The Arctic is often imagined as a new energy frontier because of its ample oil reserves. But what if its nickel is actually the resource that becomes the region’s most sought-after commodity? That may happen in the not-so-distant future if trends in the automobile industry continue to shift towards electric vehicles.
At present, the Arctic is estimated to hold some 13% of the world’s undiscovered oil. Many Arctic and non-Arctic countries alike hope that oil from the far north can help slake the world’s addiction to the fossil fuel. At the same time, particularly in the wake of the Paris Agreement, the world is trying to shift away from burning fossil fuels. Countries like Norway and China, both of which are active in Arctic oil exploration, are also attempting to reduce the amount of cars on their roads that rely on petroleum. By 2025 in Norway, all passenger vehicles are supposed to be zero-emission.
Both legislative initiatives and shifts in consumer tastes means that there is increasing global demand for electric cars. In cities like Los Angeles, the streets are already lined with Toyota Priuses and, in some wealthier neighborhoods, Teslas. Those electric vehicles may be increasingly clogging the streets of Beijing and Oslo, too.
As more drivers switch to electric vehicles, demand for nickel, the main component in their batteries, called lithium-ion cathodes, will increase. Tesla’s CEO, Elon Musk, has said that the batteries should actually be called nickel-graphite batteries due to their composition. A neat infographic from North American Nickel & Visual Capitalist explains that while at present, nickel makes up an average of 1/3 of the metal by mass in electric car batteries, not too long from now, nickel may make up 80%. The more nickel there is in a battery, the more energy efficient it is.
Demand will increase
Right now, only about 3% of the world’s annual nickel supply, which is about a $20 billion market, goes into electric vehicle batteries. But it seems fairly certain that more nickel is going to be needed in the future, both to power more electric vehicles and their evolving batteries.
That nickel will likely not come from mines in the Global South in places like Indonesia, Cuba, the Philippines, and New Caledonia, which currently produce low-grade nickel laterites used in processes like steel production. Instead, the higher grades of nickel sulphites required for electric vehicle batteries will likely come out of mines in places like the Arctic and Australia.
Russian metropolis in the lead
Already, the world’s largest nickel producer is Russia’s Norilsk Nickel. The company owns and operates the massive nickel mine outside the Siberian city of Norilsk, the second largest metropolis in the Arctic. Around this heavily polluted city, nickel and other metals are smelted on-site, rivers run blood-red, and the soil is so laden with heavy metal pollution that according to NASA, “it is now economically feasible to mine the soil.”
More scenes like this could be unfolding in other parts of the Arctic that, for better or worse, are also home to high-grade nickel deposits. One of those locations is Maniitsoq, Greenland. As scientists explain in a paper published in 2012 in Earth and Planetary Science Letters, three billion years ago, a huge meteor likely crashed to Earth on the edge of Greenland, resulting in the formation of the world’s largest crater. Magma gushing up from beneath the devastated surface left behind sizable deposits of nickel, platinum, copper, and gold. Due to billions of years of erosion, the crater is no longer visible to the naked eye, but the mineral resources remain. The Maniitsoq crater may also be the “oldest cosmic collision on Earth so far known.” It is so ancient that the meteor crashed to earth much closer to the formation of the planet 4.5 billion years ago than today.
Canadian project in Greenland
But back to the present. Canadian company North American Nickel hopes to launch its nickel mining project in Maniitsoq by 2024 or 2025. This year’s field season, which just wrapped up in October, involved 60 employees collecting samples and making maps and surveys of the area. If all goes according to plan, nickel from mines in Greenland, Russia, and also Canada, where a nickel mine is under construction in Voisey’s Bay, Labrador, could be powering your electric, possibly self-driving car within a decade. One can only hope that the post-apocalyptic, Blade Runner-esque landscapes of Norilsk are not repeated elsewhere in the Arctic.
In the meantime, especially in the U.S., both the government and the media remain fixated on Arctic oil. Whether for or against the sticky stuff, discussions about the Arctic in American circles make it seem like oil is the only commodity the region has, probably because Alaska is awash in it.
Drilling in ANWR, not the solution?
Since Senate Republicans seem to still imagine that Arctic oil holds the key to a renewed era of prosperity for Alaska and American energy independence, they are trying to plug a proposed $1.5 trillion tax cut in part with an estimated $1 billion from lease sales in the Arctic National Wildlife Refuge (ANWR). Tomorrow, the Senate Committee on Energy and Natural Resources will be holding a hearing on drilling in ANWR. Yet Bloomberg reports that lease sales would probably only bring in $145.5 million, less than a fifth of the estimated amount. Even if the hoped-for $1 billion was generated, that would only make up for 0.06% of the the tax cut.
In any case, possibly a third of global oil reserves and potentially all Arctic oil may become a stranded asset, according to a recent study in Nature. What that means is that the oil in concern is going to be unrecoverable if the world is going to seriously try to limit global warming to 2ºC. The Arctic may have a lot of oil, but given how expensive it already is, as demand tapers off, no one may want to pay very high prices for hard-to-reach fossil fuels.
Paris Agreement goals in sight
The U.S. may not be serious about the goals of the Paris Agreement. But as mentioned earlier, countries both big and small like China and Norway are. Yesterday, even the governor of Alaska, Bill Walker, signed an executive order that establishes a “Climate Action for Alaska Leadership Team.” (It’s unclear, but the strategy, or at least the hasty announcement of it, may have been motivated by 16 Alaska teenagers who are suing their state for not having a climate strategy and exacerbating climate change by encouraging more oil and gas development.) Even as extraction on the North Slope plows onward, Alaska’s new climate action team will plan to seek “collaborative solutions to climate change that support the goals of the United Nations 2015 Paris Agreement.”
Even if oil still continues to be used for decades to come, the world is gradually going electric. Powering the electric revolution will likely be nickel from mines in Greenland and Russia – not oil from wells in Alaska.
This post first appeared on Cryopolitics, an Arctic News and Analysis blog.
Related stories from around the North:
Canada: Baffinland mine ships record amount of iron ore in 2017, Radio Canada International
Finland: U.S. pullout from Paris climate pact condemned by Finnish leaders, Yle News
Germany: Cheap oil from the Arctic? Fake news, says climate economist Kemfert, blog by Irene Quaile, Deutsche Welle
Norway: Norway’s oil fund reaches $1 trillion, The Independent Barents Observer
Russia: Big dig in Kola Bay as Novatek takes new steps in Arctic gas project, The Independent Barents Observer
Sweden: Northern Swedish city gets Europe’s largest battery factory, The Independent Barents Observer
United States: Oil & gas company says Alaska’s limited tax-credit payments thwarting drilling plans, Alaska Dispatch News