March 26, 2024
New research reveals steps California must take to capture more jobs from lithium battery boom
California is capturing only 2.4% of projected jobs in planned operations in the nation’s lithium battery supply chain, with most going to states that are ranked low in terms of labor protection, worker health and safety, and wage laws.
The findings released in a new report from New Energy Nexus, with partners at the Institute for Social Transformation at UC Santa Cruz and the UC Berkeley Labor Center, detail how even the state’s very own “Lithium Valley” initiative in the Salton Sea region is projected to miss out on the growing lithium boom, where less than 1% of jobs are associated with lithium extraction. The vast majority of the more than 100,000 expected new jobs are projected to be in battery and electric vehicle (EV) manufacturing.
Co-authored by Chris Benner (Professor, UC Santa Cruz), Maggie Jones (Research Associate), Rebecca Lee (Managing Director New Energy Nexus California), Priyanka Mohanty (Research and Policy Analyst, UC Berkeley Goldman School of Public Policy), Margaret Slattery (PhD Candidate, UC Davis Energy and Efficiency Institute), and Carol Zabin (Senior Advisor, UC Berkeley Labor Center) with Vijay Dhar (Li Bridge Director, New Energy Nexus) and Carrie Hamilton (PhD Candidate, UC Santa Cruz).
Powering Prosperity: Building an Inclusive Lithium Supply Chain in California’s Salton Sea Region
Executive Summary
Global demand for lithium-ion batteries used in electric vehicles (EVs) and energy storage systems is expected to increase fivefold by 2030 (Arora et al. 2023), anchoring critical minerals as a strategic pillar of national security, energy independence, supply chain resilience, and the United States (U.S.) economy. Securing domestic sources of critical minerals is a national priority, and if managed carefully, the growth of this new industry in the U.S. could provide tremendous economic opportunity that simultaneously uplifts industry, workers, and communities. Onshoring related supply chains could create up to 100,000 direct new jobs in domestic battery industries, and three to four times that in EV manufacturing. Two pivotal pieces of federal legislation, the Bipartisan Infrastructure Law (BIL, 2021) and Inflation Reduction Act (IRA, 2022) have created major financial incentives to drive the buildout of a domestic green manufacturing industry across the U.S., particularly for lithium-ion battery and EV production (Climate Power 2024).
A key domestic site for lithium is near the Salton Sea in California’s Imperial County. Located in the Southeastern corner of California, this long underinvested region has some of the highest rates of poverty in the state and nation. Here, lithium deposits exist in hot, mineral-rich brines deep underground that are already brought to the surface for geothermal energy production. This allows for a direct lithium extraction (DLE) process in which the lithium can be recovered with a much smaller land and energy footprint than the hard rock mining or open evaporation pond methods used in other parts of the world. In recent years, this area in the Salton Sea region has become known as “Lithium Valley” as stakeholders have launched an ambitious development initiative to build out a domestic lithium extraction industry and a broader processing, geothermal, and battery manufacturing ecosystem, with the potential to create good jobs, new business enterprise opportunities and other meaningful benefits for residents. If realized, this vision would profoundly transform the region, creating an economy rooted in shared prosperity, technological innovation, environmental protection, and value-added enterprises.
Inclusive economic development—an approach linking environmental sustainability and social equity to support broad and lasting community wellbeing—has been at the forefront of conversations surrounding Lithium Valley. This inclusive approach is especially critical for a community that has experienced largely extractive economics, seasonal employment, and boom and bust labor cycles for decades. This vision has strong support in California, where policymakers and state agencies have made strides in supporting high-road climate action (see Box) through policy and regulatory levers that simultaneously advance decarbonization and economic inclusion goals. While there is still work ahead, the state’s commitment to this high-road approach (see Zabin et al. 2020) is delivering concrete results, with, for example, about 60% ($19 billion) of California’s projected climate investments budget through 2026 including a workforce standard (Appel and Hammerling 2023).
California’s solid foundation in marrying climate and equity goals positions it well with regard to current federal priorities. But how does this translate in the real-world business landscape? What do companies across the battery supply chain look at in considering where to set up operations, and how does the Salton Sea region—and more broadly, California—compete? What are the opportunities and challenges for seeding an advanced battery and EV manufacturing supply chain in the region that is centered on shared prosperity? With momentum building in various efforts to advance the Lithium Valley vision, we set out to shed light on these dynamics. We utilize our national analysis of investment locations across the U.S. battery and EV supply chain, and local analysis of lithium extraction and related investments in Imperial County, to do the following: to assess progress and define next steps in order to maximize equitable, high-road development of the lithium extraction industry already under development in the region, given the unique context of the Salton Sea region as an active geothermal hub, to identify how to build out more of the battery supply chain in the region so that the environmental, job, and community benefits can multiply, to provide concrete recommendations for how to achieve these high-road development goals.
The report and the Lithium Battery Supply Chain map are supported by a grant from The James Irvine Foundation, and represents the culmination of more than a year of research, including input from a wide range of labor, community, industry, public sector and tribal stakeholders.
About New Energy Nexus
New Energy Nexus is a non-profit organization that strives towards a 100% clean energy economy for 100% of the population in the shortest time possible. With 20 years of experience, we provide world class accelerators, funding, and training to help diverse entrepreneurs build a more just and equitable clean energy transition. New Energy Nexus started in California in 2004 and now operates programs in New York, China, India, Southeast Asia, East and West Africa and Australia. Since 2016, we have supported 1,200 startups, over 8,000 entrepreneurs, and mobilized over US$3.7 billion in investment. More: www.newenergynexus.com/california
About the Institute for Social Transformation, UC Santa Cruz
Rooted in the Social Sciences Division at UC Santa Cruz, the institute supports innovative scholarship that changes the world. The institute is a critical intellectual and social hub, connecting scholars across UC Santa Cruz and partners beyond the university, developing research-based solutions to urgent social, environmental and political problems in the world. The institute’s research aims to understand and transform the underlying systemic causes of problems in these areas and brings the research-based expertise and resources of UC Santa Cruz to collaborations with others committed to building local and global societies that are rooted in equity, access and opportunity for all people, environmental regeneration and democratic revitalization.
See Also:
UCSC Journal of International Society and Culture: Vol. IV
