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CERAWEEK: Citing concerns over China, Manchin sours on EV deployment


Manchin hesitant to rely on foreign supply chain

Domestic hydrogen seen as more favorable

  • Author
  • Brandon Mulder
  • Editor
  • Richard Rubin
  • Commodity
  • Electric Power Energy Transition Natural Gas Metals

While offering measured support for the US energy transition, US Senator Joe Manchin said March 11 he was reluctant to support the proliferation of electric vehicles due to their overreliance on foreign supply chains.

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Speaking during the CERAWeek by S&P Global energy conference in Houston, the West Virginia Democrat pinned his EV anxieties on China, which has dominated the global lithium-ion battery supply chain and controls around 80% of the world's raw material refining.

"I'm very reluctant to go down the path of electric vehicles," Manchin said. "I'm old enough to remember standing in line in 1974 trying to buy gas – I remember those days. I don't want to have to be standing in line waiting for a battery for my vehicle, because we're now dependent on a foreign supply chain – mostly China."

China's dominance of mineral mining and refining is thanks to years of investments and policy that has catapulted the country to become a world leader in less than 10 years. While the US has been slower to build out its EV supply chain, the Biden administration's Infrastructure Investment and Jobs Act includes $7.5 billion to develop domestic supplies of key minerals. On March 9, Energy Secretary Jennifer Granholm described the matter as a national security concern.

"We have, as a nation, stood by and watched this global free trade environment allow all of our manufacturing and key pieces of our supply chain go overseas," she said during the CERAWeek conference. "It has compromised our national security, our energy security, and certainly our economic security."

"We need to have the full supply chain here," she added.

Manchin also skewered his fellow Democrats' idea to spend billions to deploy EV charging stations across the country. Last year, while Congress was refining the infrastructure bill, nearly 30 House Democrats proposed increasing the bill's $7.5 billion expenditure for EV charging infrastructure to $85 billion. In addition to charging stations, the $85 billion would have been used to build more grid resilience in preparation for an electrified transportation sector.

Manchin said during the conference he has "a hard time understanding" the use of government money for charging stations.

"I've read history, and I remember Henry Ford inventing the Model-T, but I sure as hell don't remember the US government building filling stations – the market did that," he said. The crowd erupted with applause.

Manchin underscores hydrogen support

While the EV supply chain may be out of US control, that of hydrogen is not, which is one reason behind Manchin's support of the clean fuel.

"I'm a big believer in hydrogen, because I don't have to depend on a foreign supply chain to produce the horsepower we need to a carbon-free society as we move to transition," he said.

Manchin has recently become a vocal supporter of the US hydrogen economy. During a February hearing of the Senate Energy and Natural Resources Committee, he expressed support for hydrogen subsides while indicating that the motivation behind his support is fears over the rising Chinese economy.

"We have to get off the dime and start doing something. Because if we don't, we're going to be left behind and totally subservient to China," he said during the Feb. 15 hearing.

Hydrogen tax credits were a small but key feature within the Biden administration's $1.7 trillion Build Back Better Act, yet they were left hanging in the balance after Manchin pulled his support from the bill over its high price tag.

As proposed, the bill would offer clean hydrogen companies the option to cut their costs via a production tax credit, which would offer up to $3/kg of clean hydrogen depending on the production method's carbon footprint, or an investment tax credits, which would pay for up to 30% of the cost of electrolyzers or other clean hydrogen production equipment.