The summer of 2022 will go down as one of the most volatile and extreme in history. Temperatures exceeding an unheard of 40⁰C (104⁰F) in the UK (and they’ve been taking temperature readings for many centuries!). Rivers running dry in eastern Europe and China, not just escalating a drought, but also impacting crucial river transportation. One-third of Pakistan (over 100,000 square miles) is flooded and uninhabitable.

And together with the war in Ukraine upending energy (oil and natural gas) markets, nations are realizing that they must implement more renewable energy to lessen the dependence on fossil fuels and reduce greenhouse gas emissions.

But there is a problem with producing more wind turbines, electric vehicles, and solar panels. They depend on compounds that are rare on Earth and may require some not very nice environmental tactics to get them from the ground and politics to keep their flow.

The problem resolves around compounds called rare earth elements (REEs), such as lithium, nickel, cobalt, manganese, and graphite, which are crucial for producing batteries and copper and aluminum for the electric grid. Government studies appear to show that the Earth probably has sufficient REEs accessible to enable a full transition to renewable energy. The issue is the inefficiency of their extraction, transport, and use. Can the mining and processing activities across the supply chains be expanded in an environmentally and socially acceptable means quickly enough to meet the timeline of moving to a renewable economy? Many REEs are found in Africa and there is already concern about the prospect of cheap or slave labor to mine for REEs, as well as the politics of a few nations or companies controlling this crucial supply, such as China. In addition, mining operations are very energy intensive, leading to the question of tradeoffs: causing increased greenhouse gas emissions to reduce them in the future.

The good news is that the US’s Inflation Reduction Act will likely spur demand for electric vehicles and renewable energy plants. There are incentives to build more solar and wind farms and manufacture more EV vehicles. What may be the laggard in moving toward a clean energy society is the supply chain, getting a reliable supply of REEs to manufacture the equipment. Currently, about 40% of the world’s lithium (needed for batteries and for solar panels) comes from China, a specific region that suffered a severe drought this summer, drying up most of that region’s rivers, reducing electricity production itself (to mine the lithium) and transport it appropriately. All contributed by climate change. In addition, it takes 2.2 tons of water to make a ton of lithium, a problem for the drought-stricken areas where lithium is produced, China, as well as portions of Latin America. While sufficient lithium is being produced to make the batteries for EVs to meet current demand, if the recent increase in demand for EVs continue, there may well be a shortage of EVs in the market by 2025-2030.

Another issue is nickel. Indonesia produces more nickel than any other nation. However, its nickel is of poor quality, requiring it to be double smelted before it can be used. And smelting is a major energy user. One can purchase better quality nickel and avoid the extra energy cost, but the best quality of nickel comes from … Russia.

CCES has the technical experts to provide you and your company and operations with facts about renewable and battery power, whether it can be beneficial to you and the costs and benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

For the second winter in a row, Europe faces a shortage of natural gas needed to keep warm and to make electricity. The war in Ukraine and the subsequent reduction in buying natural gas from Russia has been the biggest reason for this, although there are others, such as the shutdown of several nuclear power plants and reduction of natural gas production as part of several nation’s climate change goals.

To meet the high demand, European Union countries have increased their reliance on natural gas imports, and away from Russia. The block of 27 EU countries is the world’s largest importer of natural gas. Before the war, in 2019, Hungary, Finland, the Czech Republic, Slovenia, Romania, Bulgaria, Estonia, Latvia, Slovakia, Macedonia, Bosnia-Herzegovina and Moldavia imported over 90% of their natural gas from Russia, primarily via pipelines. But these imports from Russia are now restricted, creating a natural gas shortage and with winter coming up, there is significant worry about basic heating needs throughout the continent.

On to the rescue is the US, which has plenty of natural gas supply, the technology to convert it to liquified natural gas (LNG), and the means to export it to Europe. In addition, natural gas prices are lower in the US. Thus, LNG exports are quickly replacing Russian imported natural gas. LNG is natural gas that is highly compressed and chilled, making it easier to load on ships in large quantities for transport. The US is taking advantage of the demand by shifting cargoes intended for Asia and South America to Europe, obtaining higher prices for its LNG. Half of all US exports of LNG are going to Europe. The US has 7 terminals to produce LNG and export. Reports state that they have been operating at maximum capacities. LNG arrives at terminals where it is converted back to gas and placed on pipelines to facilities.

Germany, the EU’s largest user of natural gas, has no LNG terminals. It planned to import more Russian natural gas supplied via the new Nord Steam 2 pipeline. The pipeline was constructed at a cost of over $11 billion, but has not yet been commissioned due to the war in Ukraine. Germany is working hard to de-carbonize its energy sources and is pushing renewable power, such as solar and wind. However, these strategies will not replace the power derived from coal-fired, nuclear plants, and Russian-derived natural gas. Germany is working to construct new LNG terminals. EU countries, such as Denmark, Norway, and Holland are trying to increase natural gas supplies in the North Sea and other locations. However, many of the existing wells are running dry. A major find of natural gas has occurred in the Mediterranean Sea, off the coast of Israel. Israel has begun processing natural gas from there and has installed pipelines to Europe through Greece.

In the interim, however, natural gas costs will increase as demand is unlikely to subside as the EU fights an upcoming winter and tries to avoid a recession. It will have to use these alternative sources of natural gas, as well as encourage even more renewable power, and push for conservation.

CCES has the technical experts to help you assess the energy situation of your company, municipality, or buildings, to help you assess how to minimize costs and usage. Contact us today at karell@CCESworld.com or at 914-584-6720.