Opposed Systems Design

As Amory Lovins has said, the US is the Saudi Arabia of oil demand. We can cut our consumption faster than OPEC can pull oil off the market. The speed of this drop in demand has outpaced OPEC’s ability to respond.
The IEA has already forecast that all oil demand growth between now and 2030 will come from non-OECD countries [slide 4, pdf]. I haven’t seen anything in their report that expected anything like this. When you combine this with the prospects of a serious decline in Chinese economic growth, you have a scenario where oil demand could absolutely crash.
During such a scenario, by the way, would be the best time for a smart entrepreneur to start an alternative energy transport business, building on many of the techniques publicized by theRMI. A key part of the financing would have to include real options analysis to demonstrate the value of the hedging option created by insulating customers from future oil shocks (which are sure to come). Expanding during an oil crash allows one to be prepared to profitably exploit the next oil price spike.

The comments reflect Mr. Obama’s stance that the Bush administration’s handling of conflicts in Iraq and Afghanistan suffered from an overreliance on the military and a failure to devote enough resources to political reconciliation and economic development in those nations.
A senior Obama aide said the incoming administration will create teams of diplomats and other civilian officials who can be quickly deployed overseas after natural disasters or political upheavals to help fragile countries get back on their feet.The aide declined to say whether new spending on such teams would be offset by cuts in defense spending, which has increased significantly under President George W. Bush. Many Democratic lawmakers have begun arguing that the economic crisis and the skyrocketing federal budget deficit will force reductions in the Pentagon’s budget, and senior military officials expect their funding to fall significantly.

The national debate has been dancing around the issue for years, with periodic references to civilian response corps or the need for more deployable non-military personnel for SSTR-type missions, which is why Barnett’s evangelism has been so important. At some point, the national debate is going to focus squarely on the problem. We need to be ready when that happens.
This is a perfect case study in the dynamics of making policy. And idea gestates and gets kicked around outside of government with hints of it inside government before a critical mass develops that coincides with the moment becoming ripe inside government. You can’t predict when that latter element will occur, so you prepare yourself, stay productive and keep your eyes peeled.
[H/T TPMB]

He does an excellent job debunking the false dichotomies that are made between preparing or hedging against future conventional threats and current SSTR missions. For example:

Support for conventional modernization programs is deeply embedded in the Defense Department’s budget, in its bureaucracy, in the defense industry, and in Congress. My fundamental concern is that there is not commensurate institutional support — including in the Pentagon — for the capabilities needed to win today’s wars and some of their likely successors.

Put another way, when the prevailing wind blows so hard towards conventional modernization, one needs to lean heavily in the opposite direction to maintain equilibrium. Put another way, if America’s national security leadership does not aggressively push to include SSTR capabilities in the national security portfolio, then they will be (knowingly or not) supporting a return to the portfolio balance of the 1990s.

The kinds of capabilities needed to deal with these scenarios cannot be considered exotic distractions or temporary diversions. The United States does not have the luxury of opting out because these scenarios do not conform to preferred notions of the American way of war.

Given how foreign these capabilities still are to the decades-old DoD bureaucracy, change requires constant attention to prevent institutional inertia from resisting adaptation.

Just as one can expect a blended high-low mix of adversaries and types of conflict, so, too, should the United States seek a better balance in the portfolio of capabilities it has — the types of units fielded, the weapons bought, the training done.

Getting down to the difficult business of balancing the portfolio requires some very hard work injecting transparency into budgets. Based on personal experience, the services tend to resist this. There is a long history stretching back to Secretary McNamara and the old office for Systems Analysis that makes some wary of civilian analysts from OSD intruding into service budgets. That being said, however, senior decision-makers will need to be able to consider mixing and matching different sets of portfolio elements if building a “balanced portfolio” is going to be a true strategic exercise and not just lip service.
Two Opposed Systems Design posts related to this issue:
The War Over Next
Getting Back to Great Power Competition
[H/T TPMB]

oil prices drop, but not food prices.
That’s why I argue in Great Powers that, in the 21st century, the global food nets eclipse the global energy nets as the most important flow. Think also bio terror and climate change.In short, we go from a world in which energy is harvested in one place and consumed in another to one in which it’s food that experiences such great movement–a reversal of roles. In this century, energy will increasingly be harvested and consumed locally, while it’s food that’s harvested in one place and moved great distances to consumers.

That last sentence is huge. The sort of big thinking assessment of geopolitical dynamics that keeps me reading Barnett. Colocation of energy and consumption is the natural solution - resilience to environmental disruptions as well as terrorism, combined with economic incentives all point in that direction. So, once that shift begins to happen, what become the critical global flows? Food. Somebody ought to simulate/game the geopolitical dynamics of that world. [Another great simulation would focus on the development of local energy generation platforms - sort of like IFTF’s Sperstruct meets John Robb.]