Battery Industry Is Already Calling For More Handouts In Order To Compete With China
Current production credits ... cost more than $136 billion
To meet its clean energy goals, the US might go mining in the rainforest
The United States is in a mad dash to usher in the era of green energy as it works to increase its lithium reserves and reduce dependency on fossil fuels.
However, in order to reach its clean energy goals, the U.S. is going to need far more lithium than it currently has in its possession, PBS reported.
However, in order for the U.S. to grow its mineral reserves so that it can produce green technology, it must participate in an extraction process that is wildly unclean and faces challenges from environmentalists, indigenous peoples interest groups, and burdensome government regulations.
There is also the issue that there is only one active lithium mine in the continental U.S. — despite lithium reserves being abundant across the globe. The lithium available in this Nevada mine reportedly isn’t enough to meet the growing amount required to develop rechargeable lithium-ion batteries commonly found in electric vehicles.
Currently, much of the world’s lithium supply is sourced from South America and Australia, with China dominating the global manufacturing and distribution of lithium-ion batteries. The U.S. currently produces less than 2% of the world’s lithium supply despite having nearly 4% of the estimated global lithium reserve.
“Nobody really foresaw this huge spike in demand,” Tim Crowley, the vice president of government affairs for Lithium Nevada, said. “We owned the lithium space for a long time, and we forfeited it to China.”
In order to increase lithium production, the U.S. must either expand mining and processing operations in places like Chile — home to the world’s largest known lithium reserves — which could involve the removal and destruction of parts of the Chilean rainforest — or expand its domestic production efforts, which would require open-pit mining or brine extraction to force the lithium-rich brine to the surface.
Either way, activist groups like the far-left Sierra Club have warned that increased lithium production efforts run the risk of harming lands sacred to indigenous peoples and endangering fragile ecosystems that are home to some of the world’s rarest and most endangered species.
However, Glenn Miller, emeritus professor of environmental sciences at the University of Nevada, suggested that increased lithium production efforts could, in the long run, be better for the environment by reducing global dependency on fossil fuel-burning cars.
He said, “A domestic source has tremendous value. Then we can do things that only China is doing with production.”
The Biden administration has planned for 500,000 EV charging stations to be erected throughout the country as one of its infrastructure goals. This, and the administration’s push for more American companies to produce and more American citizens to purchase EVs, will require a substantial amount of lithium.
The cost of lithium — a metal used to make electric car batteries — is up nearly 500% since last year: 'Supply is simply nowhere near enough to feed this demand surge'
The race to a low-carbon future via electric vehicles already comes with a hefty price tag. But that price tag may enlarge even more in the coming months if the skyrocketing cost of lithium serves as any indication.
What are the details?
The cost of lithium carbonate — a key ingredient used in the manufacturing of electric vehicle batteries and other low-carbon energy resources such as solar panels — has jumped 95% already in 2022, and is up almost 500% year-over-year.
According to Benchmark Mineral Intelligence, a leading price reporting agency, battery-grade lithium carbonate (EXW China, ≥99.5% Li2CO3) was averaging a whopping $76,700 a tonne in mid-March. During the same month last year, the metal was trading at $13,400 a tonne.
Benchmark reportedly added that based on reports out of China, things aren’t going to get any easier in the short term due to continued low inventory levels. China is a major producer of the mineral, selling nearly 20% of the world's supply.
But it's not just lithium. Nickel, another metal that serves as a key component in lithium-ion batteries used in EVs, has undergone an eye-popping price surge of late. On March 8, nickel prices more than doubled in a matter of hours, CNBC reported. While the price has come down from its apex in recent days, it still remains significantly inflated.
It should be noted the surge in the price of nickel is especially related to Russia's war in Ukraine, as Russia remains the metal's third-largest producer.
Why does it matter?
Overall, the news of soaring costs for lithium and nickel spotlights what some say is a market completely unprepared for the surging demand for electric vehicles.
"The price explosion tells you that lithium supply is simply nowhere near enough to feed this demand surge," OilPrice.com reported.
S&P Global reported earlier this year that supply stands almost no chance of catching up to demand, which has erupted over the last 18 months.
"Although the battery industry has been investing significantly in downstream battery capacity to power the surging EV demand, lithium is still getting less funding than required — and such investment could be too late to prevent a structural deficit in the coming years," S&P said.
It added the "structural deficit" could last "throughout this decade."
Yet the Biden administration continues to push EVs as a remedy not just for environmental woes but economic ones, as well.
In a press conference earlier this month, as gas prices soared as a result of the Russia-Ukraine war, Vice President Kamala Harris and Transportation Secretary Pete Buttigieg unabashedly claimed that "clean transportation can bring significant cost savings for the American people."
Perhaps they forgot that new EVs cost an average of $56,437, according to Kelley Blue Book. Prices at the pump would have to soar much higher than their current average for Americans to switch to EVs for strictly cost-saving benefits.
Now it appears the cost of manufacturing or replacing EV batteries will grow higher. Total cost of the vehicles will likely follow.
Are electric vehicles REALLY the best solution? Here are the FACTS
Electric vehicles are the wave of the future. They are so much better for the environment. At least that's what we have been told, but is this correct?
On his TV special, Glenn Beck explained how electric vehicles (EVs) might not actually be the environmental solution we've been led to believe. In fact, they may not be a solution at all.
Glenn shared a recent article from LiveScience that reported:
A 2014 study published in the journal Proceedings of the National Academy of Sciences looked at the entire life cycle of an EV's emissions, from mining the metals required for the batteries to producing the electricity needed to power them, and then compared this with the average emissions of a gas-powered vehicle. The team found that when electric vehicles are charged with coal-powered electricity, they're actually worse for the environment than conventional gasoline cars.
He next shared an article from The Greenage, which stated:
The Union of Concerned Scientists has calculated that manufacturing a mid-sized EV with an 84-mile range results in about 15 percent more emissions than manufacturing an equivalent gasoline vehicle. For larger, longer-range EVs that travel more than 250 miles per charge, the manufacturing emissions can be as much as 68 percent higher.
Noting how electric vehicles and other fossil-fuel alternatives require the use of mined minerals like lithium, cobalt, zinc, copper, and nickel, among others, Glenn quoted an International Energy Agency report that warned reaching the goals of the Paris Agreement "would mean a quadrupling of mineral requirements for clean energy technologies by 2040. An even faster transition, to hit net-zero globally by 2050, would require six times more mineral inputs in 2040 than today."
"Can [you] predict which country is the world leader in processing the minerals needed for these batteries? Right, China," Glenn stated. "The average EV requires over 200 kilograms of minerals. The average gas vehicle requires 40 kilograms of minerals, mostly copper. A single EV has 22 pounds of lithium in it ... yet another way that the green reset of American energy is putting us all at the mercy of Communist China."
"Oh, and remember during the Obama administration when the world was gonna end' over fracking?" Glenn asked. "Well, the Institute for Energy Research now says, and I quote, 'Mining and processing of lithium, however, turns out to be far more environmentally harmful than what turned out to be the unfounded issues with fracking.'"
Watch the video clip from Wednesday night's episode of "Glenn TV" below for more details:
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