Green
The New Energy Era: The Lithium-Ion Supply Chain
The world is rapidly shifting to renewable energy technologies.
Battery minerals are set to become the new oil, with lithium-ion battery supply chains becoming the new pipelines.
China is currently leading this lithium-ion battery revolution—leaving the U.S. dependent on its economic rival. However, the harsh lessons of the 1970-80s oil crises have increased pressure on the U.S. to develop its own domestic energy supply chain and gain access to key battery metals.
Introducing the New Energy Era
Today’s infographic from Standard Lithium explores the current energy landscape and America’s position in the new energy era.
An Energy Dependence Problem
Energy dependence is the degree of a nation’s reliance on imported energy, resulting from an insufficient domestic supply. Oil crises in the 1970-80s revealed America’s reliance on foreign produced oil, especially from the Middle East.
The U.S. economy ground to a halt when gas prices soared during the 1973 oil crisis—altering consumer behavior and energy policy for generations. In the aftermath of the crisis, the government imposed national speed limits to conserve oil, and also demanded cheaper, smaller, and more fuel-efficient cars.
U.S. administrations set an objective to wean America off foreign oil through “energy independence”—the ability to meet the country’s fuel needs using domestic resources.
Lessons Learned?
Spurred by technological breakthroughs such as hydraulic fracking, the U.S. now has the capacity to respond to high oil prices by ramping up domestic production.
By the end of 2019, total U.S. oil production could rise to 17.4 million barrels a day. At that level, American net imports of petroleum could fall in December 2019 to 320,000 barrels a day, the lowest since 1949.
In fact, the successful development of America’s shale fields is a key reason why the Organization of the Petroleum Exporting Countries (OPEC) has lost the majority of its influence over the supply and price of oil.
A Renewable Future: Turning the Ship
The increasing scarcity of economic oil and gas fields, combined with the negative environmental impacts of oil and the declining costs of renewable power, are creating a new energy supply and demand dynamic.
Oil demand could drop by 16.5 million barrels per day. Oil producers could face significant losses, with $380 billion of above-ground investments becoming worthless if the oil industry and oil-rich nations are not prepared for a surge in green energy by 2030.
Energy companies are hedging their risk with increased investment in renewables. The world’s top 24 publicly-listed oil companies spent on average 1.3% of their total budgets on low carbon technology in 2018, amounting to $260 billion. That is double the 0.68% the same group had invested on average through the period of 2010 and 2017.
The New Geopolitics of Energy: Battery Minerals
Low carbon technologies for the new energy era are also creating a demand for specific materials and new supply chains that can procure them.
Renewable and low carbon technology will be mineral intensive, requiring many metals such as lithium, cobalt, graphite and nickel. These are key raw materials, and demand will only grow.
Material | 2018 | 2028 | 2018-2028 % Growth |
---|---|---|---|
Graphite anode in Batteries | 170,000 tonnes | 2.05M tonnes | 1,106% |
Lithium in batteries | 150,000 tonnes | 1.89M tonnes | 1,160% |
Nickel in batteries | 82,000 tonnes | 1.09M tonnes | 1,229% |
Cobalt in batteries | 58,000 tonnes | 320,000 tonnes | 452% |
The cost of these materials is the largest factor in battery technology, and will determine whether battery supply chains succeed or fail.
China currently dominates the lithium-ion battery supply chain, and could continue to do so. This leaves the U.S. dependent on China as we venture into this new era.
Could history repeat itself?
The Battery Metals Race
There are five stages in a lithium-ion battery supply chain—and the U.S. holds a smaller percentage of the global supply chain than China at nearly every stage.
China’s dominance of the global battery supply chain creates a competitive advantage that the U.S. has no choice but to rely on.
However, this can still be prevented if the United States moves fast. From natural resources, human capital and the technology, the U.S. can build its own domestic supply.
Building the U.S. Battery Supply Chain
The U.S. relies heavily on imports of several keys materials necessary for a lithium-ion battery supply chain.
U.S. Net Import Dependence | |
---|---|
Lithum | 50% |
Cobalt | 72% |
Graphite | 100% |
But the U.S. is making strides to secure its place in the new energy era. The American Minerals Security Act seeks to identify the resources necessary to secure America’s mineral independence.
The government has also released a list of 35 minerals it deems critical to the national interest.
Declaring U.S. Battery Independence
A supply chain starts with raw materials, and the U.S. has the resources necessary to build its own battery supply chain. This would help the country avoid supply disruptions like those seen during the oil crises in the 1970s.
Battery metals are becoming the new oil and supply chains the new pipelines. It is still early in this new energy era, and the victors are yet to be determined in the battery arms race.
Environment
How Carbon Dioxide Removal is Critical to a Net-Zero Future
Here’s how carbon dioxide removal methods could help us meet net-zero targets and and stabilize the climate.
How Carbon Dioxide Removal is Critical to a Net-Zero Future
Meeting the Paris Agreement temperature goals and avoiding the worst consequences of a warming world requires first and foremost emission reductions, but also the ongoing direct removal of CO2 from the atmosphere.
We’ve partnered with Carbon Streaming to take a deep look at carbon dioxide removal methods, and the role that they could play in a net-zero future.
What is Carbon Dioxide Removal?
Carbon Dioxide Removal, or CDR, is the direct removal of CO2 from the atmosphere and its durable storage in geological, terrestrial, or ocean reservoirs, or in products.
And according to the UN Environment Programme, all least-cost pathways to net zero that are consistent with the Paris Agreement have some role for CDR. In a 1.5°C scenario, in addition to emissions reductions, CDR will need to pull an estimated 3.8 GtCO2e p.a. out of the atmosphere by 2035 and 9.2 GtCO2e p.a. by 2050.
The ‘net’ in net zero is an important quantifier here, because there will be some sectors that can’t decarbonize, especially in the near term. This includes things like shipping and concrete production, where there are limited commercially viable alternatives to fossil fuels.
Not All CDR is Created Equal
There are a whole host of proposed ways for removing CO2 from the atmosphere at scale, which can be divided into land-based and novel methods, and each with their own pros and cons.
Land-based methods, like afforestation and reforestation and soil carbon sequestration, tend to be the cheapest options, but don’t tend to store the carbon for very long—just decades to centuries.
In fact, afforestation and reforestation—basically planting lots of trees—is already being done around the world and in 2020, was responsible for removing around 2 GtCO2e. And while it is tempting to think that we can plant our way out of climate change, think that the U.S. would need to plant a forest the size of New Mexico every year to cancel out their emissions.
On the other hand, novel methods like enhanced weathering and direct air carbon capture and storage, because they store carbon in minerals and geological reservoirs, can keep carbon sequestered for tens of thousand years or longer. The trade off is that these methods can be very expensive—between $100-500 and north of $800 per metric ton.
CDR Has a Critical Role to Play
In the end, there is no silver bullet, and given that 2023 was the hottest year on record—1.45°C above pre-industrial levels—it’s likely that many different CDR methods will end up playing a part, depending on local circumstances.
And not just in the drive to net zero, but also in the years after 2050, as we begin to stabilize global average temperatures and gradually return them to pre-industrial norms.
Carbon Streaming uses carbon credit streams to finance CDR projects, such as reforestation and biochar, to accelerate a net-zero future.
Learn more about Carbon Streaming’s CDR projects.
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