The massive US and worldwide transportation sector are fueled mostly by crude oil. Although ethanol and compressed natural gas (CNG) have grown to 6% and 2%, respectively of the US total, gasoline, diesel, and jet fuel account for more than 90% with very little from electric vehicles (EVs) using electricity or fuel cell vehicles (FCVs) using hydrogen. Before the worldwide pandemic, worldwide crude oil consumption was more than 100 million barrels per day (MM BPD), and the US consumed 20.5 MM BPD, with 9.3 MM BPD of gasoline and 3.0 MM BPD of diesel. These fuels support a vehicle market of 278 million serving a population of 331 million. Worldwide, the number of vehicles exceeds one billion.
The original founding members of OPEC (Organization of Petroleum Exporting Countries), including Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, currently control 58% of the worldwide crude oil reserves, estimated to be about 1.7 trillion barrels. Canada is also a large player, controlling 10% of worldwide reserves but the US has less than 3%.
Therefore, at this time the critical resource for the transportation industry is crude oil, the energy source needed to power vehicles. This could change, however, as some parts of the world move away from fossil fuel driven vehicles and towards battery electric vehicles (BEV). For example, the European Union is targeting at least 30 million zero-emission vehicles on its roads by 2030. Also, China, currently the world’s largest auto market, plans to have BEVs make up 20% of new car sales by 2025 and 50% by 2035. In addition, even if there was no growing trend to move away from fossil fuels, proven reserves and worldwide consumption for crude oil suggest we have enough left for 47 years. Certainly, this number could decrease if developing countries increase consumption, or increase if more reserves are discovered from deep-water oil and fracking technologies. Nevertheless, these factors would increase crude oil production costs and potentially shift the market towards BEVs.
If the world moves to a transportation market dominated by BEVs, the big change is that the key resource will shift from an energy source (i.e., crude oil) to the metal resources needed to make batteries. Certainly, energy in the form of electricity will still be needed but a rough estimate shows the entire 278 million US vehicle fleet would represent 25% of the amount of electricity currently generated. The transition would be slow, and the basic infrastructure of electric plants and electric grid already exist, so the main infrastructure needed would be charging stations.
How does a battery work?
A detailed discussion of how a battery works is beyond the scope of this blog post, but it is important to understand the basics in order to understand the resources needed for making batteries. At this time, most BEVs use lithium (Li) ion batteries consisting of three major parts including a cathode and an anode which are separated by an electrolyte. When charging, Li ions transfer from the cathode to the anode and this process is reversed during discharging. The most common cathodes used today are lithium manganese oxide (LMO), lithium iron phosphate (LFP), lithium nickel manganese cobalt oxide (NMC) and lithium nickel cobalt aluminum (NCA). Also, the most common anode used is graphite, a crystalline form of carbon arranged in a hexagonal structure.
“If the world moves to a transportation market dominated by BEVs, the big change is that the key resource will shift from an energy source to the metal resources needed to make batteries.”
The resources needed for a BEV depends on the choice for the cathode and anode, but driving range is an important consideration. At this time, BEVs come in a variety of ranges from a low end of less than 100 miles to about 300 miles, depending on the size of the battery system. If the BEV is to become more than a commuter vehicle, 300 miles seems like a minimum value for road trips and this will require a battery with an energy content of around 100 kWh.
The types and compositions of batteries for BEVs is still in flux but typically batteries use 160 g Li/kWh, so a 100-kWh battery would use about 16 kg Li. On this basis, some of the other metals can be estimated by composition. For one version of the NMC battery, NMC333, the battery would need 45 kg nickel (Ni), 42 kg manganese (Mn), and 45 kg cobalt (Co). Co has some issues, to be discussed later, so there is another version of this battery, NMC532, with a lower Co content. For this composition, Ni is now 68 kg, Mn is 38 kg, and Co is 27 kg. Similarly, for a typical composition of the NCA battery, the number of metals would be 114 kg of Ni, 16 kg of Co, and about 3 kg of aluminum (Al). For the anode, the amount of graphite will be more than 60 kg for a 100-kWh battery pack.
Which countries are rich in resources for batteries?
Which countries are rich in these metal resources? First, it is important to note that there are both “proven reserves,” reserves that can be economically mined, and “probable reserves,” reserves which are less likely to be recovered. Also, current production may not necessarily match a country’s standing with proven reserves. For this blog post, proven reserves will be used based on United States Geological Survey (USGS) data. When it comes to Li, Chile, China, Argentina, and Australia control most of the proven reserves. Chile, Argentina and Bolivia (which has probable reserves) make up the so-called Lithium Triangle, an area in the Andes bordering these three countries. Co is controlled by the Democratic Republic of the Congo (DRC) and Australia, and the DRC has nearly 50% of worldwide reserves. Unfortunately, much of the Co comes from artisanal mining, and this mining is done in hazardous conditions and even with child labor. Mn is mostly found in South Africa, Ukraine, and Australia and these three countries control 70% of the reserves. And for Ni, almost 50% is controlled by Australia, New Caledonia, Cuba, and Indonesia with Australia at 24% of worldwide reserves. Finally, China is by far the biggest producer of graphite for the anode, producing around two-thirds of worldwide supplies.
Therefore, if the world shifts to a transportation fleet of BEVs, the control of critical resources will change from OPEC countries to countries in South America as well as China, Australia, and the DRC. This could be an economic opportunity for these countries, but external exploitation, social issues, and environmental concerns will have to be managed to reap the full benefits of production.