Energy

 
I just finished reading Daniel Yergin’s, ‘The New Map – Energy, Climate and the Clash of Nations’.  A very instructive read on the impact of current developments in the energy sector and climate measures.  The development of shale gas is presented as a key development – essentially turning the largest energy importer, the US, into an exporter.  The dependency of China on energy imports and its (resulting) push to renewables is another important factor, as is the role of Russia as a large energy provider.  The Middle East remains a complex situation, sitting on important reserves but with an uncertain future.

The war in Ukraine has been instructive.  The relationship between the west and Russia – with the continued engaging in energy trade from both sides – is noteworthy.  Both sides remain dependent even if in (indirect) conflict.

Another interesting thing to look at is the impact of the energy transition.  Some energy producers / exporters risk loosing revenue and influence.  Other minerals (e.g. used in the production of batteries) become more important and countries with key reserves of these become important economic and strategic  actors (e.g. Chili with important reserves of Lithium and Copper).  Interestingly, China is also an important source country for some of these minerals.  The EU even has a strategy for these critical raw materials. 

Some African countries could benefit from these developments (i.e. with reserves of these raw materials) but others could loose (i.e. if the interest in traditional energy drops).  Of course, all the traditional risks (bad governance, Dutch disease, how to move up the value chain and create jobs, etc.) even if a country is ‘lucky’ in this regard.  The future geopolitical landscape is also – as always- difficult to predict (another interesting read in this regard).

 
18.04.2022, Brussels, Belgium.