Securing a reliable, affordable supply of oil has long been a cornerstone of US national security strategy. But as the global economy begins a slow transition away from fossil fuels in an effort to avert devastating climate change, the geopolitical calculus around energy is shifting.
In a world that uses no oil and gas, Saudi Arabia, Russia, and other fossil powerhouses could lose much of their wealth and leverage, and the US might have less incentive for military or diplomatic interventions in the Middle East. But even if decarbonization is aggressively pursued, that world is still many decades away, according to the International Energy Agency. Meanwhile, the energy transition could actually benefit some legacy fossil producers—and present new security challenges.
“A world that is much more decarbonized will raise new geopolitical risks that we have barely started to contemplate,” said Jason Bordoff, director of Columbia University’s Center on Global Energy Policy. ”If we’re not really careful about anticipating the geopolitical and security-of-supply risks that might accompany the energy transition, that will not only have security implications, but it will undermine the pace of the transition itself.”
The 9/11 attacks were a vivid example of the sometimes roundabout link between oil and national security. Osama bin Laden’s father, Mohammed bin Awad bin Laden, started his career as bricklayer for Saudi Aramco, which was founded in the 1930s as an offshoot of Standard Oil of California, the beginning of deep US investment in Middle East oil production.
Bin Laden Sr. parlayed that experience into his own construction empire, becoming one of Saudi Arabia’s richest men as the kingdom’s fossil fuel reserves were converted into astronomical wealth. His son later used that wealth to support mujahideen fighters resisting the Soviet occupation of Afghanistan. Then, in 1996, he published a declaration of war against the US for its military presence in Saudi Arabia, which was one of the consequences of America’s strategic interest in keeping the oil flowing from Saudi, Iraq, and elsewhere in the region.
In September 2001, when Al Qaeda carried out its attacks on New York, Washington, and Pennsylvania, the US was importing nearly 11 million barrels of oil per day, a figure that had risen steadily since the 1980s and would peak in Aug. 2006 at 13.4 million.
National security officials in the George W. Bush administration perceived that this trade imbalance posed numerous serious problems. It made the US economy and military reliant on an erratic global supply chain, largely controlled by countries (Venezuela, Iraq, Iran, Russia) with complicated or overtly adversarial relationships to the US. Oil infrastructure was and is also both a potential attack target and revenue source for terrorist groups like Al Qaeda and the so-called Islamic State.
The primary solution, for Bush and his successor Barack Obama, was to dramatically increase domestic oil production, facilitated by the fracking boom of the mid-2010s. By 2019 the US became a net oil exporter for the first time. As the pandemic-related oil price spikes of the last few months have shown, that didn’t insulate the US economy from oil market volatility, although it did ensure that more of the dollars Americans spent on fuel went to US companies.
As global oil demand decreases, Bordoff argues, Saudi Arabia and other members of the Organization of Petroleum Exporting Countries (OPEC) will likely gain geopolitical influence before they lose it. With costs of production that are generally much lower than the US, these countries will be among the last to give up drilling. They will control a growing share of the oil market, and could benefit from rising prices if global capital spending on oil production falls faster than demand.
Meanwhile, the clean energy transition has the US increasingly entangled in a new set of precarious global supply chains.
The future economy will be powered by electricity from low-carbon sources, rather than direct combustion of fossil fuels. That puts China in a position of power—it dominates global production of solar panels, as well as the mining of most of the critical minerals needed for batteries and other vital clean energy technologies.
Human rights abuses in the Chinese solar industry have already created supply disruptions for US solar companies, and could complicate president Joe Biden‘s new goal to procure 45% of US power from solar by 2050, as well as US-China relations on other issues. Labor abuses are also prevalent in the Democratic Republic of Congo, another major critical minerals producer. One of the world’s largest deposits of lithium, in Afghanistan, is now controlled by the Taliban.
Meanwhile, in Asia, demand for liquified natural gas as a relatively clean alternative to coal has increased, which may be beneficial to the climate but has left countries like Japan and Bangladesh exposed to crippling energy cost spikes as the number of suppliers remains relatively limited.
The same trend could unfold with hydrogen, which is being touted by energy companies as a way to replace fossil fuels in steel production and other heavy industries, and may also be produced predominantly in the Middle East and other countries with large supplies of either natural gas or low-cost renewables, such as Chile, Bordoff warns.
“If your country’s heavy industry is dependent on hydrogen from just a few suppliers, that creates major risks,” he said.
Finally, growing demand for electricity makes the grid an increasingly rich target for both physical and cyberattacks, for which the US is ill-prepared, according to a 2019 federal review. A grid that incorporates a higher share of renewables will also need to be more interconnected, including potentially across national boundaries. Egypt, for example, is in talks with European officials to build a solar-powered electricity transmission line under the Mediterranean.
But unlike fossil fuels, electricity can’t be stored for emergency use in huge quantities, leaving the recipient country exposed to potential terrorist attacks on the system in the delivering country, or the deliberate shutoff of services in case of a dispute. Building up domestic supply chains is part of the solution, for example a major lithium mine that opened this year in Nevada. Ultimately, the new geopolitics of energy will come down to delicate diplomacy, just like the old.
“Would you want to be dependent on a neighboring country to keep the lights on?” Bordoff said. “That’s a pretty big hammer for a country to use.”