Volts podcast: Jason Bordoff & Meghan O’Sullivan on the geopolitics of clean energy

In this episode, international scholars Jason Bordoff and Meghan O’Sullivan discuss the geopolitical tensions that could be caused or exacerbated by the clean-energy transition, including supply constrictions in oil and gas and the geographical concentration of key clean-energy minerals. This episode is a great antidote to the notion that clean energy is going to make for smooth sailing in geopolitics.

Full transcript of Volts podcast featuring Jason Bordoff and Meghan O’Sullivan, January 19, 2022

(PDF version)

David Roberts:

When one contemplates the thorny geopolitics of oil and gas — with its century-long string of crises, conflicts, and moral compromises — it’s easy to think that the transition away from fossil fuels to clean energy will usher in a saner and more peaceful world.

And that may happen, in the long term, once the transition is complete. But the road from here to there, over the course of the next few decades, is likely to be bumpy. Policymakers need to start planning for the predictable disruptions headed our way.

That is the message of a recent essay in Foreign Affairs by Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, and Meghan O’Sullivan, longtime foreign policy operative and professor of international affairs at the Harvard Kennedy School.

Bordoff and O’Sullivan outline a number of risks the world faces in the short- to mid-term as it endeavors to ramp up clean energy and ramp down fossil fuels.

Investment in fossil fuels could decline faster than demand, which would perversely strengthen the position of Gulf states sitting on the cheapest oil. Production of the minerals needed to build clean-energy technologies is highly concentrated, often in countries with unstable politics and poor or no labor standards, like the Democratic Republic of Congo.

Processing of almost all clean-energy minerals is heavily concentrated in China, giving it enormous leverage and exposing world markets to economic or political upheavals there. Trade sanctions or tariffs could slow the spread of innovations. The US’s inability to get its act together could sour relations with the EU, which is moving ahead with ambitious, coordinated policy.

And so on. Clean energy will eventually diminish the sway of fossil fuel geopolitics, but the transition will create its own geopolitics, its own tensions, disputes, and chokepoints. I’m eager to talk to Bordoff and O’Sullivan about some of those risks and what might be done to prepare for them.

Jason Bordoff and Meghan O'Sullivan, welcome to Volts. Thanks for coming.

Jason Bordoff:

Great to be with you. Thanks for inviting us.

Meghan O'Sullivan:

Thank you, Dave.

David Roberts:

I want to begin by quoting your great piece in Foreign Affairs. You say: “Talk of a smooth transition to clean energy is fanciful. There is no way that the world can avoid major upheavals as it remakes the entire energy system, which is the lifeblood of the global economy, and underpins the geopolitical order.”

In a sense, the whole piece is addressed at a naive view of what the clean energy transition is going to involve. A lot of people think there's all this messy, nasty geopolitics around oil and gas, and if we just subtract that, then you have a world that's running smoothly and at peace. Can you, at a high level, describe why people have that naive view and why you think it's wrong?

Jason Bordoff:

You describe the motivation for the piece very accurately. I recall sitting a few years ago at a round table at the Munich Security Conference, talking about Nord Stream 2, a pipeline very much in the news these days as the US and Russia try to see if we can prevent conflict in Europe. There was a comment that I remember: “Why are we spending so much time on this? It won't matter soon anyway, because the geopolitics of oil and gas is simply going to fade.”

That struck me — and Meghan as well, because we've talked a huge amount about it — as simplistic. The geopolitics of energy since at least the Arab oil embargo in the early 1970s, probably much longer, has largely been about oil and gas, whether it's the concerns about OPEC’s control over oil markets, or Russia's gas supply into Europe, or anything else. So it's a hopeful vision to say, when we decarbonize and move away from oil and gas, those geopolitical risks will become a thing of the past.

We were making two points in the piece. One is that, that end state of beyond oil and gas is pretty far away. There's a multi-decade period when you have the new geopolitics of clean energy layered on top of the old geopolitics of oil and gas — and even a net-zero world is not zero oil and gas, necessarily.

But also, there will be new risks created by the emergence of clean energy, from critical minerals, to trade conflicts, to new zero-carbon fuels like hydrogen and ammonia that might move around by ship — a range of new issues that we want to make sure people are thinking about, because our concern is that those geopolitical and national security risks, if we're not addressing them, might actually undermine our ability to move as quickly as we need to to decarbonize.

Meghan O'Sullivan:

Intellectually, in the foreign policy and climate communities, when we first started talking about geopolitics, there was this focus on “what does success look like” — imagining a world, say it's 2050, where the global economy is fully decarbonized. I was part of that effort, along with some of Jason's colleagues from Columbia, and focused on painting that picture. Jason and I both agree that it's feasible, when the world is fully decarbonized, that maybe the geopolitics of energy will be more copacetic.

But what the piece does, and the focus of Jason’s and my work these days, is to say, that almost feels theoretical. What matters for the short and medium term — not discounting the long term — is what is going to happen in between. Here we're going to have, not the geopolitics of oil and gas gradually and incrementally giving way to the geopolitics of new energies, we're going to have them, as Jason said, layered on top of each other.

November/December was a great example of this, where you have the COP, and all the enthusiasm and energy around faster decarbonization and how important it is for the world, at the same time where you had an energy crisis unfolding in Europe, where Russia was playing the same old cards in the old geopolitics of natural gas. This is going to be the screenplay of the next couple of decades, where both of these things happen simultaneously.

David Roberts:

One of the risks you bring up is that, due to social pressure in the developed world and changing social mores, there's a lot of pressure to shut down [fossil fuel] production in some countries. There's a risk that production could decline before demand declines, which will have the effect of empowering those countries that are still producing. Say a little bit about what that might look like in the short term.

Jason Bordoff:

We're seeing it right now. There is a lot of concern that in the next several years we're going to go through a supercycle of commodity prices — in part because of underinvestment, not entirely because of