During his final State of the State Address, Governor Brian Sandoval had a fascinating request for President Donald Trump. It’s one that could have all sorts of lasting implications for Nevada.
What is his request, and why should you care about it?
“We all know the significance of lithium to our emerging sectors in advanced manufacturing and renewable energy, and we know that mining is critical to the future of the new nevada economy. The key to growing our mining industry is the continued opposition to restrictive federal rules related to public lands. Join me in urging the trump administration, and congress, to allow nevada to capitalize on our wealth of mineral deposits that are central to the success of our rural and state economies.”
What was he talking about? For one, Tesla. Tesla’s now seeking lithium in the Clayton Valley in Esmeralda County for the lithium-ion batteries it will be producing at its gigafactory in Storey County.
However, it’s not just Tesla. Lithium is not just a key component in Tesla batteries, but also batteries for cell phones and other electronic devices. As our world becomes more dependent upon electronic devices, and since Nevada likely has the most plentiful supply of lithium in the U.S., we can see why Governor Sandoval is salivating over a potential “new white gold rush” for Nevada’s lithium.
The famous “free market” conservative economist Milton Friedman titled one of his books, There Ain’t No Such Thing As A Free Lunch.
So what might be the cost(s) of Nevada inviting more lithium mining on our public lands?
Lithium mining may not be as environmentally destructive as fossil fuel extraction, but it isn’t 100% risk-free either.
Rather, the lithium mining process can be environmentally harmful in contaminating the landscape with toxic chemicals that are released when the lithium is extracted. And because the mining process itself is still heavily dependent upon fossil fuels, even mining for lithium to be used in “clean” products like Tesla cars can contribute to climate change.
So far, Tesla has been sourcing its lithium from the Clayton Valley in Esmeralda County. But in his State of the State speech, Governor Sandoval specifically named Humboldt County when he called for more lithium mining in Nevada.
Are other parts of the state also being considered for lithium exploration? And considering the Trump-Pence Administration’s more hostile attitude towards public land stewardship and overall environmental protection, will this “white gold rush” be used as an excuse by the White House to allow private interests to profit off public lands at the expense of the greater public good?
Again, let’s keep in mind that Tesla cars are likely far more eco-friendly than standard fossil fuel powered vehicles, even when lithium mining is factored in.
Still, Milton Friedman may have a point here. Is there ever really a “free lunch”?
This leads us to the other “lunch” in question. Ever since the early days of statehood, the mining industry has enjoyed special status that has resulted in an effective tax rate of barely over 1% for the gold that’s already extracted from Nevada turf. Due to the narrow failure of 2014’s Question 2, the mining industry will continue to enjoy this sweetheart deal for the foreseeable future. And that will likely include lithium, should state leaders proceed with their plan to expand lithium extraction operations here.
In recent years, the State of Nevada has become increasingly aggressive in offering tax subsidies in exchange for “economic development.” That trend is set to continue during the 79th Session of the Nevada Legislature, as a bipartisan duo of legislators just dropped a bill draft request (BDR) to offer tax breaks for lithium mining.
Perhaps since Nevada is already offering tax subsidies for everything from a stalled prototype of an electric car to a new stadium that might house a NFL team, why not offer one to companies seeking “white gold” in them thar’ hills?
But really, is this sustainable long-term?
Maybe you can clearly see that a company producing actual vehicles that can play a role in building a cleaner, greener future merits public investment. Maybe it’s harder to see a NFL stadium with a business plan that’s yet to pencil out meriting public investment. Can we afford to continue carving out more tax subsidies to any entity that comes to Carson City promising “economic development” in some form?
Governor Sandoval and the legislators who are now leading the charge to expand lithium mining operations may be onto something. Indeed, the world’s demand for lithium will likely grow as our world continues to become more electronically interdependent. Why shouldn’t Nevada cash in?
There may be good reasons for Nevada to cash in on this latest lithium craze, but there are also reasons for Nevada to proceed with caution. With the new administration in DC possibly looking at ways to undermine decades’ worth of consensus on public lands stewardship, do state leaders want to risk empowering federal authorities to jeopardize entire ecosystems? With the state theoretically interested in acting on climate change, will the state take steps to minimize carbon pollution from the mining process? And with the state required to keep a balanced budget, will the state take steps to ensure any expansion of lithium mining actually benefits Nevada residents?
Nevada has the potential to lead the charge on lithium, but can we get it right? That’s the test for state leaders as #NVLeg prepares to go into session.
Image courtesy of Doc Searls from Santa Barbara, USA (2010_08_06_rno-phx-bos_033 Uploaded by PDTillman) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons