interviewed them about their marriages. and i learned a lot from that book that i applied to this one. so anyways, thank you guys so much for coming out. i really those people anyou solk events. ■uwelcome, everybody i'm bob

kelley as amy said and here tonight to talk to her insider about his new book, the war, which i've read over the last week. and first of all, congratulations on the book thank you. and for people like me are in the energy business it was very informative, very instructive. and i know what a hard job it is. so congrats relations. i'm getting there. thank what i'd like to do is sort of highlight some of the main issues in the book with some questions that toss over to ernst and let him explain on some of the themes he brought up in the book with respect to the questions. the first one i'd like to start out with was absolutely staggering to me and amazing to we're talking about metals that are important in the

energy transition to go to a greener world. and what i was amazed was the amount of these metals in particular that are in things electronic vehicles in particular, the copper and the lithium. so could you expand on just the quantities involved and why it's so important that get these minerals out if we want to use these particular vehicles? sure. great to be with you. thanks for your time. we're used to thinking of internal combustion engines primarily for transportation. and as we go increasingly, we have to realize that the bolts that are inside the electric vehicle, those are the insides are much different than an internal combustion engine. so you can just think about all of the metals and minerals that are going into things like magnets inside an electric vehicle that being replaced. you have fewer moving parts inside an electric vehicle, but you have thousands and thousands

of different thousand tons miles. excuse me, of wiring for different components that go inside that. so when you think about copper, for instance, just take all of your history until 2022, all of the copper that was mined up to that into mine the same amount up to 2050. if we're going to hit net zero. so that's all the copper that's been mined throughout history, which is just a gargantuan amount. the us government, the biden administration estimates that in order hit net zero, we're goingd percent increase in lithium alone in order to get those net zero goals. and right now the us does produce copper. it's got some large copper mines, but it produces only trace trace amounts of lithium. and so you just do the math, you can start to the sheer need the united states and globally right. yeah. i was amazed by the copper required in a electronic vehicle in a tesla, for example. like you said, it would. so a number of miles of copper that go in the car.

it's a gargantuan and you think about and then also think about the infrastructure needed to that. so you've got to have charging stations everywhere. that takes a lot of copper and then you have to obviously generate the electricity, which is a whole nother conversation and probably a whole another book, but yeah, one of the one of the other things, one of the other topics, one of the other metals that you brought up in the book are what are called rare. yeah. and i'm really not that familiar. what rare earths are when i read that i said would be good to exactly what you're talking about here. what are rare and how do we get them and what are they used for in this energy transition? yeah, there's a lot of sort of crazy confusing geological names, but i worked really hard on the book, not to make a book for geologists or investors, a book for everyone. and so taking concept like rare ea was important for me to distill it down the average reader. so when you look at the periodic table, there's 17 elements known as rare earths and that's a bit of a misnomer.

they're not actually. what's rare is to find them in quantities in any one deposit on the planet, and they each have different benefits. they're sort of like pepper added to a steak, if you will, doesn't taste the same without the pepper and and certain electronics and other pieces of equipment wouldn't without rare earths, a great common example is your cell phone. the thing makes your cell phone vibrate is a rare earth magnet. there's no substitutes there. and so every time you hear a buzz in your pocket, that is because that rare earth magnet is is buzzing because the it's taking the power from the ba transferring it into motion, it's the same thing in an electric as well. there's no motor peris taking te wheels and turning them is a rare earth magnet that's taking the power from the battery and basically pushing your car forward. yeah. where where do we find these rare? i mean, are they. well, i tell you the they're in deposits all over the world really the rare industry as we know it today. modern rare earths industry got started in the united states and

i chronicle in the book the the history of how after world war two, the u.s. really grew. thanks in part to the mountain pass mine in california, which is just over the border from las vegas. and this mine to become the biggest in the world for these specialized metals and minerals and known as rare earths. europium is one rare earth that makes tvs read. so there was a lot of color tv, you know, interest, obviously, when i would see an extent, all these other shows, right? big televisions, more and more popular. so this might, as you can imagine, became extremely important to the us economy as well as the defense industry. it was us military that invented rare earth magnets that, as i mentioned, helped power into motion. they are also used in fighter jets and laser guided missiles and other pieces of equipment that are used, the pentagon, but by i chronicled this in the book in the united states is just sort of fell out of fashion and producing them around the 1980s or 1990s. and the reason is because it can be extremely just nasty if we

give it, we're there to in some instances you can radioactive waste that's produced it's a very costly laborious it takes a lot of time to produce rare earths and so china saw this a way to basically boost its own economy. and so while the us of waned in its interest with rare earths, i chronicle in the book how china basically took up the mantle and realized it had aot within own borders and it's now the world's largest rare earth miner and processor. and i would argue and do argue the book that that's part of the reason why it's the world's second largest economy because it's up this prowess that the united states let go. yeah yeah yeah. and this brings up i mean kind of one of the fundamental themes in the book, this dilemma with the environmental community. yes, i want to go green. we need to reduce the carbon in the atmosphere. that's why we want to drive electronic vehicles and then

when they see what you have to do to, get there from here and. that is open minds. and i've been involved in mining projects myself. it brings on a host of environmental objection points or issues. let put it this way, issues in terms getting the project done. so can you speak to that the this sort of dilemma that the environmental community is going to in by saying, yes want lower carbon concentrations and emissions but i don't want a mine in my backyard to talk about that dilemma that you bring up in the book. yeah, if i learned thing about writing a book and maybe you might agree or disagree as a as an author yourself, you only get to ask your audience one question. and the question that i'm asking here is one of choice. what are the choices we're willing to make if we want a green energy transition? are there some places that are too scial to mine? what are the by which we should

be mining and how do we sort of navigate, as you were saying, this sort, of stickiness between folks that do want to mine and folks that are posing then all at the same time, we as a world y, and what i increasingly found, the more i reported for this was a lot of deposits, especially in the united states. the facing a lot of different types of opposition for various reasons that it wasn't my job say whether those opposition points were right or wrong. but when you take all of these proposed projects and you add them all up, then you're not producing any lithium or copper because there's just no is everywhere. and so it becomes extremely hard in order to do it. and, you know, one great example is the twin>a metals, copper and nickel and cobalt project in northern minnesota. it's a proposed mine. it would be underground and company that wants to produce it. is this company known twin metals, which is controlled by a chilean? the problem, though, is you extract the rock that contains those metals it can in some instances when exposed to water form acid and watts in northern

minnesota a lot of waterways that border the great lakes and so there's this inherent tension there says if we allow this deposit to be mined and extracted could we have acid seepage that makes its way into the great lakes, which is, you know, the heart and the beating heart excuse of the north american waterway interest fracture. so you have these ardent conservationists are saying, no, we don't want this here. at the same time, there's a lot of unions, politicians in northern minnesota that do it. and they love to point out that cobar comes from primarily the democratic republic of the congo, where sadly, say sometimes seven year olds are mining this stuff out of the ground. they'll go with their families to the sites and, take pickaxes and shovel, and it's as dangerous as it sounds. i mean, sometimes they get injured, sometimes they die. mining is is no place for a child. and so therein lies the and i'm not necessarily saying it's not black and white. we don't allow this mine. then we're saying children in the congo should die. but i'm saying these are the things we should be thinking through. and we're not thinking through

them now as a country and as a world, really yeah, well, that brings to kind of the next issue which you highlight in the book, but i'd like to get your overview on it that is one of the national security implications of these rare earths and these are metals like lithium and copper. what's going on? what's the international dynamic, for example, between us, china and in terms of developing these resources and is that a national security threat to our country not to be able to produce these metals for not only just transition, you know, the green transition, but for other purposes on top of it. so it's speak to what's going on china and speak to what's going on in the rest of the world in terms of the the metals market in particular, the metals that you address in the book here,

how will that afct our national security? well, robert, remember, it was about four years ago this month. we all experienced the beginning of the coronavirus pandemic. and we all discovered the united states doesn't make any masks. and that, i think, caused a lot of people to be surprised. right. we don't make any masks at all in the united states. and i think for many, the the coronavirus pandemic highlighted the problems of extremely long supply chains of exporting the production of basic everyday goods to places you may never go or never visited. on the other side of the world. and that's sort of a silly, trite involving the masks. but if you think about the all of the metals and minerals that are needed for the energy transition that you just sort of magnify the the complexity of the problem then you start to see why it's so important to focus on where these are. china realized years ago that the world was going electric and so it has focused not only on rare earths we were discussing earlier, but it's also focused

on the production of lithium as well as copper it's one of the it's the world's largest copper producer. it also is a major nickel producer. invest heavily in indonesia, for instance, where a lot of nickel is being processed and produced when you tear down rainforests, which is obviously not popular with a lot of conservationists. so by using these by using these metals as an economic weapon, china has been willing to grow its economy to the second largest in the world. and use that to its to its power, which is the thing that i argue in the whoever controls lithium, copper and nickel and cobalt mining and processing in this century will control the 21st century economy. the way that crude oil and natural gas production, the control of those areas dominated the 20th century economy. so it is a national security issue. and i don't think we're thinking through it enough right now about. how the building blocks of our everyday lives come from these metals and minerals that are coming out of the ground. you know, the battery in your pocket, your laptop your

television, the car you came in on whether it's an internal combustion engine or an electric vehicle, all are filled with critical minerals, metals. and the united states does's a . and that's why i wrote the book. yeah, well, listen, given the sort of the enviro metal issues that we talked about, given the national security issues, what type of policy should we be looking at in the us to make sure we don't fall behind the power curve on getting these metals, getting them produced and meeting our domestic requirement? what what more can we do? the policy in the policy arena? i know all of us and any you that have been involved in the development know about various environmental regulations like nepa and going through the hoops that have to go through to get a project permitted. a lot of hopes, a lot of hope. and what what do you think? where should our policy be heading towards? what are your thoughts there?

well, i tell you what, robert, let's just if you bear with me for a thought exercise, let's say you owned 1000 acres in oregon, just hypothetically. and you convinced that there's a massive lithium deposit there and you want to mine it. where do you start? who do you call? which agency. do you talk to? do hire a lawyer. do you hire several lawyers? do you talk to? oregon state officials? do you talk to people in? washington. it's really confusing. i mean, i spent years talking to people for this book. and i can tell you every single executive that i talked had a different answer. but they all were confused. just confused. just like, what are the steps that we need to take? and, you know, so time and time again, i talked to a lot of in industry and conservationists and environmentalists who also said this is confusing and we don't know how to figure it out. so i would say that there's got to be a lot of clarity and increased clarity from and states as to what the rules. you know, a lot of the mines that i profiled the book have

been on drawing board for more than a decade. anmo clear to when they actually could get approved, which is just sort of mind boggling. so that's a decade without getting a yes or no. countries like canada and australia, which have a lot of mining operations out there, they usually take two or three years. i mean, there can be extreme examples, but it is usually a lot clearer. they're the law that's governed mining in the united states. it's been around since 1872 and it's not been updated a lot. so that was 1872. yes, you heard me right. 150 years ago. that's mind boggling when you think about it. it's not been updated for the minerals revolution, but mining can be extremely lucrative. you can figure it out. the united states does not impose royalties on minerals, minerals and metals that are extracted out of the ground, unlike countries. so if you can get that gantlet of a process, there and you can come out on the other side, you veextremely profitable part of the transition right now. you know, it's you make a lot

more money mining critical minerals than you do actually making electric vehicle. so tell that to general motors b or ford. well, that brings us to the hot button question here in terms of this issue and the policy involved, how do you see this looming in the upcoming presidential election? i've had a feeling that that question was going to come up. so, you know, i mean obviously president biden has made the inflation reduction core to his administration. and it is a singular piece of legislation that not just he, but also senator manchin, who's very pro mining had advocated for and you're not familiar. basically, the inflation reduction will give tax credits for electric vehicles produced withed states. or from a country with a free trade deal with the united states, basically an ally country and that's meant to spur and international mining. and that's had, i think, effects that are not fully understood yet, that are still being sorted out. i mean, one of the ironies that

i point out in the book is if we're not going to allow more mining here in, the country, so i think those are issues that the administration still needs to grapple with a little bit more. i mean, what we do know, though, is that president biden has said that he wants more. in some instances, though, he's taken steps to actually block some mines. so there's a bit of one hand nod, sort of knowing or following what the other hand is doing there with president trump. you know, we'll see what happens if he actually gets back into office. what i wilsay is he wasn't always a friend of mining. i think the assumption is that republicans are sort of just. yes every miner's propose and democrats are note every night that that is proposed and that's definitely not the case. president trump did approve several projects that i profiled in the book right before he left office, which perhaps did those companies no favors at all. because he approved them after january six. but before the inauguration, president biden. so the opticthnecessarily line d kill project known as the pebble project in alaska would be this

massive deposit of massive mine that would produce copper as well as gold. and critical minerals and metals and. this really, really, really irked a lot of folks in the mining industry because they thought had trump support. but his son and tucker carlson love fishing there and so they basically lobbied behind the scenes. and i chronicle this in the book, how they lobbied president trump behind the scenes during the republican national convention in 2020. and he came out a few days after the convention and had the had his administration kill this project. so i would say it's perhaps a maybe it goes both ways. it goes both ways. but this brings up sort of what i what i chronicle the book as well, which is the confusi washe mining industry. it sort of wafts every four years, almost like like an imperial dictate, whoever is the white house. and so that, i think, further adds to the confusion. if we want this energy, we have to have some of what the rules

actually are and that it doesn't change by whoever is in the white house. one small anecdote that then i'll share and we talk about in the book is the twin metals mine in northern minnesota. the proposed mine there that i talk about after president biden took steps that effectively killed the projects. a senior testified on capitol hill to a us senate hearing and with very carefully premeditate that language, she said that the us was not a safe jurisdiction anymore. from a legal perspective, there was very, very pointed words and she chose them on purpose. she's an attorney and. the message that the company was trying to relay there is they felt that there no certainty about what the rules are in the united states anymore, that it just depends on. whoever is sitting on pennsylvania avenue and, that if you want to invest billions of dollars it could be a waste as they had done. the irony, of course, is very same day president biden invoked, the defense production act, to try to increase minerals production in the united states. if you've got whiplash. i did.

no, that's that's that's a good example. let me end with one final question on my part and then we'll turn over to the audience, i'm sure, and you have questions you like to ask. earnest earnest. so in the long run, really, we've seen over the last 30, 40, 50 years technology evolving and changing the way we live, changing a lot of things in our life. how do you see a technical soluti t of metals and, lithium? in other words you've got this the focus here has been on climate change and reducing carbon dioxide emissions. are there ways to do that other than building electronic that are less metals intensive than of evs? sure. so can technology solve this of i don't like up the earth, but i do want to have a green.

i want to have a green system. well, i mean, one thing, you know, i'm going to answer question sort of indirect way and then sort of get there. i mean, this is about so much more than electric vehicles. if we climate change is serious, then there are ways to deal with it. but every single part of our everyday lives going increasingly electric and i have this chapter in the book where i talk about leaf blowers, which might sound extremely innocuous and silly, but for me it was a great the few years ago i got a house with a backyard and decided that i was going to go in all electric. i got an electric lawnmower, an electric weed whacker and yes, and an electric leaf blower. and that led me down this rabbit hole. okay. where do the metals and minerals come from to build this leaf blower that i'm in my backyard resources at reuters i can tap and i couldn't figure out where these metals came from. i didn't know if they came from a different part of the world. i know if seven year old in the congo had extracted cobalt that was in that battery. and to me like that, just highlight it. every single device we're

touching nowadays, most of them are powered b't know what i mea. watches, laptop batteries, etc. it's so much more than our electric and so i think carbon capture does have a role to play perhaps in lessening the transportation industries on the co2 emission front. but we still have to be thinking about where do we want to get the building blocks for all of these that power our lives? and i don't think we're having those conversations right now. so that was my main thrust with the warbelow and that's what i hope people take away. is this the necessary conversation we need to be having or not having right now? yeah, it's not just change, it's everything else correct. everything else that we're doing. yes. great. that's exhaust my set of questions. so what i'd like to do is turn it over to the audience and, see if anybody has any questions like to ask ernst about about the book. yes, sir sir about, resource nationalism, what you think that could be an obstacle. i mean, countries indonesia, for

example, banning the export of raw materials and you know, forcing to do some refinement in the country or, you know these minerals are heavily concentrated in a few countries, maybe, you know, if they can form all back of borders or, you know the contract changes the government in chile or in mexico both have announced that the industry is sort of to some extent reserved for the for the state. so how do you think this might play out on how much it could slow down sort of energy transition? because we need so many of these minerals. yeah i it was a it's a key focus of mine for part of book when i was writing it out in a previous life i used to write about opec. so sort of very familiar, a lot of the machinations there. one chapter in the book specifically looks at bolivia, which has the world's largest lithium resource, which is sort of different than chile has, the world's largest known reserves. so sort of. i don't want to put you all to sleep by explaining the difference the two. but bolivia has a of lithium and

thenation there has actually said it wants to make a kind lithium opaque and use lithium as a way to bolster not only its international prowess, but its its role ■o the ev transition. and so they would want more cathode production there. a cathode is part of a battery. lithium goes inside of and they also want more electric vehicle manufacturing there. now, the united states doesn't actually make any cathodes right now. the us not make any cathodes right now. so the of having one having two made in bolivia it was perhaps a step too far for right now but these are the goals that countries are aspiring towards there has been a huge i would say, awakening in places like la paz and to the power of resource nationalism to know that if they are able to use the metals and minerals under their feet as economic tools, thenn they can increase their economic prowess on the stage and the world stage. so i would yes, it's going to

happen more and more and hope by a lot of these house governments across the world is that they can not only be extractors, but also manufacturers as well. and the other question you mentioned, how are going more and more electric? and at the same time, you mentioned the externalities associated with the existing forms. what extent do you think nuclear is going to play in that energy transition? because it seems it has the least amount of negative externalities for maximum amount of reliable energy. but it seems like for some it's gone consistently missing from these conversations. yeah. and now that we have the cusp of nuclear fusion, we have less energy, you get more. where do you think nuclear is going to be in the coming years? i would say maybe putting aside whether not we should have particular plants or not, it gets back the core theme of the book, which is where are we going to get the building blocks? russia and kazakhstan are the world's largest uranium miners right now. you can't have a nuclear power plant without uranium.

russia is not very popular right now for obvious reasons on the world stage. are we going to rely on russia for clean form of power? i mean, these are the things we're not necessarily grappling with. i mean, you know, spent fuel. so uranium on the front end and spent fuel on the back end or of an ethanol across most places in e states. so are we willing to increase uranium mining in order to have nuclear power? i mean, i think that's another conversation not having right now and need to be having. question question researcher who of the sort of thought leaders you identified in the critical materials in minerals this name might be familiar to folks in the audience. daniel yergin, the famed oil historian, wrote several about oil has now seen the light and is gone to the critical mineral space. hosts the sierra conference here in houston every year. and it used to be and natural gas all the time he is now made i think wednesday is known as copper day so he's of the five day conference so he has of seen

the lights and there's a few other think tanks in the book that i that i talk to and quote a lotncluding go to columbia and that a head of the baker institute here in houston that i found really really great iea has some great data around this international agency as well as others. and i think increasingly as the transition accelerates on the academic side are grappling with this and realizing this is what we need to be wrestling with, but for me, the point of the book was talking to everyday people that might not necessarily the difference between a cathode a.a., but know that more and more batteries their everyday lives. so that's really i wrote the book for and the other questions from the audience. okay well first thank you very much for writing book and so very thoughtful issues on this very topical topic and. with that we'll end the session

and we have a table set up in the back for copies the book for you. so ladies, gentlemen, thank you very much and appreciate attention during our book discussion here. thank you very much. thank