Energy security and geopolitics are deeply intertwined

First Published in Business Day on   February 22nd, 2024   |   by   Gracelin Baskaran

Energy security and geopolitics are deeply intertwined

This is a year marked by uncertainty — 64 countries, accounting for 49% of the world’s population — are holding national elections.

As the research director of the energy security and climate change programme at the Centre for Strategic & International Studies, which is consistently ranked the top national security think-tank in the world, I spend a lot of time reflecting on what the implications of forthcoming elections may mean for domestic and international energy security.

Energy security is deeply intertwined with the state of global geopolitics. For example, at the start of the Biden administration the relationship with Saudi Arabia’s Mohammed bin Salman was icy at best. Within a few short years the administration began working on a normalisation deal, in which the US would fund two of Saudi Arabia’s nuclear plants and collaborate on a $15bn deal on critical minerals. A US-Saudi alliance became prioritised to counter China. My take: expect new geopolitical alliances to build energy security, regardless of election outcome.

Over the past few years there have been accusations that the Biden administration has waged a war on fossil fuels. It’s quite the opposite though — US domestic oil production hit a record high in 2023. The US produces about 13.2-million barrels of crude oil daily, millions more than what Saudi Arabia or Russia is producing and more than what was produced under Donald Trump.

My take: don’t expect to see a change in oil production trends, regardless of election outcome. Uncertainty stemming from Russia, Iran etc will see the US aim for greater self-sufficiency for itself and its allies.

Quite contentiously, the Biden administration recently paused approving proposed liquefied natural gas (LNG) export projects. It doesn’t affect projects that are under construction or already exporting, but the permitting is indefinitely paused, likely until 2025, while the department of energy evaluates how projects are aligned with public interest (climate change).

My take: this has a high likelihood of changing based on the administration. A key underpinning of Biden’s decision was long-term climate change considerations. Given the partisan differences on climate change, this could resume depending on the outcome.

Critical minerals will remain a priority. There are two areas of bipartisan consensus in Washington DC — building critical minerals security and reducing reliance on China for national, economic and energy security needs. If anything, an administration change could accelerate critical minerals efforts.

Remember, Trump issued the executive order 13,817 in 2017 to facilitate better management of critical minerals to strengthen energy security and executive prosperity. In 2021 Biden issued executive order 14,017, which advocated for reducing reliance on foreign sources and adversarial nations for critical minerals and materials that posed national and economic security threats.

In the last three years Republican and Democratic legislators passed the Bipartisan Infrastructure Law, the Chips & Science Act, and the Inflation Reduction Act, which provided more than $8.5bn in funding for critical minerals activities.

There is bipartisan support for building nuclear capacity. The Inflation Reduction Act provides tax credits for nuclear power projects, and US energy secretary Jennifer Granholm, a Biden-appointee, has supported tripling nuclear energy capacity globally by 2050. A report by Pew shows that two thirds of Republicans surveyed favour more nuclear power plants to generate electricity.

It’s an uncertain year in my world — energy security is fragile amid overwhelming geopolitical uncertainty stemming from the war in the Middle East, tension in the Taiwan strait, and the Russia-Ukraine conflict.

This election cycle in the US — between 2020 and 2024 — has certainly shown us how delicate global energy security is. Many don’t realise that while much of the Western world sanctioned Russia for most exports, including gas, gold and diamonds, it never stopped Russian uranium. The world needed it to keep its nuclear power operational and Russia has a stranglehold on the critical feedstock for nuclear power.

I’m sure I’ll be wrong on some areas, but isn’t that the heart of election-year uncertainty?

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