Tesla's announcement of a major manufacturing plant - captivatingly called the GigaFactory, with a nod to the rapidly rising gigawatt hours consumed by electric batteries - comes as a welcome story to a nation hungry for positive economic news.
The GigaFactory is aiming for annual production of 500,000 lithium-ion battery packs by 2020. Under one roof - a very large one, at 10 million square feet - Tesla will "manage everything from processing raw materials to the assembly of the batteries."
All of which raises the question: Where is all that lithium going to come from? After all, lithium demand was growing rapidly even before Tesla's Giga gambit. According to the U.S. Department of Energy, the percentage of lithium consumed in battery production more than tripled between 2000 and 2009. In fact, the Energy Department rates lithium at "near-critical risk" between now and 2025 - as the U.S. currently imports more than 70 percent of the lithium it needs each year.
It wasn't always that way. As recently as the late 1990s, the United States was the world's lithium leader, producing 75 percent of global supply. In a massive role reversal, nearly 70 percent of the world's lithium now comes from the so-called Lithium Triangle, a region straddling Chile, Bolivia and Argentina. An additional 25 percent comes from Australia - no problem there from a political risk standpoint, save for the fact that Australia's largest lithium mine was recently bought by a Chinese mining conglomerate and much of the rest of its production is already spoken for by Asian buyers.
What about new sources of lithium? There's Bolivia, with fully half of the world's known lithium, dubbed the "Saudi Arabia of Lithium," a sobriquet that unintentionally casts Evo Morales as king of some future lithium OPEC. Having booted out the U.S. ambassador and peppering his stump speeches with anti-American barbs, expecting Morales' Bolivia to pick up the lithium supply slack for its Yanqui enemy may be a bad bet.
Then there's Tibet, with three promising lithium deposits in the storied salt lakes of the Tibetan highlands. Chinese mining companies are already active there, having scratched just a fraction of the region's lithium potential. Then again in this age of "conflict metals" - Tibet is a U.S. government-designated Captive Nation - it's hard to imagine how western EV manufacturers would spin Tibetan-fueled batteries without incurring the wrath of Richard Gere.
The good news is that a future of lithium dependency isn't foreordained. There are projects under development right now that could transform the U.S. landscape for lithium - and provide the stuff Tesla's dreams are made on. Tesla knows this well, which is why the company has touched off a four-state competition, with Nevada, New Mexico, Texas and Arizona vying to become home to the GigaFactory.
It makes sense, with Western Lithium developing a mine in Nevada, projecting 26,000 metric tons per year of lithium carbonate at peak production. Texas Rare Earth Resources - where I serve as a member of the company's independent advisory board - could produce as much as 9,000 metric tons of lithium carbonate as a by-product of its proposed heavy rare earths project, southwest of El Paso. Taken together, that's equivalent to the current annual worldwide production, according to the U.S. Geological Survey.
Longer term, there is Simbol Material's effort to extract lithium from the geothermal process in California. Add in the potential to extract lithium from the oil field brines in Arkansas' Smackover fields, and further down the line, development of the massive lithium find in Wyoming, and the United States could move from being import-dependent to becoming not just a lithium exporter, but a provider of leading-edge lithium-ion batteries, helping the U.S. regain its manufacturing edge - this time in the critical sector of electric vehicles.
But the path forward is not without obstacles or obstructionists. Start with the environmental activists who, while waxing rhapsodic about drawing power from the wind and sun, remain opposed to the mining required to produce metals essential to the capture and use of alternative energy. The U.S. regulatory regime ranks worst-in-the-world for permitting delays: an average of seven to 10 years bring a mine into production. We'll soon learn how serious policy-makers are about the United States leading the way to the Electric Vehicle era.
Daniel McGroarty served in senior positions in the White House and at the Department of Defense.