A “New Joule Order” has arrived, ushering in a historic transformation in the way we think about energy. This shift is beginning to transform how the world uses energy. Through this new paradigm, energy becomes a type of capital, fundamentally transforming new political, economic, and social orders. This change is fueled by important international movements. Perhaps most clearly, America’s shale revolution and Germany’s sudden pivot in energy policy after loss of Russian gas supplies have been central.
Located within a context where energy issues are intertwined with rising global energy demands and geopolitical tensions, energy has become increasingly stratified, securitized, and politicized. The New Joule Order underscores the step away from moral simplicities that used to apply to fossil fuels, nuclear power and renewables. Rather, it emphasizes a new set of principles centered on risk portfolio management. This transition provides countries and investors the opportunity to assess energy sources by their level of return, but also volatility.
The shale revolution has fundamentally reshaped the domestic economy and labor market. Consequently, the energy consumption and investment picture has completely changed. In response, the U.S. has turned inward, prioritizing self-sufficiency and national interests above global obligations. This strategy is a striking turn from past decades when global stewardship was emphasized.
Germany’s recent about face on the energy transition highlights why this new approach is critical. As Russian gas supplies dried up, Germany began to see the dangers of depending on foreign energy sources. The country’s shift away from dependence on foreign oil is just one example of the many larger forces at play that are creating the “New Joule Order.”
Within this framework, energy is bifurcating into two distinct categories: fixed-return infrastructure and variable-return volatility plays. Fixed-return infrastructure, which behaves like bonds, offers low volatility, stable and predictable returns. On the other hand, variable-return volatility takes turns like casino gambles, involving higher risk and greater potential return.
In this brave new energy world, investors will need to be adept at both kinds of energy investments. They would have to learn the hard way, in fixed-return infrastructure. Simultaneously, they need to take advantage of the great high-risk, high-reward opportunities provided by variable-return volatility plays. As the landscape evolves, understanding these dynamics becomes critical for success in energy investment.
The doctrine of self-sufficiency is what fuels the “New Joule Order,” creating a glaring departure from past cultures. Countries like the U.S. are prioritizing their own energy needs over international obligations, creating a more insular approach to energy policy.
Now, China has mostly made itself the automatically chosen partner to fill that vacuum, leaving the U.S. behind. Over the past two decades it has quietly built its energy sovereignty. China’s centuries-long strategy involves cornering the world’s fuel stockpile, solar energy manufacturing, and battery supply chain. This shuffle from compliance to control underscores the iterative process of energy management in the “New Joule Order.”
“Hope doesn’t keep the lights on.” – New Joule Order
As China tries to create its own energy independence, its actions go a step further to highlight this new reality of global energy politics. China’s emphasis on control strengthens its hand in international markets. Concurrently, it establishes a proactive energy framework internally.
The “New Joule Order” represents a real departure in that focus. It prioritizes national interests and strategic management of resources, often taking precedence over cooperative international frameworks. This shift, more than any single force, requires countries to recalibrate their energy strategies with an eye toward a shifting geopolitical landscape.