Trend-spotting the hottest topics in energy

Top-5 hot topics when 2023 opened

1. US policy achievements
2. Mining of rare earth minerals
3. Energy security
4. Global emissions
5. Transmission infrastructure

Top-5 hot topics at the close of 2023

1. US Congress (and COP28) ineffectiveness
2. Mining of critical earth minerals
3. Global oil production resiliency 
4. Extreme weather hurts insurance industry
5. Loss of confidence in low-emission tech (OSW, solar, hydrogen, EVs, etc.)

Retrospective:
5 hot topics from 5 years ago (2018)

1. The US surpasses Russia and Saudi Arabia to become the world's largest oil producer.
2. Coal barely holds on as top source for generated electricity in the US (the last year).
3. President Trump makes clear that the US opposes the development of the proposed Nord Stream 2 natural gas pipeline from Russia to Germany.
4. President Trump's cabinet instability (Pruitt resigns and Wheeler takes over as Director of the EPA, US Secretary of Interior Ryan Zinke fights to save his job, etc.)
5. Arnold Schwarzenegger — former Terminator and California governor — sues the oil and gas industry for "First Degree Murder." ​

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​What does AES trend-spotting mean? Is the energy sector chasing fads? Or, is the sector finding alternatives within the fossil fuel sector (as opposed to alternatives to fossil fuel). Contact us for more information about our data-driven insights.

Top Energy Stories in 2023, by month

​JANUARY

• ​The National Ignition Facility at the Lawrence Livermore National Lab initiates a fusion reaction that produces more energy than it took to ignite it. This is the second successful fusion experiment, which means fusion is now an engineering challenge rather than a scientific uncertainty
• Domestic terrorists attack utility substations throughout the US (Washington, Oregon, North Carolina, etc.) on and around New Year's Day, 2023.  

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​FEBRUARY

• The US is on pace to set new oil production records in 2023 (it does); meanwhile, natural gas prices fall below $3 per million BTU. Note: this is an unusual market event (oil prices up but gas prices down).
• Global financial markets are down across all sectors and regions, except climate tech, which broke all venture deal value and activity records. Meanwhile, job growth throughout the entire energy sector surges. The fastest growing job categories in the energy sector are

                  1. Environmental Health Safety Engineer
                  2. Sustainability Manager
                  3. Energy Manager

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MARCH

• China approves the largest expansion of coal-fired power plants since 2015; meanwhile, President Biden approves the Willow Oil Project that permits drilling on federal land in Alaska (he reverses position in October).
• All evidence confirms that Europe has successfully transitioned away from Russian energy following its invasion of Ukraine one year prior.

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APRIL

• The IPCC releases its sixth and final assessment (an 8,000 page report). A summary of a few key conclusions:

1. Climate impacts are more widespread and severe than anticipated in the first assessment.
2. Some climate impacts are irreversible.
3. More investment in resilience is needed.
4. A person born in 1953 has experienced 0.85°C warming in their lifetime, but someone born in 2020 will experience about three times higher warming rates in the same time frame.

• The US Treasury Department and IRS formally introduce new bonus tax credits, especially for certain types of renewable energy projects.

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MAY

• There is more than 2,000 gigawatts (GW) of new power generation and energy storage waiting for permit approval; the total amount in the queue (~1,250 GW capacity) equals the installed capacity of the entire US power plant fleet. On the one hand, the amount of power in the queue confirms a transition is possible; on the other hand, most of these projects won't get built because permit approval takes too long.
• Congress is stuck in endless debate about the debt ceiling, but this time it is also a fight about climate change. Note: No Republican lawmaker voted in favor of Biden’s Inflation Reduction Act the year before, but more than half of the money distributed so far has gone to Republican districts.

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JUNE

• Bottlenecks in battery materials are preventing the sector from scaling. The 5 most significant material bottlenecks are, in order: 1. lithium; 2. fluorinated polymers; 3. battery-grade nickel; 4. graphite; 5. copper. Note: there are no bottlenecks for the global supply of cobalt.​
  
• Hydropower in the Western US sets all-time power production records (the snowpack is melting after a winter of record snowfall).

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JULY

• Monday, July 3, 2023, was the hottest day ever recorded globally; meanwhile, wildfires are widespread throughout Canada.​
  
• The US EPA increases the 2023 – 2025 biofuel blending obligations under the Renewable Fuel Standard (RFS). 

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AUGUST

• Declining GHG emissions in the US and Europe were offset by increasing emissions in China and India, leading to a flatlining of global atmospheric pollution through the first half of 2023. ​​(Note: GHG emissions from the power sector, the largest source of the world's emissions, are falling for the first time.)​
• Fire weather — drought followed by high-winds — cause wildfires on the Hawai'ian islands of Maui and the Big Island; meanwhile, the oceans are also the hottest they've ever been. 

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SEPTEMBER

• Because of the summer storm season, 14.6 million homes in the US have "unpriced" climate risk and are therefore overvalued; most are along the Gulf and Atlantic coasts and especially Florida. The property insurance market in the US Gulf Coast falls.​
  
• The worst-case climate scenario — a global mean temperature rise above 5°C — now seems unlikely, mainly because the US and Europe have reduced emissions.

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OCTOBER

• On October 7, Hamas launches a surprise attack into southern Israel; Israel retaliates. After ticking up a few dollars, the price of crude drops lower than the day before Hamas’s attack on Israel (wars in the Middle East usually send oil prices soaring, but now shale production in the US offsets geopolitical conflict).​
  
• The US DoE announces the seven Hydrogen Hub winners (H2Hubs).

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NOVEMBER

• Congress cannot agree on major appropriations bills (Interior, Transportation-HUD, Financial Services, Farm Bill, etc.). 
• ​Drought in Central America is limiting ship traffic through the Panama Canal, causing another supply chain "crisis."
  

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DECEMBER

• In H1 2023, interest in the offshore wind market surges in the US (especially California and New Jersey), then it recedes in the H2; EV sales also outperform projections in H1 2023 then decline in H2. Same trends with water heaters. On the other hand, US oil production (and global oil consumption), global natural gas production and consumption, mining for critical minerals, and global production of coal-generated electricity all set annual records (India is the fastest growing energy market).
• Meanwhile, the 28th Council of Presidents (COPS28) concludes with a few minor agreements.

One word to describe the energy sector in 2023

​'PYRRHIC'
A year of dubious climate "achievements"

It seems that 2023 was a year of pyrrhic energy choices. For instance, choosing "energy security" seems reasonable, except when it may contribute to the climate records set this year, such as: 
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• Hottest month in recorded history (July)
• Hottest average ocean temperature (101°F, in Florida Keys)
• Lowest Antarctic ice cover (1.6 million square km below 2022)
• Passing 2°C warming (November 17)
• Highest CO2 emissions (up 1.1% from last year's record)
• Highest atmospheric CO2 measurement (424 ppm in May)
• Warmest year in recorded history.

​What was the one word to describe 2022?

​The most common word submitted by AES Members in 2022 was "coercion," but our favorite was "ostrich."
 

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The word to describe 2021 was "vulnerable," which seems prescient.