Another potential effect of an energy crunch could be a prolonged U.S. recession which could lead to
deep cuts in defense spending (as happened during the Great Depression). Joint Force commanders
could then find their capabilities diminished at the moment they may have to undertake increasingly
dangerous missions. Should that happen, adaptability would require more than preparations to fight the
enemies of the United States, but also the willingness to recognize and acknowledge the limitations of
America's military forces. The pooling of U.S. resources and capabilities with allies would then become
even more critical. Coalition operations would become essential to protecting national interests.

What is interesting is that they are beginning to accept it would impact even on military expenditure and capabilities which have been ring-fenced from all cutbacks until now.  Can you imagine the uproar if the next generation of battle tanks/fighter jets/battleships were selected based on their fuel consumption rather than increased capabilities?

War is incredibly degrading of the environment and fuel inefficient.  Can you imagine foreign policy (and military) options being evaluated based on their impact on fuel supplies and costs?  It's happening now in relation to evaluating options against Iran and Iranian control of the Hormuz.  The deterioration of relationships with Netanyahu may not just be due to continued settlement activity, but also a US refusal to play hard ball with Iran (from a Likud perspective) for precisely that reason.

notes from no w here

Putting the evidence together, it appears that in order to trigger a recession, there must be a large price spike that swiftly causes Oil consumption to be 4% or more of GDP. On the other hand, a very gradual price move, such as we have had since last June, causes consumers to alter their behavior in a way that results not in a recession, but enough of a slowdown in growth that Oil consumption declines and Oil prices follow, having never risen higher than 4% of GDP. That's what is suggested by Oil futures prices at the Chicago Mercantile Exchange, which remain in "contango" (i.e., prices rising as we go further out into the future), but do not reach $90 until the December 2011 contract, and the 2018 contract sells for $95.08. This suggests to me that the futures market believes that higher prices now would not be sustainable.
[....]
Nevertheless, if those other factors do not push the system back into outright deflation, barring a spike in the price of Oil prices, as of now my best guess is that more likely that the economy will slow down its growth later this year enough to cause a gradual decline in Oil prices with renewed economic growth.

Of course, he's ignoring the fact that US consumption is not the only pressure on world oil prices, but it's interesting to note that if prices rapidly rise above $3 a gallon in the US, it will short the "recovery". Nobody has yet grasped that we are going to have to do recovery an entirely new way for it to be sustainable, but right now that's un-serious DFH talk.

keep to the Fen Causeway

The question is not only, will our strategic goals be crimped, but...

With cutbacks, how should we change our strategic goals?

AND, more importantly...

At what point does it all become a lost cause (ie hegemony over oil reserves fueled by those same oil reserves become an act of infinite regression)?

US military overreach is fueled by oil. Less oil = less reach. Less reach creates new strategic goals.

Future fuel supplies are of acute importance to the US army because it is believed to be the biggest single user of petrol in the world. BP chief executive, Tony Hayward, said recently that there was little chance of crude from the carbon-heavy Canadian tar sands being banned in America because the US military like to have local supplies rather than rely on the politically unstable Middle East.

Chapter 3: The war - chicagotribune.com

What are the hidden costs of America's imported oil? The answer is complex. It may ultimately be unknowable. But this hasn't daunted the likes of Milton Copulos.

A tenacious economist with the National Defense Council Foundation--a right-of-center Washington think tank--Copulos spent 18 solid months poring over hundreds of thousands of pages of government documents, toiling to fix a price tag on America's addiction to global crude. He parsed oil-related defense spending in the Middle East. He calculated U.S. jobs and investments lost to steep crude prices. He even factored in the lifelong medical bills of some 18,000 U.S. troops wounded in Iraq as of March. (About $1.5 million each.)

Copulos is a highly respected analyst in Washington. And his exhaustive findings flabbergasted the Senate Foreign Relations Committee this spring.

The actual cost of gasoline refined from imported oil, according to Copulos?

Eight dollars a gallon.

When he isolated the hidden costs of Middle Eastern crude in particular, the price jumped to $11. This included a war premium that swelled the Pentagon's spending to protect all Persian Gulf oil to $137 billion a year. In a truly transparent economy, by Copulos' math, filling up Rodriguez's Jeep would run about $230.

Consumers don't dodge the bill for all these masked expenditures. Instead, they pay for them indirectly, through higher taxes, or by saddling their children and grandchildren with a ballooning national debt--one that's increasingly financed by foreigners. The result: Unaware of the true costs of their oil habit, U.S. motorists see no obvious reason to curb their energy gluttony.

"Gas isn't too expensive," said Copulos. "It's way, way too cheap."

Infinite loop - Wikipedia, the free encyclopedia


loop:
  ; Code to loop here
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