The author in the article in the url below sets up his argument by noting the geopolitical role played by fossil fuels since their emergence as the dominant energy source. While solving the nasty side-effect of direct carbon emissions, he argues that renewable energy might be introducing an alternative source of "commodity dependence and geopolitical baggage":
"Wind, sun and hydrogen are free. But the equipment that transforms them into energy, stores it in batteries and transmits it needs vast quantities of minerals whose supply is more concentrated than that of oil and gas. Democratic Republic of Congo has 43% of the world's cobalt deposits, Argentina 34% of lithium, Chile 30% of copper and Indonesia 19% of nickel. … All exceed Saudi Arabia's 12% share of global oil production and Russia's 16% share of natural-gas output. For all four minerals, the five largest countries have more than half of global deposits. With oil and gas, the top five control less than half. … Downstream production is even more concentrated: China refines 70% of the world's cobalt, 65% of its lithium and 42% of its copper, far exceeding OPEC's share of oil output."
And, while the sustainability lobby is falling over itself to welcome the transition to electricity that is being encouraged by the Inflation Reduction Act in the U.S., the reality is that it will increase demand for these minerals that are already in short supply ("the law will increase that demand by 12% to 15% by 2035"), while also making the U.S. more dependent on imports from countries that are not necessarily predisposed to be friendly:
"For example, in 2035, non-free-trade partners will account for 90% of global cobalt production, most of it in Democratic Republic of Congo, which exports 70% of its production to China."
Meanwhile, the regulatory bureaucracy in the U.S. ensures that, even though there are deposits of some of these minerals available (in theory), we just cannot get out of our own way quickly enough to access them:
"The U.S. alone boasts copper deposits equivalent to 20 years' worth of its own demand. … The problem is accessing it; the firm estimates it takes 15 years on average for a mine to go from discovery to production."
The problems range from permitting ("seven to 10 years [in the U.S.], versus two to three in Australia and Canada"), to refining ("A copper refinery or smelter hasn't been built in the U.S. since the 1970s"), to what the author terms "resource nationalism":
"From the 1950s to the 1980s, western oil companies saw their operations nationalized by host countries. Today, resource nationalism is once again spreading. Indonesia is restricting exports of nickel ore to nurture domestic refining, and Chile is partially nationalizing its lithium mines."
Take care
David
David Chandler
© Sage Publications, 2023
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
Green Energy Shuffles Global Influence
By Greg Ip
September 14, 2023
The Wall Street Journal
Late Edition – Final
A2
