0:00

Hey, it's Bill. I'm excited

0:02

to present an episode of another podcast

0:04

that we make here at the Center

0:06

on Global Energy Policy The

0:08

big switch hosted by dr. Melissa

0:11

lot The big switch is

0:13

a narrative show all about rebuilding the energy

0:15

systems that are all around us and Melissa

0:17

is out with a new five-episode

0:20

season about batteries as

0:23

part of the green energy transition batteries

0:25

are finding their way into everything from

0:28

cars and heavy equipment to the electric

0:30

grid but Scaling up

0:32

production to meet the demands of

0:34

a net-zero economy is complicated and

0:36

it's contentious This season

0:38

Melissa digs into the global battery

0:41

supply chain from mining to manufacturing

0:44

And she asks what's getting mined

0:46

traded and consumed on the road

0:49

to decarbonization The

0:51

answer may surprise you We're going

0:53

to play the first episode of that season

0:55

now And if you subscribe to the

0:57

show you can hear the rest

1:00

of her reporting on the rise of the

1:02

battery economy as new Episodes get released over

1:04

the next month. Enjoy. I want

1:07

to tell you the story about a woman

1:10

named Alessandra Carion Alessandra

1:14

is a Renaissance woman and I

1:16

say that because she's not only

1:18

a Michigan Public Service Commissioner But

1:20

also a sustainability expert and I'm

1:23

not kidding. She's the co-owner of

1:25

a verified Neapolitan pizza shop. I

1:28

do in fact Co-own

1:30

a pizza business It's

1:33

a skill that will never go

1:35

away She also has really specific

1:37

skill set in tracking battery supply

1:39

chains So we couldn't help

1:42

but ask her does she use electric ovens

1:44

at the pizzeria at the restaurant because

1:46

we were a Verified

1:48

Neapolitan pizzeria. We used a

1:50

traditional wood fired brick oven

1:53

Alessandra talked to us not only in her

1:55

official capacity as an energy commissioner or as

1:57

a pizza lover But it's someone who it's

2:00

spent nearly a decade tracing the minerals

2:02

and materials that make up power cars,

2:04

and in particular tracing the materials that are

2:07

in our electric car batteries. She

2:09

started her career at environmental consulting, and then

2:11

in 2012 she moved into the

2:13

heart of America's auto industry, which is

2:15

at the start of this major transition.

2:17

Truly, it just felt called to

2:19

move to Detroit, Michigan, especially

2:22

with, you know, sort of the auto

2:25

industry being in a

2:27

pivotal moment back in 2008 onward.

2:29

I could see how much energy

2:32

there was around transforming

2:35

the city in the wake of a lot

2:37

of change. More coverage of

2:39

the financial crisis tonight. The big three

2:41

U.S. automakers are handing over their plans

2:43

for the future to Congress. They're

2:45

trying to convince lawmakers to get them a bailout

2:49

of $25 billion in taxpayer

2:51

money. Companies say one of

2:53

them might collapse without it.

2:57

So at that time, two really important

2:59

stories were playing out. See, a few

3:01

years earlier, America's top automakers were struggling

3:03

in the wake of the financial crisis,

3:06

and they saw that the sales for some

3:08

of their vehicles, particularly those big SUVs that

3:11

tend to giggle gas, well, they'd tanked. Hundreds

3:13

of thousands of production jobs were lost, and

3:15

the government ended up stepping in to

3:17

help them out, pouring nearly $80 billion into

3:21

GM, Chrysler and Ford. General Motors

3:23

and Ford submitted restructuring plans to

3:25

Congress Tuesday. GM promises fewer brands

3:27

and fewer dealers. Ford promises no

3:30

managers will get a 2009 bonus,

3:33

and it will speed up plans for

3:35

electric cars. As a condition

3:37

for the government support, automakers agreed

3:39

to speed up fuel efficiency standards

3:41

to encourage lighter gas-sipping models that

3:44

have been deprioritized. And meanwhile, the

3:46

American Recovery and Reinvestment Act, also

3:48

known as the stimulus bill, created

3:50

federal tax credits for different types

3:52

of electric vehicles. It

3:55

included billions of dollars to support domestic

3:57

battery manufacturing for the first time, and it also included a

3:59

$1 billion bill for electric vehicles. also included this loan

4:01

for a tiny electric car maker

4:03

called Tesla. Alessandra stepped

4:05

into this moment at Ford, where she

4:07

got a job as a sustainability business

4:10

analyst. So that required

4:12

an ability to investigate

4:15

along the supply chain where

4:17

materials came from, how they were being

4:20

processed, who was handling them. And Alessandra's

4:22

work was directly influenced by another very

4:24

important law called the Dodd-Frank Act. This

4:26

act was created in the wake of

4:29

the financial crisis, and it set up

4:31

a whole host of regulatory reforms

4:33

and consumer protection. This

4:37

reform will help foster

4:40

innovation, not hamper. It

4:42

provides certainty to everybody, from

4:44

bankers to farmers to

4:46

business owners to consumers. And

4:49

unless your business model depends on cutting

4:51

corners or bilking your customers, you've

4:54

got nothing to fear from reform. There

4:57

was a provision in the law

5:00

that required publicly traded companies and

5:02

manufacturers to report their sources of

5:04

tin, tungsten, tantalum, and gold. These

5:07

minerals are found in a wide

5:09

range of consumer electronics, jewelry, medical

5:11

equipment, and cars. And they're

5:13

often referred to as conflict minerals, because large

5:16

amounts of them are mined in the Democratic

5:18

Republic of the Congo, where they

5:20

can fund armed conflict and also are

5:22

associated with human rights abuses like child

5:25

labor. Dodd-Frank ignited

5:27

efforts inside large companies like Ford

5:29

to investigate where these materials came

5:31

from, how they were being

5:33

processed, and who was handling them. And

5:40

there were literally thousands of spreadsheets,

5:42

thousands of suppliers to sort through.

5:45

It was really a first

5:47

of its kind moment. And so

5:50

that really sparked and inspired not

5:52

only for Ford, but across many

5:55

industries, companies began to question, okay,

5:58

by law, I need to think about where my tin... and

6:00

then the gold is coming from. But what about

6:02

my lithium? What about my nickel? What about my

6:04

rubber from farms? So

6:07

I was really fortunate to be

6:09

part of the industry and in

6:11

this job at a moment where

6:13

this activity was just scaling and

6:15

expanding in an unprecedented way. And

6:25

that scale only expanded as the

6:28

entire auto industry started embracing electric

6:30

cars thanks to batteries that

6:32

were getting cheaper and better every single

6:34

year. In a brand new plant in

6:37

Michigan, the future of Ford is already

6:39

rolling out. The all-electric version of the

6:41

F-150, the best-selling vehicle

6:43

in America, with 150,000 orders. Now

6:48

Ford tells NBC News exclusively it

6:50

is going all in on electric,

6:52

pledging that within nine years, 40%

6:55

of its fleet will be battery powered. And those

6:58

lithium ion batteries are filled with another

7:00

set of critical minerals, like of course

7:02

lithium, but also cobalt,

7:04

manganese and graphite, which are

7:06

mined, processed, transported, and controlled

7:08

in highly complicated ways. EVs

7:12

represent opportunity to introduce a new

7:14

way of

7:17

planning for virtually new

7:20

blossoming supply chains, value

7:23

chains that are responsible, that take

7:25

into account social and environmental sustainability

7:28

from the onset, if we plan

7:30

it correctly, and the

7:32

ability to introduce more transparency and those

7:34

mineral supply chains that already exist for

7:37

other commodities that we can in turn

7:39

help improve. And this long lead up

7:41

over more than 15 years, the

7:44

stimulus act, the auto bailout,

7:46

Dodd-Frank, combined with batteries

7:48

getting so much cheaper, sparked interest

7:50

in electric vehicles and the battery

7:52

supply chains behind them. And

7:55

they led to this transformative law in 2022 that

7:58

put batteries at the center of the... clean energy

8:00

economy. I'm talking about the Inflation

8:02

Reduction Act. Well, John, there was

8:04

so much attention on solar, wind,

8:06

and hydrogen stocks, but battery companies

8:08

also a key beneficiary of the

8:10

Inflation Reduction Act. By this point,

8:12

Alessandra had left Ford, but she

8:14

was still focused on EV supply

8:17

chains, and the Inflation Reduction Act,

8:19

also called the IRA, added a

8:21

whole new set of stakes. And

8:24

suddenly, government policy wasn't just

8:26

focused on discouraging conflict minerals

8:28

or sprinkling some money into

8:30

R&D. It was about building an

8:32

industrial-scale battery industry from the

8:34

ground up with tens of billions

8:37

of dollars in incentives. And that

8:39

includes tax credits for battery production

8:42

and mineral refining. The second measure

8:44

is linking the EV incentive

8:46

to domestic and allied mineral production.

8:49

And so where the opportunity there becomes

8:51

is not just where are you mining

8:53

these minerals, but if you mine them,

8:56

then where do you send them to

8:58

make cathodes, to make anodes? And

9:00

does the U.S. want to be in the

9:02

business of processing those minerals to make these

9:05

cathodes and anodes that go into the batteries

9:07

that we're assembling? Over time, in

9:09

order for the EV credits to be

9:11

realized, more and more battery components need

9:14

to be mined, refined, or recycled by

9:16

the U.S. or one of our free

9:18

trade allies. John, these are complex and a

9:20

lot of supply chains. This

9:22

question really leads to a

9:25

central topic around sustainability, responsibility,

9:27

and then ultimately economic development

9:29

and ability to thrive in unique

9:31

demand with local supply. This

9:36

is The Big Pitch, a show about

9:38

how to rebuild the energy systems that are all

9:40

around us. I'm Dr. Melissa Lott,

9:42

and I'm the Senior Director of research

9:44

at Columbia University's SIPA Center on Global

9:46

Energy Policy. The

10:00

demands of a natural kind. of me is

10:02

really complicated. And it's consensus.

10:04

This season we're digging into the

10:06

ways the batteries are made and

10:08

were asking what gets mind traded

10:10

and consumes on the road to

10:12

decarbonization. This

10:15

is the first installment in our

10:17

five part series. In this episode,

10:19

the geopolitical race that is transforming

10:21

battery supply chain will open up

10:23

a lithium ion battery. Investigate what's

10:25

inside as can ask the question

10:27

a critical minerals the new oil.

10:33

A global quest to learn how batteries

10:36

are made starts really close to

10:38

home for me right here on the

10:40

campus. A club the University reverse. More

10:42

precisely it starts that the Columbia

10:44

Electrochemical Energy Center. It's just a straight

10:47

away from my office and it's were

10:49

professor. Damn fine art studies how

10:51

energy storage devices work by learning how

10:53

they fail. I do have a gun

10:56

and here we're going to like

10:58

slow as a battery. Will hopefully

11:00

won't blow up, but we're gonna cut it

11:02

open in a way that's really not meant

11:04

to be cut open because were trained professionals

11:07

are my student for it's actually getting his

11:09

Phd in setting boundaries of hard various ways

11:11

or he spent most of time flowing batteries

11:14

often so taser a safety for were giving

11:16

the day off. Okay,

11:18

that picture this for in this

11:20

lab and I'm standing next to

11:23

Dan and his Phd students. that

11:25

Schumacher and around Us cities white

11:27

cinder block walls, their lives, a

11:29

copper pipes and covenants filled with

11:31

chemicals, the talking cylinders, speakers, lox

11:33

just everywhere. And it's in this

11:36

lab that researchers are performing all

11:38

these crazy kinds of experiments. stress

11:40

test the batteries that go into

11:42

our cars and the electric fence

11:44

sitters figure out how when and

11:47

why they sail. Who

11:49

has invited? He decides he wouldn't see batteries.

11:51

Apart for your work on I

11:53

guess I recall chaotic neutral where

11:56

I live on. me

12:00

It's just, it's exciting and it's also impactful,

12:02

right? A lot of people work on battery

12:04

performance and making batteries better, make them better,

12:06

more energy, but that means a lot more

12:08

bad things can happen, right? Especially in the

12:10

city, you have a lot of battery

12:13

fires and a lot of people get hurt. So

12:15

the way that we can figure out how to not make

12:17

that happen is to study what's

12:19

happening when that happens. So that

12:21

just, I found my little niche

12:23

of battery explosions. We

12:25

spend a lot of time trying to make batteries

12:27

better and spread the said, improve the energy density,

12:29

improve the power density. Classically

12:32

anything that has high energy density, something

12:34

that stores a lot of energy in

12:37

a small amount of space, high power density can

12:39

give that energy very quickly. We

12:41

don't want batteries to be bombed. So the question is,

12:43

how do we have a battery that gets us a

12:45

300 mile range that can be charged

12:48

in five minutes that has zero

12:50

danger of exploding, right? It's probably

12:53

impossible completely, but

12:55

understanding how and why they

12:57

explode is something really

13:00

important and tragically understudied.

13:03

Okay, let's go blow

13:05

something up. Open something up. Open

13:08

something up. Don't burst my

13:10

bubble yet. We're going to blow it up. No, let's go. Let's

13:13

go open something. I can't wait to see what's inside of this thing. Okay.

13:16

If you throw on our safety glasses and Dan

13:18

and Brett take me over to our protective shield

13:20

and behind that shield, there's this

13:22

cylinder shaped battery. It looks

13:25

kind of like a double A battery, but it's slightly

13:27

larger. It's a cell called an 18650 and

13:29

that's battery speak for 18 millimeters

13:32

in diameter and 65 millimeters

13:35

in height. And this type

13:37

of lithium ion cell was rumored to be

13:39

used in the original Tesla Model S. The

13:42

idea that the cell that Brett

13:44

is taking apart for you today

13:47

would be the commodity cell

13:49

when I was Brett's age 20

13:52

years ago was seemed impossible,

13:55

but through just brutally efficient

13:59

engineering. It turned out

14:01

to be the linchpin for enabling

14:03

low-cost storage. So

14:06

Brad puts on these black protective gloves and

14:08

he starts to unravel the battery. And as

14:10

he's doing it, he's unveiling these long

14:12

strips of material that have been layered together

14:15

in a tight coil. And so if I

14:17

turn this on its head, or I guess on

14:19

its belly, what it'll look like is you see

14:21

this white here, and it's almost like a tree,

14:23

it's like concentric ring. So this is what we

14:26

call a jelly roll. What we

14:28

have actually is a really

14:30

long foil of electrodes. So

14:33

I can roll this all the way out,

14:35

and it's actually two electrodes that are just

14:37

super, super, super long. It's just

14:39

like a fruit roll-up. Yeah, exactly. So

14:43

I can roll this all the way out. And when

14:46

we rolled it all the way out, we

14:48

saw four parts made up of different materials,

14:51

which are sourced from all over the world. You

14:54

have your cathode and your anode. Those are

14:56

what you're actually going to be storing your

14:58

energy in. So your anode is your minus

15:00

sign if you're thinking of a AA battery,

15:02

and your cathode is your positive sign. In

15:05

these specific cells, we have

15:07

what's called nickel cobalt aluminum.

15:10

Our active materials on our cobalt side,

15:13

our positive side, that's going to help

15:15

store our lithium. On our opposite side,

15:17

our anode, our negative side, is going

15:19

to be graphite. That's usually what is

15:22

used in most conventional lithium-ion batteries

15:24

now. In between those two

15:26

is what we call a separator. Very

15:28

simple. It keeps the two apart, right? Whenever

15:31

we think of battery safety, the

15:33

one thing we don't want to do is

15:35

touch those two together. It's like licking

15:37

a battery, right? You get a little shock. So that's

15:39

the same thing. A separator is supposed to keep it

15:41

safe on the inside. That'll

15:44

look like a white polymer. It's usually

15:46

polypropylene, so a very common polymer. And

15:49

the way we need to make sure that

15:51

these lithiums can travel between these two electrodes,

15:54

so we use electrolyte. It's not

15:56

Gatorade. It is some sort of lithium

15:58

salt dissolved. be so cool

16:00

if it was. That's so awesome. Yeah, it'd be great.

16:02

It wouldn't be flammable too, which is awesome. But

16:05

usually what it is, it's some sort

16:07

of lithium containing salt dissolved in solvents,

16:10

like carbonate. It's like this liquid,

16:12

clear liquid that dissolves the salt in.

16:15

And that allows for the lithium ions actually to

16:17

transport between them. All right,

16:20

so we got an anode, a cathode, we got some

16:22

polymer, and then we got a lot of lithium

16:24

moving stuff around. It's basically what it's like. Yeah,

16:26

yeah. So like when we're charging a battery, what

16:28

we're actually doing is we're moving lithium ions from

16:30

one side of the battery to the other. So

16:32

when the lithium moves over at the positive ion,

16:35

we get an electron, that's electricity. So that

16:37

will go and power our cars or our

16:39

light bulbs or something like that. So the

16:41

act of moving that lithium ion is actually

16:43

pushing an electron through a circuit that we

16:45

can actually harness for energy. I've

16:51

never taken apart a battery before. So

16:53

watching Brett uncoil all the materials was

16:55

really cool to see. I'll admit I

16:57

was tiny bit disappointed that I didn't

17:00

see any small explosions, but that's a

17:02

really good thing. Because 20 years ago,

17:04

explosions were much more common in lithium

17:06

ion batteries. And the cell

17:09

that we dissected, which was perfected by Tesla, was

17:11

a big deal in terms of design. When

17:13

I started grad school, it was thought that this cell

17:16

had to be much larger and be much fancier. And

17:18

they kept on blowing up. In fact, they blew up

17:20

so much that I wasn't allowed to work on them

17:23

at Lawrence Berkeley Lab. And my project had to

17:25

change. Six years later, after

17:27

all of these batteries catching fire, the

17:29

initial team at Tesla said, let's just

17:31

use cells that we don't know don't

17:34

explode, which are cells that are in

17:36

laptops. So the immediate predecessor to the

17:38

cell that Brett took apart was used

17:40

in a laptop that looked exactly the

17:43

same. The pack

17:45

was very expensive. The initial Tesla Roadster

17:48

cost $150,000 and went

17:50

maybe 150, 180

17:52

miles, right? So certainly not the mass

17:54

market vehicle, but it

17:56

set in motion the understanding

17:59

that all All of this stuff can be made

18:01

much cheaper. And so

18:03

that little cell, as premium

18:05

and or insignificant as it might

18:07

be, a laptop battery designed

18:10

for systems in

18:13

1996 turns out to be

18:15

the crucial storage element of the energy

18:17

transition. When

18:23

I was looking at this battery cell and talking to

18:25

Dan and Brett, I was really hit by

18:27

the scale of what I was looking at.

18:30

There were about three feet of materials wrapped

18:32

up inside a cell in the lab. A

18:35

Tesla battery pack hosts like 10,000 of

18:37

those cells just in a single car. In

18:40

fact, EVs today can have hundreds

18:42

and even thousands of lithium-ion cells.

18:44

And that means that the typical

18:46

electric car on the road can

18:48

have between three and four miles

18:50

of really thin material, material that

18:52

is mined, processed and assembled all over

18:55

the globe. So after our

18:57

lab visit, I sat down with Dan in his

18:59

office to run through how it all worked from

19:01

beginning to end. So

19:09

if we break down how you make

19:11

a battery, what are the big steps

19:13

to actually taking a bunch of raw

19:15

stuff and turning it into a battery?

19:18

Well, first you have to get the raw stuff. You have

19:20

to dig it out of the ground. You have to find

19:22

the right veins. Almost everything that's in a battery by mass

19:25

that is a significant amount of

19:27

money is a metallic or metal-like element.

19:30

The most commonly used minerals

19:32

are lithium, cobalt, graphite, manganese,

19:34

nickel and copper. And

19:36

it's important that we know where these minerals come from.

19:39

So 80% of lithium comes from

19:42

Australia, China and Chile, where

19:44

70% of cobalt comes from the Democratic

19:46

Republic of Congo. 60%

19:49

of manganese comes from South Africa, China

19:51

and Australia. And China

19:53

sources 80% of the world's

19:55

graphite. Indonesia is the

19:58

world's dominant nickel producer. in

20:00

Peru are the world's top copper producers. We get

20:02

the minerals like we get any other metals. We

20:04

mine them out of the ground and then we

20:06

have to take extra care in purifying them. And

20:09

as batteries have found their

20:11

way into bigger applications, cars and

20:13

now the grid, the cost of

20:15

that purification has dropped substantially. And

20:18

this should have been predictable to be because I saw

20:20

it happen 10 years earlier with silicon but I said,

20:22

oh, this can happen with batteries. And

20:24

it turns out that luckily it could. And so it's

20:26

a great thing. And just like

20:28

it does when it comes to silicon

20:30

for semiconductors and solar cells, China dominates

20:32

here as well. In fact,

20:34

China controls 85% of all

20:38

critical minerals processing and refining.

20:40

So after we mine and purify, we

20:43

get to synthesizing the material as a

20:45

part of the battery production process, which

20:47

is incredibly sophisticated and precise. The

20:49

synthesis makes sure the elements are exactly

20:51

in the right order. It's not just

20:53

good enough to have nickel, cobalt and

20:56

manganese in some ratio mixed

20:58

together, hope it works out. You want

21:00

the nickel in one layer and then a

21:02

layer of oxygen and then a layer of

21:04

manganese and then a layer of cobalt. And

21:07

there's not the same amount of nickel, manganese

21:09

and cobalt in the electrode. And

21:11

so nickel has to be every

21:13

other layer and the manganese and the cobalt

21:16

will be interspersed every fourth

21:18

layer. And then it could be

21:20

every eighth layer and so forth. This

21:22

level of control is frankly amazing.

21:25

This whole process makes me think of Goldilocks

21:27

and three bears like getting it just just

21:29

right, except for we're talking about getting it

21:31

right at the atomic level. At

21:34

the atomic level. And ideally,

21:37

I would place every atom. But

21:40

again, this has to be really cheap. And I have to make millions

21:43

of tons of it a year. So with a

21:45

computer chip, I don't need millions of tons of

21:47

computer chips. They can be these

21:49

precious little gems relative to a battery. So I

21:51

need the kind of control. Ideally, I want the

21:54

kind of control I have in a computer chip

21:56

but made it the scale of dog food. In

21:59

case you aren't keeping... So far

22:01

in this episode, we've referred to jelly

22:03

rolls, fruit roll-ups, Gatorade, the three

22:05

bears porridge and Goldilocks, and now

22:07

dog food. And we've got one

22:09

more for you. Now that

22:11

we've mined, purified, and synthesized the material

22:13

that we need, we have to layer

22:15

it to make something that looks like

22:17

baklava. And yes, I'm talking about

22:20

that amazing and slightly sticky dessert that many

22:22

of us have enjoyed. Now imagine

22:24

you go to your favorite bakery and you

22:26

say you have to make kilometers of baklava

22:29

that with the separator spacing between

22:31

the anode and the cathode is about 15 microns.

22:35

And so not only are these layers precise

22:37

within themselves, but they have to be precisely

22:40

aligned over these distances. You've got

22:42

mining, then you've got purifying, and then

22:44

you've got a lot of different steps

22:46

that go into a bucket that could

22:49

be called manufacturing. And so

22:51

at this stage, we have a cell. What

22:53

happens next? This is the part I

22:55

love because now we have the Legos. The

22:58

cell is really hard to make. A

23:00

lot goes into it. Manufacturing

23:03

know-how over the Industrial Revolution

23:05

from the Industrial Revolution to

23:08

2023 is about doing one thing and

23:11

doing one thing over and over again and then having

23:13

that be a building block. At

23:15

this point in the process, the difficult chemistry is

23:17

behind us. And the assembly

23:19

process is all about stringing the cells

23:22

together into packs, up to 10,000 cells

23:25

in a single pack. It's still

23:27

pretty difficult, but you no longer need

23:29

specialized clean rooms. You can do it

23:31

virtually anywhere. You can ship these cells.

23:33

They're formed. They can be created.

23:35

And so while we

23:37

want to produce more cells in the US,

23:39

the fact that these cells can be made

23:41

with these precisions in Korea,

23:43

in China, in Japan, it's where most of

23:46

the manufacturing systems, there's a good amount happening

23:48

in the US, there has to be a

23:50

lot more. But once these cells

23:52

are made, you can do what we

23:54

call pack out, making the modules, making

23:56

the packs wherever. It's really incredible. So

24:00

that is a snapshot of how lithium ion batteries

24:03

are made. The process is

24:05

really sophisticated and every single step

24:07

is expanding quickly as the world's

24:10

appetite for batteries increases. That

24:12

means that we're going to need more of everything

24:15

that goes into them. The needs by 2040 are

24:17

scary, but by 2030 they might be even scarier. Because

24:21

mining and processing takes a lot of time. So

24:24

for lithium that's about seven to eight times more

24:26

by 2030. Nickel

24:28

and cobalt need to double and copper about

24:30

50% more, which are

24:32

a gigantic amount. Tom

24:34

Morinhout is a research scholar here at

24:37

the Center on Global Energy Policy. And

24:39

when Tom thinks about decarbonization, he looks

24:41

at it to the lenses of trade,

24:43

investment and industrial policy. According

24:46

to McKenzie, the global supply chain for batteries

24:48

in 2022 was around $85 billion. And

24:53

by 2030 it's expected to be worth $400 billion,

24:56

thanks largely to demand for things

24:58

like electric cars and also storage

25:00

on the electric grid. Whoever

25:03

controls that supply chain has enormous

25:05

power. So who currently

25:07

wields it? I think the obvious

25:10

candidate is China, right? So China is

25:12

definitely building geopolitical leverage with their control

25:14

over overdose supply chains. I think other

25:16

countries are currently reacting

25:19

to it. China leads

25:21

the E.B. race in part because

25:23

it controls the supply chain of raw

25:25

materials for batteries. 28%

25:29

of the world's lithium, 41% of

25:31

cobalt, threw stakes and mines on

25:33

five continents. The biggest concern

25:35

is that they would use their

25:38

supply chain dominance to basically

25:40

gain geopolitical leverage. That's

25:42

the biggest challenge. And I think that that

25:44

risk is very real. Why

25:56

should we care about China controlling so much

25:58

of the world's battery supply chains? Why

26:00

does this matter? So there are two sides

26:02

to that also. The first one is that

26:05

we should care because the numbers are

26:07

just insane. They're staggering, right? On

26:10

the refining side, China controls 80% of

26:13

manganese refining, more than 70% of cobalt and

26:16

nickel refining, more than 60% of

26:18

lithium refining. And then you

26:20

get to the most valuable components, the cathodes, the

26:22

anodes, right? China controls more than 75% of cathode

26:24

production, more than 90% of anode production. And

26:29

then eventually with respect to battery cells, they control more

26:31

than 75%. Now, those are a lot

26:33

of percentages, but I basically didn't say anything below 60%.

26:37

It wouldn't matter if it was Australia

26:39

or Canada or even Europe.

26:42

Those numbers are scary because you

26:44

are at risk of supply chain

26:46

restrictions due to things like extreme

26:48

weather events, local conflicts, right? That's

26:51

the first part. The second part is, of course,

26:53

we should care because there are concerns that China

26:55

indeed will use that leverage

26:57

for geopolitical power. China

27:00

is perceived as almost a kind of

27:02

boogeyman in international trade, and there

27:04

are clear reasons why. It's a

27:06

state-directed economy that often uses businesses

27:08

and export restrictions to retain its

27:10

dominance in a wide variety of

27:13

technology sectors. And batteries are

27:15

no different. So just as an example, China

27:17

refined 90% of the world's graphite. And

27:21

at the end of 2023, China

27:23

restricted graphite exports in an effort

27:25

to protect its own supply. And

27:28

this restriction sent battery makers scrambling. But

27:31

they can also be wrongfully bashed. So

27:33

early on, China saw the strategic importance

27:36

of technologies like solar and batteries, and

27:38

they acted on it, building some of the most

27:41

competitive technologies in the world. China

27:43

had a vision for a battery-powered future,

27:45

and they built a very successful industrial

27:48

policy around it. That is

27:50

partially evidenced by control over supply

27:52

chains, but also by technology.

27:54

If you look today at the best

27:56

type of batteries, the best cathodes in

27:58

the world, there are That is Chinese

28:01

technology and that has developed over a

28:03

number of years, one,

28:06

two decades at least, where

28:08

they had a clear strategy while

28:10

other automakers and countries were, yeah,

28:13

sorry for the pun, but asleep behind the wheel.

28:16

And while China dominates a lot

28:18

of the world's battery supply chains,

28:20

many other countries like China are

28:22

establishing their own trade restrictions. One

28:25

example is the Inflation Reduction Act

28:27

here in the US. This is

28:30

America's green industrial policy and it

28:32

gives some real advantages to US

28:34

companies. I'm talking about domestic incentives

28:36

that angered even America's close European

28:38

allies. This green industrial

28:40

race has added to an already tense

28:42

trade relationship between the West and China

28:45

and batteries are one of the reasons

28:47

why. The last few years have

28:49

been very, very, very bad. And

28:52

there's two drivers to that. First,

28:55

you have battery prices that are plummeting. And that's

28:57

a great thing for the energy transition, right? But

28:59

all of a sudden, all automakers

29:01

have to electrify. In the United States, in

29:03

Europe, if you don't do it now, you

29:05

fall behind and you have no future in

29:08

the electric vehicle industry, which

29:10

means that all of a sudden, all

29:12

of the stuff that China was producing, we now

29:14

really need a lot of it, right? So

29:18

that came at the same time as COVID. So

29:20

you have a lot of stimulus packages, right? So

29:22

you have a lot of subsidies that are now

29:24

trying to encourage, hey, let's do more of that

29:26

stuff. EVs, battery cells, catatas,

29:28

anodes, and so forth at

29:31

home, right? And

29:33

there, I think those two

29:35

have gotten us to a level where

29:37

there is a lot more sensitivity. And

29:40

where we have seen the US

29:42

stand up and say, if you

29:45

want to play a game of export restrictions,

29:47

which you have been doing in the last

29:49

basically decade, decade and a half, we

29:52

can play ball, right? And

29:54

so you have seen the CHIPs Act, where

29:56

the United States actually prohibits recipients

29:59

of subsidies. to expand

30:01

business in China, that is a

30:03

very aggressive protectionist

30:06

measure, in theory. And

30:09

I think we've seen the same thing coming

30:11

from China, where they say, look, now if

30:13

you export gallium and germanium, which are two

30:15

very important elements for chips, you need to

30:18

have a license from the government, which of course

30:20

gives them the control over exports as well. And

30:23

so there we have gotten now to the situation

30:25

of pure competition. I think it's fair

30:27

to state that China is not unique in

30:29

using trade as a geopolitical tool. Like, lots

30:32

of countries do that. Do you have a

30:34

couple of examples that stand out to you

30:36

actually of that point of countries using trade

30:39

restrictions within, I mean,

30:41

specifically the battery supply chains, as some

30:43

type of geopolitical tool? Absolutely.

30:45

As a geopolitical tool, and I would

30:47

say as a local industrialization tool, right,

30:49

to jump on industrialization.

30:52

So geopolitics is one thing. And for

30:54

me, when you talk about geopolitics, a

30:56

lot of it is also about achieving

30:58

foreign policy goals, right, or having a

31:00

specific type of influence in

31:03

that sector. I would say with respect to

31:05

industrialization, a lot of countries, what we see

31:07

today, are trying to use export restrictions to

31:11

also add more valuable

31:13

sectors to their economy. So if

31:15

you are a nickel producer, what

31:17

happened before is that you just

31:19

export it. And the more value

31:21

added segments like processing, cathode manufacturing,

31:24

and so forth, were happening elsewhere,

31:26

China specifically. We now

31:28

see countries doing that differently, right? So

31:30

Indonesia, for example, implemented a nickel

31:32

export ban over several years to

31:36

force investment into Indonesia's

31:38

processing capacity. And that

31:40

worked very well. Other countries are looking at that

31:42

and are saying, hey, we might want to do the same

31:44

thing. We have a lot

31:46

of countries that are going to be able

31:48

to go to Africa, to Africa countries, for

31:52

example, Zambia and DRC, with respect to Cobalt. Chile

31:56

has recently nationalized its lithium industry.

32:00

the Chilean state owned enterprise. So

32:02

we're seeing a lot of countries doing that. Whether

32:04

that will work, that's a big question.

32:07

Can the energy transition actually happen

32:10

on the timeframes and at the scale

32:12

we're talking about without cooperation with today's

32:15

major players in battery supply chains, including

32:17

China? No, zero chance,

32:19

not at all, not in a million years. So

32:26

it sounds like the future of battery supply chains

32:29

is global, is that fair? Absolutely,

32:31

yeah. The future of battery

32:34

supply chains is global for

32:36

sure. We'll see some

32:38

more investment happening, right? Very similar to

32:40

refineries, but the amount of demand we're

32:42

going to have for batteries is off

32:44

the charts and we'll only be able

32:46

to supply it with integrated global supply

32:48

chains. We

32:53

need to electrify a lot of the global economy

32:55

if we want to hit net zero emissions by

32:58

2050. The International

33:00

Energy Agency says that growth in annual

33:02

electricity demand will need to double through

33:04

the middle of the century. And that's

33:06

going to require a lot of batteries

33:09

to electrify transport and more

33:11

batteries in our buildings and even more batteries

33:13

across the entire grid to balance out vast

33:15

amounts of wind and solar. And

33:18

so this brings us to a really central

33:20

question about the battery economy. Are

33:22

we just going to swap out dependence on

33:24

petroleum for dependence on critical minerals from China?

33:27

Elon Musk has called lithium the new oil.

33:31

Is he right? We're

33:37

going to need a huge increase in mining

33:39

and minerals, but we should put it in

33:41

proper context in the scale of global

33:44

oil gas trade. Jason

33:47

Bordoff is the founding director of Columbia

33:49

University's SIPA Center on Global Energy Policy

33:51

where I work. But I've known Jason

33:53

since 2009 when we were

33:55

working together in the White House. And I turn

33:57

to him whenever I have questions about the geopolitics

33:59

of the world. of the energy transition. Jason

34:02

was special assistant to President Barack Obama and

34:04

senior director for energy and climate change at

34:07

the National Security Council. So he knows a

34:09

thing or two about the oil and gas

34:11

transition. Jason Blum, CEO, National Security Council, United Nations Oil

34:13

and gas are incredibly important strategic and economic commodities.

34:15

We've seen that time and again over the last

34:17

hundred, hundred and fifty years. I

34:19

spoke to Jason almost to the day

34:21

of the 50th anniversary of the Arab

34:23

oil embargo. It was striking

34:26

that we were discussing China's dominance in

34:28

the clean energy sector right at that

34:30

moment, of that anniversary. I wanted

34:32

him to explain the differences and

34:34

the similarities between the battery economy

34:36

and the fossil fuel economy. When

34:39

we think about the massive quantities of materials

34:41

and minerals that we're going to need to

34:43

get to net zero emissions, how

34:46

do they compare to oil and gas? The

34:48

global oil and gas trade is massive.

34:51

The IAs, one of the

34:53

IAs scenarios that gets you

34:55

sort of close to 1.5 degrees, if not

34:57

all the way, has critical mineral

34:59

revenue growing from 41 billion in 2019 to 263 billion

35:01

by 2040. Again, that's not all the way to

35:04

1.5, maybe

35:09

1.7 or 8. By

35:11

comparison, annual revenue from oil and gas this

35:13

year is over $7 trillion. And a lot

35:17

of this is just volume. The

35:20

volume of critical minerals needed to power

35:22

the global economy in the clean energy world are not

35:24

as big as they are for oil and gas. Even

35:27

on a net zero pathway, critical

35:30

minerals demand does not top 30 million

35:33

metric tons in 2040, according to

35:35

the IEA. And by comparison, to

35:38

30 million metric tons. Oil

35:41

production last year was 4.4 billion metric

35:44

tons. Coal was 7.5 billion tons. So

35:50

the global oil and gas industry is

35:52

enormous. And yes, we're

35:54

going to need more mining. We're going to need more

35:56

global trade in these minerals, but it really doesn't compare

35:58

to how massive. global oil and

36:01

gas businesses. And when we think about

36:03

the geopolitics of all this, how

36:05

are minerals the same and different from

36:07

oil? I think there's a

36:09

lot of sometimes facile comparisons between oil security

36:12

and mineral security. And you hear some politicians

36:14

say things like, I don't want to go

36:16

from dependence on the Middle East for oil

36:18

to dependence on China for minerals. And

36:21

there is something to that. We want to

36:23

be concerned about the dominance of any one

36:25

country, particularly one that is

36:27

not always playing by free and fair rules

36:29

of global trade or that the US has

36:32

significant and Europe has significant tensions

36:34

with like China. But

36:36

there are a lot of really important differences

36:38

too. These are not the same from

36:41

the standpoint of scale or from the

36:43

standpoint of the energy security risks. Oil

36:46

is the

36:48

daily flow of energy. If we were

36:50

to see any cut off in the

36:53

daily flow of oil, your ability to

36:55

heat your homes in some parts of

36:57

the country, to power our transportation sector

36:59

would grind to a halt or prices

37:02

would go through the roof. If

37:04

you saw a disruption in critical mineral

37:07

supplies, that wouldn't affect your ability to

37:09

get energy from say electricity or

37:12

to power your home. It

37:15

would cause shortages, delays,

37:18

cost increases in the supply chains

37:20

for minerals. So critical minerals are

37:23

an input to a manufactured good

37:25

that can produce energy or store

37:27

energy. It is not energy. We

37:30

don't burn critical minerals for energy. And

37:33

so if we had a disruption in some

37:35

types of critical minerals, you might see

37:38

delays and much higher costs

37:40

for batteries. You might have to wait six months or

37:42

12 months to be able to buy a new electric

37:44

vehicle. You might see delays in solar panels. It wouldn't

37:46

affect your ability to charge your electric car today or

37:49

get electricity from your solar

37:51

panel today. So the risks

37:53

to the macro economy are

37:55

different than they are for oil. in

38:00

battery supply chains. Although the

38:02

fossil fuel economy actually dwarfs the

38:04

battery economy in volume, there are

38:06

ways in which critical minerals create

38:08

even more concerns about energy security

38:10

than oil. And the

38:13

biggest risk is concentration.

38:15

So the top producers of oil in the

38:17

world, the US, Saudi Arabia, and Russia, each

38:20

produce roughly 10% of global

38:23

crude oil supply. The

38:25

top producer of lithium, of

38:28

cobalt, of rare earths, each

38:30

of those, the top producers, each of

38:32

those produces more than half, and in some cases up to

38:34

70% of global supply. So

38:37

there's much more concentration today in who

38:40

produces these so-called critical minerals.

38:43

That concentration brings a whole bunch

38:45

of concerns about supply shocks due

38:47

to things like expert restrictions, extreme

38:50

weather, or even another pandemic. So

38:53

when I spoke to Jason, he said

38:55

that all things considered, he'd rather have

38:57

the critical mineral security problem to solve

38:59

than the oil security problem to solve.

39:02

Oil is partly about technology, but

39:04

very much about geologic abundance. Some countries have

39:06

oil on the ground, and some don't. With

39:09

critical mineral dominance that China has, most of

39:11

that is about refining and processing. Those are

39:13

manufacturing plants, and you can build those in

39:15

lots and lots of places. And

39:18

so if we're concerned about the dominance of any

39:20

one country in the supply chain for geopolitical reasons,

39:22

or just because you want to diversify, you might

39:24

see a hurricane or a typhoon hit a certain

39:26

country. You see that with Apple now, which is

39:28

trying to increasingly build iPhones in

39:31

India, not just China. It's just good business

39:33

practice, especially we've been reminded after

39:35

the pandemic, to diversify supply chains.

39:38

We can build those refining and processing plants

39:40

in many places. I know that

39:42

you were a part of the Aspen Institute report that

39:44

was called a critical minerals policy for the United States.

39:47

In that report, you and others outlined

39:49

a bunch of recommendations for U.S. policy

39:51

around critical minerals. Could you

39:53

step us through just the most important

39:55

steps that governments can take, and where,

39:59

if anywhere, is the best way to do it? Is there some low-hanging fruit that

40:01

we could go ahead and move on soon? And what

40:03

steps are actually going to be a lot more

40:05

difficult? There's a lot that the

40:07

US government should be doing to expand

40:10

critical mineral supplies and increase security

40:12

of supply. First, we

40:14

will need more mining. And

40:17

if you're going to diversify supply chains away from

40:19

countries like China, we're going to need permitting

40:23

reform to make it easier

40:25

to do mining projects in

40:28

the United States. You need to

40:30

do that incredibly carefully. We spend a lot of

40:32

time in the report talking about the risks to

40:36

Native American communities. Many of these

40:38

resources are located within a short

40:40

distance of federal lands, public lands,

40:42

sensitive areas, Native American communities. And

40:45

so you need to be really careful about how you do that. But we

40:47

have to make it. Right now, it takes according to

40:49

the IEA an average of 16 years to bring

40:51

a new mining project to development. We have

40:53

to shorten those timeframes. And

40:56

we can also put in place measures

40:58

on the demand side to reduce how

41:00

much minerals we need through technology and

41:03

through other measures that might actually allow us to

41:05

get to the same place with fewer of these

41:07

critical mineral inputs. Second,

41:10

we spent a lot of time

41:12

in the report and engaging with

41:15

tribal communities and indigenous communities to

41:17

make sure that any energy transition

41:20

and any dramatic increase in critical

41:22

minerals mining, refining and

41:24

processing is done in a

41:26

way that is just and equitable. And the mining

41:28

industry does not always have a great track record

41:30

in this regard. So in particular,

41:33

we talked about the need to clarify

41:35

and enforce indigenous sovereignty through

41:37

the so-called concept of

41:39

free prior and informed consent

41:41

with consent directly from impacted

41:43

tribal communities. And that needs

41:45

to be a prerequisite for critical

41:48

mineral development. And

41:50

then third, we talked about the importance of

41:52

trade, that we can't do this alone. We

41:55

can't do this on a path of isolationism

41:57

and protectionism. We need a lot of partners.

42:01

First, there's almost no scenario where China does

42:03

not remain a very important part of these

42:05

supply chains, albeit maybe less

42:07

dominant than today. And you need

42:09

to think about the tools to de-risk

42:11

that, to reduce the risks of that

42:14

dependence, and put in

42:16

place tools to deal with shocks, geopolitical

42:18

or otherwise. And then we

42:20

need to diversify supplies. In order to do

42:22

that, we need to build

42:25

stronger partnerships with lots

42:27

and lots of other countries in Africa,

42:29

Latin America, and Southeast Asia. That's

42:32

really important because right now, protectionism

42:35

is on the rise, on

42:37

both sides of the aisle, and in many parts of

42:39

the world. And we're

42:41

going to need more free trade agreements and

42:43

more free trade partnerships, not fewer, if we

42:45

want to have a clean energy transition and

42:47

diversify our clean energy supply chains. And

42:50

if every country says we need to own the

42:52

entire supply chain because we want all of those

42:54

economic benefits, it's going to make the clean energy

42:56

transition so much harder. The

43:04

battery economy is here, and it

43:07

is shaping so many things. I'm

43:09

talking about global trade, geopolitical relationships,

43:11

domestic industrial policies, climate targets. But

43:14

battery supply chains also matter to every single

43:17

one of us. There are

43:19

millions of jobs at stake, and there

43:21

are environmental and human costs to mining.

43:23

And the availability of batteries has

43:25

direct impacts on the health of

43:28

the grid, and the affordability of

43:30

mobility and electricity. And

43:32

people like Alessandra Carreon, who now serves

43:34

as a public service regulator in Michigan,

43:37

are grappling with the real world consequences

43:39

of how battery supply chains are

43:41

structured. I can't

43:44

imagine how we

43:46

can justify ongoing investments

43:49

in aging infrastructure that has

43:51

served us to date without

43:53

thinking about the role of

43:56

new and increasingly affordable technologies

43:59

like batteries. batteries or

44:01

energy storage systems to

44:03

meet that charge, especially

44:06

as they become more accessible

44:08

and distributed and therefore can

44:11

help promote equitable, affordable

44:13

access to

44:15

more energy service customers. Yeah,

44:18

it's not that far removed from where

44:20

I sit now to think about how

44:22

battery supply chains matter. Starting

44:29

up this season, we're going to visit

44:31

all the steps in the battery supply

44:33

chain from mining to processing to manufacturing

44:35

to recycling. And we'll ask,

44:37

what are the benefits and trade offs

44:39

for the economy, the environment and human

44:41

well being? The

44:45

big switch is produced by Columbia

44:47

University's SIPA Center on Global Energy

44:49

Policy in partnership with Latitude Studios.

44:52

If you appreciate the reporting and storytelling that we're

44:54

doing here, you can rate and review the show

44:56

at Apple and Spotify. And you can

44:58

also send a link to a colleague or a friend who you think

45:00

would like it. You can find all

45:03

of our back episodes along with this current

45:05

season wherever you get your pods. The

45:07

show is produced by Daniel Waldorf, Mary

45:09

Catherine O'Connor, Ann Bailey and Stephen Lacy.

45:12

Ann Bailey is our senior editor. Sean Mark-Kwan

45:14

wrote our theme song and makes the episode.

45:16

And thanks to Austin Cope for field producing.

45:19

A special thanks to our Columbia team,

45:21

Harry Kennard, Natalie Volt, Koo Lee, Jen

45:23

Wu, Liz Smith and Tom Warrenhouse. This

45:26

show is hosted by me, Dr. Melissa Lott. Thank

45:29

you so much for listening. Stay tuned

45:31

for episode two next week.