January 13, 2022 12:30 pm
One of the most interesting aspects of the energy transition to renewable sources is the way in which it will transform (it is already transforming, in reality) the geopolitical assets. As happened after the advent of fossil fuels – which for most of the last century have conditioned relations between countries – even the race for the resources necessary to reduce carbon dioxide emissions will create winners and losers, and probably it will overturn some of the current balance of power.
Broadly speaking, analysts tend to think that countries that have built their foreign policy on the sale of oil and natural gas will lose weight on the international stage, to the advantage of those who hold the raw materials necessary to support the energy transition and those who who will be able to exploit them.
But, as a long and interesting Foreign Affairs article explains, it’s best not to make rash assessments about it, because a lot will depend on a number of factors that are currently difficult to predict – such as changes in supply chains, the introduction of new technologies, the discovery of new fields – and also because the process will be very long. “The so-called petrostates will experience a positive period before their decline begins, because fossil fuels will initially coexist with renewable sources, especially to allow the growth of developing countries”.
Furthermore, it is probable, as promoters of clean energy argue, that a world based on renewables will be more stable and safer than the current one; but the transition period – the next thirty years – will be marked by unprecedented upheavals in the global balance, in the dynamics of power and in the general situation of the individual states.
What is certain is that the challenge between the great powers to control the resources needed to develop and operate clean technologies has begun, and the United States does not seem very well positioned. The New York Times published a lengthy survey from the Democratic Republic of the Congo, which currently supplies more than half of the world‘s supply of cobalt, which is used to make electric car batteries. The article sheds light on the corruption of local politicians, poor working conditions and environmental damage, but it is also the story of Washington’s decline on the international stage.
Relations between the two countries have always been very close. During the Second World War the United States turned to the Belgian Congo of the time to obtain the uranium necessary to build the atomic bombs which were then dropped on Hiroshima and Nagasaki. And over the next few decades, they spent tens of billions of dollars protecting mining sites across the territory. In the 1970s, the African country (which had changed its name to Zaire at the behest of President Mobutu Sese Seko) was fundamental in Washington’s strategy to limit the influence of the Soviet Union in Africa. “If we lose Zaire, every African country will come to the conclusion that Moscow represents the future,” US Secretary of State Henry Kissinger once said.
Mobutu thought that the United States was the ideal partner to exploit his country’s large mineral resources, because it brought investments from large US companies and helped fight and suppress pro-Soviet rebels. Then a series of wrong choices, in the 2000s, changed the situation. Freeport-McMoRan, the US company that controlled Congolese mines, decided to focus heavily on gas and oil, spending twenty billion dollars to buy two companies in the sector. When the price of oil plummeted, the company found itself buried in debt, and in 2016 it had to sell the Tenke Fungurume cobalt and copper mine, the country’s largest. The only buyers were Chinese companies backed by Beijing’s investments. China molybdenum won it, for 2.5 billion dollars.
The Obama administration was aware that cobalt was becoming a key resource in the world economy and that the United States would lag behind, but it had neither the ability nor the will to prevent China‘s rise in the sector: at the time the bulk of Washington’s economic resources and political efforts were devoted to the wars in Afghanistan and Iraq and operations against the Islamic State group.
Then came Donald Trump, with his promise to “make coal great again”. Upon entering the White House, Trump canceled measures designed to accelerate the transition to electric cars, giving China an added advantage. Beijing currently controls 15 of the 19 cobalt mines in the Democratic Republic of the Congo.
In mid-November Joe Biden, speaking from a General Motors plant in Detroit, admitted that Beijing is winning the race on electric cars: “Something went wrong along the way. China is ahead “. Then, defiantly, he added: “But things are about to change”.
The hunt for lithium
The United States‘ hopes of regaining ground largely depend on what it can find beneath the desert in northern Nevada. It is estimated that in that region, known as Thacker Pass, is the largest lithium reserve in North America. An article in Le Monde talks about it. Like cobalt, lithium is also critical for the energy transition because it is capable of holding a large amount of energy in a small volume. It is used for wind turbines, solar panels and, most importantly, electric car batteries. Currently, half of the lithium supplies come from Australia, the rest from China (17 per cent), Chile (22 per cent) and Argentina (8 per cent).
The United States, which has about 10 percent of the world‘s reserves, has only one active mine at Silver Peak, also in Nevada, and supplies just five thousand tons per year. An insignificant amount compared to world production (82 thousand tons in 2020). They are also lagging behind in the production of lithium-ion batteries: China is home to 107 of the world‘s 142 factories, the United States only nine, even though it is an exporter of electric vehicles.
Biden is trying to reverse the trend. After taking office, he signed two decrees: one states that by 2030 half of new cars sold in the United States will have to be electric; another serves to improve the management of lithium reserves and develop the battery manufacturing industry. The reserves of Thacker Pass are therefore essential. According to Lithium Americas, the company that will carry out the project, once fully operational, the mine could satisfy a quarter of the world‘s demand for lithium and power one million electric cars.
The project is opposed by the environmental activists of Nevada, convinced that it makes no sense to sacrifice an uncontaminated territory in the name (paradoxically) of the ecological transition. According to them, the mine will render the surrounding land uninhabitable for plants and endanger a number of animals. Furthermore, mining could disperse dangerous metals such as arsenic, antimony and uranium into the water.
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