Attached is a very short report on the role intelligence might best play
in supporting U.S. energy policy and planning. This was prepared by my
Science and Technology Advisory Panel. After you have an op[Page 505]portunity to read it, I would
like very much to get together with you to discuss this report and any
other ideas you may have on how we can be supporting you better. May I
invite you and two or three of your assistants to come to the Agency for
luncheon with me and our top people involved in collecting and analyzing
energy information.
Attachment
3
Proposed Intelligence Activities in Support of US Energy Policy and Planning
Observations and Conclusions
1. A number of studies have indicated clearly that a driving force in
the strategic position of the major powers in the 1980s–1990s will
be the availability and price of major energy resources. In this
time frame, oil, natural gas, coal, and uranium are the only
resources that need be considered. At present, a number of agencies
and departments—CIA, DOE, Defense, Treasury, and State—have
limited efforts to examine the present situation and are making
limited extrapolations of what might happen over the next 10 years
or more with the emphasis on the shorter term projections.
2. There is a high probability of continued increases in the price of
oil and a possible severe shortage of oil relative to the demands of
the world economy by the end of the coming decade. The “crunch” will
be massive under the almost certain condition that the Soviets will
no longer be a net energy exporter. The situation will be even worse
if CIA forecasts of the Soviet need
to become a substantial importer are valid. Alternative sources of
energy will simply not be available in practical economic terms in
the necessary volume by that time.
3. The implications of this situation in itself and for the actions
of governments as it becomes closer and more salient are numerous,
critical, and complex. With the probable exception of the nations of
arid Africa, the consequences of the impending energy crunch will
impact heavily on most governments and thus on most major
international economic issues; on the stresses felt by existing
alliance systems (NATO and Warsaw
Pact); on regional power balances and emerging regional powers; and
on perceptions of the need for and incentives to use military
forces. Without engaging in overstatement, the energy fac[Page 506]tor will have at least as
much impact on the role of the United States in the world in the
coming decades as nuclear weapons have had in previous decades.
4. Relative to nuclear weapons, the energy factor will create far
more difficult requirements for information and thus tasks for the
US intelligence and policy
analysis communities. The implications cannot be adequately grasped
simply through concentration on a very small number of foreign
countries, on military as distinct from economic matters, and on
meeting the problem through unilateral US procurements or dispersal of technology.
5. The US energy policy community now
has on its agenda a large number of relevant issues and action
programs. These developments are relatively recent and fluid in
terms of the division of executive branch responsibility and focus
on coordination. Nevertheless, the policy community is well ahead of
the current production capacity and institutional priorities of the
Intelligence Community on energy and energy-related matters. Without
substantial increases in the resources allocated to intelligence
production pertinent to the energy factor, the gap will grow.
6. Scientific and technical development will greatly influence the
pace of energy resource recovery and production in countries
throughout the world. Much of this information is in the open
literature or available from easily accessible sources. At one time,
the Intelligence Community maintained almost routine coverage of
these engineering (non-nuclear) developments. Shifting emphasis to
assumed higher priority items has vastly degraded the US capability in monitoring technical
developments in many areas of fossil fuel recovery, conversion, and
use. For example, our knowledge of technological possibilities of
the use of the high BTU gas
production developed in East Germany is extremely limited. Our
knowledge of the South African technology for the development and
use of Solvent Refined Coal is similarly limited. A list of
comparable examples is virtually limitless. The failure to maintain
cognizance of technical developments in the non-nuclear energy area
will severely limit technical developments in the use of fossil
fuels in the United States.
7. Many of the policy alternatives now under active consideration and
increasingly detailed formulation call for syntheses of two kinds.
First, they require the integration of political, economic, and
scientific and technical intelligence. Second, they require the
integration of estimative intelligence on the policy intentions,
capacities, and responses of numerous governments in OECD, in CEMA, and in the developing world.
8. Unfortunately, these two sorts of syntheses are precisely what the
US Intelligence Community is
poorly organized to provide. Given [Page 507] other production burdens and historically
established interagency and interoffice divisions of labor, it is
unrealistic to expect these syntheses to be generated in the absence
of high-level guidance and demand. There clearly exists competence
among individual analysts as demonstrated by a superb ORPA report on the political
economics of energy in the Warsaw Pact.
9. Analyses which synthesize across types of information and
pertinent nations obviously can be no better than the descriptive
intelligence information and “single discipline” and “single
country” analyses on which they can draw. The activities being
undertaken and the priority questions identified for production are
by and large commendable and necessary. They are in no way
sufficient, however, to the scope of the problems posed by the
energy factor.
10. It would obviously be inappropriate to assume that the sole
provider of information pertinent to energy and energy-related
policy issues will or should be the Intelligence Community. However,
there is little evidence of a thorough assessment of which
information needs should be met by the Intelligence Community, which
would be best provided by analysts working under other public and
private sector auspices, and how these streams of production should
be organized to complement each other efficiently.
11. An examination of these efforts to understand (a) the energy
policy of the Soviet Union, (b) the implications of the energy
shortages to the LDCs, and (c) the significance of these
developments to the future of the United States convinces us that
US efforts in this area fall far
short of what is needed. In our view, the availability of energy
will determine the economic situation in the
world in the 1985–2000 period. There is at present no unified effort to understand the long-term
view of the Soviets regarding their energy policy or even their
assessment of the US policy. Limited
efforts are under way to understand Soviet R&D developments. We believe that these are
relatively weak attempts which reflect an evaluation of Soviet
R&D in terms of our own
programs.
12. The rapid evolution of requirements for intelligence on energy
systems poses two kinds of important problems. First, our lack of
experience will hinder the developments of the kind of analysis
important in the 1985–2000 time period. Second, the users of
intelligence analysis will also require experience as to the kind of
analysis that will be of greatest aid in the formulation of policy.
The development of the appropriate analytical capabilities and the
acquisition of the means to use analysis will require the close
cooperation of the analytic and policy making communities.
Recommendations
1. The DCI should charge his staff
to develop a community-wide plan for the production of energy and
energy-related intelligence and [Page 508] the identification of the additional resources
necessary to support the framing and evaluation of US policy choices. The plan should also
identify the focus of leadership responsibility to ensure that the
synthesized analyses mentioned earlier will be forthcoming.
2. The DCI and his representatives
should clarify with the Secretary of Energy and his representatives
the information needs of the latter and the contributions each will
make to the provision of needed analyses. Resolution of their
relationship is important for getting on with the substantive
intelligence needs posed by the energy factor. Failure to do so is
likely to result in unproductive hassles about control of the turf
and additional intelligence resources.
3. While all necessary work cannot be done at once, the Intelligence
Community should pursue major synthesized analyses of, and devote
ongoing intelligence attention to, a small number of particularly
crucial questions and problems facing US policymakers. These include:
• Preparations to maintain the safety of oil transport by sea to the
United States, Western Europe, and Japan.
• Feasible and acceptable US
initiatives to enhance the non-nuclear energy alternatives available
to the developing countries (and in particular to potential nuclear
proliferators).
• Alternative adaptations by major OECD nations to the coming energy crunch, including
their responsiveness to collective action proposals in cooperation
with each other and the United States.
• Clarification of the extent and the economic and technical
conditions for feasible exploitation and use of energy mineral
endowments on a worldwide basis (in particular oil, natural gas,
uranium, and coal).
• Alternative strategies to create sufficient interdependence between
major energy exporters and importers to induce the latter to sharply
boost extraction rates in time of emergency and to acquire the
facilities on a standby basis which will make that possible in a
timely fashion.
• Development of institutional techniques that will facilitate the
rapid application of energy technologies developed outside the
United States but knowledge of which may have been obtained through
intelligence analysis.
