{"id":40,"date":"2026-05-24T19:11:21","date_gmt":"2026-05-24T19:11:21","guid":{"rendered":"https:\/\/nationalconsumerreportss.com\/?p=40"},"modified":"2026-05-24T19:11:21","modified_gmt":"2026-05-24T19:11:21","slug":"electrostates-petrostates-and-national-security","status":"publish","type":"post","link":"https:\/\/nationalconsumerreportss.com\/?p=40","title":{"rendered":"Electrostates, Petrostates, and National Security"},"content":{"rendered":"<div>\n<iframe loading=\"lazy\" height=\"110px\" id=\"noa-web-audio-player\" src=\"https:\/\/embed-player.newsoveraudio.com\/v4?key=x8f23k&amp;id=https:\/\/www.lawfaremedia.org\/article\/electrostates--petrostates--and-national-security&amp;bgColor=F5F5F5&amp;color=246a71&amp;playColor=246a71&amp;progressBgColor=F5F5F5&amp;progressBorderColor=bdbbbb&amp;titleColor=757575&amp;timeColor=757575&amp;speedColor=757575&amp;noaLinkColor=757575&amp;noaLinkHighlightColor=039BE5&amp;feedbackButton=true\" style=\"border:none;\" width=\"100%\"><\/iframe><\/p>\n<p>News headlines regularly announce that China has made a wise choice in pursuing clean energy technologies and weaning itself off oil and gas\u2014a trend that has only accelerated with the U.S.-Iran war. These headlines, which emphasize China\u2019s limited exposure to the greatly diminished supply of oil through the Strait of Hormuz, are true. But the news analysis has missed two key aspects of China\u2019s \u201celectrostate\u201d victory over the \u201cpetrostate\u201d status that the United States remains wedded to\u2014and indeed has doubled down on under the Trump administration.<\/p>\n<p>Read more <a href=\"https:\/\/nationalconsumerreportss.com\/?p=38\">How Much Power Does the EU AI Office Actually Have?<\/a><\/p>\n<p>The first story that commentators have missed is that both countries\u2019 energy strategies are about more than just resources\u2014they are about energy markets. Electricity prices are largely set in regional markets that are indirectly connected to the broader world, whereas oil and gas prices are largely set by international markets that are heavily influenced by international developments. As a result, China\u2019s strong focus on using clean energy technologies to electrify its economy means not only that it must buy less oil and gas on a volatile international market but also that its energy pricing is increasingly shielded from global events. As a petrostate, in contrast, the United States has secured energy independence for itself by becoming the number one producer of oil and gas, but its abundance of resources has not enabled it to protect U.S. consumers from international oil and gas markets\u2019 fluctuating prices. In the long run, as electricity becomes the primary form of energy consumed, China\u2019s energy security strategy is enabling it to build an energy system that is both physically and economically insulated from the larger world.<\/p>\n<p>The second overlooked story is about the national security advantages and vulnerabilities that accompany each state\u2019s strategic choice. As the dominant seller of clean energy technology to many other states, China sits on top of critical supply chains for purchasing states. As a result, those states have become dependent on China for a key aspect of their infrastructure, giving China a persistent tool of diplomatic, political, and economic leverage over those states. Further, China has positioned itself to take advantage of technological vulnerabilities in those systems to conduct surveillance and\u2014potentially\u2014engage in future acts of sabotage. In the \u201cweaponized interdependence\u201d framing of Henry Farrell and Abraham Newman, China is poised to use its provision of clean energy technology as both a panopticon and a chokepoint against states that use its technology. U.S. sales of oil and gas abroad offer no such security advantages to the United States.<\/p>\n<p>At the end of the day, then, China\u2019s near monopoly on clean energy technology will redound to its economic and national security benefits in several ways that current news reporting does not fully reflect. While it is too soon to say which energy landscape will prove to be dominant in the long term, recent events provide additional reasons to question the U.S. decision to double down on its petrostate status.<\/p>\n<p><strong>The Energy Security Advantages of Being an Electrostate Versus a Petrostate<\/strong><\/p>\n<p>For as long as the notion of \u201cenergy security\u201d has been a part of U.S. national security policy, it has been equated with \u201cenergy independence.\u201d That is because the concept of energy security grew out of the energy crisis of the 1970s, when the United States first realized that it depended to a dangerous degree on oil and gas from the Middle East. Since the Organization of the Petroleum Exporting Countries\u2019s (OPEC\u2019s) first oil embargo, the United States has sought to reduce its reliance on Middle Eastern energy supplies. Although this has taken a variety of forms, two strategies came to dominate U.S. energy policy: (a) the build-out of international oil and gas markets, in the hope that a competitive market would hamper OPEC\u2019s ability to exercise unilateral control over energy prices; and (b) the development of domestic energy sources, especially oil and gas, so that the country would not be not reliant on others for its energy needs.<\/p>\n<p>These strategies largely came to fruition. Today, oil and, increasingly, natural gas are global commodities traded on international exchanges, where prices are set by market forces rather than the whims of one country. And, thanks to the revolution in fracking technology in the 2000s, the United States is now the world\u2019s number one producer of both oil and gas\u2014a phenomenon that would have been inconceivable in the 1970s.<\/p>\n<p>But what the United States missed\u2014and what the recent war in Iran has illuminated\u2014is that its energy security strategies are inherently limited in how far they can go toward the quest for energy independence. The appearance of international markets for oil and gas has weakened, but not eliminated, any one country\u2019s ability to dictate the prices of these resources. Oil and gas reserves are still concentrated in certain regions of the world and still face transportation constraints. When supply crises occur, as they have with Iran\u2019s closure of the Strait of Hormuz, U.S. consumers still feel those crises through rises in international oil and gas prices. Domestic production of oil and gas has allowed the United States to weather the supply shock better than countries in Europe and Southeast Asia that rely heavily on imported oil and gas. But by tying its fate to the fluctuations of an international energy market, the United States has made it difficult to extricate itself from the impacts of international events.<\/p>\n<p>China, by contrast, has taken a different approach to energy security. For China, too, energy security has meant energy independence. But because China was not traditionally a significant producer of oil or gas, the country turned to different domestic sources of energy: first coal, then a suite of clean energy technologies ranging from solar to wind to hydropower to nuclear. All of these technologies are valuable, especially to generate electricity. This means that China\u2019s energy strategy has also forced it to develop a robust electricity grid and a mechanism for allocating electricity across that grid\u2014in other words, an electricity market.<\/p>\n<p>Electricity markets are complicated things, and their structure often depends on nuances in how governments or other entities choose to set them up. Indeed, China is in the early stages of introducing reforms to its electricity grid, so we don\u2019t yet know exactly how its market will function. But some key characteristics of electricity markets stand in contrast to oil and gas markets. First, because electricity must be sent along transmission lines, electricity grids and the markets that coordinate them are geographically limited. They operate on the regional, rather than global, level.<\/p>\n<p>Second, prices in electricity markets are typically set through a least-cost economic dispatch model. All of the potential electricity suppliers in a market bid for their resource (e.g., a coal-fired power plant or a wind turbine) at a specified price and quantity, and winners are selected starting with the lowest priced bid and moving up until the overall demand on the system is satisfied. The last resource selected to satisfy demand, the marginal resource, sets the price for the market.<\/p>\n<p>The marginal resource in an electricity market will vary depending on the grid. For instance, in many electricity markets in the United States, natural gas turbines are the marginal bidder, so natural gas prices influence the price of electricity. (This is how oil and gas supply shocks like the war in Iran or Russia\u2019s invasion of Ukraine can lead to increases in electricity prices in the United States.)<\/p>\n<p>In China, however, electricity prices today (to the extent they are set by market forces during China\u2019s ongoing market reform efforts) are largely influenced by coal. This means that China\u2019s electricity prices are less connected to the international oil and gas markets than the United States\u2019 are. And, in the long run, in an electricity grid dominated by clean energy technologies such as the one China is in the process of building, the marginal resource is likely to be a clean energy technology such as batteries or hydropower that does not have fuel costs tied to international markets. Now, there are  to adapt electricity markets to grids dominated by clean energy technologies that have no fuel costs. But navigating volatile international energy markets is not one of them.<\/p>\n<p>Read more <a href=\"https:\/\/nationalconsumerreportss.com\/?p=36\">The Deal Washington Cannot Broker<\/a><\/p>\n<p>China\u2019s energy security strategy is thus putting itself on a path to both physical and economic energy independence. It has tied its energy prices to a regional electricity grid rather than an international energy system. And it has built that grid around domestic energy resources that, in the long run, are entirely disconnected from international fuel markets. Combined with widespread electrification of the rest of its economy\u2014including its transportation sector, the sector that is responsible for most of the oil consumption in the United States\u2014China\u2019s electrostate strategy could make it energy self-sufficient in the decades to come.<\/p>\n<p>But that\u2019s not the only security advantage that China\u2019s strategy offers.<\/p>\n<p><strong>The National Security Advantages of Dominating Clean Energy Technology<\/strong><\/p>\n<p>In addition to turning to clean sources of energy itself, China currently dominates the clean energy technology supply chain. Countries ranging from India to Australia to many European Union and African countries to the United States all buy clean energy technologies from China, including solar photovoltaic systems, wind turbines, and power storage batteries. Through its Belt and Road Initiative, China has invested extensively in green energy projects, spending $18.3 billion in wind, solar, and waste-to-energy projects in 2025 alone. Reuters estimates that, between 2018 and 2025, China exported nearly $1 trillion worth of batteries, solar components, electric vehicles, and wind power systems.<\/p>\n<p>This dominance in clean energy technology gives China at least three ways to weaponize its advantage in relation to these purchasers.<\/p>\n<p>First, as we have recently seen with both semiconductors and rare earths, dominating a supply chain on which many other states rely comes with huge geopolitical advantages. That dominance gives the producing state\u2014here, China\u2014a persistent tool of diplomatic, political, and economic leverage over the purchasing states. As a major hub of this technology with few competitors, China can provide or withhold its green energy technology as leverage at the front end over states that wish to purchase the technology and, even more importantly, as subsequent leverage when states that have locked their energy systems into that technology need to update or replace it. The U.S.-China Economic and Security Review Commission, in its 2025 , worried about this in relation to the United States itself, noting that \u201cChina\u2019s dominant position in certain sectors and components of electricity generation and transmission technologies &#8230; means the United States may have growing dependence on China for these products, especially as artificial intelligence data center investments stimulate increased demand for electricity.\u201d This supply chain leverage could take a wide range of forms: China could pressure potential purchasers to vote a certain way in the United Nations, to reduce economic engagement with Taiwan, or to evade a particular set of U.S. sanctions. And in the past five years, China has built a broad set of economic tools of national security, which empowers it to regulate imports and exports of clean technology, impose tariffs on imports that threaten its dominance, and target companies and individuals that comply with disfavored U.S. or allied sanctions.<\/p>\n<p>Second, China can \u201cweaponize\u201d the technology it sells, using the technology to conduct surveillance on purchasers. In 2025, several sources reported that U.S. officials found clandestine communications devices on Chinese-made solar inverters\u2014part of the hardware that connects solar panels to the electrical grid. (These inverters also connect wind turbines to the grid.) The officials also reportedly found undisclosed cellular radios in batteries of various Chinese suppliers. Because solar photovoltaics can collect data about the system\u2019s location, status, and energy use, these devices could provide China with access to that data and the ability to overwrite the solar firmware with malicious code. The U.S.-China Commission points out that this access could also provide information about \u201cgrid configurations, load characteristics, and asset health that help identify targets to disrupt.\u201d The United States is not the only country concerned about this vulnerability: Great Britain recently blocked a Chinese wind turbine manufacturer from participating in British offshore wind projects based on concerns about espionage risks.<\/p>\n<p>Third, China can use\u2014and seems already to have tested the use of\u2014this technology as a chokepoint or kill switch. Some of the same undisclosed communications devices just described raise the concern that the Chinese government could remotely \u201cskirt firewalls and switch off the inverters remotely, or change their settings, destabilizing power grids, damaging energy infrastructure and triggering blackouts.\u201d Moving beyond the hypothetical, Reuters reported that China disabled an unknown number of solar power inverters in the U.S. and elsewhere in November 2024. The U.S. Department of Energy refused to comment.<\/p>\n<p>By comparison, the U.S. role as a dominant petrostate provides it with a range of geopolitical advantages\u2014most notably, important sources of revenue from and leverage over states that seek to buy U.S. oil and gas. However, petrostates generally are unable to take advantage of the intrusive levers that China possesses as a near-monopolistic provider of clean energy technology.<\/p>\n<p>First, when the United States attempts to weaponize its position as a seller of oil and gas to other states\u2014for example, by cutting off supplies to traditional purchasers or imposing sanctions on an oil-exporting state\u2014that weaponization necessarily raises oil and gas prices internationally. As a result, oil and gas prices rise in the United States, directly affecting U.S. consumers. In contrast, a decision by China to use its leverage over states that depend on it for clean energy technology would have a far more limited effect (if any) on the price of electricity inside China.<\/p>\n<p>Second, because oil and gas are one-and-done commodities, rather than technologies that persist inside the purchasing state\u2019s electricity grid, the oil and gas supply chain does not inherently offer an opportunity for the United States to use its energy relationships as avenues through which to conduct surveillance or physical control. The United States will know how much oil and gas it is selling to a given state, which will tell it something about the purchaser\u2019s consumption rates, but that offers far less granular information than China can obtain from solar inverters that can trace locations, use rates, and system health. And oil and gas sales offer no physical chokepoint by which the United States\u2014during an armed conflict, say\u2014could turn off an adversary\u2019s energy system with the flick of a switch.<\/p>\n<p><strong>Conclusion<\/strong><\/p>\n<p>With advances in clean energy technology, the world is in the midst of a significant energy transition. Even as these new energy technologies come online, . In this transitional phase, China has embraced the new clean energy system while the United States has doubled down on the old fossil fuel system. Both countries have done so in the name of energy and national security. But the new clean energy system offers substantial and underappreciated security benefits that were not conceivable under the old energy system. Internally, a clean energy system enables a country to compartmentalize the physical and economic aspects of its energy system, shielding it from international market fluctuations. Externally, a country that monopolizes clean energy tech production can weaponize that technology to its own national security ends. While it is too soon to say exactly how the global energy transition will pan out, and its consequences for the United States\u2019 and China\u2019s energy and national security, the war in Iran has illuminated some of the United States\u2019 continued vulnerabilities and China\u2019s growing advantages.<\/p>\n<p>Read more <a href=\"https:\/\/nationalconsumerreportss.com\/?p=34\">The AI Race Isn\u2019t Real<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The U.S.-Iran war highlights the underappreciated national security benefits of China\u2019s electrostate strategy.<\/p>\n","protected":false},"author":1,"featured_media":39,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-40","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-armed-conflict"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - 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