The Upending of the Geopolitics of Energy: Disruption Is the New Normal

Abstract

The contours of the geopolitics of energy have radically transformed over the last two decades. In the early years of the twenty-first century, policy discussions centered around the existential threat posed by peak oil supply. In capitals across the world, policymakers wondered how they could best prepare their states for declining oil production. The scarcity of supply was the risk, and the multitude of economic and political sensitivities associated with energy security drove countries to seek new ways of securing hydrocarbons. The 2005 U.S. Government-funded study Peaking of World Oil Production: Impacts, Mitigation, and Risk Management (also referred to as the Hirsch Report) offered an assessment where peak oil supply would lead to a spike in prices and intense pressure on energy security, both at the domestic and global levels. Supply risk no longer stands out as the great disrupter but rather the ongoing trajectory toward peak oil and gas demand, and the required move toward a decarbonized energy system are the real challenges. This chapter explores the energy transition, and examines how the geopolitics of energy are experiencing a new stage of discontinuity, exposing both new risks and opportunities for producers and consumers of global energy.