant General Richard Zilmer. “Better to plan now and get ahead of that—and control the process—than react to it.”

The quest for cleaner and more efficient energy systems is already forging new trade ties and, consequently, political relationships, according to a report by Zilmer and 14 other former high-ranking military officials. Ultimately, those ties will bring “dramatic changes in global spheres of influence,” they wrote. China and European Union members are steering their economies into “the vanguard of manufacturing” and commerce, with the U.S. showing little competitive vision.

“Ceding U.S. leadership here has inherent national security risk,” the authors, part of the CNA Military Advisory Board, warn, “including loss of global influence and diplomatic leverage, as well as forgone economic opportunities.” 

Dismissing multiple decades of research into manmade climate change has been a common theme among Republicans who control Congress and now the White House. Dismissing market forces that push nations and industries to clean up while becoming more energy efficient, however, is another thing. The CNA report doesn’t mention “climate change” or “global warming,” but it makes clear that ignoring these market signals carries ominous implications for U.S. economic and national security.  

The report, called Advanced Energy and U.S. National Security [pdf], is the seventh analysis put out in 10 years by the nonprofit research group’s advisory board. Initiated in 2015, the study was led by 14 U.S. generals and admirals and a retired British Royal Navy rear admiral.

By “advanced energy,” the authors mean technologies that make energy more accessible, cleaner, and safer—namely renewables, batteries, nuclear, hydropower, and efficiency. Coined in 2011 with the launch of the clean-energy U.S. business network Advanced Energy Economy, the phrase has a euphemistic quality that shields the analysis from sounding like a clean-energy scouting report. 

Population growth and industrialization will drive energy demand from all sources through the middle of the century, the report concludes. But new energy is likely to bite increasingly into oil needs. Particularly in the U.S. and other nations where electric vehicles may eat up market share. This falling demand can be expected to change the relationships between today’s users and producers across the globe. Europe is already finding ways to reduce dependence on Russian oil and gas, as Russia is trying to find new buyers in China and other parts of Asia.

“[A]dvanced energy will weaken traditional oil exporters’ (in particular Russia's) potential ability to hold dependent nations hostage to petroleum” by using energy exports “as a tool of coercion,” they write. 

The Russian dynamic shows just how these economic connections have intrinsic security implications, none of which the U.S. can exploit if it sits on the sidelines. In effect, the takeaway is you can’t win if you don’t play.

Jockeying for Power

The report is a 76-page assessment of how to win or lose geopolitical power resulting from transformation in the energy sector. Early movers—China, Russia, Japan, the EU, and some Middle Eastern countries—have set national policies to position themselves for these changes. “The U.S. has not taken a similar strategic approach,” the report states. 

Speed rather than maturity characterizes the new energy economy. Surprising to some of the authors as they conducted their research was the extent to which the world will continue to rely on fossil fuels. Their projections for clean-energy growth come up short of projected energy demand—fossil-fuels will have to make up the difference. 

“We started off collectively with the premise that advanced energy is going to be this wonderful solve-all,” said Leo Goff, who manages the CNA board and was the principal author. “But as we started to peel back the onion, it became strikingly clear that we’re not quite there yet.”

Both policy and the absence of policy are akin to “picking winners and losers.”

The conservative administration in Washington has looked at the patchwork of energy and environmental policies implemented by President Barack Obama and found them to be a Democratic over-reach of executive authority. President Donald Trump, with the encouragement of Republicans in Congress, has reversed or is trying to cut funding for new-energy efforts, particularly at the Energy Department, Environmental Protection Agency, National Atmospheric and Oceanic Administration, and NASA.

Together, these moves could be seen as a kind of U.S. energy strategy—one diametrically opposed to what the CNA report recommends:

“The U.S. government should develop a comprehensive national energy strategy that promotes energy independence and U.S. engagement and leadership in the advanced energy future.”

The report’s top-line conclusion—energy transformation is creating new winners and losers—also reawakens a policy debate that was put to rest at least 35 years ago. 

Very few people in Washington today talk about a national industrial policy. The phrase itself hasn’t been heard much since Ronald Reagan vanquished the Democrats in 1984. The economic recovery that rolled in led people to forget about the energy crises of the 1970s and why they thought there was a need for a national-anything policy. 

But here’s the thing: The irony to the end of “industrial policy” debates is that one of its progeny remains deeply embedded in modern political discourse.

Back in Reagan’s first term, opponents to broad federal involvement in the economy warned that the government shouldn’t “pick winners and losers.” George H.W. Bush may have been the first president to use it, in a February 1990 letter to Congress. It was deployed on Capitol Hill during debates about the 2008 financial crisis and, in 2011, the demise of Solyndra, a solar-energy company that defaulted on $535 million in federal loan guarantees as part of an otherwise profitable Department of Energy program.

EPA administrator Scott Pruitt made headlines Sunday when he said the EPA’s propensity to pick winners and losers in the energy sector was a mistake. Until the past few years, conservative politicians could invoke the idea that government shouldn’t pick winners or losers as a pithy defense of the status quo.

What the new CNA study lays bare is that there is a new status quo, in which there are, and will continue to be, winners and losers chosen by markets and amplified by geopolitics. In the new energy revolution, both policy and the absence of policy are akin to “picking winners and losers.” The generals warn that America is setting up on the wrong side of that coin.

by Eric Roston

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