Could A Lithium Shortage De-Rail The Electric Car Boom?

by James Stafford (OilPrice.com) ... Lithium is our new fuel, but like fossil fuels, the reserves we’re currently tapping into are finite—and that’s what investors can take to the bank. ... And yet, despite this skepticism, lithium demand is rising steadily and sharply, and indications that a shortage may be looming are very real.

Think the Internet of things, or smart houses, or smart cities, eventually. All these fascinating ideas are powered in some way by lithium.

Indeed, says Nevada Energy Metals (TSX-V:BFF) executive Malcolm Bell, “It may be time to start worrying about a shortage, but it’s not a question of whether we have enough lithium—it’s a question of tapping into new reserves. Those who don’t see the supply wall looming, will hit with a resounding thud. Those who start tapping into new reserves will be extremely well-positioned for the future.”

Brine-based lithium production in the country is concentrated in one place only, at least for now, and this place is Nevada. That’s because it is the only confirmed place with lithium deposits. The biggest actively mined area is the Clayton Valley, with presence from both mining majors like Albermarle (NYSE: ALB) and smaller, pure-play lithium miners such as Nevada Energy Metals.

The future is pretty clear: We’re looking at a period of shortage, and shortage is where the savvy investors make real money. The lithium feeding frenzy has only just begun. Consumer electronics keeps it safe and steady, as always; the electric vehicle boom skews the demand picture dramatically, and the future’s energy storage and powerwall evolutions take it over the edge.

The reserves are there, and there’s geologists estimate there’s plenty of unproven reserves out there as well—it’s just a matter of who finds them first, and who starts extracting first. READ MORE / MORE and MORE (Treehugger)

Excerpts from Treehugger: A recent study looked in great detail at how Lithium is used to produce batteries, and the entire life cycle of the batteries. The findings were compared to the environmental impact of conventional internal combustion cars. The study measured environmental impact in a number of ways, including global warming potential, cumulative energy demand, an Ecoindicator 99 and an Abiotic Depletion Potential that measures resource depletion. Interestingly, the study found that the environmental impact of Lithium was relatively small, but that other elements of these batteries have a higher impact. For example, lithium batteries take a tremendous amount of copper and aluminum to work properly. These metals are needed for the production of the anode & the cathode, cables and battery management systems. Copper and aluminum have to be mined, processes and manufacturing which takes lots of energy, chemicals and water which add to their environmental burden.

However, a 2008 French study examines various factors regarding Lithium extraction and production and comes to a different conclusion. First of all, this study emphasizes that there would be less Lithium available than previously estimated for the global electric car market. It also states the fact that some of the largest concentrations of Lithium in the world are found in some of the most beautiful and ecologically fragile places, such as The Salar de Uyuni in Bolivia. The authors note:

"It would be irresponsible to despoil these regions for a material which can only ever be produced in sufficient quantities to serve a niche market of luxury vehicles for the top end of the market. We live in an age of Environmental Responsibility where the folly of the last two hundred years of despoilment of the Earth's resources are clear to see. We cannot have "Green Cars" that have been produced at the expense of some of the world's last unspoiled and irreplaceable wilderness. We have a responsibility to rectify our errors and not fall into the same traps as in the past."

A March 2010 article in The New Yorker goes into great detail about the complex politics of Lithium in South America and its impact on the U.S. and other countries. Do we really want to move from international relations dependent on oil from the Middle East to international relations dependent on Lithium from South America? READ MORE