Energy Shocks Are Accelerating Clean Power and Extending Coal Use

Ernest Moniz sees the current energy disruption as a force operating in two directions at once. The closure of the Strait of Hormuz and the Iran war have made the strategic case for low-carbon energy more visible: economies less dependent on internationally traded fossil fuels are less exposed to supply interruptions and price swings. But the same disruptions have made gas unaffordable for some countries, driving a switch to coal that worsens the emissions outlook.

That is the central constraint in treating energy security as a climate solution. Security, climate, and affordability are one conversation, Moniz argues—not separate policy agendas that can be solved independently. When liquefied natural gas prices spiked sharply in Asia and Europe, poorer countries, especially in Asia, responded by switching from gas to coal. For those governments, the immediate question was not the long-run carbon trajectory but access to affordable energy.

The low-carbon direction has stronger foundations than it did during the previous major geopolitical shock. After Russia’s 2014 invasion of Ukraine, Moniz says, the G7 and European Union explicitly recognized that moving toward a low-carbon economy was an energy-security measure as well as a climate measure. Yet that recognition did not produce the inflection point its advocates might have hoped for. Climate progress continued, but not at the required pace.

The present moment differs because clean-energy technologies have advanced substantially over the past decade. Renewables, storage, and electric vehicles are more mature, while their economic position has improved. Moniz expects China to export more EVs, solar panels, batteries, and wind turbines, reinforcing international interest in electrification and clean-energy deployment.

But the higher-carbon response may persist too. Once countries in Southeast Asia and elsewhere have switched from gas to coal, Moniz expects some to remain reliant on coal for a considerable period. An energy-security strategy that expands clean technology but fails to address fuel affordability can therefore increase investment in decarbonization while worsening emissions in the countries least able to absorb price shocks.

The disruption around Hormuz also exposes vulnerabilities beyond direct oil and gas consumption. Moniz points to helium used in chipmaking and fertilizers as examples of commodities affected through Gulf-linked energy and industrial supply chains. The consequences of a fossil-fuel supply disruption run through products derived from or dependent on the energy system, not simply through gasoline and electricity bills.

The strategic attraction of electrification should not obscure the scale of the fuels problem. As Justin Worland notes, the energy-security conversation often moves rapidly toward power generation and electrification even though consumers and industries still rely heavily on fuels. During the Hormuz disruption, that dependence appeared in higher jet-fuel prices and difficulty accessing liquefied petroleum gas for cooking in parts of Asia.

Moniz calls electrification “the lead horse” in addressing climate change. Wind, solar, and storage have made major progress, he says. Nuclear power is attracting renewed interest as a low-carbon baseload source, and engineered geothermal is also gaining attention. These technologies matter both for emissions reductions and for reducing exposure to imported fossil fuels.

Yet electricity represents only a minority of energy delivered to useful ends worldwide.

Moniz puts the corresponding U.S. share at about one-third, compared with roughly one-fifth globally. That leaves most final energy use dependent on fuels. Electrification can grow, but progress in the power sector alone cannot displace the world’s underlying dependence on oil and other combustible fuels.

The problem, in Moniz’s account, is economic and practical as much as technical: the world has not yet produced low-carbon fuels that are both affordable and scalable enough to displace oil. Oil is an exceptionally effective fuel apart from its carbon emissions, he says. A liter of gasoline contains about four times the energy of a liter of liquid hydrogen, while gasoline can be managed at atmospheric pressure and ambient temperature. Liquid hydrogen has an advantage in mass-energy density for vertical rocket travel, but Moniz’s comparison is that oil remains very difficult to beat for horizontal transport.

A low-carbon alternative therefore has to contend with the energy-density and handling advantages Moniz identifies, not merely with the task of lowering emissions. His example is advanced cellulosic biofuels. The field drew substantial interest beginning around 1980, in response to oil embargoes, but he says it has not produced much success after nearly 50 years of effort. Researchers initially drawn to the field moved into drug development, where the work was easier and more lucrative. The lesson is not that low-carbon fuels are unnecessary; it is that they remain difficult to develop into affordable, deployable alternatives even when the strategic case is obvious.

Corn ethanol offers a more qualified counterexample. Moniz says it is the liquid-fuel area where meaningful progress has been made and more is available. It is reasonably affordable, though it cannot scale sufficiently to replace petroleum-based fuels at the needed level.

Moniz says carbon capture and sequestration at biorefineries, along with climate-favorable agricultural practices for row crops, could potentially bring corn ethanol to zero carbon at a relatively low cost per ton of carbon dioxide. That does not make ethanol a complete answer. Even a zero-carbon version would not, in his words, “answer the mail” as a scalable global fuel solution. But it illustrates a more practical point: reducing the carbon intensity of existing fuel systems can matter while the larger search for affordable, scalable alternatives continues.

Energy security is collective because exposure to a supply disruption is uneven. Ernest Moniz returns to the G7 response to Russia’s 2014 invasion of Ukraine, when a major directive stated that energy security was a collective responsibility among allies and friends. That framing recognized that an ally’s energy insecurity can affect its broader security posture.

Energy security as collective responsibilityMoniz’s point is that allies’ energy vulnerabilities affect the security of the group, not only their domestic energy markets. is central to Moniz’s comparison between 2014 and the current crisis.

The United States’ experience during the Hormuz crisis illustrates the asymmetry. It has been affected directly through higher oil prices, Moniz says, because oil is globally priced. In that sense, an ostensibly energy-independent United States is still vulnerable to international price excursions. But U.S. natural-gas prices have not experienced the dramatic spikes seen in Asia and Europe.

Europe, Japan, and South Korea do not have the same fossil-resource position as the United States. They have renewable resources, Moniz notes, including sun and wind, but their dependence on outside energy supplies remains strategically consequential. The point of collective responsibility is not simply that allies face similar problems. Their energy vulnerability can alter political, economic, and security decisions beyond energy markets.

Moniz argues that trust in the United States as a partner is weaker than it was in 2014. That can affect where allies look for support in meeting their energy-security requirements. He points to Europe’s dramatically increased imports of Russian LNG despite the United States having the world’s largest LNG-export capacity, suggesting that the pattern might look different under different geopolitical conditions.

His deeper concern is a wider decoupling between China and the United States. If the world moves down that path, Moniz says, he is not sure which direction Europe would go. The consequences would extend through energy markets and into “everything” else.

He sees the same alliance question in nuclear security. Many U.S. allies have long had the technical capacity to build nuclear weapons but have refrained in part because of extended deterrence under the U.S. nuclear umbrella. Moniz says a number of those countries are reexamining that arrangement. In his account, the energy question—where allies find dependable support for their security requirements—sits alongside a broader uncertainty over industrial alignment with China and confidence in U.S. security guarantees.

Ernest Moniz does not think geopolitical upheaval has changed the eventual direction of the energy system. He expects the world to continue toward a low-carbon economy, though by a route different from the one imagined several years ago. Carbon dioxide removal from the atmosphere, for example, is being elevated substantially and will rightly play a larger role, in his view.

What has changed is the pace. The switch from gas to coal in price-constrained developing economies is a real backward movement in the global carbon trajectory, and Moniz expects it to endure for some time. The world had already lost time before the Iran war, he says; these additional tensions will impede progress further, particularly in developing countries.

His expectation rests less on confidence in current policy than on the accumulating consequences of a warmer world. Continued warming and more extreme weather, he says, will eventually push countries toward the same low-carbon end state.

The practical challenge is to make energy security reinforce that outcome rather than undermine it. Electrification, clean-power technologies, and lower-carbon fuel pathways can reduce both emissions and exposure to fossil-fuel disruptions. But where cleaner options are unavailable or unaffordable, an energy shock can instead lock countries into coal. The transition’s strategic value is real; so is the cost of pursuing it without workable fuel alternatives and attention to affordability.