JSPES, Vol. 36, No. 2 (Summer 2011)
pp. 154-196

Geopolitical Threats to World Energy Markets

Robert W. Kolb

Loyola University, Chicago

According to best estimates, the energy mix of the world will change only slowly over the next several decades. Oil, natural gas and coal will continue as the primary energy commodities of world commerce, so they will remain the main focus of the geopolitics of energy. Within this context, the article analyzes the implications of energy geopolitics for energy markets. The rise of national oil companies (NOCs) and the expansion of bilateral contracts between energy producing and energy importing countries threaten to diminish world energy markets. Pipelines and sea lanes are critical for international energy commerce, both with dramatic importance for energy finance. The quickly maturing liquid natural gas (LNG) infrastructure and the huge promise of shale gas will raise the importance of natural gas in world energy consumption and increase the independence of some countries with potentially large significance for energy finance. The article includes a brief consideration of the changing role of nuclear energy after the 2011 tsunami in Japan and the disaster at the Fukushima-Daiichi nuclear plant, and it concludes with a consideration of climate change and the future environmental impacts of the world’s changing energy
consumption patterns.