By Matthew Kredell
Meeting the electric vehicle demands of the future will require a quantity of lithium not yet in supply. The answer to that global problem could be right here in Southern California.
The USC Schwarzenegger Institute for State and Global Policy organized a conversation on the exciting potential of California’s “Lithium Valley.”
The Salton Sea Known Geothermal Area could satisfy more than one-third of today’s global lithium demand, bringing new investments and job growth to Imperial County. Schwarzenegger hosted the meeting at his Oak Productions company in Santa Monica on Feb. 17.
For Schwarzenegger, Lithium Valley is the next step in continuing the effort he helped start to make California the leader in clean energy by championing and signing landmark legislation to mitigate the effects of climate change as the state’s governor in 2006.
Schwarzenegger credited California Asm. Eduardo Garcia for his vision to create the Lithium Valley concept. His goal is to take this great vision and turn it into a reality, which was the focus of the meeting.
“We get a lot of different ideas on how to move forward with clean energy and lower pollution,” Schwarzenegger said. “But every so often someone comes forward with a great vision, and I love big visions. I hate Mickey Mouse stuff, the little stuff, the incremental stuff. I have no patience for that. It takes just as much energy to go after a big vision. I think this is a great vision to create this Lithium Valley. I’m 100% behind it.”
As Governor, Schwarzenegger, a Republican, formed an unlikely bipartisan partnership with state lawmaker Fran Pavley, a Democrat, to lead the way on environmental and climate change laws. Pavley urged Schwarzenegger to continue the work he started during his administration after leaving office, leading to the creation of the Schwarzenegger Institute at USC. Pavley now serves as Environmental Policy Director for the Institute.
“One thing Arnold always said is you don’t have to choose between the environment and the economy,” Pavley said. “You can have both. Here today with Lithium Valley we’re talking about the economy, the environment and equity.”
Garcia authored AB 1657 to create the Lithium Valley Commission in 2020. Lithium Valley started as a concept to improve the quality of life for people in a region that has been economically depressed for many decades. Lithium Valley can also help California meet its aggressive climate, energy and transportation electrification goals, and our state has taken notice.
Garcia said he sees the people living in the region as shareholders. He wants to make sure the community benefits from the investment in lithium capture.
“Lithium, some people have referred to it as the white gold of today,” Garcia said. “Call it what you want, this could be what changes lives for people in this region that have for decades suffered environmental issues, access to education issues and just having a good, decent paying job to take care of their families. And we have the opportunity to do that and then some and be a leader in the world.” Luis Olmedo, Executive Director of Comite Civico del Valle echoed the Assemblymember’s vision for the equitable and inclusive development of lithium.
Investments from the public and private sectors affirm the opportunity in the Salton Sea, where a reservoir of mineral-rich water is heated to temperatures as high as 700 degrees by the Earth’s natural heat.
Jonathan Weisgall, vice president of government relations for Berkshire Hathaway Energy, explained that the company operates 10 of the 11 geothermal plants in the Lithium Valley and would be investing between $6.5 billion and $7 billion into Imperial County in the next three-to-five years for lithium and geothermal production.
“As a company, Mr. Buffett is all in on this,” Weisgall said. “We can put those billions in to do the lithium and the added geothermal and the like, but there’s a need for those roads and bridges and broadband and the rest that’s more on the public side to support that industry.”
Weisgall added that 85% of the jobs at the plants are filled by high school graduates.
“We don’t need PhDs and we don’t need college graduates,” Weisgall said. “These are good-paying jobs that do not require a four-year education.”
Lithium is already being produced in the Imperial Valley through geothermal processes, not large scale extraction from mining operations that are common in other areas of the world.
Last year, the legislature passed SB 125 creating a lithium extraction tax for the benefit of Imperial County. Now lithium produced in California will direct revenues going back into local infrastructure and development.
“Last year’s budget included a significant amount of investment that I would say is unprecedented to seed going toward this region of the state,” Garcia said. “For us, I think that is a sign that this is real. There’s a lot of synergy now taking place in order to really take this to the next level.”
Lithium Valley faces challenges around workforce development, water and infrastructure.
“Infrastructure is really the key investment that we need, and ensuring that we’re putting those investments in a way that’s benefiting business, industry and the community will really ensure that we’re moving forward in a just, equitable way,” said Silvia Paz, who chaired the Lithium Valley Commission.
Ryan Kelley, Imperial County Supervisor, said the County is doing an infrastructure assessment of the Lithium Valley area and will soon have a long-term plan for making industrial water available.
He presented a vision of cathodes and battery production coming to the Imperial Valley so that lithium can be piped directly to the companies making batteries rather than shipped overseas.
David Hochschild, chair of the California Energy Commission, said the Commission is issuing three $15 million grants to battery manufacturers.
“The vision of the Lithium Valley, of everything we’re doing at the Energy Commission, to me is the single most exciting thing because we want to build a world beyond fossil fuels, and we want to do it with a new model that’s community-based,” Hochschild said.
Some around the table expressed frustration that Lithium Valley hasn’t yet received support on the federal level. Federal buy-in particularly is needed for infrastructure improvements to solidify the Lithium Valley supply chain.
Lithium Valley request of the federal government include:
- $1 billion in railway upgrades.
- $50 million for road and bridge infrastructure.
- Loan guarantees of $2.5 billion to be allocated by a maximum of $500 million per lithium producer.
- A dedicated professional from the federal level working from the Imperial Valley to assist geothermal/lithium companies with federal regulatory items.
Lane Dilg, a senior advisor at the U.S. Department of Energy, attended the meeting to encourage and advise the group on going after federal funding.
“I think this roundtable is a perfect example of the way California will lead the way in the energy transition that we are embarked on right now,” Dilg said. “We are very focused not only on the lithium potential that we know you hold but the way you are modeling to the country and to the world how this can be done together and in partnership. It is very exciting that there is the potential for lithium production not only at this scale but through geothermal rather than extraction or evaporation. There’s a lot of federal enthusiasm for what you’re doing here.”
She advised that federal grants are focusing on the creation of quality jobs, diversity, equity, inclusion and accessibility. And that there’s a lot of federal money available in transportation, so showing the connection lithium forges between energy and transportation will go over well.
There also is a national security component to domestic lithium production. Currently, most lithium in the world comes from four countries: China, Australia, Argentina and Chile. Lithium Valley provides a pathway toward not relying on other countries for this mineral that is becoming increasingly important.
Everyone around the table agreed that advocacy in Washington is key to taking Lithium Valley to the next level.
“We have a generational opportunity for Imperial County on our hands,” said Miguel Figueroa, CEO of Imperial County. “I think that synergy around the table is here. The only thing we need is that additional support to make sure that everybody outside of this room comes together and buys into what we have. We’re going to make our rounds to Washington very soon.”
Schwarzenegger committed to using his celebrity power to put a spotlight on the opportunity available in Lithium Valley.
“I’m more than happy to go with you to Washington and get the attention and focus on Lithium Valley,” Schwarzenegger said. “It would be my pleasure because I love following through and I know that we need lithium, we need batteries and we need to electrify our transportation system. It is a no-brainer, this whole thing. It’s not a maybe. There is no maybe. We just have to do it. I’m there for you.”