The American epoch of oil is collapsing. What comes next could be ugly, as China dominates the energy transition with astonishing results while fossil fuel interests in the US try to turn back the clock.
Shifting Global Balance
During a summit in Beijing, Chinese children chanted farewell to Donald Trump as he returned to Air Force One. Trump claimed he left with fantastic trade deals for US oil, jets, and soya beans, but the meetings made one thing clear: the global balance of power is shifting from the declining petrostate in the west to the rising electrostate in the east.
Trump flew home to chaos—war with Iran, surging gas prices, spectacular unpopularity, friction with former allies, and a 20th-century policy of energy dominance that seeks to turn back the clock. Meanwhile, Xi Jinping presides over a country that has invested more than any other in renewable energy, buffering its economy from gas price shocks and opening huge export markets for solar panels, wind turbines, smart grids, and electric vehicles.
Why Now?
History shows that when the dominant form of energy changes, the global pecking order shifts. The epoch of petrol, predominantly produced in the US, Russia, and Gulf states, is giving way to an era of renewables, overwhelmingly manufactured in China. The new energy order is winning economically and technologically, but the old petro-interests still wield political, military, and financial might.
Democracies are threatened by fossil fuel fascism—an extremist movement that breaks laws, spreads lies, and threatens violence to maintain markets for oil, gas, and coal. The war against Iran has multiple causes, but the wider context is a planet becoming more hostile, driving up tensions and redefining geopolitical realities.
Who Is Winning?
Short-term windfalls from the Iran conflict have gone to US petroleum companies, which enjoy a revenue surge while Gulf rivals are choked by threats in the Strait of Hormuz. However, the war is forcing countries to explore energy independence, increasing fossil fuel output by a fifth—a setback for climate goals.
But the prime beneficiary is China, which appears an oasis of pragmatic diplomacy and energy independence. Beijing's bet on renewables is paying off, making it less reliant on fuel imports and dominating global markets for wind, solar, and batteries. Future historians may see the Iran war as the moment the US ceded leadership to China.
How Empires Fall
For 250 years, the country controlling energy supply controlled the world. Oil motivated wars from World War II to Desert Storm. But today, oil is a toxic threat to climate stability. Demand must be artificially inflated by lobbying, subsidies, disinformation, and military force.
The most spectacular energy transition was in the mid-19th century, when coal-powered British gunships defeated China, ushering in a century of humiliation. Britain's empire ended when coal was superseded by oil. Now, the pendulum swings toward renewables and back to Asia.
China Looks to the Future
China has turned climate breakdown into an opportunity to end the humiliation of the opium war. For the past two years, its carbon emissions have been flat or falling. Wind and solar under construction double the rest of the world combined. Solar generation capacity has overtaken coal, and EVs account for more than half of car sales.
China dominates supply of renewable technology, critical minerals, and batteries. Its clean energy sector is worth $2.2 trillion, accounting for 11.4% of GDP. Beijing has a growing stake in global climate negotiations because it makes business sense.
The US Goes Backwards
Trump has withdrawn from the Paris Agreement and the UN Framework Convention on Climate Change, repealed the endangerment finding, and filled agencies with oil industry employees. He declared a national energy emergency, incentivized fossil fuel extraction, and halted coal plant closures. The US state is captured by a business group putting its own interests first.
Big oil poured $450 million into Trump's campaigns, and dark money flows through secret channels. The White House argues fossil fuels are necessary for energy dominance, but solar and wind are now cheaper. Electricity prices rose faster than inflation, and hidden costs of pollution hurt productivity.
Oil in Command
The US uses economic, diplomatic, and military power to stimulate fossil fuel markets. The energy secretary pressed the EU to buy US LNG and threatened to leave the International Energy Agency. Money flows to far-right groups in Europe campaigning on anti-net zero platforms.
The championing of fossil fuels relies on a big lie—that the US can return to a fossil-fueled era. Trump calls climate a hoax, stifles debate, and slashes science budgets. Billionaire backers choke climate media coverage.
The Fightback
On one side are the majority of people, nature, climate scientists, and the clean energy sector. On the other is Trump and fossil fuel interests, backed by Silicon Valley. But resistance is underway in courts, elections, and streets. California gets two-thirds of its electricity from renewables, Texas bristles at curtailments, and Michigan sues oil companies.
Despite deep pockets, the fossil fuel fascism movement will be futile. It may become more deranged and violent, but the planet will have the final say.
