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While the US pursues fossil fuel dominance, China is looking to lead the way on renewables. Which model of energy security will the rest of the world follow? <\/p>\n
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Aside from regime change, a central goal of President Donald Trump\u2019s military actions in Venezuela and against Iran has been to reinforce the US as a dominant petroleum producer while curtailing federal support for alternative energy. The war in the Middle East has already injected new uncertainty into global energy markets \u2014 with strikes on Iranian infrastructure driving oil prices higher and disrupting flows through the Strait of Hormuz \u2014 and may prompt some countries to rethink their dependence on fossil fuels even as short-term demand spikes.<\/p>\n
In sharp contrast, China is intent on advancing its lead in renewable technology, even as it meets massive domestic demand for coal and oil. These divergent national approaches set up a fundamental global contest: Will fossil fuel dominance or renewable leadership define the future of energy security?<\/p>\n
As these two superpowers intensify their competition for economic and geopolitical dominance, the world\u2019s climate future and investment flows will largely hinge on which energy model\u2014oil or renewables\u2014proves most viable. The global energy landscape risks a clear split: one path leading to enduring fossil-fuel dependence, the other to a renewable-powered world.<\/p>\n
As a November report by the Washington, DC-based think tank the Center for Strategic and International Studies put it, \u201cNearly 10 years after the signing of the Paris Agreement, a new energy investment paradigm is taking shape\u201d that is likely to influence, if not determine, government and industry policy decisions on energy security, affordability, and competitiveness.<\/p>\n At this point, the CSIS report notes, the paradigm shows fragmentation, volatility, and scarcity, even as state intervention rises. Its author, associate fellow Ray Cai, writes: \u201cA widening bifurcation between hydrocarbon and low-emission value chains\u2014in part accelerated by strategic competition between the US and China\u2014is already reshaping global energy investment flows.\u201d<\/p>\n This bifurcation, as Cai describes, is a world of \u201ctwo tracks.\u201d One track features economies with secure, affordable access to fossil fuels. Most countries are net importers, while exporters are few. As a result, the US has become a significant oil and LNG producer and exporter. According to Cai, this shift also reinforces the country\u2019s retreat from its postwar role as \u201cfacilitator and guarantor of global trade.\u201d<\/p>\n On the other track, he continues, economies are turning to electrification and renewables. Nearly 90% of energy generation capital expenditure in the Global South in 2024 was allocated to low-emission sources, about double the share from 10 years ago. \u201cDriving this shift is China,\u201d says Cai, noting that the nation has led global supply chain and manufacturing investment both at home and abroad.<\/p>\n Much of the globe, including China, is adopting what Martin Pasqualetti, an Arizona State University professor and author of several books on energy geography, calls \u201can all-of-the-above\u201d approach to energy policy, pursuing all power sources, including oil, natural gas, nuclear, hydroelectric, solar, geothermal, and wind.<\/p>\n Meanwhile, the US under the Trump administration has ended subsidies for electric vehicles and other alternative-fuel applications as it seeks to boost fossil fuel production and exports. Yet this emphasis risks squandering its many competitive advantages across other energy sources, including alternatives, according to a September report by JPMorgan Chase.<\/p>\n \u201cNorth America has a significant strategic advantage in energy because of the sheer number of energy resources it has a competitive advantage in\u2014fossil fuels, solar, geothermal, and wind,\u201d the authors noted, adding that if the US fully takes advantage of all those energy resources, it will be unrivaled in what they call \u201cthe New Energy Security Age.\u201d But they point out, \u201crecent policy shifts from Washington are creating uncertainty for America\u2019s offshore wind ambitions\u2014which can be a key strategic advantage for the US alongside fossil fuels, geothermal, and nuclear.\u201d<\/p>\n Cai agrees that recent US policy shifts are creating uncertainty for investors in alternatives, telling Global Finance in an interview that \u201cpolicy pullbacks and regulatory obstruction can raise financing costs, slow project timelines, and erode competitiveness for US firms.\u201d<\/p>\n