“Electric cars and renewable energy may not be as green as they appear. Production of raw materials like lithium, cobalt and nickel that are essential to these technologies are often ruinous to land, water, wildlife and people.”
That’s from The New York Times on May 6.
If it sounds familiar, that’s because I wrote something similar here back on April 10:
“Many of us turn a blind eye to the less-than-green facets of many “green” products or services, which aren’t as environmentally friendly as advertised…
No honest assessment [of environmental impacts] can ignore the nongreen aspects of electric vehicles (EVs), solar panels, wind turbines, or any other ‘green’ energy source or product.
Producing an EV, for example, requires about twice as much energy as producing an internal combustion engine vehicle. This differential results mostly from battery production, which uses a lot of energy to extract and refine metals like copper and nickel.”
In other words, while we’ve come to that socioeconomic moment when both consumers and investors are jockeying to “out-green” one another, at the same time, many of us turn a blind eye to the less-than-green facets of many “green” products or services.
The NYT article focused on the “dirtiness” of mining for battery metals such as lithium. And in that April 10 issue, I indeed noted that lithium-ion batteries produce a range of environmental negatives:
- They require metals that come from energy-intensive and sometimes dirty mining operations.
- Like an EV, a lithium-ion battery is only as green as the power grid that charges it. So wherever coal-fired power dominates the grid, these batteries are not particularly green.
- Lithium-ion batteries are not easy to recycle.
On average, every dollar spent to recycle a lithium-ion battery yields only about $0.33 worth of reclaimed metal. Because of this “bad math,” about 95% of all lithium-ion batteries end up in landfills.
This inconvenient truth — that green is not always green — will matter in ways that produce significant commercial impacts in the renewable energy marketplace.
However, as I’ll show you in today’s issue, it will also produce significant opportunities for investors.
Let’s take a look…
The Great Powers Are at War Again
The New York Times article went on to say:
“That environmental toll has often been overlooked in part because there is a race underway among the United States, China, Europe and other major powers. Echoing past contests and wars over gold and oil, governments are fighting for supremacy over minerals that could help countries achieve economic and technological dominance for decades to come.”
Battles like this always create huge waves of capital… and huge profit opportunities. Therefore, this Second Electric Revolution will remain a major investment trend worth pursuing for the foreseeable future.
For instance, the article noted that in just in the first three months of 2021, U.S. lithium miners raised nearly $3.5 billion from Wall Street. That’s seven times the amount raised in the prior 36 months.
Indeed, the Second Electric Revolution is powering ahead… and it is creating spectacular opportunities everywhere it goes. But finding the best ways to invest in this revolution is no easy task.
Many leading companies in the EV and energy storage sectors are losing money. Therefore, rather than invest in those money losers, I have recommended battery metal miners that provide essential ingredients to the EV and energy storage industries.
EV and energy storage technologies require vast amounts of metals like lithium, copper, nickel, and manganese. The average battery-electric vehicle, for example, contains about 180 pounds of copper — that’s about half as much as the average American home.
So, it’s likely that the boom in EVs and energy storage will create major “echo booms” in several metal markets.
However, as we’re discussing here, traditional mining is a tremendously dirty business.
“Our new clean-energy demands could be creating greater harm, even though its intention is to do good,” Aimee Boulanger, executive director for the Initiative for Responsible Mining Assurance, a group that vets mines for companies like BMW and Ford Motor, said to The New York Times. “We can’t allow that to happen.”
The Times story noted several efforts to clean up the lithium mining process.
Moreover, two years ago, the U.S. Department of Energy (DOE) broke ground on a new lithium-ion battery recycling R&D center. At the same time, the DOE announced a $5.5 million “Battery Recycling Prize.”
But so far, no one has claimed the prize money. To borrow from Winston Churchill, recycling lithium-ion batteries remains “a riddle, wrapped in a mystery, inside an enigma.”
As Grist.org reports:
Even if enough dead lithium-ion batteries can be collected to make recycling economical, today’s recycling techniques are rather crude. Recyclers might melt a battery’s metal-rich components down to slag in a furnace, dissolve them in acid to leach specific metals out, or use some combination of the two methods. Currently recycling processes are energy-intensive, produce toxic byproducts, and only recover some of the metals present, like cobalt and nickel. Most of today’s battery recyclers aren’t recovering lithium at all.
By contrast — and The New York Times didn’t mention this in its story — one competing energy storage technology does lend itself to economic recycling.
A Greener Battery
That technology is called a vanadium redox flow battery (VFRB).
Unlike solid-state lithium-ion batteries, VFRBs are basically water tanks that contain a vanadium electrolyte solution of differing oxidation states. A proton exchange membrane separates the two tanks.
Because of their size and weight, VFRBs are not suitable for EVs. But for energy storage applications, they offer a compelling alternative to lithium-ion batteries… especially when one considers their environmental superiority.
Although VFRBs remain relatively unknown, they are attracting a growing worldwide demand.
And my latest recommendation — which I revealed in the Fry’s Investment Report April issue — is well positioned to capitalize on this emerging trend.
To get that recommendation as a member of the Investment Report, click here.
P.S. Hundreds of thousands of folks saw my “Technochasm” viral video from earlier this year.
Well, the whole world has changed since then… and I’m back to talk about the Technochasm, the biggest megatrend in investing, in ways I couldn’t before… and discuss opportunities for even bigger market gains… the kind to keep you from falling behind. And I’m bringing along investing legend Louis Navellier to join me on camera for the first time ever.
On the date of publication, Eric Fry did not own either directly or indirectly any positions in the securities mentioned in this article.
Eric Fry is an award-winning stock picker with numerous “10-bagger” calls —in good markets AND bad. How? By finding potent global megatrends… before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a contest. And today he’s revealing his next potential 1,000% winner for free, right here.