Lithium is powering the
electric vehicle revolution. It's the common denominator
across all types of EV batteries, and we
desperately need more of it, especially domestically. Enter the Salton Sea: A
toxic, shrinking lake that's one of the country's
biggest environmental disasters due to a variety
of circumstances, from water contamination to a decades
long drought. It also happens to be
extremely rich in both geothermal activity and
minerals. About 40 miles north of the
California-Mexico border, the Salton Sea is estimated
to contain enough lithium to meet all of the United
States' projected future demand and 40% of the
entire world's demand. The area has been dubbed
Lithium Valley. Here at the Salton Sea, it's
a phenomenal geothermal resource, but it's a little
bit different in the sense that is a large
hydrothermal resource. So what that means is the
geothermal fluid comes out actually as a hot brine,
not a clean steam. That brine is used to
produce clean energy at the 11 geothermal power plants
in the area. And it also contains lots
of lithium, which could be recovered without the need
for open pit mining or evaporation ponds, just the
addition of extensions to the existing power plants. It will be much, much
smaller and less impactful than any of the current
ways of producing lithium. Three companies, Berkshire
Hathaway Renewables, EnergySource and Controlled
Thermal Resources are all developing joint geothermal
power and lithium recovery facilities that, if all
goes according to plan, will provide clean power to the
grid and produce battery grade lithium. GM is
already onboard, as it's committed to source lithium
from Controlled Thermal Resources. This new industry could be a
big boon to the region, where the majority Mexican
American community faces high rates of unemployment
and poverty and suffers health impacts from the
toxic dust that blows off the Salton Sea's drying
lakebed. We're cautiously excited in
regards to the Lithium Valley. We see it as a
game-changer here for the Imperial County. Lithium recovery could
provide much needed jobs and the increased attention and
money flowing into the region could hasten efforts
to reduce the dust and clean up the sea. If they're going to work
there and they've invested billions of dollars in
extraction facilities that are right next to the
Salton Sea, they're going to want to see something
that's positive for the region. Nobody wants to
work next to an eyesore. Extracting lithium from
geothermal brines has never been done at scale. But if
it works, the Salton Sea could become an epicenter
of lithium production, helping automakers meet
their ambitious electric vehicle production targets. All the big autos now are
looking for sustainable minerals. And this is the
cleanest, greenest lithium on the planet. To understand how all this
lithium got here, it's important to grasp the
Salton Sea's history. For millennia, as the
Colorado River changed course or flooded, it would
fill the low-lying area called the Salton Sink with
water and rich sedimentary deposits. And so you have a very
porous sandstone that's been filled with seawater and
Colorado River mineral deposits over the years. While the water eventually
evaporated, the minerals like lithium stayed. And in
1905, floodwaters from the Colorado River breached a
canal, causing water to pour into the Salton Sink
unabated for 18 months, creating California's
largest lake. Since then, drainage from
nearby farms in the Imperial and Coachella Valleys have
fed the lake with water containing pesticides and
fertilizers. But what was once a
thriving resort community in the fifties and sixties has
given way to ghost towns, and a surprisingly vibrant
arts community. But surrounded by desert,
the Salton Sea has been slowly evaporating for
decades and the shrinking has hastened in recent
years. Contamination from agricultural runoff and
rising salinity levels have caused a collapse of the
lake's once vibrant ecosystem. The dry lakebed
contains toxins like arsenic and selenium, and when the
dust kicks up, the surrounding population is
exposed. We know what the hospitals
are seeing, what the clinics are seeing in acute
respiratory. Niland and the one side, Salton City on
the other side. And and basically they've
turned into ghost towns. Yet amidst this
environmental disaster, the unique geology of the
region has created a geothermal resource area
that covers more than 10,000 acres. There are 11
operating power plants at the Salton Sea, ten owned
by Berkshire Hathaway and one by EnergySource. Together, they have the
capacity to produce around 400 megawatts of clean
geothermal energy, enough to power about 350,000 homes,
over seven times the number of houses in Imperial
County where the plants are located. We are standing arguably in
between the North American and the Pacific plates. So
as the continents pull apart, the crust is thin. And so you have these hot
magmatic bodies that come close to the surface. Magma heats the surrounding
rocks and salty water called brine circulates among
them. Minerals like lithium
dissolve into the brine, which is used to produce
geothermal energy when it's pumped to the surface and
converted into a gas that turns an electricity
generating turbine. Geothermal power plants
have operated at the Salton Sea for 40 years and
traditionally, the leftover brine is just re-injected
back into the earth. But as the electric vehicle
market heats up, technology that can recover lithium
from these brines is receiving increased
attention and investment. But this isn't the first
time that there's been interest in lithium
recovery at the Salton Sea. Hyped start-up Simbol
Materials previously developed a demonstration
plant, but the company ceased operations in 2015
after a failed acquisition attempt by Tesla, and never
developed a commercial-scale facility. But since then,
demand for lithium has shot up, and after falling
sharply in 2018, prices are surging once again,
incentivizing projects that might not have been
economical before. If the current trio of
companies can prove their tech works, they stand to
make a lot of money from the hundreds of thousands of
tons of lithium in the area. The Salton Sea field, fully
developed, could well serve 600,000 tons a year. I mean the world production
is less than 400 now. We could satisfy
collectively the U.S. needs alone, plus maybe
some export depending on how quick the U.S. ramps up. Right now though, the
upfront cost of extracting lithium from geothermal
brine is steep. Colwell estimates his
company's first plant will cost just shy of $1 billion
to build and will produce 20,000 tonnes of lithium
per year. Compare that to Lithium.
America's proposed open pit mine in Nevada, which is
estimated to cost just over $1 billion but produce
60,000 tonnes of lithium per year, or their proposed
evaporation pond in Argentina, which is
estimated to cost about $740 million and produce 40,000
tonnes of lithium per year. Evaporation ponds work by
pumping lithium containing brine to the surface and
waiting for the water to dry up, leaving lithium behind. But these new companies
expect that low operating costs will help to balance
out the high upfront cost of their joint
geothermal-lithium plants. Plus, all three companies
will receive additional revenue from the geothermal
energy that they produce. What we see is that
geothermal brine should be around the first quartile
in terms of market competitiveness. Of course, this remains to
be seen. And the economics remain
the biggest unknown in this whole endeavor. But if the
full-scale plants do work as intended, it's likely that
they'll be much more eco-friendly than mining or
evaporation ponds, which have huge land footprints,
are often quite water intensive and can create
lots of contamination and waste. Both of those are more
impactful to the environment than what we'll be doing. So right now we are already
pumping 50,000 gallons of brine per minute across all
of our ten geothermal facilities, and we're using
the steam from that brine to generate clean energy. And so we're really halfway
there in that we've got the lithium right here. Knapp's team is finishing up
construction of its lithium recovery demonstration
plant and plans for its first commercial facility
to be up and running in 2026. The hope, Knapp says,
is that Berkshire Hathaway will eventually add lithium
recovery extensions to all of its geothermal plants in
the area. EnergySource is jumping
straight into building a commercial-scale lithium
recovery facility. The company expects to
start construction this summer and for the plant to
be operational by 2024. And Controlled Thermal
Resources is building its pilot plant, starting
construction on a full-scale facility in October and
planning to open its first combined geothermal and
lithium plant by the beginning of 2024,
providing lithium to GM. This is an extension of an
existing industry. It's a closed loop. There's
no reagents, there's no chemicals, there's no waste
products, nothing. And with all the plants are
here, it's a small extension. If you drove
past one, you probably wouldn't know the
difference if that had a lithium plant on it or not. Controlled Thermal Resources
has developed its lithium recovery tech in
partnership with Lilac Solutions, using
ion-exchange technology. In this case, here's what
that looks like. At the recovery facility,
geothermal brine flows through tanks filled with
ceramic beads, which absorb lithium from the brine.
When the beads are saturated, the lithium is
flushed out with hydrochloric acid and
lithium chloride remains. This is an intermediary
product that Controlled Thermal Resources plants to
refine onsite, yielding lithium carbonate or
lithium hydroxide, a powder that's ready to be
processed and transformed into precursor chemicals
and then manufactured into battery cells. Berkshire Hathaway is also
using ion-exchange technology for lithium
recovery. And EnergySource has developed its own
proprietary platform called Integrated Lithium
Absorption Desorption Technology or ILiAD. All three companies plan to
refine lithium onsite, which will help to secure a
domestic battery supply chain. But the companies
aren't equipped to handle additional steps, such as
chemical processing and battery cell manufacturing,
which still primarily take place in Asia. Then the rest of the supply
chain, hopefully in the coming years, will also be
developed in the U.S., so that we're able to go
straight from lithium and other minerals in the
ground to batteries that we're using to run our
infrastructure. That could happen sooner
rather than later. EV battery maker Italvolt
recently announced plans to launch a new company with
the purpose of building a $4 billion Gigafactory in
Imperial Valley that would produce enough lithium-ion
batteries for 650,000 electric vehicles per year. The new company, Statevolt,
has signed a letter of intent to source lithium
and geothermal power from Controlled Thermal
Resources. Another open question is how
this new industry will impact the Imperial Valley
community, where many low-income residents work
in agriculture and the unemployment rate is 14%,
over three times the national average.
California formed the Lithium Valley Commission
so that government, industry and community stakeholders
could come together and analyze the potential
opportunities that lithium recovery could bring. Luis Olmedo is a member of
the commission, representing disadvantaged and
low-income communities in the Salton Sea Geothermal
Resource Area. He also runs a local
nonprofit devoted to environmental justice and
health. It's going to be really
important that the community is involved and engaged
because if the community isn't there, the vision is
going to be drawn out for them. Olmedo stresses that if
government or industry is going to bring in
scientists and economists to analyze the impacts of
lithium recovery, then the community deserves the
same. We've got to balance the
table, and we need to be able to have access to the
same expertise, to bring in the community perspective,
the environmental justice perspective and the equity
perspective. Both Berkshire Hathaway and
Controlled Thermal Resources also have representatives
on the Lithium Valley Commission and stressed the
positive impacts that they believe the burgeoning
industry will bring, from property tax revenue that
could benefit local schools and fund additional
government services to job creation. This community needs us. And this is a fantastic
place for us to invest and benefit not just ourselves
as a company, but all of us, as lithium is so essential,
and these people right here in this community, by
providing jobs, education, opportunities, all the
economic development that comes with that big of an
investment. Knapp says that they're
working with a number of educational institutions in
the area, from high schools to community colleges to
four year institutions to make sure that students
interested in getting a job in the geothermal and
lithium industries are properly trained. Colwell,
who serves on the Lithium Valley Commission himself,
says that CTR's first combined geothermal and
lithium plant will employ 220 people and that if the
company succeeds in its goal of building out eight total
plants, it will employ 1,400 people. In an open letter
to the Imperial County and Salton Sea communities,
Colwell says that 95% of these jobs will be sourced
locally and that the average salary will be almost twice
the current average in the region. If you're working as a farm
worker, for example, you can go into a part-time course
and move into a nice career operating job. We're about
90% trades, you know, we're not looking for a bunch of
PhDs here. Olmedo feels encouraged by
the conversations that are happening, but he wants to
ensure that there's binding commitments when it comes
to issues like job creation, training and other
community benefits. They need to make sure that
as they put on the table, resources, tax incentives,
policies, it has to be written. Handshake deals
aren't enough anymore. While gestures like the open
letter from Colwell are a good first step. they're
far from a promise. And since these companies
are yet to prove that their tech actually works at
scale, it's impossible to know yet what benefits the
community will actually see. We don't want to get our
hopes up high because we're thinking all this talk, is
it really happening? Or they may pull out and go
somewhere else? It's almost too good to be
true. But if there was ever a time
to bet on domestic mineral projects, that time is now. At the end of March,
President Biden invoked the Defense Production Act to
boost production of EV battery minerals like
lithium, nickel, cobalt, graphite and manganese. How and if this will effect
any of the operations at the Salton Sea remains to be
seen. But in general, the
president's order gives the government more ways to
support the extraction, processing and recycling of
critical minerals and fund feasibility studies for new
projects. The will is there from the
general public wanting to go away from fossil fuels. Right? That's the number
one. And that will's filtering up to a GM and a
Ford and a Stellantis, the manufacturers. And that's
filtering all the way through to government,
hearing the same messaging. And the window of
opportunity is now. We have an opportunity right
now to create the gold standard plan, to be able
to help inform other industries and how they
evolve in today's society, a society that is trying to
be more environmentally responsible, more
equitable. Still though, there's some
irony in the fact that even if Imperial Valley does
transform into Lithium Valley, the electric cars
where this lithium ends up will still be too expensive
for most residents. They're certainly going to
start coming down in price, but how long is that going
to be before that happens? It's going to be the next
generation. We need to have some benefits now. Environmental advocates
would also like to see habitat restoration happen
at a faster clip, and are pushing the state to
expedite projects that involve creating lower
salinity ponds on the dry lakebed, where fish and
bird species can thrive. The state's goal is to
create 47 miles of habitat and dust suppression
projects by 2028. And with California's
budget surplus, things are finally moving. I've been working on this a
long time, so we're seeing more progress than we've
seen in ever, really. There's a lot more that
needs to be done, but we're starting to see some things
happen. Environmentalists and
community advocates alike are optimistic that the new
industry will help shine a light on problems that have
been plaguing the area for decades. And as mining
projects in other parts of the country face community
concern and backlash, it seems like lithium recovery
at the Salton Sea could be the rare minerals project
that unites all stakeholders. If it works. We have a president and an
administration, the governor has a team, they want to
see the win-win plan. And we have a legislator
here locally that is certainly a champion of
environmental justice. So we know that if ever we
can create a win-win plan, it's right now.
I really hope they use some of the money to improve the area. The Salton Sea is going to start to disappear if nothing is done to refill it since the Colorado River, whose floods would refill the lake in the past, has been redirected.
Luckily there are technologies that would allow a portion of the geothermal brine to be partially desalinated and used to refill the Salton Sea in an environmentally friendly way. I'm just not sure the developers know about them.