Center for a New American Security

This post, written by CNAS colleague Matt Acocella, was originally posted on Tom Ricks's The Best Defense blog. Thanks Matt!

The International Energy Agency announced last week that China had overtaken the U.S. as the world's largest consumer of energy, citing data showing that "China consumed the equivalent of 2.25 billion tons of oil last year, slightly above U.S. consumption of 2.17 billion tons. The measure includes all types of energy: oil, nuclear energy, coal, natural gas and renewable energy sources." Chinese officials moved quickly to dispute this assertion and questioned the IEA's calculations.

 

This pushback is predictable, according to Fereidun Fesharaki, Senior Fellow at the East-West Center and Senior Associate at CSIS. At a talk at the Center for Strategic and International Studies last week on "China and India's Energy Policy Directions," Ferashaki explained that China is loathe to take on the title of World's #1 energy user because it prefers the U.S. to be in the global hot seat.  One fact particularly struck me: according to Dr. Fesharaki, China purposely waits until a lull occurs in the price of oil before it buys up large amounts for its strategic petroleum reserves, in order to avoid being accused of spiking the price of crude.

 

I went to an event last Wednesday morning at the U.S. Institute of Peace (USIP) that included a panel with James Yeager, former advisor to Afghanistan Ministry of Mines, Graciana del Castillo, a Senior Research Scholar at Columbia University and Scott Worden, Senior Rule of Law Advisor at USIP, and was moderated by Raymond Gilpin, Associate Vice President for Sustainable Economies Centers of Innovation. Strange as it may seem, the event gave me a  feeling of déjà vu.  The event, “High-Value Resource Contracts, Conflict, and Peace in Afghanistan,” didn’t on its face have much in common with an event that I had attended last Monday at the Woodrow Wilson International Center for Scholars, “China and the Persian Gulf.” Yet I was hearing an eerily similar refrain:  At the Wilson Center last Monday, Senior Research Fellow at the New America Foundation, Afshin Molavi, declared that “China has won the Iraq war,” in the sense that its state-owned petroleum and oil companies have acquired lucrative contracts, and have virtually become one of the dominant players in Iraq. 

Then on Wednesday, Yeunger’s very first statement of the session raised the issue of dealing with bids on Afghan mining tenders from Chinese state-owned corporations.  He argued that the current situation, where Western-owned, private corporations must submit bids against Chinese state-owned companies like MCC (China Metallurgical Group Corporation), is inherently unequal because China’s corporations are aiming only to gain access to commodities, and therefore don’t have to be financially profitable; in fact they can even operate at a loss.  Furthermore, bids from these companies are often accompanied by a financial aid package from the government of China that can be hard to turn down, especially if you’re the government of one of the poorest countries in the world, such as in Afghanistan, where a 20-30 million dollar bribe may be more tempting.  Worden also pointed out that there have been (passive) accusations that China’s mineral companies are free-riding off of the security provided by the U.S. military.

Human rights organizations and security wonks don’t often share similar stakes or interests-at least not explicitly.  But as one of those who identifies with both groups, I think it’s incredibly important to recognize that the U.S. foreign policy and defense communities and human rights NGOs very often have common goals and complementary resources that could help achieve them.  That’s why I was particularly excited to attend Ending the Conflict Minerals Trade, an event hosted Monday by the Center for American Progress Action Fund.  The event spotlighted a rare example of this kind of collaboration, with a panel featuring experts on the conflict minerals trade in the Democratic Republic of the Congo (DRC) from  NGOs as well as representatives from the U.S. and Congolese government, including John Prendergast, co-founder of the Enough Action Fund, Robert D. Hormats, Under Secretary of State for Economic, Energy, and Agricultural Affairs, Congressman Jim McDermott (D-WA), Ambassador Faida Mitifu of the DRC, and David Sullivan, Enough Policy Manager.

The panelists made clear that the illicit trade of mineral ores from the DRC, such as tin, tantalum (or Coltan) and tungsten, essential components of cell phones, laptops and many other electronics and defense applications, is one of the main drivers of a brutal conflict that has cost more than five million lives since 1998, and a level of gender-based violence that is unprecedented in history.  According to Amnesty International, the illicit extraction and trade of these minerals in the eastern part of the country continues to fund militia groups which in turn commit grave human rights atrocities, including “sexual violence, child and slave labor, and mass displacement.”  A first person account in The Guardian also showed the grinding poverty, terrible working conditions, violence and disease that miners and their families are exposed to as a result of this trade.  Nicholas Kristof recently wrote as well that “blood diamonds” funded conflicts in Sierra Leone and other places, these “blood phones” are now supporting a minerals trade that is fueling “mass slaughter and rape in Congo” (see Steve Jobs’ position on the sourcing of iPhone materials).

Yesterday I swung by CSIS for their fifth installment of their Game Changers and Visionaries series. The topic at hand yesterday had been innovations in the energy sector and what opportunities await us. 

The panel consisted of a wide array of energy innovators, including: Michael Grandoff, Head of Oil Independence Policies at Better Place; Josh Richman, Director of Business Development at BloomEnergy; Craig Hansen, Babcock & Wilcox’s VP of Nuclear Manufacturing (who seemed to be selling his company like he was Vince Offer, of ShamWow fame); and William B. Bonvillian, Director of MIT’s Washington office.

After using the opportunity to pick the panel’s collective brain about supply chain issues and exploring how they could affect the American energy revolution they were predicting (not to mention foreign relations and national security), I was met with a resounding response of “it’s a problem.”

With concerns over critical minerals, the recently introduced Military Energy Security Act and the Natural Security Blog’s Af-Pak week stirring around in my head, I was reminded of my CNAS co-worker (and cubical buddy), Matt Irvine’s guest blog post on minerals in Waziristan. Realizing there’d be no better time to call his piece back to your attention than a week focused on Natural Security concerns in Afghanistan and Pakistan, I’d like to reintroduce Breaking the Safe Haven: Minerals in Waziristan.

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Daniel Saraceno, Joseph S. Nye, Jr., Research Intern

PHOTO: Courtesy of Wikimedia

Yesterday’s attack on the U.S. consulate in Peshawar has brought the insurgency in western Pakistan back into the headlines. The consulate serves as the headquarters for ongoing American assistance programs in Pakistan’s Federally Administered Tribal Areas (FATA) and is a symbol of U.S.-Pakistani cooperation.

The FATA, specifically North and South Waziristan provinces, remains “al-Qaeda’s principal sanctuary” and hosts a syndicate of regional insurgent networks. The United States and Pakistan have increased pressure on militants in the lawless region during the last two years but have yet to solidify a permanent presence to counter militant influence. American foreign assistance and Pakistani development efforts offer the potential to deny the Taliban and its al Qaeda affiliated allies control over critical infrastructure and the local economy.

In remarks last week, Maj. Gen. Tariq Khan, the commander of the Pakistani Frontier Corps, lobbied for increased development efforts in the tribal areas, saying that “the world mustn’t neglect the area as it did after the 1989 Soviet withdrawal from Afghanistan, or it could fall prey again to al Qaeda and its allies.”

Development and maintenance of an extractive mineral industry could revolutionize the Waziristan economy and infrastructure in the long-term. Indeed, ongoing efforts in Afghanistan must be matched “across the border in FATA” according to Barnett Rubin and Abubakar Siddique in a 2006 USIP report. “FATA’s isolation can be broken only by improving its infrastructure…Proper utilization of several known mineral deposits in FATA will result in the growth of labor-intensive mining and manufacturing industries in marbles and precious stones.”

Today we'll be giving you a double dose of blog-ness, with postings from Will and myself. Today, I'll recap an event I attended on Wednesday across the street at the Wilson Center on China's appetite for raw materials and energy.

Much of the discussion centered around the economics of China's foreign investments in raw materials rather than the reasons they need these resources, which was a bit of a disappointment.

I was also slightly disappointed to hear that the panel's expert on Chinese-African relations, Deborah Brautigam, respond that she hadn't thought of it, when asked whether China's investments in raw materials and infrastructure in Africa was more economic or national security based. (Though perhaps there's an argument to be made that they are one in the same given that China must maintain 8 percent economic growth just to support its growing working class.)

What did stand out to me were some investment figures. According to panel member Derek Scissors of the Heritage Foundation, China is like a state level version of Brewster's Millions: it’s not spending its money for the purpose of gaining money, as that would just exacerbate their problem. He elaborated by explaining that China has so much money currently that it is physically unable to invest in itself and has elected to invest abroad instead. Being starved for resources in many sectors, its investments are largely used to secure energy and mineral resources. Scissors stated that Chinese bond investments in energy last year alone were $60 billion, and $70 billion in metals. Mind you, he was citing statistics from the Heritage Foundation's own database.

Scissors went on to explain that China is not worried so much about an equal trade partnership, or even paying fair market values, citing that China had paid nearly $500 million too much for a Canadian oil sands investment. He argued that China has the money, needs the resources and that's all that matters to them. His overall argument was that China is not trying to buy up the world politically, they just want some resources, and have the money to get it.

Last week while checking out an event for a CNAS colleague's blog, I couldn’t help but get caught up in some interesting natural security issues I hadn’t heard much of before. The event was a “what if?” over at the Korea Economic Institute, covering the sinking of the 1,200-ton South Korean naval corvette Cheonan and the death of 46 members of its crew. The “what if?” being, what if North Korea was proven to be the cause of the tragedy.

A concern that emerged again and again among panel members surrounded crabbing to the West of the Korean peninsula.

The border dividing the Korean Peninsula extends into the Yellow Sea (the Northern Limit Line) and snakes around a variety of islands, while hugging the coast of the northern land mass—the very area where the Cheonan was ripped in half by an explosion. Needless to say, the border is somewhat difficult to define and adhere to given its somewhat arbitrary nature. What’s more, due to the understandable level of confusion surrounding sovereignty claims along the border, there has been almost no precedent set for the border’s enforcement.

The panel members noted that this territory has been a recurrent source of tension between the two states, especially during the crabbing season, when a legion of both North and South Korean fishermen surge into the Yellow Sea, intermixed with security patrols, no less. The Yellow Sea hosts a large Blue Crab population which not only serves as an important source of food for the famously starved people of North Korea, but also a key trading commodity.

Mounting tensions in the crabbing waters of the Yellow Sea have caused regional concern before, including an incident in 1999, when, according to The New York Times:

A North Korean gunner opened fire on a South Korean boat that was ordered to ram a North Korean vessel. The North had at least 30 men killed in the exchange, and one of its torpedo boats was sunk. Four of its other vessels were damaged. At least five South Korean patrol ships were damaged and nine sailors wounded. . .

The immediate cause of the June confrontation was the concentration of valuable crabs south of the NLL. South Korean authorities allow South Korean crab fishing there only in the month of June. Thus, competition for the crabs was intense.

One of the KEI event’s panel members described incidents such as these, several having resulted in casualties on both sides of the border, as being so tense that he had feared an outbreak of war at the time.

Couldn't make it today? 

Was the Willard too packed for you? Live in Papua New Guinea? Accidentally slept in?

While we wish you could have been here, but we're glad to say you can still catch all the action. Check out a live webcast of our Natural Security: Navigating the Future Global Environment event.

Also, don't forget to stay on top of the highlights with our event live tweets.

Hey all. Not too much of a blog today, as we're a little preoccupied setting up for just about the most epic event to hit D.C. since Lady Gaga was last here in September.

The Willard's sure to be packed with the 450+ who have already confirmed their attendance for the event, hope you're one of them. You're not? We can make an exception for our blog reader faithfuls. Just RSVP here and we'll make sure you get a chance to check out the event that's been a topic of discussion all around town.

Taking part in the dialogue over issues of natural security (as featured in one of our latest publications, Broadening Horizons) will be the likes of Rear Admiral Philip H. Cullom, Director of Fleet Readiness Division on the Navy Staff, David Kilcullen, President and CEO of Caerus, and CNAS' own Bob Kaplan and Christine Parthemore.

Want to know the big news? The event is going to feature a keynote address from the Honorable Carol Browner, Assistant to the President for Energy and Climate Change.

Check out some live tweeting action on the CNAS twitter page. Hope to see you there!

With Friday's forecast calling for twenty inches of the white stuff, to be followed shortly thereafter by a chance of Four Horsemen, there was only one thing I could think of that would compliment DC's Snopocalyptic impending doom: attend a presentation on the U.S. Navy's strategic interests and game plan—not being a sports fan myself, that's pretty much the only Superbowl reference you'll get—for the Arctic. The Arctic Roadmap event was hosted by fellow D.C. think tank, the Stimson Center.

Beginning with a short talk by Director of Task Force Climate Change, Rear Admiral David Titley, the event then followed with a panel discussion with Caitlyn Antrim of the Rule of Law Committee for the Oceans (a joint host of the event), John Bellinger, former State Department  Legal Adviser, Major General Richard  Engel, USAF (ret.), Director, Climate Change and State Stability Program in the Office of the Director of National Intelligence, and Amit Pandya from the Stimson Center.

Here are my main takeaways from Real Admiral Titley's talk:

• The Arctic contains up to 25% of undiscovered petroleum resources, in addition to immense     caches of minerals including copper, cobalt, gold and zinc.
• The Arctic Roadmap is available online for all to read.
• “Roadmap” is just an en-vogue term for “strategy.”
• In 30 years, the Arctic may experience its first fully ice-free summer.
• The officers that will have to navigate the turmoil of an ice-free Arctic are already enlisted (in other words, that’s how short the timeframe is we’re dealing with).
• Shippers need at least eight weeks of no ice to navigate the Northwest Passage, which won’t be seen for another 40 years. Even then shippers might not use it, as they are more concerned with reliability than speed. The Arctic is anything but reliable.

The UN Climate Change Conference in Copenhagen last month received more anticipation and optimism than New Coke, and much like the long forgotten beverage, once it was finally here, disappointment ensued.  To assess the Copenhagen aftermath, yesterday the Center for Strategic and International Studies held the first of what they announced would be a series of such events, titled Post Copenhagen Outlook.  I attended the event in hopes of learning just what happened, and the implications it has for our country and its foreign relations.

The featured speaker for the event was the State Department’s Deputy Special Envoy for Climate Change Jonathan Pershing.  Pershing wasted no time in making known his three key points:

1. Climate change is happening.
2. The science shows that people aren’t helping the situation.
3. This is really important.

Pershing described the past and future role that climate change-focused international agreements (like what many had hoped that Copenhagen would generate) have had on diplomacy and development. He compared the refusal by the United States to ratify the Kyoto Protocol to the same stance of San Marino (a landlocked country found entirely within the borders of Italy, approximately one-third the size of Washington, DC) as a poor decision which has had real ramifications for U.S. support abroad.  As an example, he explained how American green energy scientists find themselves basically blacklisted by some Kyoto signatories.  He also highlighted the fact that the states that are currently most susceptible to conflict are often the most exposed to environmental issues such as drought and rising sea levels.  Some of the issues which already stoke the flames of conflict and instability may be further exacerbated by climate change.