The Economic & Geopolitical Realities of Energy Security

By Kenny MacEwen

Energy security is the foundation of economic stability, national sovereignty, and global trade. As the world moves toward a more renewable-driven energy future, oil and gas’s critical role in shaping economic growth and geopolitical stability cannot be ignored. While renewables are expanding, the global economy remains deeply intertwined with hydrocarbons, and premature reliance on intermittent energy sources could create vulnerabilities that threaten financial stability and national security.

The ongoing energy transition is a complex balancing act. Countries that fail to secure reliable energy sources risk economic stagnation, while those dependent on energy imports face geopolitical leverage issues. Nations that successfully integrate a diversified energy mix—while maintaining strategic oil and gas infrastructure—will be best positioned to navigate the shifting energy landscape.

The Role of Oil & Gas in Economic Growth and Poverty Reduction

Energy is the lifeblood of economic development. Nations with reliable, affordable, and scalable energy sources experience faster industrial growth, increased productivity, and higher living standards. Oil and gas have historically provided the foundation for modern economies, supporting transportation, manufacturing, and electricity generation at a scale that renewables have yet to match.

Access to cheap and abundant energy is critical for developing nations to lift populations out of poverty. The World Bank estimates that more than 750 million people still lack electricity, primarily in sub-Saharan Africa and parts of South Asia. While renewables can contribute to decentralized power generation, grid-scale energy solutions—often powered by natural gas and oil—are essential to sustaining economic growth in these regions.

• Industrialization and Job Creation: Manufacturing, agriculture, and heavy industries all require high-energy-density fuels that renewables cannot yet provide. Expanding industrial output without affordable energy sources is impossible, which is why nations with access to stable oil and gas supplies have experienced faster economic development.
• Affordable Energy and Living Costs: Nations with low energy costs enjoy greater economic competitiveness. High energy prices increase transportation, food, and heating costs, creating inflationary pressures that disproportionately impact low-income populations. Energy poverty remains a pressing issue, and transitioning too quickly to expensive renewable infrastructure could exacerbate economic inequality.

Why Energy Independence is Crucial for National Security

Energy dependence has long been a geopolitical vulnerability. Nations that rely heavily on energy imports are subject to supply chain disruptions, price volatility, and political leverage from energy-rich nations. In contrast, countries that maintain domestic energy production—particularly in oil and gas—enjoy greater economic and strategic autonomy.

The 1973 Oil Crisis and the 2022 European energy crisis are prime examples of how energy dependency can destabilize economies and threaten national security.

• The 1973 Oil Embargo: When OPEC nations restricted oil exports to the U.S. and its allies, energy prices quadrupled, triggering economic recessions, fuel shortages, and inflationary pressures worldwide. This event highlighted the risks of over-reliance on foreign oil and spurred nations to invest in domestic energy production.
• Europe’s 2022 Energy Crisis: Europe’s heavy dependence on Russian natural gas left it vulnerable when geopolitical tensions escalated. In response to the war in Ukraine, European nations attempted to cut ties with Russian energy, leading to crippling electricity and heating costs. The crisis forced European nations to reopen coal plants, ration energy, and import expensive liquefied natural gas (LNG) to stabilize their grids.

Energy independence does not mean abandoning global trade, but it requires a strategic approach to energy policy—one that prioritizes self-sufficiency while maintaining diversified energy partnerships.

The Risks of Relying Too Heavily on Imported Renewable Energy Technologies

While reducing reliance on fossil fuels is a priority for many governments, transitioning too quickly comes with its own geopolitical risks. Unlike oil and gas, which are produced and transported globally, renewable energy infrastructure is heavily concentrated in a few key regions—creating potential bottlenecks and new forms of energy dependence.

• Solar Panel and Battery Supply Chains: Over 80% of the world’s solar panels and lithium-ion battery supply chains are controlled by China. The materials required for these technologies—such as lithium, cobalt, and rare earth elements—are mined and processed in a small number of countries, making supply chains vulnerable to trade restrictions and geopolitical tensions.
• Wind Turbine Manufacturing: The global wind turbine market is similarly concentrated, with China, Denmark, and Germany leading production. Any disruption in these supply chains—whether due to political conflict, resource shortages, or economic policies—could slow down renewable energy deployment and lead to price volatility.
• Energy Storage Limitations: Unlike oil and gas, which can be stored and transported easily, electricity generated from renewables must be used immediately or stored in batteries that are expensive and supply-constrained. Over-reliance on renewable imports could create new vulnerabilities, as energy security shifts from fuel availability to battery and technology supply chains.

A diversified approach to energy security—including investments in nuclear, domestic oil and gas production, and renewable technology manufacturing—can help mitigate these risks.

How LNG and Pipeline Expansion Support Global Energy Resilience

One of the most effective ways to enhance energy security while supporting a lower-carbon future is through the expansion of natural gas infrastructure, particularly liquefied natural gas (LNG) and international pipelines.

• LNG as a Flexible Energy Source: LNG allows nations to access global energy markets, reducing dependence on single suppliers. Countries like Japan and South Korea, which lack domestic fossil fuel resources, rely on LNG imports from multiple suppliers to maintain energy security. The U.S. has emerged as a leading LNG exporter, providing an alternative to Russian and Middle Eastern gas supplies.
• Pipeline Infrastructure for Stability: Pipelines provide secure, cost-effective energy transportation, reducing the risks associated with volatile shipping routes and supply chain disruptions. Expanding pipeline networks—such as the Trans Mountain Expansion in Canada and the EastMed pipeline in the Mediterranean—can improve energy stability and reduce geopolitical leverage from energy-dominant nations.
• Natural Gas as a Transition Fuel: While coal remains the dirtiest fossil fuel, natural gas is 50-60% cleaner when used for power generation. Countries transitioning away from coal can significantly cut emissions by shifting to natural gas while integrating renewables gradually.

LNG and pipeline expansion strategies ensure that energy remains affordable, reliable, and geopolitically secure, allowing nations to balance economic growth with environmental commitments.

A Balanced Energy Strategy for the Future

Energy security is about more than just reducing emissions—it is about ensuring stable economies, protecting national sovereignty, and preventing geopolitical vulnerabilities. A successful energy strategy must account for both environmental goals and the realities of global energy demand.

• Oil and gas will remain essential to industrial processes, heavy transportation, and economic growth.
• Energy independence reduces national security risks and shields economies from supply disruptions.
• A diversified approach to renewables is needed to avoid over-reliance on concentrated supply chains.
• LNG and pipeline expansions provide global energy stability while supporting the transition to a lower-carbon future.

The world is moving toward a more renewable future, but energy security must remain the top priority. Nations that maintain a balanced, strategic approach to energy policy—investing in domestic production, diversified trade partnerships, and infrastructure resilience—will be best positioned for long-term success.