Critical Materials: Insights from the MIT Energy Conference

lithium ingots photo

Lithium - a critical element for energy? (Courtesy of Treehugger.com)

At the MIT Energy Conference last week, the energy was palpable – literally. The event, which annually attracts hundreds of energy professionals and students (including a number of AEL fellows and authors this year), brought to the table a refreshing mix of hard-nosed analysis, technical insight and unbridled enthusiasm about the challenges and opportunities for the world’s collective energy future.

One of these future challenges lies in the question of strategic materials for energy, which a panel of experts tackled on the second day of the conference. In the process of co-organizing this panel – along with two fellow teammates from the MIT Energy Club - I have grown increasingly aware of the issue of strategic materials and the important role they play in clean energy technologies.

The highlight of the panel was an introduction by MIT professor Robert L. Jaffe to the policy report on Critical Elements for Energy that was recently released jointly by the American Physical Society and the Materials Research Society. As the report describes, rare earth minerals, such as helium and lithium, are becoming increasingly relevant for energy solutions in the 21st century:

“A number of chemical elements that were once laboratory curiosities now figure prominently in new technologies like wind turbines, solar energy collectors, and electric cars. If widely deployed, such inventions have the capacity to transform the way we produce, transmit, store, or conserve energy.”

However, these materials are extremely scarce, unevenly distributed around the globe, and they rarely benefit from stable supply chains:

“The production complexities of elements primarily obtained as by-products create a difficult environment for planning and investment in these elements, as well as in the new technologies that require the unique attributes of the elements themselves. Large fluctuations in price can occur after joint-production options are saturated and before new supplies hit the market.”

The serious economic, environmental, and security-related challenges of these critical elements have yet to be met. In addition to stronger coordination within the US federal government and better information dissemination under the auspices of the US Geological Survey, Dr. Jaffe also advocated for a greater role for R&D:

“A focused federal research and development (R&D) program would enable the United States to both expand the availability of and reduce its dependence on ECEs [energy critical elements]. This federal R&D would be particularly critical to the competitiveness of small U.S. companies that are unable to engage in their own ECE basic research programs.”

Dr. Jaffe’s insights came alongside comments from Diana Bauer, who described the policy role of the US federal government from the perspective of the Department of Energy, as well as Terence Stewart, a trade law specialist who addressed the role of the WTO and international trade in managing critical elements. Finally, Alastair Neill, an executive from the private-sector firm Dacha Strategic Metals, explored the importance of rare earth elements and stressed the role of the private sector in addressing these issues in the long run.

As Bauer, Stewart and Neill shared their own perspectives on the topic, the utter complexity of the critical materials issue came into full view. In particular, the speakers reached a curious disagreement about China’s recent restrictions on rare earth exports, with Neill suggesting that China may actually have done the world a favor while Stewart criticized Beijing for going against its WTO obligations. And as Bauer described the conclusions from a recent DOE report on critical energy materials that she was recently involved in, it became clear that the proper role of the US government in tackling critical materials will turn out to be equally complex in the long run.

The panel at the MIT Energy Conference came as a stark reminder that the US cannot meet the emerging challenge of critical elements for energy without sustained involvement from the private sector, international organizations and the federal government. Much is at stake: our high-performance gas turbines, our hybrid cars, our wind turbines and our energy R&D laboratories all depend crucially on critical elements. This is not an issue we can afford to take lightly.

For more about the MIT Energy Conference, readers can also check out the AEL coverage by my colleague Daniel Goldfarb as well as the post by Tom Zeller on NYT’s DotEarth blog.

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David Cohen-Tanugi is a Policy Fellow in AEL’s New Energy Leaders Project.

Grounding Our Innovation Policy Debate

grouding our innovation debateAs Congress begins to debate whether the DOE deserves a funding increase to support innovation initiatives, a look at its record over the last two years will become a key point of contention. Organizations such as ARPA-E and the Energy Frontier Research Centers (EFRCs) will come under particular scrutiny with regard to their cost and effectiveness.

Programs of any nature, whether public or private, will always have a mixed record of successes and failures. It is equally inevitable that proponents and opponents of a given program will focus on certain elements of that program in order to make the strongest possible case for their position. This disagreement can be healthy when it helps policy makers to get a complete and revealing assessment of that program. Once each argument is made in full, a productive debate can begin and the most effective policy can be crafted. However, the increasing polarization between proponents and opponents of government financial support for innovation is, at times, preventing this healthy debate from occurring.

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A Lesson from the History of Clean Energy Research

The focus on innovation in Obama’s State of the Union marks a new high point for clean energy R&D advocacy. In the coming months, politicians and policy makers will likely align around proposals to encourage everything from basic research to putting solar panels on our roofs and hybrids in our garages. It is easy, in such an environment, to forget the barren stretch of time between the oil crisis induced renewable energy craze of the 1970s and the present day. During this time, funding dried up, programs were cut, and renewable energy research and deployment was forced to go abroad or wither in an apathetic United States.

Politicians, policymakers and enthusiasts talk about ways that new programs will help America race past its competitors as it did in the space race, but there is not enough attention on how the old programs died and what was the full impact of their disappearance. There are important lessons to learn, the biggest of which is that inconsistency in policy can be crippling to research. While proponents of clean and renewable technologies should welcome the renewed interest and funding, it is important that they learn from the past and focus on creating a support system that is not only robust but also provides some assurances of long-term commitments.

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For proponents of clean energy technology, the holy grail is to reach price parity with conventional power sources such as coal. For photovoltaics, this tipping point is generally regarded as a dollar per watt ($1/Wp), a measure that indicates the generation capacity of a cell in peak sunlight.  At this point the stage will be set for a massive explosion in the number of solar panels being installed and sold – a situation eagerly anticipated by the PV industry and environmentalists alike.

While most agree that cost competitive solar panels would be a good development, there is a great deal of disagreement on how to reach this point. In this debate, two major schools of though have emerged. The first school recognizes that market externalities such as the cost of pollution must be internalized in order to allow the free market to allocate enough resources to renewable energy. Proponents of this view back programs such as carbon taxes and cap and trade.

The second school of thought acknowledges that market signals need to be corrected, but believes that the free market is not able to support the massive upfront costs required to advance renewable energy technology. This group maintains that the market is excellent for creating incremental advances and lowering costs for existing products, but it does not support the decades of investment required to develop a new technology before profit can be generated. In these cases, it is necessary for government entities to ensure that necessary advances occur despite the lack of a market.

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Speculation over when gasoline will reach $5 per gallon seems to be a major theme of the new year.  Although the group pushing this story is primarily interested in leveraging America’s emotional attachment to cheap gasoline to push an offshore drilling agenda, a wiser response to the prospect of rising oil costs might be a serious conversation on fuel economy.  The American auto industry faces a number of hurdles in its pursuit to achieve new federal fuel standards, but, smart policy could aid this key industry while acting as a boon for America’s economy and efforts to reduce greenhouse gas emissions.

It is fitting that the first week of 2011 ushered in a new series of federal fuel standards, meaning passenger cars sold this year must achieve at least 30.2 miles per gallon.  This alone is nothing big: the previous standard for passenger cars was 27.5 MPG, it had been on the books since 1985, and the Obama administration’s 2011 standards are even slightly less ambitious than those the Bush administration had been toying around with in 2008.  Far more significant is that the 2011 standards kick-start an annual progression that will bring us to passenger car averages of 39.5 MPH by 2016.  With light trucks required to improve their fuel economy from 24.1 MPG this year to 29.8 by 2016, industry-wide averages five years from now should exceed 35.5 MPG.  The Union of Concerned Scientists calculates that these standards will “reduce U.S. oil consumption by 1.2 million barrels per day by 2020, more petroleum than the United States presently imports from Saudi Arabia and Kuwait combined,” and in terms of carbon emissions will represent “the equivalent of taking nearly 31 million of today’s cars and light trucks off the road” over the next ten years.

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mini-nuke-990In his February TED talk “Innovating to Zero,” Bill Gates voiced his concern for our inability to meet growing world energy demand while simultaneously limiting our effect on the environment. He observed that we badly need “miracles” in low and zero-emission power generation technology in order to stabilize the earth’s mean surface temperature over the next century. Such a technology, he insisted, must be deployable on an international scale and competitive in the existing market. In the quest to find such a miracle, some are betting on small modular reactor (SMR) technology.

While a handful of possible miracles are in the works, ranging from smarter wind farms to large-scale solar plants to an array of innovative nuclear reactor designs, from an engineering perspective, the nuclear route seems the most likely to yield a game-changer soon. Most recently, in fact, the SMR design’s inherent scalability and supposed affordability have been hyped as an answer to Mr. Gates’ call. Yet, while industry, government, and public enthusiasm for the SMR is certainly welcome, many of the details which may prevent the design from delivering our miracle often go unaddressed. Rather than deeming the SMR a mirage or praising it as a miracle, a more comprehensive discussion on the topic is needed, one which identifies the technology’s unique position as a potentially breakthrough stepping stone toward solving our pressing energy demand and climate change problems. (more…)

The term ‘energy efficiency’ usually brings to mind better-insulated homes and smart power meters. But emerging thermoelectric technology could give energy efficiency a whole new meaning by tackling the huge energy waste that happens before the watts even reach our homes.  Yet, to reach market, thermoelectics will have to overcome a number of technological and policy related barriers.

The Promise

Thermoelectric devices, which enable the conversion of heat into electricity, are still at an early stage in the energy innovation chain, but the principle behind how they work can help to highlight a crucial aspect of energy waste across the world that is often ignored in the policy realm.

You may have heard that homes in developed countries waste 25-35 percent of their energy due to insulation problems and inefficient devices. But the lion’s share of energy waste actually comes at the early stages when the electric power is generated in power plants and carried across transmission lines.

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Saving the Oceans or the Oceans Saving Us?

Amidst all the hustle and bustle of the most recent round of UN climate negotiations in Cancun, an important event went overlooked by many: Oceans Day. While this may at first brush sound like a “save the dolphins” affair, over 90 high-level participants from governments, the UN, NGOs and academia gathered to discuss not only how we can save the oceans, but how they can save us.

Oceans are an enormous carbon sink, soaking up nearly as much anthropogenic carbon dioxide as the atmosphere. However, they are also an incredible source of energy through thermal heat, waves, tides, currents, even salinity gradients (differences in “saltiness” across bodies of water), which could ultimately provide for up to 10% of the US energy needs. Oceans Day participants discussed how to use oceans in fighting climate change, both through increasing the CO2 absorptive capacity of marine ecosystems and using ocean energy technologies to displace fossil fuels.

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Noah Rare EarthChina caused a stir in late October by expanding an existing embargo on rare earth metals to include the U.S. and other western nations. Although an infrequently discussed issue when it comes to energy policy, China’s monopoly of the rare earth metal production provides them yet another advantage in the clean energy race. Rare earth metals are vital to the development of clean energy technologies and therefore the future of clean energy in the U.S. As a result, it is imperative that future domestic energy policies include provisions for more secure and reliable acquisition of these metals.

Rare earth metals are actually not particularly “rare”, and consist of 17 minerals, many of which are used in clean energy technologies. Neodymium, a highly magnetic substance, is found in direct drive wind turbines, and metals such as gallium and indium are vital for photovoltaic panels.

China dominates the rare earth market by producing roughly 95 percent of the global supply, a monopoly which could be leveraged to provide Chinese clean-tech companies with considerable advantages. However, global rare earth metal resources are not as sharply skewed in favor of China.  According to the U.S. Geological Survey, China leads the world with 36 percent of global resources, and the U.S. follows with 13 percent. This vast discrepancy between global reserves and production, due mainly to the high fiscal and environmental costs of mining, fueled increasing concern amongst domestic and foreign leaders during the brief embargo.

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Special Series: The Future of Energy Technology

Thin Film Solar Panel

As we collectively stepped back this past week for Thanksgiving, the prospects for real change in the United States’ energy policy – at least in the near term – look rather bleak. If the policymaking machine is at a roadblock, can technology save the day?

The host of Democratic lawmakers and (a few liberal Republicans) who championed the fight against global warming pollution in the past two years will find it hard to promote the same approaches in the post-election environment. And while climate negotiators from around the world will make some headway on international climate talks as they gather in Cancun next week, most experts agree that any progress will be limited.

In this context, it is disturbingly unclear how the United States will manage to meet its climate pledge in the next ten years. And it remains equally uncertain how countries across the world will manage to keep global warming below 2 degrees Celsius. As it becomes increasingly clear that lawmaking and international negotiations won’t be enough to help us meet these goals, many have begun to look at technology as the answer.

In a forthcoming series of posts for Americans for Energy Leadership, I will explore the role that new technologies can play in helping us face the challenges – and opportunities – of our common energy future.

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