Is the United States an "oil nation" or an "electricity nation"?
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"Electricity nation" and "oil nation" are two concepts that have frequently appeared in international energy and geopolitical discussions in recent years. Where exactly is the boundary between the two? If China is a typical "electricity nation," is the United States under Trump becoming a new type of "oil nation"?
This article uses China, the European Union, Saudi Arabia, Russia, and the United States as coordinates to outline three distinct prospects for fossil fuels: China and the European Union are moving towards electrification, Saudi Arabia and Russia, as traditional oil-supplying countries, are facing changes in global demand, while the United States, with its huge oil and gas supply and massive domestic demand, may choose to "lock in" the 20th-century hydrocarbon energy model. 
(Image caption) Oil-producing countries vs. Electricity-producing countries
From Conceptual Enthusiasm to Conceptual Caution
Sometime last year, academics and the public began to consciously distinguish between "electricity countries" and "oil countries." China is a prime example of an "electricity country." As for the United States under Trump, it almost deliberately flaunted its support for fossil fuels.
The result was a surge of headlines and commentaries comparing "electricity nations" to "oil nations." The title of my lecture in the *London Review of Books* last autumn also represents my contribution to this type of writing. (Editor's note: The lecture, titled *Electrostates, Petrostates and the New Cold War*, can be viewed in the original newsletter.)
Subsequently, I became increasingly concerned about the continued generalization and misuse of this comparison. Because, although it is quite appealing to editorial writers, this distinction still needs to be handled with great care.
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What is a "power nation"?
If a country derives a high and continuously increasing share of its total final energy consumption from electricity, it can be called an "electricity country".
This contrasts with another social structure that still largely relies directly on the combustion of natural gas, oil, or other fuels for energy, whether for industrial or domestic use, or for cars, trucks, ships, and airplanes.
The form in which energy is delivered to the end user is of great significance. This is because, in the context of the clean energy transition, a core slogan is "electrify everything." Electricity is an energy form for which we have already mastered clean production methods.
Admittedly, in most parts of the world, electricity production itself is still far from "clean"; but it is the prospect of energy transition that gives special importance to the issue of "electrification" and injects strong momentum into the concept of the "electric nation".
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Why is China often regarded as a typical "electricity country"?
China is often singled out as a typical example of an "electricity nation." It has been continuously increasing the proportion of electricity supplied in the form of final energy consumption.
Meanwhile, renewable energy has become China's fastest-growing source of electricity generation over the past five years. Furthermore, Chinese manufacturers dominate the electric vehicle industry, making the prospect of internal combustion engines being rapidly replaced clear.
High-speed electrified railways will compete with air transport for cross-regional travel within China. Furthermore, China is undoubtedly a mixed economy where the state plays a crucial role. Therefore, China almost perfectly fits the characteristics of a "power nation." 
(Image caption) China: A typical example of an electricity-rich nation
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Electrification is not a Chinese patent
But a little thought reveals that the development landscape of "electricity nation" is not inherently limited to certain specific countries.
In the past, when coal and hydropower were the cheapest ways to generate electricity, and natural gas could not be transported over long distances except through pipelines, mountainous countries with suitable rivers and countries rich in coal reserves had an advantage in electrification.
However, the emergence of liquefied natural gas, along with the development of renewable energy and battery technology, means that electrification has now become a path that can be chosen by any place and any country.
Who wouldn't choose electricity, which is so versatile, especially when it can be provided by clean and inexpensive energy sources?
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The world is moving towards the electricity sector, just at different speeds.
The Soviet Union was once a powerhouse in electrical engineering, and China's first generation of electrical engineers received their training there. Brazil is known for its hydroelectric power. The Gulf states have also long been keen to import Chinese solar panels and batteries.
In the United States, Texas is a leader in power plant-scale renewable energy generation. For a significant portion of the day, the nation's largest oil and gas producing state relies heavily on solar and wind power, supplemented by batteries, for its power grid.
This illustrates that whether a country produces large quantities of oil, natural gas, or coal does not necessarily preclude it from becoming an "electricity nation." The key lies not only in resource endowment, but also in governance capacity, industrial structure, power grid capacity, and policy choices.
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AI computing power is amplifying America's electricity bottleneck.
Hyperscale AI companies are projected to invest $650 billion in computing power by 2026. They are eagerly anticipating building America’s “electricity nation” infrastructure.
The problems they face are not just that the United States refuses to import the cheapest Chinese solar panels and wind turbines, nor that the United States under Trump is generally undermining the development of renewable energy.
More importantly, regardless of who is sitting in the White House, the entire process of expanding, connecting, and interconnecting the US power grid has severely malfunctioned, to the point that even if new power generation capacity is built, it cannot be efficiently connected to the system.
In short, any economy can become an "electricity nation." The extent to which a country becomes an "electricity nation" is not reflected in its basic resource endowment or its economic structure itself, but rather in the degree of rationality in its economic and governmental governance.
It is more like a composite indicator for measuring whether an economy has the capacity for modern economic and technological development.
The United States is not not an "electricity nation." It certainly is. It's just that on the road to a new era of ultra-low-cost electricity, the United States has moved forward hesitantly rather than swiftly. 
(Image caption) The US Energy Paradox: Oil and Gas, AI Computing Power, and Grid Bottlenecks
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So why is the United States called an "oil nation"?
Nevertheless, a growing trend lately has been to refer to the United States as an "oil nation." And this term is usually not well-intentioned.
Why?
The shale oil revolution has made the United States the world’s leading oil and gas producer and a major exporter. However, the term “oil nation” is usually used to refer to economies and countries that rely on oil and gas for rental income, added value, export foreign exchange earnings, or government revenue, and often all of these.
In other words, being called an "oil country" usually means that the country has a relatively low level of economic development or a low level of governance.
This designation applies to economies like Angola. It could also be reasonably used for Gulf countries, despite their efforts in recent years to diversify their economies.
According to official sources, oil and natural gas account for "only" about 40% to 50% of Saudi Arabia's economy. Saudi Arabia is not a city-state, but a country with a population of 32 million.
To put it mildly, it's acceptable to call Russia an "oil-producing country," especially considering its government revenue and export profits.
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In the classic sense, the United States is not actually an "oil-producing country".
However, if we look at the classic meaning of this concept, applying it to the United States is not entirely valid.
The American Petroleum Institute claims that the oil and gas industry contributed $1.8 trillion to the U.S. GDP in 2021, accounting for approximately 7% to 8%. In Texas, the oil and gas industry accounts for about 15% to 16% of GDP. This is certainly considerable, but not enough to make Texas a "petroleum nation" in the strict sense.
If commentators and politicians insist on referring to the United States as an "oil nation," it's largely for political reasons. It's a "discourse construction," not a self-evident economic fact.
The dominant position of the U.S. fossil fuel lobby needs to be explained, rather than taken for granted.
As for its comparison with "electricity nations," this is even more true: Texas accounts for 42% of the United States' oil and gas production, but it is also the largest producer of renewable electricity in the country and a pioneer in the deployment of battery energy storage.
Why? Because it makes economic sense.
Competitive oil and gas producers like those in Texas or Saudi Arabia do not have the right to waste resources. In fact, a highly active oil and gas sector in a regional economy often drives up costs in other sectors—a phenomenon known as "Dutch disease." This, in turn, incentivizes other sectors to find cost-saving methods, such as using cheap and clean electricity. 
(Image caption) Prospects for three fossil fuels
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What makes the United States truly unique is its demand side.
What truly makes the United States stand out as an oil and gas producer and gives the term "oil nation" some relevance is not primarily the supply side, but the demand side.
The United States is not only the world's number one oil producer, with a daily output of more than 13 million barrels, but it is also the world's largest oil consumer, with a demand of approximately 19 to 20 million barrels per day, accounting for about 20% of global demand.
In comparison, China consumes 15 to 16 million barrels per day, but its domestic production is less than 4 million barrels. The EU consumes approximately 10 million barrels per day, while its production is less than 500,000 barrels per day. Saudi Arabia produces approximately 9.5 million barrels per day, while consuming only around 3.5 million barrels. Russia produces slightly less than 9 million barrels per day, while consuming approximately 3.9 million barrels.
This has led to three different positions on the outlook for fossil fuels.
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First scenario: China and the EU become electricity nations.
Both China and the EU have good reason to seek to replace imported oil with domestically produced clean electricity.
This is precisely why China's development logic as a "power nation" is so convincing. And for this reason, it is quite puzzling why Europe has not pursued this direction with greater力度 (intensity/effort).
In any case, the general trend seems quite clear: the EU and China will increasingly move towards the "electricity nation" model. 
(Image caption) Political choices for closed oil-producing countries⸻
Second scenario: Saudi Arabia and Russia's supplier dilemma
Saudi Arabia and Russia face a different dilemma.
As suppliers, they are indeed "oil-producing countries"; however, because their production far exceeds local demand, they ultimately have to rely on global markets to absorb their output.
They can cultivate and "lock in" global markets by building infrastructure such as pipelines, LNG terminals and refineries; but ultimately, they are competing with other forms of energy, especially electricity, on price.
Dependence on external demand, and often on external capital and technology, is a common characteristic of classic "oil-producing countries." With China and the EU moving towards decarbonization, the outlook for fossil fuel demand remains uncertain.
This gives classic "oil-producing countries" a strong incentive to shift their economies away from fossil fuels. Wealthy producing countries, such as Saudi Arabia, rather than Iraq or Angola, have sufficient funds to invest, and clean and affordable electricity is clearly a logical path.
Therefore, Gulf countries are investing in China's renewable energy industry. Their future development trajectory is more likely to resemble that of "oil-producing countries with national electricity sectors."
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A third possibility: The United States may lock itself into the fossil fuel model.
What makes the United States a unique "oil nation" is not just its massive oil and gas production, but also the fact that this supply corresponds precisely to an even larger domestic demand.
This gives the United States an option: since supply and demand are largely matched, it could very well decouple from the global trend toward green electrification and "lock in" a national or continental model based on hydrocarbons.
This is not the most obvious path. For the United States, the more obvious path should have been to choose a different hybrid economic model than that of Russia or Saudi Arabia, namely, to maintain a large hydrocarbon sector while gradually transitioning to a greener "electric nation".
This is precisely the "all-in-one" model favored by the Obama and Biden administrations.
But Republicans and Trump do not support this path. For ideological reasons, they oppose a hybrid model that combines fossil fuels with electric technology.
This is an unusual political choice. But unlike elsewhere in the world, in the United States, it is at least a conceivable option.
In a way that defies conventional logic, the United States is precisely because it is large, wealthy, and complex enough that it has the capacity to freeze the late 20th-century model for the foreseeable future.
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Natural gas-fired power systems: a viable but inefficient fallback.
If this happens, efforts to electrify transportation will be halted. Internal combustion engines will continue to rely on domestically produced oil or cheap imported oil.
If renewable energy is excluded from the power system through regulatory orders, the United States may even revert to the natural gas-based electrification model of the early 21st century.
For the United States, a natural gas-based power system is indeed a realistic option.
From a marginal perspective, this model is less efficient than the model where the proportion of renewable energy is constantly increasing. However, its main obstacle is not entirely economic, but rather that the United States lacks the capacity to produce enough gas turbines and the ability to rapidly integrate new capacity into its grid.
Although few people put it so bluntly, it is this underlying concern that keeps the notion that "the United States is an oil-producing country" circulating.
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If the United States becomes a "closed oil nation"
If this were to happen in the future, its significance would lie not only in the direct consequences themselves, but also in how it would disrupt our usual understanding of cause and effect.
After all, the term "oil-producing country" was originally based on a naturalistic economic development model that believed that economic development was driven by resource endowment.
Because these countries are defined by their natural resources, "oil-producing countries" are, in a sense, considered more "primitive" than diversified economies that survive and thrive by finding their niche in the international division of labor.
However, if the United States chooses to use its abundant fossil fuel resources and its economic size to freeze the status quo established in the early 20th century, and thus become increasingly out of touch with the global trend of electrical technology development, it will no longer be a natural fact, but a political choice.
In this way, the United States will become a pioneer of a new type of "closed oil nation".