Understanding the Global Energy Transition in the Context of Great Power Competition

Asmeret Asghedom, you had an impressive career in government before joining Lawrence Livermore National Laboratory’s Center for Global Security Research (CGSR) and have mainly focused your work on global energy security issues. You’re also a member of IGCC’s working group on climate change and security. What do you think are the biggest energy and climate security challenges that we’re facing today?

That’s a great question. Honestly, I would say the energy transition, which is why I wrote a paper focused on it. It’s a very challenging problem set. Policymakers do understand that there are challenges and tradeoffs, but it will be harder to figure out how to actually deal with those tradeoffs. I’m sure your readers are familiar with the energy transition, in terms of transitioning to low-carbon energy technologies and reducing fossil fuel production. There’s a lot of disagreement on this concept because it’s not just an energy problem. It starts off as a technical question about energy, but then it evolves into a much larger question about politics, international collaboration, coordination, and economics. That’s what makes it such a difficult question. 

There’s also a lot of debate on the international stage, since climate change and goals around it are inherently global and require international coordination. But we end up with different countries that have different interests and desires in terms of which levels to phase out fossil fuels and whether to use more carbon removal technology. We’re seeing it now at [the] COP28 [United Nations Climate Change Conference]—there are a bunch of disagreements related to coordination. So, there are technical challenges, international political challenges, and coordination challenges, which make it a really hard problem set. In the past, most issues in the energy field were contained to energy, and sometimes to global politics, but right now we’re seeing energy issues spill into so many other different topics.

You recently published a paper entitled, “Examining the Energy Transition Through the Lens of Great Power Competition,” in which you identify seven competitive flashpoints that can “amplify strategic competition economically, technologically, and politically, and can increase tensions among great powers.” Can you summarize these flashpoints for us? How will the energy transition intensify great power competition?

The main crux of the paper is to explain that, as with any change, there are always going to be tradeoffs. People oftentimes criticize policymakers about which policy route they take, but at the end of the day, choosing policy is about analyzing the tradeoffs and understanding which tradeoffs are better to live with than others. I wanted to look at the energy transition in that way, especially in the context of great power competition.

I identified seven competitive flashpoints. The first one is competition to acquire critical minerals, which are a big component of clean energy technology. We have to look at how we are going to increase that production and where we are going to get it from. The second one is Chinese dominance of low-carbon manufacturing. For decades, China has been setting up a comprehensive domestic supply chain for clean energy technologies, including solar and batteries, and they’re also making a lot of progress on wind. Policymakers should be aware that, as we head down the road of increasing low-carbon technologies, we want to make sure that we do it in a way that gives our domestic supply chain time [to develop] so that we won’t be dependent on foreign imports from adversaries.

The third one is the race for nuclear energy exports. A lot of countries are very interested in nuclear energy, and Russia is currently the leading exporter of nuclear energy technology. There are nonproliferation issues associated with that, and the U.S. has traditionally led standard setting on nonproliferation, so we need to make sure the U.S. stays in that position. China also wants to be a big player in nuclear energy technology exports, so we’re going to see increased competition between the three countries as they try to attract countries and capture market share.

I talked about the fourth one earlier: the trade and finance tensions between developed and developing countries. In terms of trade, there are a lot of developing countries that oppose climate-oriented trade policies, such as the Carbon Border Adjustment Mechanism that Europe is starting to implement. The question of financing fossil fuel projects is also a contentious issue. Many developing states want financing from developed countries, but developed nations, including the U.S., are curtailing public financing for fossil fuel projects in developing countries. But developing countries say that it’s an equity issue because the developed countries were able to economically develop using similar projects. These arguments will only get more intense, so U.S. policymakers need to figure out how to deal with them.

The fifth flashpoint is energy-related disinformation campaigns from China and Russia. For example, there are reports that China launched a disinformation campaign against a rare-earths processing facility in Texas, although there’s still some debate about whether that was actually backed by the Chinese government. Russia has had a history of launching disinformation campaigns on the natural gas industries in the U.S. and in Europe. The sixth flashpoint is related to cyber risks. The increased electrification and digitalization of energy systems makes them more susceptible to cyberattacks, so policymakers should be aware of that.

The last flashpoint is energy insecurity and uncertainty, especially in the environment of heightened economic and great power competition. There are concerns that there will be higher energy prices in the future because of the volatility of critical mineral markets, similar to oil markets, and supply shortfalls of both renewable and fossil fuel energy because of inadequate investment in both

As you’ve shown, the intersection between the energy transition and great power competition is a combination of many different fields, from economics and political science to climate science and cybersecurity. Is there a large literature analyzing the connections between these different fields? Or is this more of an emerging approach?

I’m glad you asked that question. That was my goal with this paper. I’ve seen things written on these issues, but all in different places. I wanted there to be one paper that tied all of these topics together and captured all of the geopolitical issues that may pop up in the energy transition. I felt like that didn’t really exist.

Based on your interdisciplinary approach, what are some of the ways in which U.S. policymakers can shape the energy transition with great power competition in mind?

Broadly, we should rethink the way we’re setting goals. We tend to set long-term goals, such as ending fossil fuel consumption by 2050, and it totally makes sense to set goals. But sometimes the long-term consumption goals conceal the intermediary steps. For instance, if we want to get to an energy target of 30 gigawatts of offshore wind by 2030, what will that require? Are we going to have to import wind turbines from China? For solar, wind, and batteries—how much of that is going to be made domestically and how much will be overseas? It’s fine if it’s overseas, but where is it from? Twenty years from now, are we going to be too dependent on China? Over the past ten years or so, China has increased its use of economic coercion to try to compel other countries to support their stance on the international stage. Russia has done the same. For this reason, the U.S. should be careful of depending so much on them for energy technologies and resources. It’s important that policymakers are more methodical in how they’re setting up their goals and adding intermediary steps.

In terms of the diversity of energy supply for the future, there are calls to eliminate fossil fuels. I don’t think that is going to be feasible. For example, if you try to eliminate natural gas, that will actually increase carbon dioxide (CO₂) emissions in Asian countries because then we’re going to have most Asian countries using coal to integrate renewable energy onto their grids. We’d rather have them use natural gas because it’s half the amount of CO₂ emissions. We can’t compel other countries to do what we want them to do, so let’s work with them. There are tradeoffs to every fuel, even renewables, so we need to understand the diverse energy mix as opposed to trying to wholesale take something out.

In terms of recommendations, I also talked about the U.S. looking to still be a dominant supplier of natural gas. The U.S. becoming a major natural gas supplier was a good foreign policy win in the case of Russia. When Russia tried to weaponize its energy supply to Europe—which they started to do before their invasion of Ukraine and then really ramped it up after the invasion—U.S. LNG [liquified natural gas] filled a huge supply gap for Europe after Russia cut gas supplies to Europe. Asia’s probably going to demand more gas in the future, so we don’t want them to be increasingly dependent on Russia. We still have to keep in mind the geopolitical wins that the U.S. has had from oil and gas production, so we shouldn’t just be extreme and forget about those. And we should think of ways that they can complement increases of low-carbon energy.

When most people think of the national labs, they think of nuclear security and weapons design. However, CGSR has held several climate workshops over the past couple of years. What role do you see for the lab in the global fight against climate change?

Livermore is mainly known as one of the nuclear weapons labs, but they also do a lot on climate and energy that the world doesn’t always hear about, though many are familiar with how the lab achieved fusion ignition last year. The lab has a robust climate modeling program, as well as energy security programs that are trying to develop technologies and techniques to further the energy transition. CGSR is always taking cues from what the lab teams are doing and providing them with broader workshops so they can see the bigger global picture and understand the demand signals for what the lab should be focusing on. I’m hoping that papers like this will help the lab programs understand the broader picture of what they’re doing.

 

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