How Electrification is Replacing Fossil Fuels as the World’s Top Resource
For decades, oil has been central to the global economy, shaping geopolitics, driving industrial growth, and fueling transportation. But as the world undergoes the energy transition, electricity is emerging as the new strategic resource. The rise of artificial intelligence, electric vehicles, robotics, and other electricity-intensive technologies is driving a shift away from oil and toward electrification. This transformation is redefining energy supply chains, reshaping global power dynamics, and forcing nations to rethink how they secure their energy futures.
Global Electricity Demand to Increase by 4% Annually
According to the International Energy Agency, global electricity demand is expected to grow by 4% annually through 2027, driven largely by the rapid growth of data centers, EVs, industry, and other electrification efforts. In the U.S. alone, data centers are projected to consume 8% of total electricity by 2030, up from 3% in 2022. Electricity is becoming as strategically important as oil once was.
EVs are expected to make up 33% of the global new passenger vehicle sales by 2027, up from 17.8% in 2023, according to BloombergNEF. This transition is reducing reliance on oil while increasing demand for electricity. The rise of robotics and manufacturing is also accelerating the need for reliable, abundant power.
Geopolitical Implications: The New Energy Race
Just as oil has shaped global geopolitics for the past century, electricity is now a focal point of international competition. Nations are racing to secure their electricity supplies, invest in next-generation energy infrastructure, and dominate emerging technologies like AI and advanced manufacturing.
The U.S. is prioritizing grid expansion to support AI development and data center growth. AI requires steady-state power, which intermittent renewable sources like wind and solar struggle to provide at scale. As a result, the U.S. is increasingly turning to natural gas as a bridge fuel. Natural gas generates about 43% of U.S. electricity, with a 4.1% increase last year, making it the dominant electricity feedstock in the near term.
Meanwhile, Europe is also doubling down on natural gas to ensure energy security while transitioning away from Russian oil and gas. The EU has invested heavily in liquefied natural gas (LNG) infrastructure to support increased supplies. In 2023, the U.S. was the EU’s largest LNG supplier, making up almost 50% of total LNG imports.
The Future is Nuclear
For the next decade, natural gas will play a critical role in meeting the world’s growing electricity needs. It’s abundant, relatively affordable, and produces fewer emissions than coal. In the U.S., natural gas is expected to grow as the country ramps up AI and data center infrastructure.
But natural gas is a transitional fuel. To achieve long-term decarbonization goals, we need nuclear power. Nuclear provides the steady-state, carbon-free electricity needed to support AI and other high-demand technologies. The U.S. and its allies are investing in advanced nuclear technologies, including small modular reactors (SMRs), which could come online in the next decade. But until then, natural gas will be essential in securing the global electricity supply.
Electricity as the New Oil
The global shift from oil to electricity is reshaping energy, with far-reaching implications for geopolitics, industry, and supply chains. As AI, EVs, and robotics drive demand for reliable power, nations must secure electricity supplies and invest in next-generation infrastructure. As electricity becomes the new oil, the nations that can produce it most efficiently and reliably will emerge as the leaders of the 21st-century economy.
