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The U.S Department of Energy confirmed its discovery of a 3,400-kiloton reserve of lithium in California's Salton Sea, making it one of the largest exploitable lithium deposits in the world

California might be the blessed Geographical place on this planet in history

Currently, the United States is almost entirely dependent on foreign countries for all lithium extraction, manufacturing, and production. The largest exploitable lithium reserves are in South America’s Lithium Triangle, which comprises Bolivia, Chile, and Argentina. While Chile has been a productive ally of the United States, Bolivia and Argentina have faced enormous economic, political, and geopolitical barriers to production.

Argentina’s lithium sector is typically marred in scandal and bureaucratic dysfunction. At the same time, Bolivia’s limited technological capacity, complex history and geography, and disruptive politics have made the nation unable to extract its lithium, instead relying on Chinese and Russian state-owned companies.

Heather Exner-Pirot, the director of the Energy, Natural Resources, and Environment Program at the Macdonald-Laurier Institute, remarked on the insecurity of Latin American production, saying, “For Latin American producers, the booms and busts of the mining sector will continue to challenge economies and budgets, even as we enter a commodity upswing.” The United States has the opportunity to cut out the middleman and so ensure its own supply within a volatile market.

For now, the United States continues to rely on the rest of the world for its lithium. After extraction, most of the world’s raw lithium is then transported to China, which has over half of the world’s lithium refining capacity. While the United States has talked a big game about boosting domestic critical mineral production, it has increased its imports of lithium products from China, including lithium batteries used in electric vehicles and specialized electronics.

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There is essential political momentum for the United States to nearshore its critical mineral supply and decrease its reliance on China, Russia, and other competitors. Prominent politicians, both Democrats and Republicans, including presidents Joe Biden and Donald Trump, have explicitly described the need for the United States to become less dependent on China while building America’s critical mineral and manufacturing capacity.

In November last year, the chairs of both the Senate Intelligence and Energy committees called upon the Department of Energy to “take steps to boost U.S. battery manufacturing and next-generation battery research, citing China’s dominance and export controls,” as reported by Reuters. The proposal’s political capital should not go to waste.

Exner-Pirot, an expert on critical mineral policy, argued that the discoveries are “good news for the United States’ energy transition and security goals.” She added that the United States must ensure that it can compete with other cheaper, more established producers if it wants to use these discoveries for export. However, the discoveries will provide battery manufacturers with new options in the global market.

Promoting American-made lithium and lithium products would achieve both. The IRA’s Section 45c(6) explicitly provides the U.S. with the ability to invest public funds into lithium projects. It should be used to back up the exploitation of these two lithium deposits and develop the technology and infrastructure necessary to do so.

With an American lithium base, the United States can control its lithium and battery supply, ensuring that no foreign country like China or Russia can ever turn off the tap. America’s adversaries have shown time and again their willingness to use economic and energy dependence as a weapon to leverage their interests, even going so far as turning off critical energy supply during a period of war as a show of force to its adversaries. This should be an unacceptable bargain for the United States, and exploiting lithium reserves at home would solve this problem.

The American lithium project would also help revive dying American manufacturing, most of which has left the United States for economies offering cheaper costs, lower taxes, and fewer regulations for manufacturers. Doing so would be a massive political win for those ambitious enough to pursue it while boosting domestic economic activity ahead of a predicted recession. Local communities and towns scattered across the southwestern desert could benefit directly from the boundless economic opportunity created.

DeepDive

National Interest Article