WPR's The New Rules: In Tough Times, America's 'Dirty Harry' Streak Re-Emerges

President Barack Obama has presented himself as the ender of wars. Moreover, where the preceding administration went heavy with its military power, the Obama administration goes laparoscopically light. And as if to culminate a quarter-century trend of U.S. military interventions that have all somehow devolved into manhunts of some sort, America now simply skips the intervention and gets straight to hunting down and killing bad guys. We stand our ground, as it were, on a global scale. Give us the wrong gesture, look, attitude or perceived intention, and wham! One of ours might kill one of yours -- in a heartbeat. You just never know.

Read the entire column at World Politics Review.

Wikistrat post @ CNN-GPS: Predicting Iraq's future

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.

The U.S. invasion of Iraq began 9 years ago this week, triggering a conflict that cost the U.S. approximately 4,500 lives and a trillion dollars of taxpayers’ money. In honor of that anniversary, Wikistrat’s an alytic “crowd” debated: a) what America ultimately accomplished in Iraq, and b) where Iraq is likely headed in the years ahead. These are our six primary judgments.

Read the entire post at CNN's GPS blog.

Nice analysis of Turkey v. Iran

Solid opening:

The Arab Spring has heightened the ideological tension between Ankara and Tehran, and Turkey's model seems to be winning. Last spring, Iran often claimed that the Arab revolutions were akin to the Iranian one decades before and would usher in similar governments. Yet in Tunisia and Egypt, for the first time, leading figures in mainstream Islamist parties have won elections by explicitly appealing to the "the Turkish model" rather than to an Iranian-style theocracy. What's more, in December 2011, the Palestinian movement Hamas salted the wound when a spokesman announced the organization's shift toward "a policy of nonviolent resistance," which reflected its decision to distance itself from Syria and Iran and to move closer to Egypt, Turkey, and Qatar.

The clash between Turkey and Iran has been more than just rhetorical. Tehran has been Syrian President Bashar al-Assad's biggest supporter, whereas Ankara has come to condemn the regime's "barbarism" and put its weight behind the opposition, hosting the Syrian National Council and the Free Syrian Army, the rebel government and army in exile. In Iraq, Iran is a patron of the Shias; Turkey is, at least in the eyes of many in the Middle East, the political and economic benefactor of the Sunnis and the Kurds. And the two countries have had tensions over the missile shield that NATO deployed in Turkey in September 2011. The Turkish government insists that the missile shield was not developed as a protection against Iran. Nevertheless, in December, an Iranian political official warned that his country would attack Turkey if the United States or Israel attacked Iran.

The rest can be found at Foreign Affairs.

The geo-pol argument on Russian-Iranian bond

Nifty oped in WSJ Monday on Russia's "stake in Syria and Iran" by Melik Kaylan, a "writer in New York."

Usual case made on the old Sov-era naval base in Syria (snore), but more vigorous one made on Iran being sort of geo-strategic southern plug that keeps Russian influence substantial in the Central Asian republics - as in, lose Iran and the CA Reps "escape" with all their oil and gas ("southern bottleneck"), thus loosening Russia's energy grip on Europe, etc.:

Why is Iran so central to Mr. Putin's global pretensions? Take a look at the Caspian Sea are map and the strategic equations come into relief. Iran acts as a southern bottleneck to the geography of Central Asia. It could offer the West access to the region's resources that would bypass Russia. If Iran reverted to pro-Western alignment, the huge reserves of oil and gas landlocked in Kazakhstan and Turkmenistan and the like could flow directly out to the world without a veto from Moscow . . .

At stake here is not merely the liberation of a vast landmass from the Kremlin's yoke. The damage to Russian leverage would amount to a seismic shift in the global balance of power equal to the collapse of the Warsaw Pact.

Hmm.  Had me going right up to that bit, but the argument is certainly compelling enough when you see just how much the emerging reality and future prospect of North America's energy export boom is already redrawing certain global energy market landscapes.

There is no such thing as "Asian values," just pre-development ones

Really cool column by Patti Waldmeir on Asia (despite the weird lack of noun-verb agreement).  She is FT's Shanghai bureau chief.

Gist (well captured in title): "China's young workforce warm (sic) to west's work-life balance." [Online version of title cuts "workforce," so agreement works there.  Picky me, I know.]

Starts with recollection of asking founder of BYD battery/carmaker what he did in his free time.  He scoffed at the notion that such a thing existed, and then lectured her on why China would surpass the West because its people had no such conception.

True for the "rise"-initiating generation, but not true to the kids who follow:

But that was three years ago, and three years is a long time in China. Since then, the younger generation of Chinese workers have (sic) begun to discover the joys of sloth. Leisure - which has had a bad rap on the mainland - is making a comeback.

Why? Overwork, plus increasingly long commutes.

Upshot:  according to the head of GM in China, the post-80s generation is increasingly into the the whole life-work balance, creating all manner of HR challenges (none of them new to GM, please).

A headhunter says more and more of his applicants want to work at places that respect the weekend: "These overseas trends are coming into China now."

Of course, if you're trying to build up domestic consumption, you need to encourage this mindset.  Plus, in an economy that seeks to prioritize innovation, all work and no play make Jin a dull boy.

But the larger point, just explored in a great Master Narrative proposed by a Wikistrat analyst in our ongoing "China Hits the Great Wall" simulation, is that China may well confound us by getting to the point of wealth and then disappointing all the "realists" out there who imagine the country's only path to be maximizing "national power" (whatever that is). Especially when you factor in the rapid demographic aging, we are more likely to get a China that goes straight to a Nordic socialist-heavy, more admirable lifestyle package than mindlessly replicating the Kaiserian Germany push toward great-power war (crazy talk, I know, for a pol-mil analyst who wants to be taken "seriously" by Washington).

But there you have it: far faster than it appeared in Japan, we see the work-life balance monster rear its relaxed head.

WPR's The New Rules: Make China the Face of the World Bank

When Robert Zoellick recently announced that he won’t seek a second term as president of the World Bank, representatives of numerous emerging-market countries issued a flood of statements decrying America’s 66-year lock on the position. Meanwhile, the Chinese went out of their way within the organization to express their firm desire to have a commanding say in who succeeds Zoellick. Insiders are predicting that an American will still win the spot and that the Chinese simply want to exercise a showy veto over the proceedings. That would be too bad, because there are a host of good reasons why Washington should presently burden Beijing with the job of running the World Bank.

Read the entire column at World Politics Review.

Wikistrat post @ CNN-GPS: Millennials shaping foreign policy with Kony 2012?

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.

The Kony2012 Youtube sensation has triggered a secondary op-ed explosion, as “real experts” sound off - mostly negatively - about having their sacred analytic turf encroached upon by celebrity endorsers and ADHD-addled “slackivists” who’ve merely clicked a couple of buttons (Like! Donate!) before moving on to the next viral sensation.

There’s nothing more disturbing to the national security intelligentsia than having American foreign policy crowd-sourced, especially when those allegedly apathetic Millennials are preemptively arguing for aU.S.military intervention.

Doesn’t America’s biggest-ever generational cohort realize that the country is tired of performing global police work?

This week’s Wikistrat crowd-sourced drill looks at the Kony2012 video phenomenon, offering several reasons why it signals something new and important in U.S. foreign policy debates – and not.

Read the entire post at CNN's GPS blog.

The case for exporting natural gas

WAPO reports that America surpasses Russia as world's biggest natural gas producer, but the WSJ notes that domestic prices have gotten so low with the NG glut that drillers are cutting back and local govs are seeing tax revenue shrink.

All that would change, of course, the minute we start exporting gas out of Louisiana and that new LNG export terminal there, but some in Congress, backed by certain industries and enviros, seek to block that. There is actually a proposed bill to block LNG exports until 2025.

This is why gas in the US is oftentimes 1/4 the price of LNG in Asia, and buyers there are crying out for gas.

So WAPO's editorial makes the case for exporting, attacking the notion that slighly higher electricity prices are worth all the benefits that can accrue:

But the benefits of expanded exports must be weighed against these predicted costs — which are neither inevitable nor dramatic. Among them would be a potentially significant reduction in the U.S. trade deficit, which would mean less need for the United States to borrow from its Asian trading partners. Foreign demand gives U.S. companies an incentive to produce more, which creates jobs; if they don’t expand production, then, over time, supply will dwindle, and domestic prices will creep up anyway. Don’t forget that taxes and other fees on gas production help state and local governments balance their books. Already, low prices, and the resulting reduction in drilling, have cost many communities revenue.

The silly chimera of "energy independence" looms in some of this anti-export thinking, but the real push is to keep gas incredibly cheap here relative to industrial and manufacturing competitors.  Problem is, the Nat Gas industry will not go along with being beggared, thus drilling slows down and the price will inevitably rise.

That's what happens when you go for win-lose instead of a win-win. 

LNG global demand

Of great personal interest to me right now:  FT reporting yesterday that Bernstein Research is predicting global demand for LNG will double by 2020.

That's right, double.

You may think it's all about Germany and Japan running from nuclear power, and that's certainly a big part of it. But I can tell you from personal experience right now that there is exploding demand for LNG in emerging markets.  Bernstein cites LATAM, the Middle East, India and China. But frankly, it's everybody out there.

This is why North America's emergence as a potential big source (imagining as much as 1/4 of US production being shipped out) is such a game changer.  

This is why so many investing companies are looking at East Africa right now (as another FT story portrays) for both oil and gas.  Natural gas production in Africa is up roughly 80 percent from a decade ago.  And it will only move higher in response to such incredible demand.

West Hemisphere way behind on integrating intra-regional trade

Per the 10 March Economist editorial on Latin America's growing fears about being recaptured by China as just a source of commodities (deindustrialization) and per the recent Wikistrat sim on North America's Energy Export Boom where we discussed, in one master narrative, the notion of NAFTA using the lure of cheaper and cleaner energy to re-energize the Free Trade Area of the Americas initiative.

Now, you have to understand that this chart is misleading, because it counts intra-EU trade while not counting interstate trade within the multinational union known as the US.  If the stats were equalized on that scale, then the NorthAm numbers would be unreal.

But larger point about Latam's numbers being small (and presumably the W Hem numbers being commensurately low) is valid.  The US and the rest have not made the regional trade integration effort that is possible here, as South America is beginning to recognize its mistake is not pursuing FTAA.

People will paint this as de-globalization, but it's not a binary choice.  Globalization tends to push regions to up their regional integration for all sort of reasons, the primary one being the title of the editorial here: "unity is strength" in trade negoations.

But the long-term advantage here is substantial: if you want to grow, then you want to have high trade flows with faster-growing neighbors first and foremost.  China is doing that in SE Asia but US is not doing the same in W Hem, thus the strategic impulse now to go after things like reviving FTAA.

WPR's The New Rules: In Gaming the Future, Don't Bet Against the Millennial Generation

As someone who thinks long and hard about global futures, I participate in a lot of professional forums where experts discuss the growing complexity of this world and question the ability of existing political systems, both democratic and authoritarian, to handle it. Some professionals, like Thomas Homer-Dixon, fret about an “ingenuity gap,” while regular readers of this column can attest to my frequent accusation that today’s political leaders lack “strategic imagination.” In short, we’re all arguing that politics isn’t keeping up with economics, much less technology.

And it scares us.

Read the entire column at World Politics Review.

The oil renaissance in the Western Hemisphere

Bunch of big ads run by Cambridge Energy Research Associates (CERA) in the WSJ last week. All part of its annual confab of industry biggies.

The most interesting factoid to me was the rise in liquid fuel production in the W Hem from 2000 to 2020: from 12.2 million barrels a day to 19.6.

With conventional oil decreasing in both US and Canada, the three reasons for the up-tick are "tight oil" production in the US, oil sands production in Canada and Brazil ramping up new production. US will be up over 10mbd - just barely - come 2020, with about 1/4 coming from unconventional sources.

Don't export US natural gas!

Also per the recent Wikistrat simulation, a weird alliance of environmentalists and the US chemical industry getting together to try and put a halt to ambitious plans to export natural gas as LNG (liquid natural gas), something that big buyers like Japan are lobbying to see happen.  The enviros don't want all the greenhouse gases released by fracking (mostly methane), and the chemical companies want all that cheap gas to be hoarded by the US economy to keep its feedstock flow as cost-advantageous as possible (ultimately allowing that export profit to be somewhat hoarded by the chemical industry).

If all the planned LNG export facilities were built, as much as 1/4 of US nat gas production could go abroad.

We are now 7 years past when Fed Reserve Chairman Alan Greenspan warned Congress that America needed to build more import terminals.

Peak this!

Wikistrat post @ CNN-GPS: Five countries that may rise up next

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.

Is the Arab Spring over? Or are there other countries that might rise up in the year ahead? Wikistrat asked its global community of analysts to consider this question. Here’s what they came up with:

Read the entire post at CNN's GPS blog.

The displacement effect of all that new US natural gas

See it already in how natural gas deals are proceeding internationally: the flow out of North America alters things, regionalizing flows more as Japan and Germany move off nukes and seek to ramp up their use of gas to generate electricity, and as emerging markets in general ramp up their gas use.

But another displacement raised in the recent Wikistrat crowd-sourced online simulation on the North American Energy Export Boom was the notion that the long-term abundance of cheap gas in NorthAm would encourage a crowding out of oil in transportation:

• Encouraging hybrids by making electricity cheaper long term;
• Enabling more direct natural gas fueling of vehicles (typically trucks); and 
• Pushing refiners to take NG, process it into syngas and then into gasoline.

WSJ story cited here:" "Natural gas to power pickups." US auto makers introducing trucks powered by NG "as they look to catch the growing wave of interest in the fuel as an alternative to gasoline." So here we're talking either pure compressed natural gas (CNG) or vehicles, like the one Chrysler is working, that will run on a combo of gasoline and CNG.

Exciting stuff.

North American energy boom attracting Chinese investment

Per the recent Wikistrat online crowdsourced simulation on the North American Energy Export Boom, one of the summary conclusions was that China should aggressively invest in the US fracking industry (tight oil, shale gas). While the US attracts only a tiny share of China's total global FDI (foreign direct investment), when you look just at investments in oil and gas, recently North America has become the biggest Chinese target ($20B or so since onset of global financial crisis).

The key to overcoming US political concerns:  keeping it to a minority investment.

Most estimates have Chinese shale gas reserves as equal to that of the US and Canada combined.  Canada is #7 in the world and the US is #2.

The quintessential deal in the works:

Chinese firms now are attempting to negotiate partnerships with FTS International, a Fort Worth, Texas, company that specializes in hydraulic fracturing, a process used to extract energy from shale, according to one person familiar with the matter. FTS, which is owned by Chesapeake [already in deals with Chinese firms] and a consortium of Asian investors, would use proceeds from any deals to expand internationally, this person says.

That is right out of the win-win scenario ("Cooking with Gas") from the Wikistrat sim: encourage Chinese investment so super-energy hungry China can dramatically upgrade its capabilities and tackle its own shale gas challenge, but do so in a way that accelerates the internationalization of the US fracking technology via US firms.

WPR's The New Rules: Assad's Ouster Best Chance to Stave off Israel-Iran Conflict

The debate among U.S. foreign policy analysts over the wisdom of an Israeli attack on Iran’s nuclear facilities -- and whether or not America should allow itself to be drawn into an ensuing conflict with Iran should Israel strike -- has largely taken place parallel to the debate over whether to pursue an R2P, or responsibility to protect, intervention in Syria. It bears noting, however, that forcing Syrian President Bashar al-Assad’s departure may be the best near-term policy for the U.S. to avoid being sucked into an Israeli-Iranian war.

Read the entire column at World Politics Review.

Wikistrat post @ CNN-GPS: What Putin 2.0 will mean

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.

In last year’s parliamentary (Duma) elections, current Russian Prime Minister Vladimir Putin’s United Russia party had to stuff ballot boxes just to avoid falling too far below the 50 percent mark.  Now, as Putin presents himself to voters this Sunday as the once-and-future president, there’s clearly a bottom-up backlash brewing among the urban young and middle-class.  Will it prevent a Putin win?  Hardly.  The only uncertainty here is how far Putin’s United Russia party will have to go to ensure a respectable victory margin. Whether anyone - at home or abroad - will actually respect the process is another thing.

So, stipulating that Putin 2.0 is a given, here’s Wikistrat's weekly crowd-sourced examination of what all this may mean for Russia and the world at large.

Read the entire post at CNN's GPS blog.

China nuclear protests grow

FT story.  Fukushima is the cause.   People see smart countries like Germany and Japan basically ditching nuclear power and they’ve got to wonder about China building so many so fast.  China has 15 running, 26 under construction, 51 in the planning stages and 120 proposed.

China is the biggest energy consumer in the world, and gets just 2% of its power from nukes – a tiny dent in its massive use of coal for electricity generation.  Overall, on energy (electricity, transpo, etc.), it’s still 71% coal, 18% oil, and natural gas on 4%!  The renewables/water/nukes are about 8%. 

But here is where the fracking revolution can be huge, as Wikistrat just explored in its multi-week sim on the North American Energy Export boom (just finished report and taped brief on that).  China has the biggest shale gas reserves in the world – something on the order of almost 20% of all known reserves and 50% more than #2 America.

As the shale revolution eventually takes off in China, it’ll be interesting to see what happens with China’s quiet ambition to take over the global nuclear supply industry from a fading Japan.  Maybe attempting to be the biggest producer of shale gas will do the trick, but I’m better China tries to master both domains.  It just needs that much more energy over time.

WPR's The New Rules: A Positive Narrative for U.S. Foreign Policy

Where is the positive vision for U.S. foreign policy in this election? President Barack Obama and on-again, off-again “presumptive” GOP nominee Mitt Romney now duel over who is more anti-declinist when it comes to America’s power trajectory, with both slyly attaching their candidacies to the notion that “the worst” is now behind us. On that score, Obama implicitly tags predecessor George W. Bush, while Romney promises a swift end to all things Obama. 

Halftime in America? Indeed.

Read the entire column at World Politics Review.