Host: David Roberts
Category: ⚡ Renewable Energy
Podcast’s Essential Bites:
[0:24] “Recently, there's been a lot of talk in the energy world about the minerals needed by clean energy technologies and whether mineral supply problems might pose a threat to the clean energy transition. To hold warming beneath 1.5 degrees Celsius over pre-industrial levels, the world must cut greenhouse gas emissions in half by 2030, and reach net zero by 2050. To do that, it must radically ramp up production of solar panels, wind turbines, batteries, electric vehicles, electrolyzers for hydrogen and power lines. Those technologies are far more mineral intensive than equivalent fossil fuel technologies. A typical electric car requires six times the mineral inputs of a conventional car […] and an onshore wind plant requires nine times more mineral resources than a gas fired plant of the same capacity. Power lines require copper batteries and EVS require cobalt, lithium and nickel. Wind turbines require rare earth elements and so on.”
[1:34] “In its encyclopedic 2021 report on the subject IEA estimates that a concerted effort to reach the goals of the Paris Agreement would mean a quadrupling of mineral requirements for clean energy technologies by 2040. An even faster transition to hit net zero globally by 2050 would require six times more mineral inputs in 2040 than today. Some individual minerals will see particularly sharp jumps. The World Bank says graphite and lithium demand are so high that current production would need to ramp up by nearly 500% by 2050 under a two degree scenario, just to meet demand.”
[4:18] “Assigning all 328 million Americans equal share of our fossil fuel use, every American burns 1.6 tons of coal, 1.5 tons of natural gas, and 3.1 tonnes of oil every year. That becomes around 17 tonnes of carbon dioxide, none of which is captured. It is all tossed like trash into the atmosphere. The same US lifestyle could be achieved with around 110 pounds each of wind turbines, solar modules, and batteries per person per year, except that all of those are quite recyclable and getting more recyclable all the time. So there is reason to believe it will amount to only about 50 to 100 pounds per year of stuff that winds up in this trash. That is a huge difference. 34,000 pounds of waste for our lifestyle the old way versus 100 pounds the new electrified way.”
[5:52] “Fossil fuels are a wildly destructive and inefficient way to power a society. Two thirds of the energy embedded in them ends up wasted. That inefficiency has been rendered invisible by fossil fuels’ ubiquity and the lack of alternatives. Now that alternatives are coming into view, it's clear that any shift away from mining, drilling, transporting and combusting fossil fuels will dramatically ease human pressure on the biosphere and atmosphere.”
[7:09] “Another common misconception is that the clean energy transition could fall short because there simply isn't enough of certain minerals. This especially comes up around the somewhat misleadingly named rare earth elements. It's not true. Known reserves of all these minerals, including rare earth elements are much higher than demand and […], despite continued production growth over the past decades, economically viable reserves have been increasing for many energy transition minerals. Reserves will rise further with new exploration and detection methods. Currently, demand is forecast to grow much faster than supply. As that happens, there are bound to be choke points and price fluctuations, but those stresses will be temporary. Especially if policymakers anticipate and prepare for them. New caches of minerals will be found and recycling will increase in scope and effectiveness.”
[8:24] “Temporary minerals shortages or disruptions could result in more expensive, delayed, or less efficient energy transitions. IEA […] summarizes the risks to the transition posed by minerals supply […]: 1) higher geographical concentration of production 2) a mismatch between the pace of change in demand and the typical project development timeline 3) the effects of declining resource quality 4) growing scrutiny of environmental and social performance of production and 5) higher exposure to climate risk, such as water stress, among others. […] None of these risks is prohibitive, but if they are not managed, they can slow the transition.”
[9:19] “Production of the minerals needed by clean energy technologies is currently more geographically concentrated than oil and gas production. No single producer dominates in oil and gas markets the way the Democratic Republic of Congo dominates cobalt, China dominates graphite and rare earth elements and Australia dominates lithium. Similarly, processing of these minerals, refining and preparing them for industrial applications is highly concentrated, but mostly in one place, China, which processes around 40% of copper and nickel, around 60% of lithium and cobalt and around 85% of rare earth elements. The US, like most developed countries, has become highly import dependent on minerals. […] At least through 2025, IEA does not expect the level of concentration to change much. Aggressive investment in alternative supplies can decrease concentration eventually, but in the short term solutions will involve drawing producers into more transparent market frameworks, pressuring them to improve social and environmental performance in developing some buffer reserves of critical minerals.”
[11:59] “Demand for minerals is already rising and will accelerate rapidly in coming years. Unfortunately, exploration, discovery and exploitation of new mineral resources are marked by substantial lead times, in some cases over 15 years. These long lead times raise questions about the ability of supply to ramp up output if demand were to pick up rapidly. IEA writes: If companies wait for deficits to emerge before committing to new projects, this could lead to a prolonged period of market tightness and price volatility. To keep up with demand investors need to think ahead and lead times need to decline, which will involve substantial investment and governance help from wealthy consumer nations to poor producing nations.”
[12:51] “In recent years, two trends have driven down the average resource quality of many minerals. First, the known high quality deposits have been mined, and two, technological advances have allowed the mining of ever lower quality resources. […] As resource quality declines, the emissions intensity of mining rises, as does the amount of waste. Concerted action and investment will be needed to counteract this trend.”
[15:06] “Production of clean energy minerals is increasingly exposed to climate extremes. Lithium and copper are perhaps the two most important minerals in an electrified world. Over half the world's lithium production takes place in areas under high water stress. In Chile 80% of copper output comes from arid or water stressed regions. Other producing regions like Africa, Australia and China have seen increased extreme heat and flooding. Expanding demand could push production into even more vulnerable areas.”
[16:49] “The race for minerals courts some of the same dangers that came with oil and gas. Minerals will become crucial to the global energy system and their distribution, both production and consumption will shape geopolitics. Unplanned supply disruptions could have global consequences, just as with oil and gas. But it's also important to remember that minerals are different from oil and gas in crucial respects. The most important is that fossil fuel technologies require continuous fuel input. If there's a disruption in oil markets, it is experienced by every driver as an ongoing increase in gas and diesel prices. Minerals are only essential to the building of clean energy technologies, not to operating them. They are a materials input, not a fuel input. Supply disruptions or price fluctuations will affect markets for the technologies, but they will not affect existing users of those technologies. Solar energy from existing panels will not get more expensive just because copper does. This insulates minerals somewhat from the volatile consumer politics of fossil fuels.”
[18:01] “Every country in the world has an established relationship to oil and gas. It's a producer or it's not. But minerals and mineral markets are much more varied and dispersed. Countries could consciously decide to become producers by exploiting new reserves, they could invest in processing or manufacturing. Supply chains will shift and morph. Individual countries may have very different positions in the value chain for each of the minerals, ie rights. This makes the geopolitics of minerals more complicated than fossil fuel geopolitics.”
Rating: ⚡⚡⚡⚡⚡
🎙️ Full Episode: Apple | Spotify
🕰️ 20 min | 🗓️ 01/21/2022
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