The key to a cleaner energy future is batteries. Regular listeners will know I’m a little obsessed with this topic. Now, I’m not alone. Last week, General Motors confirmed plans for a new battery production plant somewhere in the U.S. And last month, President Joe Biden ordered a review of the domestic supply chain for large-capacity batteries.
Right now, most of the materials for making batteries come from other countries. But many of those metals, including lithium and cobalt, can be found here in the U.S. I spoke with Chris Berry, a strategic-metals consultant and president of House Mountain Partners. The following is an edited transcript of our conversation.
Chris Berry: A lot of people, when they hear lithium or cobalt or rare earth elements, they think that these resources are rare. And they’re actually not. I mean, you could actually extract lithium from seawater if you had the right technology and the incentive price was high enough. You really need three factors to line up to make things happen in the United States. No. 1 is you need ample capital. No. 2 is you need political will. And the third factor is time.
Molly Wood: Let’s tease those apart a little bit. So the capital, in some ways, that’s happening. Does there need to be a commensurate investment from the United States? Is it all private capital? Could a carbon tax play into this?
Berry: Yeah, I think the majority of the capital that is going to build out the supply chain is going to come from the capital markets themselves. I think the government will really be there to backstop some of these strategic projects. But I would not expect the U.S. government, whether or not it’s specific departments like Energy or Defense, to match the scale of capital in the private markets.
Wood: And then what are the political hurdles to establishing like a new manufacturing industry in the United States? That seems like sort of a no-brainer, actually.
Berry: The challenge has always been: How do we build these mines? “Mining” is, quite frankly, it’s been a dirty word in the United States for a long time. You have that sort of NIMBY view, where it’s great to have access to the raw materials, whether or not they come from the [Democratic Republic of the Congo] or from China or areas of South America. But we’ll mine it elsewhere, and we’ll import it here into the United States. And my view has always been that security of supply of the raw material is the most important piece of this supply chain.
Wood: It’s interesting, though, because “mining” has not just been a dirty word, it’s been a dirty practice. And so I wonder, could the prospect of doing that domestically help to clean up that industry writ large?
Berry: Yeah, I think that’s a great point. And I completely agree. One of the things that I think we really learned from COVID-19 and from the U.S.-China trade war was it exposed weaknesses in existing supply chains. One of which was, again, we’re really not sure about mining practices in countries like China. And I just use them as an example because they’re sort of the 800-pound gorilla when you talk about these supply chains. But the more of that supply chain that we can bring home and put a fresh set of eyes on it, you can kind of rest assured as a consumer that you’re utilizing Western technology to mine and refine these materials. It may be a little bit more expensive, obviously, because of labor costs in particular. But again, I think that’s probably the price that we’re going to pay to make sure that there is full accountability along the supply chain, which is what consumers and governments alike are all looking for right now.
Wood: If this third aspect is time, there is research happening now into creating different types of batteries. Do you think that if we put in a big effort to get supply chains here in seven-plus years, we could have moved on to other materials, then lithium by then?
Berry: For automotive capabilities, I don’t think anything is going to take the place of lithium-ion for the next 15 years. And there is a fair amount of [research and development], in particular going into what I would call next-generation lithium-ion. But I wouldn’t think you’d see really quantum leaps in lithium ion before 2025, maybe 2027 at the earliest. So the time is now to build out this infrastructure.
Wood: Do you think it’s going to happen? How do you feel about this moment?
Berry: I think, if we want to use a baseball analogy, we’re sort of at the second inning here. I think that what’s going to happen over the next decade is mobility, in particular, is going to be completely transformed. I think that the lithium-ion battery is going to get much cheaper in terms of dollars per kilowatt-hour — that’s how you value these batteries. But I think it’s going to get a lot cheaper, much more quickly than people believe. And that’s why the size of the prize is so enormous. That’s why you see countries like China saying, “We want to have 25% of our overall vehicle sales by 2025 be electric.” That’s why you see the European Union focusing on what they’re calling a [Green Deal] to really build out their own, self-sufficient supply chain. Because, again, yes, this is a climate change issue. But it’s also an enormous issue for job creation and also increasing the tax base. So it’s a rare opportunity, where I think regardless of where you are on the political spectrum — maybe you’re a hawk and you’re worried about national security or you’re more of a dove and you’re focused on climate change — everybody can benefit from this. So I think that it’s just really an enormous opportunity out over the next five to seven years.
Related links: More insight from Molly Wood
The federal government in January approved a large lithium mining operation in Nevada. Critics say the approval process was fast-tracked at the expense of environmental concerns. In 2018, the federal government accelerated the approval process for lithium mining permits. The mine has been portrayed as a way to speed economic recovery during the pandemic. Nearby Native American tribes hope it will provide jobs on a neighboring reservation. But as Chris Berry noted, everyone is worried about the environmental impact. There are also concerns about jobs not being distributed to nearby communities and the speed of the approval process, with limited public comment on the mine. So yes, even our transition to a greener economy comes with some serious trade-offs.
And even if we don’t bring mining to the U.S., that just means outsourcing it to places where the mining practices are not only dirty, but carry pretty well-documented human rights abuses with them, too, like child labor allegations. And yet this supply chain is the key to transitioning away from fossil fuels. The U.S. is poised to become a big supplier, and demand is only going up. But as we mentioned, perhaps bringing more mining and production to the U.S. could shine a light on how these materials are mined and force improvements.
I found a story out of Canada from last month about how a Calgary geophysicist has been working on a greener way to mine lithium, extracting it, actually, from saltwater brine that is a waste product from oil wells. She says investors, including Tesla CEO Elon Musk, have approached her about building her tech to a commercial scale, since it’s clear that we can neither continue with oil and gas production as we always have, but we also can’t ship dirty and dangerous and exploitative mining practices to the rest of the world and hope no one notices, while we drive shiny, new Teslas and GM electric cars and feel like we’re saving the world.
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