Making Less Vulnerable the Minerals Critical to Power's Future

The Energy Act of 2020 defines a critical mineral as a non-fuel mineral or mineral material essential to the economic or national security of the U.S. and which has a supply chain vulnerable to disruption. But there is a lot more to the discussion when it comes to where the energy and utilities industry is headed on the road to decarbonization.

The terms, critical minerals and rare earth minerals, are bandied about especially when it comes to electric vehicle batteries. It is important to realize, as renewables generally are more favored for reaching clean-energy goals, that solar photovoltaic plants, wind farms, and electric vehicles require more minerals to build than their fossil fuel-based counterparts. A lot more.

The shift to clean energy is driving a huge increase in requirements for such minerals, so the energy and utilities sector is among those vying for these markets. To figure this all out, PUF brought together four experts to discuss this important issue.
 

PUF's Steve Mitnick: According to General Motors, why should the industry find this subject of critical minerals important?

Michael Maten: The transition to electric vehicles is inevitable. It is the best solution to decarbonize the transportation sector. That means there's a massive role for batteries and electricity.

Michael Maten: Look into alliances with trusted allies like Canada, Australia, that we know are resource rich. To potentially form agreements to secure supply for all this capacity that’s coming online in America and then longer term in the six- to ten-year timeframe.

The best technology we have right now for batteries is lithium-ion and that's going to persist into the future. Perhaps we find different chemistries, elements that are more abundant, so that we can make more energy-dense batteries. That's what we hope will happen.

In the meantime, we're trying to go through this shift quickly and you see an article every day about this critical mineral. The bottleneck could very well be, not demand for electric vehicles but supply of the materials to make the batteries.

It gets more attention because of the semiconductor crisis today, but it will be a real issue in the late twenties unless we start thinking about the problem now. It involves a couple of things.

It's availability of critical minerals, but also about security of supply chains as we look to domesticate these supply chains. A lot of this capability is in North America and by building it here, you can guarantee sustainability and security.

Alex Moyes: There’s competition for natural resources required for the transition. GM and Tesla have supply agreements and direct funding of mining operations. Rare earth elements, we need a lot for offshore wind, but they need those for EV motors. Utilities are a bit behind.

We have to keep an eye on cost competitiveness and how we make that cost competitive. Batteries are more expensive than the alternative but there's so much money being thrown at this, there's so many smart minds and research that I know we're going to get there.

It's going to play a massive role in the way energy is distributed. You're going to have cars with enormous energy needs, but also enormous storage capability.

We are going to deploy essentially the world's largest energy storage network. We're going to have to think about how to use that asset efficiently.

Is everybody's car going to become a storage place for the grid? No, that's not what we're talking about, but they will be a part of this overall energy storage network that can be optimized for the best efficiency, given that some of the energy creation, solar, wind, is intermittent. Batteries become a big part of that energy equation.

Jane Nakano: Critical minerals and rare earth are available in many places and it’s not that they’re rare. It is rather rare to be able to extract, produce, and supply them at commercial scale. There is geographical concentration of these minerals.

Batteries are also a solution to some of the fast-charging needs as you build out the EV charging infrastructure. If you have four or eight or ten, three hundred fifty kilowatt chargers in a location, it's doubtful you're going to have a service that can support concurrent use of all those chargers. You're going to need some stationary storage that points to batteries, which gets us back to this critical minerals issue.

PUF: Turning to Dominion Energy, why is this subject important to one of the biggest utilities in the country?

Alex Moyes: Utilities are working with auto manufacturers like GM, Ford, Tesla because to charge their batteries they need reliable electrical services. We're intertwined, so the growth of EVs is also the growth of load for our system.

That means we're able to deploy more capital and that's how a utility earns income. We need to be in lockstep as these electric vehicles are hitting the market, so we're building a grid that can sustain it, but it also needs to be a grid that is green.

Grant Bromhal: We’re looking at ways we can use more available minerals that might have the same functionality as some of rare earths. Can we use sodium-ion batteries instead of lithium or can we find substitute materials for the rare earths in magnets that will still give the same functionality?

It needs to be as carbon-free as possible or else the benefit of an electric vehicle isn't as beneficial if you're still running the grid say, from a coal-fired generation plant. That's on the EV side of the mix.

The storage potential of vehicles is something we're looking at, but one of the complications is often when we need to balance the grid, as that's not when they want us to drain their batteries and put that energy into the grid. Matching supply and demand can be challenging, which brings up the stationary storage concept that utilities are exploring in a big way.

There are some stationary storage options that are less critical mineral intensive. You might be using some of these ion flow type batteries that are less energy dense, take up more space, but require less critical materials. There are more materials available for these types of batteries but they're not necessarily commercially ready to go.

A lot of the grid in the U.S. isn't to a point where there are enough renewables on the grid that we're able to capture a lot of excess energy from. We do need to think about the storage side of things, once we have renewables built out enough that we're over-generating and can use that excess capacity to power when we have high peaks. There is going to be a critical mineral component whether it's a lithium backup battery or otherwise.

When we talk about low-carbon energy generation at Dominion Energy, we are all-in on offshore wind. Offshore wind has many benefits, such as a higher utilization rate compared to onshore wind, to solar. All three are important, but offshore wind is also the most material intensive of renewable energy generation.

We're in the process of building out one of the largest offshore wind projects in the United States, offshore Virginia, and there's going to be two thousand six hundred megawatts from one hundred seventy-six wind turbines. These are massive pieces of machinery that have a high critical minerals demand.

We're looking at about a million and a half pounds of rare earth elements that'll be going into those turbines to help generate electricity. When you scale that, since the world average grade for rare earth elements is about one percent, that's a lot of earth that needs to be excavated.

You're now talking about mined materials of over a hundred million pounds just for the rare earth elements in the turbines and a utility needs to think about that.

Our customers are not thinking about who supplied these rare earth elements to Dominion. They're looking at Dominion and saying, you have deployed this energy source, we hope you are using critical minerals that have been mined in a sustainable way, they haven't used any forced labor, haven't been coming from a mine that's done massive environmental damage.

These are questions that utilities need to be asking since currently the majority of critical minerals are processed in China. Many of them are also mined in China where mining standards are much lower than in Western nations.

We need to have our hands on what are the processes that they're using and how can we ensure that these mines are using low-carbon energy sources? Utilities should be partnering with mines and thinking about how we can help them power their operations with natural gas, solar or wind, and battery backup here in the United States.

Because of how interconnected autos, utilities, and mining are, we need to be partners and help each other make this as sustainable a transition as possible for the folks in North America.

PUF: Where are all these critical minerals? You have to know where they're coming from?

Jane Nakano: These critical minerals and rare earth are available in many places and it's not that they're rare, even when it comes to rare earth. One tricky thing about rare earth is that when people hear rare, they think it almost does not exist.

But it is rather rare to be able to extract, produce, and supply them at commercial scale. Rare earth and other critical minerals, there is certainly geographical concentration of these minerals.

For example, for lithium, there are four or five countries including China, also Australia, Chile, a couple others in Latin America that have large reserves.

When it comes to refining, that's where I stress that much of the refining capacity lies in hands of Chinese companies. That's where some of the geopolitical concern arises from multiple countries wanting to get more value out of minerals and turn them into consumer products, including electric vehicles, as well as renewable energy, power-generation equipment.

PUF: The Department of Energy is all over this subject, so talk about what the government is focused on and what the path is to make things better.

Grant Bromhal: The Department of Energy sees the rare elements of critical minerals as critical to the clean-energy future. Every energy aspect we're looking for in the next thirty years is going to require more use of these.

Projections from the International Energy Agency say critical minerals in general will rise by a factor of four times more than what's used today. Lithium will rise by a factor of over forty, graphite by a factor of twenty-five. Rare earth elements by a factor of seven, over what they are today.

We're already reliant on other countries and especially China for most of these. The secret that not everyone knows, is for many of these critical minerals, the U.S. has them here domestically. They can be found in different sources across the country. But can they be recovered in a way that's environmentally friendly and can compete with others on cost?

The Department of Energy is trying to develop the technologies that enable us to do this sustainably, so we can meet these needs coming forward, including generating new extraction technologies and processing technologies.

In the group I'm working in, we're focused on waste material, for example, coal waste and acid-mine drainage. It turns out we can recover rare earth elements from these sources.

What we've seen so far, tells us we can recover rare earth elements and other critical minerals, like lithium, cobalt, and nickel from these waste materials. We're in the process of standing up the technologies that will show we can do that at a large scale, the next step toward commercialization.

PUF: What is GM trying to do to secure its ability to manufacture and sell a lot of electric vehicles cars?

Michael Maten: We're working across the entire EV ecosystem and plan on offering a full portfolio of electric vehicles. Starting of course, with the Bolt EV, Cadillac LYRIQ, and Hummer EV, which are out there today. Also, the Silverado EV that's coming out next year. The Equinox EV at a thirty-thousand-dollar price point.

We plan on offering a full portfolio of EVs for all uses, at all price points. We also have efforts in the infrastructure space with companies like Dominion to make sure the infrastructure is there.

We can't just focus on one aspect. We have to look at residential infrastructure. How can people charge at home or from their apartments?

Workplace charging is important. That's the other place vehicles spend a lot of their down time is at the workplace, even in a post-COVID world. Finally, public fast charging, which is going to be important for road trips to get people comfortable that they can get a charge.

The government with its 7.5 billion allocated for the charging infrastructure rollout, leaving the spending to the States. That's a critical step.

But frankly, the 7.5 billion is only a fraction of what is needed in that space. It's probably ten percent, maybe less.

On the supply chain side, working to build our capacity and assemble electric vehicles. We know how to assemble a vehicle. We're going to switch our plants over to electric. But also getting into the cell manufacturing space, making those cells right here in the U.S.

We're trying to cover all aspects of the supply and demand equation and bring everybody along with us. This isn't something that can just be for the rich and trickles down. This effort can be used to create American jobs too.

PUF: What is Dominion doing to secure its supply chain?

Alex Moyes: This is such a new concept for most utilities. I don't know that the utility industry as a whole has got its arms around it. While we're — renewable energy companies — all working together, there's some level of competition for the natural resources required for the transition.

You're seeing the auto manufacturers leading the way. You've seen a lot of direct investments in mines to ensure they have the available supply.

You haven't seen utilities necessarily start moving in that direction, which would be an important step for utilities. Take rare earth elements and lithium for example.

GM and Tesla, among others, have gone into supply agreements and the direct funding of mining operations.

If you look at rare earth elements, we need a lot of those for offshore wind, but they need those same rare elements for their electric vehicle motors and communications technology. Those permanent magnets are so important in everything from the motor that rolls up your window, to the speakers inside a telephone.

People don't understand how many of these permanent magnets are in modern electronic devices. They all need rare earth elements.

Utilities are a bit behind on making sure we've got the supply. It would take about sixteen years on average to go from exploration to have mine production of critical minerals. This must be taken into consideration during planning for renewable energy deployment to ensure the demand is matched with sustainable supply, and in many cases, they are out of sync.

Utilities should be finding ways to look at the waste we have here in the U.S. The industry has generated a massive amount of coal ash and other byproducts. Dominion is looking into new, innovative ways on how we might be able to extract, in particular, rare earth elements from our coal ash.

Hopefully, that's something over the next few months, we'll have potentially more to say about. You've seen other utilities such as Berkshire Hathaway, which has geothermal assets in the Salton Sea. They've got a unique opportunity to coproduce lithium with their geothermal brine.

Depending on the assets utilities have, they might be able to directly contribute to the critical mineral supply. Those options are more limited than we would all like, but utilities do need to come together and explore those brine and coal-ash opportunities.

Utilities are starting to partner with large mining companies that are starting to install solar. There is an opportunity to at least partner, to make sure we're supplying as much clean energy as possible to these mining operations.

For our supply chain, we are trying hard to make sure those suppliers we buy from have secured contracts for these critical minerals. We do our best to ensure our suppliers are getting their critical minerals from nonconfrontational countries or countries using the highest environmental standards. But it's hard because traceability is almost nonexistent since the majority of the upstream and midstream supply chain is in China.

PUF: Jane, talk about what companies and governments are doing to address these problems of the vulnerability of supply. Not just in the U.S.

Jane Nakano: Let me speak more to what the governments are trying to do, as opposed to individual companies. Europeans have been looking at this intersection of decarbonization and industrial competitiveness for quite a while.

Securing the rare earth and critical minerals requirement for them is about being able to deliver on the decarbonization goal, and to expand their economic opportunities. I'd argue they've been ahead of the United States.

The U.S. has been focused on critical mineral supply chains, but more from a national security requirement perspective. It's rather recent that we've put two and two together that there's great economic opportunities to be seized.

There are other OECD developed economies interested in getting more value out of this ongoing energy transition. The Japanese and Koreans are heavily dependent on imports for some of the upstream supplies, but they have some midstream capabilities.

They're looking at ways to collaborate with mineral-rich countries, such as the United States. But also, with countries like Australia and Canada.

The permitting process takes a lot longer in the United States, than some other western economies with comparable respect for governance, sustainable mining, and labor standards. Such countries are more attractive as partners to some of these mineral-importer countries.

I want to note the Chinese are hoping to stay competitive. It took them a while to fully develop their supply chains. They were more of a simple supplier of rare earth and other minerals in the past.

But since the turn of the century, the Chinese have been able to capture more values out of their minerals and metals, also being able to manufacture clean-energy technology components and supply to the global market. They also face a supply and demand concern over minerals themselves.

Securing critical minerals supply is a concern universally shared among all the economies that have climate-mitigation interests and industrial competitiveness objectives. In the United States, it has lot to do with our desire to ensure that supply chain is secure so our energy transition will be geopolitically sustainable.

PUF: Grant, give an overview of what the U.S. is doing to address some of these problems and that the Department of Energy is looking into and working on.

Grant Bromhal: Diversifying supply, finding different sources, is one of the main things we're working on. DOE is also working on developing substitutes.

We're looking at ways we can use more available minerals that might have the same functionality as some of these rare earths now. For example, can we use sodium-ion batteries instead of lithium or find substitute materials for the rare earths in magnets that will still give them the same functionality?

We're looking at the recycling landscape. Now, recycling is not going to be a huge part because we're still in the growth stage, we're still ramping up. We expect if you take everything we produce now and look at end of life, we're not going to recycle our way to where we need to go.

In the next decade or so, we want to be ready with our technology, so we can get a significant portion of the materials we need for all these clean-tech energy technologies from recycling.

This is something we're looking at across the Department of Energy and government.

As we look toward the energy transition, there's going to be a significant change in the next ten to thirty years from energy resources in this country. There are going to be communities that are hard hit.

We're looking at working with those communities to make sure as we bring back this manufacturing base into the country, we're building their needs into this, we're keeping their air, land, and water clean, and also from a workforce development standpoint.

In addition, DOE is working across the government to do a better job at identifying what these future needs are going to be. Identifying which minerals and materials we need to focus on.

We're working with organizations like ISO to develop standards that are going to be used for mining, extraction, processing, refining of rare earth elements, lithium, and other critical minerals, so we can better play on a level playing field with other countries in this space.

PUF: In the next, three to five years, what can the industry do to help you move forward?

Michael Maten: It's important, what are the near-term needs? The infrastructure, those chargers have to get put in the ground, be deployed, and they have to work.

On the supply chain side, we have a massive amount of cell-manufacturing capability that's going to come online in the next three to five years in the U.S. Probably a couple one hundred gigawatt hours in the next five years, probably five or six giga-factories of cell-manufacturing capability.

At the same time, you're going to see the raw-materials processing. The cathodes, anodes, separators, electrolytes that go into those battery cells, most of that comes from Asia, largely from China today, but those factories will start to ramp up here.

What we're not going to see in the next three to five years is a lot of extraction because those projects are longer term, but that doesn't mean we don't need action. We need people at DOE, as well as other parts of government to take a look at where these minerals are. Find the best, most sustainable way to extract them.

Look into alliances with trusted allies like Canada, in Australia, which we know are resource rich. To potentially form agreements to secure supply for all this capacity that's coming online in America and then longer term in the six- to ten-year timeframe.

PUF: Alex, look three to five years out. What can the utilities industry, state governors, regulators, policymakers, legislatures do to help you succeed in strengthening our supply?

Alex Moyes: In the short-term, we have seen so many announcements for gigafactories over the last year, and that is great news.

There's a lot of capacity to build more batteries even here in the United States. But the announcements for new mines are lagging behind. We need to change the rhetoric. Right now, mining has a dirty past.

We need to focus on what is mining doing now and where is mining going in the future? Think less about the unfortunate past of mining, but lessons have been learned and we need to start creating an environment in the United States where we become pro-mining again.

That brings me to what I think is potentially a short-term and long-term challenge. One of the biggest risks we face in the United States is our students are not going into mining-engineering. They're not going into metals- and materials-engineering.

That's a big problem. We need to figure out how we get our youth excited about being part of the energy transition. We have not done a good job going into the high schools and colleges and explaining the connection between mining and our modern, technological society.

A lot of college students would tell you, We love renewables. They don't understand the connection to mining. That's something I'm working on with other academics on how we can better get that message out.

Here's an interesting fact. Take a one thousand pound electric vehicle battery, and for the nickel, cobalt, and lithium, you're looking at about five hundred thousand pounds of raw material for that battery.

If you look at the targets for electric vehicle deployments over the next twenty years, we will be mining more materials for those electric vehicle batteries than we have throughout all human history. That takes serious innovation.

In the near term, we're focused on waste streams. That is a fantastic place to start. We have a long legacy of mining in the United States. From the early days of mining, we have big waste piles, and big tailing piles, which hold a lot of these critical minerals that we can go back and reprocess. That's similar to the coal-ash story.

Developing new technologies to be more efficient at reprocessing waste could be something that's going to make a big difference. The innovation part of it is going to be important.

We talk about replacements. There are fifty critical minerals that the U.S. has deemed critical. For about half of them, we are one-hundred-percent import reliant upon.

We are having these conversations about, what if we switch this critical mineral for this mineral that's less critical, but what could happen is called anti-innovation. We need to be careful because some of these critical minerals have important properties that are hard to replicate and using less efficient metals and materials would take us in the wrong direction.

We need to find a balance of not moving backward just for the sake of the supply chain. We are better off trying to figure out our supply chain and trying to do as much domestic production as possible, so we can continue to innovate, and not forgo these critical minerals because of our predicament.

PUF: Jane, what's your crystal ball? Where is this issue going in the next three to five years?

Jane Nakano: There is a continued need to tell the public that this so-called, low-carbon energy system, will be mineral intensive. That does not mean we should stay away from low-carbon energy technologies. Nor do I advocate for complete shutdown of oil and gas wells because there is still important value to what fossil fuels can do.

There is an emerging recognition that we require a lot of mining, a lot of minerals to be able to expand clean-energy supplies. Communities need to become more aware that we can't say we want more wind turbines, but we don't want any mining for minerals and metals for wind-power equipment, while feeling economically secure.

There is always a trade-off. The high import dependence comes with a lot of the political concerns.

Go to high schools, go to elementary schools, just to let the kids start thinking about different opportunities. But the mineral supply chain will be more important, as there is this healthy rivalry not just between China and the west, but also among a lot of western economies, to be able to have more secure supply chains and create more jobs at home.

At the same time, though, there is a sense of the urgency when it comes to the climate crisis. The idea is to collaborate with countries that do have similar values, mining standards, and governance standards, to figure out where we could benefit from synergy, from interdependence that has brought about important benefits to different parts of economies in the past.

Going forward, I expect more discussion, especially in the short-term, on what to do with mining regulations. There's the federal level, with close to half a dozen key ones, and then state and local level permitting requirements.

Especially looking at what Europe is going through vis-a-vis the Russian aggression, just because it might require more mining, doesn't mean we should turn away from this EV transition or greater renewable power deployment.

The idea is to recognize that each has different energy security attributes, as well as climate attributes. Just because we transition to a certain type of energy system doesn't mitigate geopolitical concerns. They just come with a different set of stakeholders we need to deal with and try to find the best way to safeguard the critical mineral supply chains.

PUF: Grant, what's in your crystal ball the next three to five years?

Grant Bromhal: I'll start by using the word infrastructure. From a DOE perspective, I'll mention the bipartisan infrastructure law. There are significant resources in there, that we're in the process of working out how to fund new research and development projects.

There's six billion dollars in grants programs aligned for battery-materials processing and battery manufacturing. There's information on where people can apply on DOE's website, and the goal is to stand up facilities, create several demonstration and commercial-scale facilities in the next few years to help build out that midstream and downstream supply chain that's so important for these critical minerals.

We have an RFI for building out a demonstration facility, and we're in planning to take those waste materials that I mentioned before, either acid-mine drainage, mine waste, or similar materials, and generate a facility that will refine those all the way to metals here in the U.S., at a significant scale. We expect in the next three to five years to have that facility in place and demonstrating this can be done.

The Department of Defense has been using the Defense Production Act for rare earth elements already, looking to generate processing facilities in the U.S., whether from domestic or trusted foreign sources. DOE and DOD are going to work together to figure out how we can best use that for battery materials in different forms.

One of the programs we run in my division is our CORE-CM initiative. These are a series of regional groups across the country that are looking at, what are the resources available within these regions that can be used to help build domestic supply chains?

We're looking at mineral resources from this broad variety of sources, but we're also looking at what are the infrastructure resources? What are the workforce resources we can help retrain, or have the skills we can bring together? A lot of those are run by universities.

The Critical Materials Institute has been in place for almost a decade now, producing new technologies across the spectrum from recycling to developing substitutes. They have new technologies that I hope and expect will be moving toward commercialization in the next few years.

This year, it's the 150th anniversary of the 1872 Mining Law that's used for all hard-rock mining, and there's a concerted effort across the government to review that with the USGS. The Department of the Interior is a leader.

Many other agencies are involved to see what we can do to update that, so that we can help facilitate moving forward in a safe, environmentally friendly, just, and expeditious way that will help us meet future clean-energy goals.