America just swung a wrecking ball at the global trade system.
On Wednesday’s “Liberation Day,” President Trump unleashed a package of new tariffs — 34% on Chinese imports, 20% on European goods, and a 10% baseline tax on virtually everything else entering the United States. The post-World War II economic architecture that America itself designed? Trump declared it a system where America has been “looted, pillaged, raped and plundered.”
Wall Street is recoiling. Allies are stunned. But these tariffs aren’t just an isolated trade action; they’re the latest earthquake in a tectonic shift that is reshaping the global energy landscape. And if you’re trying to understand how it’s influencing energy markets worldwide, there’s a helpful new framework: the New Joule Order.
Jeffrey Currie, chief strategy officer of energy pathways at the global investment firm Carlyle, argues in a new analysis that we’ve entered a fundamentally different era of energy transition where security, not climate, has become the primary driver of clean energy investment.
In this week’s episode of Open Circuit, we explored how this security-driven paradigm can help us understand the next phase of the energy transition — and actually accelerate clean energy adoption faster than climate policies ever could.
For the past decade, the energy transition has been primarily framed around climate concerns. The 2015 Paris Agreement established targets for emission reductions. Corporations embraced net-zero pledges. Investors sorted assets into “green” versus “brown” categories.
The Paris Agreement “was really based a lot on international cooperation,” explained Open Circuit co-host, Katherine Hamilton. “Let’s have countries work together to reduce emissions and adapt to climate change. And as we know now, it isn’t really working very well.”
Renewables now make up 90% of all new power capacity additions globally, but countries are painfully far behind on their climate commitments. With collective climate action stalling, another shift is underway. “I feel like at this point we’re past having to talk about climate,” said Open Circuit co-host Jigar Shah.
Supply chains fractured during the pandemic; Russia weaponized natural gas to Europe; and America’s role in the global order is shifting radically. And amidst it all, countries everywhere are asking a different question: not just “how clean is our energy,” but “how secure is it?”
As a result, Currie argues that the “green premium” is being replaced by a “security premium” as nations race to insulate themselves from geopolitical energy risks — and that push for localization could actually be a more powerful catalyst for cleaner sources of energy.
The post-war order that built the oil age
Since World War II, the United States has played a unique role in global energy markets. Even when oil was being shipped between two countries with no American involvement in the transaction, U.S. naval power ensured those shipping lanes remained safe and open. This security umbrella allowed countries worldwide to depend on oil and gas imports without constant fear of disruption.
“If the dollar was the heart of Bretton Woods and the U.S. Navy its muscle, then oil was the lifeblood flowing through its veins,” writes Currie. “By shouldering the burden of global security, the United States enabled its allies — and eventually Russia and China — to structure their economies around a stable and predictable oil trade. Now, as that system unravels, the future of energy and geopolitics is entering uncharted territory.”
America’s position in the global energy landscape has fundamentally changed. The shale revolution transformed the U.S. into the world’s largest oil producer, which has altered the country’s incentive to protect global trade routes and promote liberal trade policies.
The consequences of this shift are profound. Countries that once relied on the American security umbrella are scrambling to reduce their vulnerability to energy import disruptions through localization and diversification of energy sources. “The green premium has already faded and the market is in search of a security premium,” Currie writes.
So what does that mean for the energy transition?
According to Currie’s research, the energy security era (from 1973 to 1993) following the oil shocks actually produced an energy transition that reduced fossil fuels from 94% to 85% as a share of total energy consumption. By comparison, the climate-motivated transition (from 2014 to the present) has only moved the needle from 85% to 81%.
Some of the strongest clean energy success stories are rooted in security. France didn’t build a low-carbon nuclear fleet to save the planet; it needed to free itself from dependence on Algerian hydrocarbons. And China isn’t dominating solar and battery manufacturing because of climate altruism; it saw the strategic value in controlling supply chains for those technologies.
“China did not build its enormous electrification economy based on the Paris Agreement,” Hamilton explained. “They actually started their transition in 2000 and their fossil fuel imports peaked in 2019. So they had been well on their way.”
Shah expanded on China’s motivation: “When I’ve traveled extensively to China and India and other places, those countries have local currencies and they have to buy all of their imported fossil fuels using U.S. dollars. And so they don’t have a surplus of U.S. dollars.”
For these nations, each dollar spent importing fossil fuels is a dollar that can’t be invested in productive domestic assets. “They could have bought AI equipment, they could have bought robots, they could have bought lots of things to make their economy more productive, but instead they were stuck buying fossil fuels,” he explained.
From ‘peak oil’ to ‘peak oil trade’
Currie also argues that we’ve likely already reached what he calls “peak oil trade.” While fossil fuels aren’t disappearing, the volume traded across borders peaked in 2017 and has since declined by 5%.
As Hamilton put it: “If trade is under threat, so are fossil fuels because they are so dependent on that trade.”
This is where Trump’s tariffs and the broader retreat from globalization become particularly relevant to energy markets. Local energy sources become more strategically valuable in a world of trade tensions. And renewables have a built-in advantage: no one can sanction your sunshine or blockade your wind.
For investors navigating this transition, Currie offers a new mental model that replaces the old “green versus brown” categories. He focuses instead on how assets make money in an unpredictable world — framing it as “tolling versus trading.”
“Tolling” assets work like highways collecting predictable fees. Solar farms, wind installations, and nuclear plants cost a lot upfront but then generate steady, reliable revenue for decades. “Trading” assets, by contrast, make money from price swings. Natural gas plants, battery storage systems, and upstream producers don’t simply collect fixed payments — they actively profit from price differences across time and markets.
A well-designed energy strategy needs both types. Tolling assets provide stability; trading assets offer flexibility. And together, they create natural portfolio diversification as they often perform well under different economic conditions.
The potent combination of security and climate
We’re still early in this new security-driven era, but it begs the question: could it actually be more effective at driving clean energy than one motivated by climate concerns?
Heightened trade tensions and security concerns in Western countries have become a dominant force in green industrial strategies. “Because of the Ukraine conflict, the Europeans who were saying ‘we’re happy to take cheap stuff from China and deploy it at scale’ are now rethinking the whole thing,” explained Shah.
But Hamilton emphasized we don’t need to choose between motivations: “I actually think it doesn’t have to be either/or. I think it’s going to be both.” Security and climate goals aren’t competing forces — they’re increasingly driving toward the same outcomes.
For investors trying to navigate this shifting landscape, Shah noted that the New Joule Order framework offers much-needed clarity: “Given that we’re not even a hundred days into the Trump administration, there’s a lot of investors who are just like, ‘what the heck is the framework right now? I’m sitting on my hands because I don’t understand what I’m doing.’ And so this paper provides a framework.”
What’s becoming increasingly clear, even amid uncertainty, is that in a world fragmented by tariffs, sanctions, and geopolitical tensions, energy technologies that provide self-sufficiency will command a premium. And for most countries, that means diversification toward renewables, nuclear, and domestic resources.
In that sense, Trump’s “Liberation Day” might inadvertently be pointing toward a different kind of energy liberation.
For more of Stephen Lacey’s conversation with Jigar Shah and co-host Katherine Hamilton, listen to the whole episode of Open Circuit.
