California’s dysfunction could squander Lithium Valley’s half-trillion-dollar potential

Welcome to California’s “Lithium Valley,” where infighting, hyper-regulation and litigation run as deep as the estimated 18 million metric tons of lithium sitting beneath the arid landscape. Here, collective dysfunction may prevent a state in financial difficulty from seizing an opportunity potentially worth more than half a trillion dollars. 

What began as a generational opportunity for the region’s economy and for America’s green energy independence has turned into a stalled quagmire of empty promises, paralyzing self-interests and unfulfilled progress. 

Today the many players involved — environmental activists, community groups, elected representatives and private enterprises — stand at a crossroads. They can continue down the divergent paths that have yielded nothing, arguing over regulation, or they can come together and share in the rich economic and environmental rewards offered by this buried treasure. 

Lithium is a vital component in renewable energy technology, and we have long known that there is a rich deposit underground near the Salton Sea. In 2022, the U.S. Department of Energy said Lithium Valley was “powering our clean energy transition,” while Gov. Gavin Newsom called the area “the Saudi Arabia of lithium” and made it an important part of that year’s budget. 

Only in late 2023 did researchers discover the true scope and magnitude of the deposit. Soaring new estimates said there were 18 million metric tons of lithium available, or enough to produce over 375 million electric vehicle batteries, worth an estimated $540 billion.

It is a massive opportunity to boost renewable energy and enhance energy independence for a nation that has had to import as much as three-quarters of our lithium in recent years. And it is an economic opportunity to invigorate Imperial County, where 17% of people live in poverty and 17% are unemployed, more than triple the state average. 

Sadly though, Lithium Valley has thus far generated more unfulfilled plans and lawsuits than EV batteries. 

California’s latest economic blueprint calls out critical minerals as an economic sector the state will “bet” on, and it has already invested well over $100 million. Yet businesses that committed to the effort are reconsidering their plans as progress stagnates. The industry’s attention and resources are being redirected to smaller lithium deposits in more progress-friendly states, including Nevada, Texas, Arizona and Arkansas.

This month, San Diego State University opened a new, state-funded $80 million STEM facility to provide training that will empower the people of Imperial County to reap the benefits of the “white gold” in their backyard. But unless progress in Lithium Valley accelerates rapidly, these students will graduate into an empty local job market.

Each new lawsuit, policy and delay pushes the realization of Lithium Valley’s promise further over the horizon. As we are already seeing, the ramp-up process can take years, during which customers will solidify their supply chains in other regions, and it will become even harder and more expensive for us to compete. Costs will continue to rise and a 10% tax credit for companies that extract, refine and recycle critical minerals like lithium will be gone by 2034.

Lithium Valley could prove that California really is open for business, and that sustainability and environmental stewardship can actually coexist with job growth and prosperity. It could be a national model for efficient, sustainable and locally driven development.

Clean energy, national security and local and statewide prosperity are at our fingertips. But that vision will slip away if the many players involved cannot harness these collective interests, commit to collaborate and prove our ability to succeed.