States see lithium rush for EVs as environmentalists urge caution

Nevada and other states are poised to rake in huge benefits from a boom in lithium mining for batteries pushed by federal incentives as U.S. demand surges for electric vehicles (EVs).

Environmentalists, however, are warning amid investments from the Biden-backed Inflation Reduction Act (IRA) that a heavy-handed approach to lithium mining could bring many of the same problems associated with fossil fuel extraction.

The U.S. holds an estimated 3.6 percent of world lithium reserves, according to the U.S. Geological Survey, but extracting it is a painstaking process that requires infrastructure the U.S. has largely neglected to build since the height of American lithium production in the 1960s.

Currently, the U.S. has only one lithium production site — Silver Peak in western Nevada. The sector is dominated by Chile, China and Australia, something the administration hopes to change with billions in new investments.

The Inflation Reduction Act passed by congressional Democrats contains a number of tax incentives for EVs and specifically requires their components be built domestically or by U.S. trading partners to qualify, setting the stage for a flurry of new domestic development.

“The way that the new EV tax credit is structured, there is a big incentive for domestic mineral extraction and processing,” said Albert Gore, executive director at the Washington-based Zero Emission Transportation Association. 

“One of the goals of the IRA is to onshore as much of the supply chain for these vehicles as possible, and there are a lot of benefits to that, both economic in terms of job development in the United States, as well as national security and resiliency to supply chain shocks and other macro issues that can affect manufacturing,” he added.

Last week, Australian firm Ioneer announced a loan of up to $700 million from the Department of Energy for a new lithium development site in Nevada, conditional on securing the required permits. Australia is among the nations that qualify for the IRA credit. 

Nevada’s representatives in Congress have been eager to boost domestic lithium production in the state, calling it an engine of job creation. 

“Nevada is well positioned to take advantage of our nation’s untapped domestic critical mineral supplies, which will create thousands of good-paying jobs, help us combat climate change, and allow us to make more products in America,” Sen. Catherine Cortez Masto (D-Nev.) told The Hill in a statement.

Cortez Masto’s office also pointed to a provision she secured in the bipartisan infrastructure law that establishes EV battery supply chain infrastructure domestically, rather than requiring components to be shipped overseas. 

A separate project in northern Nevada — Lithium America’s proposed Thacker Pass mine — was approved by former President Trump but has been tied up in litigation for two years. Chief Judge Miranda Du of the federal court in Reno is expected to rule on whether the mine can proceed in the coming months.  

Other projects are in the early stages in California’s Salton Sea, Maine’s Plumbago Mountain and Arkansas’s Smackover Formation.

Among other reasons, experts say a domestic lithium boom could have national security benefits, reducing U.S. reliance on production in China that has been tied to human rights abuses and environmental corner-cutting.

“We think that our strong environmental regulations are actually our strength,” said Abigail Wulf, vice president of the Critical Minerals Center at Securing America’s Energy Future. 

“It’s difficult to compete on cost because where you’re currently digging things out of the ground, they’re ostensibly exploiting workers and degrading the environment in a way that you wouldn’t be allowed to in the United States,” she added. “And so we’d rather see an exporting of those values and standards rather than diminishing our own standards here at home.” 

Increased domestic production, she said, would create incentives for a “race to the top” rather than the current “race to the bottom” that convoluted international supply chains can create.

But even with the IRA easing the process, “the big picture is we’re essentially creating a battery supply chain from scratch in the United States,” Gore told The Hill.

With only one currently operating site in the U.S., “we’re looking to grow the mineral development, processing, battery manufacturing and recycling projects all at the same time in the United States, and that’s a big, challenging goal,” he said. 

Another unknown factor is Sen. Joe Manchin’s (D-W.Va.) ongoing efforts to streamline the energy permitting process, which would apply to both fossil fuel and renewable energy projects.

Manchin’s first version of the bill died in the Senate last year, and it has been condemned on the right as insufficient and on the left as a giveaway to the oil and gas industries. However, Manchin has vowed to continue pressing the matter. 

With more money at stake in the lithium supply chain, Gore said, pressure will increase to streamline the permitting process in some way, even if it’s not Manchin’s version.  

“There’s absolutely interest across the spectrum and streamlining the process through which these types of critical projects get approved in the right way,” he said.  

Proponents of lithium mining and rising EV demand have pointed to carbon emissions associated with gas-burning cars and called development essential to the renewable energy transition. But some advocates worry increased large-scale mining could bring new environmental problems.

Katie Fite, director of public lands for WildLands Defense, noted that the boom in demand for lithium comes as the Western U.S. copes with a two-decade drought, and an incautious approach to mining could further affect water infrastructure. 

“We can’t just go into some of the last, best wild places and important habitats and start wrecking them,” she said.  

Green groups have argued the Bureau of Land Management (BLM) rushed to approve the Thacker Pass development in particular. It was approved within a year of the environmental analysis starting, a process that typically takes closer to twice as long.

In the 2021 lawsuit, WildLands Defense joined three other conservation groups — Basin and Range Watch, the Western Watersheds Project and Great Basin Resource Watch — in arguing that the BLM “violated federal environmental statutes and swept under the rug the mine’s serious environmental impacts.” 

“We can’t just go in with the wrecking ball approach, and unfortunately, that’s what we’re seeing now, and BLM is just sitting back and not really doing any planning to try to figure out where mining like this would be more environmentally benign,” Fite said.