2023 Energy Predictions
It’s a special edition of Path to Zero where Tucker looks into his crystal ball for 2023 as it pertains to energy. He explores 5 big energy topics and what he sees for the year ahead.
1. Energy Security
Instability in Europe and Ukraine reminds us that energy security is more than a common interest, it is a front-of-mind priority.
In 2023, will energy security be stronger than 2022? Likely not. Inflation will impact the utility and energy space in the coming year with spiking prices in response to turmoil. Abundant, domestically produced fuels like propane will resist inflation but gasoline, diesel and natural gas will continue their jagged climb upwards because demand continues to gobble up supply and refinery capacity continues to be crimped by hostile rhetoric and regulatory uncertainty.
We’re going to hear a lot more about the fragility of the grid in 2023. What people in the electric industry had feared for decades has come to fruition in recent months-the grid is an easy target to someone who knows what they’re doing. Sabotage is top of mind with the recent attack on a power station in North Carolina.
Extreme weather is going to continue, sometimes so extreme that transmission lines are going to fall.
So, the fragility of the grid is highlighted with every wildfire, with every windstorm and every tornado. As everyone piles on to electrify, where does that power come from? What does that do to the fragility of the grid?
3. Battery Electric Vehicles
We’re seeing massive investments from auto companies in EVs. The issue is, will batteries continue to grow? There’s a lot of talk about battery manufacturing and certainly America can manufacture batteries, but to manufacture them you need to have the supply chain. Batteries require three materials…lithium, cobalt, and nickel.
None of those things are really found readily and ready to use in America. You see a massive movement to begin investing in mines. Where is that going to happen? Even the most ardent supporters of battery manufacturing are not going to support a new mine in their backyard. Mining is probably many years away from really being something we talk about in the United States.
4. E-Fuels and Liquid Biofuels
We are seeing a completely new discussion for the first time around the value of liquid biofuels. It wasn’t that long ago where renewable liquid fuels were considered a thing of the past. But now we’re beginning to see for the first time those renewable fuels getting some love.
We also don’t talk much about e-fuels. That’s the short word for electrofuels, which are fuels that are made from combining hydrogen that comes from renewable sources with captured CO2 to make things like renewable propane. It’s all about carbon intensity and for the first time maybe 2023 will be the year we begin to get carbon intensity into the vocabulary of normal people to think about the implications of these new fuels.
The Inflation Reduction Act proved that incentives, not onerous regulations, are a great way to move toward a low carbon future. We’ll continue to emphasize that we need more incentives to get to workable solutions. We need to focus less on moon-shot shiny objects that get headlines but do nothing in the next decade to address carbon emissions.