Oil has long dominated concerns about energy security because oil products have fueled nearly all of the world’s transportation for over a century. But that may be changing as vehicles powered by electric motors have become competitive with those powered by internal combustion engines. Should the mass adoption of electric vehicles occur, access to reliable and affordable sources of minerals like cobalt, graphite, lithium, manganese, and nickel, which are used in modern electric-vehicle batteries, will come to occupy a larger share of energy security concerns, especially since one country has already gained control over much of the world’s production and processing of those minerals.

For the moment, however, oil products still provide over 90 percent of the energy that the world uses for mobility. Hence, the energy-security problem of ensuring the availability of reliable and affordable oil supplies remains a relevant one. And, not so long ago, that problem seemed particularly acute. In 2008, oil prices reached an all-time high of $140 per barrel. Many sounded the alarm that the world had reached “peak oil,” the point at which the global supply of oil would start to run out. That alarm, of course, had been heard many times before. In 1977, President Jimmy Carter warned that the United States would need “the production of a new Texas every year, an Alaskan North Slope every nine months, or a new Saudi Arabia every three years” to keep up with its oil consumption. Four decades later, the United States produced more oil than ever and, as of September 2019, became a net exporter of oil and oil products for the first time since the 1950s.

What changed America’s oil production fortunes was the new combination of two existing technologies: horizontal drilling and hydraulic fracturing, better known as fracking. Together, they unlocked oil (and natural gas) deposits trapped in shale rock, massively increasing American oil output. Thus, oil has remained abundant and affordable, despite major production disruptions during the Arab Spring from 2010-2012, in Libya from 2013-2016, and in Venezuela after 2017. In fact, oil prices had dropped 60 percent from their 2008 highs by early 2020, even before the COVID-19 pandemic had made a dent in the global economy.

Old Energy, Old Problems

With abundant oil supplies and low oil prices, energy security concerns seemed to warrant less attention. But major oil-producing countries can still cause trouble. As long as oil continues to be the world’s leading transportation fuel and provides hefty royalties to their governments, it enables such countries to exert power. Indeed, falling oil prices throughout the 2010s may have lulled Western policymakers into believing that the Russian Federation, whose economy is heavily reliant on oil and natural gas exports, would become more docile. It did not; instead, it continued to modernize its military and intimidate its neighbors. Russia even sent troops to Syria.

Moreover, countries can still wield their control over oil production as a tool of coercion even when oil prices are low. That was demonstrated in March 2020 when a long-simmering dispute between Russia and Saudi Arabia over the “fair price” for oil boiled over into an all-out price war. Russia, fearing more market share losses to American shale-oil producers, lobbied the Organization of Petroleum Exporting Countries (OPEC) to raise its oil production so that oil prices would settle at $60-65 per barrel, a level that would undermine the profitability of America’s highly leveraged shale-oil industry. But Saudi Arabia, OPEC’s leader, disagreed at the time. With its government budget expected to balance at $75-80 per barrel in 2020, Saudi Arabia wanted OPEC to cut its oil production in order to increase oil prices.

OPEC and Russia bargained for months, but talks finally broke down after Moscow refused to limit its oil production to help stabilize oil prices in the wake of the slump in global oil demand caused by the COVID-19 pandemic. Calculating that it could hurt Russia enough to force it back to the negotiating table, Saudi Arabia boosted its daily oil output by 20 percent, flooding the market with oil. Not to be intimidated, Russia responded with a short-term increase in its own oil output (possibly to strike back at Saudi Arabia or to force some American shale-oil companies out of business or both). As a result, oil prices collapsed. The futures price for West Texas Intermediate crude touched a remarkable -$37 per barrel. Although beneficial for oil consumers, the Russia-Saudi Arabia oil price war was a reminder of the influence that state-driven oil producers still had over the world’s energy security.

New Energy, New Problems

But even as new technology has vastly expanded the availability of oil, it has also begun to undermine oil’s dominance as a transportation fuel. Advances in battery technology have made electric vehicles a practical alternative to traditional automobiles. And as electric vehicles have become more popular, the marginal demand for oil has ebbed, which has led some to believe that a shift from oil to electricity as the fuel source for the world’s mobility would bring an end to energy security concerns for good.[1] It will not. Just as access to reliable and affordable oil resources came to define energy security in the 20^th century, access to reliable and affordable minerals, which are used in modern electric-vehicle batteries, will occupy a larger share of energy security concerns in the 21^st century.

Already, those concerns have percolated as a single country, China, has gained control over much of the world’s production and processing of the cobalt, graphite, lithium, manganese, and nickel used in lithium-ion batteries, the type of electricity-storage devices favored by electric-vehicle manufacturers today. Though China does not have large reserves of most of these minerals within its borders, Chinese companies have been actively acquiring controlling interests in mines abroad, such as the Kisanfu cobalt mine in the Democratic Republic of the Congo in December 2020. Indeed, Chinese companies now control almost half of the DRC’s cobalt output, which constitutes over two-thirds of the world’s production. Perhaps of greater concern, China has come to dominate the refining and processing of those minerals. Eighty percent of the cobalt sulphates and oxides used for lithium-ion battery cathodes are processed in China.

China also processes all of the world’s spherical graphite, the processed form of natural graphite that is used for lithium-ion battery anodes. China’s monopoly can be largely attributed to its relatively low energy costs and less stringent environmental regulations. Traditional graphite processing is both energy intensive and highly polluting, using high-temperature furnaces and hydrofluoric acid to purify the mineral after it is shaped. While some companies in Australia, Canada, and the United States are developing new ways to create spherical graphite, none are yet in use on an industrial scale, ensuring that China will maintain its grip on spherical graphite production for several more years.

Though China controls a smaller share of the world’s production of lithium than that of other minerals, it has been buying up stakes in lithium mines around the globe.

China’s Tianqi Lithium now owns 51 percent of the world’s largest lithium reserve in Australia. In 2018, the company became the second-largest shareholder in Sociedad Química y Minera—the largest lithium producer in Chile. Another Chinese company, Ganfeng Lithium, has a long-term agreement to underwrite all lithium raw materials produced by Australia’s Mount Marion mine—the world’s second-biggest, high-grade lithium reserve.

And China has not stopped there. Moving up the value chain, it is expected to build 101 of the 136 lithium-ion battery manufacturing plants that are currently planned over the next decade.

China’s dominance over such strategic minerals is not, in and of itself, necessarily worrisome. But Beijing’s history of restricting access to those minerals makes it so. In 2010, China abruptly restricted its rare-earth metal exports to Japan, nominally to protect the environment. But after a lengthy review, the World Trade Organization ruled against China’s restrictions. Since then, worries about relying on China as a strategic-minerals supplier have continued to grow. Sometimes, China feeds those fears. In one 2019 incident, China’s state-run Global Times flaunted the country’s dominance over rare-earth metals as a strategic weapon against other countries with the headline “China gears up to use rare-earth advantage.” Such not-so-veiled threats from government-linked media only fan suspicions that China will behave no better than Russia or Saudi Arabia—and possibly worse.

Energy Secure at Last?

China’s control over much of the minerals used in modern electric-vehicle batteries has not escaped the notice of governments. In 2019, the U.S. Department of State launched the Energy Resources Governance Initiative to “promote resilient and secure energy resource mineral supply chains” for all kinds of renewable energy and battery storage technologies.  The initiative’s membership has grown to include Australia, Botswana, Canada, Peru, and the United States. Though it is too early to say what impact the initiative might have, it is clear that some governments have grown warier.

While electric vehicles may help to temper traditional energy security concerns, such vehicles will not entirely end them. Oil will remain an energy security concern as long as its products continue to fuel a major share of the world’s transportation. Meanwhile, electric vehicles have given rise to new concerns. From the perspective of energy security, what may be even more troubling is that the world appears to be swapping its old dependency on OPEC and Russia, a fractious bunch that until recently was losing power to American oil-shale upstarts, for a new one on China, a single country with a one-party government. Far from reaching energy security’s terminus, the world might be on the road to a more precarious place.

The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.

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[1] Fred Stein, “Ending America’s Energy Insecurity: Why Electric Vehicles Should Drive the United States to Energy Independence” Homeland Security Affairs, vol. 9 (February 2013).