Energy

Companies are turning to seemingly unlikely sources for the lithium needed to make electric vehicles, according to The Wall Street Journal (subscription): oil-and-gas reservoirs.

What’s going on: “These oil-and-gas sites harbor not only hydrocarbons, but also brine that contains metals including sodium, calcium and some lithium. When drillers poke holes into oil-saturated formations, the brine flows back to the surface along with the molecules that end up as fuel, and companies have been prompt to discard the earthy marinade.”

• “But now that the EV battery material has become a prized commodity, lithium companies are developing technologies to remove it from this brine—and oil-and-gas companies are also taking a second look.”
• Lithium companies in the U.S. and Canada are working with oil-and-gas firms to get the metal out of old oil fields and produce it from wastewater pumps.

Skyrocketing demand: U.S. demand for lithium is expected to increase to nearly six times its current size by 2030, to $52 billion, according to Boston Consulting Group.

Why it’s important: Most lithium today comes from China, Chile and Australia, with the three countries providing around 92% of the lithium extracted globally last year. But in the U.S., the process would be more environmentally friendly.

• “Because energy companies have drilled millions of oil-and-gas wells and collected subsurface data in the process, lithium prospectors know where to look.”

A faster process: The direct extraction method could significantly speed lithium production. In it, “brine is sent to a processing unit, where chemicals, a resin or a membrane, among other technologies, are used to capture the lithium ions. The water is then reinjected into the aquifer where it originated. The process takes at most a few days, and recoveries are up to 90%.”

• Some are hoping direct extraction will allow lithium producers to get the metal in the Permian basin of West Texas and New Mexico.

A Charlotte, North Carolina–based company that started life as a paper mill is now the world’s largest lithium producer—and “a key cog in a tight global supply chain for battery metals used in electric cars, smartphones and other applications at a time when governments are pushing to electrify their economies,” according to The Wall Street Journal (subscription).

What’s going on: Albemarle is one of the few companies that can produce lithium at a competitive cost, thanks in large part to its 2015 purchase of a lithium producer in New Jersey.

• The global lithium market has grown an enormous 2,900% since that purchase, to $48 billion from $1.6 billion.
• To keep up with demand, “Albemarle has embarked on new acquisitions and capacity building,” including an ongoing bid to purchase Australian lithium miner Liontown Resources.
• Last month, Albemarle—which also mines lithium at operations in Nevada and Chile—announced plans to double the capacity of a lithium hydroxide plant in Western Australia in which it has an 85% stake.
• Lithium is also used in “industrial-scale batteries that can store energy from solar panels and wind farms and smaller ones for residential use.”

Competing with China: The company’s “integrated approach has put it at the center of Western efforts to diversify supply lines” to counter China’s dominance in the electric-vehicle market.

• “China has emerged as a global leader in EV production and is spending billions to boost its access to lithium-mine production globally. Meanwhile, it dominates the business of refining lithium extracted elsewhere in the world. The West is trying to catch up.”

What’s next: Last fall, the Department of Energy gave Albermarle a grant of nearly $150 million to produce EV batteries.

• In March, the company said it would spend more than $1.3 billion on a lithium-processing plant in South Carolina.

As the Federal Energy Regulatory Commission prepares to issue a final rule that would change the way new energy projects connect to the U.S. electrical grid, some are concerned the regulation may be insufficient, according to E&E News’ ENERGYWIRE (subscription).

What’s going on: “Speeding up the grid connection system is critical for the success of the Biden administration’s signature climate initiatives and for many states’ clean energy goals. Today’s protracted process for linking new energy projects to the transmission system is widely considered one of the chief hurdles to deploying more carbon-free energy.”

The problem: Developers of clean energy undertakings and others say FERC’s coming changes likely won’t have the effect of getting new projects online sooner.

• Some policies—such as the direction of regional transmission lines to study interconnection requests in groups, not individually—have already been implemented to little effect, they say.
• And some potential issues slowing grid connection aren’t covered by the regulations, including grid operators’ difficulty in hiring sufficient numbers of experienced engineers to process all the requests.
• Then there are network-upgrade costs, which “are rising sharply” and may not be “meaningfully address[ed]” by FERC’s proposed rule.

Too long a wait: Before being able to deliver power to businesses and households, new energy projects need to be connected to the transmission system—and getting approval for that connection can take years.

• “As of last year, it took an average of five years for a new energy project in the United States to move through that study process and reach commercial operation, according to the Department of Energy’s Lawrence Berkeley National Laboratory. That’s up from an average of three years in 2015 and less than two years in 2008.”
• What’s more, “[i]n the current interconnection process in most of the United States, projects are sometimes restudied up to 10 times before they’re approved to connect,” one source told ENERGYWIRE.

Prioritizing projects: The proposed regulation tries to prioritize projects by commercial viability and construction readiness to cut down on the number of “possible” projects in the lineup.

• However … some in the renewables industry say “it’s unrealistic to expect project developers to have most of their permits and contracts in place before they have gone through the interconnection process,” another source told the news outlet.

A fundamental change: FERC has its work cut out for it given the foundational changes that have taken place in the U.S. energy system in the past few decades.

• “Historically, the electric grid was dominated by large, centralized power plants. But as the clean energy transition continues,” that is likely to change.

The NAM’s take: “Manufacturers depend on access to reliable and affordable energy to expand—which is why we support reforms that would foster transparent, streamlined and timely federal regulatory processes for the siting, permitting and licensing of energy delivery infrastructure of all types,” said NAM Vice President of Energy and Resources Policy Brandon Farris.

China, which already commands most of the world’s lithium refining, is undertaking “a risky strategy” in an effort to lay claim to more of the metal globally: buying stakes in mines located in developing nations, according to The Wall Street Journal (subscription).

What’s going on: “China is spending billions on stakes in nations that have histories of political instability, local resistance and resource nationalism. Projects often face protests, regulatory delays and even cancellations. If China succeeds, however, it could secure access to one-third of the world’s lithium-mine production capacity needed by 2025, according to industry estimates.”

• Canada and Australia, which hold among the world’s largest lithium reserves, recently put an end to new Chinese investments in critical minerals.

Why it’s important: Lithium is a critical component of batteries used in electric vehicles and smartphones—and demand for the mineral could outstrip supply significantly by the end of the decade.

A precarious investment: To ensure sufficient lithium stock to power its EV industry (particularly as tensions with the U.S. rise), China has acquired stakes in close to 20 mines throughout Latin America and Africa.

• Some of the countries in which the mines sit face the risk of terrorist attacks, while others have a history of revoking agreements made with foreign firms.

However … China has some advantages over Western nations when it comes to securing lithium from South American and African nations.

• “CATL, for example, is a battery behemoth, with the political backing of Beijing and a strong network of companies along the supply chain.
• Developing nations often want to partner with Chinese firms that also do processing, refining or battery making, because they believe such companies will better guarantee them steady streams of income. ​​​​​​​

A power line and wind farm project first conceived in 2006 finally received a critical permit this month—a perfect example of why we need permitting reform, according to The Wall Street Journal (subscription).

What’s going on: “The Interior Department’s Bureau of Land Management gave the green light [last] Thursday for a high-voltage power line [in the SunZia project]. The permit allows the developer, Pattern Energy, to build the country’s largest wind energy project across three counties in rural New Mexico and deliver that electricity to large markets in Arizona and California.”

• Developers applied for federal approval in 2008, and the Obama administration “fast-tracked” the project four years later.
• Pattern Energy plans to start construction later this year.

Why it’s important: SunZia is emblematic of a flawed system, one which President Biden and legislators are now trying to fix, according to the Journal.

• “The labyrinthine state, local and federal permitting processes are often drawn out for years, require duplicative paperwork and generate thousands of pages of government analysis. The average federal environmental review, for example, takes 4½ years, according to a 2020 White House report.”
• Earlier this month, the White House recommended changes it said would help speed the approval of transmission projects.

What they’re saying: “‘The White House doesn’t have a prayer of implementing the infrastructure bill or the [Inflation Reduction Act] without permitting reform,’ said Rep. Garret Graves (R., La.), a lead Republican negotiator in the debt-ceiling talks. ‘And anyone who’s actually out there trying to build things will tell you that.’”

What we’re doing: The NAM has been one of the foremost voices urging permitting reform on Capitol Hill.

• NAM President and CEO Jay Timmons recently testified before Congress on the topic and outlined manufacturing priorities for overhauling the permitting process.
• At another recent congressional hearing, NAM Vice President of Energy and Resources Policy Brandon Farris told legislators, “Streamlining and modernizing our nation’s permitting laws and procedures will help us advance many of our nation’s shared priorities, improving the quality of life for all communities; modernizing our infrastructure; achieving energy security; ramping up critical mineral production; enhancing manufacturing competitiveness; and creating manufacturing jobs in the U.S.”

Why is China winning the electric-vehicle production race? Because it controls or dominates every step of the process of making EV batteries, according to The New York Times (subscription).

What’s going on: “Despite billions in Western investment, China is so far ahead—mining rare minerals, training engineers and building huge factories—that the rest of the world may take decades to catch up.”

• Rare minerals: China owns the majority of the cobalt mines in Congo—where most of the world’s supply of the metal sits—and it controls most of the world’s lithium mining.
• Refining: “Regardless of who mines the minerals, nearly everything is shipped to China to be refined into battery-grade materials.”
• Components: China produces more EV batteries than any other country, which it managed “partly by figuring out how to make battery components efficiently and at lower cost.”
• Final products: China boasts the most EVs on the road of any nation, and almost all of them use batteries made domestically.

Why it’s important: Now, eight years after the Chinese government instituted policies to bar foreign competitors from the EV market and increase consumer demand, “the Biden administration … [is] pursuing a similar strategy to foster battery development in the United States. But in a business with huge capital costs and thin profit margins, Chinese companies have a big head start after years of state funding and experience.”

Energy Secretary Jennifer Granholm supports the Mountain Valley Pipeline, a natural gas project in Appalachia that would provide clean energy “where there’s huge demand for power”—and she defended her position at POLITICO’s energy summit in Washington last week, according to POLITICO (subscription).

What’s going on: “Granholm endorsed the pipeline in a recent letter to the Federal Energy Regulatory Commission,” POLITICO reports.

• At the event, she followed it up by saying, “We know that there is a real desire to have energy security in areas where there’s huge demand for power. We also know that we have got to accelerate investment in clean [energy].”

Why it’s important: Granholm’s support for the pipeline and her comments—which were disrupted by protestors who ran toward the stage shouting their opposition—“underscore the Biden administration’s balancing act in meeting its goals of ending carbon pollution from fossil fuels while acknowledging the continued role of the oil and gas industry in the economy.”

Helping allies: The U.S. has large supplies of natural gas, Granholm told the audience, and it “is going to be ‘a friend’ to its allies,” many of whom have moved away from Russian gas in response to that country’s invasion of Ukraine last year.

The last word: “The NAM supports an all-of-the-above energy approach, including traditional fuels, such as U.S. natural gas,” said NAM Vice President of Energy and Resources Policy Brandon Farris.

• “The proposed Mountain Valley Pipeline is a critical part of our energy future as natural-gas production strengthens energy access for manufacturers while generating billions of dollars in new investments, benefiting local communities and creating well-paying jobs.”
• “The NAM recently hosted Department of Energy Assistant Secretary of Fossil Energy and Carbon Management Brad Crabtree for a NAM-member briefing on manufacturer priorities and followed up by reaffirming the NAM’s support of U.S. natural gas production and exports.”

Washington, D.C. – Following the release of the Environmental Protection Agency’s new rule on power plant emissions, National Association of Manufacturers Vice President of Energy and Resources Policy Brandon Farris released the following statement:

“Manufacturing in America is cleaner and more sustainable than ever, and the power generation sector has been making historic strides in bringing zero-emissions sources online. Even as that trend continues, this proposed regulation will prove unfeasible. With nearly 60% of our nation’s energy generated from natural gas and coal, this will either require deployment of still nascent technologies at an impractical pace or force those plants to shut down entirely. With the many threats to global energy security, that is a grave risk to our economy and to our families. The U.S. cannot afford to shut down more than half of our power generation and grind our economy to a halt. The NAM looks forward to working with the administration to ensure emissions standards protect public health while allowing manufacturers to continue pioneering technologies to make our air even cleaner and our climate even healthier.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.90 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

U.S. natural gas production is likely to keep growing through 2050, while LNG exports will take off, according to new forecasts from the Energy Information Association.

The gist: Natural gas production is predicted to increase 15%, while LNG exports will skyrocket 152% between last year and 2050, according to the EIA’s “Annual Energy Outlook 2023.”

• “Production growth is largely driven by U.S. LNG exports, which we expect to rise to 10 [trillion cubic feet] by 2050,” an EIA blog post explains.

Where it’s happening: “Natural gas production growth on the Gulf Coast and in the Southwest reflects increased activity in the Haynesville Formation and Permian Basin, which are close to infrastructure connecting natural gas supply to growing LNG export facilities.”

• “New liquefaction facilities in Louisiana became fully operational in 2022, ahead of schedule. In addition, new LNG trains in Texas are scheduled to be online by 2025.”

How they figured it out: This projection comes from the “reference case” in the outlook report for 2023.

• “We use different scenarios, called cases, to understand how varying assumptions affect energy trends. The AEO2023 Reference case, which serves as a baseline, or benchmark, reflects laws and regulations adopted through mid-November 2022, including the Inflation Reduction Act,” according to the EIA blog.

Washington, D.C. – The National Association of Manufacturers has announced Brandon Farris as its new vice president of energy and resources policy.

“Brandon joins the NAM at a pivotal time in our country and for our industry,” said NAM President and CEO Jay Timmons. “Manufacturers across the United States face regulatory challenges that affect their ability to do what they do best: transform and deploy modern technologies to protect the environment, while creating jobs and strengthening the economy. Commonsense regulatory and permitting reform, along with energy security, are needed now more than ever. Brandon’s experience and expertise will help manufacturers accomplish these critical goals.”

Before joining the NAM, Farris was the head of federal government relations for The Chemours Company, where he played an integral role in securing passage of the AIM Act, designed to phase out refrigerants that contribute to climate change. He worked closely with the NAM to help secure bipartisan ratification of the Kigali Amendment to the Montreal Protocol during the 117th Congress. Along with these and other major legislative accomplishments, he was honored as a 2022 top lobbyist by the National Institute for Lobbying & Ethics.

Previously, Farris served as assistant general counsel for Arkema as well as senior counsel for government relations for the Saudi Basic Industries Corporation. After serving in the Marine Corps Reserve, he began his career in Washington as a Bryce Harlow Foundation Fellow at the George Washington University School of Law while working on the U.S. House Agriculture Committee.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.