A Conversation with Richard L. Engel

Wednesday, March 20, 2013
Richard Engel
Director, Environment and Natural Resources Program, National Intelligence Council; Retired Major General, U.S. Air Force
James McIntyre
Newscaster, All Things Considered, NPR; former Senior Pentagon Correspondent, CNN

JAMIE MCINTYRE: Ladies and gentlemen, if I could have your attention we're about to start. Hi. I'm Jamie McIntyre. And I'm going to be your interlocutor today, I guess is the term, in the discussion with General Rich Engel here. And before we start, I just wanted to give you a quick -- couple of quick cliff notes on my background, just in case you don't know them.

I'm a newscaster at NPR, formerly known as National Public Radio. NPR now goes by NPR because it's more than just radio. Before that, I was the senior Pentagon correspondent for CNN for 16 years. And I covered conflicts and other issues at the Pentagon, beginning with Somalia in 1992 and wrapping up with the wars in Iraq and Afghanistan. I missed the one in Libya, but it was pretty quick so. (Laughter.)

In my role as a journalist, I've always felt that it's really important to bring -- that the highest role of a journalists is really -- is to bring facts to bear on an issue and to help people understand what the real issues are, as opposed to sometimes a lot of the bloviating that goes on in Washington, a lot of the sort of caricatures of issues. And so that's kind of what we're going to try to do today.

So my guest is General -- Major General, retired, Richard Engel, who's the director of the Environmental Natural Resources Program at the National Intelligence Council. And I'm going to ask you to give just a quick on your background before we get started, just so people have the context.

MAJOR GENERAL RICHARD ENGEL (RET.): My pleasure. 1968 graduate of Texas A&M University, which I'm very proud of. Spent 31 years in the United States Air force as a pilot. Most of that was in research development, testing evaluation, rooting around in the Mojave Desert at Edwards Air Force Base, California, where quite frankly anything environmental or natural resources was just about the last thing on my mind, except we had to protect the desert tortoise. And I was very careful to do that. (Laughter.)

When I left the Air Force, I wanted to continue in service in some way. And in somewhat of a lark, I applied to the CIA online, via their website, and they asked me for an interview. (Laughter.) And then I came to work for the Central Intelligence Agency as a military analyst and strategic analyst for about four years, and then went to the National Intelligence Council as part of a normal rotation.

Through a series of jobs at the NIC, I ended up in the position that I'm currently in, which is just one of the most fascinating jobs I've had because as intellectually fascinating, obviously, as developmental flight test was as a test pilot, it is equally intellectually fascinating to look at these emerging issues. It's a whole different world and it has stretched my mind, which I've immensely enjoyed.

MCINTYRE: OK, so just to be clear, which character in "Zero Dark Thirty" was based -- (laughter) -- you always learn something --

ENGEL: (Inaudible.)

MCINTYRE: You always learn something interesting when you hear someone's background. And just as a side note, my father also went to Texas A&M University, and he was also an Air Force pilot.

ENGEL: Fantastic. Fantastic.

MCINTYRE: He didn't actually graduate, though, but --

ENGEL: Yeah, there was a little war going on.

MCINTYRE: Well, there was a whole lot going on back then.

So I think we all know intuitively that the environment -- the health of the planet is somehow related to our own security. But other than that sort of broad, sort of intuitive understanding, I think there's -- I'd like to start out, Rich, if I may call you Rich --

ENGEL: Sure.

MCINTYRE: -- by asking you really sort of to kind of bring that down to earth. How is it, really, in a broad sense that these -- essentially the health of the planet affects our national security?

ENGEL: OK. That's an excellent question, and it's a question that we had to first go through ourselves as we started to do these studies -- intelligence studies on why environment, natural resources issues are really national security issues.

And the way we approach this is, we look at the four elements of U.S. national power: military, economic, geopolitical and then the social cohesion of the United States itself.

And we say that anything that degrades or enhances those elements of national power is a national security issue. And we see that happening because either an event or an absence of water or an absence of energy will either directly impact the United States or will indirectly impact the United States because it impacts a major economic partner in the United States or it impacts a region or it impacts a United States ally -- military ally.

And with that kind of logic, we step back and say, oh, OK, how will food, water, energy, climate change affect these people and then -- or ourselves -- and indirectly affect the United States? That's how we get to the logic trail that leads us to identifying these issues as national security issues.

MCINTYRE: So how much of this is a -- you know, and it seemed to me that, you know, when you look at any of these issues -- and we'll get into some of the specific things that you've mentioned -- but when you look at any of them, you could -- you could paint a scenario that's pretty dire and has some dire consequences. How much of that is alarmist, and how much should we really be concerned about it?

ENGEL: Well, the way we identify whether or not it's really going to cross the threshold is we step back and say, is this going to cause some kind of social or political instability in a country or region that we're interested in? And interestingly enough, the issues by themselves typically don't do that. It's these issues in combination with other factors.

In other words, if you have a food crisis -- you have high food prices -- if the citizens are already disenfranchised from their government because they think it's corrupt, because the government has failed to support them, because there are elites that are well-taken-care-of and they are not, then what you have is, you have the foundations for social disruptions -- protests and riots and things like that that ultimately, depending upon how severe it is, can lead to political disruptions and political instability.

So usually, it's -- the peace parts by themselves aren't the issue. It's because they contribute to some other residual -- some other enduring problem that exists.

MCINTYRE: I guess what I'm asking also is, are we in a crisis now? Are we heading for a crisis? Is that -- is this a problem that we should just be looking at over a long timeline?

ENGEL: Well, it's like a frog in boiling water. (Laughs.) We are -- we are in a set of circumstances that are getting progressively more challenging, and what has really happened -- and this is kind of the by-product of some of our research -- we've come to appreciate specifically that food, water and energy are very connected. There's a nexus that connects these three. You impact water, you impact energy, you impact food.

So they're really tightly coupled. And what we're seeing is, the situation -- because there's more people on the planet -- water resources are more limited for the amount of people we have. We find a situation where food is more limited. As we heard earlier, a speaker very accurately described the stock-to-use ratio; the amount of reserves we have for food is quite low.

And if you look at these things along with a growing population and an energy picture that's really uncertain out in the future, you end up with a set of circumstances where you kind of have the -- kind of the perfect storm that comes together and has one or two of these triangles become degraded. And then, all of a sudden, you have a real crisis globally that could affect security in a very broad area.

MCINTYRE: Well, you mentioned the growing population. How many people do we have on the planet now?

ENGEL: 7 billion plus.

MCINTYRE: And where are we headed?

ENGEL: On our way towards 9 billion, according to some research, depending upon how you look at it -- what time frame.

MCINTYRE: And what's the immediate impact of that sort of population growth?

ENGEL: Well, immediate impact of the population growth is, you need more food, obviously. You're going to use more water. But the economic development that goes along with that population growth is also going to add to it. So you have the food demand that goes up. Not just as a function of the population; it goes up as a function of the population and economic development.

We like our Double Whoppers with cheese, and, you know, a great majority of the planet lives on grain. But as they become wealthier and wealthier, they're going to want that higher meat content in their diets, and that's going to put more stress on global resources.

MCINTYRE: And by the way, I'm going to run out of questions here after a while, so I hope you're all thinking of the really important questions that I've failed to ask because we'll take a break in a little bit and get to your questions.

But let's get back to the -- let's take the subject of food, for instance. You know, we've had some -- we've experienced some drought in the United States, but we're not in a food crisis. I don't see any -- you know, we're not in a position where we can't generate enough food. Other countries are not necessarily in the same position. What's the -- what's the prognosis for the situation with food and hunger?

ENGEL: Well, here's the situation. We had -- in 2008 we had food price shocks, and it was probably as much the rate at which the food prices changes as it was the absolute level, caused riots in over 50 countries, 30 of which were sometimes violent in the countries and ultimately led to, at least in some people's minds, the Arab Spring, some of the instability we saw in the region -- also coupled, I might add, with high food -- with high energy prices.

So if you look at that and you go forward, you say, well, if we have those shocks again -- and again, because I said the food markets are tight, the supplies we have available to handle degradations in production are not as robust as we would like to have them -- and here's where it gets really interesting and here's kind of a climate change play on it. What we anticipated when we did our initial research on climate change -- and the IPCC reported on it -- we anticipated that climate change was more long-term impact, 2030, 2050, temperatures going to rise; we're going to see some degradation in agricultural productivity. What we did not see -- at least when we were doing the intelligence analysis at the time, we didn't see the increase of extreme weather events, particularly the increase in floods, droughts that we're going to have.

So what you have now is a set of circumstances -- and it's kind of -- if someone wants to ask why, it's a fascinating story of how we got to that situation. We see more extreme weather events near term. These cause droughts to occur. Now if you take a set of circumstances where you have tight agricultural markets, where you don't have a lot of flexibility and you have droughts or floods in one or two major producing areas, prices go very high very fast. And in the United States and in the developed world where the average cost of food is somewhere around 50 percent -- 15 percent of what we make -- probably about 1 percent of what you make -- you know, the price shock --

MCINTYRE: Right. Because I'm in the high-paying group of public broadcasting. (Laughter.)

ENGEL: The high -- the cost of that is something we can easily endure. However, if you're in sub-Saharan Africa or another part of the world where you're spending 45 percent of your total income on food, then this shock or this change in price really becomes devastating.

MCINTYRE: So I guess what I want to ask you is, so can you identify countries or perhaps regions that are in danger of hitting the sort of tipping point? And can you describe how that would result in instability that the United States would have to worry about as a matter of its national security?

ENGEL: Let me describe the general type of a state that would have this kind of a problem and then I'll give you some regions. I think a state that subsidizes food for its people -- in other words, it provides food for its people because they can't afford it, and it goes to the global markets in particular to get this food -- then it is vulnerable if food prices rise. The state will either not be able to provide the food or will provide it at a lesser quantity, or a very poor country where people are concentrated in urban areas, which is growing a lot, and where inside these urban areas the people may not have as strong an employment capability and they therefore are very dependent on food subsidies or they pay these high prices for food -- these are the kinds of countries that would be most vulnerable for this type of shock.

Now, where is this liable to occur? In the developing world clearly is where you're going to see that more than other places: North Africa, sub-Saharan Africa, maybe not quite so much because they depend more upon local food, but in North Africa, would certainly be that area. I would imagine you'd see that in maybe parts of Southeast Asia, although Southeast Asia is not quite as bad shape because they have a lot of local food themselves also.

MCINTYRE: I mentioned that when I started covering the Pentagon, it was in 1992, and the United States was going into Somalia. But people forget that the mission in Somalia was not necessarily going after warlords but actually feeding starving people. Are there lessons from that involvement about a crisis in food and how it can translate into U.S. foreign policy?

ENGEL: Well, as our previous speaker from the NGA correctly identified, I think there's a whole history of how absence of food security result ultimately in people doing actions that are considered desperate and they could turn into pirates or turn into criminals, and Somalia probably is the poster child for that.

I would also say that when you have places around the world where you have food instability that the government cannot step in and work itself around, you become vulnerable to nefarious actors. Terrorists can come in and leverage that food deficiency in their argument against why the government is bad or criminals can come and charge or traffic illegally in human beings or other things to try and help the people with the resources they need to get their food.

MCINTYRE: Now, I think everybody remembers the classic scene in the movie, "The Graduate," where the guy whispers "plastics."

ENGEL: Plastics. (Chuckles.)

MCINTYRE: Plastics -- when I was at the Pentagon, people used to whisper the word "water." Water, they used to whisper and say that the next big conflict in the world was going to be over water resources.

ENGEL: Well, we completed a national intelligence estimate on water in October of 2011. We published an unclassified version of it in March of 2012. And in that, we certainly agreed with the premise that water was a major national security issue. We said that there were many countries important to the United States around the world that had water deficiencies because they didn't have enough, they didn't properly use what they had or they let it get polluted. And we thought that would result in instability in these countries.

In some cases, the instability would preoccupy the central government, and the central government would not longer be able to partner with the United States on issues. In other cases, it might have stopped them from, for example, producing hydropower. They might not have the ability to continue their own economic development, which would be to our detriment, because they were a big market for us. So clearly, water inside states made a difference.

We saw several cases around the world where water conflicts -- while they historically have been avoided between states -- water issues were going to be more difficult to resolve. Water would become a tougher issue for the countries themselves to deal with, so it increased the risk of tension between states. And that obviously would impact the United States, particularly if it incurred in regions in the world where we have economic or other geopolitical interests.

And then we saw in agriculture -- the connection, as I mentioned, this nexus between food and water energy -- we saw in looking at water, that there are many parts of the world, including the United States, where people have withdrawn ground water out at a rate in excess of what it's being replaced. And as a result of that, they're ultimately going to run dry of water. In some cases, they even subsidized this overextraction of ground water through fuel subsidies or other things. But if you look at that over a period of time, that's a disaster waiting to happen, because you're going to run out of water and your food supply's going to get degraded. So we saw agriculture degradation a little bit longer out being a problem.

Now, having laid out all these challenges associated with water, not the least of which, the last one I suppose is that when you have critical water infrastructure in a country and if you're dealing with the potential for terrorist activities, that infrastructure, like any infrastructure, becomes a target that they might want to go out.

What we saw also in the water NIE was there are some ways to work through this. One is to really value that water can be traded. We don't normally think of water as a commodity we trade, but water's embedded in products. The amount of water in beef and soybeans and grains that the United States exports is huge. So we are literally exporting water in a country that has wealth and can buy the export, is importing what we call virtual water. So we could leverage that by encouraging the kind of trade that allowed water to -- water-rich goods to go to countries that don't ever otherwise have it.

We also identify that some simple agricultural improvement techniques, strip irrigation, avoiding flooding or land-leveling so you better use the water you had, could make a big -- a big difference in terms of being able to use the water that a country has more efficiently.

And then finally, I would say, you know, obviously, pollution is critically important because water gets reused. A factory may use and then push it on down. In the developed world, many factories are trying to develop what's almost a zero -- a zero-reuse of water. Every bit of water comes in the factory is used; they don't put anything back out in the stream. Well, that's not true around the world.

However, where it is -- where you do put something back in the stream, it's important it be treated and safe so it can be used downstream fro other things. And some of the water treatment issues, for which the United States and the developed world has the skill set, could be deployed in other parts of the world. And we thought that would be -- that would a good way to reduce some of the challenges.

MCINTYRE: All right, so I'm glad we're also talking about solutions as well as problems, but I do want you to scare us a little bit more before we talk some more about the answer -- what the answers to some of these challenges might be.

And one of the interesting things was that frankly, I only became aware of -- a couple of years ago, frankly, when I saw a report on CNN, was this whole situation with rare --

ENGEL: Rare earths.

MCINTYRE: -- minerals, elements that I was completely unaware that China has almost a monopoly on. Explain what these are, why they're important, and how is it that China controls so much of it?

ENGEL: Well, they are, as the name implies, rare earth. It doesn't mean they're not available on the Earth, it just means that they're not available probably in the same quantities as iron or some of the other minerals we're used to. They are important because they have some unique either magnetic properties --

MCINTYRE: What are they -- what would examples be, or?

ENGEL: I couldn't even pronounce the name.


ENGEL: I'd have to go to the Periodic Table and go way to the side.

MCINTYRE: All right. You can Google that if you need the exact name.

ENGEL: You can Google that. And then there's also a category of heavy rare earth that is a special category. But they have either unique electromagnetic properties, electro properties or magnetic properties that makes them attractive in electronics. Your cellphone undoubtedly has some. Mines has. Apple products do. And military systems use these rare earth elements because of these unique properties. So they're important to our society in terms of the -- because of the sophistication of the electromagnetic tool -- the electro tools we have -- the IT tools we have.

Now, China did indeed have a monopoly on these several years ago. They made a decision to reduce their exports significantly, by I think about 40 percent. And that creates shock in the world in terms -- because they weren't available. So some other countries started looking at where they could mine the rare earths and develop the same capability to produce them. The United States has, Vietnam has, Australia has, Canada has -- all mining projects getting ready to look at developing these.

Turns out these are a little challenging to really get them to where you can use them in a product. It takes a lot of raw material to get the rare earth you want and it's not environmentally friendly because of the processes you have to go through to finally get it. So for that reason, getting these developed in some countries has been --

MCINTYRE: So is that why China has such a -- because they, A, have the raw material and, B, they're not as concerned about the environmental -- (inaudible) --

ENGEL: I wouldn't critique their environmental, but that's clearly -- they have the concentration -- they have the material, so they have the concentration, they have the economic reason to --

MCINTYRE: But we do have these things in the United States, it's just not sometimes economically --

ENGEL: It was not economic when China was putting them out at the prices they were.


ENGEL: But when they're not available -- and some prices of these have risen almost 600 percent.

MCINTYRE: And the affect of that on our national security?

ENGEL: Well, if we lost them completely it would not be good, but we don't expect that we will lose them completely. We are still -- have access to some sources. As I said, we are developing sources inside the United States. And the United States military has kind of transitioned the way we fight.

We don't fight a lot with the World War II model where we use the industrial base to help us get through the war. We actually fight with what we have on hand. So if we have the parts and we have the equipment, we're probably going to fight with what we have on hand. That's a little change in the way we have historically waged war.

MCINTYRE: OK, well, let's talk -- before we get to questions and maybe some of the answers -- let's talk about one more area -- fuel.

ENGEL: Fuel. Energy.

MCINTYRE: You know, we've been hearing a lot about fracking or hydraulic fracturing and how -- I just saw a report the other day that suggested the United States might actually be the dominant energy exporter sometime in the future. And it was like, hey, problem solved. What's the -- what's the real situation with fuel?

ENGEL: Well, the story with fuel -- it's fascinating and I would say in the next seven to 10 years, it really looks very encouraging for the United States, just the energy portion of it. There's some environmental concerns people have, but just the energy portion. We are, with shale gas, potentially going to be a net natural gas exporter. The prices of gas in the United States are one-third what they are in Europe and one-quarter what they are in Asia right now. So that gives U.S. industries a tremendous advantage in terms of energy costs.

Tight oil, light tight oil, has also been developed using the same techniques that we have used for shale gas. And light tight oil will allow the United States -- we probably always will be importing oil at some level, but by 2020 the United States is projected to be the largest producer of oil in the world -- equal to -- slightly ahead of Saudi Arabia.

Then, according to energy administration -- Energy Information Administration, that tapers off a little bit and we are supposed to be importing a little bit more later on, although at National Intelligence Council we did a study to look at how we could get totally free. We had a group of people look at some improvements we could make to our own economy to get to a net -- no imports type of circumstance.

But here's the issue with oil: The fascinating question is the demand for oil globally is really going up. I mean, it's the Indias and the Chinas and the Asias of the world that are demanding more oil. If -- as the United States has entered the market, it has allowed some things to happen immediately. It has kept the prices from really running way up because of the new demand. It's kind of kept them reasonably level. However, with some of the restrictions on Iran and some of the other producers being in the midst of instability themselves, there's been a very small marginal capacity for Saudi Arabia, which is the big shock absorber of the world to produce more oil. There's been a limited ability for Saudi Arabia to really be -- ramp up quickly if we needed a lot.

What the U.S. introduction of oil has done is it has increased the flexibility in the global market. So the anticipation is we will see a little bit less variability.

Now, we still have some significant mismatches between where the oil is and what kind of oil we need at the various spot, and you see that in the prices. Brent, which is the overall international price for oil, is -- basically sits about a 109 (dollars), $110 a barrel today, I think somewhere in that area. West Texas Intermediate, which is the baseline U.S. oil, sits about 10 (dollars) to $15 less than that. And then our light tight oil, which comes out of North Dakota, that is actually another $15 less than that. So you have a pretty big spread between the various types of oil. Part of that's because of transportation issues inside the United States.

But what this means is that we're able to export some types of oil. We're also able to export refined products. And we are now taking in oil and exporting refined products at a higher rate. I think the United States surpassed Saudi Arabia in terms of exports of gasoline. If not this year, maybe we did it towards the end of last year.

MCINTYRE: So is the world running out of oil or on the track to run out of oil? Even -- because you've described this great new demand that's coming from the countries like China and -- (inaudible).

ENGEL: Well, that's the rest of the shoe -- the rest of the story, as Paul Harvey would say.

MCINTYRE: (Inaudible) -- for news.

ENGEL: (Inaudible) -- for news. What happens after about 2020? This is -- in our business, this is hugely unknown. One argument says that all the technology of the United States has developed; we will be able to transfer that to other countries. China will develop its shale gas. Light tight oil will be developed in other places around the world. And in the real extremes of that scenario, the price of oil would drop low because it would be so much of it produced. That would cause some real problems for countries that are highly dependent upon the high price to make their own budgets work. That's an aside.

And the other scenario says, this is really a uniquely U.S. phenomenon because we have the infrastructure, we have the engineers to do it, we have -- we have the distribution system and we have the refining capacity to use it and that it won't be that easily transferred to the rest of the world. If that scenario plays out, what you'll probably see is prices rise. They won't -- they may not necessarily rise really rapidly, but they will certainly rise because of the increased demand -- and I should mention not only the increased demand out of Asia, but you have a general degradation of conventional oil, the type of oil that we're used to. That's becoming slowly less and less available. So we don't see ourselves running out, at least not till the 2030, 2040, 2050 time frame from an oil point of view, certainly not from a gas point of view.

But what the prices are going to do and how much residual flexibility will be in the market, that's a huge unknown depending upon how well this technology can move out of the United States.

MCINTYRE: So let me go back -- (inaudible) -- but I wanted to ask you, so the conventional wisdom that you hear all the time, that we're overdependent on oil, not true?

ENGEL: Becoming increasingly not true. We have lots of sources for our oil. Most of what we import is a heavy oil. Canada produces some of that from tar sands. Some of it comes inside the Americas. Venezuela produces that kind of oil, so does Saudi Arabia. What we're producing out of this new field, as I indicated, is mostly light oil, what's known as sweet oil. That is not presently compatible with our refineries at the same level that heavy oil is, but that's not to say we couldn't adjust over time.

So we are clearly going to have more geopolitical flexibility. We will not be as dependent upon external sources of oil as we have been before. And I think that may cause some consternation in certain parts of the world as they see us recalculate our interest.

MCINTYRE: So how confident are you in these projections? And I'm just thinking back, because I grew up, you know, during -- I was putting 35-cent-a-gallon gasoline into my Volkswagen Beetle when the energy crisis -- remember the energy crisis happened? -- yes. And I also remember back then that I had an engineering friend who was studying nuclear engineering, and he told me that nuclear power would in the future be too cheap to meter. It would be so easy. (Laughter.) It would be so cheap, you wouldn't even bother spending the money to meter it. You just -- so how confident are you that -- at least in the next 20, 30 year time frame that we're on track that you've described?

ENGEL: The next seven to 10 years? Yes, I'm confident. As I said, how the technology moves beyond there, I'm not that confident.

We did not anticipate the shale gas revolution, or the tight oil. I mean, I think maybe there were certainly some people in the -- in the business world who saw it but we didn't see it. But I will tell you, I don't think the large oil producers saw it, either. If you would have looked at their forecasts five years ago, they didn't see it. So certainly we've had a technological surprise.

And there are technological surprises out there that I think are possible -- if not in the next seven years, certainly in the next 20 years -- that I don't want to say nuclear power would be unmetered, but we could really be surprised at what our energy future looks like out there.

MCINTYRE: OK. So I hope -- we're getting to the halfway point, so I hope -- there's some smarter people in the room than me, I'm sure, who have some sharper questions that can pin you down.

ENGEL: (Inaudible.)

MCINTYRE: But while they're thinking of their questions, we're going to pass the microphone around here. Just one last one from you. So I'm the president of the United States and you're my national security adviser, and we've been discussing all these pressing concerns that could -- challenges we could face over the next time. What do you tell me? What's your advice? What are you advising me to do? What should I be doing?

ENGEL: Today?


ENGEL: Well, first of all, intelligence community doesn't do policy recommendations.

OK, got that out of the way. (Laughter.) National security adviser would. (Chuckles.)

But this may seem a little strange, I would say leverage what has been given to us as a phenomenal capability: natural gas and light tight oil. The other thing I would say is you cannot invest too much money in renewable energy, because if you ever want to hedge in case you're going to get surprised, it's going to come from there. And in the process of doing that, you're going to put off some potential challenges with climate change, which I said the extreme weather events have been a big surprise, and that could get a lot worse. So the necessity to make that transition could be more demanding. I would say invest in research and development as much as you can for other kinds of energy sources so that we can get nuclear power unmetered.


I hope we have some good -- we have the microphones that -- I guess we'll go -- let's start over here. Yeah, let's go there and we'll just sort of work our way across the room.

QUESTIONER: My name is Martha Harris. You mentioned a no-net import scenario. And since over the years we've really been fixated on energy independence, I wanted to just ask you specifically, how hard would it be to achieve that situation? And although I wouldn't ask you, you know, for policy advice, what would be the downside or upside to getting there?

ENGEL: In the scenario that was crafted for us by -- it was done for us by Strategic Business Insights, a firm out in California that looks at emerging technologies, essentially the big impact -- they assumed about the conventional growth for the light tight oil and the existing resources, which was helpful. By the way, some people project even higher growth for those resources. What they really did was we got more efficient. They projected a change in the demand from notionally, if you say I want 15 million barrels per day down to about 8 million barrels per day, which is a pretty big drop in demand. But we reached this point in 2030. And that came about because of solar panels got cheaper, so we saw more solar and less requirement for energy out of power plants for that. They -- a battery breakthrough made automobiles more efficient, along with continued improvements in the internal combustion engine which required less demand.

And one of the really interesting things that they identified was the need to build these, get the right kind of lights in the buildings and develop the high-efficiency standards in buildings. And all of those together reduced the demand down from about 15 (million) to about 8 million barrels by 2030, which is a phenomenal thing to think about, because the economy continued to grow, but in doing so we got down to the point where we required no imports -- close to no imports.

MCINTYRE: If you could pass the mikes over this way, we'll move across the room here.

QUESTIONER: Thank you. Paula Stern. You talked about technological surprises such as the -- what we're now reaping from the fracking. But it's my understanding that we did invest, as a matter of policy, R&D. And that leads me in these technologies --

ENGEL: Particularly the -- particularly the technology for discovering where and how to do the drilling.

QUESTIONER: So my question is, with regard to technology and renewables, what the role of the government should be both in encouraging the R&D in areas of renewables that are -- may not be specified by Congress, who says, do this, do that, but just more open-ended technologies, and the role of the government also in procurement, particularly the Department of Defense, in assuring that we have those renewables which you think we should really have on hand that we can't even imagine today?

ENGEL: We don't do policy recommendations. What the -- what the government has done -- what our government has done is -- both the Department of the Navy and Department of the Air Force have done research looking at new types of fuels. And I was always fascinated, as the installation commander at Edwards -- I looked out and I had 4,000 military family housing units on the base, and I said to myself, you know, if every base got a certain kind of widget, we would create enough of a market so we might get some business over the edge.

Now, I didn't get funded that way, but anyway, that was my vision. (Laughs.) So that's the kind of thing, in theory, that the Department of Defense does. I mean, they bring a market to play, and if they choose to use it -- they choose -- and the Congress agrees, because the Congress has to appropriate the money for that.

Now, put your hat on from the point of view of the guy who's trying to go fight the war. If that comes at a real economic price near-term, and my budget is already on its way south, you know, there's a real resistance to want to do anything that's going to cost me more. And they look at that in the department and, I think, quite legitimately, say that's not my job. You know, you called me to defend the people and support the constitution; that's not my job. So that's an issue that's a policy question that has to be sorted out between the Congress and the Department of Defense.

QUESTIONER: You can argue it though.

ENGEL: You could make that argument.

MCINTYRE: All right, let's go way in the -- in the back of the room there. Oh, sorry. And then we'll come back.

Woman in the -- oh, you had -- didn't you have a question? Oh, OK. Yeah, go ahead. Sorry.

QUESTIONER: You can go first.


QUESTIONER: John Hougee (ph). A question on the Keystone pipeline, which I would -- had expected you would ask our guest about. Would you say, based on your analysis, that that is not necessary, but adds to diversification?

ENGEL: Well, we -- our analysis in the intelligence business doesn't look inside the United States. I mean, we just don't get that specific about things inside the United States.

The observation from what we have looked at is that preservation of the capacity to get heavy oil into our refineries which are heavy oil dependent is important. How that's done, again, is a policy question.

The Canadians would love to have that pipeline built, because that's a source of getting the heavy oil into our refineries. And if they don't do that, then they're going to have to figure some other way to get it out.

MCINTYRE: Let me ask you just a quick follow-up on the Keystone XL pipeline, because I just find this sort of an interesting subject. It seems all of the debate in Washington about that was very politicized, very much about whether it's going to create jobs or something, and very little about the actual environmental impact of the line and what the risk was and what the actual economic benefit would be from it, which is -- a lot of it was just very, very -- it was almost like each side was a caricature of the other's arguments. Are there some myths about that, or is there some context you could provide about whether the value of the --

ENGEL: I'm not that knowledgeable of it.

MCINTYRE: OK. All right, I'll do that later. (Laughter.)

ENGEL: Or I wouldn't touch it if I was.

MCINTYRE: That's OK. Let's go up here to the front.

QUESTIONER: I'm Mitzi Wertheim with the Naval Postgraduate School, and the first thing I want to do is say bravo to the National Intelligence Council for having produced your Le Menu. I am now giving it to everybody and telling anybody who does a report for the government ought to do something like this because if you want to get to the people at the top, they don't have time for anything more than this.

So I would like you to share as broadly and encourage as many to do it so people can learn about it. Nobody has time to read your 70 or 80 page book.

ENGEL: Of course. (Laughter.)

QUESTIONER: Well, that's the reality of what's happened with time.

ENGEL: I understand.

QUESTIONER: I'm going to ask about educating the public on these issues because it's terribly important to have them saying: This really is important. I've been working with the Navy for 37 years, and in fact it was out of a group that I had at my house that we got the line in the president's State of the Union: The nation has a problem. We're addicted to oil. And DOD then started educating -- I mean, we -- everybody recognized we were energy illiterate. And we started this thing called the energy conversation, which DOD funded for three and a half years.

But what we're struggling with now is changing behavior in the military and getting them to conserve because we're not -- we may not have it forever, but conservation turns out to be, I think, a very important thing. And when I got into the energy game, what I really cared about was having all Americans feel the way I felt as a child working in our victory garden or counting the coupons or whatever, that I was helping to win the war. So there's this whole question of telling the story so you get everybody basically trying to be good conservers of energy. How do we do that?

ENGEL: Here is the dilemma. And I think there is a very good argument on both sides of this. And this -- I will tell you, this came up when we did the climate change national intelligence assessment. There were some individuals who said to us: You have a responsibility to tell this to the American people so they understand how important climate change is. There were other people that said: You guys don't know what you're talking about. You have no business talking to anyone.

And there was the other side of the argument which was really, I think, a more compelling issue that we had to wrap our hands around -- the philosophical question: Do you want the United States intelligence community being in the business of persuading the public? Or is the intelligence community better in a position to inform the policymaker?

If you accept that we are an unbiased shaper of public opinion -- yeah, the room got quiet. I wonder why that is? (Laughter.) Many Americans would wince at that thought. And so therefore, I think we need to -- we need to be very careful in the intelligence community as we go down this path of alerting, certainly the policy community, there's no question about that, and then were appropriate putting things out there that are important for the public.

If you look at the director of national intelligence's current threat assessment -- his 2013 current threat assessment, the unclassified version -- beginning on page nine through about page 12 there is about two and a half pages on natural resources. It essentially says same -- similar things that I said.

So we would argue that that is probably as far as the intelligence community should go in this issue of informing the public, aside from if anyone asks to talk, we'll come do our best to answer the questions that are in the public domain.

QUESTIONER: I was really looking at it from a broader point of view, not that you should be the voice but that the knowledge you have needed to get to a much broader audience. How would you propose doing that, I guess I'd say?

MCINTYRE: Oh. Well, you know -- let me jump in for a moment because, of course, the role of journalism, as I said at the beginning of this, is to inform the public. It's -- and I think it's sometimes discouraging that the trends that we're seeing with a lot of mass media these days is not toward what I would call informing the public but more toward inflaming public opinion.

The business model for a lot of -- you know, the all-news cable networks and stuff, is to focus on a couple of sensational stories, sometimes stories that aren't, and not really provide much context. One of the reasons that I'm happy to be working at NPR is that I feel like sometimes we're one of the last organizations that are in the context business. We don't always do it perfectly, but we do set out trying to do that. And NPR does do stories that tries to explain to people.

And I do sympathize because I think many of us want to be, you know, good citizens and do things that are smart. But I have to -- you know, I watch my wife, who's a big recycler, and I watch her washing out all kinds of, you know, paper products so they can go in the recycle bin. And I'm thinking are we wasting more water trying to clean the products? And then I wonder, are we really -- are we really wasting the water, because here in the Washington area most of the water is treated and goes back into the -- so.

And so, I'm trying to understand, what are the actions that I'm taking that really do that? So I think -- I think grants funding really good environmental reporting at NPR would be one answer, just -- (laughter) -- one that just comes into my head. (Laughter.) Let's go back -- where were we? We were -- let's go over here, this purple tie here?

QUESTIONER: Thank you. Fred Tipson. I'm with the U.S. Institute of Peace. I am also a member of the Richard Engel fan club. (Laughter.)

ENGEL: Thank you.

QUESTIONER: Because I think you've done such a good job of transferring green issues into red, white and blue issues. And I think that's the name of the game because unless we do that, we're not going to take the kinds of actions we need. People won't take it seriously enough.

But as I've looked at these issues, I -- the one problem I have with the work of your group is that it's too light on the political side of things. And as I listen to the conversation today, a lot of is, well, we know what to do, we just need to do X. We just needed to invent this technology. We just need to take this political action. We need to do this economically in a rational way.

And I would ask you about the political deficit that we see as a trend. Moises Naim's book, "The End of Power," documents this to me in a very powerful way. We don't have political systems capable of dealing with these problems and managing these problems in ways that resolve them, those that are solvable. I mean, some of the trends to me are just going to be changed.

But the real crisis and the reason that I think Chicken Little and the Boy Who Cried Wolf and Thomas Malthus were just head of their time, is that we don't have the political capacity either on a multilateral front, which is our next discussion, or nationally, including in our own country, to deal with these really tough trade-off problems. And I don't get from your -- you know, when you do projections of how serious the problems are, there's enough of a sense of just politically how powerful the challenge is to get these things done in order to change the trajectories.

ENGEL: Well, if we're hesitant to talk to the public -- I mean, you have to appreciate, there's a real sensitivity to try and get in the midst of the political choices.

I will say, in the products that we produce, we distribute them -- every product the National Intelligence Council produces is by law required to go over to the Hill. And it goes to both sides of the Hill. So I think we do a very good job of the classified reporting, getting it to both sides of the aisle.

The issue you bring up, in my mind -- and I'll speak to the United States, and this is a little bit of a challenge. And some of the other speakers alluded to this, but it's not unique to the United States. And then I'll talk about the international side of it. These are issues where you have to think strategically. You have to say, this is a problem that I have to commit to solve 10, 15 years down the road.

That's hard for our political process to do. If there's -- so how do we do that? I mean, maybe we need a constitutional -- Constitution 2.0 or something to go out and figure out how we commit ourselves to think strategically. So that's -- but that's way above the pay grade of the National Intelligence Council, not our job.

MCINTYRE: Yeah, I would just add, by the way, that I think that the problem that you identify is, you know, really embodied by the gridlock that we see in Washington today. I mean, these problems are problems that require -- to have a good understanding, I mean, they require some depth of knowledge. They require some understanding of nuanced things, of balancing different interests and risks. And that is just the kind of debate that you don't -- you don't hear much in Washington these days.

I mentioned earlier, I listened to some of the debate about the Keystone XL pipeline, and the debate simply went, one side was that the president was a job-killing president who didn't want to -- didn't want people to be employed. And the other side was that the, you know, that we wanted to kill the environment.

And there was very little discussion of the actual alternate routes, the threat to the tar sands, the type of technology employed, what the trade-offs were, you know, whether the oil -- what the economic benefits in the oil would be, the fungible nature of oil. None of the nuanced parts of the debate did I hear in any of the congressional back and forth on it.

So I -- you know, I think that's -- one of the problems that we have is that we have a really hard time these days dealing with complex important issues that require scientific -- or depth of understanding and some sort of willingness to try to find some area to make progress. That's the end of my sermon, sorry.

Back to the questions, let's go over here.

QUESTIONER: Thank you, I'm Peter Seligmann with Conservation International.

I have actually two questions; I'm not sure you'll answer both of them, or you can. But the first is, you're talking strategic and you're thinking about long-term horizons. So when you discuss U.S. energy independence and really link it to a massive and understandable investment in natural gas, is there a possibility that we will not be able to really address the CO2 emissions challenges by creating a dependency on -- and independence -- and a dependency on natural gas, and just getting in that habit, especially at a low-price point? That's one question.

The second thing I wanted to ask you about was you talked about goods and services from nature. We talked about food and water. But you haven't mentioned sources. How do assure that -- kind of going back to the ecosystems that provide those services. And I just wonder, in your assessments, are you looking at the actions that are required to secure the productivity and the supply of those goods and services that nature provides?

ENGEL: Well, on the second question, we -- when we do go through and we do the analysis, like we did on water and like we are doing on food and we do on energy, we do talk about opportunities in there. We don't get policy prescriptive, because that's not our job, but we do talk about opportunities, like I described with water. And we -- in our food estimate, which we are working on now, we hope to have finished before the fiscal year expires, we will do the same type of -- same type of issue, identify some opportunities for the United States.

On the -- on the question of how you really try and -- your first -- what was your first question? Give me your first question again. (Chuckles.) I forgot it.

QUESTIONER: It was really dealing with the opportunity that you described for the country to be energy independent.

ENGEL: Energy independent.

QUESTIONER: And my question was, when you're that energy independent and you're dependent upon a fossil fuel, are you actually more dependent than independent?

ENGEL: It is -- it's been well-written and well-documented by external research, and we have only parroted it, that obviously the degree to which the United States has attractive fossil fuel options reduces some of the fiscal motivation for doing the renewables. And I can tell the policy community that, but you know, they don't hit their forehead and say, gee, I didn't think of that. I mean, that's very well-known. So we point that out, but they know that.

I would like to kind of take a little spin on that question though, and go back to an earlier question someone asked today. And that was about -- they described a set of circumstances where it used to be the motivation for these renewables were, one, climate change and, two, we were running out of energy. Clearly, we're not running out of energy anymore. I agree with that. And -- but we do face a challenge from the climate change perspective of it, according to the science.

And we, the intelligence community, doesn't do our own science. We rely upon what outside people tell us. And -- but the outside science story is really interesting and it's taken a very scary turn, as it's been explained to me. The CIA, you know, through a program with some climate experts, asked for a series of studies to be done, and they also asked the National Academy of Science, one of which looked at extreme weather events. Their last one is published by Harvard -- it's on the Harvard website.

But here's the story: Extreme weather events are happening much faster than we thought they were going to occur. And I would just -- and I will probably properly describe this, as it was given to me by a climate scientist. But basically, what has happened is the Atlantic -- the Arctic jetstream has lost its umph. And when it lost its umph, the mid-Atlantic -- the midlatitude -- excuse me -- the midlatitude jetstream, the one that the pilots like to fly the right way in to give us good tail winds, is meandering.

Instead of going predominately from west to east in the United States, it's developed these incredible north-south patterns. And what that means, if it dips real down, someone's going to get a ton of Arctic air. If it goes way up, someone's going to get a lot of warm air they didn't see before. That can create droughts, floods, extreme weather that you're not used to seeing. It's what makes these, what people have said, a hundred-year events occurring at a much higher frequency. That's happening today.

QUESTIONER: Quick point about energy independence. Isn't there a limit, though, to the value of energy independence, in the sense that, for instance, Canada is oil independent.

ENGEL: Oh, absolutely.

QUESTIONER: They -- gasoline prices in Canada are no cheaper, in fact more expensive, than in the United States. And because of the global nature and the fungible quality of oil, it just -- it all goes into the oil market.

ENGEL: Right. And the oil -- the oil producing countries will be the first ones to point this out to you, as well as economic partners that are dependent upon it. We are integrated in a global energy market, especially as it relates to oil. So we have -- even if we are independent, if there's a big price problem, we're going to feel that price problem. We're going to feel it inside the United States and our economic partners are going to feel it. And it could potentially, you know, pull a couple percentage points off global GDP, which would directly affect us.

MCINTYRE: So we -- we're getting down to -- (inaudible). Time for one or two or more questions. If you keep them brief, we might be able to squeeze three in. Let's go back to Jan in the back there. I happen to know Jan, so I'm going go to call on her.

QUESTIONER: Hi. Jan Smith Donaldson. Question: Can you sum up exactly how you think that climate warming is a game changer for national security, and what do we need to do other than the R&D mentioned in terms of alternative energy? What else do we need to do to accelerate our readiness?

ENGEL: Well, the paths we identified in a climate change NIA I think are still valid. Climate change impacts security because it creates water challenges and food challenges. Initially, we said those will cause people to move. Now it's a little more complex. It will actually cause instability in some countries.

Climate change, because of extreme weather events, damages valuable infrastructure, and that particularly is a problem of the developed world. The United States is vulnerable to having our infrastructure damaged by extreme whether events.

And the last way that climate change impacts security is it creates changes in disease patterns -- disease patterns that can affect food, which would affect our security and disease patterns that could even affect human beings, depending upon where it takes place.

I mentioned the issue of trying to work your way through this by accelerating the business case for renewables. The other thing that becomes critically important is to look at the infrastructure. And when we did the climate change NIA and we came down to this third item which was damage to valuable infrastructure, it was kind of an epiphany for me, this realization that our infrastructure design criteria is not adequate for our future world. And not only is it not adequate, it needs to be a dynamic document because the world's going to continue to change.

So if you think about -- and we're going to build buildings that last 30 years, I can't build it upon today's climate: I have to build it upon a climate that's going to last 30 years. And if I'm going to renovate it in 15 years for another 30 years, I'd better build in the capacity to make it even last longer. So you have to have sensitivity to a dynamic infrastructure design criteria.

MCINTYRE: Let's try to squeeze one more here, right in the front here. We're getting down to the --

QUESTIONER: David Hitchings -- David Hitchings from Northrop Grumman. You -- we talked a lot about cost of energy. Could you explain to the folks what the cost of energy is delivered to the forward operating bases of the troops and lives? And is solar and alternative energy on forward deployed bases in our projection of power something that is valuable to the government?

ENGEL: I don't know the numbers off the top of my head. The Department of Defense people probably do, but it's hugely expensive, hugely expensive compared to what we pay in the United States. And moving the fuels is expensive in terms of lives because of the convoys you've got to protect in moving it. So obviously to the degree we got off of that, it's attractive -- better battery technology, for the soldiers' ability to generate power locally so they don't have to bring in fuel for diesel generators -- all of those things. And the department is very aggressively looking at that stuff. They understand how important that is.

MCINTYRE: We're just about out of time. We might be able to squeeze in one more. I need one really good question. Who's got the best question that hasn't been asked so far? (Laughter.) All right, really? Really, really? All right, let's go in the back there. These people think they've got to a good question. Right back here. You guys can fight over the mic back there.

QUESTIONER: Just a quick question. James Francfenelli (sp) with the Carlyle Group. Extending on your rare earth metals, and General, with your caveat on beyond 2020 is a bit of a guess, but the IMF is now projecting the Chinese economy will surpass the U.S. by 2025. They've got a global commercial industrial policy, very aggressively investing across the Southern Hemisphere, Asia, Western Hemisphere. What's the impact of the Chinese militarily on the global commons to a much greater degree within the next 10 years than they are today, much like we see them in the cyber domain?

ENGEL: I think that's an excellent question. I think that's a question that's probably being debated in Beijing, to be real honest with you. And Beijing is probably very interested in what the United States is going to do. We've went through the discussion about the United States dependency upon fossil fuel, particularly from the Middle East, maybe less reduced. So if I were in Beijing, I would look at the Americans and say, does this mean you're not going to protect those sea lines of communication anymore? And how we answer that question would drive one set of Chinese potentially -- drive one set of Chinese behavior, or depending upon what you answer, could drive a different set.

Clearly, they would be the first ones to point out to us what I said earlier. Look, we're integrated. We're all in a common energy market. You know, we got to keep energy prices low, good for you, good for me. Continue to protect that oil.

But I think that's an issue that is probably being debated pretty strongly in Beijing.

MCINTYRE: General Engel, thank you very much.

ENGEL: My pleasure.

MCINTYRE: Let's give him a hand. (Applause.) One item I should mention: As a news reporter, I usually like to bring these things up at the beginning, but this entire session has been on the record.

ENGEL: (Gasps.) (Laughter.)

MCINTYRE: So anything you said can and will be used against you in the court of public opinion.

ENGEL: No problem. (Laughter.)

MCINTYRE: Thank you very much.

ENGEL: Thank you.

MCINTYRE: Thank you.






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