As the U.S. drives more miles in EVs and burns less fuel, American economics, environmentalism and politics all face a sea change. Also, why don’t we just store our energy in water?
We’re burning less gasoline for the first time ever. That’s a big deal.
There was a particular day over the past year or so that came and went quietly, but it’ll go down as one of the most pivotal moments in American history. That was the day of peak gasoline, when the U.S. burned more gasoline than it ever will again. (1)
With electric vehicles (EVs) taking over more and more road miles every year, the demand for gasoline has begun a long, slow decline. The Energy Information Administration expects daily demand to drop less than one percent over 2023 and to continue its decline gradually for the foreseeable future.
That doesn’t mean gas is going to get cheaper. Oil suppliers have already reduced refining capacity by a million barrels per day and are unlikely to take any action that’ll make gas cheaper. They also have little incentive to invest in refining infrastructure, so gasoline supply may drop quicker than demand as old refineries go offline, and nothing replaces them. That would translate into future price spikes and short-term profits for the industry but would probably accelerate the switch to EVs.
The oil industry is not pulling up stakes, however. The industry is exploring ways to manufacture more plastics with all the oil and gas not being used for transportation and power. (2)
But the reduced demand for gasoline will have much broader implications for the U.S. than what we pay at the pump. Climate policy, health and longevity, international and domestic politics, national security, regional employment patterns and even population migration have been driven by our gasoline consumption for close to a century. How those issues react in the coming years will drive much of our policy choices during the energy transition.
The decline is the culmination of a great deal of work from regulators, environmentalists and other advocates. With transportation as the largest contributor to greenhouse gas emissions in the U.S. (2), the shift signals real progress in the fight to combat climate change and air pollution.
And just like the actual day of peak gasoline came and went without notice, the consequences of the U.S. turning away from gasoline will not be immediately obvious. But the effects will be felt long into the future.
1. Peak gasoline! Demand in U.S. is in decline as climate policies take hold, Bloomberg
2. Big Oil Is in Trouble. Its Plan: Flood Africa With Plastic, NY Times
3. Carbon Pollution from Transportation, Environmental Protection Agency
Pushing water uphill to save money and energy
Energy storage is big business. It seems that each passing week brings another announcement of a billion-dollar investment in battery manufacturing in the U.S. And it makes sense. Lithium-ion batteries are the rising star of the energy world, with 13 gigafactories expected to come online in the next couple years. (1) The Inflation Reduction Act created a bunch of incentives available only for batteries manufactured and sourced in the U.S.
As the world shifts from fossil-fuel-based electricity to renewable energy, the need for energy storage is going to continue to rise. That’s because solar and wind energy is generated at different times of days than we demand it for our homes and manufacturing. Finding a way to save up the energy from the noonday sun to cook our late evening dinner is one of the biggest challenges for utilities as they shift from burning fossil fuels to generating energy through renewables.
But it turns out that the vast majority of America’s current utility-scale energy storage doesn’t require high-tech factories, lithium or even advanced chemistry. According to the Energy Information Administration, 93% of all utility-scale energy storage in the U.S. comes in the form of good, old-fashioned water pumped up a big hill.
Pumped storage hydropower (PSH) isn’t stored as electricity, but as water that has been pumped into a reservoir above a generator. When the power is needed, the water flows through the generator and voila! Electricity!
PSH is pretty efficient, coming in at between 70% and 80%. (Lithium-ion batteries do considerably better, clocking in at around 95% efficiency.) There’s nothing theoretical or unusual about PSH — the Energy department lists 46 active utility-scale sites around the U.S., and says it accounts for 21 gigawatts of energy storage currently.
The water comes out of the process none the worse for wear, so the storage process itself has minimal environmental impact.
So PSH is efficient, proven, safe, and environmentally friendly. Why aren’t we using more of it?
As any realtor will tell you, “Location! Location! Location!”
PSH requires access to a lot of power, water and space, along with a very steep incline. Although PSH is efficient, the problem is that flowing water isn’t very energy dense. So, it takes a big body of water to store enough energy to make the whole process worthwhile. And however much water you are using, you need space for twice that much — one reservoir above the generator and one below. Even when PSH power plants are built on rivers, they require a dam and a reservoir in order to manage water flow.
Storing the water higher gives the pumped water more potential energy, meaning a tall, steep hill makes the best setting.
And of course, there needs to be a nearby source of inexpensive clean energy to power the whole process. The International Hydropower Association has maps of both existing facilities and sites around the world that are well suited for PSH storage.
With solar energy now the least expensive energy source, look to see more PSH entrepreneurs taking advantage of solar’s flexibility and lower-environmental impact. If a PSH facility is powered by renewable energy, it has the potential to supply clean energy through the night without the use of lithium or other expensive materials.
The Weekly Sunsong
Singer/Songwriter Hannah Robuccio wants to know which you would choose if you had a choice between water and gasoline. As we celebrate a drop in gasoline demand and we consider the viability of water-based energy storage, we know which way we’d go.