Beyond Batteries: What’s Really Driving the Energy Transition?
The world is becoming increasingly electric and connected, transitioning towards a future powered by batteries and running on electronics that will require an ever-growing supply of critical minerals and materials. From the Ford F-150 Lightning to the F-35 fighter jet, these minerals and materials already power our most advanced technologies and nearly every facet of our everyday lives.
In the race to transition from a fossil-based to a minerals-based economy, the Biden Administration has been focused on semiconductors and battery materials. The passage of the Inflation Reduction Act, Infrastructure Act and CHIPS Act is providing an unprecedented influx of government funding to spur domestic manufacturing. This is especially true for dual-use minerals and materials needed for the green energy transition and defense applications.
However, there is much more at stake than just the lithium, cobalt, and nickel we hear about for EV batteries.
The U.S. needs more copper for energy transmission and storage, more titanium for defense and aerospace applications, and more gallium to produce critical semiconductors. Not surprisingly, the U.S. is a net importer of copper, Russia is a leading producer of titanium, and China produces 98% of global primary gallium. These are just a handful of materials that are essential to the electrification of economies that have been the subject of supply chain coercion.
Just look at alumina, the key input for making aluminum.
Aluminum has long been critical to U.S. economic and national security, from electrical infrastructure to the aerospace, auto, and defense sectors. This metal will play a crucial role in decarbonizing the power, transportation, and building sectors. Meeting demand will allow the U.S. to meet its environmental commitments on an accelerated timeline.
Before aluminum is utilized as an electric wire, a car door, or a solar panel, it must be transformed through a complicated production process. The first step is mining bauxite, found in plentiful reserves in Africa, Australia, and Brazil to meet world demand for another 100 years.
Next is crushing, heating, and refining that bauxite into alumina, which is then smelted, requiring a near-constant flow of energy, to produce aluminum. From there, that piece of virgin metal is processed several different ways to make a wide range of products, from airplanes to trucks to beverage cans to the foil in your kitchen drawer.
But there is no aluminum without alumina. With only one remaining domestic alumina refinery, the U.S. is at risk of a single-point failure for this critical material.
When examining reindustrialization policies, it is crucial to evaluate supply chains in their entirety. Narratives surrounding aluminum production-both in industry and policy circles-tend to focus on the smelting process. However, the intermediate materials, like alumina, deserve as much attention as final products in conversations about supply chain resilience.
In the coming decade, where these minerals come from and how they are produced will have profound consequences on America’s national security and economic competitiveness. Being dependent on unreliable and hostile actors elevates the strategic imperative of avoiding new dependencies for the critical materials needed to power the green transition.
There is a tremendous opportunity to re-shore and ally-shore, especially from Canada, so the U.S. and its allies are not dependent on nations who do not share our interests. It is imperative that effective government intervention can ensure economic production and extraction critical minerals and materials to ensure supply chain resiliency for greater economic and national security benefits.
Policymakers should leverage the government’s purchasing power through procurement requirements to stimulate market growth for advanced manufactured goods produced using the latest technologies and innovations. Stimulating the necessary levels of capital investment through government support will ensure a globally competitive U.S. heavy industry.
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