From the Joint Forces Command report:
Using a base line of 2.5% growth for the developed world and 4.5% growth for the developing world, including China and India (a figure that grossly understates the present growth trajectory of these two nations), the world economy would double by the 2030s from $35 trillion to $72 trillion. Global trade would triple to $27 trillion. Given these projections, those living in extreme poverty would fall from 1.1 billion to 550 million, while those living on $2 a day would fall from 2.7 billion to 1.9 billion.
Currently, only six countries in the developing world possess populations of over 100 million people and a GDP of at least $100 billion (China, Russia, India, Indonesia, Brazil, and Mexico). By the 2030s Bangladesh, Nigeria, Pakistan, the Philippines, and Vietnam will have joined that group. Thus, in terms of the developing world alone, there would be 11 states with the population and the economic strength to build military forces possessing the ability to project significant military power in their region.
As more young enter the work force, the developing world will need to increase employment by nearly 50 million jobs per year.
China and India alone need to create 8 to 10 million jobs annually to keep pace with the numbers entering the work force every year. If economic growth suffices to provide such employment, it would go far to reduce international tensions and the endemic troubles inherent in youth bulges. While poverty has rarely been a driving force for revolutionary movements and wars, rising expectations often have.
In a world covered by media reports and movies from around the globe, rising expectations will increasingly be a driving force of politics, war and peace. Real catastrophes may occur if economic growth slows or reverses either on a global scale or within an emerging power. Growing economies and economic hopes disguise a number of social ills and fractures.
The results of a dramatic slowdown in China’s growth, for example, are unpredictable and could easily lead to internal difficulties or aggressive behavior externally. That is precisely what happened in Japan in the early 1930s with the onset of the Great Depression.
Even within the most optimistic economic scenarios, there will be major areas of the world left behind – the bottom billion.
Between now and the 2030s, many of these areas will likely lie in sub-Saharan Africa and the Middle East (excluding the oil boom countries). Although both regions have maintained impressive growth rates over the past several years, those rates have not been sufficient to decrease unemployment.
If economic stability and growth continue unabated up to the 2030s, there would be sufficient global resources to provide support for failing and failed states — that is, providing the political will is there.
A broken economy is usually a harbinger of social collapse and anarchy, or ruthless despotism.
To meet even the conservative growth rates posited above, global energy production would need to rise by 1.3% per year.
By the 2030s, demand would be nearly 50% greater than today.
To meet that demand, even assuming more effective conservation measures, the world would need to add roughly the equivalent of Saudi Arabia’s current energy production every seven years.
Unless there is a major change in the relative reliance on alternative energy sources, which would require vast insertions of capital, dramatic changes in technology, and altered political attitudes toward nuclear energy, oil and coal will continue to drive the energy train.
By the 2030s, oil requirements could go from 86 to 118 million barrels a day (MBD). Although the use of coal may decline in the OECD countries, it will more than double in developing nations. Fossil fuels will still make up 80% of the energy mix in the 2030s, with oil and gas comprising upwards of 60%.
The central problem for the coming decade will not be a lack of petroleum reserves, but rather a shortage of drilling platforms, engineers and refining capacity. Even were a concerted effort begun today to repair that shortage, it would be ten years before production could catch up with expected demand.
The key determinant here would be the degree of commitment the United States and others would display in addressing the dangerous vulnerabilities the growing energy crisis presents. That production bottleneck apart, the potential sources of future energy supplies nearly all present their own difficulties and vulnerabilities.
The OPEC nations will remain a focal point of great-power interest. These nations may have a vested interest in stymieing production increases, both to conserve finite supplies and keep prices high. Should one of the consumer nations choose to intervene forcefully, the “arc of instability” running from North Africa though to Southeast Asia easily could become an “arc of chaos,” involving the military forces of several nations.
OPEC nations will find it difficult to invest much of the cash inflows that steadily rising oil prices bring. While they will invest substantial portions of such assets globally through sovereign wealth funds – investments that come with their own political and strategic difficulties – past track records, coupled with their appraisal of their own military weaknesses, suggests the possibility of a military buildup.
With the cost of precision weapons expected to decrease and their availability increasing, even small, energy-rich countries could build up military forces with advanced technological capabilities. These could include advanced cyber, robotic, and even anti-space based systems.
Finally, presuming the forces propelling radical Islam at present do not dissipate, a portion of OPEC’s windfall might well find its way into terrorist coffers, or into the hands of movements with deeply anti-modern, anti-Western goals, movements which have at their disposal increasing numbers of unemployed young men eager to attack their perceived enemies.
None of the above provides much reason for optimism.
Non-OPEC Oil: New sources (Caspian Sea, Brazil, Colombia, and new portions of Alaska and the Continental shelf) could offset declining production in mature fields over the course of the next quarter century. But without drilling in currently excluded areas, they will add little additional capacity.
Oil Sands and Shale: Production from these sources could increase from 1 MBD to over 4 MBD, but current legal constraints, such as U.S. law forbidding importation of oil from Canada’s tar sands, discourage investment.
Natural Gas: Production from this energy source could increase to the equivalent of 2 MBD, with half coming from OPEC countries.
Biofuels: Production could increase to approximately 3 MBD–equivalent, but starting from a small base, biofuels are unlikely to contribute more than 1% of global energy requirements by the 2030s.
Moreover, even that modest achievement could curtail the supply of foodstuffs to the world’s growing population, which would add other national security challenge to an already full menu.
Renewable: Wind and solar combined are unlikely to account for more than 1% of global energy by 2030. That assumes the energy from such sources will more than triple, which alone would require major investments.
Nuclear energy offers one of the more promising technological possibilities, given significant advances in safety since the 1970s. In particular, it could play a major role in replacing coal–fired plants, and a greater supply of cheap electricity could encourage electric–powered transportation. Nevertheless, expanding nuclear plants confronts considerable opposition because of public fears, while the disposal of nuclear waste remains a political hot potato. Moreover, construction of nuclear power plants in substantial numbers will take decades.
OPEC: To meet climbing global requirements, OPEC will have to increase its output from 30 MBD to at least 50 MBD. Significantly, no OPEC nation, except perhaps Saudi Arabia, is investing sufficient sums in new technologies and recovery methods to achieve such growth. Some, like Venezuela and Russia, are actually exhausting their fields to cash in on the bonanza created by rapidly rising oil prices.
At present, the United States possesses approximately 250 million cars, while China with its immensely larger population possesses only 40 million. The Chinese are laying down approximately 1,000 kilometers of four–lane highway every year, a figure suggesting how many more vehicles they expect to possess, with the concomitant rise in their demand for oil.
The presence of Chinese “civilians” in the Sudan to guard oil pipelines underlines China’s concern for protecting its oil supplies and could preview a future in which other states intervene in Africa (or other regions of the world) to protect scarce resources.
The implications for future conflict are ominous. If the major developed and developing states do not undertake a massive expansion of production and refining capabilities, a severe energy crunch is inevitable. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds, and exacerbate other unresolved tensions, even push fragile and failing states into conflict and chaos.
Although the world depends on oil, existing capacities and the development of existing reserves cannot keep up with demand.
Massive investments in enhanced oil recovery techniques, non-conventional oil reserves such as oil shale, and large scale new finds will be required to meet anticipated future oil demand.
In summary: To generate the energy required worldwide by the 2030s would finding an additional 1.4 MBD every year until then.
During the next twenty-five years, coal, oil, and natural gas will remain indispensable to meet energy requirements. However, the discovery rate for new petroleum and gas fields over the past two decades (with the possible exception of Brazil) provides little reason for optimism that future efforts will find major new fields.
At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.
By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.
To avoid a disastrous energy crunch, together with the economic consequences that would make even modest growth unlikely, the developed world needs to invest heavily in oil production. There appears to be little propensity to consider such investments. Although as oil prices increase, market forces will inexorably create incentives. But the present lack of investment in this area has created major shortages in infrastructure (oil rigs, drilling platforms, etc.) necessary for major increases in exploration and production.
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