An essay on TheAtlantic.com by Eric Garland, a former strategy analyst and author of Future Inc: How Businesses Anticipate and Profit from What’s Next and How to Predict the Future…and WIN!, recounts Garland’s growing disenchantment with the field in which he’s made a living for 15 years: strategic intelligence.

I don’t particularly trust anyone who writes books with titles like that (particularly ones with totally ungrammatical subtitles), but Garland’s indictment is stinging and persuasive. “The market for intelligence is now largely about providing information that makes decision makers feel better, rather than bringing true insights about risk and opportunity. … Our future is now being planned by people who seem to put their emotional comfort ahead of making decisions based on real — and often uncomfortable — information.”

Garland is mostly talking about strategic intelligence at the corporate and nation-state level, but his definition of “strategic intelligence” (“researching trends, analyzing their potential impact, and reporting the possibilities to decision-makers”) could certainly apply to the field of clean technology research and analysis that we inhabit at Pike Research, as well.  He identifies three trends that are making it harder for empirical evidence and clear-eyed analysis to overcome institutional biases, internal politics, and short-term thinking.  First, “the explosion of cheap capital from Wall Street has led major industries to consolidate,” leaving a smaller pool of firms, many of which operate in markets distorted by politics, protectionism, and government handouts.  Second, this concentration of capital and economic clout has created giant bureaucracies in which “conventional thinking and risk avoidance become paramount.”  When you’re part of a large bureaucracy far removed from the real-world consequences of individual decisions and actions, it’s harder, and less rewarding, to base your thinking on strategic intelligence.

Finally, the influence of policy-makers is stronger than ever before.  This may seem counter-intuitive at a time when the United States can’t even craft a national energy policy, but Garland makes the case that national governments are now in the business of shielding large corporations – GM, Verizon, big banks – from the turbulent forces of globalized capitalism.

“How can you use classical competitive analysis to examine the future of markets when the relationships between firms and government agencies are so incestuous and the choices of consumers so severely limited by industrial consolidation?”

Watch Out for the Elephants

I have a couple of responses to this lament. One is that, although many cleantech sectors (electric vehicles and solar power, to name two) are certainly influenced by – many would say “distorted by” – government policy and government handouts, I have not found it the case that that limits the usefulness of evidence-based analysis and quantitative market sizing and forecasting.  Quite the opposite: the companies we talk to every day need independent intelligence more than ever, in large part because the actions of governments can be so unpredictable and so market-changing.  When you’re trying to run through an elephant herd it helps to know which way the trunks are swinging, as it were.

Second, the lamentable state of strategic intelligence is not news.  Garland never refers to the invasion of Iraq nor the intelligence failures (or misuses) that led up to it, but his critique certainly springs from the dark days of 2002, when an entire generation of CIA intelligence gatherers and analysts saw their work distorted and repurposed to further a predetermined foreign policy objective: the invasion of Iraq.  In 2007 John Heidenrich wrote a long essay on the CIA’s official website called “The State of Strategic Intelligence,” which made the same complaint that Garland makes today: “The architects of the National Security Act of 1947 would be greatly surprised by today’s neglect of strategic intelligence in the Intelligence Community.”

Last year former Fortune managing editor Walter Keichel III published an essay on the Harvard Business Review site in which he noted that the entire business model of corporate strategic analysis has shifted: “Behemoths such as McKinsey and BCG … have broadened what they do and moved down the food chain. McKinsey teams are beavering away in places like the United Arab Emirates and the ‘Stans — Turkmenistan, say, or Tajikistan — but they’re as likely to be doing operations projects as pure strategy work.”  These days the real money, Keichel notes, lies not in corporate strategy but in “semi-permanent, year-in, year-out relationships with companies rich enough to pay scores of millions annually for help and advice.”

That reminds me of the old Woody Allen joke: “I know therapy works – I’ve been doing it for 30 years!”  (To be sure, though, ongoing customized client relationships are often not only more lucrative to the consultant but more valuable to the client than one-off, high-level strategic studies.)

Garland’s overall point is inarguable.  “The study of the future used to be easier to sell, maybe because the analysis usually predicted the growth of the consumer economy or the next great gadget,” he writes.  “But the future is no longer nearly as palatable, and the customers are less interested.”

But the customers who aren’t interested in hard truths about an unpalatable future aren’t good customers, anyway, because they’re not going to be around for very long.

Last week, doing some reporting on the economic benefits of abundant, cheap natural gas from shale deposits in the United States, I spoke to Dave McCurdy, the president of the American Gas Association. A seven-term Democratic congressman from Oklahoma, McCurdy headed the Alliance of Automobile Manufacturers before joining the AGA in February, 2011.  His experience in Congress and in the two trade groups gives him a unique view on the spread of natural gas as a replacement fuel, particularly for transportation, so I asked him if the “100-year supply” of low-cost natural gas is driving growth in the natural-gas vehicle market.

“Absolutely,” McCurdy replied.  “It’s starting at the bottom of the pyramid, as a foundational part of the market, with heavy transport. Then it’s moving on to fleet vehicles, school buses, garbage trucks, FedEx vans – these kinds of commercial fleets are tailor made for natural gas.”

That accords with the findings of Pike Research’s 2011 report, Natural Gas Vehicles.  There are currently about 12.6 million natural gas vehicles (NGVs) in use worldwide, the majority of them in Latin America, the Middle East, and Africa.  Worldwide sales of natural gas vehicles are expected to grow rapidly over the next five years, to 3.2 million units annually by 2016 from 1.9 million in 2010, with three-quarters of the increase coming in corporate and government sales.  While senior analyst Dave Hurst foresees the lack of convenient refueling stations continuing to inhibit demand for consumer NGVs, McCurdy, not surprisingly, is more optimistic: “We’re now seeing major manufacturers directly building assembly-type production for engines.  They’re moving toward light duty trucks, and we’ll see a number of autos in the not too distant future.”

AGA’s utility members, McCurdy told me, are making investments to build refueling stations and “fill that infrastructure need,” first along interstate highways, then around commercial fleet routes.

“I was at the Tampa airport the other day, and they’ve opened a natural gas fueling facility. The average price of gasoline is about $3.85 a gallon, and the gallon of gas equivalent in natural gas was less than a dollar. The market is riding that difference.”

The debate over whether cheap domestic natural gas will be the economic panacea its supporters predict is unsettled, and the AGA is, naturally, a biased source.  If 50% of McCurdy’s predictions come true, though, the ripple effects for U.S. motorists, automakers, and conventional oil producers will be profound.

“Seventy-eight percent of all oil imports go to transportation, and we have the ability to reduce that by 50%,” he stated.  “We have an opportunity we’ve not had in my adult lifetime, to truly break our dependence on foreign oil.”

The San Luis Valley in southern Colorado is a place of desolate beauty, roughly the size of New Hampshire, the driest high-elevation area in the United States.  It’s also becoming a proving ground for both wind and solar power projects, some of them of vast scale.  This week the Saguache County Board of Commissioners voted to issue a permit for a sprawling solar power facility that would generate 200 megawatts (MW) – three times the electricity of the three solar plants already existing in the Valley.

The San Luis project, being developed by Santa Monica, Calif.-based SolarReserve, is also noteworthy because it uses concentrating solar technology, which uses arrays of sun-tracking mirrors, known as heliostats, to amplify and focus the sun’s energy onto a fluid – water or molten salt – that is heated to make steam.  Covering 4,000 acres, SolarReserve’s plant will include two 656-foot towers surrounded by 1,700 acres of heliostats.  Although SolarReserve has a contract with Xcel Energy for 100 MW of transmission capacity on a nearby Xcel power line, it has not yet found a buyer for power from the complex.

A technology with potential advantages over conventional, photovoltaic-based solar power, concentrating solar power (CSP) has not yet fulfilled its promise and may be reaching a make-or-break phase in its development.  The San Luis Valley announcement came just as an auction was scheduled to sell off the assets of Maricopa Solar, a pilot CSP project built by Stirling Energy Systems, which went bankrupt last September.  The fact is that CSP, besides being a more potent form of energy collection, presents certain disadvantages as well, the most obvious being that many CSP systems require copious amounts of water to cool the mirrors and lenses – a significant downside in a desert environment like the San Luis Valley or like California’s Mojave Desert, the setting of the 392 MW Ivanpah plant being built by BrightSource Energy.  Dry cooling systems are becoming more prevalent, but are also more expensive.

BrightSource was also in the news this week as it filed for an initial public offering in which it plans to raise $182.5 million. Backed by Google and by power producer NRG Energy, BrightSource is also the recipient of a $1.6 billion loan guarantee from the U.S. Department of Energy – a fact that could become politically inconvenient once it’s a publicly traded company with millions in shareholder cash.  BrightSource already has 13 contracts to sell power to utilities including PG&E Corp. and Edison International.  The IPO is scheduled for mid-April, according to Bloomberg.

Several other companies including Acciona SA of Spain, German tech giant Siemens AG, and ABB Ltd. of Switzerland are trying to bring CSP to market.  Some of these companies recently launched a trade group called the Concentrating Solar Power Alliance to “educate” (i.e., lobby) U.S. regulators and lawmakers on the benefits of CSP technology.  By the time the nascent industry gathers in San Diego for the 4th annual Concentrating Solar Thermal Power conference, on April 18^th and 19^th, the near-term prospects for CSP are likely to be clearer.

In his March 15 “State of Energy” address, President Obama strongly defended his clean energy policies and ridiculed Republicans like Newt Gringrich, who has referred to Obama as “President Algae” for his support of R&D on biofuels.

Referring to “a lot of the folks who are running for a certain office,” Obama said, “They dismiss wind power.  They dismiss solar power.  They make jokes about biofuels. They were against raising fuel standards. I guess they like gas-guzzlers.  If some of these folks were around when Columbus set sail, they probably must have been founding members of the flat earth society.”

In a fair world, this ought to be an optimistic time for U.S. energy supplies and security.  Natural gas production is surging to record highs, even as the price of natural gas remains low; the United States last year became a net exporter of petroleum products for the first time since the late 1940s; the number of operating oil rigs has quadrupled in the last year or so; prices for solar photovoltaics continue their rapid falls; the U.S. economic recovery is gathering steam, benefiting the oil majors and opening up new opportunity for clean energy innovation.

The world, however, is not fair.  Oil futures rose again last week as the possibility of military action against Iran – once considered a Strangeloveian fantasy – took on an ominous air of inevitability.  Atlantic national correspondent James Fallows has been charting the “Iran Drumbeat Watch” in his blog and recent installments have been alarming, if you credit sources who point to, among other things, naval deployments (the Enterprise Strike Group has sailed, the Navy is doubling the number of minesweepers in the Persian Gulf, etc.)  As a result, average gas prices hit $3.80 a gallon and show no signs of moderating.  Obama and British Prime Minister David Cameron reportedly discussed tapping each country’s strategic petroleum reserves in their meetings last week.

Unfortunately, pouring more oil onto the U.S. market wouldn’t do much about gas prices at the pump, which are driven by worldwide market forces.  And if you think four dollar-a-gallon gas is eye-opening, just wait and see what happens if, say, Israel launches an air strike on Iranian nuclear facilities.  “I think you will see $5- and $6-a-gallon gas,” energy consultant Andrew Lipow, president of Lipow Oil Associates, told Washington political blog The Hill.  Other analysts went even further: a doubling of gas prices in the United States is well within the realm of possibility if the Israel-Iran conflict breaks out, the Iranians begin blocking oil shipments through the Strait of Hormuz, and the U.S. finds itself dragged in.

The possible worst-case scenarios, according to former White House counterterrorism director Richard Clarke, include “a huge energy crisis,” terror attacks in U.S. cities, cyber-attacks on U.S. power grids and oil refineries, and other equally sobering thoughts.

From the clean energy perspective there’s only one immediate response: it’s a lot harder to disrupt distributed solar arrays, biofuel plants, and wind farms (not to mention natural gas plants running on domestic supplies) on U.S. territory than it is to blow up an oil tanker in the Persian Gulf.  The shift to domestically produced, renewable sources of energy would be the single greatest boon to national security any presidential administration could deliver.  The governments in Jerusalem and Tehran could deal a serious blow to Barack Obama’s re-election prospects by launching a regional war that drives a worldwide spike in oil prices.  Such a disastrous conflict, though, would likely also spark rising public demand for and renewed political acceptance of new and less vulnerable energy supplies.  Speaking in Boulder City, Nevada, on March 21^st on a Western swing to promote his energy policies, President Obama once again affirmed his support for clean energy technologies.  It’s a message that resonates more powerfully as tensions mount in the Middle East.