New Geopolitics of Energy

The new geopolitics of energy is made from four current energy revolutions [Nobuo Tanaka, Former Executive Director of the EIA, Sep 2019]. The world is witnessed a dramatic price-reducing in solar photovoltaic, which made Solar will be the cheapest energy in the near years (first revolution). From 2008 to 2018, the cost of residential solar energy drop significantly from over 7USD/watt to 2.3USD/watt [Sunrun, 2018], around 60% since 2010 [].Whilst the electrification process (second revolution) is happening very fast everywhere in the world, particularly in China. Most of the new technologies invented using electricity instead of conventional resources.  AI, big data, electric cars will dominate the world’s future by electricity. The way people’s cooking is switching from burning gas or coal to use electromagnetic stoves due to its efficiency and safety factors.

With the advantage of rare earth metal element production, China’s green revolution (third revolution) is changing the world. In 2018, China is keeping over 60% of rare earth metal production of the world [S. Kalantzakos, 2018], which is the basic foundation of renewable development.  In 2010, China cut off rare-earth to Japan due to tensions between two countries, the price of this matter went up at top price gains of as much as fourfold. Also, China is the cheapest manufacturer in renewables energy and, therefore, hugely influences the world through renewable tools. China is leading in three of the above renewable’s revolutions.

In contrast, the US is leading a conventional revolution with the shale gas revolution and increment of oil production (fourth revolution). From imported energy country, the US recently to be an exported/independent energy country. Even though China is one of four countries that have a fracking program, but the US made the shale revolution happen with its innovative fracking technology. There were 10 LNG terminal projects pitched in Louisiana alone to export their gas to the world [Agnia Grigas, 2017]. Total exports of liquified natural gas were up 37% between the first six months of 2019 compared to 2018 inLouisiana [Kristen Mosbrucker, 2019]

Further, the US awarded about the trend of oil’s reducingrole in the future then they decided to exploit their oil production and will be soon the top three oil producers in the world. The role of oil cannot be the same as the past because many changes happened in the energy market. A big amount of shale gas production, renewable development, electrification is happening at the same time. Especially, the development of depth sea drilling technology creates oil production went abundance in many places. Also, oil demand in developing countries like China, the biggest oil importer, is slowing down due to slow growth aswell asthe 4.0 generation revolution. With a huge amount of oil production from the US, the nonicreasing trend ofoil price is obvious

World Order is changing along with the new geopolitics of energy

These big changes shift alliances and relations among states, and countries have rethought about their relations [IRENA, 2019]. In the past, the US depended on the oil from Middle East countriesso they focus much on Middle East area. However,they are switching their main focus from the Middle East toIndia, Pacific Asia, EU, where locates main oil and gas importing countries. Alliances between the US and Saudi Arabia are weaker, and Saudi Arabia is closer to Russia.At the same time, relations between LNG import countries and the US will be stronger innext years. 

The US does not need oil from Middle East Countries, so they will not play a key role in securing security in the Persian Gulf as the past. It willcauses high marine security risk for imported energy countries such as Japan, S. Korea, Taiwan, India, and China. Recently, drone attack in Saudi Arabia hits world’s largest oil processing facility dropped 5% of the would’s oil production is a warning signal for those countries, then Japan and S. Korea have to consider to send their troops to ensure Persian Gulf security. 

Furthermore, without fear of the oil crisis, the US is confident to implement sanctions with Iran, Venezuela, and Russia. Low oil pricemade huge damages on such oil intensive dependency countries with low-efficiency drilling technologies. As a result, Iran and Venezuela gone criss on economic and society while Russia faced a lot of difficulties. In the other hand, the US is the main enjoyer of low oil price because they are the second-largest oil demand in the world. This is also a major factor for US economic growth under President Trump.

Russia and Europe are in close relationship because the winter in Europe is largely heated by Russian gas pipelines through Ukraine. Previously, the United States had no role in this relationship and left Russia manipulating Europe. But things are different now because the United States was able to export gas (LNG) to replace Russian gas pipelines for Europe. Ukraine and some European countries are ready to accept US LNG to reduce their dependence on Russia. Russia has responded with this situation by the construction of two new gas pipelines that do not cross Ukraine – the northern stream (Nord Stream 2) through the Baltic Sea and the Turkish stream. For Europe Union, they strive to develop renewable energy to be as independent of energy as possible.

China is also trying its best to ensure energy security in the context of new geopoliticsof energy. China’s Belt and Road Initiative, which aims to build power grids to connect with most other countries on the Eurasian continent. At the same time, they are deploying the construction of many nuclear power plants, connecting with many gas pipelines from Myanmar, Central Asian countries and Russia, and paying special attention to oil and gas in the East Sea and East China Sea. Their renewable energy industry is also thriving to reduce dependence on oil and gas imported from the Middle East and the United States.

The new geopolitics of energy have made a clear impact on many aspects of the world, including the system of coalitions between nations. More broadly, these factors are gradually shifting the world order that has formed over the past 60 years.

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Energy outlook ofthe world

IEA (International Energy Agency) (2018a), World Energy Outlook 2018, OECD/IEA, Paris.

Bloomberg New Energy Finance. New Energy Outlook 2018. (2018).

BP. Energy Outlook 2018. 

Equinor. Energy Perspectives. (2018). 

ExxonMobil. Outlook for Energy: A View to 2040. (2018). 

Institute of Energy Economics, Japan. Outlook 2019: Energy transition and a thorny path for 3E challenges. (2019). 

OPEC. World Oil Outlook. (2019). 

Shell. Sky Scenario. (2018). 

US Energy Information Administration. International Energy Outlook. (2017). 

Global CCS Institute. Global Status Report. (2018). 

New Geopolitics of energy

(Nobuo Tanaka, Former Executive Director of the EIA, Sep 2019). China Is Pushing its Green Revolution for Geopolitical Reasons, Not Just for Sustainability.

(IRENA, 2019). A New World: The Geopolitics of the Energy Transformation. International Renewable Agency. 

New Geopolitics ofnatural gas

Agnia Grigas(2017). TheNewGeopoliticsofNaturalGas. Book

AmyMyersJaffe& Meghan L. O’Sullivan (2012). The Geopolitics of Natural Gas.Report of Scenarios Workshop of Harvard University’sBelfer Center and Rice University’s Baker InstituteEnergy Forum.

Robert A. Manning(2014).The shalerevolution and the new geopolitics of energy. The Atlantic Council of the United States. 

Soner Cagaptay & TylerEvans (2013).Turkey’s energy policyand the future of natural gas. Harvard University’sBelfer Center and Rice University’s Baker Institute. 

Fred B. Olayele (2015). The Geopolitics of Oil and Gas. International Association for Energy Economics.

Kristen Mosbrucker (2019). Louisiana leads nation in natural gas as net exports double, Lake Charles metro sees most gains.

New Geopolitics of oil

Gawdat Bahgat (2013). The New Geopolitics of Oil: The United States,Saudi Arabia, and Russia. the Center of Middle Eastern Studies at Indiana University ofPennsylvania.

Jim Krane & Kenneth B. Medlock III (2017). Geopolitical dimensions of US oil security. Rice University’s Baker Institute for Public Policy, Houston, TX, United States.

Wenxue Wang & Fuyu Yang (2014). The Shale Revolution, Geopolitical Risk, and Oil Price Volatility. 

New Geopolitics of renewable

Meghan O’Sullivan, Indra Overland, and David Sandalow (2017). The Geopolitics ofRenewable Energy. Center on Global Energy PolicyColumbia University and The Geopolitics of Energy ProjectBelfer Center for Science and International AffairsHarvard Kennedy School.

Daniel_Scholten (2018). The Geopolitics of Renewables. Lecture Notes in Energy, volume 61.

Published by Lê Khánh Công

PMP, MSc on Nuclear energy in S. Korea, Researcher on the topic of "Geopolitics of energy impacting on Vietnam Energy security"

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