PEAK LITHIUM?

The cars that will recharge the country may have a problem with their batteries. Or at least with the stuff their batteries are made from.

The General Motors (GM) Chevrolet Volt is the most widely publicized of a new generation of plug-in hybrid electric vehicles (PHEVs) racing to the market. Toyota and Honda are right at GM’s rear bumper and a host of U.S., European, Asian and start-up companies are in a bunch just behind them.

What they all have in common is big battery packs, much bigger than the ones in today’s gasoline-driven cars, battery packs capable of powering the PHEVs 40 miles on all-electric power and then operating for hundreds of miles via on-board gas engines that recharge the batteries.

Just behind the PHEVs is another horde of auto-makers developing fully electric vehicles (EVs) with bigger battery capacities and bigger battery packs.

Almost all the announced PHEVs and EVs will use lithium-ion batteries. Unless it is turns out to be true that world lithium supplies may be inadequate to the task.

Lithium is already in high demand for use in the batteries that drive the gadgets that fill the world’s enormous electronic marketplace.

Lithium is a mineral and a common substance. It is most readily obtained from "salt flats." It can also be mined from a mineral called spodumene. It is found around the world, but not in concentrations economic to develop at current prices. China and Argentina are presently the big producers.

There is an emerging debate about the adequacy of lithium supplies.

One side, represented by geologist R. Keith Evan and Barbara Heydorn, director of SRI International’s center of excellence in energy at science, believe the abundance of the material will allow the market to drive production to meet demand.

Heydorn, SRI International: "These are brand new markets. If it truly becomes a limiting factor, prices go up and we find new sources of material or ways to recycle the material…"

William Tahil, energy and transportation consultant with Meridian International Research, disagrees.

Recent Tahil papers suggest the abundance of lithium is less significant than the cost of producing it. When the lithium easily harvested from salt flats is used up – and it will likely be used up quickly when battery-driven transportation achieves the levels of production demanded by the world’s drivers – supplies will peak because easy-to-get-at sources will be quickly consumed and it will become too costly to get at and mine the hard-to-reach sources.

Some think the supply issue will work out.

Craig Irwin, vice president of energy storage and energy efficiency, Merriman Curhan Ford: "There are two highly polarized camps…The processing technology (for spodumene) is not entirely mature yet, but I don't think it's an insurmountable challenge."

Some are not at all sure it will.

Rob Day, venture capitalist/ partner, @Ventures: "In all these newfangled clean technology applications, quite often the ones that appear to have strong growth potential face a challenge in that they are reliant on some material that has been in short use to date…Possibly, they don't have enough supply to fulfill (growth) requirements."

Interesting aside to the Tahil theory: The U.S. appetite for lithium can be expected to incur resentment and hostility from lithium-rich Latin America as suppliers aggressively go after it to meet market demand.

Evan says lithium is too plentiful for there to be a worry of such problems.

If there are problems and expenses bringing it to market, that will only drive prices up. When the price is high enough, entrepreneurs will find ways to supply lithium.

Tahil believes a variety of obstacles such as ecosystem destruction that comes from salt flat exploitation and environmental degradation could prevent lithium markets from working so efficiently.

Tahil, Meridian International: "The point is that electric cars are supposed to be environmentally friendly cars and there are many other materials such as zinc and iron...which don't require any more environmental degradation than has already been done…"

Tahil points out another danger of circumscribed lithium resources: The potential for market disruption or price manipulation is even bigger than in OPEC-governed oil markets.

His opponents acknowledge such possibilities but point to silicon markets in response. Silicon was never an important commodity until it became essential for computer chips. It remained abundant until global climate change led to a boom in solar panels, which use even more of the semiconductor than the chips.

Suddenly there were not enough facilities that mined and processed silicon. The cost of solar panels shot up. The result: New links in the supply chain and new silicon supplies, though at a higher price.

During the period of limited availability, the solar panel market also took another option offered by market dynamics. Solar system engineers developed thin films made from non-silicon semiconductor materials and solar power plants that use mirrors.

The search has already begun for a better, more abundant battery material than lithium.

Matthew Nordan, president, emerging technology consultant Lux Research: "There's a flowering of interest in battery technologies with abundant materials…Abundant materials are the words of the day."

Desperation will usually lead to the right answer after many foolish choices are exhausted. Efforts are now being pushed to figure out how to efficiently and economically recycle lithium from used batteries.

A lithium-ion battery schematic. (click to enlarge)

The Trouble with Lithium 2; Under the Microscope
William Tahil, 29 May 2008 (Meridian International Research)
and
Electric-car race could strain lithium battery supply
Martin LaMonica, October 31, 2008 (CNET)
and
Swapping Peak Oil for Peak Lithium?
October 31, 2008 (hybrid Cars)

WHO
William Tahil, energy and transportation consultant, Meridian International Research; R. Keith Evan, geologist, U.S. Geological Survey; Barbara Heydorn, director, SRI International center of excellence in energy at science; Matthew Nordan, president, emerging technology consultant Lux Research; Brian Jaskula, lithium mineral specialist, U.S. Geological Survey; Rob Day, venture capitalist/partner, @Ventures; Ripu Malhotra, associate director, SRI International chemical science and technology laboratory

WHAT
The Trouble with Lithiun 2 raises the question of peak lithium and associated questions such as environmental impacts.

From a Tahil paper. (click to enlarge)

WHEN
- Most major automakers are expected to bring PHEVs and EVs to market between 2009 and 2012 that use lithium-ion batteries.
- Lithium use has been growing since the boom in battery-operated consumer products began in the early 1990s.
- Prices over the past 5-to-10 years have steadily increased.
- The long-term availability of supply is not clear.
- One Tahil calculation: A continued 25%/year growth in portable electronics use would limit the lithium available for PHEVs to 1.5 million vehicles by 2015.

WHERE
- One of the most common earth elements but rarely in isolated quantities and usually only in low concentrations requiring harvesting and separation.
- Main production: China and Argentina.
- Commercial quantities found in the U.S., China, Australia, Bolivia and Russia.
- The world's largest salt flat is the Salar de Atacama in Chile.
- Smaller lithium-ion batteries are being recycled in Europe and Asia.

WHY
- Lithium ion batteries are used in consumer electronic gadgets and laptops and have become the preferred battery for PHEVs and EVs.
- Commercial solar photovoltaic panels were made only from silicon but as the price rose panels were developed that use several other semiconductors.
- The Toyota Prius hybrid uses nickel-metal hydride batteries. Lithium-ion is superior for the next generation of battery-driven cars because it is lighter and holds more charge.
- Lithium can be extracted from a mineral called spodumene.
- General Electric recently assigned a research scientist the full-time job of studying sources of materials that are critical to GE, including electricity storage technology.
- Because lithium is a corrosive substance, batteries that use it can short circuit and catch fire.
- Manufacturers are aiming at a recycling process that recaptures 50% of a used battery’s lithium.

From a Tahil paper. (click to enlarge)

QUOTES
- Matthew Nordan, president, emerging technology consultant Lux Research: "You can solve the transportation problem but end up creating an equally vexing commodity problem…It's a big concern."
- Brian Jaskula, lithium mineral specialist, U.S. Geological Survey: "Prices in the last couple of years have slowly gone up…But if the Chevy Volt and other cars like that become a big raging success and the demand really increases but supply doesn't keep up, then the price will go up obviously."
- Glen Merfeld, manager, Chemical Energy Systems Laboratory at GE Research:
"The ability to supply batteries, including the raw materials, from a national security standpoint is a valid question which we should be posing. I don't know the answer…"