Political Dispute Over Energy Spending Has Implications for Battery Research
Recent legislative and appropriations measures passed by the U.S. House of Representatives would have significant impacts on energy storage research and development programs at the U.S. Department of Energy. The lead-acid industry needs to pay close attention to how it is affected by these measures.
Introduction
U.S. battery programs were set up 25 years ago to replace lead-acid. They haven’t succeeded. While sales of lithium-ion batteries have grown in automotive markets, the vehicles powered by the batteries comprise less than three per cent of the market. The retail price of lithium-ion batteries remains stuck between $350-450/kWh. Lithium-ion recycling is not profitable. Lithium-ion batteries are mostly imported into the U.S. rather than exported.
This is creating a terrific opportunity (R&D and marketing) for the lead-acid battery industry. The question is how to capitalize on this opportunity and what should be the relationship between the lead-acid battery industry and the U.S. government?
The U.S. government R&D programs established to promote lithium-ion batteries are coming under pressure, mostly from Republicans in the U.S. House of Representatives, for (1) their inability to capture a larger size of the U.S. automotive market and (2) the fact that lithium companies based in China, Japan and South Korea are becoming increasingly active in the U.S.
Background
Republicans in the U.S. House seek to reduce spending for applied research in renewable and energy efficiency programs in the U.S. Department of Energy, including those supporting lithium-ion. House Republicans believe that because lithium has not achieved price targets, the programs should face the consequences. Among those programs are (1) DOE’s vehicle technologies program and (2) the Joint Center for Energy Storage Research (JCESR), the battery research “hub” at Argonne National Laboratory. JCESR was set up to achieve a research “breakthrough” that would result in a new battery that within five years would be five times more powerful than a lithium-ion battery at one-fifth the cost. The JCESR program is entering its fifth year without making significant progress toward that goal.
These efforts by Republicans in the U.S. House to trim funding for JCESR and vehicle technologies are strongly opposed by the Obama Administration and Democrats in both houses of Congress. (Even some Republicans in the U.S. Senate believe their counterparts in the House have been going “too far.”)
Status of legislative and appropriations bills
Within the past month, the Republican-controlled U.S. House passed two measures that would sharply trim DOE applied research funding and provide modest improvements to DOE basic energy science research. One is H.R. 1806, the America COMPETES Act, which would authorize increases in DOE basic energy science research spending, but significantly cut applied research, including DOE energy storage R&D and demonstration. The other is H.R. 2028, the annual House appropriations bill that sets DOE spending levels. The Obama Administration has threatened to veto H.R. 2028. (Senate versions of America COMPETES and appropriations bill are more moderate than the House and both enjoy bi-partisan support.)
DOE | FY15 Enacted | FY16 DOE Request | FY 2016 House | FY 2016 Senate |
---|---|---|---|---|
Efficiency & Renewables | $1.93B | $2.72B | $1.65B | $1.95B |
Basic Energy Science | $1.73B | $1.85B | $1.77B | $1.84B |
Republicans through the years have believed the U.S. government should emphasize basic research over applied research in the belief that if basic research reveals promising new advancements, the private sector will invest and will not need further government guidance or interference. This, of course, does not help many of the “advanced” battery chemistries such as lithium-ion that need continued government help to become successful in the marketplace. As to lead-acid, which is profitable for many U.S. companies, an emphasis on basic research over applied research would appear to be welcome.
Implications for lead and lead-acid battery industries
Yet, the policy question facing the U.S. lead industry is whether it should endorse what the House Republicans are doing. A cost-benefit analysis is required.
First, what are the benefits of endorsing the House Republican strategy? It would certainly pull government support away from lead-acid’s competitors. A stronger basic research program would also help the lead-acid industry address some of the fundamental material science questions that should be answered if the industry’s batteries are to achieve greater cycling performance.
Second, however, what are the costs of endorsing the House Republican strategy? It would undermine the work of U.S. DOE energy storage program managers who believe lead-acid should be a part of a strong portfolio of options for battery producers. While DOE program managers acknowledge that most of their work has gone to lithium, they are fully aware that lithium has not achieved anticipated price targets. They are encouraging the lead-acid industry to come forward with proposals because they believe a strong lead-acid industry can provide needed competitive discipline for other chemistries.
As a result, if the House Republican strategy succeeds, it would weaken DOE’s ability to help foster a strong portfolio of competing battery chemistries that includes lead-acid. DOE program managers who are encouraging the lead-acid industry to submit proposals would not appreciate it if the industry were on record encouraging Congress to cut their budgets.
Moreover, it would undermine an effort by Argonne to develop a strong life-cycle analysis program for all battery chemistries, with lead-acid as the model. This is an effort that is receiving financial support from the DOE vehicle technologies program. If the House Republican effort to cut that program succeeds, one of the consequences could be the elimination of funding for the Argonne battery life-cycle program. That would in turn undermine one of the most important policy goals of the lead-acid battery industry, which is to promote its superior recycling profile as a sustainability model for all battery chemistries.
The importance of recycling is reflected in another important bill, S. 883, “The American Mineral Security Act of 2015.” Its purpose is to “facilitate the reestablishment of domestic, critical mineral designation, assessment, production, manufacturing, recycling, analysis, forecasting, workforce, education, and research capabilities in the United States.” (No companion bill has been introduced in the House.) This bill is strongly supported by the U.S. mining industry, which includes two major members of the ALABC, The Doe Run Company and Teck Resources, Ltd. The ALABC is particularly interested in Sec. 107 of S. 883, which would authorize DOE to encourage further development and utilization of recycled materials, including lead. The ALABC, in collaboration with the ILA, has sent to the Senate Energy Committee a letter suggesting the inclusion of specific language “to promote the development and use of recycled minerals as economically viable alternatives to minerals extracted from natural resources.”
Summary
While it may seem tempting to actively support the House Republicans in their desire to reduce funding for DOE initiatives that help support lead-acid’s competitors, the lead-acid industry should take a broader view and assess the potential implications.
U.S. Congress Legislation of Interest to Advanced Lead-Acid Battery Consortium (ALABC)
Legislation | ALABC Position | GovTrackUS Prognosis | Comment |
---|---|---|---|
S. 883: “The American Mineral Security Act of 2015.” Purpose to facilitate the reestablishment of domestic, critical mineral designation, assessment, production, manufacturing, recycling, analysis, forecasting, workforce, education, and research capabilities in the United States.” (No companion bill in House.) |
Support with ALABC-proposed additional language to “promote the development and use of recycled minerals as economically viable alternatives to minerals extracted from natural resources.” | 30% chance of enactment | Strong support from U.S. mining industry and also from U.S. ALABC members with mining and primary/secondary lead production. ALABC’s proposed additional language pending in Senate Energy Committee. |
H.R. 1806: the “America COMPETES Act.” House bill increases in DOE basic energy science research spending, but significant cuts in applied research, including DOE energy storage R&D and demonstration. |
No position | 15% chance of enactment | Controversial bill strongly opposed by Obama Administration and Congressional Democrats. While the bill’s support for basic science would appear to benefit ALABC, there is little to be gained for ALABC by taking a position on the bill. |
S. 1398: “America COMPETES Reauthorization Act.” Senate bill would double DOE Basic Energy Science budget and modestly increase funding for applied research. |
Support |
49% chance of enactment (Note: chance of enactment would be higher if differences between House and Senate can be reconciled if bill reaches conference.) |
Bill enjoys bi-partisan support and support from scientific research community. ALABC’s basic energy science research program would benefit by bill. |
H.R. 2028: “Energy and Water Development Appropriations.” House version cuts funding for energy efficiency, modest increase for basic science. |
No position | 41% chance of enactment | Obama Administration has threatened to veto H.R. 2028. If bill not enacted, a continuing resolution to maintain FY15 spending levels is likely. |