The Battle of Chernobyl

Elizabeth Sherwood-Randall, a senior research scholar at the Freeman Spogli Institute's Center for International Security and Cooperation (CISAC), has been named special assistant to the president and senior director for European affairs at the National Security Council.

Prior to her appointment, Sherwood-Randall served as a founding senior adviser to the Preventive Defense Project (PDP), a Stanford-Harvard initiative that focuses on security problems and threats. She also was an adjunct senior fellow at the Council on Foreign Relations.

"We are delighted that President Obama has asked Liz to advise him on European issues critical to our mutual political, military, and economic security, particularly during these challenging economic times," said Coit D. Blacker, director of the Freeman Spogli Institute and the Olivier Nomellini Professor in International Studies.

"Liz brings a wealth of experience and knowledge that will help strengthen effective, constructive relationships between this country and our friends and allies in Europe."
- Coit Blacker

This is the second time Sherwood-Randall has served in the executive branch. From 1994 to 1996 during the first Clinton administration, she was deputy assistant secretary of defense for Russia, Ukraine, and Eurasia. In this role, she developed and implemented regional security policy toward the newly independent states of the former Soviet Union, including Russia, Ukraine, the Caucasus, and Central Asia, and also established defense and military relationships. Sherwood-Randall was instrumental in extending NATO's Partnership for Peace program across Eurasia and in building the foundation for cooperation between Russia and NATO in the joint peacekeeping operation in Bosnia. For her work at the Pentagon, she was awarded the Department of Defense Distinguished Service Medal by then-Secretary of Defense William Perry, who now co-directs the PDP at Stanford.

"I am delighted that Liz has been selected for this important job," Perry said. "Her achievements during her tenure at the Pentagon while I was secretary of defense were significant and far-reaching.  I expect in her new role at the National Security Council she will make equally powerful contributions."

From 2007 to 2008, Sherwood-Randall was a member of the Review Panel on Future Directions for Defense Threat Reduction Agency Missions and Capabilities to Combat Weapons of Mass Destruction. In 2008, she served on the National Security Strategy and Policies Expert Working Group that advised the Commission on the Strategic Posture of the United States, which Perry also leads.

Prior to her service in the Department of Defense, Sherwood-Randall was co-founder and associate director of Harvard's Strengthening Democratic Institutions Project. She also has served as chief foreign affairs and defense policy adviser to then Sen. Joseph R. Biden, Jr., and as a guest scholar in foreign policy studies at the Brookings Institution. 

Sherwood-Randall earned a bachelor's degree from Harvard College and a doctorate in international relations from Oxford, where she was a Rhodes Scholar in 1981.

The ongoing crisis in Georgia has catapulted relations with Russia to a top place on the foreign-policy agenda. It has presented the United States-and the West more generally-with important policy decisions, and it has brought to a head a debate that has been taking place for many years about how to deal with Russia. One side in that debate believes that post-Communist Russia has taken the wrong path of development and should therefore be isolated and punished; the other advocates a continuing search for cooperation with Russia on a range of important issues such as nuclear disarmament, global warming, energy, and Iran's nuclear ambitions. The crisis in Georgia has clearly strengthened those who want to isolate Russia; it is not so clear, however, that that would be a wise policy.

It now seems unlikely that anyone will benefit from the war in Georgia. Georgia has been humiliated and its prospects for economic and political development have been seriously set back. Russia has acted brutally as a great power bullying a small neighbor, and its relations with other states will suffer as a result (the speedy signing of the U.S.-Polish agreement on missile defense is an indication of that). The strong rhetoric coming from Washington cannot hide the U.S. failure to prevent Russia's intervention in Georgia and its inability to come directly to the aid of a state that looks to it for support.

The Georgian crisis requires a reassessment of U.S. policy toward Russia. To put that in context, consider the enormous upheaval Russia has gone through in the past twenty years. The Soviet Union was dissolved at the end of 1991, creating fifteen new states where previously there had been one. This geopolitical transformation, which took place with far less loss of life than many feared, was for Russians a severe blow to their sense of national pride, and it left some simmering disputes, especially in the Caucasus, not only in Georgia but also within Russia (Chechnya), as well as in neighboring Armenia and Azerbaijan.

At home, too, Russia has been transformed. The 1990s were a period of political freedom in Russia, but they also brought economic collapse and social turmoil, with widespread deprivation and great anxiety about the future. When the former KGB officer Vladimir Putin succeeded Boris Yeltsin as president in 2000, he adopted the goal of restoring the power of the Russian state. He tamed the oligarchs and increased state control over the economy. He also curbed the mass media and repressed political opposition. Russia today is far from being the democracy that many people hoped for ten or fifteen years ago, but it is also far from being a reincarnation of the Soviet Union. It now has a capitalist economy, and there is much greater freedom than in Soviet times.

Putin has been a popular leader, thanks in large measure to the economic turnaround that has taken place since he became president. The economy has grown steadily, at rates of 6-7 percent a year, and much of the population has benefited-even if the benefits have been very unequally distributed. The rising price of oil helps to account for this growth, but economic reforms put in place by Yeltsin and Putin have played their role too. Economic growth has allowed Russia to reassert its regional interests and its status as a great power.

Many Americans have been greatly disappointed by Russia's development over the past twenty years: Why, they ask, has Russia not become a democratic state? And why has it become so antagonistic to the United States-opposing the deployment of missile defenses in Europe, for example, and now sending its troops into Georgia?

Russians, too, are disillusioned by recent history, but for different reasons. Many Russians are willing to give Putin some credit not only for raising living standards but also for introducing a degree of stability into political life. According to the same polls, however, they are also profoundly unhappy about the level of corruption, the arbitrary behavior of law-enforcement agencies, and the failure of the government to provide services in an efficient and effective manner.

Russians' disillusionment springs also from a sense that they have not been treated fairly by the rest of the world. The current Russian leadership feels, rightly or wrongly, that Russia's interests have been ignored by the United States for the past fifteen years, and that feeling appears to be widely shared by the Russian public. There is a standard litany of complaints about the way in which the West is said to have taken advantage of Russia's weakness: NATO enlargement; NATO intervention in Kosovo and the recognition of Kosovo's independence; U.S. withdrawal from the ABM Treaty; support for the "color" revolutions in Georgia (Rose) and Ukraine (Orange). Russian leaders see this as geopolitical encirclement by countries that speak of partnership but ignore Russia's interests.

Early last year Putin launched a harsh attack on American policy for failing to take Russia's interests into account. His goal was to recalibrate the U.S.-Russian relationship in a way that would give Russia a greater voice in international politics. Russia's improved economic performance, as well as U.S. difficulties in Iraq, made it seem an opportune time for Russia to return to what it regards as its proper place in the world.

This is the context in which Russia has acted in Georgia. It has made it perfectly clear for some time that it did not want to see Georgia join NATO. After the recognition of Kosovo's independence early this year, Russia stepped up its control over the breakaway provinces of South Ossetia and Abkhazia. Georgia President Mikheil Saakashvili's reckless decision to use military force to try to seize Tskhinvali, the capital of South Ossetia, gave Russia the pretext to introduce more troops into Georgia (in addition to those it already had in South Ossetia and Abkhazia).

If Russia had not responded with military force, its claims to a more assertive role in international politics would have lost credibility. But Russia has not only expelled Georgian troops from South Ossetia; it has also sent its forces into the rest of Georgia to destroy Georgia's war-making potential. This has led to widespreaed uncertainty about Russia's ultimate goals in Georgia, and indeed in the former Soviet Union more generally.

For all its recent assertiveness, Russia is weak internally and restricted in its options abroad. Its domestic problems are severe: its economy is too dependent on the energy sector; the inadequate health system needs to be rebuilt; failing infrastructure requires heavy investment; the population is declining rapidly as a result of the low birth rate and low life expectancy. The list of domestic problems is long and impressive, and the political class knows that Russia needs to deal with them if it is to secure its status as a great power. Russia today is not the Soviet Union, either ideologically or in terms of military strength, but it does retain the capacity to create difficulties by mobilizing Russian minorities living outside Russia or by manipulating oil and gas supplies to U.S. allies.

In dealing with the aftermath of the Georgian crisis, the United States should pursue three goals. The first is to help Georgia recover economically and politically from the war and also to play whatever role it can in creating conditions that will allow Georgia to become a stable and prosperous democracy. That will inevitably involve working through international organizations such as the Organization for Security and Co-operation in Europe (OSCE) and the European Union to try to resolve the complex conflicts that exist in the Caucasus. It will also involve engaging with Russia, which has interests of its own as well as a powerful position in the region.

The second is to provide reassurance to other former Soviet republics and satellites (the Baltic states and Poland, for example) that their position as independent states is secure. That is most easily done for those states that are already members of the European Union and of NATO. The most delicate case is that of Ukraine. A secure and prosperous Ukraine is extremely important for the West (as well as for Ukrainians of course), but Russia may have some leverage there through the large Russian-speaking population in the eastern part of the country. The West should focus on the economic and political integration of Ukraine into Europe rather than on its admission to NATO.

The third is to seek cooperation with Russia in such areas as the reduction of nuclear weapons, curbing the rise of Iranian power and influence, defeating the Taliban in Afghanistan, and tackling the issues of energy supply and global warming. These three goals may appear to be in tension, but they are to some degree complementary. A deep antagonism between the United States and Russia is not likely to further American interests; nor is it likely to help either Georgia or Ukraine.

Boris Yeltsin found himself leading a nuclear superpower after the Soviet Union collapsed in 1991. The new Russian Federation not only possessed the largest number of nuclear weapons of any of the nuclear states, but it also shared them with its three post-Soviet neighbors--Kazakhstan, Ukraine, and Belarus. Transferring control of these weapons to Moscow and consolidating the remaining nuclear weapons in Russia was a serious challenge.

Most of the credit for the orderly and safe transfer belongs to the professionals in the military who actually did the job, and to Kazakh, Ukrainian, Belarusian, and U.S. diplomats who worked out the legal side of consolidating the former Soviet nuclear arsenal. But we should not underestimate the contribution from Yeltsin and other political leaders. They allowed the professionals to do their job, which helped diffuse political tensions in the process.

Every day, the United States burns through 20.7 million barrels of oil. China, the world's second largest consumer, uses about 6.9 million barrels a day. Although the United States is the third leading oil producer in the world (behind Saudi Arabia and Russia), its appetite is so enormous that it overwhelms the country's production capacity. Its known reserves, about 21 billion barrels, would supply only enough to keep the country running at full speed for about three years.

So when STANFORD gathered five faculty members to talk about the implications of U.S. dependency on foreign oil, we expected grave declarations of alarm. But their concern did not square with the growing chorus of citizens and elected officials about why reducing this dependency is so important.

On the next five pages, faculty from political science, economics, law and engineering explain why the debate about energy security is missing the point, and what they think needs to be done.

STANFORD: How would you frame the issue of dependency on foreign oil? What should we be concerned about?

David Victor: The problem is not dependence per se. In fact, dependence on a world market produces enormous benefits, such as lower prices. Nor is the problem that energy's essential role in the economy means that dependence must be avoided. The real problem is that energy - oil, especially - doesn't operate according to normal market principles. Something like 75 percent of the reserves of oil and gas are controlled by companies that are either wholly owned or in effect controlled by governments, and there's enormous variation in how those companies perform. Some of them are just a disaster, like [Mexico's state-owned oil company] Pemex, and others can work at world standards, like Saudi Aramco or Brazils Petrobrás. Some of these governments, such as Venezuela, use oil revenues for political purposes that undermine U.S. influence. High prices do not automatically generate new supply or conservation, partly because suppliers can drop prices to undercut commercial investment in alternatives. Second, we have what has become known as "the resource curse." There'sa lot of evidence that the presence of huge windfalls in poorly governed places makes governance even worse. Revenue that accrues to oil-exporting governments is particularly prone to being misspent, often in ways that work against U.S. interests.

Scott Sagan: I agree that calling the problem "energy dependence" and therefore seeking energy independence is the wrong way to think about this problem. Talking about energy independence feeds the xenophobic impulse that occurs all too easily in American politics. And it suggests to other countries that they should seek independence rather than a more cooperative approach. I see very negative consequences politically in the signal that attitude sends. Think about the current nuclear crisis with Iran. Iran claims that it needs independent uranium enrichment capabilities to have "energy sovereignty." Such uranium enrichment production could be used, however, for civilian nuclear power or for making a bomb, creating enormous nuclear weapons proliferation problems. We're feeding into that kind of thinking when we use the same language about independence when referring to oil. And it produces uncooperative effects elsewhere. The Chinese, for example, cut a deal with Sudan as a means of creating energy security for themselves. It inhibits efforts of the international community to encourage that government to behave responsibly.

John Weyant: There is a distinction between dependence, meaning how much of the oil the United States consumes is imported, and vulnerability, meaning how at risk our economy and our social order are to oil-supply disruptions. That vulnerability is defined by how much of the total supply of oil in the world market comes from unreliable sources. So you have to look at oil supply on a global scale, not just in the United States. It's the instability of the supply that affects price.

Victor: I like John's term "vulnerability," and it leads us to various kinds of actions to reduce our vulnerability to the market rather than trying to make us completely independent. One of them has been around since the '70s - building and coordinating strategic stockpiles so that they are supplied into a single world market. Traditionally that could be done by the major Western countries because they were the major oil consumers. One of the big challenges for policy makers today is how to get India and China to think about the operation of this world market in the same market-based way that we think about it, and to get them to build up those stockpiles and coordinate them with our own. There's some evidence that that kind of coordination can reduce our vulnerability.

Weyant: There's this fallacy among the public that if we don't import so much oil, other oil-exporting countries are going to be hurt and we will be unaffected if oil supplies are cut off. But these countries are sometimes major trading partners of allies, and asking those allies to take a hit on our behalf just leads to other economic problems. If the economies in China and Europe and Japan, who are all major trading partners, go down, it affects how much they can buy from us. It's another reason we can't be xenophobic and just look inward on an issue like this. You get these international trade flows outside the energy sector that could be pretty devastating.

STANFORD: Last summer we saw crude oil prices hit $70 a barrel and gas prices went well above $3 per gallon nationwide. That momentarily changed consumer behavior, and reduced demand. Are high prices a good thing?

Michael May: The key factor in normalizing market conditions is assuring the market that high prices are here to stay. Major oil companies like Exxon and bp have been putting their money to other uses than exploration. They have been buying back shares and increasing returns to stockholders because that's the way Wall Street drives them. That might change if prices stayed high. It probably won't be $70 a barrel, but even $50 a barrel as a base price is almost twice the historic average. The extent to which investors become convinced that that's going to be the future average will have some bearing as to how much money they spend on exploration. Toyota and General Motors and others can make hybrids or much more efficient cars, but it takes billons of dollars of investment, and if the price of gasoline goes down, they have less incentive. When gas is cheap, driving an SUV is not such a big deal.

Victor: The reason some of these companies are buying back the shares is not just because of Wall Street but because they don't have a lot of truly attractive opportunities for investing in new production. Most of the oil reserves are either legally off limits for the Western oil companies or international oil companies generally, or they're de facto off limits because they're in places where it's so hard to do business. Although the public is seized by the high price of energy, the major energy companies are seized by concerns that prices are going to decline sharply. If there is a recession, which would dampen demand for energy, or the capacity to produce oil around the world improves, then prices will decline. It has happened in the past. That fear really retards a lot of investment because these investments have a very long capital lifetime, and you need to protect them against low prices over an incredibly long time horizon.

Michael McFaul: It's very important to understand that oil companies owned and operated by governments are not necessarily profit-maximization entities. Take Gazprom, the gas company of Russia. It is closely aligned with state interests, so profit isn't its only motivation. It will use its money for strategic purposes as defined by Vladimir Putin, not as defined by the shareholders of Gazprom. For instance, early in 2006, Gazprom cut off gas supplies to Ukraine, mostly for geopolitical reasons. Why is Hezbollah so well armed? Because of Iran, which uses oil revenue for strategic purposes; it is not used for investing in a company or investing in the market per se. This is part of the problem of the "resource curse" David referred to. If oil is discovered in a country before democratic institutions are in place, the probability of that country becoming democratic is very low. In countries where the state does not rely on the taxation of its citizens for its revenues, it doesn't have to listen to what its citizens want to do with that money. So instead of building roads or schools or doing things that taxpayers would demand of them, they use their money in ways that threaten the security of other countries, and, ultimately, their own.

Victor: It's important that we not overstate the extent to which users of energy are going to respond automatically to high prices, and the personal vehicle is a great example. Fuel accounts for about 20 percent of the total cost of operating a vehicle. Traditionally it's only been 10 or 15 percent, but we are much wealthier today than we were three decades ago when we had the [first OPEC oil embargo]. I think that helps explain a lot of the sluggishness in response in the marketplace. People are buying smaller, more fuel-efficient cars, but that trend will only go so far because there are other factors that determine what kinds of vehicles people purchase. In the United States and most advanced industrialized countries, most oil is used for transportation, where oil products have no rival. It is hard to switch. In most of the rest of the world, oil gets used for a variety of other purposes, including generating electricity. Those markets are probably going to be more responsive to the high price of oil because they're going to have opportunities to switch to other fuels. The United States used a lot of oil to generate electricity in the early 1970s and when that first oil shock came along, essentially all of that disappeared from our market. That's part of the reason why the U.S. energy system responded fairly quickly to the first oil shock, and why changes in behavior are harder to discern in the current crisis. There is no easy substitute for gasoline.

May: If we generally agree that high oil prices, on the whole, are a good thing because they cause investment in more production and more efficient uses of oil, then it would follow that the rapid growth in consumption in China is also a good thing and we should welcome it, right?

Victor: I disagree with that. In effect what we have right now is a "tax" that's been applied to the oil market due to the various dysfunctions of the way it operates and to unexpectedly high demand in the United States and China. The revenue from that tax is accruing to the producers, and if we think about how to get out of the mess here, then what we want to do is in effect apply a tax to the oil products. If we raise the price of these products to reflect the real total cost of our vulnerability to the world oil market, those companies have an incentive to go off and look for alternatives.

May: So you're saying the same thing: that high oil prices, whether from this tax or otherwise, are a good thing.

Weyant: It depends significantly on who is collecting the tax.

McFaul: Yes, the fundamental question is how the money is being spent. If I had high confidence that the money was going to reinvestment, then I could agree that high prices are good, but that's not what is happening. The Soviet Union's most dangerous adventures in the Third World correlated with the high oil prices in the 1970s. You can see the direct effect. And when the prices came down, the Soviet Union collapsed. The same is true with Iran today. They are being very aggressive in the region - in Iraq, in Lebanon, in Afghanistan - trying to become the Middle East hegemon. This would not be happening if they didn't have all these clients - Hezbollah, Hamas, their friends in Iraq - that they can support with millions of dollars. Going back a few decades, where did Osama bin Laden come from? Where did support for the Taliban come from? It came from this tax that David is talking about. If we're talking about security issues and oil, this is much more serious than supply disruption to the United States.

Victor: I agree with Mike 100 percent. If you look at where the revenues are going from Iran, Venezuela and so on, there's a long list of folks who are doing things that are contrary to our interests with the money that ultimately is coming out of the pockets of American consumers. Dealing with that is job one.

STANFORD: So how would you counsel American policy makers? What needs to happen to reduce our vulnerability over the long term?

Sagan: The vulnerabilities we have today should provide an incentive to make some critical investments and to change our thinking, but we're not really doing that. I was quite surprised at how much I agreed with one aspect of the second Bush inaugural address. [He said] let's start talking about our addiction to oil and all the problems associated with that, but I've been completely disappointed with the lack of follow-through. And part of the problem is this notion of energy independence. We need diversity in our research and development spending across the board, on a variety of technologies. We're going to produce energy security to a large degree by finding cooperative solutions that are efficient and secure for many countries working together. We need to see our national security as being very dependent on others and that's not entirely a bad thing.

Victor: There is one cluster of technology that's going to be exceptionally important - electric vehicles. The all-electric vehicle has been kind of a disaster. We tried to do that in California without much success at all. The new set of pluggable hybrid vehicles, which you plug in at night and charge up, are more promising. If such technologies make it feasible to reduce some of the transportation dependence on oil, then markets will be forced to become more "normal" and more responsive. Electric cars and other technologies can help to keep prices lower and ultimately help make the transition completely away from oil over a period of 30 or 50 years.

Weyant: We only think about energy as a nation when prices are high, and so there's a short attention span on the issue. That makes it really hard to sustain a policy that would be rational over the long term. If we're going to have a big R&D program, for example, you need to invest in technologies and sustain the investment over a long time horizon. If you couple this short attention span with our aversion to taxes, at least historically, you end up with policies that are almost designed from the outset to fail. The political tide is turning a little bit so a well-designed tax might be possible. Maybe you don't raise taxes now but you assure that the price of a [hybrid] car won't go below a certain level and that'll help create a little more confidence with the marketplace. If you just focus on research and development without getting the economic incentives right, you come up with all kinds of great gizmos that no one will actually make or use.

McFaul: We've been talking mostly about how to manipulate the market to change people's behavior and I think that's quite right. I can't tell you how many people I saw come out of a Palo Alto theater after seeing Al Gore's movie [An Inconvenient Truth] and jump into their gas-guzzling machines. I would like to tax those machines; use economic tools to change people's behavior in a way the movie didn't. This has to become a public policy issue. It's not right now. Think about the way the market for cigarettes worked in this country 50 years ago, and think of how it is structured now. We have not just taxes but regulation - they can't be advertised on television - and a national campaign trying to educate people about the health concerns. We need a similar effort on this issue.

Sagan: When you watch the Super Bowl you don't see advertisements for cigarettes, but you do for Hummers. There's no attempt at all to educate people about the relationship between these longer-term problems and what you do individually. And that takes decades.

Victor: One of the acid tests for whether the nation is pursuing a coherent energy policy is our policy on ethanol. Ethanol is important because it is a partial substitute for oil-based gasoline. In this country, almost all of the ethanol that is delivered to the marketplace is made from corn, which is economically inefficient. But we do that because the corn grows in the heartland, such as Iowa - an important state electorally. There have been lots of proposals to, for example, erase the tariff on imported ethanol. Brazil produces ethanol from sugar cane and it's much cheaper and more efficient. But the farm lobby always intervenes and these proposals languish, with the result that the U.S. ethanol industry never faces the rigors of world competition. So long as energy is bouncing around lower on the list of priorities, it will be difficult to have a coherent policy.

Weyant: It would be far better if people were willing to bite the bullet and say this is a problem and it's not going to be painless to solve it, but if we play our cards right it's not going to reduce our standard of living much. Convincing the public is really one thing that might be worth some more effort. It's a cacophony to them.

STANFORD: What is your greatest hope and your worst fear with regard to demand for oil?

Victor: My greatest hope is that inside the Chinese government and inside the Indian government people know that this independence view of the world energy market is completely wrongheaded. Maybe that will create an opportunity for the United States and India and China along with other major oil consumers to collectively manage this issue, and the consequences of doing that will spill over onto other areas of cooperation. My greatest fear, in addition to the things we've already discussed, is that the United States will use the oil issue to beat up on the Chinese and the Indians, and that our relationship with those countries, which is already fragile, will make it harder to work together on other things that also matter.

May: My greatest hope is that the United States, China, India and other major countries work together towards a more hopeful future, including improving the global environment, providing a counterbalance to mischief in the Middle East, and promoting a transition to modernization and away from extremism. My greatest fear is that the little termites who are nibbling at what is currently a somewhat sensible Chinese policy will have their way, either because the country's economy slows down - which it will inevitably - or for some other reason, and we'll wind up fighting each other or destroying each other's capabilities.

McFaul: My greatest sense of optimism comes from this discussion, and about what my colleagues in this discussion said about China, because from the surface it looks like there's a much more pernicious policy of China going its own way. I've learned today that in fact there are very reasonable voices within the Chinese government, and I hope that there will be in my own government. My greatest fear is that there will continue to be politicians who control oil revenues who do things that do not serve international security, and I'm speaking not only of Iran. My nightmarish scenario is that 10 years from now Iran, Iraq and, God forbid, Saudi Arabia are controlled by hostile governments that want to use the revenues that we pay them for their oil to harm us. I give that a low probability, but in terms of things that worry me about our security, it's the instability of those oil-exporting regimes.

Sagan: The hope is that this current crisis will provide the right set of incentives to encourage investment in a diverse set of energy R&D programs across the board, and will encourage cooperation between countries in energy research and development. That would help educate and change the culture of the United States away from a gas-guzzling, governor-in-the-Hummer culture. The fear is that this will become yet one more excuse to move to a more xenophobic policy that discourages cooperative international policies.

Weyant: Remember David Stockman, the erstwhile head of the Office of Management and Budget? I ran into him in Washington and he literally said to me, "Don't worry about oil security and disruptions or any of that stuff. We've got battleships to take care of this problem." That shocked me to no end, and my response was "Do you really want to be in that position, where that's your only option?" Your whole response is "We're best in the battleship field and you shouldn't mess with us?" This type of attitude is what worries me the most.

Sagan: We were earlier talking about the resource curse, and this strikes me as an example of the hegemon's curse. To not take the necessary steps on economic policies or energy policies because you think you've got a military backup solution. If our military strength causes us to be passive or uncooperative on the economic or energy front, it will have a boomerang effect that will really hurt us.

The Society for the History of Technology has awarded its 2006 Brooke Hindle Fellowship to Sonja Schmid, a CISAC social science research associate and lecturer in Stanford's Program on Science, Technology and Society.

Schmid accepted the $10,000 award at the society's annual conference on Oct. 14. She will use it to support additional research in Russia for a book she is completing on the effects of the Chernobyl disaster on the Soviet and Russian nuclear power industry.

Tentatively titled "Producing Power: The Construction of a Civilian Nuclear Industry in the Soviet Union," the book begins with the Chernobyl explosion of April 26, 1986--"the worst accident at a civilian nuclear facility ever," Schmid notes.

The explosion ignited a fire that burned for more than 10 days and released radioactive materials over a large area of Belarus, Russia and Ukraine. Some 116,000 people evacuated the area that spring and another 220,000 moved later, according to a 2005 report by a forum the International Atomic Energy Agency convened to assess the accident's economic and health legacies.

The tragedy also resulted in the trial and sentencing of plant operators and "dismissal of the Chernobyl-type reactor design as 'inherently unsafe,'" Schmid explains. Her research examines the development of institutional structures and professional cultures within the Soviet civilian nuclear industry and the history of Soviet reactor design choices.

Schmid has done extensive research in Russian archives that opened after the fall of the Soviet Union. However, "much of this history was never written down," she said, so she also interviewed more than 20 senior nuclear specialists in Russia.

Now filling in details on her largely completed historical analysis, Schmid expects to finish the book manuscript by next summer. The fellowship selection committee called her work "a path-breaking contribution to the field" of technology history. Schmid's "study revises much of what we thought we knew about the development of nuclear power in the Soviet Union," the committee wrote.

On a trip to Russia in September and October 2006, she talked with high-ranking specialists in the Soviet and current Russian nuclear industry, some of whom she met through CISAC visiting professor Siegfried Hecker. A former director of the Los Alamos National Laboratory, Hecker continues to work with Russian scientists in cooperative threat reduction programs to secure former Soviet nuclear materials that could be used for weapons.

A source Schmid has yet to tap is the Archive of the Russian Federal Agency for Nuclear Energy, which maintains records on both military and civilian nuclear programs. The agency "has been publishing excellent series of documents on the history of the Soviet atomic bomb, or the military program," Schmid said, "but their documents on the civilian program so far remain classified." She said she will try again and that on this last visit to Russia she "was encouraged to keep doing so."

Her painstaking research stands to illuminate technological decisions with profound consequences. "While everything about the Chernobyl accident was Soviet--the reactor design, the attitude of operators, the bureaucracy--it shook a system that was designed to be safe," Schmid said. "The system, by its own standards and norms, was normal and perfectly functional," she added.

"Chernobyl is not something that 'could only happen in the Soviet Union,'" Schmid cautioned. "It could happen elsewhere."

While the improving U.S. economy remains the engine of growth for the world economy, an underlying trend involving "huge imbalances and risks" should be cause for serious alarm, Paul Volcker warned Feb. 11 during a speech on campus. Americans have virtually no savings, the former chairman of the Federal Reserve said, and the nation is consuming more than it is producing. Furthermore, Social Security and Medicare are threatened by the retirement of millions of baby boomers and skyrocketing health care costs. More broadly, he continued, the world economy is lopsided.

"Altogether, the circumstances seem as dangerous and intractable as I can remember," Volcker said during a keynote address at the second annual summit of the Stanford Institute for Economic Policy Research. "But no one is willing to understand [this] and do anything about it."

Volcker spoke at the end of a daylong conference that attracted about 450 corporate leaders, entrepreneurs, policymakers and academics. The event included discussions on the stability of the global economy, the U.S. economic outlook and the role of the Internet in helping to level the competitive playing field worldwide. The conference also featured sessions on outsourcing, Medicaid and Medicare, technology policy and the Sarbanes-Oxley Act, which was implemented in 2002 to restore investor confidence in corporate America following a series of bankruptcies and far-reaching accounting scandals.

During a morning session, William J. Perry, a former secretary of defense and a senior fellow at the Stanford Institute for International Studies, gave a chillingly stark assessment of the crisis of terrorism that was reinforced by George Shultz, a former secretary of state.

"I fear that we're headed toward an unprecedented catastrophe where a nuclear bomb is detonated in an American city," Perry said. "The bomb will not come in a missile at the hands of a hostile nation. It will come in a truck or a freighter at the hands of a terror group."

Perry, who holds the Michael and Barbara Berberian Professorship, said the "awesome military capability" of the United States has had unintended consequences in that it has increased the incentive for a hostile power, unable to compete in conventional warfare, to acquire weapons of mass destruction and launch terror attacks against America. U.S. military superiority is not particularly effective against such tactics, he said. "There exist terror groups, of which al Qaeda is the most prominent, that have the mission, the intent to kill Americans," Perry said. "They have the capability to do so; they have the resources to do so." A truly nightmare scenario would involve a terror group using nuclear weapons acquired clandestinely, he said: "After 9/11 that threat seems all too real."

Such a catastrophe is preventable, but the United States is not taking the necessary measures to avert it, Perry warned. Important steps should include a major expansion of the Nunn-Lugar Cooperative Threat Reduction Program with the support the G-8 group of industrialized nations. The program was created in 1991 to reduce the threat posed by the legacy of the Soviet nuclear arsenal and succeeded in dismantling and destroying weapons in Kazakhstan, Ukraine and Belarus. Furthermore, Perry said, a clear strategy of "coercive diplomacy" should be used against North Korea and Iran, followed by a major diplomatic initiative to convince other nuclear powers that the threats posed by terrorists are real and not just directed at Americans. "While America must show real leadership in dealing with this problem, [it] cannot deal with it alone," he said.

Shultz, the Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution, said the United States faces a huge problem in combating Islamic radicals intent on using terror to achieve their goals. "Eventually, what they want is to change the way the world works by creating a unified Islamic theocratic state," he said. "It's a worldwide agenda."

Shultz argued that the United States must help supporters of mainstream Islam understand the fundamental nature of the problem so they will take action against the radicals themselves.

"That's why Iraq is of such overwhelming importance," he said. "Here we have a country in the heart of the Middle East where there is a chance. If Iraq can emerge as a sensibly governed country--that's a gigantic event in the Middle East and in this war on terror. Our enemies recognize that just as well as we do, and that's why we're having so many problems."

Other measures that Shultz said should receive greater support include efforts to set up independent media in countries such as Iraq, as well as a revival and expansion of the U.S. diplomatic service, which he said was allowed to atrophy after the end of the Cold War. "We have developed an awesome military capability," he said. "We need a diplomatic capability that is as every bit as good." Shultz also stressed the need to reduce U.S. dependence on foreign oil. "We are out of our cotton-picking minds not to be doing much, much more to figure out how to use much, much less oil," he said to applause from the audience.

In the afternoon, Thomas Friedman, a columnist at the New York Times, also called for greater efforts to develop alternative energy supplies. This should be the "moon shot of our generation," he said.

Friedman discussed how the convergence of personal computers, cheap telecommunication and workflow software has changed the way the world works. In his upcoming book, The World Is Flat: A Brief History of the 21st Century, Friedman explained that the world has shrunk to the point where individuals, not countries or companies, are increasingly able to think and act globally. "And it's not just a bunch of white Westerners," he said. "It's going to be driven by individuals of every color of the rainbow."

Friedman told the audience that these technological advances quietly unfolded just as the 9/11 terror attacks, the Enron collapse and the dot-com bust grabbed America's attention. "People thought globalization was over but actually it turbo-charged globalization; it drove it overseas," he said. "9/11 completely distracted our administration, and then there was Enron. We have hit a fundamentally transformative moment and no one is talking."

In this new scenario, people anywhere in the world will be able to "innovate and not emigrate" if they have the required skills, Friedman said. This means that engineers in India and China will be able to compete on a level playing field with people in this country. "When the world goes flat, everything changes," he said.

To address this challenge, Friedman said the United States must radically improve science, mathematics and engineering education and encourage young people to enter these fields. "We're not doing that," he said. "In the next two years, five years, it won't matter. In 15 years, which is the time it takes to build an engineer, it will matter. We will not be able to sustain our standard of living."