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President Biden plans to employ the little-used Defense Production Act (DPA) to increase American production of minerals vital for building electric vehicles (EVs) and other forms of battery storage that are key to weaning the United States from fossil fuels, according to reports.
Citing “people familiar with the matter,” Bloomberg News reported Wednesday that on Thursday, Biden will add materials for batteries to the list of commodities covered by the 1950 law. (The Intercept had previously reported that the administration is in the process of drafting an executive order.) The expected action could allow U.S. mining companies to access $750 million in funds under the DPA to boost production of lithium, nickel, graphite, cobalt and manganese, which, at present, U.S. manufacturers largely source from China.
The move comes at a time when U.S. policymakers are debating how to protect the energy supply chain in response to Russia’s invasion of Ukraine and China’s support for its autocratic neighbor. Russia is a major source of fossil fuels such as oil and gas, as well as metals such as nickel, a key component in electric vehicle batteries, and platinum, which is used in making so-called green hydrogen — a clean fuel that could replace natural gas in home heating and industrial uses.
The United States has imposed economic sanctions on Russia, and tensions with China are running high. The Biden administration has attempted to counter what it sees as China’s unfair trade practices and its oppression of ethnic minorities with measures such as a diplomatic boycott of the recent Winter Olympics in Beijing.
Global shortages of the minerals needed to produce EV batteries were a concern even before the Feb. 24 outbreak of war in Ukraine. Axios reported in January 2021 that J.B. Straubel, the former battery chief at Tesla, the EV manufacturer, has launched a startup to recycle EV batteries. “The U.S. has plenty of lithium, he noted in an interview with Axios, but pulling it from the earth is expensive and difficult,” the website reported.
Another reason that ramping up U.S. production may be difficult is that mineral mining can have harmful effects on local ecosystems, including water loss, and soil and water contamination. “Amid concerns from critics, including some Democratic members of Congress, aides are taking steps to make sure the presidential actions won’t skirt environmental reviews or permit regulations,” Bloomberg reported, citing an unnamed source.
The outlet also noted that expanding the clean energy and EV domestic supply chain would require more substantial investment on the part of Congress. Senators from both parties, but mostly Democrats, have signed letters to Biden this week urging him to use the DPA to bolster domestic battery manufacturing for EVs.
Biden’s Build Back Better proposal called for significant investment in clean energy and electric vehicle deployment. However, due to unified Republican opposition and the recalcitrance of Sen. Joe Manchin, D-W.Va., the Senate has not passed the bill. On Wednesday, more than 100 clean energy and transportation companies sent a letter to congressional leaders urging passage of those provisions.