· 5 min read
Energy security is often framed as a competition between independence and dominance, but the reality is far more complex. Modern energy systems are inherently interdependent. The dynamics below demonstrate that no nation can achieve true energy independence without incurring severe economic trade-offs, nor can any single power establish unchallenged dominance in an era characterised by complex supply chains and technological disruptions.
The US shale boom and global integration
While the United States became the world’s largest oil and gas producer, it remains deeply connected to global energy markets. Oil prices are predominantly set by international demand and geopolitical events, rather than solely by domestic output. While increased domestic production can reduce exposure to some disruptions, it does not completely insulate the US from global price volatility. Moreover, significant and growing energy exports further connect the US to international markets, demonstrating that total energy independence is a political ideal rather than an economic reality.
Europe’s energy independence strategy
In its bid to reduce reliance on Russian gas, Europe turned to LNG imports from the US and Qatar. This shift, while diversifying energy sources, merely replaced one dependency with another, demonstrating that 'independence' often translates into 'alternative reliance.' Europe’s acceleration towards renewables introduces a different set of dependencies on critical minerals like lithium, cobalt, and rare earths, which are sourced from a limited number of countries. This dual reliance on LNG imports and strategically sensitive renewable supply chains underscores the challenge of achieving true energy independence in a globally interconnected world.
While traditional energy dominance has been rooted in fossil fuels, today’s energy influence increasingly derives from control over critical technologies, raw materials, and supply chains. Here too, the notion of independence proves illusory.
The mineral supply chain
China dominates refining critical minerals such as lithium, cobalt, rare earths, and copper, creating strategic vulnerabilities for the US and Europe. Establishing alternative supply chains faces significant barriers, including long lead times to build new refining capacity and develop domestic resources alongside China’s current technological and infrastructure advantages. This concentration of refining capacity enables China to exert considerable influence over global energy markets, raising concerns about potential supply disruptions. However, China’s own dependence on raw materials from unstable regions like DRC and Myanmar adds an element of vulnerability to its control over these critical resources, illustrating the complexities within interdependent energy systems.
Technology hegemony and geopolitics
Control over AI-driven grid management, blockchain energy trading, and advanced battery technologies is reshaping global energy dynamics. While resource-rich exporters retain significant leverage, power is shifting toward nations and corporations that control the technologies and data infrastructure driving energy systems. This shift introduces new dependencies in the digital realm, where cybersecurity risks could undermine critical infrastructure. As nations race to develop these technologies, geopolitical factors shape new alliances and fuel competition. The pace and direction of this shift depend on technological innovation, regulations, and how nations adapt to the evolving energy landscape.
Cybersecurity risks as a new battleground
Modern energy networks, increasingly dependent on AI and digital systems for grid management, LNG operations, and energy trading, face a new spectrum of vulnerabilities. Cyberattacks, including ransomware, targeted malware, and distributed denial-of-service (DDoS) attacks, can disrupt critical energy infrastructure as effectively as physical blockades, leading to power outages, fuel shortages, and economic instability. The interconnected nature of digital systems means a breach in one node can ripple across entire networks, amplifying systemic vulnerabilities.
Interdependence: The inescapable reality
Despite efforts to reshore production and diversify supply chains, energy markets remain deeply interconnected and interdependent.
Limits of reshoring and friend-shoring
Efforts by the US and EU to build resilient domestic supply chains face significant time, cost, and regulatory challenges. For example, the EU’s Critical Raw Materials Act aims for 40% domestic sourcing by 2030 but faces obstacles related to infrastructure, investment, and environmental concerns. While innovations in mineral extraction, recycling, and alternative materials could help reduce dependencies, they require ongoing international collaboration and investment.
Renewables shift dependencies
The transition from fossil fuels to renewables does not eliminate energy interdependence; it merely shifts it to different technologies and materials. Wind turbines, solar panels, and energy storage systems depend on rare earth elements and advanced batteries, increasing reliance on specialised supply chains. This shift intensifies geopolitical competition for critical minerals and technological leadership, potentially creating new forms of leverage. The degree of dependency varies among nations, with those possessing advanced manufacturing capabilities or domestic mineral resources holding a relative advantage.
Energy trade routes remain critical
Energy trade routes remain essential, though their significance is evolving. Even with increased domestic production in regions like the US, strategic chokepoints such as the Strait of Hormuz, which carries ~20-30% of global oil (IEA), are critical yet vulnerable. Geopolitical disruptions in these areas have global consequences, but regional diversification and strategic reserves could mitigate the impact. The renewable energy transition creates new chokepoints in mineral supply chains, requiring balanced energy security strategies that address both traditional and emerging risks.
Interdependence is an inescapable structural feature of modern energy systems. The challenge is not to eliminate dependence, but to manage it strategically by diversifying energy sources, strengthening infrastructure, and forming partnerships with nations that share similar security goals.
The future of energy security
The illusion of energy independence is increasingly untenable in a world that is fundamentally interconnected. True energy security no longer lies in isolation or dominance but in the capacity to effectively navigate and manage these complex and shared interdependencies.
This article is also published on LinkedIn. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
