2022 will be the year of “Energy Realism.” Spiraling natural gas and gasoline prices combined with the Great Texas Power Outage of 2021 have highlighted the need for greater care and planning of our path to a Green Energy Future. We need to maintain alternative/backup power sources. Abundant, low-cost, clean energy raises the living standard of everyone, so we need to be thoughtful, not reactionary, as the world sets and executes energy policy.
First, we need to maintain and even increase investment in natural gas and gas pipelines and distribution infrastructure. “Sacrilege,” many environmentalists will cry out. Still, natural gas replacement of coal has made an incredible impact on CO2 and other emissions in the last five years – a 50% emission cut, to be exact. More importantly, as Green Hydrogen becomes prevalent, natural gas infrastructure is easily converted to hydrogen transport. Economics and the cost of infrastructure matter. You can’t throw away trillions of dollars of infrastructure on a whim.
Green Hydrogen is ideal for long-haul transportation, industrial equipment (tractors, construction, etc.), aircraft, and solar power energy storage. Lithium-Ion batteries have too many drawbacks for these applications, and through 2030 there is a shortage of lithium to meet growing demand. Why the fuss over hydrogen? Because the energy cycle starts with water (H2O), and when we convert H2 (hydrogen) back to energy, it becomes water again - no other byproducts. Venture capital investments are generally an indicator of future success. VCs are making significant investments in green hydrogen technology. In 2022 more capital and more green hydrogen products will hit the mainstream. Here are a few examples:
Universal Hydrogen – working toward hydrogen-powered commercial flight
Nicola Motors – hydrogen-powered long haul trucks
EnerVenue – Hydrogen battery cells
And many more
In 2022 proponents of green energy will start accepting nuclear power as a necessary part of the green energy ecosystem. France already figured this out, while Germany is already reeling from its knee-jerk anti-nuclear policy decision (giving Russia economic leverage and wealth supplying natural gas). The new nuclear future will be based on small mass-produced reactors. Again venture capital is leading the way with Bill’s Gates TerraPower and NuScale Power as examples.
Nuclear fusion has been “20 years away” for the last 40 years, and government research seems to make progress as slow as molasses. As an example, compare NASA to venture-backed SpaceX. Venture capital has started placing massive bets on nuclear fusion. Case in point, Commonwealth Fusion Systems LLC raised more than $1.8 Billion at the end of 2021, hoping to demonstrate a working reactor in 2025 and commercial reactors in the early 2030s. VCs are backing a number of other startups worldwide. The race is on. Let’s hope competition and efficiency inherent in the VC model deliver the results.
My last prediction in energy for 2022 is that the US government will reverse course on oil production and pipeline investments to get energy costs under control (that and other geopolitical concerns, but I digress...). This in no way slows or inhibits the green energy revolution –the world was already on a course to greatly reduce fossil fuel use and remain on that course. Over the next two decades, green energy infrastructure will phase as older fossil fuel infrastructure is phased out - a gradual but relentless transition.
