Existing and planned U.S. geothermal installed capacity (MWe) by state | U.S. Department of Energy
Friends of CTR,
As countries continue to fight hard on the front lines of the COVID-19 crisis, global leaders are already assembling teams of health, academic and economic specialists to tackle the next critical battle front…
Where to from here?
In the past four weeks alone, we have seen a flood of interviews, forecasts and ‘best guesses’ regarding short and long-term predictions for EV sales, lithium demand and renewable energy take-up in the United States. This is to be expected in these unprecedented times and many hard and difficult questions are being asked by those seeking to create a more resilient and sustainable way forward post-COVID-19.
I like to share a few observations based on these current commentaries and how the lithium and renewable energy sectors might offer some powerful solutions to combat the coming health, infrastructure, and economic challenges we expect to face in the United States.
From my perspective, I believe we are witnessing a major shift across all fundamental areas related to the energy sector; from geographical supply risk, to clean fuels and energy and the sustainable sourcing of materials, through to the financing of major infrastructure projects with ‘green credentials’.
Many are still predicting a slow and gradual transition from fossil fuels to clean energy, and this is likely to be the case, but there are a growing number of influential voices advocating for change now, rather than later.
A new focus on air quality and links to health
A new report released by Harvard University, and featured in Utility Dive this week, suggests that areas in the United States that had high levels of air pollution before the outbreak of the new coronavirus are more likely to see patients die from the infection during its spread.
"The results of this study also underscore the importance of continuing to enforce existing air pollution regulations during the Covid-19 crisis," the report reads. "Based on our result, we anticipate a failure to do so can potentially increase the Covid-19 death toll and hospitalizations, further burdening our health-care system and drawing resources away from Covid-19 patients."
Around the globe, reports of cleaner air quality since lock downs were implemented, have highlighted the urgent need to continue decreasing carbon emissions. Drops in nitrogen dioxide (NO2) emissions of 30% to 60% are being recorded in many European cities according to the European Environmental Agency.
While locking down entire countries is clearly not a solution, the general public are, for the first time in their lives, able to see and experience the positive impact that a transition to electric vehicles could have on their health.
I believe the results from the Harvard University report and other peer groups will become a major topic of discussion in the United States post-COVID-19.
As oil crashes, ‘America’s untapped energy giant’ could rise
In a recent Grist.com article, the collapse of oil, driven by COVID-19 and a war for market share between Saudi Arabia and Russia, has created a massive downturn for US drilling companies and their workforces. Last week, the U.S. Energy Information Administration revised its short-term outlook for crude oil production, predicting a steep decline through 2021.
Right now, there is a unique and immediate opportunity for big oil to invest in geothermal resources and ‘re-purpose’ their considerable drilling, extraction and infrastructure expertise into a clean energy projects. Oil and gas workers could also benefit as many of the skill sets are transferable between these industries.
Getting America’s drill rigs and workers back to work can happen and can happen very quickly with the right support from government and the private sector.
Geothermal resources in the U.S. are enormous, but geothermal energy accounted for just 0.4 percent of total utility-scale electricity generation in the United States in 2019, according to EIA data.
According to DOE, this could change, and geothermal could generate 8.5 percent of all U.S. electricity and account for 3.7 percent of total U.S. installed capacity in 2050, if costs drop significantly and if technology continues to improve.
Green Investment - also on the rise
Analyses from BlackRock, Morgan Stanley and others reflect what the rest of the world is learning in the COVID-19 fight: Aggressive action that proactively addresses systemic risk produces better outcomes than pretending there is little risk.
The evidence of ongoing climate risk is compelling investors to reassess core assumptions about modern finance, CEO Larry Fink of BlackRock, the world's biggest asset manager, wrote in January.
“Companies that do not respond to climate change will face growing scepticism from the markets and a higher cost of capital, but companies that respond will attract higher-quality, more patient capital.”
An investor response has started. Climate Action 100+, a global investor coalition with over $41 trillion in assets, is pushing its 161 companies across all sectors to align their actions with the goals of the Paris Climate Agreement, the report said. And The Climate Majority Project, representing investors with $1.8 trillion in assets, called for the top 20 U.S. IOUs to target net-zero emissions by 2050.
Chris Berry from House Mountain Partners also commented this week on opportunities to strengthen domestic OEM supply chains. “Companies and investors along the electrification supply chain now have a window to properly allocate capital and fund a robust and localized supply chain centred on resilient and cleaner transportation and energy use.”
Could COVID-19 Move More EV Battery Manufacturing to the U.S.?
InsideEVs recently reported on the potential shift to more US EV battery manufacture. “For years, the United States has fallen behind its competitors in EV battery production, but will COVID-19 act as a catalyst in the move of battery manufacturing from China to the US?”
To better understand how a change like this could happen, it is important to look at where the main elements of lithium-ion batteries come from. You guessed it; lithium is a large component of EV batteries. For years dating back to the early 1990s, the US led the entire world in lithium production, but for the last 25+ years, that has not been the case.
There are currently four countries that dominate in lithium production: Australia (51,000 tons), Chile (16,000 tons), China (8,000 tons), and Argentina (6,200). Raw lithium production numbers in the US are not made public, but we do know that the US is well behind and according to Benchmark Minerals Intelligence, we are producing just 1% of global raw lithium materials. It’s not that the US can’t become a leader in lithium production, it just hasn’t invested the time, finances and energy as yet. We hope this is about to change.
What does all this mean for California’s ‘Lithium Valley’?
It means we are currently seeing a once in a lifetime opportunity to create economic relief for the Imperial Valley region. It means jobs. It means a new tax base. It means a win for the environment and the Salton Sea environmental repair. It means a win for renewable energy. It means US minerals and supply chain independence. It means clean air…I could go on all day.
California Energy Commission Chairman David Hochschild recently described lithium as “the oil of the clean energy future.” He’s optimistic that CTR’s technical partner Lilac Solutions, might finally unlock the Salton Sea resource, adding to the clean energy economy of a state that already has about 700,000 electric vehicles and 17 electric-vehicle manufacturing plants.
We have a unique opportunity to create the world’s first master-planned Lithium and Resource Production Hub that that will run on 100% renewable energy and has the potential to reposition the United States as a leader in sustainable lithium supply and battery manufacture.
The way forward
Immediate support through an emergency response action by the public sector and a substantial injection of investment from the private sector will directly assist in creating real solutions.
This is an incredible opportunity for the United States to use what we already have in abundance. Clean geothermal energy, a robust lithium resource, a highly skilled workforce and drill rigs ready for deployment!
The rise of geothermal - California's 'untapped energy giant' offers economic stimulus, improves air quality, strengthens domestic energy independence, improves environmental responsibility, stabilizes renewable energy grids, and most importantly creates jobs for local workers and those transitioning from fossil fuel projects.
Together, we can do this and make a real and lasting difference.
Rod Colwell
Chief Executive Officer
Note to Readers: This is a ‘General Information Only’ article. It includes personal opinions and forward-looking statements and should not be considered as advice. This article contains links to external websites and other information platforms. CTR takes no responsibility for the quality or accuracy of these external links, nor should any reader rely on any information provided anywhere in this article.
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