In recent years, natural gas prices in the United States have gone from historic highs of over $12 per mmBtu in the summer of 2008, to under $2.50/mmBtu in 2012. While demand side factors – such as the crisis in global financial markets – were partially to blame, many would argue that the real story is on the supply side, where increased production of shale gas – a form of unconventional natural gas trapped in leafy shale rock – drove gas prices down across the continent. The impact of low gas prices was felt in the form of cheap electricity, heating, and feedstocks to consumers and industry, which in turn bolstered the economic recovery. As an added bonus, cheap gas displaced dirty coal in power generation, reducing carbon emissions and pollution.

It is no wonder then, that when a recent U.S. Energy Information Administration publication on world wide reserves of shale gas crowned China as the holder of the world’s largest shale gas reserves, many inside and outside the Middle Kingdom were intrigued and enthralled by the possibilities of what shale gas could mean for China – in terms of climate, pollution, quality of life – and what it could mean for the broader international gas trade.

In this upcoming EWG talk, we will highlight some of the current activities and future plans for unconventional gas development in China. We will focus on the political, institutional, and commercial forces at play, and discuss some of the potential upsides and pitfalls that China will encounter on the road to realizing its unconventional gas potential.

Timed between the election's first and second rounds, this discussion brings together noted scholars and authors with unique and deep insight into contemporary French political culture.

Co-sponsored by the Europe Center and the French Culture Workshop

A brief write-up of this discussion titled "French vote a rejection of Sarkozy, panelists say" can be found in the May 7, 2012 edition of the Stanford Daily.

Event Summary:

Arthur Goldhammer opens the panel by arguing that the first round of the French presidential elections, not the second, are "the real story." For the first time in the history of the Fifth Republic, divisions between left and right were less pronounced than between the top two tiers of candidates (Hollande/Sarkozy, and Melénchon/Le Pen) especially regarding their attitudes toward European integration, globalization, and the Euro. Goldhammer points out that given France's role as a top global investor as well as a leading destination for foreign investment, the anti-globalization stance of the second tier candidates is unrealistic, although it enjoyed broad support at the polls. Sarkozy responded to this show of support by attacking the Shengen agreement and other aspects of the EU in a bid to win votes, while Hollande kept a low profile on the same issues. If Hollande wins, Goldhammer predicts, he will be tested by the markets and the global financial industry. He also points out that the Socialist and UNP parties are both internally divided on important issues.  If Sarkozy loses and decides to leave politics, Goldhammer predicts a power struggle for leadership of the party.

Laurent Cohen-Tanugi predicts that if Hollande wins, the outcome will be a statement against Sarkozy more than one in favor of Hollande. He echoes Arthur Goldhammer's concern about a strong market reaction to a victory by Hollande, who has positioned himself as pro-growth and has sanctioned Sarkozy for his strict austerity measures. Cohen-Tanugi adds that Hollande's focus is on domestic politics, and that he lacks significant international experience. Whoever wins, he cautions, France is in for difficult times.

Jimia Boutouba describes the rise of the extreme right – which has invoked nostalgia for a pre-globalization era - leading up to the elections. This rise has been dominated by Marine Le Pen and the Front National, which vows to defend the "French way of life" and (like Sarkozy as the election neared) has made anti-immigration rhetoric a key component of its platform. Le Pen, however, has attracted many first time, rural, and female voters, and has been successful in setting the tone and the agenda of national politics. Boutouba sees several problems with this trend toward defining the nation by what it opposes (Islam, globalization, international finance, etc), and warns it can be very disruptive to the political system, pointing to the recent fall of the Dutch government. More significantly, the anti-immigrant tone of the discourse discourages second and third generation descendants of immigrants from voting or participating in the political process.

A question and answer session following the roundtable addressed such questions as: Have both Hollande and Sarkozy radicalized their rhetoric and proposals to win support from far right and far left voters? Will the taxes and government spending (which is already very high in France, at 57%) promised by some politicians choke private sector growth? Which candidate will be most attractive to this new generation of French college graduates? What are the main differences between the three potential leaders currently jockeying for control of Sarkozy's party? To what extent would a Hollande presidency be beholden to Communists, Greens, and other extreme left parties? How will a Hollande presidency affect France's involvement with NATO, and relations with the United States? What are the prospects for the future of the Euro?

The Stuxnet computer worm is perhaps the most complicated piece of malicious software ever built - roughly 50 times the size of the typical computer virus. This threat leveraged a huge array of new techniques to spread itself, conceal itself and to attack Iranian nuclear enrichment centrifuges. This talk will provide a detailed dissection of the Stuxnet worm, answering such questions as how it spread, how it evaded detection, what it did once it found its target, and ultimately, how successful it was.

About the speaker: Carey Nachenberg is a Fellow and Chief Architect at Symantec corporation, the world's largest computer security provider. As Chief Architect, Mr. Nachenberg drives the technical strategy for all of Symantec’s core security technologies and security content, which in total protect hundreds of millions of customers around the world. During his time at Symantec, Mr. Nachenberg has led the design and development of Symantec’s core antivirus, intrusion prevention and reputation-based security technologies; his work in these areas have garnered over fifty United States patents.

He holds BS and MS degrees in Computer Science and Engineering from University of California at Los Angeles, where he continues to serve as an Adjunct Assistant Professor of Computer Science and a member of UCLA’s Computer Science Alumni Advisory Board.

There are currently 60 nuclear reactors under construction worldwide with nearly half of these projects being built in China. There is no doubt that East Asia is emerging as a leader in the international nuclear community where China and the Republic of Korea (ROK) are playing major roles as a result of their aggressive new plant build programs. Both China and South Korea present very interesting case studies where the former is rapidly building up domestic expertise in nuclear construction while the latter has gone one step further in capitalizing successfully on a nuclear export business. Both countries have relied heavily on external commercial support in building up this expertise. In the case of South Korea, the “Koreanization” of nuclear power took place in the 1980’s and 1990’s, first with a large number of Western builds and ultimately a complete indigenization of pressurized water reactor technology through a technology transfer with Combustion Engineering. The Chinese domestic nuclear program has been largely influenced by Western vendors as well; however, there has been significantly less emphasis on exporting the technology up to now as they master the imported technologies for their domestic program. The recent AP1000 technology transfer between Westinghouse Electric Company and China has opened up unique transnational learning opportunities between the United States and China where the lessons learned building the first AP1000 plants in China will be shared with the two U.S. utilities now embarking on new plant construction at the Vogtle and V.C. Summer sites, in Georgia and South Carolina, respectively. This talk will review both the historical experiences of exporting nuclear technology to the ROK and China, as well as the progress being made by these countries in absorbing the technology. Further, the AP1000 passive plant technology will be summarized as an example of the general trend for future designs in response to the reactor accidents at Fukushima Dai-ichi in March 2011. Finally, the advanced construction techniques being used to build AP1000 plants in both the U.S. and China will be highlighted along with their benefits in delivering new plants on schedule.

About the speaker: Dr Matzie is the former Senior Vice President and Chief Technology Officer for Westinghouse Electric Company and was responsible for all Westinghouse research and development undertakings and advanced nuclear plant development. He is also on the Board of PBMR Pty Ltd. and Chairman of the Board Technical Committee. In that role, he assures proper oversight of the design, safety, licensing, research and development, and quality aspects of the PBMR enterprise.

Previously, Dr Matzie was responsible for the development, licensing, detailed engineering, project management, and component manufacturing of new Westinghouse light water reactors and was also the Executive in charge of Westinghouse replacement steam generator projects and dry spent-fuel-canister fabrication projects. He became a Senior Vice President in 2000, when Westinghouse purchased the nuclear businesses of ABB. His career has been devoted primarily to the development of advanced nuclear systems and advanced fuel cycles, and he is the author of more than 120 technical papers and reports on these subjects.

Diego García-Sayán was elected President of the Inter-American Court of Human Rights for the 2010-11 and reelected for the term 2012-2013. He was the first Peruvian to be elected President of the Court. He has  served as a judge on the court since 2004. During his distinguished career, Judge García-Sayán has served as Minister of Justice of Perú, and Minister for Foreign Affairs of Perú and as a member of the Peruvian Congress.  He founded the Andean Commission of Jurists and was the Chairperson of the United Nations Working Group on Enforced or Involuntary Disappearances.  Judge García-Sayán is a university professor at Pontifical Catholic University of Peru and author of many publications on international law and human rights.

About the topic: What could queueing theory, the science of customer flows and delays in service systems, possibly offer towards understanding and countering terrorism? In terror queue models, newly hatched terror plots correspond to newly arriving customers, the number of ongoing terror plots corresponds to the queue of customers waiting to receive service, undercover agents or informants correspond to service providers, customer service is initiated when a terror plot is detected, and service is completed when the plot is interdicted. Not all plots are interdicted; successful terror attacks correspond to customers who abandon the queue without receiving service! Building upon these ideas, we will focus our attention upon a simple observation: other things being equal, the number of ongoing terror plots increases with the duration of time from plot initiation until execution or interdiction (whichever comes first), yet no estimate of the probability distribution governing terror plot duration has appeared in the open literature. Starting with a review of US terrorism-related indictments, lower and upper bounds for the initiation date of 30 distinct Jihadi plots were identified in addition to the date of arrest or an attempted/actual terror act. Accounting for the censoring and truncation effects inherent with these data; the estimated mean duration equals 9 months, while 95% of all plots are estimated to fall between 1 and 25 months. These estimates suggest that in the United States, on average approximately three ongoing Jihadi terror plots have been active at any point in time since 9/11/2001.

About the Speaker: Edward H. Kaplan is the William N. and Marie A. Beach Professor of Management Sciences, Professor of Public Health, and Professor of Engineering at Yale University’s School of Management who is currently on sabbatical as Distinguished Visiting Professor at Stanford’s Graduate School of Business. The author of more than 125 research articles, Kaplan received both the Lanchester Prize and the Edelman Award, two top honors in the operations research field, among many other awards. An elected member of the National Academy of Engineering and the Institute of Medicine of the US National Academies, Kaplan’s current research focuses on the application of operations research to problems in counterterrorism and homeland security. 

In this session of the Shorenstein APARC Corporate Affiliate Visiting Fellows Research Presentations, the following will be presented:

Yasunori Kakemizu, "Strategy of CATV in the Competitive TV Market: Open vs. Closed Models"

After prospering for more than a half-century in the United States, the cable industry is taking on a new competitor, Over-The-Top providers (OTT). OTT providers are a product of the information technology revolution that emerged from the invention of Internet protocol of the late 20th century. In his research presentation, Kakemizu tries to answer the question: What is the strategy of the cable industry in the United States and what will happen to it in the near future? Kakemizu analyzes the current threat and opportunity facing cable television companies, focusing on the strategies against OTT, such as Netflix and Hulu.

Hideaki Koda, "Driving the Electric Vehicle Forward: Reshaping Car Sharing with EV and ICT"

Should the all-electric vehicle challenge the traditional car head-on in the mainstream market? The answer may be "no" if you look back on the history of disruptive innovations. An innovative technology at its dawn often succeeds first in a smaller, untapped market where its strengths shine and its weaknesses are shadowed (or even turned into strengths). It then enters the mainstream market over time by achieving more maturity, as typically shown in the computer market. Then where is the market for the electric vehicle? It might be car sharing, which is thought to be a potentially large market. Koda discusses how to combine electric vehicles and car sharing with information and communications technology (e.g. Big Data processing) to achieve a win-win solution for all by taking advantage of the unique characteristics of the electric vehicle.  

Haiming Li, "Competing Strategies for China's Large Commercial Banks"

Competing strategies are critical to China's large commercial banks, as they determine future direction of development for these banks. Research shows that following five strategies, namely a strategy for lead changes, a strategy for globalization, a strategy for diversification, a strategy for systematic risk management, as well as a strategy for establishing a decision-making support system, need to be adapted. Coordinated implementation of these strategies will enhance the competitiveness of China's large commercial banks both home and abroad.

Yoshimasa Waseda, "Nantotechnolgoy for Fuel Cells: The Impact and Analysis of the Status Using Patent Information"

Judging from the need to reduce increasing dangers of future global climate change, clean energy has become more important and is a key issue for future development. Fuel cells are a candidate for achieving clean energy in the future although they currently have some disadvantages. Many researchers study the application of nanotechnology for fuel cells to solve these disadvantages using the unique phenomena of nanomaterials. In this presentation, Waseda discusses the impact of nanotechnology for fuel cells and analyzes the status of each region using patent information.

In this session of the Shorenstein APARC Corporate Affiliate Visiting Fellows Research Presentations, the following will be presented:

Kazuma Fukai, "Current Situation of Shale Gas Revolution and its Impact on the U.S. and Japan"

Shale gas is called a “game changer”. According to the Energy Information Administration, shale gas will be the major source of incremental U.S. natural gas supply, increasing its share of production from 23% in 2010 to 49% in 2035. President Obama expressed even as the U.S. develops next generation energy technologies, the U.S will continue to rely on oil and gas. Due to the shale gas boom, the current price of natural gas (U.S. Henry Hub) is declining, about 1/8 of the peak price in 2005. Given the importance of environmental issues and efficiency, combined with depressed natural gas prices, the demand for natural gas in the power sector will grow rapidly. In Japan, the unprecedented nuclear disaster at the Fukushima Daiichi Nuclear Power Plant affected energy policy dramatically. While the future of nuclear power in Japan is still unclear, natural gas power plants would be one of the most important energy resources to compensate for the loss of nuclear power plants as a realistic and reliable short and middle term approach. If the abundance of natural gas in the U.S. flows to Japan, it would contribute to a choice of supplier and different price formula for Japan. Fukai will present information based on the current state of shale drilling in the U.S., environmental issues, and interviews with many key experts and professors in shale gas as well as his experience at Kansai Electric Power Company.

Katsunori Hirano, "Learning from Sustainable Energy Financing Models Operating in the U.S. Market:  A Study for Japan's Clean and Safe Energy Future after Fukushima"

The Fukushima meltdown, which followed a devastating natural disaster in March 2011, presented the Japanese citizenry clear evidence that the way to meet their energy needs had not been sustainable. They have found the value of improving their resilience and security by their own initiative, intelligence, and foresight. The growth in the energy efficiency and renewable energy market is the defining feature of Japan’s energy future.

A substantial number of financing models are being implemented to help encourage investment in energy efficiency improvements and renewable energy deployments in the United States. In his research, Hirano tries to identify the best model operating in the U.S. market to provide financing opportunities for sustainable energy.  The local authorities in Japan can swiftly and flexibly apply this model for local households and businesses in their jurisdiction.

Yuji Kamimai, "A New Business Model for the Media Industry"

For a long time, it has been said that media is the mirror of the times we live in.  In his research, Kamimai tries to understand the ascent of and vast changes of media through a historical backdrop to help explain and recognize new service and technological innovation in the Silicon Valley.  Additionally, he examines some trends other than media that could help provide a deeper understanding.  From the rise of media and the latest IT business model, Kamimai learns what is important for the media to do, and explains what the next action steps are.  

Masami Miyashita, "A Study about the Ecosystem that Creates and Develops Global Start-ups"

Innovation is critical to economic growth, and entrepreneurship and startups are pivotal ingredients of innovation. After Japan’s economic bubble bursting in 1990, there was much talk about the lack of entrepreneurship in Japan as a driver of creative destruction and economic revival. The “Silicon Valley model” of entrepreneurship was heavily studied. Beginning in the late 1990s, the Japanese government rapidly developed institutional and social frameworks for startups in Japan. In the early 2000s, however, few Japanese startups were global in scale, and the presence in Silicon Valley of Japanese entrepreneurs and startup were still very limited. After the first decade of the 21st century, there are preliminary indications of a new wave of startups by Japanese entrepreneurs making inroads in Silicon Valley. Compared to other groups, such as Chinese or Indians, the number of Japanese entrepreneurs in Silicon Valley still remains miniscule. However, for the Japanese entrepreneurs to take advantage of the Silicon Valley entrepreneurial and innovation opportunities, lessons from the experiences and challenged faced by Japanese based in Silicon Valley are important.  In his research, Miyashita provides some of the key factors that are feeding this new wave of startups.