The Realities of Net Zero
Organizations around the world are focused on addressing climate change. Most major corporations are rearranging priorities and reallocating capital and personnel to determine the most efficient path to achieve Net Zero (where emissions of carbon dioxide or methane are eliminated or balanced by removal from the atmosphere). The Paris Climate Accord focused the efforts of participating governments to achieve Net Zero by 2050—that’s less than thirty years away. Specifically, the Net Zero objective is driven by achieving two main gargantuan transitions: changing to non-carbon-based fuel for both the transportation and energy sectors. These are virtuous objectives for sure, but where is all the metal going to come from that will allow this galactic shift to occur?
Electric vehicles (EVs) require three to five times more copper than an internal combustion engine (ICE). Lithium, nickel, and cobalt are also necessary to store the energy in a car battery. Windmills and solar panels require five to ten times as much copper per megawatt than a coal-fired power plant, along with a host of other metals, including the rare earth elements (REEs) that at present are only produced in a usable form in China. And the hydrogen highway—a chain of hydrogen-equipped filling stations that facilitate the use of hydrogen-powered cars—well, that requires some different metals, including the platinum group metals (PGMs), but certainly a lot more metals than old-fashioned ICE. And we haven’t even talked about battery storage yet—not for the vehicles but for the grid, since wind and solar energy sources are intermittent and require storage for efficient redistribution. Batteries are an absolute necessity to store and distribute power in any new electrical grid that hopes to replace what is currently in operation.
A Lot of Zeroes
There has been lots of talk about “critical metals.” The Biden administration acknowledged this fact with an Administrative Order followed up by language in the recently passed Inflation Reduction Act. There are fifty metals on the official US Geological Survey critical metals list. Oddly enough, copper didn’t make the list, which I find odd because it is the most critical of all the metals; none of the other metals work without copper. Bottom line: achieving all of our renewable energy goals will require more metal than has been mined in our brief history on planet earth!
To address the argument that all we need to do is consume less and recycle more, let’s agree to be realistic: we suck at consuming less, so let’s not pretend that is an answer to save the planet. As for recycling, let’s do some simple math. (I use copper as the example because it figures largest in the green energy and transportation future.) Globally we consume 27 million tonnes of copper annually. Approximately 32 percent of that is recycled copper, or about 8.7 million tonnes per year. Copper has a five- to thirty-year product life use, meaning that we already recycle about 80 percent of the copper in use. So even if we could recycle 100 percent of the copper, it isn’t even close to meeting the green demand.
Copper is one of the most efficiently recycled metals because of its value, currently about $3.50 per pound. People make a living collecting scrap copper from old buildings—and unfortunately sometimes new ones under construction (definitely not cool!). Gold, silver, and PGMs are also efficiently recycled because of their value. On the other hand, iron rusts, and other metals like zinc, nickel, manganese, lithium, cobalt, and REEs are much more difficult to recycle because they are mixed with other metals and materials. Yes, we should absolutely recycle more! We should incentivize true recycling (not just feel-good recycling where the materials end up as a huge pile of (s)crap in some foreign land), and we should support research that develops the technologies to do so. I am a firm believer in recycling and would love to see it happen in earnest in Alaska, but it’s important to accept that recycling is not a solution to Net Zero—and certainly not by 2050!
Since recycling can’t get us to Net Zero by 2050, let’s take a realistic look at the magnitude of the challenge ahead of the mining industry to provide the metal resources required to meet the energy and transportation transition. In less than thirty years, North America alone will have to convert some 400 million vehicles to electric or other non-ICEs. According to Mines, Minerals, and ‘Green’ Energy: A Reality Check by Mark Mills and published by the Manhattan Institute, every EV requires a half-ton battery made of multiple metals and minerals (iron, aluminum, zinc, copper, nickel, manganese, lithium, graphite, gold, PGMs, REEs) extracted and processed from some 250 tons of mined materials. To transition just the ICE vehicle fleet to electric in North America over the next thirty years will require 200,000,000,000,000 pounds in mined materials. For those who can’t keep track of zeros— that’s 100 billion tons of mined material. And then there is Europe, China, India, Africa… you get the picture.
But there is also the green energy side: windmills, solar panels, and battery storage. It does no good for Net Zero to drive a Tesla powered by coal or diesel! It takes hundreds of billions of tons of material—way more than we have mined in human history. And to address the argument that we all don’t need to drive a car, mass transit alternatives are even more metal intensive, particularly over the next thirty-year period. The numbers are driven by population, and we can’t hide from that either.
With that background, let’s look at Alaska’s role in helping achieve Net Zero. We are a resource abundant state. According to the Fraser Report, Alaska ranks as one of the best jurisdictions for mineral potential worldwide and in the top five for investment attractiveness, meaning we have a rule of law that governs best practices to protect people and the environment.
Alaska’s Red Dog mine is the world’s largest zinc mine and was developed in partnership with NANA corporation. That mine development has transformed northwestern Alaska and the lives of many NANA shareholders in the Northwest Arctic Borough. It is a model of meeting environmental, social, and governance (ESG) goals. Alaska was doing ESG long before the three letters were put back-to-back! Let’s replicate this model, show the world what real ESG looks like, and do our share of contributing to Net Zero.
We know the metals and material needed to support the green energy and transportation transition are here. We have known deposits of copper, cobalt, tin, tungsten, lithium, graphite, REEs, and PGMs. What is holding us back from contributing more? Generally speaking, it is a lack of social license, or support from local communities most affected by mining activity. For the process to work, there has to be engagement and compromise. There has to be dialogue, which there is sadly far too little of in today’s world, despite our technologically increased ability to do so!
At least part of this dialogue is education. Here is a perfect example of the disconnect between needing minerals but not wanting to invest in them. On July 19, 2022 the Vatican Secretariat for the Economy announced a new set of investment guidelines for the Holy See. Vatican City has $33 billion to invest. While the new policy encourages investment in companies working to protect the environment and promote the use of clean energy, investments in alcohol, oil, gas, coal, nuclear—and all mining—fell into the same category of activities for which investment is discouraged. According to this institution, mining is not generally acceptable. So what would the solution be for Net Zero? Why are many still demonizing an industry that is absolutely necessary to achieve the objectives of electrifying energy and transportation—and pays among the best basic wages in Alaska?
Unfortunately, we have made it too easy for people to forget or overlook how fundamentally important mining is to nearly everything we do, especially as it relates to seriously addressing decarbonizing our energy and transportation systems. Hopefully we don’t end up making all the same mistakes we made when we developed our reliance on oil, which historically has required supporting unsavory dictators and tyrannical regimes. It still does: witness Europe’s hyper-dependence on Russia for energy. Today we are reliant on places like China, Russia, and the Democratic Republic of Congo for many of the critical metals we need for the energy and transportation transition.
Why not mine and process these materials ourselves, where we have control over ESG values and can make a real difference for all Alaskans? We need people to educate themselves on the realities of achieving Net Zero and we need real dialogue and compromise between the mines and the communities most directly impacted. And we need to keep in mind that we have less than thirty years to make a difference.
“Electric vehicles require three to five times more copper than an internal combustion engine…Windmills and solar panels require five to ten times as much copper per megawatt than a coal fired power plant.”