Biden plans to boost mineral extraction for electric vehicles

WASHINGTON — Faced with rising oil prices after Russia invaded Ukraine, President Joe Biden plans to invoke the Defense Production Act this week to increase the extraction of critical battery minerals used in electric vehicles.

That’s according to a person familiar with White House plans who insisted on anonymity to discuss the likely policy decision. The person said production would be done under strict environmental and labor standards as well as through tribal covenants, though some Democrats in Congress have concerns because the mining sector is regulated by a 150-year-old law. years.

Increased federal support for fossil fuel alternatives would reduce the influence of Russian President Vladimir Putin and others on U.S. national security and economic issues, though it reflects a long-term game rather than a response immediately to the economic damage caused by the war.

Biden’s likely order using the Defense Production Act would provide a significant financial incentive to develop a national supply chain for electric vehicles and enable the move away from gas-powered cars.

Putin’s assault on Ukraine began more than a month ago, rattling global energy markets for oil and natural gas in ways that would likely hurt global growth. U.S. crude oil was trading above $107 a barrel on Wednesday morning, down from nearly $60 a year ago, as inflation emerged as a lingering threat.

The Democratic president is considering invoking Title III of the Defense Production Act of 1950, which would give the government economic powers to address industrial shortages. Mining companies could access funds under the law for the production of minerals including lithium, nickel, graphite, cobalt and manganese.

The government would not provide loans or buy minerals directly. Instead, the funding would cover feasibility studies, production at current operations, and upgrades to safety standards and production.

Lawmakers are divided on whether invoking the law is the best policy, as economic and national security issues can clash with environmental protections despite assurances that standards would be met.

A bipartisan group of senators, led by the senses. Joe Manchin, DW.Va., and Lisa Murkowski, R-Alaska, urged Biden to roll out defense production action to increase domestic production of critical minerals such as lithium and graphite.

“The United States relies almost exclusively on foreign nations — many of them hostile and with non-existent labor and environmental standards — to meet much of our current demand for minerals,” the senators said in a letter. to Biden this month. “Letting our dependence on foreign minerals persist is a growing threat to U.S. national security, and we must take all necessary steps to address it.”

Manchin, who chairs the Senate Energy Committee, is a key player on energy issues and single-handedly blocked Biden’s social and environmental legislation known as Build Back Better. He has since said he is open to some of the climate and energy bill’s proposals, as long as they don’t punish fossil fuels such as natural gas.

The letter was also signed by Republican Senators Bill Cassidy of Louisiana and Jim Risch of Idaho.

But some Democrats on the House Natural Resources Committee have urged Biden not to invoke the Defense Production Act, saying increased mining projects on public lands could jeopardize public health and sacred sites of the West.

“It turns out the oil and gas industry isn’t the only one profiting from the tragedy in Ukraine,” said Rep. Raul Grijalva of Arizona, chair of the panel. “Like their fossil fuel counterparts, mining companies are making opportunistic calls to advance a decades-old mining agenda that lets polluters off the hook and leaves Americans to suffer the consequences. Outdated standards that put our public health, our wilderness and our sacred sites at risk of permanent damage are simply not the solution.”

The mining industry is governed by the 1872 Mining Law, which is 150 years old. Under this law, mining companies on public lands pay no federal royalties and are not held financially responsible for cleaning up the tens of thousands of toxic abandoned mine sites scattered across the United States.

Grijalva said he will propose legislation to reform mining law later this spring.

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