When it comes to energy, the United States’ self-sufficiency and independence is now under threat from a number of different factors, some of the biggest and most dire of which are climate change, security, ramping up international competition, and woefully underdeveloped infrastructure. It’s going to become increasingly more difficult for the United States to maintain its energy independence unless the country starts addressing the issues in a serious way and with a major sense of urgency.
1. Climate change and the renewable revolution
Climate change won’t just change the global energy landscape–it will change everything. As weather patterns shift and extreme weather events become commonplace, supply chains will become increasingly vulnerable and global priorities will shift radically. In Texas’ catastrophic and tragic deep freeze earlier this year we all saw how fragile our energy grids really are, and those kinds of stress tests are only going to become more powerful and more frequent.
What’s more, thanks to the world finally getting serious about climate change, you can bet that oil will never again carry as much currency as it does right now. We’re already seeing the beginning of the end of the fossil fuel era. Many experts believe that we are already experiencing peak oil. Renewable energy technologies are advancing at a breakneck pace, and wind and solar are now competitively cheap, even pricing out coal in most of the world. Renewable energy investment shattered records across the globe in 2020 as the spread of the novel coronavirus upended oil markets ultimately catalyzed the global clean energy transition, causing the renewable energy industry to grow faster than it has in over a decade.
[embedded content] Despite all of the decades of warning signs and outright pleading from environmental scientists and activists, the United States has been severely lagging in preparing the energy industry and the country as a whole for climate change. Decades of dragging feet and outright denial have put the U.S. behind in the race for the frontlines of the new global warming economy. Even the new presidential administration, which has centered climate change and clean energy in its platform, may be too little too late to keep the United States competitive in the global clean energy race.
All of the developments in the global clean energy transition outlined above mean that sitting on top of massive petroleum reserves no longer translates to global power and influence like it used to. Clean energy, in many ways, is a democratizing development in global energy industries, as practically anyone with the infrastructure can produce their own energy relatively cheaply.
Of course, while generally true, this is a gross oversimplification. Even renewable energy and electric vehicles require finite resources that certain countries have in spades and which others do not. This will likely be a major geopolitical factor in the energy landscape of the future–but it won’t be in the United States’ favor. A clean energy resource war could be brewing between the first and second biggest economies in the world. Renewables are currently reliant on lengthy supply chains for finite rare earth minerals and metals including lithium and cobalt, and at present China is in control of more than 90 percent of some of these essential resources. Related: $70 Oil Could Put The Brakes On China’s Crude Buying Spree
While China has been keen to become energy independent and energy secure for a long time now, renewables have emerged as the nation’s clearest path to achieving that goal, as well as to establishing Beijing as one of the major energy-industry superpowers of the world, if not the outright global leader. While the United States will still be able to produce plenty of its own energy through natural gas and its own clean energy production, there is no doubt that the United States’ overall energy independence and exporting power will fade right along with the shale revolution as other powers around the globe expand their own energy production capacity.
Unless you’ve been living under a rock for the past couple of weeks, you probably already know that the United States has some major troubleshooting to do when it comes to security in the energy industry (and in general). Cars lined up at gas stations across the Southeastern United States and a level of petrol panic reminiscent of the 1970s swept the nation last week as the Colonial Pipeline was shut down by a cyberattack, causing shortages and supply chain interruptions. The hack was carried out by a criminal group seeking a ransom payout to get the pipeline back up and running.
If that’s what a group of hackers can do, imagine how vulnerable we are to all-out cyber warfare. “Energy companies will come under greater pressure from governments and investors to bulk up their defenses against cyberattacks,” the New York Times reported this week, “but those and other vulnerabilities will not be easily overcome, especially after years of underinvestment.”
All of this brings us back to infrastructure. As President Joe Biden will be quick to tell you, the United States is woefully behind on infrastructure investment. Almost nowhere is this more true than in the energy industry, where aging and outdated power grids, dangerously old nuclear plants, and severely underdeveloped clean energy capacity has rendered the country completely anachronistic in an age of constant energy updates and innovations.
The United States has had an understandably hard time letting go of its petro-power just a decade after shale oil and gas jettisoned it to the top of global energy trade. It won’t do the country any good, however, to hang on to oil for love of God and country. Investment into clean energy capacity, renewable energy storage, smart grids, electric vehicles, and forward-thinking green tech research and development is absolutely essential for the United States to stay energy dependent and even to stay relevant on the global stage.
By Haley Zaremba for Oilprice.com
This article was originally published by Oil Price. Read the original article.
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