Forget oil – what about lithium?

Are we just moving from one dependency to another?

In conversations that we have had with a variety of individuals, this topic has come up. We have looked at the vast lithium deposits in South America and thought that they seemed to be relatively large, but it likely seemed that way when people thought about using oil for a power source too.

The old Jay Leno Dorito’s line – “Eat all you want. We’ll make more.” – can not really be applied to a natural resource such as oil or lithium. Growing corn for chips is one thing. Economically mining mother nature’s finite energy resources is another thing entirely.

Not long ago we looked at the placement of lithium reserves around the world. While discovering that a Chinese stranglehold on our electric future is highly unlikely (they just don’t have enough of the stuff), we didn’t really take a look at how long discovered lithium reserves will last. Now someone has.

First – who wrote the study. It seems six guys kicked in their time to do the research. Four have ties to the University of Michigan. One is associated with a research group, and one works for Ford Motor Company. So it looks like the U of M and Ford stepped up to the plate. Hopefully Ford threw more money at the research than the school did. It would show a stronger commitment to this field than we have seen from them to this point.

Being the broad strokes (as opposed to intricate detail) guys that we are, we read the summary first and then the conclusion. There are 11 pages in between and 2 pages of footnotes should you care to read the original research yourself.

Right up front, the claim is that there appears to be enough lithium to take us through the next 90 years or so – for automotive and non-automotive uses. In other words, gasoline brought us through the first 100 years of the automobile. Lithium can provide for the next 100 years. This takes into account all current and projected future uses of lithium. It also leaves some of the lithium in the ground. The estimate figures 39 million tons available, with demand not exceeding 20 million tons through 2100.

The meat of the report essentially covers the supply and demand equation over the next 90 years. The study brackets the findings in 2% to 3% GDP growth rates. Many words are used to say that there are multiple sources, with varying efficiencies of removing the lithium from its surroundings. As with any mining operation, increased demand with higher prices will provide incentive to initiate more expensive processes to extract it. In addition, on the demand side, recycling is expected to keep much of the extracted metal in continued use. Current recycling efforts have been incorporated into estimates of future projections of use.

So what’s the story? Projected demand? 12 to 20 million tons. Projected availability? 39 million tons.

Keep in mind this is taking current use and projecting into the future. Carlos Ghosn has said that Nissan is looking to move to fuel cells in ten to 15 years when the technology becomes more affordable. As technology continues to improve, the resources needed to allow the creation of the technologies will continue to change. The trick is to keep improving the recycling side of the equation and to keep improving the supply side.