Energy is woven into the fabric of modern geopolitics. The oligopolistic stranglehold OPEC nations enjoyed over global energy supply was made clear in the 1970s when embargoes almost brought the West to its knees. Today, the United States and its allies continue to indulge Saudi Arabia, Qatar and other OPEC members despite divergences on human rights, democracy and support for extremists. For OPEC+ leader Russia, the transit of gas provides a weapon against neighboring Ukraine, while the controversial Nord Stream 2 pipeline to Germany allows Moscow to divide and conquer Europe.
The geopolitical leverage derived from hydrocarbon exports is motivating the development of alternative energy resources among the world’s heaviest energy consumers. After the first oil embargo, France built a formidable nuclear reactor fleet to maximize its energy autonomy. As wind and solar power each nears cost parity with traditional sources, fuel importers have new opportunities to wean themselves off foreign hydrocarbon dependence.
But the transition to renewables, if poorly managed, may not be as conducive to energy independence as policymakers might hope. Alternative energy resources, as well as technical know-how and industrial inputs, obey the same established geopolitical logic. As the transition gathers pace, beware the advent of green geopolitics.
A recent book, “The Prologue: The Alternative Energy Megatrend in the Age of Great Power Competition,” by Dr. Alexander Mirtchev describes how an alternative energy “megatrend” — a confluence of interconnected trends transforming the global zeitgeist — is revolutionizing international relations.
With climate concerns, economic motives and energy security imperatives fashioning the megatrend, professor Mirtchev details a “green gold rush” as nations race to control renewable resources.
The unequal distribution of solar and wind power — and advances in cross-border power transmission — will entail uneven energy trade. British Prime Minister Boris Johnson’s pledge to make Britain the “Saudi Arabia of wind” implies significant export potential, while European Union plans to develop North African solar, wind and hydrogen power for European consumption could recreate the patron-client relations currently experienced by weaker fossil fuel suppliers. Other alternative energy resources could precipitate conflict: Ethiopia’s building of a hydroelectric dam risks Egyptian military intervention if downstream water flow is curtailed.
In the United States, a vast and varied geography, combining a sun-drenched Southwest with a wind-swept northeast coast, seems to make energy independence a simpler proposition. Estimates suggest the U.S. could easily meet its total electricity demand through wind and solar alone. Yet harvesting wind and solar energy requires turbines and solar panels built with rare earth elements — a group of metals used to create permanent magnets — which are also needed for portable electronics, electric vehicles and even advanced military hardware.
The metals’ rarity is a misnomer; they are abundant within Earth’s crust. Yet, extracting them is costly and exacts a steep environmental toll. While the U.S. once mined its own rare earths, environmental neglect as well as low and subsidized production costs helped China conquer about 85 percent of the global market for rare earth oxides by 2019. Beijing’s dominance became clear in 2010 when a maritime dispute with Tokyo prompted a rare earths embargo, stifling Japan’s technology-intensive economy.
According to Mirtchev, the Sino-Japanese rare earths dispute presages increasing great power competition over critical green technology components.
Diversification of rare earth supplies has become a priority outside China. The U.S., the EU, Japan, Canada and Australia have drafted critical materials lists, all of which include rare earths. North America and Australia have ample deposits, but capital-intensive extraction may fall victim to Chinese price fixing, whereby markets are flooded with below-cost supply to bankrupt competing miners.
The U.S. Department of Defense has countered by pumping tens of millions of dollars into domestic rare earth production. Meanwhile, the State Department launched an Energy Resource Governance Initiative supporting extraction elsewhere. The Biden administration is reviewing America’s supply chain security, which includes reliable and affordable access to inputs vital to national security.
Solar power shares the same issue. Nearly four-fifths of the panels installed in the U.S. come from Chinese companies. Beijing subsidizes the industry heavily, and costs may be kept low in some cases through forced labor in Xinjiang — little wonder the United States’ own subsidized suppliers, like ill-fated Solyndra, find it difficult to compete.
Today, using a stick rather than former President Barack Obama’s carrot, the Biden administration has sanctioned Chinese firms linked to forced labor, a clear move of green economic statecraft.
In this alternative energy race, technology — like natural resources — is part of the game. Innovation is key to making the transition work; for solar and wind to fulfill their energy independence promise, reducing intermittency is crucial.
Advances in battery technology are required for storing excess power generated during periods of intense sun and wind. The country delivering these breakthroughs could control the grid-scale battery market.
As Mirtchev noted, technology is a vital component of green great power competition. In this megatrend, the intersection of geopolitics, economy and innovation creates a world where everything is a security matter.
In this universally securitized world, cooperative policies among democracies are desperately needed. Australia and Canada seek partnership with the U.S. on alternative mineral supply chains, while the U.S. kills the Keystone XL pipeline vital for Canadian oil exports.
In the North Sea, Britain, Norway and Denmark are integrating hydro and offshore wind transmission to create viable alternative power markets. Similarly, Western research should be collaboratively scaled up to compete with China.
Will collaboration prevail? The G-7 summit produced plenty of talk, including of a green rival to China’s Belt and Road Initiative, but relations among Western countries remain strained. The EU and the U.K. are in an uneasy “Sausage War” cease-fire, and American allies doubt if Washington can be trusted again.
Though former President Donald Trump’s “America First” policy has been softened to Biden’s “Buy American” version, in the post-pandemic “green recovery” and energy transition, every nation remains for itself.
As such, as Dr. Mirtchev warned, a fractured West could remain at the mercy of a politically minded energy cartel — only this time from China. We have yet to see how the green energy megatrend will unfold, but the geostrategic pieces are already ominously in motion.
Paddy Ryan is a climate editor at Global Risk Insights and an alumnus of the Atlantic Council’s Global Energy Center’s Young Global Professionals Program. He has a master’s degree in international relations from the London School of Economics, and has written for The Spectator, the Atlantic Council and Energy Post.
