President Obama has made global warming one of the key issues of his administration and it’s an extremely ambitious agenda he’s bringing to the table. Included in his agenda is a pledge to eliminate oil imports from the Middle East and Venezuela within a decade and to slash his country’s carbon dioxide emissions by more than 30 per cent by the year 2020.
If President Obama is to successfully implement his energy doctrine his administration has to do two things:
1.Wean America off using fossil fuels (coal, oil and natural gas) to produce energy.
2.Develop alternative clean energy sources within the US to avoid energy imports.
This Clean Energy Agenda will be spearheaded by White House Chief of Staff Rahm Emanue and complemented by hard line green leadership in both the House and Senate. This new committee has stated it will be acting quickly and decisively to reduce global warming and ending US dependence on foreign oil.
The following quote makes it very clear two of the clean energy solutions being promoted by this administration are electricity and batteries.
“Today, we have the chance to achieve a real breakthrough: the plug-in hybrid…Hybrid engines save gasoline by switching back and forth from battery to gasoline power……With a plug-in hybrid, commuters can drive back and forth to work, recharge their cars overnight, and go a month or more without a trip to the gas station.” White House Chief of Staff Rahm Emanuel.
To achieve this breakthrough the US is going to need batteries that are cheaper, more durable and more powerful then the current nickel-metal-hydride (NiMh) batteries. Because of groundbreaking research there’s already an answer being voiced, lithium-ion. With double the “energy density” of today’s standard NiMh batteries lithium-ion cells have emerged as the leading battery technology to power hybrid vehicles.
- Lithium-Ion battery packs are GM’s solution for the Volt hybrid
- Lithium-Ion battery packs can be manufactured to any shape or size, thereby making them easy to fit into any car design
- No memory effect, therefore easier for drivers to charge and maintain
- High energy-to-weight ratio, helping increase efficiency and environmental friendliness
- Most new hybrids and hybrid concepts being introduced rely on Lithium-Ion battery technology
Where Will the Lithium Come From?
As electricity starts to replace gasoline in America the country could very well be running the risk of replacing it’s dependence on foreign oil for a dependence on foreign lithium or foreign produced lithium cells.
“We cannot allow ourselves to become dependent on foreign sources of lithium-ion battery cells (or lithium itself) as we have become dependent on petroleum from the Middle East,” National Alliance for Advanced Transportation Battery Cell Manufacture’s Attorney James Greenberger.
- According to the USGS, overall demand for lithium is growing at a rate of 4-5% per year
- Demand for lithium destined for battery usage is predicted to grow by 20% per year
- Over 60% of mobile phones and 90% of laptop computers feature Lithium Ion batteries
- The worldwide market for rechargeable lithium batteries is estimated to be worth over $4 billion/year
- The automotive market alone is projected to reach $337 million in 2012, and $1.6 billion in 2015
President Evo Morales has already nationalized the oil and natural gas industries and now a growing nationalist movement could prompt the head of state to do the same with the lithium fields. “The previous imperialist model of exploitation of our natural resources will never be repeated in Bolivia. Maybe there could be the possibility of foreigners accepted as minority partners, or better yet, as our clients, ” head of lithium extraction Saul Villegas
Lithium is not traded publicly, instead it’s sold directly to end users for a negotiated price per ton or pound of Lithium carbonate (Li2CO3). High demand and low supply has recently caused reported paid end user prices to reach US $6,600.00 ton.
But right now price isn’t the issue, rather the issue is one of supply. Demand for lithium is increasing and Mitsubishi Motors Corp. anticipates that demand will increase fivefold to meet the needs of electric vehicles. At present, demand in North America is about 100,000 tonnes of lithium carbonate equivalent.
There’s one unit of lithium in a cell phone battery, 3,000 units in a hybrid car and 7,000 units in an electric car; the numbers work out to 9 to 30 kilograms of lithium oxide per car battery. One of President Obama’s goals is 1,000,000 built in America hybrid cars on American roads by 2015. The automotive industry needs a secure uninterrupted supply of lithium to ramp up its production of the next generation of hybrid electric vehicles using lithium-ion batteries.
The traditional hard-rock mining of pegmatites containing the lithium bearing silicate spudomene is time, energy and cost intensive. Lithium is the thirty-third most frequently occurring mineral so it’s not exactly scarce, but concentrations are generally too low, and extraction too difficult and costly to be viable. The major trend in the lithium industry has been a transition from hard rock mining-based sources of lithium to brine-based ones. The cost-effectiveness of brine operations forced even large producers in China and Russia to develop their own brine sources or buy raw materials from brine producers.
The economics of obtaining lithium carbonate from brine are so favorable that most hard rock production has been priced out of the market. Lithium brines are currently the only lithium source that can support mining without significant other credits from tantalum, niobium, tin etc., (low manganese content within Nevada’s Clayton Valley brines significantly reduces recovery costs, unlike Chile’s high manganese content brine deposits). Lithium brine resources are now the preferred method of lithium recovery.
The only lithium producing plant in North America is located in Clayton Valley, Nevada, USA. The facility was opened in 1967 and has been producing lithium carbonate from brines ever since.
Recovering lithium from brines is not considered hard rock mining, its classified the same as placer and permitting is much easier and quicker.
Lithium recovery from brines could lead to a huge carbon footprint reduction because of a nearly zero-waste mining method. Once the lithium is recovered the chemicals used can be recycled, also the by-products include saleable compounds such as potash and/or boron.
The Uranium Solution
To meet President Obama’s stated goals of energy independence and a huge reduction in its carbon emissions, the US transportation system has to be electrified. Electricity is an energy source that needs to be produced and stored. The electricity needed for Obama to succeed in replacing fossil fuels, both for transportation and everyday use, will have to come from nuclear generation. There is simply no other logical alternative.
- Coal and natural gas plants emit carbon dioxide emissions.
- Extensive use of hydrogen is not practical due to its volatile nature and lack of infrastructure.
- Solar, wind and geothermal are all niche suppliers and are untried on a large scale. Solar and wind have extremely large footprints and geothermal seems to be limited to a few parts of the country. All three of these technologies are extremely important and each will successfully contribute, in a small way, to America’s energy independence.
- High emissions, a negative energy return and severe environmental costs are associated with ethanol and make its use impractical.
- Hydro supplies approximately 10% of US power but going to clean eco-friendly energy isn’t accomplished by damming what free-flowing rivers are left.
America produces less then ten percent of its uranium needs and relies on imports and the Russians for the rest of their Uranium. If America never builds another nuclear plant the existing demand is not going to go away or even lessen.
Worldwide over 100 power reactors with a total net capacity of almost 120,000 MWe are planned and over 250 more are proposed.
To meet Obama’s goal of energy independence the US will have to build many more reactors and presently there’s proposals for over twenty new plants. To supply these new and existing plants uranium deposits in the US need to be developed.
The United States is not even close to being self sufficient in Lithium or Uranium. If America is to end its dependence on foreign energy and vastly reduce its carbon footprint it will have to develop its own internal resources of these critical minerals.
Developing countries such as China and India, with 2.3 billion people between them, will, even while going mostly nuclear, drastically increase their consumption of fossil fuels. Oil, natural gas and coal are all going much higher in price. Soon it is going to be imperative that the present US administration is seen to be doing something, as promised, about high energy prices, foreign energy dependence and the US’s extremely large carbon footprint.
The Alternative Energy Revolution with its “Yes we will!” slogan has been presented as a major plank in Obama’s election platform and there’s no question he will follow through. He has to, the coming high price of energy derived from non-friendly foreign fossil fuel suppliers combined with ever increasing competition for limited resources will make it happen.
Lithium and Uranium are two of the best ways to play President Obama’s energy agenda. The power of the Office of the President of the United States will be backing the Eco-Energy Revolution and billions of dollars will be given out to develop the technology behind the lithium-ion battery. This energy revolution is a serious investable long-term trend and we, as investors, have to take advantage of the opportunities being presented. We’d be smart to get in early, ahead of the herd, to take advantage of the coming global rush to electricity – generated by nuclear power and stored in lithium-ion batteries.
The rechargeable power needs of our modern society has made lithium a serious player in the commodity markets and something for investors to seriously think about getting involved with. Each and every laptop, PDA, cell phone, and iPod sold makes lithium that much more valuable and interesting.
But with President Obama’s agenda to end the Unites States dependence on fossil fuels and reduce his countries carbon footprint soon the main market for lithium won’t just be cellphones, iPods and laptops but the next generation hybrid or totally electric vehicle batteries.
Uranium and lithium could very well be an unbeatable combination to have in your portfolio, either one or both have the potential to be the next break-out investment.
Lithium and uranium might just become the commodity of choice for investors.
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Richard (Rick) Mills
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