The Organization of the Petroleum Exporting Countries has been in control of the oil supply for decades. Its decisions determine what U.S. customers pay at the pumps.
The control of the materials required to make this transition remains in the hands of those who want it.
China dominates the global processing of critical minerals, which are in high demand for batteries used to power electric vehicles and store renewable energy. To gain greater control over the supply chain, U.S. government officials are negotiating with other countries a series agreements to increase America's access important minerals such as lithium, cobalt and nickel.
It is not clear which of these partnerships are going to succeed or if they can produce anything near the amount of minerals that the United States will need to manufacture a variety of products including electric cars and solar batteries.
The leaders of Japan, Europe, and other advanced nations who are meeting in Hiroshima agree that their countries' reliance on China to process more than 80% of the minerals makes them vulnerable to political pressure by Beijing. Beijing has a long history of weaponizing supply chain in times of war.
The leaders of the Group of Seven countries reiterated on Saturday the need to manage risks caused by vulnerable supply chains of minerals and build more resilient resources. The United States announced a partnership with Australia to share information, coordinate standards and invest in order to create more sustainable and responsible supply chains.
'This is an enormous step from our perspective - a massive step forward in the fight against climate change,' said President Biden Saturday, as he signed with Australia the agreement.
It will be difficult to find all the minerals that the United States needs. Mineral-rich countries often have low environmental and labor standards. Although the G7 speeches emphasized partnerships and alliances, wealthy countries are still competing for scarce resources.
Japan and the United States have signed an agreement on critical minerals, while Europe is currently negotiating a similar deal. Like the United States, these regions also have a much greater need for critical minerals in order to feed their factories than they do supply.
Kirsten Hillman said that Canada's ambassador in the United States had stated in an interview, that although the two countries were allied, they also competed in some areas. She said, 'It's a relationship, but there are certain levels of tension.'
Hillman said that the current geopolitical situation is complex. We are all working together in order to reach the same destination.
She said: 'We need to create a marketplace for products that are created and produced in a manner that is consistent with the values we hold.'
State Department is pushing for a " minerals security partnership" with 13 governments to encourage public and private investments in their critical supply chains of mineral. European officials are pushing for a "buyers'club" for critical minerals, with the G7 nations. This could set certain labor and environmental standards.
Indonesia, the world's largest nickel producer, floated the idea to join with other resource-rich nations to form an OPEC style producers cartel. This arrangement would try to shift power to mineral suppliers.
In recent months, Indonesia also sought a similar deal to Japan and the European Union. Officials in the Biden administration are considering whether or not to grant Indonesia preferential access. This could be through an independent agreement, or as part a framework of trade that the United States negotiates with the Indo-Pacific.
Some U.S. officials warn that Indonesia's lax environmental and labor standards may allow the importation of materials that could undermine the country's new mines as well as the values it holds. A deal of this kind is likely to be met with stiff opposition by Congress, which has criticized the Biden Administration's deal in Japan.
Jake Sullivan (the national security advisor) hinted at this trade-off in a speech he gave last month. He said that negotiations with states producing critical minerals would be needed, but they would raise 'hard' questions about the labor practices of these countries and America's broader environment goals.
Mr. Sullivan was unsure whether the new American agreements would be a club of critical minerals, a fuller negotiations or something else. He said: 'We're now trying to figure out what that will look like.'
Cullen Hendrix is a senior fellow with the Peterson Institute for International Economics. He said that the Biden administration’s strategy for building more secure international supply chain for minerals outside China has been "a bit incoherent" and 'not necessarily sufficient' to achieve this goal.
The climate law of President Biden, which offered tax incentives to investments in the electric car supply chain, especially in the final assembly and battery manufacturing, has played a major role in increasing the demand for minerals. Hendrix, however, said that the law had a limited impact on the increase in the number of mines to supply the new factories.
He said, 'The United States will not be able go through this alone.
Officials from the Biden administration agree that ensuring a reliable supply of minerals required to power electric vehicles batteries is one their greatest challenges. U.S. officials claim that global lithium supply alone will need to grow 42 times before 2050 in order to meet the growing demand for electric cars.
While battery innovations could reduce the demand for certain minerals in the future, there are currently dramatic shortages of these materials. Many officials believe that Europe's dependence on Russian energy after the invasion of Ukraine helped illustrate the dangers of foreign dependency.
Global demand for these resources is fueling a resource nationalism wave that could intensify. In addition to the United States and Canada, other countries have introduced subsidy programs in order to compete with the United States for new mines or battery factories.
Indonesia has gradually tightened restrictions on the export of raw nickel ore. It now requires that it be processed within Indonesia. Chile, which is a major lithium producer, has nationalized the lithium industry to control how resources are developed. Bolivia and Mexico have also done this.
Chinese companies continue to invest heavily in the acquisition of mines and refinery capacities around the world.
Biden's administration appears to be hesitant about making deals with countries that have a mixed record on labor and environment. Officials are looking at ways to improve U.S. mining capacity. This includes faster permits for mines and closer partnerships with allies like Canada, Australia, and Chile.
The White House announced on Saturday that it would ask Congress to include Australia in a list of nations where the Pentagon could fund vital mineral projects. This criteria currently only applies to Canada.
Todd Malan is the chief external affairs officer of Talon Metals. The company has proposed to build a nickel mine near Minneapolis to supply Tesla North American production. Malan said adding Australia to this list, a country with high production standards in terms of environment, labor and Indigenous participation was a smart move.
Malan said, however, that extending the list of countries eligible for benefits under this new climate law to include countries without similar environmental and labor standards would undermine efforts in the United States to build a stronger supply-chain.
He said: 'If you open the door to Indonesia, the Philippines, or anywhere else where you don't share the same standards, then we will view this as being outside the spirit of the incentives that Congress is trying to incentivize for a domestic supply chain and friends'.
Some U.S. officials, however, argue that the supply and demand of minerals will not be met if new agreements are not made with rich resource-rich countries across Africa and Asia.
The Biden administration wants to streamline the US permitting process for new mines. However, approval of such projects could still take many years, or even decades. The auto companies, who are the largest employers in the United States, have warned of future shortages in battery material and called for agreements that would allow them greater flexibility and lower costs.
Adam Megginson is a price analyst for Benchmark Mineral Intelligence. He estimates that the G7 nations and the countries with whom the United States has signed free trade agreements produce 30 percent the world's refined cobalt, nickel and lithium chemicals, but only one percent its natural flake flakes.
Jennifer Harris, former Biden White House official and expert on the critical mineral strategy, said that the United States should be moving more quickly to develop domestic mines. She also said that the United States needs a new multilateral framework that includes countries that are large mineral exporters.
She said the government could set up a stockpile program for minerals such as lithium in times of low prices, giving miners greater assurance that their products will be used.
She said, "There are so many things that need to be done that it's a world of 'both/and.'" The challenge is to pull out more rocks from the ground today.