An energy transition from fossil fuels to alternative sources is inevitable, and "the only questions are when and how abruptly or smoothly such a transition occurs," this according to the top US intelligence panel. This week the Washington Times revealed the contents of a draft report from the National Intelligence Council (NIC). A report that took about 18 months to complete and "engaged hundreds of people around the world in solicitation of ideas."The world's population is expected to grow by about 1.2 billion between 2009 and 2025 -- from 6.8 billion to about 8 billion people. And India's population will "overtake China's around 2025." But population expansion is not our only challenge.
The draft goes on to say: "The next 20 years of transition toward a new international system are fraught with risks, including possible interstate conflicts over resources." There are two major differences from an earlier report. First is the "assumption of a multipolar future." A second major change involves energy. The 2004 text predicts energy supplies "in the ground" are considered "sufficient to meet global demand." In contrast, the latest NIC report "sees the world in the midst of a transition to cleaner fuels."
"We believe the most likely occurrence by 2025 is a technological breakthrough that will provide an alternative to oil and natural gas, but with implementation lagging because of the necessary infrastructure costs and need for longer replacement time," the draft says.
The panel is predicting that by 2025 China will be the world's second-largest economy and a major military power and Russia will become the world's fifth-largest economy in 20 years, (although the oil boom could catapult it there by 2017). The report envisions widespread appeal of "state capitalism, a loose term to describe a system of economic management that gives a prominent role of the state. Rather than emulate Western models of political and economic development, more countries may be attracted to Russia's and China's alternative development models."
It warns that the U.S. dollar "could lose its status as an unparalleled global reserve currency and become a first among equals in a market basket of currencies, forcing the U.S. to consider more carefully how the conduct of its foreign policy affects the dollar."
The text also says that conflicts over resources could re-emerge, because "perceptions of energy scarcity will drive countries to take actions to assure their future access to energy supplies." "In the worst case, this could result in interstate conflicts if government leaders deem assured access to energy resources, for example, to be essential for maintaining domestic stability and the survival of their regimes," it says.
The report is clear in its implications. As American military and economic dominance wanes, the US will need to have an effective alternative energy program to compete in a multipolar world. As pointed out by one of the reports authors, "the future is subject to influence" and what we do or don't do can make all the difference.