Brief # 116 Environment Policy
Title: The sobering reality of a post-carbon world starts with lithium
By Todd Broadman
May 17. 2021
The Biden Administration has recognized what previous administrations have not: that carbon-based energy has been destroying our planet and must stop, that greenhouse gas emissions must be reduced to net zero by 2050. Recognition is a major step forward. Government action to replace our fossil fuel economy with renewables is a colossal task and one that Biden aims to tackle.
What we know is that carbon-free energy is actually more mineral intensive than its oil-based counterpart. There are some 35 rare earth minerals that are key components to making the transition from fossil-fuels to clean energy. Lithium has recently garnered much attention for its essential role in the production of lithium-ion batteries that power our next generation of EV cars. (Other essential minerals include aluminum, cobalt, copper, and nickel).
As part of Biden’s 2.25 trillion-dollar American Jobs Plan (AJP), $174 billion-dollars is earmarked to address this mineral requirement – though indirectly through subsidies to the EV industry. It is wrapped in “mobilizing the country to meet the great challenges of our time: the climate crisis and the ambitions of an autocratic China.” And as its title suggests, millions of jobs are to be created along the new EV supply chain. The AJP also calls for $35 billion in related research and development investments that “address the climate crisis.”
The Plan is also framed as an industrial “race” against China. Specifically, a competition for dependable, self-reliant supply chain from sourcing of the necessary raw minerals like lithium to the manufacture of lithium-ion batteries, and finally the automobiles themselves. U.S. Energy Secretary Jennifer Granholm stated that, “the supply chains for critical materials like lithium and cobalt will determine whether we win or lose.”
Currently, 55% of lithium is sourced in Australia, and most of the remaining sources are in Latin America. With more than 50 lithium-ion “megafactories” in operation and another 60 or so planned, China controls the vast majority of lithium processing. Granholm underscored the importance of funding Biden’s Plan and national self-reliance: “[China] wants to be the go-to place for the guts of the batteries, yet we have these minerals in the United States. We have not taken advantage of them, to mine them.”
At 29 percent of total CO2 emissions, transportation is the single largest contributor, and what guides Biden’s EV policy.( In consideration is a 33% tax credit for anybody buying an electric car – up to $10,000. )A further 25 percent of CO2 comes from electricity generation and 23 percent comes from industrial use.
Consequently, demand for lithium is expected to grow 70 times over the next couple decades. But the supply from existing lithium mines and projects under construction can only meet about half the projected demand this decade. According to Fatih Birol, the executive director of the IEA International Energy Agency (IEA), “This [supply/demand] mismatch is something that worries us … our numbers show that the critical minerals are not a sideshow in our journey to reach climate goals. It’s a part of the main event.”
U.S.-based lithium and other mining interests are pressing the administration to accelerate domestic production and want lawmakers to insert a $10 billion grant program into Mr. Biden’s infrastructure bill, arguing that it is a matter of national security. These efforts are balanced by environmentalists, tribes and local groups who are taking legal action to block lithium mining development.
Of America’s 270 million inventory of cars, just 2 million are currently of the carbon-free EV variety. What we do know is that oil-based gasoline has 100 times the energy density of a lithium-ion battery utilized in electric cars. This disparity was factored into a recent University of California, Berkeley model which concludes that by 2050, with an EV transition, the U.S. will need almost 90% more electricity than it did in 2018. Their study looked at what it would take to make the power grid 90% carbon-free by 2035.
The administration must also be able to address environmental impacts of lithium mining and processing. The mining of metals continues to be the leading industrial polluter in the United States. A standard lithium mining practice is to mix the clay dug out from the mountainside with tons of sulfuric acid creating millions of cubic yards of mining waste that must be treated. Lithium processing requires an immense amount of water: 500,000 gallons of water per ton of lithium extracted.
Even if ways can be found to minimize environmental damage of lithium mining, there is the issue of lithium supply. One study found that in a 100% renewable energy future, demand for lithium could reach 280% of known deposits – deposits that are economically feasible to extract. A single EV manufacturer, Tesla, has a goal of selling 20 million vehicles a year by 2030. This volume alone would require more than three times the current total global lithium supply. To meet the projected demand from all auto manufacturers worldwide, our supply of lithium would need to grow six times.
Adding to this ambitious transition ahead, is the need for convenient, ubiquitous lithium-ion battery charging stations. In the AJP, Biden proposes $15 billion to begin rolling out electric vehicle charging stations, with the goal of reaching 500,000 charging stations nationwide by 2030. The American Energy Alliance reports that 500,000 charging stations “wouldn’t even amount to half of what is needed in California alone.” And we haven’t begun to practically address the electrification of larger trucks and buses.
Lithium and other essential minerals will play a crucial role on the road to decarbonization. The level of sacrifice ahead and scale of mobilization required by the American public is unprecedented, even through the historical lens of a Civil War, Great Depression, and couple of World Wars. If the country cannot be united in this effort, more will be lost than Biden’s second term in office.
https://gspp.berkeley.edu/ University of California, Berkeley School of Public Policy: a graduate school that prepares students for careers in public leadership.
https://www.americanenergyalliance.org/ a not-for-profit organization that engages in grassroots public policy advocacy and debate concerning energy and environmental policies.
https://www.iea.org/ The IEA is at the heart of global dialogue on energy, providing authoritative analysis, data, policy recommendations, and real-world solutions to help countries provide secure and sustainable energy for all.
https://www.eenews.net/ E&E News reports on energy and environment issues for professionals. It is staffed by a dedicated reporting team within the POLITICO newsroom.