President Joe Biden is pushing for more green energy storage to get us out of the gasoline crisis. He’s encouraging the American special minerals industry to increase production. Biden wants more lithium, nickel, cobalt and other metals to come from the U.S. to help fuel more domestic manufacturing of batteries that power electric vehicles.
More electric vehicles mean less demand for gas, which means less reliance on oil from other countries, particularly important when gas prices are high, like they are now. I spoke with Leah Stokes, who teaches energy and environmental politics at the University of California, Santa Barbara. She explained the old-school law Biden is using to address this modern problem.
Leah Stokes: There is an act that goes back to the 1950s called the Defense Production Act, and it gives the president the power to direct some of the economy. In this case, what [Biden’s] going to do is say, “Hey, we want to build more batteries. So we want companies that build batteries to do more of that, so that we can invest in them, provide grants, loans, etc.” So what it’s doing is sort of directing our economy to do more on clean energy faster.
Kimberly Adams: The Defense Production Act can be used to require companies to do things. President [Donald] Trump used it to order General Motors to make ventilators at the height of the pandemic. Why not order mining companies to open more mines or do more at the ones that are already open?
Stokes: Well, that’s a little bit like what the president is doing. The Defense Production Act doesn’t have to be coercive, it can be kind of voluntary. And I think that’s more the approach that the Biden administration is taking. They’re not, like, taking over a mine or requiring a company to do something. They’re saying, “Hey, we want to do more of this. We’re going to create a market for it, we’re going to invest in it. We want you to move faster.” And the reason why they’re doing that is because Russia has invaded Ukraine illegally. That has driven up oil prices around the world, including in the United States. And the Biden administration knows that true energy independence is about getting off of volatile, expensive and dirty fossil fuels and moving towards clean energy.
Adams: Bloomberg is reporting that the administration is offering something like $750 million to expand operations and conduct feasibility studies. What does that mean, and how much impact could it have?
Stokes: The idea is that they want to increase the amount of domestic manufacturing of batteries. We need more of these critical minerals like lithium. And so the federal government is using some money to help companies in the United States scale up their operations so that we can make more batteries for electric vehicles, for grid battery storage, so that we can power the clean energy transition faster using Made in America materials. And that has other benefits, like increasing employment. And one of the parts of this directive is also about making sure that there are good labor and environmental standards that go along with this. So hopefully, a good chunk of these jobs might be good paying, even unionized jobs.
Adams: How do you think this move by the Biden administration will impact the speed of private investment in the space?
Stokes: The federal government is really good at sending a signal to the market. That is going to make private companies go even faster, to invest more of their dollars, to hire more people. And I think you can already see this because several of the companies that are doing this kind of critical mineral work, their stock prices went up before and during this announcement.
Adams: We at Marketplace have talked a lot about lithium — in particular, lithium mining and how environmental concerns have made it difficult to run some of these mines sustainably. What are the risks in trying to ramp up production of these minerals so quickly?
Stokes: Well, my view is that the risks of climate change are very big and very known. So if we want to take on the climate crisis, we have to get off fossil fuels. And the way to do that is through clean energy and electrification. And clean energy and electrification require more batteries. They need us to use electric vehicles, to use grid-scale battery storage. And so, yes, there are going to be some environmental impacts from the clean energy transition. But those environmental impacts are a lot smaller than the impacts from fossil fuels, which include really bad health implications through air pollution, particularly in communities of color.
Adams: What other climate technologies has the administration hinted it might deploy the Defense Production Act for?
Stokes: In the fact sheet accompanying the president’s announcement, there was a reference that they were probably going to use the Defense Production Act again for something like heat pumps. And the president actually said “heat pumps” in a speech — probably the first time a president has done that. What is a heat pump? A heat pump is an efficient electric appliance that can both heat and cool your home. So it replaces your dirty gas furnace as well as your air conditioner. And it’s a really amazing technology that more and more Americans are excited to install in their homes. But we need more domestic manufacturing of these technologies so that the price can come down and so that they’re really easily accessible. And so the president has signaled that he may be investing in heat pump manufacturing through the Defense Production Act in the near future as well.
Adams: From this announcement to you and I seeing it in our day-to-day lives, what kind of timeline are we talking about?
Stokes: Scaling up manufacturing takes time. We saw the Defense Production Act used for masks and ventilators during the pandemic. And that even took some time. But of course, the president also said there’s one other critical ingredient to that happening, and that is the Senate needs to pass the $555 billion in clean energy and climate investments that have already passed the House.
Related links: More insight from Kimberly Adams
The White House put out a fact sheet with more details on the steps it’s taking to deal with high gas prices. It’s a two-part plan to move toward energy independence by speeding up the transition to cleaner energy options, but also to immediately increase the supply of gasoline by releasing oil from the Strategic Petroleum Reserve and asking Congress to pressure oil companies to pump more oil here in the U.S.
The “How We Survive” podcast, from former “Marketplace Tech” host Molly Wood, explores one of the minerals in high demand for use in EV batteries: lithium. Molly visited a proposed, and controversial, lithium mine in Nevada as well as the Salton Sea in California, where entrepreneurs are trying to use superhot, corrosive brine to get the lithium we need to electrify the world — and hopefully ease the climate crisis.