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Mud pot fields near the southeastern shores of the Salton Sea show the potential energy brewing beneath the surface of the known Salton Sea Geothermal Resource Area where EnergySource have built geothermal plants and others like Controlled Thermal Resources of Australia are also developing geothermal plants. Ultimately, both companies will also build lithium-extraction facilities to draw the valued mineral from the geothermal brine and serve a demand that is escalating rapidly. | CONTROLLED THERMAL RESOURCE PHOTO

Newsom Voices Pledge to Lithium Valley

State Budget Proposes $22.5 Billion for Climate Resilience Projects

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SACRAMENTO — Gov. Gavin Newsom on Monday, Jan. 10 announced a commitment to incentivize and spur development of the state’s lithium reserves around the Salton Sea.

“We have what someone described as the Saudi Arabia of lithium here in the state of California down in Imperial County near the Salton Sea,” Newsom said on Monday as he unveiled his budget proposal for 2022-2023 dubbed “The California Blueprint.”

Newsom’s administration will work on a new regulatory framework to spur private investment, create loan programs to reduce investment risks, and “focus on environmental and labor standards right up front” to accelerate investment and “and focus on regionalizing economic opportunity in part of the state that deserves more investment and more attention,” he said.

The state administration, according to the Blueprint, will work with the Legislature, the Lithium Valley Commission, and county and community partners to develop a model for revenue sharing and a fund that benefits Californians, and simplify the permitting for geothermal facilities and lithium extraction in the Salton Sea while maintaining high environmental standards that protects the surrounding communities.

By regulating lithium extraction, the state will work with industry and community members to provide high-paying jobs, and expanded economic opportunity to the Salton Sea community, according to a county of Imperial press release.

Imperial County Supervisor Jesus Escobar | COURTESY IMAGE

“The County of Imperial applauds the Governor’s Blueprint as it sets in place the important role Lithium Valley will play in the State’s and Country’s future. As the Imperial County continues to be a leader of renewable energy production, the Board of Supervisors are committed in providing any support and assistance to continue this momentum to bring jobs and opportunities to the residents of our County,” county Board of Supervisors Chair Jesus Escobar stated in a Thursday, Jan 13. release.

Newsom’s $286.4 billion budget for the upcoming fiscal year would spend $22.5 billion over five years to advance the state’s climate resilience agenda as he seeks to position California as a world leader in the green economy.

It earmarks $6.1 billion for various electric vehicle initiatives, particularly for low-income buyers and underserved areas. About $3.9 billion of that would fund electric trucks, transit and school buses, as well as the attendant charging infrastructure.

Some $9.1 billion are earmarked for green transportation initiatives, including a high-speed rail and various bicycle and pedestrian projects.

It sets aside about $937.8 million for clean energy projects, which includes $380 million for battery storage to bolster the state energy grid.

It also calls for $1 billion in tax credits over three years for California companies working on cutting-edge climate solute solutions and clean energy technologies.

Gov. Gavin Newsom addressed the media during a press conference where he unveiled his budget proposal for 2022-23 in Sacramento on Jan. 10, 2022.

“If you want to invest, there’s no better place to invest in the future of green energy, low-carbon green growth, than the state of California and these tax credits are another example of California leading the way,” Newsom said.

Newsom didn’t put numbers or dollar signs on his vision for “Lithium Valley,” but it revolves around a world-class battery manufacturing ecosystem driven by the extraction and processing of lithium, a key ingredient in rechargeable batteries.

The Salton Sea area sits atop millions of metric tons of lithium in the form of its geothermal brine, and for several years, companies, government officials, and agencies have been working to tap into that resource.

They may soon be successful.

The California Public Utility Commission issued a procurement order of 11,500 megawatts on energy last June, which required that 1,000 megawatts of that order be from new geothermal resources by 2026. The order creates a path forward for about a dozen geothermal energy projects at the Salton Sea, which were at a cost disadvantage compared to solar and wind generation.

Around that time two major automakers signed deals to acquire lithium from mineral extraction components of geothermal-energy projects at the Salton Sea.

Worldwide demand for lithium is expected to double by 2024 as automakers rush to expand their electric vehicle footprint.

EnergySource is developing a commercial-scale lithium recovery project utilizing the geothermal brine from the Hudson Ranch Power Plant. That project continues to advance, and Vincent Signorotti, vice president of resource and real estate assets for EnergySource, said he hopes to be in construction soon.

Controlled Thermal Resources is building a geothermal plant and lithium recovery facility which it expects to extract just under 40,000 tons per year.

BHE Renewables, a subsidiary of Berkshire Hathaway Energy, which operates nearly a dozen geothermal energy wells at the Salton Sea, announced last year that it was building a demonstration plant converting lithium chloride into battery-grade lithium hydroxide at its Calipatria facility. If it is successful, they plan to extract lithium from all 10 of their geothermal plants, according to Jonathan Weisgall, vice president of government relations.

Production of the battery metal is set to almost triple by 2025 to more than 1.5 million metric tons, according to S&P Global, but much of the world’s supply chain of lithium is wrapped up in practices that are questionable for the environment, and the competition to secure access to the resource is fierce.

Most of the world’s lithium is extracted in China, Australia, and the “lithium triangle” of Argentina, Bolivia and Chile in water-intensive, environmentally toxic open pit mines.

(This story was updated on Thursday, Jan. 13 with a statement from Imperial County Board of Supervisors Chair Jesus Escobar.)

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