Biden to invoke Defense Production Act on battery minerals

Source: By Scott Waldman, Jael Holzman, E&E News • Posted: Thursday, March 31, 2022

President Biden speaking in November during a visit to the General Motors Co.'s Factory Zero electric vehicle assembly plant in Detroit.

President Biden speaking in November during a visit to the General Motors Co.’s Factory Zero electric vehicle assembly plant in Detroit. Evan Vucci/AP Photo

President Biden is expected to sign an order as soon as this week invoking the Defense Production Act to ramp up domestic production of the critical minerals needed to make electric vehicle batteries, said a person familiar with the plan.

The administration plans to deploy the Cold War-era statute to focus on battery minerals, including lithium, nickel, graphite, cobalt and manganese, said the person, who was not authorized to speak on the record about the discussions. Bloomberg News first reported on the development.

The plan calls for Biden to invoke Title III of the Defense Production Act, according to the person. Title III allows the president to use loans, direct purchases and other government-backed business investments to incentivize production of goods and materials. Biden has used the law in the past to boost medical equipment manufacturing to aid hospitals during the Covid-19 pandemic.

The Russian invasion of Ukraine has rattled the clean energy sector by increasing volatility in metals markets, driving up the prices for key minerals like nickel, aluminum and palladium. It has also shaken those most likely to deal with the immediate impacts from a domestic push on mineral mining, including Native American communities (Greenwire, March 10).

If Biden goes through with the order, it would certainly please Sens. Lisa Murkowski (R-Alaska) and Joe Manchin (D-W.Va.), who wrote a letter to the president earlier this month requesting the law be invoked for mineral production (Greenwire, March 25).

Last night, House Natural Resources Chair Raúl Grijalva (D-Ariz.) wrote his own letter to the president, urging him “to forgo any action on critical minerals using the Defense Production Act,” citing a risk to “natural resources and environmental justice communities.”

“We urge you to reject this longstanding, ill-conceived request from the mining industry and instead focus your administration’s work on improving regulations that protect public lands, clean water, and tribal communities from the harmful impacts of mining,” Grijalva wrote.

The person familiar with the White House plans said the goal is to reduce the U.S. reliance on “foreign sources of oil and natural gas.”

The Interior and Energy departments will help implement the plan and help ensure it will not bypass or expedite the permitting or environmental review process, the person said.

Instead of including loans or direct purchases of materials, the administration’s plan would focus on helping mining companies access money under the Defense Production Act for “feasibility studies, co-product and byproduct production at current operations, and productivity/safety modernizations,” the person stated.

Earlier this week, the Biden administration hinted it would rely on Defense Production Act funds to bolster battery production.

In its annual budget request released Monday, the administration asked Congress to provide $43 million to the Defense Department that would assure “access to advanced battery capabilities.” It also asked for $253 million to fund a national defense stockpile of “strategic and critical materials” — an increase from the $125 million Congress gave the program in the recent omnibus funding bill for this year.

At a press briefing later that day, the Defense Department stated it would “leverage the Defense Production Act” as it would “make these key investments.” The department did not respond to requests for comment.