Will batteries usher in a new era of global energy sovereignty?

Originally published in TechCrunch

Look around you. Batteries power nearly all the devices we depend on throughout our lives.

As the world shifts toward a more sustainable future driven by electrification, batteries are more important than ever. The complex dynamics of global policies, supply, and innovation will impact the battery industry in the coming decades.

How will nations and governments perceive the future of electrical energy? And what role will technology innovation play?

We must reflect on our past with fossil fuels as our primary energy source. The United States’ dependence on oil has long influenced its domestic and foreign policies. Should we expect the same with the future of batteries?

Lessons of sovereignty learned from the petroleum industry

In 1938, Standard Oil of California (the precursor to Chevron) discovered one of the world’s largest oil reserves in Saudi Arabia, catapulting the Arabian peninsula to one of the top economic priorities for energy security.

In 1945, in an iconic meeting, President Franklin D. Roosevelt met with King Abdul Aziz of Saudi Arabia on a U.S. Navy destroyer, highlighting the importance of the new energy source to U.S. strategic interests. This led to decades of U.S.-Saudi relations and the formation of the Arabian American Oil Company (Aramco), which today has a market cap in excess of $2 trillion.

As the petroleum industry flourished, nations around the globe started asserting their rights to economic interests. In September 1960, five major oil-producing countries — Saudi Arabia, Kuwait, Iran, Qatar, and Venezuela — founded the Organization of the Petroleum Exporting Countries (OPEC) with the purpose of championing “the inalienable rights?.?.?.?of all countries to exercise permanent sovereignty over their natural resources.”

As oil shortages wreaked economic havoc in 1973, the U.S. mandated strict fuel efficiency standards for new automobiles and established the strategic petroleum reserve. Arguably, the U.S. has a global naval presence today to maintain the security of energy.

The war in Ukraine and its impact on natural gas supplies to Europe brought back to prominence energy independence. U.S. Congress has passed no less than 25 energy acts over the past century. The most recent, the U.S. Inflation Reduction Act (IRA) of 2022, sets the guidelines to guarantee energy security for batteries.

The question is: Will electrical energy, and in particular, stored energy in batteries, be subject to the same global economic and geopolitical forces that shaped fossil fuels? How long before nations with mineral deposits critical to the battery industry come together to create the Organization of Battery Exporting Countries or something similar, to assert their rights to sovereignty over their natural resources?