A New Energy-security Paradigm
When President Joe Biden "fist-bumped" Saudi Crown Prince Mohammed bin Salman in July 2022, the photo of the exchange instantly cemented its place in the annals of foreign-policy infamy. Just three years earlier, on the campaign trail for the 2020 election, candidate Biden vowed to "end fossil fuel" altogether. But by the summer of 2022, a global energy crisis had pushed Biden to visit Saudi Arabia, where he implored the Saudis to produce more oil. The juxtaposition of candidate Biden's words and President Biden's actions underscores the growing tension between lofty climate-change goals and the geopolitical imperative to maintain our nation's energy supply.
The topic of energy security has long felt anachronistic: Oil embargoes, gas-station lines, OPEC holding sway over American energy policy — surely we left all that behind in the 1970s? But the last two-and-a-half years have brought the subject back to the fore. Russia's invasion of Ukraine reminded the world just how effective energy is as a geopolitical tool. And Europe — which was heavily reliant on Russian oil and natural gas — suddenly found itself subsidizing the invasion of one of its neighbors.
This resurgent focus on energy security can only be understood in the context of the world's recent pursuit of a clean-energy transition. Candidate Biden's "end fossil fuel" stance was motivated by concerns about climate change, a topic that has animated governments across the globe. But such climate-driven energy policies are increasingly butting heads with our energy-security imperative — our need for uninterrupted access to affordable and reliable energy. And in a world dominated by scarcity and intense geopolitical competition, energy reality trumps energy ideology.
Our national security, along with the global economy and human prosperity in general, depends on fossil fuels for abundant, cheap, and reliable energy, and will continue to do so for the foreseeable future. Politicians may pontificate about climate action, but reality forces them to accept that phasing out fossil fuels overnight is impossible.
Faced with growing geopolitical tensions and serious environmental concerns, we need policies that will strengthen domestic energy production, bring prices down, and protect national security, all while reducing emissions and ensuring that our energy sources are sustainable. We must chart a vision for a new energy-security paradigm that can confront and overcome each of these challenges.
HOW DID WE GET HERE?
For a long time, American politics enjoyed something of an energy-security consensus. As recently as Barack Obama's presidency, both Democrats and Republicans emphasized the importance of an all-of-the-above energy policy that included oil and gas production for both domestic consumption and exportation. In 2019, the United States became energy independent — that is, we produced more energy than we consumed — for the first time since 1957, with all the economic and geopolitical benefits accompanying that status.
The rise of climate politics has jeopardized this energy-security consensus. In the last few years, the United States and governments around the world have aggressively prioritized the pursuit of clean energy while subordinating energy security to emissions-reduction efforts.
The Russian invasion of Ukraine threw a spotlight on the unfortunate state of energy policy in the West today. Germany, often hailed for its ambitious climate goals, serves as a cautionary tale. In 2011, as a response to public pressure and safety concerns that arose after the Fukushima nuclear accident, Berlin embarked on a strategic pivot to phase out nuclear power in favor of renewable energy. At the same time, the country also pledged to phase out fossil fuels. But Germany did not in fact shift to renewables: Instead, it became heavily reliant on oil and gas imports from Russia.
The post-Fukushima wave of nuclear skepticism convinced many countries — including Switzerland, Spain, and Belgium — to shut down existing plants and place moratoria on the construction of new ones. In doing so, they abandoned their only source of clean, reliable baseload power. The result, once again, was increased dependence on countries like Russia and Saudi Arabia for fossil fuels to offset lost domestic generating capacity. And contrary to what politicians promised, Europe did not magically stop using fossil fuels — instead, it steadily increased fossil-fuel consumption while offshoring production.
American energy policy has not fared much better in recent years. On day one of his administration, President Biden canceled the Keystone XL pipeline, which would have transported crude oil from Canada to refineries on the Gulf of Mexico. That same oil will now be transported via train or truck, resulting in higher transportation costs, increased emissions, and greater spillage risk. Biden also imposed a drilling moratorium on new oil and gas projects on federal lands and waters (though that order was swiftly overturned by a federal judge) and introduced regulations that increase the cost and complexity of domestic energy production. On the global stage, Biden reversed his support for the Eastern Mediterranean pipeline, which would have connected eastern Mediterranean gas resources to Europe and reduced the continent's dependence on Russia.
States' policies on nuclear energy have fared even worse. Since 2012, 10 states have shut down a total of 12 nuclear plants. New York, Massachusetts, and Pennsylvania replaced the lost generating capacity with imported natural gas, leading to energy scarcity, higher prices, and rising emissions. California, which already has some of the highest energy prices in the country, was on track to shut down its last remaining nuclear plant at Diablo Canyon only to reverse course at the last minute as the global energy crisis deepened in 2022.
Russia's war in Ukraine and weaponization of its energy supplies exposed the shortsightedness of these policies. Seemingly overnight, emissions reductions took a backseat to the more pressing challenges of averting energy poverty and maintaining geopolitical stability. Germany reopened coal and biomass plants. Several other European countries reversed their nuclear phase-outs. And Biden lobbied Saudi Arabia and Venezuela to increase oil production. The result has been a triple whammy of higher costs, lower reliability, and elevated emissions.
FINDING A BALANCE
The energy-policy question implicates a trilemma of concerns related to affordability, reliability, and sustainability.
When it comes to energy, affordability is critical for human prosperity in that it enables not only widespread access, but also the kind of dispersed availability that leads to technological innovation. Reliability — access to energy uninterrupted by external conditions, such as the weather — is also crucial because it enables homes, schools, hospitals, military installations, and more to function on a consistent basis. Finally, sustainability — the viability of an energy source given its environmental and public-health impact, coupled with its long-term supply — must be considered if we are to protect the public while ensuring that future generations have access to safe, affordable, and reliable sources of energy.
Energy sources rank differently across these three factors. Fossil fuels are both affordable and reliable, but they also produce harmful emissions and are in finite supply. Renewable-energy sources are affordable, theoretically infinite, and emit no greenhouse gases, but they are intermittent and thus generally unreliable. Nuclear energy is also theoretically infinite, and provides constant, reliable power without emitting pollutants. However, it carries high upfront costs and real, if overblown, safety concerns related to radiation.
In an ideal world, we would aim for a balanced three-legged stool of energy affordability, reliability, and sustainability. For a long time, as countries sought to industrialize rapidly, they prioritized affordability and reliability while ignoring sustainability. The Industrial Revolution, fueled in large part by cheap and abundant power, brought about unprecedented economic growth and technological advancement. Starting in the 1970s, however, some countries — especially those in the West — began considering environmental factors in their energy-development plans. That trend has only accelerated as policymakers increasingly prioritize climate concerns and take proactive steps to reduce emissions.
Conversely, climate-cognizant policies have more often than not disregarded energy affordability and reliability. Regions that have prioritized emissions reductions tend to have exorbitant electricity prices: Germany's electricity costs are among the highest in Europe, whereas California's rank among the highest in the United States. And, as noted above, renewable energy sources are often intermittent. Until battery-storage technology vastly improves, renewables are simply too unreliable to depend on as stand-alone sources of energy.
Of course, fossil fuels do not come without their own affordability and reliability risks. Although the United States has made significant progress in reducing its dependence on foreign oil, it remains entangled in the global energy landscape. As a result, events in far-flung regions can still affect domestic fossil-fuel prices and supplies, as we have seen with the war in Ukraine and more recently with the turmoil in the Middle East. Average natural-gas prices tripled between 2021 and 2022, jeopardizing our economic security. Establishing true energy security, therefore, requires a comprehensive approach that accounts for not just domestic energy production, but also the international energy market.
How can we ensure access to an energy supply that is affordable, reliable, and sustainable?
A NEW PARADIGM
To address the energy challenges of the 21st century, we need to develop a new paradigm that recognizes three crucial realities.
The first of these is the geopolitical reality. Blindly plunging into a clean-energy transition that increases American and Western dependence on hostile nations like Russia and China — the latter of which dominates most clean-energy supply chains — threatens our energy security. To avoid putting our access to energy at risk, we must ensure that the clean-energy future is American made and avoids the volatility and geopolitical vulnerabilities of fossil fuels.
The second is the energy reality. Transitions between energy sources take a long time. We will continue to rely on fossil fuels for many more decades, especially in the developing world. Phasing out fossil fuels too rapidly will only bring economic misery and increase our reliance on rival nations. Producing oil and gas in the United States must therefore remain a key part of our energy-security strategy.
The third is the climate reality. Climate change is a global problem that requires global solutions. All too often, climate activists exhibit a myopic obsession with reducing domestic emissions without accounting for the fact that countries like China and India will continue emitting at far higher rates for many more decades. Even if the United States were to achieve zero net emissions tomorrow, it would have limited long-term impact on our environment due to the high and rising levels of emissions released abroad. In a nutshell, the mainstream climate movement risks sacrificing our energy security for minimal climate impact. If we want to reduce emissions worldwide, we need a mechanism that will compel all nations to act with climate concerns in mind.
The inescapable truth is that developing countries will not, under any circumstances, pursue clean-energy sources and emissions reductions at the expense of their own economic security. United Nations climate summits have failed to achieve significant tangible progress. Relying on the Chinese Communist Party (CCP) to reduce emissions out of the goodness of its heart is guaranteed to fail. A new energy-security paradigm would recognize that economic incentives and global competition are the only means by which all countries can be compelled to address climate concerns.
Crucially, this new paradigm should not focus on addressing climate change: It is first and foremost an economic and geostrategic necessity. The world is heading toward a clean-energy future, regardless of whether the United States is on board. Consumers are demanding clean-energy options, markets are prioritizing investments in these technologies, and countries are competing for a share of the clean-energy pie, which the International Energy Agency estimates will be worth $650 billion per year by 2030. As the global demand for clean-energy technology grows, nations that lead in energy innovation will benefit financially.
That is why China has surpassed the United States in fabricating solar panels, electric batteries, nuclear reactors, and wind turbines, and has come close to monopolizing the critical-minerals supply chain. The CCP is not taking these steps out of a sincere desire to tackle climate change, but rather because it understands where the future is headed.
The United States has an opportunity to build the energy technology and supply chains of the future, allowing us to unleash a new era of economic dominance. By developing the most affordable, most reliable, and cleanest technologies in the world, we will drive domestic job creation, innovation, and economic growth.
In addition to the financial benefits to be gained, there are also geopolitical benefits. Without domestic supply chains, countries in the West have become reliant on adversaries for the resources they need to power their economies and militaries, thereby opening themselves to intense vulnerabilities. Dependence on Chinese supply chains puts our energy security at the mercy of our most powerful geopolitical rival. It is thus in America's strategic interest to be at the forefront of the clean-energy future.
Transitioning to a clean-energy system will be crucial for promoting America's economic and national-security interests, but it must be done carefully to avoid exacerbating energy-security risks. Overly aggressive policies to phase out fossil fuels without adequate planning will lead to energy shortages, price spikes, and even emissions increases. Therefore, while it pursues a clean-energy future, the United States must also continue to dominate oil and gas production in the present.
On that front, we do not need to ignore sustainability entirely. Climate activists tend to overlook the fact that oil and gas produced in the United States is significantly cleaner than that produced almost anywhere else in the world. Russian natural-gas exports to Europe, for instance, produce over 40% more emissions than American liquefied natural gas exported to the continent. Displacing Asia's use of coal with American gas exports could reduce emissions by up to 50%. And as carbon capture and other technologies mature, America will continue to reduce the emissions profile of the fossil fuels it produces.
American dominance of clean-energy technology and supply chains will enhance our energy security by reducing our dependence on China and other hostile countries. Positioning ourselves at the forefront of the clean-energy revolution will allow us to take advantage of the significant financial opportunities associated with this new technology while augmenting our economic independence. With the right policies in place, clean-energy sources — including wind, solar, and nuclear — can become less susceptible to supply-chain disruptions and price volatility than fossil fuels are today.
Once the United States begins to benefit from this new paradigm, other countries will realize that competing in the clean-energy arms race will be crucial to promoting their own economic and strategic interests. With the rest of the world on board, we can begin to pursue true progress on the environmental front.
WINNING THE RACE
If the United States is to reap the benefits of the new energy-security paradigm, we must position ourselves to win the clean-energy arms race. This will not happen by accident; success will require making proactive and deliberate policy decisions that align our energy-security and environmental goals.
Policymakers should begin by focusing on reforming our domestic permitting system, which comprises a maze of red tape, onerous delay points, and opportunities for frivolous litigation that holds back domestic energy production. Ironically, according to research from the R Street Institute's Philip Rossetti, up to 90% of the major projects delayed under the National Environmental Policy Act are clean-energy projects. Streamlining the process by which we grant permits to build new energy infrastructure will reduce both project costs and construction delays, which will be crucial if the United States is to take the lead on clean-energy innovation and development.
On a similar note, policymakers must reform the regulations that make it exceedingly difficult to build new energy-transmission infrastructure. A robust interconnected grid system enables the efficient transfer of energy across regions, reducing the risk of energy shortages and saving grids money by better balancing supply and demand. Developing such a system will help keep our energy supply both affordable and reliable.
If we want to reduce emissions in the short term while also producing affordable and reliable energy, we cannot do so without nuclear technology. Rather than shuttering nuclear power plants, we should be extending their lifetimes while investing in next-generation nuclear technologies like small modular reactors and nuclear fusion. This starts with reforming the Nuclear Regulatory Commission and establishing a separate, light-touch permitting track for next-generation technologies. We should also work with our allies to export American nuclear technology across the world.
America's national labs are breeding grounds for such innovations. We should therefore increase research-and-development funding for advancing crucial clean-energy technologies — including nuclear fusion, battery storage, and advanced geothermal systems — to accelerate their development and commercialization.
One of the most important of these technologies is carbon capture and storage (CCS) — a three-step process that involves capturing carbon-dioxide emissions, condensing and transporting those emissions offsite, and then permanently storing them in rock formations underground. CCS will be key to reducing emissions and ensuring the long-term sustainability of our energy industry. We can support its development through both regulatory clarity and early stage tax credits, which will help ensure we get out ahead on this vital technology.
In addition to sufficient funds, advancing and expanding clean-energy technology will require a stable supply of critical minerals. Though we have many of the necessary resources here in the United States, we currently rely on China to supply the overwhelming majority of our critical-mineral needs. Due to onerous regulations and lawsuits, opening a new mine in the United States takes an average of 29 years. To assert our energy independence, we must make it easier to mine and process domestic sources of these minerals and work with allies to establish more secure supply chains. We should also stockpile uranium, rare-earth elements, and other critical components of clean-energy technologies to safeguard against supply disruptions and geopolitical risks.
Finally, American manufacturing and energy production are among the cleanest in the world. We should prioritize exporting cutting-edge clean-energy technology and the energy we produce to the rest of the globe. By working with our allies to reduce export barriers and diminish their reliance on China, we can strengthen our energy security and our economy while reducing worldwide emissions.
THE RACE IS ON
Economic security, national security, and environmental sustainability are interconnected challenges that demand a comprehensive and balanced solution. The paradigm outlined above provides a strategic framework for tackling all three. In recognizing the realities of energy, geopolitics, and the climate, this framework demonstrates that pursuing energy security can increase our economic competitiveness and geopolitical leverage in the world while meaningfully addressing climate concerns.
Indeed, we have no other choice. Following Germany's lead will guarantee economic irrelevance, geopolitical weakness, and failure on the environmental front. Yet rejecting clean energy will weaken us in other ways — namely by allowing China to dominate the supply chains of the future while continuing to burn enormous amounts of fossil fuels.
Winning the clean-energy arms race offers a path forward that will unleash American energy dominance, ensure long-term economic growth, strengthen our geopolitical standing in the world, and help ensure energy and environmental sustainability. It is the single best tool at our disposal to achieve these goals.
We cannot be complacent or naïve, lest we repeat the mistakes of the past. The future can be bright if we choose to make it so.