Riley Beggin

US looks to Canada for minerals to supply EV batteries

WASHINGTON — U.S. policymakers hoping to power an electric vehicle boom acknowledge the country lacks a robust and reliable supply chain for the minerals needed to power next-generation cars. That reality — exposed by the economic aftershocks delivered by the COVID-19 pandemic — looms as a national security risk the administration plans to remedy, in part, by working with like-minded nations. Increasingly, Canada appears to be among the first in line. The White House is signaling plans to increase collaboration between the U.S. and Canada on critical minerals, according to a recent supply chain review that highlighted the country’s mineral assets. It’s one of several indications the administration sees Canada as a crucial ally to realize its EV goals, including a joint announcement July 1 to collaborate on reducing emissions through clean energy, mineral sourcing and accelerating EV adoption. “No two countries in the world have their energy sectors as closely linked as Canada and the United States do,” Canadian Natural Resources Minister Seamus O’Regan said in a statement. “It’s a relationship that supports thousands of jobs and drives economic activity on both sides of the border. We’re strengthening our bilateral energy relationship to build a clean energy future.” In the long term, President Joe Biden and his administration hope the U.S. can build up domestic mining operations to provide reliable mineral sources such as lithium, cobalt, nickel and graphite at home. But in the short term, they’re looking to allied countries like Canada with robust mining operations and compatible environmental standards to help out. It’s part of a larger strategy in which Canada is positioning itself to be a “premium” supplier of battery minerals to the U.S. and other countries looking for transparent supply chains with requirements for environmental and labor safety, analysts say. And compared to other allies like Australia and Japan, Canada enjoys an advantaged tax status and proximity to auto manufacturing centers in Michigan and Ohio. “These two federal governments share the same values,” said Christopher Sands, director of the Canada Institute at the Wilson Center, a non-partisan foreign policy think tank. “We have the same common cause — that’s what Canada is really trying to get across with its outreach to the Biden administration. To say, ‘We get you, we share exactly your perspective and we want to help you succeed.’” The China problem As the coronavirus pandemic ravaged communities and shut down economies, it revealed a new weakness that U.S. policymakers are just beginning to grapple with: A supply chain so fragile that the economy or national security can be impacted by a ship stuck in the Suez Canal, sudden increased demand for electronics, or political rivals seeking retaliation. In particular, the latter possibility is sending chills up lawmakers’ spines. The leading economic and political rival to the United States on the world stage, China, is home to more than 75 percent of all battery production capacity and around 80 percent of global refining capacity for EV minerals, giving it immense influence over the battery supply chain. “It is reasonable to expect that China could restrict exports of any or all of the battery supply chain materials it produces” due to trade tensions or interest in giving priority to Chinese customers, Department of Energy researchers wrote in a recent supply chain review for electric vehicle batteries and critical minerals. “Alternatively, China could dump processed materials or finished anode and cathode materials on global markets to reduce competition.” It’s not just about economic strategy: The fragile mineral supply chain is also being dubbed a national security threat, as lithium batteries are crucial parts of “propulsion, communications, sensors and weapons” operations within the Department of Defense, according to the report. The United States has stores of many of the raw materials needed for electric vehicle batteries, but it lags behind China and such countries as Australia, Brazil and Canada in mining and processing, according to the report. And with a democratic system that won’t accommodate the quick, targeted spending strategies used by China’s communist government, experts say the United States will have to take an approach that incentivizes domestic production while filling in the gaps with reliable imports. “I think there’s a growing acceptance at a government level that there’s a lot of potential benefits from taking an approach to battery raw materials that’s more regional, rather than just within your own borders,” said Andrew Miller, product director at Benchmark Mineral Intelligence. “As people become more familiar with some of the challenges facing the strategic minerals supply chain, it becomes pretty apparent that you’re not going to solve these problems overnight. Most likely, you’re still going to have some kind of dependence on other nations. So positioning those dependencies with allies and with countries that have a strategic position to help you does make sense.” Northern neighbors Biden has pledged to make the U.S. a leader in battery manufacturing and to ensure new jobs supported by the growth of electric vehicles will be kept in the U.S. The new supply chain review and recommendations from the Departments of Commerce, Energy, Defense and Health and Human Services reflect that’s still the plan, accomplished in part by boosting demand for electric vehicles and incentivizing more private sector investment. The administration has faced some early opposition from some conservationist and Indigenous groups over environmental concerns about increasing mining activity within U.S. borders. Biden has said he would triple the amount of federal land set aside for conservation, but it’s likely to be a point of tension as the administration seeks to both accelerate battery production and protect natural resources and prioritize environmental justice. “A lot of these EV raw materials aren’t necessarily scarce around the world,” said Miller of Benchmark Mineral Intelligence. “But attracting the financing and having the technical capabilities to turn that into something that the battery industry can use; that’s where the gap is.” While Canada has an established mining industry, it’s not yet producing electric vehicle battery minerals at scale, he said. However, U.S.-Canada trade in critical minerals already exceeds $76 billion, according to the Department of Defense, and Canada also has some unique advantages as a frequent trade partner and geographic neighbor. Being close to auto manufacturing centers in Michigan and Ohio makes Canada a natural supplier choice, as the cost of shipping goes up the further away resources are coming from. Canada also plans to become a center for battery recycling for this reason, Sands said, as lithium-ion batteries are heavy and shipping them from Detroit to Quebec is cheaper than other far-flung areas. Lithium-ion cells and battery packs imported to the U.S. are subject to a 3.4 percent tariff, but Canada and Mexico are exempted under the United States-Mexico-Canada Agreement. Plus, Canada is the only country that can be considered a “domestic source” under the Defense Production Act, making Canadian companies eligible for some U.S. government funding. Canadian officials are likely to face similar opposition from conservationist and Indigenous groups, Sands said, but the Canadian government in recent years has tended to coordinate more closely with Indigenous groups than in the U.S. and is attempting to get ahead of potential conflicts. “The way that Canada has been approaching these new mining projects is bringing everybody on board and trying to line up a very consumer-friendly, investor-friendly picture: heavy mining that’s done in the safest possible way,” Sands said. “They think that that will be their edge.” This is not the first time Canada and the U.S. have indicated they’re planning to collaborate on critical minerals. Former President Donald Trump’s administration agreed upon an action plan to secure critical minerals supply chains early last year. The Biden administration doubled down on that commitment in February. In March, the Commerce Department held a roundtable discussion with mining companies and battery manufacturers about how to strengthen the mineral supply chain between the U.S. and Canada. Both countries also already participate in an international consortium with Australia, Botswana and Peru that’s dedicated to ethical mining practices called the Energy Resource Governance Initiative.

Do EVs actually have a smaller carbon footprint than gas-powered cars?

WASHINGTON — A quiet partisan battle is brewing in the nation’s capital over government’s role in helping the fledgling electric vehicle market off the ground. As Democrats push President Joe Biden’s $174 billion electric vehicle proposal with the hopes of out-competing China and reducing carbon emissions, many Republicans are calling the administration’s approach an anti-free market plan that costs too much; and that when it comes to emissions, the cure could be worse than the disease. How the debate ends could have profound implications for Detroit automakers and their rivals, who all generally agree that the road to an electrified fleet should be paved in part by government subsidies to speed consumer adoption. Derailing the Biden push could make that transition slower. “While EVs are branded carbon-free or emission-free, that is simply not the case. The electricity comes from somewhere, and that somewhere is predominantly power plants that are reliant on fossil fuels,” Rep. John Rutherford, R-Fla., told Transportation Secretary Pete Buttigieg in one such exchange during an April committee hearing. “I fear that the $174 billion that we’re about to invest in what really are the Model A, I think, of electric vehicles — we’re going to invest that and our environment, our emissions and our air quality could actually be worse off, not better.” Buttigieg’s response: That without electric vehicle adoption, “we have very little chance of meeting our climate goals before it’s too late.” “I take your point that the carbon profile of driving isn’t just about the tailpipe. It’s about the power that goes into the vehicle, too. And we do want to be conscious of that — although I would suggest that unlike the carbon profile of driving a diesel or gasoline vehicle, it stands only to get better each passing year as our generation sources get greener.” Scientists say the emerging debate has an answer: EVs are not “emissions-free,” but they already produce fewer emissions over their lifetimes than gas-powered cars. While the grid must expand to accommodate more EVs on the road, forecasts indicate it likely will get more renewable in the coming years. According to the U.S. Department of Energy, nearly 80 percent of electricity in the United States comes from fossil fuels. There’s no exhaust coming from electric vehicles, but the process of producing and charging them still produces carbon emissions. However, life cycle analyses of electric vehicles — which account for all of the emissions created by producing, using and recycling them — show that EVs already produce fewer greenhouse gas emissions over the course of their lifetimes than gas-powered vehicles, and only stand to produce fewer such emissions as technology advances. “Even if the grid is powered by coal or natural gas, an EV of the same vehicle size and capability still typically has better CO2 emissions,” said David Tuttle, a researcher at the Energy Institute at University of Texas at Austin. “So, it’s a catchy soundbite, but a false statement that conventional vehicles produce” fewer carbon emissions than their EV counterparts. Fewer emissions overall Scientists studying electric vehicles’ lifetime emissions have found that their carbon intensity tends to be on the front end. Gathering the raw materials and producing EVs typically makes more greenhouse gas than gas-powered cars, according to a recent congressional analysis of the scientific literature. But gas-powered cars quickly outpace electric ones in emissions once they hit the road. Amgad Elgowainy, senior scientist and leader of the electrification and infrastructure group at Argonne National Laboratory, and his team have spent years doing “cradle to grave” analyses. They found in 2016 that plug-in hybrids, battery electric vehicles and fuel cell electric vehicles already had lower emissions than gas- and diesel-powered vehicles and a higher capability to improve. In their newest study, which will come out later this year, that gap has only widened. “Using the average carbon intensity to make a unit of electricity that goes into battery electric vehicles — if I compare that today to a gasoline internal combustion engine, it cuts the emissions by half,” he said. Even if gasoline-powered engines start using the lowest-emission power source — forest residue, a renewable biomass fuel that can be treated in order to be used in conventional cars — it would still emit more greenhouse gases over its lifetime than an EV being charged with its lowest-emission power sources, solar and wind electricity. The share of renewable energy sources making up the average U.S. grid has grown in the last five years while coal use has declined, and renewables are only expected to continue to grow, according to the U.S. Energy Information Administration. Making EV batteries lighter and more compact also decreases vehicles’ carbon footprint because it takes less energy to propel them. “There’s no silver bullet there to see into the future. It’s all about scenarios. But in general, if you look … at how the grid will evolve into the future, it is definitely evolving into a lower-carbon portfolio,” Elgowainy said. “The grid will become cleaner over time regardless.” Jessika Trancik, an M.I.T. professor who runs a lab studying emerging energy technology, also told The Detroit News via email that battery electric vehicles “reliably and substantially reduce greenhouse gas emissions relative to internal combustion engine vehicles” even on today’s power grid. For example, the Tesla Model 3 produces 87 percent fewer emissions over its lifetime than a comparable gas-powered car, the Mercedes-Benz A220, and the Chevrolet Bolt produces 68 percent fewer emissions than the comparable gas-powered Mazda 3, according to an analysis tool developed by Trancik’s lab. That’s not to say that EVs are totally environmentally friendly: Environmental and human rights groups have raised concerns about methods used to mine the raw minerals such as cobalt and lithium needed to make electric vehicle batteries. The majority of the world’s cobalt comes from the Democratic Republic of Congo, where many workers, including children, dig for the material by hand and are exposed to frequent safety hazards. Congolese cobalt mines can also produce hazardous waste and air pollution. Mining lithium, primarily from Australia and South America, can be particularly water-intensive; batteries can take more than 50 percent more water to produce than an internal combustion engine. Expanding the grid But Republicans note it’s not just about how EVs perform now; it’s about what will happen if a majority of cars on the road are powered by electricity rather than gasoline. If the United States’ energy levels remain the same, it would put a strain on the grid, Department of Energy officials acknowledge. Rep. Larry Bucshon, R-Ind., asked Energy Secretary Jennifer Granholm during a House Energy and Commerce subcommittee hearing last month how the administration plans to account for increased electricity demands due to more EVs on the road. “There definitely will be increased demand,” the former Michigan governor said. “And that means we have to add additional energy sources to the grid. That’s why a lot of the new energy that is coming on, like solar and wind, which are cheaper than others, is an opportunity for us to continue to provide affordable electricity.” Bucshon noted those sources will not only have to expand existing energy capabilities but will also have to replace fossil fuel energy if the administration is successful in its plans to reach carbon pollution-free electricity generation by 2035. “It’s a big challenge,” he said. Biden’s proposed budget includes $10 billion to support clean energy projects — which would include wind, solar, hydro and nuclear power, among others — and would increase the Department of Energy’s overall budget by more than $4 billion over the last fiscal year. In the short term, as EVs become a larger share of cars on the road, that extra demand on the grid may or may not translate into more emissions depending on when and where the vehicles are charged, Elgowainy said. Some areas have electricity grids supported by much cleaner energy sources than others. In the long term, meeting the administration’s clean power goals likely will require a significant expansion of wind and solar energy generation with some regional differences, according to the department. About 75 percent of new additions to the U.S. grid in 2020 were renewable, largely solar and wind. “For the grid to get to 100 percent clean, we need to have flexible loads and storage both” to balance variability and ensure consistent energy availability, said Michael Berube, Deputy Assistant Secretary for Sustainable Transportation at the Department of Energy. One strategy, he said, is developing regional charging strategies to take advantage of peak times when renewable sources are available. For example, supporting mid-day workplace charging in places like California, where solar can meet the extra need. Another way is to build energy storage into charging stations and buildings to meet needs at surge times. “Transportation, our studies show, will be the largest new load to the grid, but also the most flexible,” he said. “We’re very focused on thinking about smart charging technology so that you have the capability to manage when you charge those vehicles to help flatten the load.” While the transition to electric vehicles marks a major technology shift, Berube said it’s not unprecedented; the electric grid has adapted in the past to field big new loads like air conditioning and refrigeration. “It’s not out of the norm of what’s been done. One of our key messages is: If you wanted to do it all next year, that might be close to impossible. But if you want to do it over the next 15 years, that looks and feels a lot more like what we have done as a country over time and that’s a lot more plausible,” he said, adding that’s also why “there’s urgency. We need to get going now.”
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