The Defense Production Act will be triggered by President Joe Biden to secure U.S. sources of critical minerals and materials used to make batteries for electric vehicles and energy storage.
The order is in response to spiking gas prices and supply chain constraints caused by Russia. It is part of Biden's plan to respond to Putin's price hike at the pump. Increased domestic production of oil and a historic release from the nation's Strategic Petroleum Reserve are two things Biden has called for.
Because of Putin's war of choice, less oil is getting to market, and the reduction in supply is raising prices at the pump for Americans.
According to the American Automobile Association, Americans are paying an average of $4.225 per gallon at the pump as of Thursday, compared to about $2.859 a year ago.
The Defense Production Act allows the president to direct private companies to prioritize orders from the federal government. Because Biden is calling for a boost in domestic production, his administration might offer loans to American companies that mine and process battery materials, make purchases or even allow companies to coordinate with each other, which in other circumstances might be an antitrust issue.
The Defense Production Act could provide capital for exploration, mining, processing and production of minerals for electric vehicles and stationary grid storage batteries to help strengthen the foundation for a transition to cleaner energy use in the U.S.
According to Hopp-Michlosky, the company is open to working with the U.S. government on projects using its Silver Peak, Nevada and Kings Mountain, North Carolina resources.
About 60 percent of Albemarle's lithium goes into energy storage.
Hopp-Michlosky said that they are increasing their global conversion capacity to meet the demand for batteries.
It is not clear how broad the Defense Production Act will be. It is likely that companies securing battery materials and battery manufacturers will see a boost. For a few years now, a range of other automakers, like Toyota, General GM and Ford, have all set in motion plans to build battery facilities in the U.S.
Even though the Department of Defense will implement this authority using strong environmental, labor, community and tribal standards, some climate activists worry that rushing production of precious minerals via extraction processes will bring about the next gold rush that will ultimately lead to more.
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