Catalyst with Shayle Kann - The Carbon Copy: The lithium land grab in California

Episode Date: February 10, 2022

This week, we're featuring an episode of The Carbon Copy. Batteries are everywhere. In our electronics, our power tools, our electric grid, and in our cars. And almost all those batteries use a lithium-ion chemistry. The Imperial Valley in southern California is home to the Salton Sea, a land-locked body of water that contains vast reserves of lithium. California Governor Gavin Newsom called the region the "Saudi Arabia of Lithium." If mined, it could completely reshape the global supply chain. This week on The Carbon Copy: California has ambitious plans to fuel the global EV boom with the Salton Sea’s lithium. But will the people who need it most get left behind? Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you're a startup, investor, enterprise, or innovation ecosystem that's creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more. Catalyst is supported by Nextracker. Nextracker’s technology platform has delivered more than 50 gigawatts of zero-emission solar power plants across the globe. Nextracker is developing a data-driven framework to become the most sustainable solar tracker company in the world – with a focus on a truly transparent supply chain. Visit nextracker.com/sustainability to learn more.

Hey everyone, Stephen Lacey here. I'm the executive editor of Catalyst, and I'm here with a bit of news. Shale is out on family leave. He'll be back in mid-March. We're sad not to hear his voice for a little bit, but we're happy for him that he's welcoming a new member of his family, and we're going to welcome a new member of our podcast family. That is Laura Pierpoint of Actuate. Laura is an industry veteran, and she has a lot of really compelling perspectives,

and she'll be doing interviews and episodes on advanced nuclear, hyper-efficient HVAC, tech and much more. So stay tuned for some episodes with Lara. This week, we've got something different for you, a crossover episode with a podcast that I host called The Carbon Copy. It's a Catalyst's sister show. It's part of the Canary Media lineup. And it explains the changing planet through the lens of current events. We take one story in the news and talk about the big picture context of that story in a narrative way. And in this episode, we're diving into lithium production. Lithium reserves under a body of water in California called the Salton Sea could fuel the battery revolution. But locals are worried that they're going to be left behind. It's a look at the complicated,

messy work of building climate technologies. We talk on Catalyst a lot about the tech forces underway. This episode looks at the social and economic forces behind that tech boom. Have a listen. Subscribe to the carbon copy wherever you get your shows. And stay tuned for more episodes of Catalyst with our guest host, Laura Pierpoint. from the studios of PostScript Media and Canary Media. You are looking at a remarkable idea, an idea that has intrigued and attracted and literally thrilled thousands upon thousands of men, women, and children. And you, my friends, are about to witness this idea become a reality.

For this is the story of the miracle sea in the desert, the Salton Sea. The Salton Sea is the biggest inland body of water in California. But if you've never heard of the miraculous sea in the desert, you're not alone. In the 1950s, it was a booming vacation destination. It rivaled Yosemite National Park and tourism. Frank Sinatra and the Beach Boys vacation there. It became known as the California Riviera, and resort speculators poured in. That is, until the Salton Sea started disappearing.

Over time, it just kept evaporating, evaporating, and just like a pot of water, eventually, it simmers down to the minerals that are there, and that's why it leaves that dusty particles underneath at the water. Luis Salmado has lived in the region around the Salton Sea his whole life. It's known as the Imperial Valley. In that valley is the Salton Basin, which has been filled with water a handful of times over the last thousand years. But the Salton Sea was different.

In 1905, the Colorado River breached irrigation canals. It created a body of water as big as Delaware. When the canals were finally fixed, the only water feeding the lake was runoff from industry and farms. All the minerals, all the chemicals, all the toxins. It's a polluted body of water that received no protections. Back during the tourism years, that runoff wasn't noticed. But then the salt and sea started receding.

The pollution got more concentrated. Celebrities stopped coming, resorts crumbled. Today, the water is saltier than the ocean. The beaches are covered in fish bones, and toxic dust plagues residents. There was no long-term vision. It's more like, let's make money now and kick the can down the road. Now we have to pay that bill. Luis can see the price all around him, high rates of disease and little economic opportunity.

There is a high percentage of unemployment, poverty levels high. We are also persistently dealing with endemics, whether it's asthma or other diseases. Over the years, companies and lawmakers promised to fix those problems. land restoration, dust suppression, renewable energy jobs, most of the promises were never delivered. And now there's a new industry coming to the region in bringing the biggest promise yet. We've heard a lot about the white gold rush at the Salton Sea.

Lithium is called white gold for its silvery color, and there's a lot of it at the Salton Sea. As more of our lives go electric, the world is using more lithium batteries each year, and that means the world is turning its attention to the Salton Sea. The lithium sitting under the Salton Sea could fuel production of batteries that are transforming our cars in the electric grid. These opportunities, these economic opportunities that now exist with these minerals that could help us transition to a cleaner, more economically equitable future. The Imperial Valley could be transformed by lithium.

But Luis and other locals worried that the rush to extract the resource won't benefit the people living there. And more than likely, given the history of the Imperial Valley, it will be a few, a handful of people who have enriched themselves and have benefited for the lack of engagement of the population here. This is the carbon copy. I'm Stephen Lacey. The world needs more lithium to support the clean energy boom. California has it, and it's under the Salton Sea. This week, the ambitious plans to tap that white gold

and the questions about who will and who won't benefit. When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility, built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, batteries, thermostats, and more through a single platform built for utility scale. Predictive, verifiable, and designed to perform when it counts. Learn more at energyhub.com. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the

institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. Batteries are everywhere. They're in our electronics, our power tools, our lawn equipment, and now they're on our grid and in our cars. And almost all those batteries are lithium ion. So to make an all-electric world possible, we're going to need a lot more of one very important mineral, lithium. And demand is skyrocketing.

Demand for lithium is searching as more automakers shift to EVs, and that demand should continue to grow through the end of the decade, according to estimates. That's right, a record year for lithium amid this electric vehicle boom. And experts say prices are going to keep on climbing. With auto makers promising vast EV fleets, demand is far outstripping supply. There's just not enough lithium to make all the batteries we need. In 2021, prices surged over 400 percent. And demand is expected to increase fivefold over the next decade.

There's only one active lithium mine in the U.S. The vast majority is mined in Australia and South America and processed in China. The lithium beneath the Salton Sea could change everything. California Governor Gavin Newsom called the Imperial Valley the Saudi Arabia of lithium. 600,000 tons of lithium could be extracted from the valley every year, enough to completely transform the global supply chain. The stakes are very, very high for both the state and the country. That's Aaron Kuntu.

He's an independent journalist who writes about oil and gas and the energy transition in California. And last year, Aaron went to the Salton Sea. and he wrote a feature for the Guardian about plans to extract lithium there. In theory, the reserves under the Salton Sea could meet today's demand for lithium for storage applications. So how significant would this resource be if developed at full capacity? Well, you hear a lot of grand statements, right? Estimates in state documents say the potential supply from the Salton C region would

supply up to a third of global demand currently. The caveat, of course, is that demand is increasing very quickly, but it's not insignificant. It seems like it would make a sizable impact on supplies of lithium globally. The whole sort of supply chain could be transformed pretty quickly in maybe the next decade or so. Thousands of feet under the Salton Sea sit chambers of hot brine. That brine can be pumped up to the surface to run a steam turbine for electricity, a geothermal power plant, and the lithium salts can be separated from the brine. Big energy developers are hoping to add lithium extraction to their existing geothermal plants in the region. One plant is already underway, and many more are planned.

Geologically, it's advantaged by the fact that the brine is really hot, but then, you know, it's also advantaged by the fact that there are several geothermal plants already positioned there. So, you know, you're kind of just adding something to an existing industry as opposed to creating it completely from scratch. There's an incredible amount of enthusiasm on the state level in California and from the Biden administration federally. What did you hear locally

as you went and talked to people within the community? The number one sentiment that I heard from people is, well, we need some kind of industry here because we really have nothing. Agriculture has been the major industry in the Southern Imperial Valley for about a century.

You have maybe some trucking businesses, but really there's not very much. So people were excited at the prospect of jobs and the prospect of industry. I think people also generally feel neglected in this part of the Imperial Valley. They feel one person who I talked to, he was actually one of the younger folks I interviewed. He was 33. He was an at-home tutor. And he made the remark that because this region votes Democrat, a majority, you know, it's a reliably Democratic district. He felt that state politicians overlooked the region or took it for granted. One fifth of Imperial Valley residents live below the poverty line. 85% are Latino, and many live and work on both sides of the Mexico border. This region

has one of the highest unemployment rates in the state. People there have been promised help for years and gotten little. This project is a test. It's a test for for California, for clean energy companies, for the Biden agenda. Everyone is talking a big game about environmental fairness and justice, and the Imperial Valley is a place for them to prove it. How can we do this in a way that people aren't left behind, that the benefits are distributed relatively, equitably? Several members of environmental justice organizations and social justice organizations

in that region made it very clear that when this kind of thing happens, generally, people who live locally are left out, right? They get a raw deal. You know, Luis Olmeadow, he made the point to me. You know, people are disempowered here. People don't engage because they don't feel invited. Luis Olmeido is the person you heard at the beginning of the show. He's the executive director of Comite Civico del Valle,

a social and environmental justice organization founded by farm workers. He's also a member of a commission set up by the state of California that's trying to figure out how to make sure lithium development benefits everyone. So far, the state's process has created more questions than answers. This is a new opportunity to reset what the future is. And I think that the lithium industry is a great opportunity for a region. Now, that's not to say that as an environmental justice advocate, I'm endorsing it. But we're looking at the whole picture, right?

Is lithium extraction going to be safe? Is it going to have any impacts on anything that would be? be an infringement on the values of environmental justice. We're starting to go back a little bit to making sure people know that this is theirs. These natural resources are theirs and that they need to negotiate them as the rightful owners of whether it's air, whether it's minerals, whether it's water, whether it's clean land, all of it. Coming up after the break, the consequences of getting it wrong and how Luis is hoping things will go differently this time. Virtual power plants are becoming a reliable way for utilities to manage capacity,

but enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched, and being able to prove it, from the control room to the living room. Energy Hub's platform handles the full picture, from near-real-time forecasting, locational dispatch, and the kind of rigorous verification that holds up when regulators, grid operators, or leadership, ask, did it deliver? easy enrollment creates momentum, proven performance builds trust. That's why more than 170 utilities rely on Energy Hub to manage over 2.5 million devices

delivering 3.4 gigawatts of flexible capacity. See what that looks like at energyhub.com. We're living through a profound economic shift, and energy sits at the center of all of it. Trillions of dollars are flowing into power plants, transmission lines, battery factories, data centers, but the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital, as I talk with people deploying capital, shaping policy and building projects. Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made.

Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. This is not the first time the clean energy industry has promised to bring economic growth to the Imperial Valley. In the 80s and 90s, 11 geothermal power plants were built to tap the hot water underneath the salt and sea. In the 2010s, wind and solar activity picked up, and there were big promises to create local green jobs from those industries too. But the long-term employment never came. Because when we had all this wave of solar and wind, they promised jobs. They promised the same thing. And now we ended up with hundreds of people with certificates that are useless.

Certificates for solar where there are no jobs. Here's Aaron Kuntu again. It's been seen as a potential hub of that kind of industry. In practice, it hasn't really worked out that way. and now there's fears that this lithium development can also crumble in the same way, but the hope is that it won't. The state or the federal government are going to step up, or even the local government with subsidies and dollars and tax incentives,

we want to make sure that there is evidence that they're really going to create these jobs. One way to ensure that industry delivers on their promises is this special kind of agreement. The majority of these resources are public resources. It's public land. It's publicly owned minerals. Whether the state owns them or whether our local utility owns them, that's the people's minerals. So why should the people give up their mineral without having some kind of community benefits agreements? A community benefits agreement. It's this kind of contract between a town or a city and a developer.

It specifies exactly what kinds of benefits a community will receive. think hiring requirements, investments in businesses and institutions, even royalty sharing. Agreements like these can shift the power imbalance between locals and industry. Because these companies are going to enrich themselves with this mineral. We need to make sure that there is a return in profits. These models exist. There's nothing new. They just don't exist in disadvantaged, low-income communities of color.

Why? Because industry a lot of times think they can take advantage of our communities. The state is working through these issues right now. In October, the Lithium Valley Commission will submit a big report to lawmakers, and that could guide regulation of the lithium industry. Luis is pushing hard to make sure that justice issues are taken very seriously. And these days like to focus on the opportunities we have to make a more equitable and more just present and future, learning from the failures of the past. What are the stakes for developing this resource when it comes to California's climate and clean energy economic goals? I think the potential benefits are massive for the state.

You know, economically, it could transform the Southern Imperial Valley. It could help the state reach its emissions reductions goals, whether through faster adoption of electric vehicles or getting rid of dirty power sources and using energy storage batteries in place of fossil fuels as part of a network of solar and wind sources. the benefits could be really, really huge. I think failure for the state would be really embarrassing. And so if this big idea with so much attention and resources and hope isn't able to get off the ground, I think it'd be pretty disastrous for any future potential ventures in this part of California.

The Biden team calls lithium supply a national security issue. they are putting policies in place with the hopes of getting millions of electric vehicles on the road. What are the national stakes for getting this right in the Salton Sea? Well, I think the stakes for the nation are similar to the stakes for California. I think, you know, the Biden administration recognizes rightfully so that the country is at a particular geopolitical disadvantage if it can't produce lithium or other metals necessary for the end. energy transition from domestic sources. I think economically and geopolitically, the stakes are pretty high. Is this going to happen at the scale that we're talking about? Like, is it inevitable that all this

development happens? I still think it's far from guaranteed. For all the hype and for all the planning that have gone into it so far, I think there's still a chance that it could fall apart. I think the politics of the region are indicative of how these sorts of grand promises for renewable industries have fallen apart in the past. So I think there's still a lot to be seen. Aaron Kuntu is an independent reporter. You can read his lithium story on the Guardian's website, and we'll link to it in the show notes. Did you take a swim when you were there? I didn't really want to get into the water, but I do know some people still swim in it. And Luis Olmeido is the executive director of Comitee Civico.

Del Valle. He deals with lots of serious subjects, but he also has a sense of humor. If you wouldn't mind just stopping the recording, and then what you can do is I'm going to ask you to send that to me via... I didn't record anything. Oh, no. Really? I'm just kidding. Okay. I was like, oh gosh. Okay. The Carbon Copy is a co-production of PostScript Media and Canary Media.

Our producers are Jamie Kaiser, Alexandria Her, Delvin, Abbas. Boage and Daniel Waldorf. Thanks to Alexandria Her for taking the lead on this episode and for her original reporting. Sean Marquan mixed the episode and composed our theme. Original music came from Echo Finch and Blue Dot Sessions. Thanks to Canary Media for their partnership. You can find all our episodes at Canarymedia.com. Please give us a rating and review.

It's super helpful. And share a link on social media. Join us here next week. This is The Carbon Copy. I'm Stephen Lacey.