Yesterday, an executive order from Biden fueled debate over whether a US-based electric vehicle supply chain can be affordably launched by the federal government without damaging the environment.

the plan signed by President Biden yesterday, calls for a review of the state of national supplies of batteries, key battery minerals and semiconductors used in electric cars – as well as “rare earth” minerals used in electric cars. wind turbines and, potentially, other materials used in clean energy.

The administration wants to understand how to wean the United States off its dependence on China for many of these electric vehicle technologies and avoid shortages that could slow adoption – or, it believes, put at risk. national security.

A backgrounder provided by the White House cited the ongoing slowdowns at auto factories caused by a shortage of semiconductor chips and the need for the United States to “make better use of our large reserves of lithium and carbon. our manufacturing know-how ”for lithium-ion batteries.

Within 100 days, the Department of Energy must submit a report identifying risks in the battery supply chain and recommending policies to address them, according to the text of the decree.

The Defense and Commerce departments will prepare similar reports for critical minerals and semiconductors as part of the plan. A year from now, the agencies will publish a follow-up with broader recommendations on setting up new production plants, training workers, and carrying out high-priority research and development.

“We will stop reacting to supply chain crises as they arise and move on to preventing future supply chain problems,” said Peter Harrell, senior director of economic competitiveness at the National Security Council, during a press conference. press briefing yesterday.

Biden’s action has been met with enthusiasm by mining interests, automakers, electric vehicle advocates and a few prominent Republicans.

Ford spokesmen called it “incredibly important” to alleviating the semiconductor shortage, and Volkswagen has pledged its “full support” for the order.

The president of the National Mining Association said Biden “clearly recognizes the threat” of over-reliance on foreign minerals. Robbie Diamond, president of Securing America’s Future Energy, hailed it as a step to “compete with China’s enormous influence at every step of the electric vehicle supply chain.” And Sen. John Cornyn (R-Texas) said he had a “very positive” meeting on the Executive Order yesterday with Biden and Vice President Kamala Harris.

The start of battery production in the United States was a rare area of ​​bipartisan agreement during the Trump administration, which released a list of critical minerals and battery mineral companies’ eligibility released for Department of Lending Loans. ‘Energy (Energy wire, December 2, 2020).

“It all really started 10 to 15 years ago, with small adjustments and government actions,” said Taite McDonald, partner at Holland & Knight LLP who lobbies on behalf of the battery component companies.

But Biden’s review, she added, seems likely to produce “a much more comprehensive plan than we’ve ever seen before.”

“In the end, I expect that will move the needle.”

But Biden’s order opens a Pandora’s box of political dilemmas for the administration and other corners of the energy policy world.

Environmentalists are wary of what new mines and battery production could mean for wildlife habitats and the quality of local water supplies. Free market groups are wary of subsidies and other political backing, having previously led an offensive against Obama-era loans for electric vehicles and clean energy.

And the magnitude of the administration’s ambitions – to create multiple new mining and manufacturing industries in the United States – could test the attention of Congress and the White House.

“This executive order is a welcome step, but an easy lift,” said Tristan Abbey, former Republican policy adviser to the Senate Committee on Energy and Natural Resources and former member of President Trump’s NSC energy staff.

“The interagency process needs 100 hours, not 100 days, to consolidate all the recommendations developed by the previous administration which are now collecting dust on city shelves,” he wrote in an e- mail to E&E News. “These supply chain reviews… must be a path to concrete action.”

“The devil is going to be in the details”

Environmentalists and environmentalists, including researchers from Earthworks, Earthjustice and the Center for Biological Diversity, have responded to Biden’s decree with qualified praise.

“Clearly, we fully support the move towards a clean energy economy,” said Blaine Miller-McFeeley, senior legislative representative at Earthjustice.

Even though the green groups agree that CO2 emissions should be reduced by promoting electric cars, they have nonetheless expressed concerns about how the production of batteries could cause problems for local environments, especially through the ‘extraction of minerals such as lithium used in batteries.

Only one American mine, Albemarle Corp.’s Silver Peak, actively produces this ore on an industrial scale. A second planned mine in Nevada, Thacker Pass, began to magnetize opposition.

After the Trump administration approved permits for the Thacker Pass at the end of January, environmentalists blasted what they saw as a rushed environmental review that “would result in the destruction of important habitat and push rare species into extinction. “(Green wire, January 19).

“Location is very critical when it comes to these issues,” said Randi Spivak, director of public lands at CBD. “The devil is going to be in the details.”

His group and Miller-McFeeley’s Earthjustice are among those hoping the Biden administration and Congress will do more than just launch new industries. Mining laws must first be reformed to extend protection of land, water and cultural resources and charge royalties to miners, these groups say. And encouraging recycling – and not just mining “virgin” battery minerals – should be a front line.

“We think this review is going to show that these things are badly needed,” Miller-McFeeley said.

Such recommendations could, however, divide Congress. Nick Loris, a Heritage Foundation free market researcher, told E&E News he would welcome reforms that remove “government-imposed barriers” and cut red tape.

Overall, he added, Biden’s supply chain efforts “should not be the code for a government-subsidized industrial policy” that goes beyond the needs of the military. . “It will only hurt the industries they aim to help and ultimately consumers through higher prices.”

“All the tools are on the table”

A key question raised by the President’s review is how, exactly, the federal government would go about attracting battery and mineral companies to the United States, and ensuring that all of their materials are sourced domestically as well. .

Currently, three partnerships – Tesla Inc.-Panasonic Corp., LG Chem Ltd. and SK Innovation Co. – account for the vast majority of planned or existing battery capacity in the United States. But these companies still import most of their materials from abroad.

An incentive could come from the Energy Ministry’s lending programs office, which has billions of dollars in loan authorization for battery projects and said it would prioritize those proposals. This program, however, was pushed back by the Conservatives, who say the market should fund key energy technologies (Energy wire, January 26).

Some battery component companies also want the Biden administration to grant subsidies under the Defense Production Act, an idea that was not ruled out by administration officials yesterday.

“I don’t think we’re here to talk about how we would use DPA for a particular supply chain at this point, but as we seek to create resilient supply chains at all levels, all tools are on the table for this administration, ”Harrell, the head of the NSC, said at a press conference.

A lobby group that represents battery minerals and mineral processors in the United States and Canada, known as the Battery Materials & Technology Coalition, is pushing members of Congress to secure $ 10 billion in grants from the Department of energy for the processing of materials and the manufacture of anodes, cathodes and battery cells.

“We are very satisfied with the laser focus of the Biden administration on this issue,” said Ben Steinberg, spokesperson for the coalition. “It’s time to tell our companies that are making it cheaper overseas to come home.”

Journalists James Marshall and Lesley Clark contributed.