As the world enters the Fourth Industrial Revolution, energy demand needs to continue to play a role in America’s grand strategy.
Two important geo-economic and geo-technological trends are converging. As the world transitions to the Fourth Industrial Revolution, economies are being transformed by the growing utilization of artificial intelligence (AI) to drive the massive data centers which are tasked with researching and developing solutions for upgrading and transforming how we connect, how we manufacture goods and services, and how we cope with a host of perennial challenges ranging from disease to the effective utilization of resources.
The massive energy demand required to power such centers – and the related industrial hubs that produce the components that these facilities require – connect directly to the energy security challenge. The massive increase in energy demand that data centers, AI utilization and chip fabrication facilities require cannot come at the expense of the existing demands that a modern, high-energy economy imposes on the grid.
There are specific infrastructure demands for creating and operating these facilities, and their absence means that harnessing these new technologies cannot occur, starting with energy. Creating safe, secure and reliable energy supply chains is therefore a national security priority
It is estimated that the electricity demand needed to power the growth in the use of AI doubles every 100 days. The International Energy Agency recently released its assessment of where trends in energy demand are pointing. The IEA predicts a global doubling of energy consumption by data centers to 945 terawatt hours by 2030 (which, as they note, is slightly more than the entire electricity usage for Japan in 2024). Greater use of energy-efficient technologies can only dent, not erase, this growth in demand.
Given reindustrialization commitments and a desire to secure other supply chains, especially in the United States, there is likely to be little appetite for shifting energy usage from other high-energy industrial projects – including the production of steel, concrete and a variety of petrochemicals. More generation capacity is needed. Europe’s experience over the past several years – first with attempting to use higher conventional energy prices as a way to force the adoption of renewals, and then with the loss of large supplies of cheaper Russian gas in the aftermath of the invasion of Ukraine – has contributed to a de-industrialization trend across the continent. Securing energy abundance is now an absolute necessity for Europe’s economic recovery. This lesson has not been lost in other parts of the world, and securing reliable energy sources is rising to the top of most countries’ national security to-do list.
Nuclear energy provides one long-term solution, but creating and rapidly scaling up nuclear power faces considerable regulatory and financial hurdles and cannot address the near-term gaps opening up between energy supply and demand. This leaves natural gas as the preferred fuel of choice for powering new generation capacity (as well as continuing to incentivize the transformation of coal-burning plants to a cleaner energy source). As Morgan Bazilian has noted, “The energy consultant group Enverus predicts up to eighty new gas-powered plants, adding some forty-six gigawatts of capacity, will be built in the United States by 2030.”
This increased thirst for the blue fuel is powering a new round of Russian confidence – that after three years of stringent Western sanctions on Russia’s natural gas sector, economic realities will begin to win out over an ideological commitment to the continued enlargement of the Euro-Atlantic community to the post-Soviet space. There has been a quiet but emerging call, particularly on the part of some of the continent’s manufacturing and petrochemical firms – for being able to add more Russian energy back into the European energy mix.
But this growing energy demand – not only across the Atlantic but also throughout the Indo-Pacific basin –provides the United States with a geo-economic rationale for its traditional geopolitical commitments. Creating two massive energy “bridges” – one across the Atlantic, one across the Pacific, could connect North American energy sources to growing demand from U.S. allies and partners – and provide a renewed rationale for the United States to maintain its role in being able to secure and project power across the two oceans.
In April, Uniper, in Germany, committed to purchasing LNG from Woodside’s Louisiana project, while Total, in France, agreed to accept 1.5 million tons per annum (MTPA) per year as part of a twenty-year contract from Rio Grande Energy’s Train 4. This builds on the massive expansion of European purchases that have pushed the United States to the rank of the third-largest supplier of gas to Europe. In turn, a steady stream of LNG tankers crossing the Atlantic provides a clear economic rationale for the revitalization of the U.S. Second Fleet – to secure this critical trans-Atlantic energy chain, alongside the effort to ensure the unimpeded surge of U.S. forces and equipment to Europe in the event of any major conflict.
And in the last month, we’ve seen a revival of interest on the part of Japanese, Korean and Taiwanese firms for developing Alaska’s gas reserves and the necessary export infrastructure for LNG to be sent across the Pacific. Other U.S. partners, including India and Vietnam, have signaled their possible interest. This could create an analog of a Pacific energy corridor with a steady, reliable supply of energy and also shape how the United States positions and structures its military in the Pacific to be able to safeguard this critical supply chain. And in both cases, U.S. security commitments would be more aligned with its geo-economic interests.
If this energy partnership gets off the ground, it could also create a new impetus for cooperation in other areas. Japanese and South Korean shipyards could be essential partners in helping to scale up the number of hulls for future U.S. Navy vessels and to help close the gap with the production coming out of Chinese yards. Reliable, predictable energy sources would be critical for ensuring stable prices. LNG partnerships could also lay the basis for longer-term cooperation in setting up allied consortia for capturing the benefits of nuclear power.
China and Russia, of course, also have cards to play. Russia still has preexisting (even, if in some cases, damaged) infrastructure that could be restarted at a lower cost than making the necessary longer-term investments for European and Asian partners to continue to pivot away from Moscow. Chinese firms are taking the lead in locking up long-term contracts for LNG not only for expected domestic use but also, more critically, to be able to trade on global markets. The window for using increased global demand for energy as a way to lock in U.S. partnerships will not remain open indefinitely.
Nikolas K. Gvosdev directs the national security program at the Foreign Policy Research Institute. Adrian Kranz is managing partner at South Shore Consulting.
Image: Shutterstock/UnImages
