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Conversation #1

Michael Kane
Staff Writer

© Copyright 2006, From The Wilderness Publications,  All Rights Reserved. This story may NOT be posted on any Internet web site without express written permission. Contact May be circulated, distributed or transmitted for non-profit purposes only.

Uncle Sam - Be Energy Smart
This poster welcomed us all to DoD’s first “inter-agency conversation” on energy. It was derived from a “war on terror” poster in the Pentagon outside of Secretary Rumsfeld’s office.

Excerpts from the Q&A session with former Director of Central Intelligence James Woolsey, March 27, 2006, at the first Department of Defense (DoD) “inter-agency conversation on energy” just outside of the Pentagon:

Michael Kane: Michael Kane with From the Wilderness Publications. First off, anyone here with DoD that’s familiar with the March 2005 Renewable Energy Assessment, if you have any information on that or what’s developed since then, I would love to get more information.

Recently the Army Corp. of Engineers has released a report on Peak Oil wherein they claim that the most likely year for the peak of conventional oil supply to be 2005, if not, Peak Oil is in sight.

Robert Hirsch completed the Hirsch Report for SAIC that said we need to plan anywhere from 20 to 30 years prior to the peaking of conventional oil to implement a mitigation strategy to avoid major social and economic turmoil.

Given those facts, and given that peak is well at hand at this point, we are just starting this mitigation strategy…

…you recently gave testimony to the Senate where you said a lot of the things you said today, and Senator Hagel and others had said there has to be a crisis; there has to be a crisis for the American people to wake up and know what has to happen…

Are we on the brink of that crisis? Do we have the time to mitigate it or is this a crash-plan?

James Woolsey: Well, uh, I think we are about as close to a crisis as one can get: we ought to be close enough to motivate people to move.

April 3, 2006 1000 PST (FTW) - WASHINGTON D.C. -The Pentagon’s solar farm almost seemed to wave hello as I drove into the parking lot of the Pentagon on March 27, 2006.

This was when the first in a series of inter-agency military discussions on energy took place where the main speaker was former Director of Central Intelligence, James Woolsey titled “Energy: A Conversation About Our National Addiction.” The next event will be on April 24, where Robert Hirsch and Congressman Roscoe Bartlett will be speaking explicitly on Peak Oil. At least 300 people filled the room—more than expected—and the gang was all there.

Pentagon, Army, Navy, Air Force, Department of Homeland Security, Defense ARPA, State Department, Congress, international embassies, think tanks, conservation and environmental groups, Booz Allen Hamilton, Northrop Grumman, and many more high-powered interests were all represented in a small banquet room at the Doubletree Hotel on Army Navy Dr.

The three-hour event was sponsored by the DoD’s Under Secretary for Acquisition, Technology and Logistics and the Office of Force Transformation (OFT). CNA Corp (Center for Naval Analysis), a 60-year old non-profit specializing in Naval issues and public relations, handled the event planning headed by Mitzi Wertheim who is working under contract with OFT.

FTW was only able to learn of this event after Publisher Mike Ruppert received an anonymous email giving the date, time and subject, but not the location. After assigning the story to this writer, it was only after several attempts and the assistance of a congressional staffer familiar with the subject matter that the actual location was learned. As I tried to obtain details it seemed that FTW’s presence wasn’t going to be encouraged, at least by the organizers.

I randomly sat in the second row where Theodore Hilgeman, Ph.D., of Northrop Grumman was to my left and Hank Gaffney of CNA Corp, was to my right taking impeccable notes the entire time. I was one of very few reporters in attendance.

Frank Anderson, the President of the Defense Acquisition University, told the audience that President Bush has declared the energy problem a “national priority.” A new office in the Pentagon focusing on the department’s use of oil will soon be created.1 Mitzi Wertheim of CNA Corp, who formerly worked as James Woolsey’s deputy when he was an undersecretary in the Navy, introduced Woolsey. Wertheim is the main organizer of these monthly events, and it is said that she “knows everyone in Washington.”

Wertheim told us the “reason we are all here” was because of James Woolsey. After Bush was reelected Woolsey was asked a hypothetical question of what he would do if he were President. He said he would make energy efficiency and conservation his #1 priority. That is where the evolution of what might be called an “energy consensus” inside the Beltway began, leading into this series of events.

After a few jokes, Woolsey opened his speech by saying he was glad to see the “war on terror” was now being referred to as “the long war.” World War II wasn’t the “war on kamikazes,” said Woolsey. Back in December of 2004 at an American Council on Renewable Energy (ACORE) Conference in Washington D.C., Woolsey said a major component of the “war on terror” is oil.

His rhetoric on energy focused primarily on terrorism avoiding Peak Oil entirely until Q&A forced the issue. He spoke of how the Cold War view of warfare is irrelevant in the face of Islamic terrorism and said his son was pulled out of the South Tower on 9/11 by a policeman just 30 seconds before it collapsed.

Americans sit in the middle of hundreds of complex systems: from food to transportation to energy and beyond—all of these systems have many complexities wherein chaos theory alone could account for any one of them being brought to a halt, said Woolsey. He used the August 14, 2003 blackout as an example to emphasize his point, where a few falling tree limbs were blamed for causing the massive failure.

He did not mention that throughout the entire Northeast and Midwest on that 90-degree day in August, demand for energy was peaking, nearly outstripping supply; nor did he mention that most of the tree limbs blamed for causing the blackout were never recovered or even proven to have fallen; nor that downed tree limbs could have occurred after the system started to cascade having nothing to do with causality; nor that all of the commissioners investigating the blackout were sworn to secrecy, which never happens in blackout investigations.2

Regardless, Woolsey’s point that complex systems are prone to massive failures from seemingly small events should be well taken.

He repeatedly praised We Were Warned – Tomorrow’s Oil Crisis, the recent hour-long CNN documentary, saying it was a good place to start educating people on what the problem is. When confronted with my question on Peak Oil, Woolsey responded by acknowledging we are “as close to a crisis as one can get,” but he framed this looming crisis as originating from a terror attack or a natural disaster, not from the geological reality of Peak Oil. The CNN documentary frames the debate exactly as Woolsey does.

The truth is that all of these factors are at play, which is a highly volatile situation.

Woolsey then explained Hubbert’s theory to his audience (since many in attendance lacked the necessary background information), saying it was a very accurate method for predicting peak in some countries. He recognized that Kuwait’s largest oil field, Burgan, has reportedly just peaked. (Some experts, including those in Kuwait, have used the term “collapsed.”) From there, he digressed into some of his economic theories relating to his interpretation of Global Peak Oil.

In 1986 Saudi Arabia was able to manipulate the oil market by drastically cutting output followed by a ramp-up in production, which drove some of its competitors out of business. Woolsey said he is concerned this can happen again. But today’s oil market is so tight that this form of manipulation is unlikely to occur again, though economists continue to worry. According to the Army Corp of Engineers report on Peak Oil titled Energy Trends and Their Implications for U.S. Army Installations, Saudi Arabia has not increased its oil production since April of 2003.3 If Saudi Arabian production is cut any time soon, it will likely be imposed by nature.

We are much more likely to see uncontrollable price volatility due to the geological reality of Peak and its impact on the market than from a manufactured supply glut that today would be geologically impossible to manufacture. This is what one private-sector, military-industrial insider at the event claims is the most pressing immediate concern, which correlates to the findings of a recent study from the University of Tokyo showing that volatility widens drastically just before markets collapse.4 Immediately after such volatility occurs, it is worrisome to consider what might happen when panic sets in with the American people.

Woolsey went on to say that with costs as low as they are in the Middle East, peaking wells may cause production costs to double from say $5 to $10 a barrel (for example), but that would still leave plenty of room for oil producing countries in the Persian Gulf to profit, considering the current price of oil.

Woolsey then discussed peaking as if it will happen over “decades,” which we could call “the plateau theory,” held by Daniel Yergin and his colleagues at the Cambridge Institute, along with many oil industry insiders. This explained why Woolsey made the bizarre claim that Hubbert’s theory is accurate in “some” countries; he wanted to leave room for the optimist argument even though supporting evidence is lacking. But then he recognized Matt Simmons’ excellent work in his book Twilight in the Desert, where Simmons concludes Saudi Arabia’s oil production is at or near peak, which would mean that the world has peaked and irreversible decline is “just round the corner.”

James Woolsey is 100% politician.

The current debate (dialectic) is whether Peak Oil will be a significant event in history wherein global production falls into irreversible decline quickly (over a few years) on a global scale, or whether oil production will remain constant (plateau), spanning over many decades and allowing time for (an as-yet hypothetical) technological mitigation before irreversible decline sets in. Woolsey is paying lip service to both views. Effectively, he is licking his finger and sticking it in the air to see which way the political wind will blow before committing to a position.

Ultimately, geology will have the last word as the Army Corp of Engineers, Investment Banker Matt Simmons, geologists Colin Campbell and Kenneth Deffeyes, and many other prominent figures already know.

It seemed that the individuals in attendance from the private sector had a much better grip on the reality of Peak Oil than most government officials. One official from the State Department said that the oil insiders he regularly speaks to feel Peak is 20 to 30 years away, and he is anxious to hear what Bartlett and Hirsch have to say at next month’s event. It is highly likely their information will resemble what they presented to Congress on December 7, 2005, at the first full-scale Congressional hearing on Peak Oil.

Woolsey’s recommendations for dealing with the oil crisis were the same ones he made to Congress back in November that FTW has already reported on and addressed; biofuels, hybrids with plug-in capabilities, and carbon composite materials used in aerospace technology to produce lighter vehicles. These are band-aids that will do little to stop the gushing severed artery of Global Peak Oil. At least Woolsey continues to recognize that the Hydrogen Economy is not a viable option.

Biofuels and Gasification

It is nothing short of frightening to consider what a drastic increase in the use of biofuels could cause as oil production falls into decline: head-to-head competition between food and transportation. Others at the event privately addressed their shared concern in this area.

During the Q&A session with Woolsey, Brazil was mentioned as a shining example of how a society can transition to a transportation system based on ethanol and flex-fuel vehicles. But it took Brazil 30 years to get 40% of their transportation fuel consumption from ethanol.

We don’t have 30 years before Peak Oil. Woolsey said the projection for biofuel replacement of gasoline in America is 25% by 2020, and that is assuming cellulosic ethanol develops as anticipated. This is “too little, too late,” and offers no hope for mitigating the coming U.S. energy crisis.

As for Brazil, we have yet to see comprehensive analysis of their ethanol production. How much commercial fertilizer (natural gas) does it take to grow sugar cane as fuel stock? How much food does Brazil currently import to sustain the required domestic land usage for their ethanol production? Can we even compare Brazil’s transportation sector to the size and scope of America’s?

A quick Internet search seems to reveal that Brazil has 20 million cars on the road. So it took the country 30 years to get under 10 million cars running on ethanol. Does this mean anything at all for America’s 220 million automobiles?

Gasification of coal and natural gas was discussed at the event, which is the production of liquid diesel fuel from coal or natural gas. Woolsey said the main concerns with gasification are cost effectiveness and carbon. If the process is economically viable, the question then becomes: Can carbon be sequestered underground for hundreds of years without leaking?

Woolsey said this was important because “the environmentalists don’t like it,” but that is misleading. The trade of CO2 emissions is a new and growing derivatives market that has developed because the finance community now views global climate change as a financial risk. This is the real reason why CO2 emissions are being so closely scrutinized.

Natural gas is so vital to heating, electricity, and commercial fertilizer production that bringing it into the liquid fuel market could drastically impact reserve capacity, causing price volatility and taking us ever closer to the unknown brink of the natural gas cliff. We maysee some gasification from natural gas in Asia, where reserves are still abundant, but not much since natural gas will continue to skyrocket in value in its gaseous and liquefied (LNG) form for shipment overseas. There is little room for natural gas to move into yet another market that has virtually no existing infrastructure.

Coal will likely be used in gasification in America since we have an estimated coal reserve of 250 years if consumed at current levels. But, if we increase our coal consumption by a mere 2% per year, those reserves drop to only 50 years of coal, as Congressman Bartlett has stated on the floor of Congress. Considering the predicament we are in, it’s going to be hard to limit our consumption to a 2% increase per year. And the issue of carbon still needs to be addressed by building clean coal infrastructure (that does not yet exist)


No one from DoD approached me regarding my request for information on their March 2005 Renewable Energy Assessment. I stayed well past the end of the event and made myself easily and readily available, but no dice. One DoD employee thanked me for mentioning the report since he was unaware it existed. Either there was no one present who was familiar with the report, or no one was interested in giving me more information. FTW will be further reporting on the military’s use of renewables in the near future.

The entire event was very well orchestrated politically.

CNA Corp closely handled the event to make it appear as though it was hardly handled at all. The 6pm after-work start of these loosely titled “inter-agency conversations” carries with it an image of voluntary interest and dedication that Mitzi Wertheim clearly wants to maintain.

The evolution of this event can be traced back to an eclectic group centered around energy (and Woolsey) including Mitzi Wertheim and Nora Maccoby among others. Maccoby was described on page six of the NY Post as an “enviro-babe and screenwriter” who “kicked Rumsfeld’s ass” by schooling him on energy issues at a holiday party in Georgetown. This is said to have been the catalyst for Rumsfeld’s memo requesting information on who was in charge of energy issues in the Pentagon.5

Sounds like something out of a movie!

K. Scott Pugh, a retired US Navy Captain and Executive Director of ASPO-USA (Association for the Study of Peak Oil), joined Wertheim’s group six months ago. By that time, there were over 25 people involved and dinners were happening every other week, according to Pugh. In light of Woolsey and Wertheim’s Naval background, it is necessary to note that Admiral Timothy J. Keating has commanded NORAD/NorthCom ever since Air Force General Ralph “Ed” Eberhart retired immediately after Bush’s reelection on November 4, 2005.6

After the event concluded, I spoke with Pugh and William Clark, author of Petrodollar Warfare, regarding Peak Oil, 9/11, and Crossing the Rubicon—familiar topics for all of us. Pugh was in the Pentagon on the morning of 9/11 when it was struck. Both Pugh and Clark will be attending the Local Solutions to the Energy Dilemma Conference in New York at the end of April.

The DoD has been forced to recognize the energy elephant in the room, and the Democrats—led by Woolsey with strong Navy support—seem to have a running head start in front of the Neo-Conservatives who put all of their eggs into one broken basket of war in Iraq. Now we see the Neo-Liberal “plan B” unveiled before us, which is a crash plan of “use whatever the hell we’ve got, and fast!”

What we must not forget is that what is being discussed here is how to win an ever-growing number of wars as efficiently as possible. Back in December of 2004, Michael C. Ruppert wrote the following in regards to the military’s marriage with renewable energy:

…the military is interested (in renewable energy) too -- not because energy independence will make it less necessary to kill and die, but because the war machine will be more flexible and enduring if they can run it on biodiesel.

To Ruppert and most of FTW’s readers, the military’s broad and optimistic assumption that it can win many wars, let alone one, is another debate altogether.

1 Gopal Ratnam, “Pentagon Seminars Seek Solution to U.S. Oil ‘Addiction’,”, 3/28/06

2 This information was obtained from a December, 2003 interview with lifetime IEEE fellow Jack Casazza, who was very disturbed by the Blackout Commission’s findings. Casazza has served on six blackout investigation panels in his career and not once was he required to sign a confidentiality agreement. It’s not surprising we see this level of secrecy surrounding energy issues in light of Vice President Dick Cheney’s refusal to release the documents produced from his taxpayer-funded National Energy Policy Development Group.

3 Donald F. Fournier and Eileen T. Westervelt, Energy Trends and Their Implications for U.S. Army Installations, Army Corp of Engineers, September 2005

5 Page six of the NY Post is the best known gossip column on the planet:

mirrored here:

6 General Eberhart’s retirement came three months after he testified under oath at the final 9/11 Commission Hearing where he had refused to respond to my question asking him who was in charge of coordinating the multiple war games on 9/11. His retirement came only one month after Crossing the Rubicon was published.

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