The Biden Administration will invoke the Defense Production Act to increase the output of minerals used in batteries and electric vehicles, such as lithium, nickel, cobalt, graphite and manganese, the administration announced Thursday.
The Defense Production Act requires companies to prioritize federal contracts as a response to a national emergency. The goal of authorizing its use in this case is to reduce the country's "reliance on China and other countries for the minerals and materials that will power our clean energy future," the administration said in a fact sheet. The move comes as nickel prices have fluctuated wildly in recent months, leading to EV companies hiking their prices.
Russia's war in Ukraine precipitated those price hikes as the former is home to major nickel reserves. (It's also driven up gas prices, leading to higher demand for EVs.) China, meanwhile, has large reserves of lithium and has also aggressively pursued the minerals that will define the future in other countries as well. Now, the U.S. is playing catch-up as the Biden administration tries to get its climate agenda on track by cleaning up transportation and electricity emissions. The fact sheet notes these two sectors alone "account for more than half of our nation’s carbon emissions."
The administration said that the Department of Defense will implement this authorization using strong "environmental, labor, community and tribal" standards. While there's no denying the need to rapidly decarbonize every single aspect of the economy and the benefits of batteries in doing so, the U.S. still faces some challenges in meeting the lofty goals of environmental, labor and tribal justice outlined in the fact sheet.
The U.S. lithium mining industry is still in its nascent stages. Yet it's already run headlong into the exact problems the administration says it's trying to sidestep. Thacker Pass, Nevada, has been the site of a major proposed lithium mine that's run afoul of both tribes and environmental groups and become bogged down in lawsuits. There are also other avenues for both fixing mining regulations and ensuring a steady supply of minerals to build out a no-carbon future, though they may not jive with the DPA order.
"The government must focus its purchasing power on recycled content and building a circular minerals economy, and reform federal mining laws to ensure protections for our shared public lands and the communities that call those lands home," Lauren Pagel, policy director for nonprofit Earthworks, said in a statement.
The DPA isn't the only avenue the Biden administration is using to try to ease pain at the pump in the near term (and not blow up the climate down the road). The administration also called on Congress to make fossil fuel companies pay fees on unused oil wells on federal land, saying that they're "hoarding without producing" as prices spike.
"Companies that continue to sit on non-producing acres will have to choose whether to start producing or pay a fee for each idled well and unused acre," the administration said.
Rep. Katie Porter famously dunked all over oil CEOs and the president of their industry trade group during last year's landmark Big Oil hearing for having nearly 14 million acres of unused federal land under lease, all while pushing for more federal leasing. So the Biden administration has at least one member of Congress who's probably onboard already.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE