The demand for lithium has exploded worldwide—up by at least 68% ^[1] in the past five years. If you’re unfamiliar with the reasons why, it’s easy to believe that its ‘New Gasoline’ ^[2] moniker is marketing hype. You might be right, but you’d also be wise to consider its possible truth.

Lithium is abundant and easy to refine. It’s also highly valued because it can be used in compact batteries that have a higher energy density than their predecessors, meaning that we can store and extract greater energy from less material. In December 2015, Goldman Sachs predicted ^[3] that the global lithium market could triple in size by 2025. Surprisingly, that forecast is conservative, driven only by the electric vehicle sector.

The lithium-ion battery in a state-of-the-art Tesla Model S ^[4] operates similarly to the lead-acid battery in your car, although here it also powers the engine, not just the auxiliary systems. Importantly, we must understand that whereas conventional cars burn fuel, running an electric vehicle doesn’t “consume” lithium. Instead, potential energy is stored in the battery. (Batteries work ^[5] by using the flow of ions to create electrical current; meaning that the scope for improvement lies in the materials used.) So when we talk about lithium-ion cells, we’re really talking about batteries that use specific compounds of lithium to transport charge, and that are distinguished from older cells by their charge-rate, capacity and mass.

Introduced by Sony in 1991 ^[6], the first commercial lithium-ion batteries evolved into sophisticated power sources for today’s smartphones. Improvement continues: a group from the University of California recently demonstrated a lithium-ion battery that outlives conventional batteries by a factor of 80 ^[7], while institutions like MIT look to different lithium-centric storage technologies. With twice the energy ^[8]density of lithium-ion batteries, lithium-air batteries ^[9] are set to join the revolution ^[10].

Of course, if the demand for lithium is said to be exploding, the hope is that the same adjective doesn’t apply to the batteries themselves. Unfortunately there have been high-profile incidences ^[11] of—yes, you guessed it—explosions ^[12]. Fortunately, we know that lithium batteries don’t tend toward spontaneous combustion, so critical failures can be traced to concrete causes: poor quality control ^[13] that engenders short circuiting, devices forced to operate outside of the ‘safe operating window ^[14]’, poorly integrated multi-battery systems ^[15], or inadequate protection from external objects ^[16]. Such issues can be addressed by more rigorous safety standards, aggressive inspections on the factory floor, more intensive consumer testing and education, and a better grasp of the pressures that incite manufacturing short-cuts.

If the economic indicators are right, production will continue escalating. The market forces are strong (PDF, p.17 ^[17]): phone batteries use about 1.1g of lithium; a single battery in a Tesla vehicle uses 11.9kgs, so even a small uptake here translates to big numbers in the global marketplace. In the race to compete globally, it’ll be the regulators struggling to keep pace. Companies will juggle innovation, profit margins and sales strategies with consumer safety and confidence; their efforts will be policed to some extent by the market, particularly as we see a company like Samsung lose billions ^[18] in revenue after product recalls, or as Tesla experienced reduced demand ^[19] following high-profile fires. Actually the Tesla example is instructive, as the company consequently self-regulated, voluntarily ^[20] increasing battery resilience, leaving each car safer ^[21]. But we should know better than to blindly trust the invisible hand… Countries like South Korea have taken the lead as they demand and enforce ^[22] greater governmental oversight, more consumer-oriented legal frameworks and safety measures encompassing stricter design standards and mandates like x-ray testing.

Lithium technology is also primed to play a more direct role in energy markets. Energy storage solutions provide redundancy in electrical networks and ensure that irregularly-produced renewable energy can be fed smoothly into the supply chain. Recent blackouts in South Australia ^[23] emphasise the need to guarantee baseload electricty. Lithium might be able to “solve” mass grid storage ^[24]; batteries are a viable contender, and given increasing ubiquity, have the advantage of incumbency. Successful industrial acceptance is possible ^[25]—but even if we don’t see widespread usage here, we’ll see skyrocketing domestic adoption, as innovations like the Tesla Powerwall ^[26] provide solutions to problems that previously slowed the home renewable markets.

Australia’s heavily dependent ^[27] on petroleum products refined in Southeast Asia, and has a dearth ^[28] of strategic oil reserves. Energy storage at home, coupled with portable solutions and evermore viable industrial-scale solar power, is an enticing prospect for national energy security and independence.

Evolving markets necessitate evolving policy, and a strategic understanding of new developments. For a start, Australia’s the world’s biggest producer of lithium (PDF ^[29], p.101). But there’s plenty of scope beyond mines: lithium batteries give us options ^[30] when it comes to energy storage in the next generation submarines ^[31], for example, championed by countries like Japan ^[32]. There will also be competition among suppliers that will have global implications. Vast mineral reserves in South America’s ‘lithium triangle ^[33]’ and in countries like Afghanistan ^[34] will combine with huge consumption in places like China ^[35] to mould key geopolitical dynamics in the coming decade.

‘White petroleum ^[36]’ is poised to leave its mark on a broad spectrum of commercial, economic, industrial and national interests. The world’s lightest metal is about to start punching even higher above its weight.