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The Lithium Revolution

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The Lithium Revolution

The Lithium Revolution

How the shift to clean energy has opened a window of opportunity for energy metals.

“The Lithium Revolution” infographic presented by: Dajin Resources

Commodity investors know that it in recent years, the sector has had a rough ride. Recently, factors such as China’s slowdown have weighed on short-term prices of industrial commodities like fuels and base metals.

However, not all of the energy sector has struggled. The rise of clean energy has continued to gain momentum, which could be a boon for energy metals producers and explorers.

Energy Metals

Simply put, energy metals are metals used in the creation or storage of energy. Here are some examples of energy metals needed to make lithium-ion batteries, which are the storage mechanism of choice for many green energy producers:

Lithium: Lithium is the main ingredient to lithium-ion batteries – the metal’s ions move back and forth to charge and discharge the battery.

Cobalt: Widely used in lithium-ion cathodes

Graphite: The most common anode material for lithium-ion batteries.

Note: Uranium is also used for nuclear power, and copper is fundamental for creating and transporting energy around the world. However, in this infographic we focus on specialty metals.

Electric cars and energy storage for renewable sources have been driving the increases in price and demand for these sectors. Let’s take a look at the specific momentum that has been growing since 2014.

The Momentum

Political and social:
2014

  • Obama reveals clean energy plan: The push will involve more than $1 billion in government funds to back new clean energy and energy efficiency projects along with funding research and development of new energy technologies.
  • Who were the biggest investors in renewable energy in 2014?
    China ($83.3 billion), USA ($38.3 billion), and Japan ($35.7 billion)

2015

  • Volkswagen DieselGate scandal causes uproar, as it becomes clear that millions of the company’s vehicles have cheated emissions tests for years
  • Elon Musk announces a mandate for Tesla Motors to acquire raw materials from the USA when possible.
  • 4,000 people die, each day, of pollution related deaths in China alone.
  • The United States deems lithium as a strategic metal and doesn’t give any statistics of its reserves or production.

Business:
2014

  • Tesla reveals plans to build $5 Billion Gigafactory in the Southwestern US.
  • Tesla announces Nevada as the site of its already-famous Gigafactory project.

2015

  • The 1 millionth electric car is built in September 2015.
  • Report surfaces that Apple plans to ship driverless cars by 2019.
  • Google’s self-driving cars reach the milestone of 1 million miles driven autonomously.
  • Tesla takes $800 million in orders for its new home batteries in just two weeks.
  • A TSX-V traded company was the most recent recipient of an off take agreement to supply Tesla with Lithium Hydroxide.
  • Volkswagen’s stock price gets crushed over 30% in the aftermath of DieselGate.
  • FMC recently announced an “across the board 15% increase in price” in all finished lithium products. Lithium Hydroxide rose from $9,500 per ton, up to $10,870. Lithium Carbonate from $6,500 per ton up to $7,475 USD.

General Trends:

  • Charging stations have increased rapidly around the world.
  • Every major auto manufacture has more than one fully electric car. Some automakers mandate is to have an electric version of every model.
  • The oil price has hit a 6.5 year low, yet electric vehicle sales have held momentum.
  • Lithium battery manufacturing costs are dropping in price while lithium battery technology is getting better.
  • New technology is decreasing the charge time for electric cars. Meanwhile, “miles per charge” is rising, and some cars can even recharge wirelessly.
  • There’s a greater interest in looking after the environment with a continued scare of global warming.
  • Wind and solar storage needed to regulate output of electricity back to the grid.
  • China is a nation now giving priority to EV cars on their highways and parking lots.

Green Shift

The above momentum means energy metals like lithium could continue to buck the general trend of global commodities. So far, the price of lithium has increased steadily since 2011.

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Energy

Visualizing U.S. Energy Use in One Giant Chart

This interesting diagram breaks down all U.S. energy use by both source and industry, and everything that happens in between.

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Visualizing U.S. Energy Use in One Giant Chart

If you feel like you’ve seen this diagram before, you probably have.

Every year, it’s assembled by the Lawrence Livermore National Laboratory, a research center founded by UC Berkeley and funded primarily by the U.S. Department of Energy.

The ambitious aim is to chart all U.S. energy use in one Sankey diagram, including the original energy source (i.e. nuclear, oil, wind, etc.) as well as the ultimate end use (i.e. residential, commercial, etc.) for the energy that was generated.

U.S. Energy Use in 2018

According to the research center’s most recent published version of the diagram, U.S. energy use totaled 101.2 quads in 2018.

In case you are wondering, a single quad is equal to 1 quadrillion BTUs, with each quad being roughly equivalent to 185 million barrels of crude oil, 8 billion gallons of gasoline, or 1 trillion cubic feet of natural gas.

Here is how the recent figure compares to previous years:

YearU.S. Energy Consumption% Fossil Fuels in Mix
2018101.2 quads80.2%
201797.7 quads80.0%
201697.3 quads80.8%
201597.2 quads81.6%
201498.3 quads81.6%

As you can see in the table, U.S. energy use has been generally increasing, eventually topping 100 quads per year by 2018. During this time, the total percentage of fossil fuels in the mix has dropped, but only from 81.6% to 80.2%.

Taking a closer look at the data, we can see that the largest percentage increases in the mix have come from solar and wind sources:

Source20142015201620172018Change ('14-'18)
Solar0.4270.4260.5870.7750.949+122%
Wind1.731.782.112.352.53+46%

Energy use measured in quads (1 quadrillion BTUs)

Solar use has increased 122% since 2014, while wind jumped 46% over the same timeframe. Not surprisingly, energy derived from coal has fallen by 26%.

Dealing With the Rejects

One interesting thing about the diagram is that it also shows rejected energy, which represents the energy that actually gets wasted due to various inefficiencies. In fact, 68% of all energy generated is not harnessed for any productive use.

This makes sense, since gasoline engines are usually only about 20-40% efficient, and even electric engines are 85-90% efficient. Put another way, a certain percentage of energy is always released as heat, sound, light, or other forms that are hard for us to harness.

As electric cars rise in popularity and as modern gas-powered engines also get more efficient, there is hope that the amount of this rejected energy will decrease over time.

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Mapped: Fossil Fuel Production by Country

These four animated cartograms show the nations leading the world in fossil fuel production, in terms of oil, gas, coal, and total hydrocarbons.

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Fossil fuels exist as a double-edged sword for most countries.

On one hand, they still make up a dominant piece of the current energy mix, and oil is still seen as a crucial resource for achieving geopolitical significance. It’s also no secret that fossil fuels are a driver for many economies around the world.

But with governments and corporations counting carbon emissions and mounting concerns about climate change, reliance on these same fuels will not last forever. As attitudes and policies evolve, they will continue to see a reduced role going forward.

Visualizing Fossil Fuels by Country

So, which countries are pumping out the most hydrocarbons?

Today’s cartograms come from 911Metallurgist, and the animated maps resize each country based on their share of global fossil fuel production.

Below, you’ll see four cartograms that cover oil, gas, coal, and total fossil fuel production.

Crude Oil Production

The United States leads this category, producing about 18% of the world’s total oil:

Oil production by country

Although the U.S. is the number one producer globally, it should be noted that the country doesn’t have the same quantity of oil reserves as other leading nations.

Weirdly, Venezuela has the exact opposite problem. The country has the most oil reserves in the world, but currently only sits as its 12th biggest producer.

Natural Gas Production

In terms of gas, the U.S. leads again with a 20% share of global production. Russia is also a gas powerhouse, with a 17.3% share.

Natural gas production by country

After the U.S. and Russia, it’s a fairly steep dropoff in terms of natural gas production. Countries like Iran, Canada, Qatar, and China are the next most significant players, but they each only produce 4-6% of the global total.

Coal Production

Coal use may be on the decline, but China still produces a whopping 45% of the world’s coal.

Coal production by country

China’s current relationship with coal is an interesting one.

Every year, coal has become less important in China’s energy mix – in 2011 it represented 70% of energy consumption, and by 2018 it had fell to 59%.

Despite this meaningful progress, China’s economy has grown so fast, that coal use has essentially held steady in absolute terms. Meanwhile, the country’s production of coal has actually grown slightly over the same timeframe.

Total Fossil Fuel Production

Finally, here is the sum of all three above categories, converted to metric tonnes:

Total fossil fuel production by country

The United States produces 20% of all global fossil fuels, with Russia and Iran rounding out the top three. After that comes Canada, which produces just under 5% of all fossil fuels globally.

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