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National Security Consequences of U.S. Oil Dependency, a report by the Council on Foreign Relations Independent Task Force on Energy, concludes that the “lack of sustained attention to energy issues is undercutting U.S. foreign policy and U.S. national security.” The report goes on to examine how America’s dependence on imported oil—which currently comprises 60 percent of consumption— increasingly puts it into competition with other energy importers, notably the rapidly growing economies of China and India.

The task force was chaired jointly by James R. Schlesinger, a former secretary of defense and secretary of energy, and John Deutch, former director of Central Intelligence and undersecretary of energy, and drew from industry, academia, government, and NGOs. PESD Director David Victor directed the task force and FSI senior fellow by courtesy James Sweeney, director of Stanford’s new Precourt Institute for Energy Efficiency, served as a member.

The task force unanimously concluded that incentives are needed to slow and eventually reverse the growth in petroleum consumption, particularly in the transportation sector, but was unable to agree on which specific incentives—such as gasoline tax-funded energy technology R&D, more stringent and broadly applied Corporate Average Fuel Efficiency (CAFE) standards, and a cap-and-trade permit system for gasoline—would most effectively achieve this result.

The task force report included additional recommendations regarding the supply and consumption of energy including the following:

  • Encourage oil supply from all sources
  • Promote better management and governance of oil revenues
  • Remove the protectionist tariff on imported ethanol
  • Increase the efficiency of oil and gas consumption in the United States and elsewhere
  • Switch from oil-derived products to alternatives such as biofuels
  • Make the oil and gas infrastructure more efficient and secure
  • Increase investment in energy technology R&D
  • Promote the proper functioning and efficiency of energy markets
  • Revitalize international institutions such as the International Energy Agency (IEA)

The report stressed that the U.S. government must reorganize to integrate energy issues with foreign policy to address the threats to national security created by energy dependence. The task force offered a number of recommendations to better promote energy issues in foreign policy deliberations as follows:

  • Establish an energy security directorate at the National Security Council to lead an interagency process to influence the discussion and thinking of the NSC principals
  • Fully inform and engage the secretary of energy on all foreign policy matters with an important energy aspect
  • Include energy security issues in the terms of reference of all planning studies at the NSC, Defense, State, and the intelligence community

The task force restricted its inquiry to the challenges of managing U.S. and global dependence on imported oil and gas and did not address other important energy security issues such as nuclear proliferation and global warming.

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David G. Victor
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Timely reunion panel hosted by Stanford president John Hennessy, moderated by Stanford alum Ted Koppel, and featuring Bill Perry and George Shultz.

The final decade of the 20th century was a time of great optimism. The fall of the Iron Curtain ushered in a new era of democracy and freedom for millions. The expansion of the European Union promised to open borders to trade and opportunity. The technology revolutions of the 1990s promised to bridge cultural gaps and unite diverse people.

Yet, in the first decade of the 21st century, this optimism has faded in the face of myriad threats: the menace of terrorism and nuclear proliferation, the danger of virulent pandemics, the global dependence on oil from volatile regions, and the far-reaching and often unsettling implications of an interconnected planet.

In such uneasy times, is it safe to feel safe? What is the way forward in the midst of these challenges? What will it take? What is Stanford doing to help address these issues?

Panelists

John L. Hennessy, Stanford President and Bing Presidential Professor

Jean-Pierre Garnier, MBA '74, CEO, GlaxoSmithKline

The Hon. Anthony M. Kennedy, '58, Supreme Court Justice

William J. Perry, '49, MS '50, former Secretary of Defense, Berberian Professor in the School of Engineering

Dr. Lucy Shapiro, Ludwig Professor of developmental biology and cancer researcher

George P. Shultz, former Secretary of State, Ford Distinguished Fellow, Hoover Institution

Jerry Yang, '90, MS '90, co-founder, Yahoo!

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The seminar is expected to provide a foundation for a new study examining the role of LNG imports for Brazilian natural gas markets centered at the Instituto Economia (IE) at the Federal University of Rio de Janeiro (UFRJ). Meeting attendees included experts from UFRJ, Brazilian state oil and gas company Petrobras, and experts on North American and European natural gas markets. The meeting discussed the operation of the key Atlantic Basin gas markets that will drive the development of future LNG trade, considering the potential role of Brazil in the future market for LNG.

Rio de Janeiro, Brazil

Encina Hall E419-B
Stanford University
Stanford, CA 94305-6055

(650) 724-1714 (650) 724-1717
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Mark H. Hayes was recently a Research Fellow with the Program on Energy and Sustainable Development (PESD). He lead PESD's research on global natural gas markets, including studies of the growing trade in liquefied natural gas (LNG) and the future for gas demand growth in China.

Dr. Hayes has developed models to analyze the impact of growing LNG imports on U.S. and European gas markets with special attention to seasonality and the opportunity for arbitrage using LNG ships and regasification capacity. From 2002 to 2005, Dr. Hayes managed the Geopolitics of Natural Gas Project, a study of critical political and financial factors affecting investment in cross-border gas trade projects. The study culminated in an edited book volume published by Cambridge University Press.

Prior to coming to Stanford, Mark worked as a financial analyst at Morgan Stanley in New York City. He was a member of the Global Power and Utilities Group, where he was involved in mergers and acquisitions, financing and corporate restructuring.

In 2006 he completed his Ph.D. in the Interdisciplinary Program on Environment and Resources at Stanford University. After completing his Ph.D. at Stanford, Mark has taken a position at RREEF Infrastructure Investments, San Francisco, CA. Mark also has a B.A. in Geology from Colgate University and an M.A. in International Policy Studies from Stanford. From 1999 to 2002 he served on the Board of Trustees of Colgate University.

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A major exporter of oil and natural gas, Central Asia occupies a prominent place in the global economy. While the region has great potential for wealth, most Central Asians remain among the poorest people in the world. This unit explores the extraordinary range of challenges facing Central Asia and encourages students to reflect on what might be done to solve them.
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North Korea's nuclear facility at Yongbyon, which had been "frozen" under international inspection since 1994, was reactivated this January for the production of plutonium. Just last week the North Koreans announced that they intended to use the resulting plutonium to make nuclear weapons, which only confirmed what we always believed.

If it keeps on its present course, North Korea will probably have six to eight nuclear weapons by the end of the year, will possibly have conducted a nuclear test and may have begun deployment of some of these weapons, targeted against Japan and South Korea. By next year, it could be in serial production of nuclear weapons, building perhaps five to 10 per year.

This is a nightmare scenario, but it is a reasonable extrapolation from what we know and from what the North Koreans have announced. The administration to this point has refused to negotiate with North Korea, instead calling on the countries in the region to deal with the problem. The strategy underlying this approach is not clear, but the consequences are all too clear. It has allowed the North in the past six months to move from canned fuel rods to plutonium and, in a few more months, to nuclear weapons. And the consequences could extend well beyond the region. Given North Korea's desperate economic condition, we should expect it to sell some of the products of its nuclear program, just as it did with its missile program. If that happens, a nuclear bomb could end up in an American city. The administration has suggested that it would interdict such transfers. But a nuclear bomb can be made with a sphere of plutonium the size of a soccer ball. It is wishful thinking to believe we could prevent a package that size from being smuggled out of North Korea.

How did we get into this mess?

For several decades North Korea has aspired to have nuclear weapons. During that period successive administrations have, through a combination of threats and inducements, curtailed their program but never their aspirations. In the late 1980s the first Bush administration saw the potential danger and persuaded the Soviet Union to pressure North Korea to join the nuclear Non-Proliferation Treaty and subject its nuclear facilities to international inspection. The North Koreans complied, but they stalled long enough to give them time to make and store enough plutonium for one or two nuclear bombs before the inspectors arrived.

Shortly after the Clinton administration took office, they tried again. As spent fuel was being taken from the nuclear reactor at Yongbyon, the North Koreans ejected the inspectors and began preparations for reprocessing. This would have given them enough plutonium for five or six additional nuclear bombs. President Clinton considered this sufficiently dangerous that he declared reprocessing a "red line." In response, I had the Joint Chiefs prepare a plan to use military force if necessary to prevent this outcome. When Kim Il Sung offered to negotiate the issue, Clinton responded that he would negotiate only if the North Koreans froze all activity at Yongbyon during the negotiation. In the end, military force was not necessary. The agreement that ended this crisis was far from perfect, but in its absence North Korea could today have 50 to 100 nuclear weapons.

But the North Koreans never gave up their desire for nuclear weapons. Even as they complied with the freeze at Yongbyon, they covertly started a second nuclear program at a different location. American intelligence discovered signs of this program and last fall confronted the North Koreans, who did not dispute the charge. The administration responded by stopping fuel oil deliveries called for under the old agreement, to which the North Koreans responded by reopening Yongbyon and racing to get nuclear weapons.

There are three basic approaches for dealing with this dangerous situation. The administration can continue to refuse to negotiate, "outsourcing" this problem to the concerned regional powers. This approach appears to be based on the hope that the regional powers will be able to prevail on North Korea to stop its nuclear program. But hope is not a strategy. If their hopes are not realized and North Korea continues on its present course, it will soon have a significant nuclear arsenal. And while the regional powers could play a role in resolving this crisis, they are unlikely to succeed in the absence of a clear American negotiating strategy in which they can participate.

A second alternative is to put economic pressure on North Korea and hope for "regime change." Or the United States could take military action to bring this change about. But while the regime may one day collapse, with or without economic pressure, there is no reason to believe that it will happen in time - the nuclear threat is imminent. Taking military action to force a timely regime change could result in a conflict comparable to the first Korean War, with casualties that would shock the world.

The third alternative is to undertake serious negotiations with the North Koreans to determine if there is a way to stop their nuclear program short of war. The administration is clearly reluctant to negotiate with the North Koreans, calling them loathsome and cheaters. It is easy to be sympathetic with this position; indeed, the only reason for considering negotiation with North Korea is that the other alternatives are so terrible. The administration, seeing the danger, has said that it "would not tolerate" a North Korean nuclear arsenal. The North Koreans responded to this declaration by accelerating their program. The conflict between our views and their actions is a formula for drifting into war. It is imperative that we stop that drift, and the only clear way of doing that is by negotiating.

Any negotiations with the North Koreans are likely to be difficult and protracted, so they should be predicated on a prior agreement that North Korea will freeze its nuclear activities during the negotiations. For negotiations to have a chance of success, they would need to have a positive dimension, making it clear to North Korea that forgoing nuclear weapons could lead it to a safe and positive future. But they would also need a negative or coercive dimension, both to induce North Korea to take the right path and to give us and our allies more credible options if diplomacy should fail. President Kennedy said it best: "We should never negotiate from fear, but we should never fear to negotiate."

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Christine Scheiber is the Microsoft Research Scholar on Corruption on the Rule of Law at the Center on Democracy, Development and the Rule of Law (CDDRL). Her current research examines corruption in the extractive industries (in particular hydrocarbons and diamonds) and how international anti-money laundering instruments can help to prevent and combat political corruption and further the restitution of ill-gotten funds. She received her PhD from the London School of Economics. Her dissertation advances a functionalist theory of the design of international institutions with a focus on international institutions that deal with illicit flows of money, small arms, narcotics and conflict diamonds. She pursued her undergraduate studies in Switzerland and at the Institut d'Etudes Politiques (Sciences Po), Paris, France.

Encina Basement Conference Room

Christine Scheiber Speaker
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The United Nations Secretariat--the main part of the UN bureaucracy directly under the Secretary-General--has arguably changed or been challenged more than any other part of the UN system in recent years, with more and more mandates and rising expectations. Though much attention has been given to the reform of the Security Council, and though Washington has made UN 'management reform' a core pillar of its UN policy since the Oil-for-Food scandal, the UN Secretariat has nevertheless proved singularly impervious to even the common sense suggestions for improvement. In many ways, there is a greater gap today than at any time in the past between what the Secretariat does, what it's meant to do, and the capacity it has. Why has improvement been so difficult and what have been the recurrent mistakes of UN reform efforts? With the election of a new Secretary-General due in late 2006, can we think about the UN bureaucracy in a different and more practical way?

Thant Myint-U is a visiting senior fellow at the International Peace Academy. He is also a senior advisor to the Conflict Prevention and Peace Forum at the Social Science Research Council and a Fellow of the Cambridge University Centre for History and Economics.

From 2000-2006 he worked in the United Nations Secretariat, first for the Office for the Coordination of Humanitarian Affairs (OCHA) and then for the Department of Political Affairs (DPA). From 2004-5 he was Chief of DPA's Policy Planning Unit of the Department of Political and in 2005-6 he was a Senior Political Officer in the Executive Office of the Secretary-General. In 2004 he was also a member of the Secretariat of the Secretary-General's High Level Panel on Threats, Challenges and Change.

Thant Myint-U has also served on three United Nations peacekeeping operations, with UNTAC in Cambodia in 1992-3 and with UNPROFOR and UNMIBH in the former Yugoslavia from 1994-6. In 1994 he was the UN's senior spokesman in Sarajavo.

From 1994-1999 Thant Myint-U was a fellow of Trinity College Cambridge, where he researched and taught Asian and British imperial history. He received his bachelor's degree from Harvard University in 1988, his master's degree in international relations from the Johns Hopkins School of Advanced International Studies in 1992 and his PhD in history from Cambridge University in 1996.

He is the author of several published and broadcast works, including two books: The Making of Modern Burma (Cambridge University Press, 2000) and The River of Lost Footsteps: Remembering Burma's Past (Farrar, Strauss and Giroux, 2006 forthcoming).

Reuben W. Hills Conference Room

Thant Myint-U Senior Visiting Fellow Speaker International Peace Academy
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Christopher Hitchens is a columnist for Vanity Fair. His most recent book is Thomas Jefferson: Author of America. His most recent collection of essays is titled Love, Poverty, and War. Mr. Hitchens, longtime contributor to The Nation, wrote a wide-ranging, biweekly column for the magazine from 1982 to 2002. With trademark savage wit, he flattens hypocrisy inside the Beltway and around the world, laying bare the "permanent government" of entrenched powers and interests. Mr. Hitchens has been Washington editor of Harper's and book critic for Newsday, and regularly contributes to such publications as Granta, The London Review of Books, Vogue, New Left Review, Dissent and the Times Literary Supplement.

Born in 1949 in Portsmouth, England, Mr. Hitchens received a degree in philosophy, politics and economics from Balliol College, Oxford, in 1970.

 

Event Synopsis:

In this presentation Mr. Hitchens presents a "balance sheet" from point of view of those, like him, who advocated regime change in Iraq and hoped that it would have positive effects in Saudi Arabia and Iran as well. He presents areas where progress has not materialized, such as attempts to revive Iraq's badly damaged oil industry. However, he points out political progress made by Kurds in the north of Iraq, and growing pressure on the regimes of Bashar al-Assad in Syria and Muammar Gaddafi in Libya. Attempts to "dry up the swamp" where terrorism breeds have not eliminated but have isolated Islamic fundamentalist terrorism. He urges the international community to "make friends" with moderate forces in Muslim countries which reject terrorism, and to pursue policies that continue to isolate extremist groups.

 A discussion period following the talk raised such questions as: Is there a secular democratic alternative to Hamas? In light of difficulties encountered in establishing democratic governance in Iraq, shouldn't there be a reassessment of the belief system that led to the Iraqi operation? What evidence can be found that Iraq was on the verge of collapse prior to the recent military intervention? How do the happenings in the Middle East translate into a policy regarding North Korea, which is vocal about acquiring weapons of mass destruction? With Saddam Hussein gone, can Iraq remain one country? Is there a risk that intervention in places like Iraq has a galvanizing effect on other enemy groups?

Reuben W. Hills Conference Room

Christopher Hitchens Author Speaker
Seminars
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