U.S. Energy Secretary Says Allies Need To Work Together To Ensure Security Of Critical Minerals Supply Chain
With the push toward clean energy in full flight, concerns about the security of critical mineral supply chains will need to be addressed, says U.S. Energy Secretary Jennifer Granholm.
Speaking Tuesday at Columbia University’s annual Columbia Global Energy Summit, Granholm said it’s vital that the U.S. and allies such as Canada work together to ensure that the massive amounts of critical minerals that will be required in the coming years and decades are securely available and supplied.
“I think this is important — the friend-sharing component of things — particularly as it related to critical minerals. Now, [the U.S.] has a lot of critical minerals. It just takes us a long time in the United States to be able to extract them with permitting and all the other concerns,” she said.
“There are other countries that are very close to us like Canada and Australia that do a better job of it and more quickly. But Canada, for example, doesn’t do processing. We can share a bit of that so we have a North American strategy.”
Working with allies on critical mineral supply chain and procurement issues is required so that North America, for example, is not reliant on countries like China.
“China has done the vast majority of processing of critical minerals. We are starting to incentivize the processing component of the supply chain in the United States, but there are other countries that can do that as well and that are friends,” Granholm said.
“So the notion of being able to create a buyer’s club, if you will, or an allies’ club of being able to supply the key components is an important part of the strategy even as we want to do as much of it as possible in the United States. And really, that’s what the Inflation Reduction Act tax credits incentivize.”
Inflation Reduction Act resulting in ‘tectonic’ shift in clean energy investment
Granholm noted that the Inflation Reduction Act and its incentives toward clean energy technology investment and development are working as planned.
“First of all, we see right now the tectonic plates are shifting with respect to investment in the United States as a result of the Inflation Reduction Act. As a former governor of Michigan, over the decades we have just sort of folded our hands as a nation and watched while other countries that had strong industrial policy come and take our IP, took our companies and cornered the market on some key technologies,” she said.
“So [with] the Inflation Reduction Act as of Monday … 150 companies who have come or decided to expand in the United States just in the battery supply chain all over the country. And so, the Inflation Reduction Act, number one, is incentivizing the build-up again of our manufacturing backbone,” Granholm added.
“That’s important. But it’s also giving us the ability to locate factories in communities that have been left behind. The stackable nature of those tax credits and the incentives to locate in communities that have been disproportionately negatively affected by fossil fuels is transformative. And that is hugely exciting. Who knew policy matters?”
Granholm believes the U.S. Inflation Reduction Act will further spur on other jurisdictions globally to enhance their incentives for clean energy development.
“We hope that this Inflation Reduction Act will create a virtuous cycle; a race to the top, if you will. And we’ve seen that in Europe. This is what we’ve said to Europe: ‘Put your own incentives on the table.’ There’s enough to go around. Bloomberg has said that this is going to be a $23 trillion sector, this clean energy sector and the products that are in it, by 2030,” she said.
“Believe me, there is enough room to go around. The same with Canada. They also adopted incentives to be able to attract the manufacturing. So that’s great. Let’s all do this because we have a huge job ahead to get to our goals of the Paris Agreement.”