Government stockpiles of metals, materials could aid clean energy transition
Government stockpiles of metals, materials could aid clean energy transition
For much of the past year, the federal government has been refilling the Strategic Petroleum Reserve — a cache of crude oil kept on hand by the Department of Energy in case of supply shocks. The government sold off a good chunk of the reserve in 2022, when Russia’s invasion of Ukraine sent global oil prices skyward.
But oil isn’t the only thing our government stockpiles. There’s the Strategic National Stockpile, which contains medical equipment and treatments like face masks, vaccines and ventilators. That stockpile was drawn way down in the early days of the COVID-19 pandemic.
Then there’s the National Defense Stockpile, a stash of commodity metals and materials managed by the Pentagon. Historically, the NDS has been little used because the U.S. has faced few major attacks domestically. But some experts argue that the NDS could be mobilized against another threat — climate change — by helping to transform the nation’s energy infrastructure.
Cold War cache
The military has kept extra metals and other materials laying around since the 1930s: tungsten for ammunition, cobalt for aircraft fuselages, mercury for artillery fuses and more.
But it was during the Cold War that the stockpiling started to look more like hoarding, said Morgan Bazilian, a professor of public policy at the Colorado School of Mines. “The amount of money and the amount of materials that were included in the stockpile skyrocketed.”
The material value of the NDS rose from about $1 billion, in today’s dollars, in 1939 to about $40 billion in the early 1950s, said Bazilian. That’s what the government thought it would need if the Soviet Union attacked.
But when Cold War tensions eventually eased, so too did the threat of a major strike on U.S. soil. That meant the NDS became, in large part, excess inventory — which any business owner will tell you is inefficient to maintain.
So, “a significant amount of stockpile inventory was sold off,” said Julie Kelly, a researcher at the Institute for Defense Analyses. “It essentially brought the program back to pre-World War II levels.”
Today, the NDS includes about $1 billion worth of materials stored in six depots nationwide. But in 2022, the Joe Biden administration proposed building the National Defense Stockpile up once again — and not only for military purposes.
Multiuse materials
“When you actually look at our threat environment right now, one of the largest threats on the homeland is not conventional war. It’s not even foreign terrorism,” said Juliette Kayyem, who served as assistant secretary for homeland security during the Barack Obama administration. “It’s going to be climate disruptions.”
In part to mitigate those climate disruptions — including flooding and extreme heat — the U.S. energy system is undergoing a massive facelift in the form of solar panels, wind turbines and electric cars.
In other words, we’re building lots of new stuff, said Bazilian. “Modern energy systems are going to be very metal and mineral heavy.”
A bunch of those metals and minerals happen to be part of the National Defense Stockpile program. Lithium, nickel and graphite are among the substances that could be used for either defense or energy, said Bazilian. But, he added: “those markets are not nearly as mature as the oil market.”
Markets for these materials are small, volatile and largely controlled by China, which has put some export restrictions in place. Plus, the pricing of minerals remains a huge source of uncertainty for the energy sector, especially compared to ol’ reliable oil.
“You can go on your phone right now and you can tell me what the price is of oil in the North Sea of Europe in 10 seconds,” said Bazilian. “But if I gave you the same exercise for graphite, you would have to ask me 20 follow-on questions.”
Synthetic or natural? What flake size do you want? What currency are we gonna do this deal in?
Bazilian said equipping the National Defense Stockpile to supply the private sector, when the materials aren’t needed for defense, could make it easier for energy developers to buy what they need and get projects built, said Bazilian. “By adding another market player who is simply seeking better transparency. That transparency will be good for commercial reasons, and it will also be good for security reasons.”
Not to mention good for addressing climate change. For now, though, the National Defense Stockpile sits ready and waiting — and unused.
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