Biden to Invoke Defense Production Act for Electric Vehicle Battery Materials

March 31, 2022

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by Zack Budryk (The Hill) President Biden is set to invoke the Defense Production Act (DPA) as early as this week to step up production of minerals used to manufacture electric vehicle batteries, a source familiar the plans confirmed to The Hill.

Biden is set to issue a presidential determination to stoke domestic production of the minerals, which are used for both stationary batteries and vehicles. The person emphasized that the production will not bypass existing permitting or environmental review processes.

The addition of certain minerals, including lithium, cobalt, graphite, nickel and manganese, to the list of items covered under the law could give mining companies access to some $750 million under the DPA’s Title III fund, the person told The Hill.

The DPA, initially passed during the Korean War to boost aluminum and titanium production, grants the president authority to order domestic production ramped up of certain supplies. Former President Trump invoked it during the COVID-19 pandemic for meat production, while Biden used it shortly after taking office to ramp up production of pandemic-related supplies.

The person familiar told The Hill the White House will implement the order in collaboration with the Energy and Interior departments. The law will not be invoked for loans or direct purchases but rather funding for “feasibility studies, co-product and by-product production at current operations, and productivity/safety modernizations.”

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Bipartisan members of Congress have also backed the idea. Earlier this month, Sens. Joe Manchin (D-W.Va.), Lisa Murkowski (R-Alaska), James Risch (R-Idaho) and Bill Cassidy (R-La.) called for Biden to invoke the DPA for battery materials.

They specifically cited the near-monopoly Chinese companies hold on production of the materials in question, writing, “Allowing our foreign mineral dependence to persist is a growing threat to U.S. national security, and we need to take every step to address it.” READ MORE; includes VIDEO

Biden to invoke Defense Production Act on battery minerals (E&E News)

Biden could invoke Defense Production Act for critical minerals as soon as this week (CNN)

BIDEN MAY TAP INTO WAR POWER (Politico's Morning Energy)

MINING FOR ANSWERS: (P0litico's Morning Energy)

DoD Awards $35 Million to MP Materials to Build U.S. Heavy Rare Earth Separation Capacity (Department of Defense)

Russia’s War in Ukraine Reveals a Risk for the EV Future: Price Shocks in Precious Metals -- After the nickel market goes haywire, the United States and its allies launch a critical minerals energy security plan, with stockpiling an option. (Inside Climate News)

Biden’s Bet on Electric Vehicles Is Drawing Opposition from Republicans Who Fear Liberal Overreach: Even GOP lawmakers who sense the inevitability of EVs are opposed, leaving some analysts fearful that EVs could become entangled in the culture wars. (Inside Climate News)

Will electric vehicles really create a cleaner planet? We explore what it might take to get to 100% electric vehicle adoption, and the ripple effects the revolution will bring across industries and governments. (Thompson Reuters)

Is Biden driving up gas prices to get you to buy an EV? Conspiracy theorists think so (USA Today/Associated Press)

Biden order to boost mining may not have quick payoff -- President Joe Biden is turning to a Cold War-era law to boost production of lithium and other minerals used to power electric vehicles (Associated Press/The Gazette)

Biden eyes Cold War-era defense law to boost mining sector (Reuters/The Gazette)

Army Corps deals blow to Ga. titanium mine, reverses Trump move: Indigenous activists and environmentalists have argued the proposed mine would damage the Okefenokee Swamp. (Politico's Morning Energy)

Biden’s Climate Goals Rest on a 71-Year-Old Defense Law -- The Defense Production Act has become an important tool as the White House’s climate policy has stalled in Congress. (The Atlantic)

Biden officials nix price support to counter China’s mineral dominance -- Critical mineral producers have warned of unfair competition from China. The industry turns to the Trump administration and Congress now. (Politico Pro Greenwire)

Excerpt from E&E News: In its annual budget request released Monday, the administration asked Congress to provide $43 million to the Defense Department that would assure “access to advanced battery capabilities.” It also asked for $253 million to fund a national defense stockpile of “strategic and critical materials” — an increase from the $125 million Congress gave the program in the recent omnibus funding bill for this year.

At a press briefing later that day, the Defense Department stated it would “leverage the Defense Production Act” as it would “make these key investments.” The department did not respond to requests for comment. READ MORE

Excerpt from Politico's Morning Energy: MINING FOR ANSWERS: Senators on the Energy and Natural Resources Committee will hear today from critical minerals experts on how the U.S. can establish its own domestic supply chain to support the growing clean energy industry.

Chair Joe Manchin wants to see the U.S. establish stronger mining and processing capabilities — while also strengthening supply chains with friendly nations like Canada and Australia in order to wean off dependence on Russia and China, according to his opening statement, shared with ME. He also intends to echo previous calls for Biden to use the DPA to boost domestic production.

And Ranking Member John Barrasso (R-Wyo.) plans to chide Biden for his lack of action on supply chain issues, even though the materials are needed for the U.S. to reach the administration’s clean energy goals, according to a preview of his remarks shared with ME.

“Currently, the United States is 100 percent dependent on imports of 17 key minerals. We are over 50 percent dependent on imports of another 29 minerals,” Barrasso will say. “If President Biden doesn’t reverse course and stand up to mining opponents in his own party, this will only get worse. It will mean that we will continue to fund our adversaries.”

Among the testifiers is Scott Melbye, president of the Uranium Producers of America. Though the nuclear fuel was officially removed from the U.S. list of critical minerals earlier this year, Republican lawmakers questioned that decision during a confirmation hearing for Biden's nominee to head the Department of Energy's nuclear energy office — and DOE has indicated uranium could reappear on the list. READ MORE