metals

If the U.S. is to significantly grow its production of electric vehicles (EVs), it’s going to need a robust domestic supply chain that includes critical metals and minerals. The Biden administration has previously provided billions in funding made available through the Infrastructure Investment and Jobs Act (IIJA, also known as the Bipartisan Infrastructure Law) to help establish new clean-energy industries, an approach it is repeating with EV battery manufacturing and its goal of having EVs account for half of all new-car sales by 2030. In today’s RBN blog, we look at the $3.5 billion set aside to fund investments in the EV battery supply chain and increase domestic manufacturing. 

The world will need extraordinarily large quantities of lithium to support the development of renewable energy, batteries and electric vehicles (EVs). The problem is, much of the supply chain for lithium and many other important energy-transition minerals is either owned or controlled by China, whose strategic and economic interests are directly at odds with the U.S. and its allies. In response, the Biden administration and Congress have been taking steps to reduce our dependence on Chinese supplies by providing financial incentives to encourage the development of more domestic mineral production and processing capacity. But that development can only happen if the projects can clear the often-daunting regulatory and legal hurdles they almost always face. In today’s RBN blog, we discuss a few of the leading U.S. projects being planned and the challenges they face in moving forward.

Global demand for electric vehicles (EVs) is on the rise, and with it demand for EV batteries and the key minerals needed to produce them. China is the world’s fourth-largest producer of lithium — perhaps the most important EV component of all — and is far-and-away the #1 lithium processor, giving it a critical edge over the U.S. and its democratic, capitalist trading partners as EV production and sales ramp up. The Biden administration and Congress have been taking a number of steps to enable the U.S. and its compadres to reduce — with an aim to end — our dependence on Chinese batteries going forward. One recent move by the U.S. was to provide EV subsidies only to vehicles whose batteries and battery components come from the U.S., Canada or other countries we can depend on through thick and thin. But much more substantial advances need to be made to encourage lithium production if there’s to be any hope of securing a significant portion of the minerals expected to be required for an energy transition. In today’s RBN blog, we discuss these efforts and the challenges the U.S. and its friends face in becoming “EV-battery independent.”

When you boil it down, there are only two energy-related responses to Russia’s war on Ukraine. First, there’s a big push to find sources of crude oil, refined products, natural gas and NGLs to replace Russian supplies as quickly as possible. Second, governments on both sides of the Atlantic are scrambling to reaffirm and even expand commitments to lower-carbon energy sources to delink from Russian hydrocarbons as well as meet energy transition goals. Both raise the same question: How fast can the world bring online any new sources of energy on the scale needed? Policymakers would like to believe the answer can be found through the stroke of a legislative pen invoking aspirational language. No one doubts the power of that pen to create incentives or impediments. But the answer to that question is dictated by the realities of the physical world. In today’s RBN blog, we discuss the options for accelerating the availability of the minerals, metals and other materials needed to build the required machinery for the energy transition.

Since the first OPEC oil embargo nearly a half-century ago — and more recently with Russia’s invasion of Ukraine — energy producers and consumers alike have learned important lessons about the significance of energy commodity sourcing. It all comes down to this, really: (1) know what you’ll need going forward; (2) diversify your sources of supply, focusing on suppliers who are reliable and friendly; and (3) don’t screw up by becoming overly dependent on suppliers who could prove to be sketchy. For decades, the industry’s focus was on oil and gas — which is still critical, as Europe knows all too well. But as policymakers attempt to transition to renewables and electrification, a whole new set of commodity-supply concerns is coming to the fore. In today’s RBN blog, we discuss the challenges associated with securing the key materials required to build the machinery of the energy transition.

On March 24, 2022, in the wake of the still-unfolding crisis in Ukraine, “energy and climate ministers” from 40 countries convened in Paris for an International Energy Agency summit to send a “strong message of unity” regarding energy security and to issue a consensus on accelerating “clean energy transitions worldwide.” But there are already strong signals that accelerating the construction of solar and wind power systems, battery storage and electric vehicles (EVs) won’t be easy and won’t be cheap. One of the greatest challenges ahead is this: The minerals and metals that will be needed to build it all may not be available in the massive, almost unthinkable volumes that will be required. And the materials that will be available may cost a lot more — maybe even enough to force a scale-back of energy transition goals. There was already evidence of impending shortages and higher prices well before Ukraine was invaded by Russia. And the price inflation has worsened considerably since then, in part because Russia is a major supplier of many key commodities. In today’s RBN blog, we discuss the major cost challenges of pursuing the energy transition.

Among the many challenges facing the energy transition, one is particularly ominous: a lot of stuff will need to be produced, fabricated, and constructed to replace the hydrocarbon-based energy network that runs the world today. We’re talking wind turbines, solar arrays, energy storage batteries, electric vehicles, and all of the other infrastructure and components that will be needed to make the energy transition happen. Not only will all this stuff require a lot of concrete and steel, it also will demand huge quantities of specialty metals and minerals such as lithium, copper, chromium, neodymium, etc. It’s a fact that a decarbonized energy network is much more material intensive — that is, it takes a lot more total investment in minerals, metals, and construction materials to produce the same energy as comes from hydrocarbons. Further complicating things, the increased material needs will be front-end loaded. In today’s RBN blog, we discuss the materials-related challenges facing the energy transition.