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Petroleum revenue is necessary not only to keep ISIS at bay, but also to rebuild destroyed cities and help Baghdad keep provinces bound to the center. The likelihood that some of these geopolitical developments—and perhaps many more—will come to fruition increases the longer energy prices stay well below the level needed to keep producer budgets afloat.
We are seeing big changes in the structure of energy markets that will have their own geopolitical ramifications. For instance, the gradual but distinct movement away from regional natural gas markets toward a global one will make trade in natural gas harder to utilize as a geopolitical tool.
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Patterns of trade are shifting as the United States, the largest consumer of both oil and natural gas, becomes more self-sufficient in the first and nearly independent in the second, affecting the national conversation about U. Old institutions, such as OPEC, have lost their vigor. As more countries discover and develop energy sources of their own, diminished dependencies will transform bilateral relations.
The new energy abundance is erasing the long-held vulnerabilities of some countries, creating leverage for weak states over strong, and offering new opportunities to address persistent challenges to the international order. It is both advancing and deterring efforts to combat climate change around the world. On the whole, the new energy abundance is a boon to American power—and a bane to Russian brawn. On balance, China is already a winner from this energy revolution, both from the lower energy prices it has brought and through the geopolitical opportunities that it now offers to Beijing.
These new energy realities have presented unforeseen avenues of cooperation between the United States and China, while creating strains on long-standing partnerships between Washington and the capitals of the Gulf in the Middle East. The impact that energy has on geopolitics is no game at the margins.
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It will, in fact, be a major determinant of the international order or, rather, how the world works. It will alternatively hasten and help arrest the major trends now discernible to any global strategist: the corrosion of the rules and norms that have shaped the liberal international order since World War II, the shift of power and wealth from West to East, the push by Russia and China to establish spheres of influence, the rise of nonstate actors at the expense of sovereign governments, and the retrenchment of the United States and Europe from the global stage.
Energy—its abundance, scarcity, price, method of production, et cetera—will not be the only factor shaping geopolitics in the years ahead. The future always has many engines.
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The pace of technological progress, the balance of power between countries, the durability of political alliances, the robustness of the global economy and its institutions, the vulnerability of fragile regimes, the distribution of natural endowments, the military strength of great powers, and the decisions of certain individuals will all play a role in charting the course of the next decade and beyond. But the vicissitudes of energy can and will influence each of these factors. And, in turn, energy will shape the conduct of foreign policy and national security and the contours of global affairs.
While this interaction itself is not novel, the energy dynamics at work have changed dramatically in the past decade. They are therefore sending new and different signals throughout the international system. How this new energy abundance unfolds will have a greater—if more diffuse—bearing on international affairs than many of the current issues that dominate headline news. This book concentrates primarily—although not exclusively—on the impact of energy changes in the oil and gas sector on global politics.
This focus is not to imply that renewable sources of energy lack importance. To the contrary. Every major change in the global energy mix or in the energy system brings with it its own geopolitical ramifications. We should therefore expect the widespread deployment of renewable energy eventually to have major repercussions for global politics. These changes may take familiar forms, such as the formation of cartels not around oil, but around lithium and other critical resources.
Or they could spur the need to manage state collapse among some oil producers, if renewable energy penetrates the transportation sector on a large scale. The energy poverty that currently keeps so many people from enjoying the fruits of growth could also be addressed more quickly than imagined. Yet at the same time, countries powered primarily by renewable energy may find themselves subject to new vulnerabilities as economies become heavily electrified.
And to those who have battled the politics of pipelines, the politics of supergrids may become familiar.
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While renewable energy itself is unlikely to cross borders too often, the electricity it generates might, as will the technologies and know-how that give a country a competitive edge. These intriguing possibilities notwithstanding, for the time being, global politics are shaped far more by fossil fuels than by any other energy source.
There are several reasons for this dominance. Moreover, virtually all cross-border trade in energy is in fossil fuels; renewables are generally consumed in the country in which they are generated. While the potential is large, cross-border electricity trade generated from renewable energy is still limited. Moreover, the exact geopolitical contours that this energy transition will take remain essentially unknown; they will depend in large part on which technologies and energy sources replace fossil fuels. The big takeaways from that book are the sheer number of energy innovations bearing fruit or holding promise, and the wide variety of outcomes that could emerge over the coming years and decades.
Given this, efforts to attribute broad geopolitical shifts to more sustainable energies in a systematic way necessitate some speculation, whereas the impact of oil and gas on geopolitics is clear and in the present. Roadmap This book is divided into three parts that, collectively, explain the new energy landscape and its impact on the world of foreign affairs and international security. The first section is devoted to illuminating the new energy abundance. Chapter One explains the forces of technology and politics that were behind the big price plunge beginning in Chapters Two and Three delve deeper into oil and gas, respectively, revealing how the new energy abundance shapes not just price, but also the structure of markets in ways that will be lasting and have geopolitical consequences.
The second section of the book pertains to the new energy landscape and America, the genesis of many of the energy developments transforming global markets and geopolitics. Chapter Seven examines the U. The third section of the book focuses on the international arena beyond the Americas.
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Even though the boom in oil and gas production has been thus far largely limited to the United States, its geopolitical impacts are much broader. Because energy markets are global or regional in nature, and because of the huge footprint of the United States as a consumer and producer, the new oil and gas coming from North America reverberates beyond its borders.
It is felt on every continent, in every country, to some degree. While Africa and Latin America are also affected by this new energy landscape, this book concentrates on the regions most likely to be the main drivers of global politics in the years ahead. Chapters Eight, Nine, Ten, and Eleven examine how the new energy abundance is transforming politics and international affairs in the important power centers of Europe, Russia, China, and the Middle East.
Finally, the Conclusion takes a step back and considers the entirety of this complex landscape and offers thoughts for policymakers who are looking to do what great powers have done for centuries: use energy as either a means or an end to their grand strategies. In particular, it urges the United States to seize the good fortune of the energy boom not only by focusing on the economic benefits it brings at home, but also on the strategic advantages that can accrue to it in many parts of the world as a result of the new energy realities. About The Author. Product Details. Raves and Reviews.
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Zip Code. Some see benefits in moving slowly to cleaner sources of power. X cel is among those that sniff profits in the winds of change. For decades, to describe electric utilities as dull was not an insult but a summary of corporate purpose: keep lights on, rates low and returns steady. The somnolence of their corporate offices, a seasoned visitor quipped, was disturbed only by the periodic whirr of a printer.
It suspended retail choice for consumers soon after. Today just 15 states have competitive retail electricity markets. The business model of utilities seems designed not to speed up innovation but to stifle it. Some firms corner the market for transmission. Vertically integrated monopolists generate power, too.
This soporific status quo has served utilities rather well. Now things are heating up. Some companies must contend with the impact of global warming.
Other companies are trying to make their infrastructure more resilient to floods along coasts, tornadoes in the Midwest and other climatic disruptions. The politics of green electricity, too, are evolving.
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Clean-power plans feature prominently in the Democratic presidential primaries. States led by Democrats, and even some led by Republicans, have set goals for clean electricity; in all, 29 have set targets for raising its share. Utilities face scrutiny from green-minded asset managers. Most important, the economics of power is being turned on its head by the falling costs of renewables.
The answer depends partly on their location.