Will Lithium Sink OPEC?

"Instead of begging OPEC to drop its oil prices, let's use American leadership and ingenuity to solve our own energy problems."
Pete Dominici


In last month’s Absolute Return Letter – The Productivity Conundrum – I raised the curtain on fusion energy and how it is likely to affect productivity down the road. I clearly underestimated the impact my mention would have, as I received dozens of comments and questions; hence my decision to dig deeper this month.

Laptop batteries in the bathtub

What happens if you take half a bathtub of water - seawater will do – and the amount of lithium that goes into one laptop battery? The purists will probably say “not a lot” and, at first glance, that is indeed correct.

However, imagine that the ongoing research into fusion energy is a few years further down the road, and scientists find a way to commercialise a technology that has already been proven in research laboratories all over the world. A lot will now happen.

As I said last month, the fusion process - converting hydrogen to helium - releases about 10 million times more energy than what is released when burning the same amount of hydrogen. While a 1000 MW coal-fired power plant requires 2.7 million tonnes of coal per year, a fusion plant which is geared to deliver the same output will only require 250 kilos of fuel per year.

Only a few grams of fuel are present in the plasma at any point in time. This makes the fusion reactor incredibly economical in its fuel consumption, and it adds important safety features to the process. In plain English, combining the half-filled bathtub of water and the lithium from the laptop battery will lead to about 200,000 kWh of electricity – about 30 years of UK per capita electricity consumption (Exhibit 1).

Exhibit 1: The two main ingredients in the fusion process
Exhibit 1: The two main ingredients in the fusion process
Source: Absolute Return Partners LLP, MacroStrategy Partnership LLP

Technically, what happens is that you make two hydrogen isotopes, deuterium and tritium, collide, and the fusion produces a heavier element, helium, and a neutron. Lithium is the fuel that operates the fusion power plants. You can read more about it here.