A new study projects that the United States is home to the largest known lithium deposit in the world which is worth an estimated $1.5 trillion. Scientists estimate that the deposit near the Nevada-Oregon border may hold up to 40 million metric tons of lithium, nearly double the largest known deposit in Bolivia. Lithium is a key component to many of the goods that power modern living, as well as many defense and green technologies. Increasing domestic supplies of lithium and other critical minerals has economic, environmental, and geopolitical advantages for the U.S. Policymakers can help the private sector capitalize on America’s critical mineral abundance by creating an efficient, predictable permitting process that maintains rigorous environmental safeguards. 

>>>READ: General Motors Secures Lithium Access With $650 Million Investment

Lithium is the raw material for energy-dense, rechargeable lithium-ion batteries and therefore affects the price consumers pay for many of the products they rely on every day like cell phones and laptops. Importantly, lithium prices can have significant impacts on the future and electric vehicle car sales. Although electric vehicle sales are up in the U.S. and around the world, the sticker price remains a concern for most American consumers, even with generous and economically inefficient subsidies available. The EV market will be more economically robust when it can compete on price and performance without preferential treatment from the government. While manufacturers have made progress on both, a big part of that challenge remains the cost and range of the battery.  

Lithium-ion batteries make up more than 50 percent of the cost of an EV, and they can be expensive to replace or repair. Competition and breakthroughs in technologies could diversify the battery supply chain and help lower prices, but it is extremely likely that more lithium and other critical minerals will be necessary well into the future. As the International Energy Agency (IEA) emphasized, price reductions in batteries will not come from innovation alone but from cost reductions in battery minerals by increasing supplies. Raw materials represent an increasingly higher percentage of battery costs, and prices could offset the price reductions made by increasing production capacity. Even with increased production of critical minerals last year, demand far outpaced supply. IEA reported: 

In 2022, lithium demand exceeded supply (as in 2021) despite the 180% increase in production since 2017. In 2022, about 60% of lithium, 30% of cobalt and 10% of nickel demand was for EV batteries. Just five years earlier, in 2017, these shares were around 15%, 10% and 2%, respectively. As has already been seen for lithium, mining and processing of these critical minerals will need to increase rapidly to support the energy transition, not only for EVs but more broadly to keep up with the pace of demand for clean energy technologies. 

In the IEA’s ambitious Sustainable Development Scenario (SDS), which is the trajectory of clean energy needed to meet the Paris Climate Agreement targets, lithium demand would need to increase 40 times by 2040. Projecting resource requirements across multiple decades is not a prediction but is instead an assessment of the potential demand. Expert predictions of peak oil, food shortages, and resource exhaustion have come and gone, often with little accuracy. Further, markets change, sometimes rather quickly, as innovators drive efficiency and technological progress. Nevertheless, the wealth of natural resources, including the latest lithium deposit, presents a tremendous economic opportunity for job creation and for the U.S. to be a key contributor to meeting the world’s rapidly rising lithium demand. 

>>>READ: Electric Car Sales Reached New Heights in 2022

Liberating the abundance of resources domestically and improving efficiencies for private investment and research, development, and demonstration programs will help combat rising prices for mineral commodities, establish more secure supply chains, and diversify away from unethically sourced minerals. American leadership in critical mineral development and on climate change should empower innovators to provide cleaner choices at lower prices.

As reports come out that Senators John Barrasso (R-WY) and Joe Manchin (D-WV) will convene to address permitting, policymakers should capitalize on this opportunity to enact meaningful and durable solutions to empower companies to capitalize on our domestic resource abundance. An all-of-the-above energy policy won’t work if producers cannot access the resources below the ground. 

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.