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Tribune News Service
Tribune News Service
National
Riley Beggin

Biden uses Cold War-era law to spur EV battery metal production

WASHINGTON — A Cold War-era law designed to bolster the U.S. economy in times of war will soon be used to help the country get a leg up in a global race to build electric vehicles.

President Joe Biden on Thursday announced he would add critical minerals used in electric vehicle batteries to the list of products covered by the Defense Production Act, which has most recently been used to order companies to build ventilators, N95 masks, tests and vaccines to combat the COVID-19 pandemic.

Projects to produce lithium, nickel, cobalt, graphite and manganese within the United States would be eligible to benefit from financial help with feasibility studies, production at current operations, modernizing safety standards and more.

"We need to end our long-term reliance on China and other countries for inputs that will power the future," Biden said. "I'll use every tool I have to make that happen."

Biden also announced Thursday that the administration would release more oil from the strategic petroleum reserve, putting an additional 1 million barrels of oil on average on the market every day for the next six months.

Biden also condemned oil companies who have chosen to "sit on record profits" and not increase production to bring down prices. He called upon Congress to make companies pay fines for not using leases they already have on public lands.

The two announcements were framed as both a short- and long-term strategy to ease price shocks and better prepare the country for the global energy market in the future.

"We and the whole world need to reduce our dependence on fossil fuels altogether," he said. "We need to double down our commitment to clean energy and tackling the climate crisis."

Russia's invasion of Ukraine has sent gas prices skyrocketing, colliding with massive inflation that has crunched American consumers amid the ongoing economic recovery from the pandemic. Crude oil was trading at more than $101 per barrel on Thursday afternoon, up from nearly $60 a year ago.

Soaring gas prices have dovetailed with Biden's months-long push to accelerate domestic production of electric vehicles. Automakers are already investing billions into transitioning their fleets from gas-powered cars to electric ones, but they're challenged by shortages or foreign dependencies for crucial minerals needed to build EV batteries.

Both Biden and former President Donald Trump have used the 1950 law to respond to the coronavirus pandemic. Trump used the Defense Production Act to order General Motors Co. to produce ventilators and 3M to produce N95 masks, and to prevent the export of personal protective equipment needed by hospitals. Biden has used it to accelerate coronavirus vaccine and test production.

Early in his presidency, Biden ordered executive branch agencies to do a comprehensive supply chain review for critical goods, including EV batteries. The report released last June noted that high-grade nickel, lithium and cobalt are "primary upstream supply chain vulnerabilities" and recommended that both the public and private sector consider increasing domestic production.

It also noted the U.S. has an even more significant dearth of refining and processing capability for EV battery minerals. "Coupled with recycling, (increasing processing capacity) is the most promising pathway to securing the supply chain for minerals," the report said. The Defense Production Act funds could potentially be used to support processing and refining projects as well.

The price of battery minerals has risen in recent months as automakers ramp up EV plans and as global supply chains struggle under the continued pandemic disruption and the war in Ukraine, which dramatically pushed up nickel prices in early March.

Mining industry advocates have pushed Biden to do something to help boost mineral production to align with the administration's goals, while environmental advocates and Indigenous groups have frequently raised concerns about potential water contamination and other pollution from mining projects.

The presidential memorandum sent Thursday to the Department of Defense states that the government should promote the supply of EV battery minerals "through environmentally responsible domestic mining and processing; recycling and reuse; and recovery from unconventional and secondary sources, such as mine waste."

This language is in part why the president's decision received praise from both environmental and mining advocates.

Secure sources of critical minerals are "absolutely essential" to national security, said Collin O’Mara, president and CEO of the National Wildlife Federation, in a statement. He added that Biden's decision ensures "the clean energy revolution is made in America while also conserving our wildlife, public lands and waters, and clean air."

The Alliance for Automotive Innovation, an advocacy group representing most automakers selling vehicles in the U.S., did not immediately respond to a request for comment Thursday.

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