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Why the Global Energy Transition Does Not Mean the End of the Petrostate

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  • Andreas Goldthau
  • Kirsten Westphal

Abstract

The world going low carbon is believed to put an end to petrostates, and to force incumbent oil producers to diversify their economies away from fossil fuels. This article challenges this assumption. Whether petrostates are in for the long game or end up with a ‘panic and pump’ strategy, it is argued, is a function of the lifting costs and the social costs of producing oil. What is more, the low‐carbon energy transition may well throw petrostates an additional lifeline, as fast decarbonizing OECD countries will shed some of their most energy‐intensive sectors, including refineries and petrochemicals, which opens up new export opportunities. Particularly for Middle Eastern petrostates it may therefore be very rational to further specialize in the high‐carbon segment. The policy challenge, therefore, will be twofold: managing a rapidly changing energy system in order to secure the transformation dividends it will bring, for human security and economic welfare; and balancing the (geo) political after pains of the incumbent fuels leaving the system.

Suggested Citation

  • Andreas Goldthau & Kirsten Westphal, 2019. "Why the Global Energy Transition Does Not Mean the End of the Petrostate," Global Policy, London School of Economics and Political Science, vol. 10(2), pages 279-283, May.
    • Handle: RePEc:bla:glopol:v:10:y:2019:i:2:p:279-283
    DOI: 10.1111/1758-5899.12649
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    Cited by:

    1. Ostrowski, Wojciech, 2023. "The twilight of resource nationalism: From cyclicality to singularity?," Resources Policy, Elsevier, vol. 83(C).
    2. Ghanbari, Saeed & Mackay, Eric J. & Heinemann, Niklas & Alcalde, Juan & James, Alan & Allen, Michael J., 2020. "Impact of CO2 mixing with trapped hydrocarbons on CO2 storage capacity and security: A case study from the Captain aquifer (North Sea)," Applied Energy, Elsevier, vol. 278(C).
    3. Vakulchuk, Roman & Overland, Indra & Scholten, Daniel, 2020. "Renewable energy and geopolitics: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 122(C).
    4. León-Vielma, J.E. & Ramos-Real, F.J. & Hernández Hernández, J.F. & Rodríguez-Brito, María Gracia, 2023. "An integrative strategy for Venezuela's electricity sector (VES), from an analysis of stakeholder perspectives," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    5. León-Vielma, J.E. & Ramos-Real, F.J. & Hernández Hernández, J.F., 2022. "The collapse of Venezuela's electricity sector from an energy governance perspective," Energy Policy, Elsevier, vol. 167(C).
    6. Elena Shadrina, 2020. "Non-Hydropower Renewable Energy in Central Asia: Assessment of Deployment Status and Analysis of Underlying Factors," Energies, MDPI, vol. 13(11), pages 1-29, June.
    7. Morgan Bazilian & Michael Bradshaw & Johannes Gabriel & Andreas Goldthau & Kirsten Westphal, 2020. "Four scenarios of the energy transition: Drivers, consequences, and implications for geopolitics," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 11(2), March.

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