Clean Energy Does Not End the Energy Security Game — It Reshuffles the Deck

Between blazing oil wells in the Middle East and gas shutoffs in Europe, the associations linking fossil fuels to international conflict and power run deep. As such, substituting fossil fuels with clean technologies to address climate change may seem to offer an attractive co-benefit — the resolution of energy security worries thanks to the democratization of energy supplies away from hydrocarbon-producing countries and corporations.

Undoubtedly, decarbonization will alter how energy and geopolitics interact. World governments certainly would no longer need to nervously eye the Strait of Hormuz or cultivate strategic oil reserves. However, it is perhaps naive to count on cleaner technologies to uniformly guarantee energy security.

On the contrary, new technologies come with new strategic considerations — from materials to interconnections to cybersecurity — that will leave geopolitics and energy tightly linked.

At the same time, the necessary process of transforming energy infrastructure to accommodate clean tech will provide appealing geopolitical opportunities — to diversify trade partners, secure reliable energy supplies, and harden grids against cyberattacks. In navigating the clean energy transition, policymakers planning proactively around energy security might thus even reap geopolitical rewards.

For many countries facing energy security concerns, achieving greater energy independence could dramatically shift their national circumstances, lessening their dependence on foreign fossil energy imports and unreliable trade partners. Belarus, for instance, remains a significant energy importer, sourcing essentially all of its oil and gas from Russia. This relationship has fostered strong Russian influence in domestic affairs thanks to the use of Russian oil and gas subsidies as leverage in bilateral negotiations. For its part, Russia partly depends upon Belorussian pipelines to carry oil and gas exports to markets in Europe. Heavy investments in new nuclear capacity; reduced reliance on oil for transportation; or increased sourcing of electricity from wind, solar, and hydro-rich European neighbors could diminish Belarus’s import dependence on Russian fossil energy, while dramatically shifting the geopolitical leverage its pipeline infrastructure represents.

While today’s dramas around oil tankers and gas pipelines may eventually become phenomena of the past, threats around international imports and exports of electricity or low-carbon fuels could well take their place.

For Korea, Japan, and Taiwan — all highly dependent on coal, gas, and oil imports that must transit sensitive ocean regions like the Persian Gulf and South China Sea — even an unrelated spike in tensions between third parties could jeopardize energy security. Such incentives are strong drivers behind efforts in all three countries to develop renewable energy projects, from Korea’s Green New Deal proposals to Japan’s growing offshore wind ambitions.

However, the decarbonization process in many countries will also depend on key imports. Energy security vulnerabilities do not disappear overnight, and building clean energy infrastructure at large scales requires importing technologies or securing significant quantities of raw materials to build them at home. Critical materials like rare earths and precious metals play important roles in building clean energy capacity yet could remain concentrated within the hands of relatively few nations. Such strategic materials could become new forms of international leverage.

This is already a regular occurrence. Metals and minerals are commonly subjected to import tariffs and export restrictions, provoking retaliation in kind and sparking disputes that often require WTO arbitration. In 2010, China famously embargoed exports of rare earth metals to Japan after tensions spiked amidst a regional territorial dispute. This act sent governments worldwide racing to assess critical material dependencies, sparked a wave of academic research into potential materials bottlenecks in the clean energy transition, and strongly colors US materials policies and planning to this day. Used widely in consumer electronics, the automobile industry, and the defense sector, rare earth elements feature in important clean technology applications, including permanent magnets for many wind turbine and electric vehicle models. China’s continued dominance as a major global supplier of rare earths and other critical raw materials assuredly plays into the energy policy calculus of Korea, Japan, and Taiwan — all simultaneously wary about increasing dependence on Chinese goods and services, even as they move towards greater investments in wind and solar.

Certainly, worrying about metals represents a different problem entirely compared to worrying about fossil fuel supplies — one that governments might in fact prefer. For instance, while restrictions on rare and precious metals imports might impede a country trying to build new energy infrastructure, they would not interfere with already-operating wind or solar farms. Such actions exert very different national pressures relative to, say, the 1979 oil crisis or Russian shutoffs of European-bound natural gas in the mid-2000s.

The current landscape of raw material supplies may also change. Ironically, Myanmar has recently demonstrated willingness to restrict exports of rare earth ores to China, upon which China’s rare earths processing industry is itself increasingly reliant. China’s current rare earths dominance reflects significant investments in extraction and processing expertise and infrastructure rather than a monopoly on global deposits, which span many regions of the world from the United States to Australia, Russia, and Myanmar. Innovations in wind turbine, battery, or electric vehicle designs could also reduce the intensity of critical material use in energy technologies — or replace them entirely with substitutes. Advances in recycling could also strengthen the ability of countries to repurpose key materials from waste and scrap.

Nevertheless, such considerations around strategic materials only underline the likelihood that the energy sector will remain closely intertwined with events on the international stage.

The necessary process of transforming energy infrastructure to accommodate clean tech will provide appealing geopolitical opportunities — to diversify trade partners, secure reliable energy supplies, and harden grids against cyberattacks.

Many countries will continue to rely upon energy imports in a clean energy future, with all the geopolitical entanglements such interconnections can entail. Global decarbonization will not change the reality that some countries will not be fully energy independent. Nor is full energy independence an ideal that every nation should strive for, given cost and efficiency considerations.

In the meantime, the global clean energy transition may also take place more slowly in some regions than in others, forcing countries that are slow to decarbonize to adapt to shifting energy economics. As global fossil fuel consumption falls, the landscape of fossil fuel production will dramatically change in ways that remaining fossil energy-importing countries may not be able to easily predict. The uneven progress of global decarbonization may consequently present periods of heightened, albeit transient, traditional energy security risks.

And while today’s dramas around oil tankers and gas pipelines may eventually become phenomena of the past, threats around international imports and exports of electricity or low-carbon fuels could well take their place. With China’s eager pursuit of interconnections with its neighbors’ power distribution networks, such concerns weigh heavily in the minds of involved governments. Even less-direct partnerships may pose risks. In the Philippines, international power projects utilizing Chinese equipment or proceeding under partial Chinese ownership are raising worries over potential Beijing-ordered shutdowns in the event of conflict.

Indeed, with high-profile state-sponsored hacking of rivals’ electrical and energy infrastructure in recent years, governments are showing increasing concern over cyberattack — a threat that could grow more potent as electrical grids grow more complex and networked to accommodate diverse generation technologies.

In December 2015 and 2016, amidst Ukraine’s ongoing armed conflict with Russia and Russia-aligned separatists, Russian hackers conducted successful large-scale cyberattacks against Ukrainian grid infrastructure, knocking out power across large portions of Kiev in the middle of winter. A sophisticated 2017 hacking attempt on an oil refinery in Saudi Arabia came dangerously close to sparking a catastrophic accident. Meanwhile, earlier this summer, government institutions in Australia came under heavy cyberattack attributed to state-affiliated hackers based in China. Compared to long-standing energy import dependence, cyberattacks are transient and short-lived but nonetheless can apply significant geopolitical pressure. Given the high-profile consequences of cyberattacks and cyber espionage, coupled with their plausible deniability, cyberwarfare represents a powerful tool for gaining leverage on international rivals.

New technologies come with new strategic considerations — from materials to interconnections to cybersecurity — that will leave geopolitics and energy tightly linked.

Power grids rely heavily upon automated monitoring and control — a challenge that increases further for low-carbon smart grids transmitting electricity over long distances, matching variable generation to shifting demand, and integrating more distributed production sources. Such complex systems consequently represent inviting targets for attack and difficult objectives to defend. Both China and the US are placing growing priority on preventing and combating cyberattacks, with the United States even recently weighing policy to ban power sector equipment purchases from some foreign countries.

In the end, it should be obvious that energy and geopolitics will continue to intersect even in a world running completely upon clean technologies. Modern society requires enormous quantities of energy to function and, given differences in national contexts, not every nation will enjoy energy independence in a low-carbon future. Furthermore, given the importance of energy to economic activity and daily life, we should expect that governments will keep wielding energy as leverage in international affairs. And we shouldn’t discount the challenges posed by the transition process itself, which will require significant global trade in raw materials for building tomorrow’s green infrastructure.

Yet while energy will keep its place on the global stage, players can seize the chance to change their roles and positions. The movement to decarbonize represents a fundamental reinvention of national energy landscapes, overturning associated power relationships and dependencies. In fact, by emphasizing the domestic benefits such opportunities represent and the advantages of becoming technology leaders in the new world of energy, climate advocates could produce greater national ambition for climate mitigation than from environmental appeals alone.