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As has been my habit for a dozen years as a contributor at Forbes, it is time to conduct a midyear review of the annual energy predictions I made at the first of the current year in a piece titled “9 Consequential Energy Predictions For 2024.” It’s a little past time, actually, but a series of life events intervened. Better late than never.
So, let’s just review those 9 predictions in the order they were made and see how we’re doing so far:
Non-Tesla automakers will be pressured by investors to scale back EV plans further.
The basic premise of this prediction was that legacy automakers like Ford, GM and Stellantis would be forced by investor pressures to scale back and revise their EV development and production plans and goals.
This certainly has happened so far in 2024, with the most consequential shifts coming at Ford. After suffering massive losses in the first quarter of 2024, Ford management announced it would delay billions of dollars in EV-related investments, along with plans to scale back plans to introduce new battery electric car models in favor of introducing a set of hybrid cars instead.
GM has also moved to scale back and revise its own EV planning and production, and announced last month it was scaling back even more in response to slowing consumer demand for electric cars. For its own part, Stellantis announced layoffs of 400 workers in March as part of a cost-cutting program in its EV division and rolled out further cost-cutting measures last month.
With consumer demand for EVs continuing to soften, we can expect these and other automakers to continue scaling down their plans and goals across the remainder of 2024.
Renewable energy sources will keep growing, but growth will be tilted to solar more than wind.
This headline is self-explanatory, and again, there is no doubt it has been accurate thus far in 2024. The U.S. Energy Information Agency (EIA) reported in June that new additions of solar generation have not only outpaced wind growth in the first half of the current year, but solar has also grown faster than all other power generation sources. No surprises here.
The world will again use record volumes of coal.
Despite the spending of trillions of dollars by OECD governments on subsidies for alternative generation sources over the last 30 years, the world used a record amount of coal during 2023. My prediction in January was that, despite predictions by the International Energy Agency and others that coal usage would reach a “peak” in 2024, global coal consumption would reach a new record high this year, driven mainly by demand growth in non-OECD nations like China, India, Indonesia and other developing nations.
The jury remains out on this one, but stories about plans in both China and India for massive increases in their coal production, imports, and usage, along with rapidly rising global electricity needs due to AI and other factors indicates no such “peak” will be achieved anytime soon.
National energy security considerations will continue to be prioritized over international climate goals.
This prediction was really low-hanging fruit, given that nations outside of North America and Europe have consistently prioritized energy security needs over climate goals. If anything, this is a trend that has only become stronger in 2024.
US Energy policy and its future direction will become a central issue in the fall elections.
As I noted in January’s piece, energy and energy policy have seldom risen a truly key issues in any presidential campaign. And, true to form, the moderators of the June 27 debate between Donald Trump and Joe Biden raised the topic only tangentially in a single question focused on climate change. We will have to wait and see how the post-party convention general election campaign plays out to know whether this prediction proves accurate. I still believe that will be the case.
Global demand for crude oil will increase by between 2 million to 2.5 million barrels of oil per day during 2024.
In its most recent monthly Oil Market Report, the International Energy Agency (IEA) estimates that 2nd quarter global crude demand rise by 710,000 barrels per day year-over-year. But the IEA, OPEC, and other analysts have consistently expected 2024 demand growth to be stronger in the 2nd half of the year. If that proves to be the case, this prediction could turn out to have been accurate. We will have to wait and see.
The price for crude oil will not rise above $90 per barrel at any point during 2024.
This one has been accurate so far, with the price for West Texas Intermediate (WTI) reaching a high of $86.91 on April 5. The WTI price spent the first half of the year range-bound between $70 – $87 per barrel. With the global market for crude essentially in balance now and US producers still in a comfort zone in which strict capital discipline and growth through acquisitions are producing strong profitability, there is little reason to revise this prediction now.
The U.S. domestic rig count will continue to gradually drop.
Due to the same factors cited above, this one has also turned out to be entirely accurate through the first half of the year. The Enverus Daily Rig Count shows that the number of US active drilling rigs stood at a modest 642 on January 1, and has fallen gradually to 627 as of this writing on July 16. The count reached a high of 670 on January 28 and saw a low of 610 on May 23. It is possible the industry is close to reaching a bottom in this count after 4 years of decline, so we could see a modest turnaround during the 3rd and 4th quarters.
There will be no big spikes in gasoline prices during 2024.
In January’s piece, I wrote that the “factors combining to moderate oil prices by raising supply will in turn result in consumer-pleasing moderation and consistency in prices for gasoline at the pump.” Again, this has turned out to be accurate over the first half of the year. Data published by Statista shows the US average price at the pump for regular grade gas stood at $3.07 on January 1, peaked at $3.68 in late April, and stood at $3.52 on July 15.
So, no big spikes – just the normal ebbs and flows to be expected during a year in which global crude oil markets have remained unusually stable.
The Bottom Line
The simplest way to summarize this mid-year assessment seems to come down to ‘so far, so good.’ But we cannot know what the next six months will bring. It’s a long time to December 31, and with a presidential election heating up, some of these predictions that look good right now could turn out otherwise when 2025 dawns.
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