U.S. Needs to Develop Its Lithium Power

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lithium

The U.S. wants to strengthen its energy security through the development of diverse domestic energy operations and regional agreements. However, encouraging support for new projects needed to accelerate a green energy transition is proving difficult. Although the U.S has huge lithium reserves, most remain untouched due to state level opposition to new mining operations. Meanwhile, its imports of metals and minerals are growing rapidly, increasing U.S. reliance on China. However, there is still time for the U.S. to develop its lithium capacity, as well as support regional production and trade. 

Homegrown Lithium

While searching in Maine for gemstones, one couple recently stumbled upon one of the only hard-rock sources of lithium found in the U.S. to date. The expansive lithium deposits found in Maine are thought to be worth as much as $1.5 billion. But, more importantly, they could be vital in supporting the Biden’s administration’s green transition plan. Biden has been encouraging greater exploration and the development of domestic mining activities to help alleviate the U.S. reliance on China for metals and minerals. 

Lithium is considered a ‘critical mineral’, required to produce the lithium-ion batteries needed to run electric vehicles (EVs) and other electronic devices. As the demand for these products increases, especially as governments begin to place bans on fossil fuel-powered cars, the demand for lithium is expected to increase dramatically. And, at present, the U.S. relies heavily on imports for its supply of the white gold. 

Developing mining activities in Maine could help the U.S. begin to produce lithium on home turf, but Maine has some of the strictest mining and water quality standards in the country, prohibiting digging for metals in open pits larger than three acres. There are no active metal mines in the state and no company has applied for a mining permit since the passing of the strict law in 2017. Several companies have searched the state for nickel, copper, and silver deposits, but many towns are now putting their own bans on industrial mining in place to preserve the environmental integrity of the region. State Rep. Margaret O’Neil explained, “Our gold rush mentality regarding oil has fueled the climate crisis.” O’Neil added, “As we facilitate our transition away from fossil fuels, we must examine the risks of lithium mining and consider whether the benefits of mining here in Maine justify the harms.”

High Import Levels 

Environmental concerns over mining and a not-in-my-back-yard mentality are limiting the ability for the U.S. to develop its lithium production. This is increasing the U.S. dependence on imports to meet the growing demand for batteries, an industry that China overwhelmingly dominates. In the first three months of 2023, the imports of lithium-ion batteries to the U.S. increased by 66% compared to the same period last year, to 235,386 metric tons. That marks the 11th consecutive quarter of increasing battery imports. 

China provided the largest proportion of these imports, around 87.9%, compared to 77.5% a year ago. Meanwhile South Korea accounted for 3.2% of the imports, down from 4.7% and Poland provided 3.1%, compared to 1.4% in Q1 2022. 

Exxon’s Big Plan 

While imports may be high and lithium mining is restricted, it does not prevent the U.S. from establishing ambitious plans for the lithium and battery industries. In November, Exxon announced plans to start producing lithium from subsurface wells by 2027. The company aims to produce lithium to support its EV and electronics battery production. Exxon will pump water out of the ground in Arkansas, using the lithium deposits in the waters. 

Exxon anticipates huge growth in the demand for lithium and it plans to be at the center of U.S. production. It hopes to be supplying lithium for over a million EV batteries a year by 2030.  In addition to using subsurface wells to source lithium, Exxon will also use conventional oil and gas drilling methods to access lithium-rich saltwater from reservoirs at around 10,000 feet below the ground, using direct lithium extractive technology to separate lithium from the saltwater. 

Regional Production and Trade 

As the U.S. looks to boost its energy relations with Latin America, investing in operations across the region and establishing expansive supply chains, there is also significant potential for the U.S. to increase its presence in the lithium market. Argentina, Bolivia and Chile, together form what is known as the Lithium Triangle, holding around 75% of the world’s lithium reserves. China already has a significant stake in these reserves, with several Chinese companies recently signing major agreements for new production and processing activities. 

The Biden administration is encouraging EV producers around the globe to produce more vehicles in North America and source their critical minerals within the lithium triangle, to encourage market diversification and decrease the world’s reliance on China for their lithium and battery supplies. Yet, Chinese companies continue to be swooping in to develop new projects across the region as U.S. and other global actors drag their feet. 

To ensure the future of its energy security during a green transition, the U.S. must develop its homegrown lithium supplies, establish a domestic battery manufacturing industry and invest in the development of regional lithium production activities. Pursuing these three activities will help the U.S., and the Americas, reduce their reliance on China for the provision of lithium and batteries, while boosting regional energy security.

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