The Role of Cheap Energy in Historical Advancements

Energy is the backbone of any economy. It powers industries, fuels innovation, and enables military capabilities. Throughout history, nations with access to abundant, cheap energy have often been able to outpace their rivals in economic growth, technological development, and military strength. This is because cheap energy reduces production costs, increases productivity, and allows for the scaling of infrastructure and defense systems. However, while energy is a critical factor, it’s not the only one—innovation, governance, and global trade dynamics also play significant roles.

England in the 20th Century: Coal and the Industrial Revolution

England’s dominance in the 20th century can be traced back to its leadership in the Industrial Revolution, which began in the late 18th century and accelerated through the 1800s. The key to this transformation was coal. England had vast coal reserves, and coal was the primary energy source for steam engines, factories, and later, electricity generation. This cheap and abundant energy source allowed England to:

Industrialize rapidly: Coal-powered machinery increased production efficiency, leading to the rise of textile, iron, and steel industries.

Expand its military: Coal-fueled steamships and railways enhanced military logistics and naval power, helping England maintain its global empire.

Improve social conditions: While the early Industrial Revolution had harsh working conditions, the wealth generated eventually led to improved living standards, urbanization, and advancements in public health and education.

By the 20th century, England’s early adoption of coal had laid the foundation for its global economic and military leadership. However, it’s worth noting that England’s success wasn’t just about energy—it also had strong institutions, a culture of innovation, and access to global markets through its colonies.

China in the 21st Century: A Multi-Energy Strategy

China’s rise in the 21st century is another example of how access to cheap energy can fuel national growth. China has invested heavily in a diverse energy portfolio, including coal, nuclear, hydroelectric, and renewable energy. This strategy has supported its rapid industrialization and military modernization:

Coal: Despite global shifts toward cleaner energy, coal remains a cornerstone of China’s energy mix due to its abundance and low cost. It powers much of China’s manufacturing sector, which is the largest in the world.

Renewables and Nuclear: China is also the world’s largest producer of solar panels and wind turbines and has invested heavily in nuclear power. This not only supports its energy needs but also positions it as a leader in green technology.

Economic Growth: Cheap energy has allowed China to become the "world’s factory," producing goods at a scale and cost that few can match. This has driven unprecedented economic growth, lifting hundreds of millions out of poverty.

Military Advancements: Energy abundance has also supported China’s military expansion, including the development of a blue-water navy and advanced missile systems.

However, China’s reliance on coal has come with significant environmental costs, and its energy strategy is now shifting toward cleaner sources to address pollution and climate concerns. Still, its ability to leverage cheap energy has been a key driver of its rise.

Other Historical Examples

To identify patterns, let’s look at other cases where cheap energy correlated with advancements:

United States (19th and 20th Centuries): The U.S. had abundant coal and oil reserves, which powered its industrial boom and military dominance. The discovery of oil in Pennsylvania in 1859 and later in Texas fueled the rise of the automobile industry and petrochemical sectors. Cheap energy also supported the U.S.’s role as a global superpower during and after World War II.

Germany (Late 19th Century): Germany’s industrialization was also coal-driven, particularly in the Ruhr Valley. This cheap energy source helped Germany become a leading industrial and military power by the early 20th century.

Japan (Post-WWII): Japan’s post-war economic miracle was fueled by access to cheap oil imports, which powered its manufacturing and export-driven economy. However, Japan’s lack of domestic energy resources made it vulnerable to oil shocks, as seen in the 1970s.

Counterexamples: When Energy Isn’t Enough

While cheap energy is a powerful enabler, it’s not a guarantee of success. Here are a few counterexamples:

Russia: Despite having vast oil and gas reserves, Russia has struggled with economic diversification and political instability. Its economy remains heavily dependent on energy exports, which makes it vulnerable to price fluctuations.

Venezuela: Venezuela has some of the largest oil reserves in the world, but mismanagement, corruption, and political turmoil have led to economic collapse despite its energy wealth.

Saudi Arabia: While oil has made Saudi Arabia wealthy, its economy is still heavily reliant on energy exports, and it faces challenges in diversifying and modernizing its society.

These examples show that while cheap energy can provide a foundation for growth, it must be paired with good governance, innovation, and strategic planning to achieve sustained success.

Social Advancements Driven by Cheap Energy

Access to cheap energy has also been crucial for social progress:

Electrification: In the U.S. and Europe, the spread of electricity in the early 20th century transformed daily life, improving health (through refrigeration and sanitation), education (through lighting and communication), and productivity.

Urbanization: Cheap energy enabled the growth of cities, as it powered factories, transportation, and infrastructure. This led to greater access to jobs, education, and healthcare.

Global Development: In the 21st century, access to affordable energy is seen as essential for lifting people out of poverty, particularly in developing countries. Energy powers schools, hospitals, and businesses, driving social and economic development.

The Big Cycles: Energy Transitions and Global Power Shifts

Looking at the broader historical cycles since the 1800s, we can see that energy transitions often coincide with shifts in global power:

Coal and the British Empire: The shift from wood to coal in the 18th and 19th centuries powered the Industrial Revolution and Britain’s global dominance.

Oil and American Hegemony: The 20th century saw oil replace coal as the dominant energy source, fueling the rise of the U.S. as a superpower.

Renewables and the Future: The 21st century may see a shift toward renewable energy, with countries like China and Germany leading in solar and wind technology. This could reshape global power dynamics once again.

However, energy transitions are slow and complex. For example, despite the rise of renewables, fossil fuels still dominate global energy consumption, and countries like China continue to rely heavily on coal.

Conclusion: Energy as a Catalyst, Not a Silver Bullet

Countries with the most advanced and cheapest energy supply "win" is largely supported by history. England’s coal-powered Industrial Revolution in the 19th century set the stage for its 20th-century dominance, while China’s multi-energy strategy has driven its 21st-century rise. Historical examples like the U.S., Germany, and Japan further reinforce this pattern. However, energy is not a silver bullet—Russia, Venezuela, and Saudi Arabia show that without good governance and innovation, energy wealth can be squandered.

Looking ahead, the next big cycle may be defined by the transition to renewable energy. Countries that can harness cheap, clean energy will likely have a strategic advantage, but they’ll also need to navigate the social and environmental challenges that come with it. So, while cheap energy is a powerful catalyst for national success, it’s not the only factor—innovation, governance, and adaptability are equally crucial in turning energy abundance into lasting prosperity. Cheap energy is a necessary component, but not sufficient.