Redrawing the Map of the Energy World
10 min read
Energy plays a unique role on the world stage, guaranteeing military strength, economic development, transportation of people and goods, and social well-being. The price of energy, and oil and gas in particular, is set by the global interplay of supply and demand. For many oil and gas producing nations, it has become such a vital part of their economy that it wields a decisive influence on politics. And in recent decades, people worldwide have woken up to the fact that energy also impacts another key issue: climate change.
© THINKSTOCK - China stands out as the world's new energy giant. Here, we see the Shanghai Bund from an unusual viewpoint.
Six key factors in the geopolitics of energy are described below.
China's Rise is Redrawing Global Boundaries
Geopolitics has historically been shaped by the balance between major powers. Looking back over changes in consumption – a yardstick of economic growth –, two regions stand out: the United States and Europe. In 2000, the U.S. consumed 2,269 million metric tons of oil equivalent (Mtoe) and Europe 1,853 Mtoe, accounting for nearly half of all global consumption. China, in comparison, consumed 1,161 Mtoe. By 2013, the U.S. and Europe had both slightly reduced their consumption, particularly following the 2008 financial crisis, while China exceeded 3,000 Mtoe, supplanting Europe as a global energy .
Other countries also "emerged" between 2000 and 2013. India increased its consumption by 80% and Brazil by more than 50%. Meanwhile Russia, the twentieth century's other postwar superpower, added a mere 18% to its total. These changes have redrawn boundaries all over the world.
The U.S. is Edging Toward Energy Independence
Thanks to the boom, the U.S. is now self-sufficient in natural gas. Since 2022, they have even become the world's leading exporter of . Domestic production went from covering a third of the country's needs in 2005 to 62% in 2014. The U.S. new-found self-sufficiency could lead it to take less interest in the internal struggles of the Middle East and even partially disengage. But it seems unlikely that, after so many decades of protecting the Gulf, it would so readily abandon it to other foreign interests.
Fossil Fuels will remain at the Center of Geopolitics for Decades to Come
One of the looming questions for the coming decades is how to supply enough energy to meet growing demand from emerging economies or, put simply, how to ensure access to resources. According to the baseline scenario put forward by the , fossil fuels ( , gas, oil) will continue to make up 76% of the global in 2035, compared to 81% in 2011. Given that fossil fuels are traded internationally, controlling supply is expected to remain a coveted privilege among world powers.
Climate Change is Throwing a Monkey Wrench into the Energy System
The established energy system was dealt a serious blow when a new factor entered the equation: the very real threat of climate change. People quickly began wondering how our reliance on fossil fuels could ever be reconciled with a reduction in emissions. According to the , preventing average global temperatures from rising by more than 2°C above pre-industrial levels by 2100 will require more than just a reduction in GHG emissions – it will require net zero emissions from 2060 to 2100. This is currently the topic of multilateral discussions being overseen by the United Nations (U.N.).
Renewables and Nuclear Energy are Gaining Ground
Apart from emitting only small amounts of carbon dioxide, renewables and have the advantage of being location-specific and, by extension, of not stirring geopolitical tensions, even though manufacturing the equipment remains a high-stakes economic issue. Renewables, particularly , are witnessing fast expansion in China, Europe and the U.S. The IEA scenario predicts that they will make up nearly one third of total power production by 2035, hydropower included. Nuclear power is expected to maintain a steady presence, albeit much further eastward in China, India and Russia.
Technologies and Innovation are Potential Game Changers
With each new crisis, technology progresses to offer solutions in areas such as , effective use of and , electric-powered mobility, carbon capture and storage... This gives major industrial groups a responsibility for developing these technologies and, consequently, a role to play in geopolitics.
Advances in technology are the driving force behind innovation, which is reflected in the new global balance of power. China is no longer the world's factory, and has moved its focus from "Made in China" to "Designed in China". According to the latest report from the World Intellectual Property Organization (WIPO), while the United States was for a long time in the lead, it is now China that remains the main source of international patent applications. It is followed by the United States, Japan, South Korea and Germany.
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