The massive US and worldwide transportation sectors are fueled mostly by crude oil. Although ethanol and compressed natural gas (CNG) have grown to 6% and 2%, respectively of the US total, gasoline, diesel, and jet fuel account for more than 90% with very little from electric vehicles (EVs) using electricity or fuel cell vehicles (FCVs) using hydrogen. In 2023, worldwide crude oil consumption was about 100 million barrels per day (MM BPD), and the US consumed 19 MM BPD, with 8.9 MM BPD of gasoline and 3.0 MM BPD of diesel. These fuels support a vehicle market of 283 million serving a population of 335 million. Worldwide, the number of vehicles exceeds one billion.
OPEC (Organization of Petroleum Exporting Countries) controls around 65% of the worldwide “proven” crude oil reserves, with total reserves estimated to be about 1.7 trillion barrels. A detailed definition of “proven” oil reserves is beyond the scope of this discussion, but they are defined as having at least a 90% probability of being recoverable, as opposed to “probable” and “possible” reserves, with probabilities of 50% and 10%, respectively. And, while hydraulic fracking has made the US a net exporter of oil, about 65% of total production comes from oil from fracking, typically too light to process in Gulf Coast refineries.
Therefore, at this time the critical resource for the transportation industry is crude oil. This could change, however, as some parts of the world move away from fossil fuel driven vehicles and towards battery electric vehicles (BEV). For example, the European Union is targeting at least 30 million zero-emission vehicles on its roads by 2030. Also, China, currently the world’s largest auto market, plans to have BEVs make up 20% of new car sales by 2025 and 50% by 2035. In addition, even if there was no growing trend to move away from fossil fuels, proven reserves and worldwide consumption for crude oil suggest we have enough left for 59 years and only about 10 years for the US. Certainly, these numbers could decrease if developing countries increase consumption, or increase if other oil reserves become economically viable or newly discovered, such as reserves deep-water oil, fracking technologies, tar sands, and oil shale. Nevertheless, these reserve types have higher production costs and potentially shift the market towards BEVs.
If the world moves to a transportation market dominated by BEVs, the big change is that the key resource will shift from an energy source (i.e., crude oil) to the metal resources needed to make batteries. Certainly, energy in the form of electricity will still be needed and a rough estimate shows the entire 283 million US vehicle fleet would represent 25% of the amount of electricity currently generated. The transition would be slow, and the basic infrastructure of electric plants and electric grid already exist, so the main infrastructure needed would be charging stations.
How does a battery work?
A detailed discussion of how a battery works is beyond the scope of this post, but it is important to understand the basics in order to understand the resources needed for making batteries. At this time, most BEVs use lithium (Li) ion batteries consisting of three major parts including a cathode and an anode which are separated by an electrolyte. When charging, Li ions transfer from the cathode to the anode and this process is reversed during discharging. The most common cathodes used today are lithium manganese oxide (LMO), lithium iron phosphate (LFP), lithium nickel manganese cobalt oxide (NMC) and lithium nickel cobalt aluminum (NCA). Also, the most common anode used is graphite, a crystalline form of carbon arranged in a hexagonal structure.
The resources needed for a BEV depends on the choice for the cathode and anode, but driving range is an important consideration. At this time, BEVs come in a variety of ranges from a low end of less than 100 miles to about 300 miles, depending on the size of the battery system. If the BEV is to become more than a commuter vehicle, 300 miles seems like a minimum value for road trips and this will require a battery with an energy content of around 100 kWh.
The types and compositions of batteries for BEVs is still in flux but typically batteries use 160 g Li/kWh, so a 100-kWh battery would use about 16 kg Li. On this basis, some of the other metals can be estimated by composition. For one version of the NMC battery, NMC333, the battery would need 45 kg nickel (Ni), 42 kg manganese (Mn), and 45 kg cobalt (Co). Co has some issues, to be discussed later, so there is another version of this battery, NMC532, with a lower Co content. For this composition, Ni is now 68 kg, Mn is 38 kg, and Co is 27 kg. Similarly, for a typical composition of the NCA battery, the number of metals would be 114 kg of Ni, 16 kg of Co, and about 3 kg of aluminum (Al). For the anode, the amount of graphite will be more than 60 kg for a 100-kWh battery pack.
Which countries are rich in resources for batteries?
Which countries are rich in these metal resources? First, it is important to note that, like crude oil, there are both “proven reserves,” reserves that can be economically mined, and “probable reserves,” reserves which are less likely to be recovered. Also, current production may not necessarily match a country’s standing with proven reserves. For this post, proven reserves will be used based on United States Geological Survey (USGS) data. When it comes to Li, Chile, China, Argentina, and Australia control most of the proven reserves. Chile, Argentina and Bolivia (which has probable reserves) make up the so-called Lithium Triangle, an area in the Andes bordering these three countries. Co is controlled by the Democratic Republic of the Congo (DRC) and Australia, and the DRC has nearly 50% of worldwide reserves. Unfortunately, much of the Co comes from artisanal mining, and this mining is done in hazardous conditions and even with child labor. Mn is mostly found in South Africa, Ukraine, and Australia and these three countries control 70% of the reserves. And for Ni, almost 50% is controlled by Australia, New Caledonia, Cuba, and Indonesia with Australia at 24% of worldwide reserves. Finally, China is by far the biggest producer of graphite for the anode, producing around two-thirds of worldwide supplies.
Therefore, if the world shifts to a transportation fleet of BEVs, the control of critical resources will change from OPEC countries to countries in South America as well as China, Australia, and the DRC. This could be an economic opportunity for these countries, but external exploitation, social issues, and environmental concerns will have to be managed to reap the full benefits of production.
