The emerging democratic effort has the support of progressives, who are concerned about climate change; unions that see the fulfillment of Biden’s promise to create jobs; and moderates, who see a return to blue-collar manufacturing as a way to help components that lose their jobs in the fossil fuel sector.
“We don’t produce any of the rare earth minerals, or very, very, very little of any rare earth minerals that it takes to make a battery,” Senator Joe Manchin (DW.Va.) said during a press conference. on Monday, at the National Press Club. “We depend on other sources in the world and, practically, people are enslaved in parts of the world, in order to obtain the resources that we seem to want not to be visible, from the mind and we just say: Well, we have an electric vehicle. “
President Joe Biden knows the troubled history of the latest Democratic administration’s effort to use green technology to boost the economy. Despite a number of incentives in the 2009 stimulus act, the solar energy supply chain has largely moved to China after the country’s government invested heavily in industry.
Since last year, the world’s three largest solar producers are all Chinese. Biden and his team intend to make sure that this does not happen again with the batteries, the next clean energy technology is going to take off.
“If we do not catch up, America will lose the chance to shape the world’s climate future in a way that reflects our interests and values, and we will lose countless jobs for the American people,” said Secretary of State Tony Blinken. said Monday in remarks about clean energy.
China’s considerable advantage in this sector makes energy experts worried that the US could be drawn into generations of resource-based foreign policy entanglements, as well as what has happened to the Middle East.
“In 1973 and 1979, when oil supplies were intentionally limited to the United States in response to what was happening in the Middle East, and the biggest response was a diversification of supply,” said Ernest Moniz, who worked as Secretary of Energy under former President Barack Obama. The same idea should apply to trade in batteries and their components between the US and China, Moniz said.
The United States today operates only three large battery factories, including the famous “giant” Tesla in Nevada.
This weak figure will increase to just 10 by 2030 if current trends continue, according to analysis firm Benchmark Mineral Intelligence. This includes the planned SK Innovation plant in Commerce, Ga., Which was threatened by an international trade dispute until a $ 1.8 billion settlement this month allowed work to continue.
By then, China will have 140 factories and Europe will have 17 benchmarks. And the demand in the US for batteries from car manufacturers and the electricity grid will be astronomical.
“Between now and 2030, the US needs to build another 20 battery factories, maybe 10 if they are really big,” to meet car demand, said Simon Moores, general manager at Benchmark. “That means you need them set by 2027, which means you need to start working on them in 2023.”
By 2024, there will be more than 200 models of electric or hybrid cars on the US market, each driven by a package of rare earth metals mostly from outside the US. Electricity is another source of demand – it will have 107 gigawatts – hours of stationary batteries to help stabilize the power grid by 2025, according to analysis firm Wood Mackenzie, enough to drive nearly 2.7 million new Nissan Leaf electric vehicles .
If factories are not built fast enough, carmakers will have to delay new models, affecting the ambitious goals of the Biden climate and electric vehicles. Or it could look for batteries abroad, which Moores said would likely mean Chinese suppliers.
To serve the new battery factories, lawmakers and industry say they hope to entice mining and critical metal processing – such as lithium, cobalt and so-called rare earth minerals – in the US But these processes come with high risks of pollution.
Abandoned mines have been leaking chemicals to local water sources for centuries, long after the companies that ran them disappeared into bankruptcy and mining slowed in the United States amid environmental concerns. Mining companies and unions both say they need to change.
“We need to warn that this direction towards electrification is really based on mining,” said Rich Nolan, CEO of the National Mining Association, a trading group that represents mining companies. “We should not let the Chinese overtake us in this race. We must seize these opportunities and attract the capital of the United States.”
The need for domestic mineral production to support the battle against global warming has created some strange friends in Washington. Conservation groups that have long opposed new mining projects have met quietly with mining companies and unions to explore greener methods of supplying rare earth minerals.
“We are in preliminary talks on this,” said Corey Fischer, director of land policy for conservation group Trout Unlimited. “There is nothing official like a united front with the administration or a set of principles, but we would like to move in that direction.”
Trout Unlimited and the National Health Federation, another nonprofit environmental organization, released a report last year outlining key principles they could learn to resume domestic mining. They still oppose mining in sensitive areas, such as the Boundary Waters Canoe Wilderness Area in Minnesota, which may be rich in key resources.
The same is true in Congress. Moderate Democrats in traditional coal states, such as Manchin and Senator John Hickenlooper (Colo.), Are drafting legislation to stimulate mining and mineral processing, hoping to obtain some materials from coal and old mine waste products.
Republicans have previously supported some of the ideas Democrats are proposing. Manchin joined Sens. Shelley Moore Capito (RW.Va.) and Lisa Murkowski (R-Alaska) in 2019 to introduce the Advanced Coal Technologies Act for Rare Earth Elements (S. 1052 (116)) to extract metals from rare earths from waste of coal.
But so far, Republicans have strongly opposed most Democratic initiatives involving the transition to fossil fuels, and their support for a broad package that includes Democratic incentives for production seems unlikely.
Meanwhile, climate falcons, such as Finance President Ron Wyden (D-Ore.), Are pushing for tax credits for factories that will turn these materials into batteries that will drive electric vehicles and stabilize the electricity grid for decades to come.
Talks on mining and mineral recycling are still in their infancy, according to a member of the Committee on Energy and Natural Resources, led by Manchin. Ideas discussed include tax credits or government grant programs for new mines and processing facilities.
Parliamentarians are also exploring whether existing tax programs, such as a special credit for advanced production, can be expanded or reused for battery recycling and rare earth processing. Manchin and Senator Debbie Stabenow (D-Mich.) Introduced a bill to do so, focusing on former coal mining communities where unemployment is high.
“We need to invest in the extraction and processing of critical minerals and in the recovery of abandoned mining sites, both of which would use the skills of our American miners,” Manchin told the Press Club event.
The Finance Committee’s bill is still in its infancy, but Wyden said it will also include incentives for the domestic manufacture of semiconductors and solar components – two other areas where lawmakers fear Chinese rule.
Collaborating with Sens. Michael Bennet (D-Colo.) And Stabenow, Wyden want the bill to extend to Biden’s support for a 10% production tax credit he supported during the campaign. But lawmakers are still undecided on details, such as the size of the loan or how many industries it should target.
The House Energy and Commerce Committee has also allocated $ 12.5 billion for the manufacture of internal batteries as part of the LIFT America Act. And the White House is pushing battery manufacturers to pull their suppliers out of China, targeting the sector in an executive order to review critical supply chains.
But to build the domestic battery industry in the face of intense competition from China, the US will have to renew these incentives until the domestic supply chain is self-sustaining, say battery manufacturers.
“This can’t be a one-off deal,” said Jason Knapp, vice president of government relations for battery maker KORE Power. “We need to support battery production in the same way we support other critical industries, which is every year. It will become an integral part of our transport system and our network. We need to treat it as a recurring thing. ”