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Nick Cunningham

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

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Could Tech Create A New Paradox Of Plenty?


The electric vehicle revolution and the rapid adoption of solar and wind technology will break the world’s dependence on fossil fuels. For many countries, that will dramatically improve energy security, by reducing overreliance on volatile and unstable oil producing nations, particularly in the Middle East.

However, the switch to clean technology could swap out one geopolitical vulnerability for another. A new report looks at the geopolitics of renewable energy and concludes that the clean tech revolution will bring many new supply chain vulnerabilities just as they solve old geopolitical dependencies.

The report from Harvard’s Kennedy School of Government, the Columbia Center on Global Energy Policy, and the Norwegian Institute of International Affairs finds multiple geopolitical problems that will crop up from the spread of renewable energy.

First, the raw materials used to build solar panels and batteries for electric vehicles are often concentrated in very few – and sometimes unstable – countries. For example, more than half of the world’s cobalt is mined in the Democratic Republic of the Congo. Lithium, as of now, is found mostly in the Lithium Triangle of Argentina, Bolivia and Chile, although more lithium mines are opening up in Nevada in the U.S.

Also, nearly all of the world’s rare earth minerals are produced in China, and China and Russia control more than half of the world’s known reserves of rare earth minerals. This presents the possibility of a cartel forming, not unlike OPEC, to control the trade and pricing of rare earths.

Related: Oil Prices Rise As Texas Braces For Hurricane Harvey Landfall

Second, the area of finance and technology presents complications, which are more difficult to untangle. For instance, there will be fights over technology transfer, patents, anti-dumping, and the like. Developing and developed countries will clash over access to finance. Large pools of capital, such as sovereign wealth funds or state-owned companies, could dictate where and how money is spent. The effects of the clean energy revolution on the global flow of capital is still in its early stages.

Perhaps the most obvious geopolitical consequence of the switch to renewable energy is the possibility of a new resource curse that could emerge from the sale of raw materials and rare earths, creating new problems for new countries. Congo could see an influx of capital because of the demand for things like cobalt. While the country might welcome the windfall, it could also further fuel corruption and instability.

But an even grimmer scenario awaits the petro-states of yesteryear, which could become increasingly unstable as revenues dry up. What will happen in Saudi Arabia, for instance, if oil demand peaks and falls, taking oil prices down with it? Some argue that Saudi Arabia is already starting to see the writing on the wall, having declined to prop up oil prices back in 2014 in favor of a strategy of all-out production. “If you have 100 years’ worth of oil reserves, then 25 years looks like a very short time frame,” Martijn Rats, a Morgan Stanley oil analyst, told Bloomberg in an interview earlier this year.

Needless to say, Saudi Arabia has since backtracked on that market share strategy, as oil prices plunged to painfully low levels. But the partial IPO of Saudi Aramco, the implementation of new taxes, and major planned investments in non-oil activities are all part of an effort to pivot away from oil.

Saudi Arabia has blown through hundreds of billions of dollars of foreign exchange and has also turned to debt markets to plug budgetary holes. Expect more of that as the clean energy future unfolds and eats into oil demand. For weaker countries, acute destabilization is not out of the cards. There are a lot of complex reasons for Venezuela’s current implosion, but low oil prices is certainly one of them.

Of course, there will be a lot of benefits to the clean energy transition. Leaving aside the obvious upside in regards to climate change – which has been discussed at length elsewhere – the economic benefits of switching to clean energy be “overwhelmingly positive for most countries,” the Harvard report says, although it adds that the benefits will be “unequally distributed.” New jobs, innovation, cheaper energy or access to energy in places that haven’t had it before – the benefits are too long to list here.

Related: Venezuela’s “Oil Fire Sale” To Benefit Russia, China

To take one specific that highlights the complexity of the clean energy revolution, building out renewable energy will necessitate the transformation of electric grids, which might lead to greater interconnections across borders, reducing the incentive for conflict. The flip side of that is the proliferation of off-grid or micro-grid solutions could free countries up to pursue a more bellicose, or at least independent, path. The authors cite the case of the European Union’s dependence on Russia for natural gas. If the EU broke that dependence with renewable energy, it would have been more open to harsher sanctions targeting Russia’s gas sector. In the future, the increasing self-reliance on home-grown distributed renewable energy could whittle away at the economic, energy, and infrastructure ties that bind nations together.


All of that is to say that the main takeaway is that the transition to cleaner energy is more or less inevitable, and while the benefits of doing so will be monumental, they also carry risks that many policymakers have yet to consider.

By Nick Cunningham, Oilprice.com

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Leave a comment
  • Dan on August 27 2017 said:
    People in the Congo are drying for your EV push.
  • James on August 27 2017 said:
    It really is sad, having to make poor, malnourished kids mine up lithium in order to push this fraudulent EV/climate change agenda, I wish the DRC would stop this operation and give those kids something better to hope for. Since apparently 60% or so of the cobalt comes from those mines all that has to happen is they stop mining, and then a large portion of cobalt goes off-line and then battery prices skyrocket.
  • Aquilan on August 28 2017 said:
    The situation of many small scale energy producers cum consumers, with varying peak energy demands makes it necessary for 'smart grids' to balance & distribute the available energy at any one time. Micro grids are a must but 'smart' interconnections between micro grids must be made for better energy distribution over wider geographical areas! All interconnections must be looped to prevent the downing of any micro grid from having a knock on effect on other grids. Huge high voltage transmission cables over long distances need to be reduced in favor of 'smart networks' of grids interconnected by small, low voltage cables connected in loops in redundant networks. This is to minimize supply disruptions over large areas due to failure of any local grid or interconnection. The resulting energy distribution network will resemble the Worldwide Internet Network of today! More automation, redundancies, 'smart' connections & multi-looped networks must be developed to achieve efficiency, reliability, recovery & economy!
  • Amit Raina on August 28 2017 said:
    In countries having new tech, you forgot to mention about Australia, which is a stable country with a huge source of Lithium -already under production in mines.
  • zipsprite on August 28 2017 said:
    And thank goodness no one has ever, or will ever die as a result of climate change caused by fossil fuels.
  • onlymho on August 28 2017 said:
    I totally agree with the resource constraints and dirty mining practices to obtain the materials needed for solar and wind energy production being no better then the pollution concerns of fossil fuels.

    The actual contribution to energy production by wind and solar while dramatically growing remain a negligible contributer
  • Naomi on August 28 2017 said:
    Wind energy, solar energy, and electric vehicles are not economical, not cost effective.
  • Naomi on August 28 2017 said:
    Rare earths are plentiful not rare. The reason they are only mined in China or Russia is because they are toxic. Care must be observed in handling and processing. China and Russia think nothing about the early death of employees.
  • Bill Simpson on September 01 2017 said:
    Some Canadian company discovered a large deposit of rare earths in the Central US. They aren't that rare. Cobalt might be a problem. South America has huge lithium reserves. It's a big planet. A lot of stuff is still undiscovered. Drilling is the only way to locate a lot of it.
    Oil will be valuable as long as humans walk the Earth. Think of asphalt roads, roofing shingles, thousands of chemicals, diesel, kerosene, gasoline, propane, and drugs. Man will always covet hydrocarbon molecules he doesn't have to make from the elements. Nobody will ever be sorry that they own reserves of crude oil. You can bet your life on that opinion. They call crude oil, 'black gold' for a reason. You are living in the Petroleum Age. Life will get harder after it is gone.

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