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BIDEN’S MINERAL MOMENT: President Joe Biden faces a dilemma in that he wants to encourage domestic mineral production to boost renewable energy but faces environmentalist pressure to tighten regulations on the mining industry.
The issue is coming to a head because the Interior Department said yesterday it will form an interagency working group to reform U.S. hardrock mining laws, regulations, and permitting policies, all to inform a prospective rulemaking on mining.
Interior Secretary Deb Haaland said in a statement it’s time to “take a hard look at how we regulate and permit mining in this country” and to amend the Mining Law of 1872 “to reflect our current realities,” and especially to impose royalty rates on minerals extracted on federal lands.
Mining politics: The Biden administration’s priority of expanding mineral sourcing here at home has clashed with its other environmental concerns.
Interior cut off the Twin Metals mining project last month, which would have exploited what developers claim to be the world’s single largest undeveloped deposit of nickel and copper, after it determined amid pressure from environmental groups that the Trump administration wrongly renewed the project’s underlying mineral leases.
That enraged congressional Republicans, including Rep. Pete Stauber, who represents the northern Minnesota district in which the deposits are located.
But environmental groups have praised the administration’s mining strategy: “We do not need more dirty mining to achieve the clean energy transition,” Blaine Miller-McFeeley, environmental law firm Earthjustice’s senior legislative representative, said in response to Interior’s announcement yesterday.
The National Mining Association, however, said that added regulations would hurt: “The only things that will be ‘secured’ by duplicating the robust environmental and financial assurance regulations that already exist on both the federal and state levels are our import dependence and supply chain issues,” said Conor Bernstein, NMA’s VP of communications.
However they come, the minerals are needed: Interior’s announcement yesterday, and the White House’s other announcements touting domestic mineral industry developments, add to the general sense of urgency regarding shoring up mineral supply chains.
The three-month nickel contract price on the London Metal Exchange climbed to its highest level in approximately 10 years this week, per data from Rystad Energy.
Lithium prices are also on the rise, the group said, while annual demand growth for lithium iron phosphate batteries is expected to rise by about 70% in 2022.
Add higher prices for copper and polysilicon, components of photovoltaic solar cells, into the calculus, too.
All of it threatens the speed and scale of deployment of renewable energy technologies, which the U.S. and other governments in Europe seek to do at rapid scale, Rystad’s Audun Martinsen told Jeremy.
“That is of course a big headache for many developers because a lot of their future projects and economics is based on assumption that the cost for PVs and batteries will continue to drop,” said Martinsen, who is Rystad’s head of energy service research.
Mineral firms across the world are working to boost output of these minerals with global demand so strong, Martinsen said, but it can’t happen especially swiftly as with other commodities such as oil.
“A lot of these are materials that you cannot really just get to the market quickly. It takes time to get the resources mined, to get it processed, to get it transported, and further refined to the actual battery-grade lithium or solar-PV grade polysilicon,” he said. “That lead time can actually lag everything from a year to even five years for lithium.”
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USGS ISSUES FINAL CRITICAL MINERAL LIST: Amid the slew of mineral news yesterday, the U.S. Geological Survey released its 2022 list of critical minerals detailing which mineral commodities are deemed essential to U.S.’s economy and national security and determined to have supply chains vulnerable to disruption.
The list includes 50 mineral commodities, with zinc and nickel among the 15 additions to the list as compared to its 2018 version.
USGS also removed helium, potash, rhenium, and strontium from the list, over objections from two Senate Energy and Natural Resources Committee Republicans: Ranking Member John Barrasso and Mike Lee.
USGS said previously the commodities didn’t meet the criteria for inclusion, arguing, for example, the U.S. is a net exporter of helium and its largest producer.
Barrasso and Lee told Haaland earlier that helium should be included on the list, and uranium, too, or else the administration would signal it is prepared to cede market share to Russia and other adversaries.
EU PREDICTS PROLONGED ENERGY PAIN: Volatile natural gas and electricity prices will afflict Europe until “at least 2023,” according to the European Commission.
Euractiv reported a leaked draft assessment of the bloc’s energy outlook, which is supposed to be finalized and published early next month, and it diagnoses a “growing gas crisis” for member nations facing wholesale gas prices some 400% higher than this time last year.
The situation has been alleviated by higher liquefied natural gas imports, the document says, but costs to manufacturing and residential electric ratepayers are still hurting economies.
Growing those imports, as well as developing new gas storage requirements for EU members, are among proposed immediate term actions, but the draft says renewable energy is the ultimate answer.
BIDEN WARNS OF HIGHER GAS PRICES FROM RUSSIA CONFLICT: Seeking to get ahead of any political criticism, President Joe Biden warned yesterday that gas prices in the U.S. are likely to increase as a result of new U.S. sanctions on Russia — even as he vowed that his administration would use “every tool” at its disposal to limit pain at the pump.
“As I said last week, defending freedom will have costs for us as well, and here at home,” Biden said. “We need to be honest about that.”
“We are closely monitoring energy supplies for any disruption,” he added. “We’re executing a plan in coordination with major oil-producing consumers and producers toward a collective investment to secure stability and global energy supplies.”
The acknowledgement came as Biden unveiled what he described as the “first tranche” of U.S. sanctions on Russia, which target major Russian banks and sovereign debt, as well as Russian elites and their families.
To be sure, Americans have already been feeling the squeeze of high gas prices, which have increased by an average of 40% since January 2021, according to the Bureau of Labor Statistics.
Gas prices are also continuing to rise in the U.S., with the average price of gasoline climbing to $3.53 per gallon today, according to AAA. The average price of gas in California hit $4.75, the highest on record, versus a national average of about $3.50.
Andrew Gross, a AAA spokesperson, warned that prices would get much worse if Russia retrenches in the face of sanctions. “And if they choose to withhold their oil from the global market, such a move would eventually be reflected in higher gas prices for American drivers,” he said.
The EU is also slated to unveil a strategy to break free from Russian gas. The Washington Post reports that the new strategy — slated to be unveiled next week — will call for a 40% reduction in fossil fuel use by the year 2030. It also calls on European energy companies to fill their storage tanks with natural gas over the summer, in an effort to reduce Europe’s dependence on Russian gas supplies next winter.
And in the meantime, Europeans are likely to feel the squeeze. “In the short and medium term, there are no good options,” Nathalie Tocci, the head of the Italian Institute of International Affairs and an adviser to E.U. policymakers in Brussels, told the Post. “The problem is not now, but next fall. And by next fall we will not have found the silver bullet.”
For context, Russia is the third-largest crude oil producer, and the world’s largest natural gas producer. (Some 40% of the EU’s natural gas supply currently comes from Russia, while Moscow’s economy depends on oil and gas exports for roughly 36% of its country’s budget.)
Jason Bordoff, a former Obama administration official who now leads Columbia University’s Center on Global Energy Policy, echoed Tocci’s sentiment. A decision from European leaders to break from Russia “doesn’t change the fact that Europe needs Russian gas,” Bordoff told the Post. “Nothing is going to make a difference in the medium scenario.”
“It takes time to build out renewables and to electrify heating and diversify fuels for heavy industry,” he added. “And it takes time to build infrastructure needed to pull natural gas from world markets. Russia is still the cheapest gas into Europe. So you have to be willing to pay a premium” for more expensive LNG.
SALVAGE CREWS TO BOARD BURNING SHIP OF ELECTRIC VEHICLES: Portuguese officials hoped that salvage crews would be able today to board the Felicity Ace, the a 60,000-ton merchant ship loaded with luxury cars on fire in the Atlantic, the Wall Street Journal reported.
If the crews are able to extinguish the fire, they would then move on to figuring out what caused it, and whether EV batteries sparked the blaze or made it harder to control.
The Rundown
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Grist Who’s in charge of fixing the environment in eastern Oklahoma?
Calendar
TUESDAY | MARCH 1
10:00 am: The Senate Energy and Natural Resources Committee will hear testimony on pending legislation, including the Department of Energy Science for the Future Act of 2022 (S. 3699), the Fission for the Future Act of 2021 (S. 3428), the Energy Emergency Leadership Act (H.R. 3119), and more.
