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The energy landscape has decisively changed — and yet, it also hasn’t.

The shift in Washington is radical: The Trump administration is jettisoning its predecessor’s “all-of-government” focus on climate and is instead amplifying the theme from its first term — energy dominance, based on oil and gas.

Yet, despite the sharp differences, certain basic factors persist. For one, the United States is the world’s top producer of oil, far ahead of Saudi Arabia and Russia, and the largest producer of natural gas. That is thanks to the astonishing transformation driven by the shale revolution. In less than a decade, starting from zero, the US has become the world’s largest exporter of liquefied natural gas. That has reshaped the country’s trade balance: Its LNG exports are now worth well over half of its semiconductor exports, more than its soybean exports, and twice what the movie and TV industry sends abroad.

This preeminence in conventional energy has changed not only energy markets, but also geopolitics. When Russian President Vladimir Putin cut off gas exports to a highly dependent Europe in order to shatter the coalition supporting Ukraine, US LNG exports were able to make up for over 40% of the missing Russian gas, helping to foil Putin’s stratagem.

Another constant is China’s growing leadership in clean energy — although “clean” doesn’t necessarily take into account the energy used in digging up minerals and building solar panels, wind turbines, and electric cars. All that reflects what Chinese leader Xi Jinping has described as Beijing’s determination to dominate “new industrial supply chains.”

The most visible impact will be the spread of inexpensive Chinese electric cars around the world, with the inevitable trade tensions. The most geopolitically significant, however, will be China’s global position in mining and its control of the industrially intensive processing of minerals into metals. This is evident in its recent ban on exports of rare earth elements to the US, on the grounds that they have both military and civilian uses.

“Half of North America could see shortfalls in electricity
in the next five to 10 years.”

For the future, two big issues stand out.

First, it’s now apparent that getting to net zero carbon dioxide emissions by 2050 is going to be harder than previously thought. While wind and solar generation continue to grow, so do oil and coal. Natural gas would too, were it not for its decline in Europe because of the Ukraine crisis. The Trump administration is bent on cutting back investment in the energy transition, and while European countries may maintain a commitment to net zero, their goals and timelines may well slip as they divert resources to boosting defense spending and improving the continent’s economic competitiveness.

The second issue is where energy dominance meets AI dominance.

AI has been described as “manufacturing electricity into intelligence.” Data centers today account for about 4% of US electricity; that is projected to reach as much as 12% by 2030, even though chips and AI models will become more efficient. The current electricity supply in the US cannot meet this demand, let alone that from other sources of growth. Nor can the current system of transmission lines. The North American Electricity Reliability Corporation warns that half of North America could see shortfalls in electricity in the next five to 10 years.

The national energy emergency that President Donald Trump declared on his first day in office therefore focuses largely on two things: slashing the permitting rules for electricity facilities, pipelines, and transmission lines that can delay construction for years, and ensuring sufficient electricity supply.

What are the options for the latter? There’s striking new momentum for nuclear power, but small modular reactors will not be deployed until sometime in the 2030s, and fusion, at scale, will take longer still. Wind and solar power will, with batteries, help meet demand growth — though that also increases US dependence on China, which currently leads in their manufacture.

But the biggest additional generation source will be natural gas, which is already responsible for over 40% of US electricity. Who would have guessed half a decade ago that the shale revolution, which made the US an energy superpower, would now be a central agent in the country’s race for AI superiority.