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XThe Lithium Race Takes Shape in the Salton Sea
David Shultz
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
Located roughly a hundred miles east of San Diego, the Salton Sea is California’s largest landlocked body of water, for now.
Measuring 5 miles across and 35 miles long in its current form, the lake was created by diverting water from the Colorado River into the region for agricultural purposes. Once a vacation destination renowned for its wildlife and wetlands, a series of environmental mishaps and mismanagement have left the lake toxically salty, shrinking and often malodorous. Conditions have gotten so bad that Palm Springs Life Magazine called the region’s transformation “the biggest environmental disaster in California history” in March of 2020.
But against this unlikely backdrop, new life—or at least new industry—is scrambling to set up shop in the region. The Salton Sea, it turns out, is rich with lithium, an element that has taken center stage in the world’s transition to clean energy and its ever-growing demand for batteries. From smartphones to electric vehicles, there’s a pretty good chance that the last battery you used had lithium ions inside. Prices for the metal reached an all time high in September, and futures are up more than 400% since the start of 2021. With Biden’s new economic policy outlined in the Inflation Reduction Act, there are strong financial incentives to move battery production back to North America.
If that’s going to happen the Salton Sea could very well become the lithium capital of North America, or to paraphrase Governor Gavin Newsom, the region could become the “Saudi Arabia of lithium,” and the players are already starting to assemble.
Currently, there are three companies attempting to set up plants in the Salton Sea for direct lithium extraction: EnergySource Minerals, Controlled Thermal Resources and BHE Renewables, a branch of Berkshire Hathaway. All three companies have similar business strategies from a high level, all of which involve geothermal power plants. These plants, which are common in many parts of the world, draw hot, salty water from deep in the ground to create steam which drives a turbine to produce electricity. What makes the Salton Sea so special is that its geothermal brines just happen to contain lithium.
In a 2017 study, researchers from the U.S. DOE Office of Energy Efficiency and Renewable Energy analyzed more than 2,000 samples of geothermal fluid from U.S. sources and found that only 1% had significant lithium concentration. This rare confluence of geothermal activity and lithium presence provides an opportunity for companies to generate electricity and mine lithium simultaneously.
Beyond their marriage of geothermal energy and lithium extraction, the three companies begin to diverge.
According to former dot.LA engagement editor Luis Gomez — whose newsletter Lithium Valle, is essential reading on this topic — EnergySource seems to be out in front early.
“They claim to have the technology that’s patented, they claim to have done the research, they claim to have the funding, and they claim they're ready to go and start production,” says Gomez. “They are kind of considered the canary in the coal mine.”
According to a report from the United States Department of Energy, EnergySource plans to eventually scale production up to over 20,000 metric tons of lithium hydroxide per year using its proprietary Integrated Lithium Adsorption Desorption technology.
Construction on the plant was slated to start earlier this year, but has been delayed. EnergySource has said publicly that lithium production might begin in the second quarter of 2024, but it’s unclear whether this date will also be pushed back. The company has a long history of operating in the region, having run the John L. Featherstone geothermal plant since 2012. The new venture into lithium would leverage that same plant, but without more details about how their proprietary technology works, there’s not much to do but wait and see.
One potential problem facing all three lithium extraction companies is that the Salton Sea geothermal brines are not the same as the brines in evaporation ponds similar to those in Argentina, Chile and Bolivia, where more than half of the world’s lithium is produced. Specifically, the deep geothermal brines in the Salton Sea contain more silica and transition elements, which may complicate the chemistry of purifying the lithium. Still, many researchers are extremely bullish on the prospect of tapping into these reserves. Alex Grant, The Principal at Jade Cove, a research organization focusing on direct lithium extraction technologies, says that much of the skepticism surrounding the technology can be attributed to competing financial interests that are trying to squash the nascent tech’s potential in favor of an established method.
Lithium Mines in the Atacama Salt Flats, Chile from an altitude of 15km via Google Earth. The facility is about 10km wide.
Google Earth
For its part, BHE Renewables, operating as CalEnergy, runs a fleet of 10 geothermal plants in the Imperial Valley. The company had previously announced its intent to set up a direct lithium extraction demonstration plant sometime before the end of 2022 to assess the viability of lithium extraction. If that pilot program goes well, the company could build a commercial-scale facility as early as 2026 with a projected annual capacity of 90,000 metric tons of lithium.
Obviously, having the backing of Berkshire Hathaway comes with advantages and capital. Add into the equation another $15 million in DoE grant money obtained last winter, and BHE appears to be well positioned as a major player in the long term.
Finally, there’s Controlled Thermal Resources. As the only company not already operating a geothermal business in the region, CTR is something of an outsider and dark horse. By 2024, the company hopes to build both a geothermal energy plant and a direct lithium extraction plant to operate in parallel, projecting a capacity to extract 300,000 metric tons of lithium carbonate equivalent annually by 2030. As dot.LA previously reported, Controlled Thermal Resources has partnered with Statevolt, a company that intends to build a $4 billion gigafactory nearby that will run on power from CTR’s geothermal plant and make batteries from the lithium it extracts. It’s a beautiful closed-loop business model. But again, all of this relies on the direct lithium extraction technology, and details are scant.
According to Gomez, despite the typically cut-throat nature of the energy industry, the relationship between the three upstarts in the Salton Sea is often surprisingly cooperative at the moment.
“They want the others to succeed because it kind of gives them the confidence that their technology is also eventually going to succeed,” he says. “It gives confidence to investors.”
Which is all to say, there may well be space for all three companies if the technology is as solid as they claim. If that’s the case, the Salton Sea and its surrounding region may have yet another miraculous transformation up its sleeve.
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David Shultz
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
Cryptocurrency IRA Firms Are Springing Up Around Los Angeles
06:00 AM | February 09, 2022
Photo by Viktor Forgacs on Unsplash
Despite a rattled market and an uncertain regulatory future, cryptocurrencies continue to entrench themselves further in the mainstream. Now, the digital asset class has found relevancy in a new investment market: self-directed individual retirement accounts, or IRAs. And Los Angeles has quickly established itself as an epicenter of the crypto IRA industry.
Self-directed IRAs have long allowed investors to put their money into alternative assets such as gold, silver, platinum and palladium: minerals that are tangible, and stored securely by banks and financial institutions. But cryptocurrencies—which are essentially pieces of data that are authenticated and tracked on digital ledgers known as blockchains—are considerably different. Yet despite their decentralized, inherently riskier nature, that hasn’t stopped investors from pouring their retirement savings into crypto—giving rise to a cadre of new players seeking to manage such funds.
There are a handful of firms in the L.A. area focused on selling self-directed IRAs with a crypto focus, including Sherman Oaks-based Bitcoin IRA; Burbank-based BitIRA; Woodland Hills-based CoinIRA; and Beverly Hills-based Regal Assets, which is largely focused on metal commodities but sets up crypto IRAs for its wealthy client list.
Most notably, Long Beach-based iTrustCapital raised $125 million in Series A funding last month from New York-based Left Lane Capital. The raise gave iTrustCapital an eye-popping $1.3 billion unicorn valuation some four years after its launch, as well as the capital needed to continue its prolific growth.
With more than 150 employees and operations scattered across the South Bay and Irvine, as well as Salt Lake City, iTrustCapital could double in size by the end of 2022, company CEO Todd Southwick told dot.LA. It plans to use the new funding to build out its regulatory and compliance teams, pursue acquisitions and up its marketing budget.
iTrustCapital now holds roughly $2 billion in assets under custody and 27,000 client-funded accounts, with an average size of $55,000 per account. The startup said it has more than doubled its total transaction volume in the last six months alone, to more than $4.5 billion.
iTrustCapital CEO Todd Southwick.
Courtesy of iTrustCapital
Southwick maintains that iTrustCapital is profitable with revenues of less than $50 million in 2021, thanks in part to a pandemic that drove growth in the crypto market. A Series B raise could follow in 2022, though the timing has yet to be decided. “You’re either going to exit via acquisition or go public—I don’t have a preference,” he said.
iTrustCapital’s competitors include Nashville-based Alto Solutions, which is also a self-directed IRA platform and raised $40 million in a Series B round in January. “I think it’s a two-horse race right now [between Alto and iTrustCapital],” Alto founder and CEO Eric Satz said, discounting some of the smaller players active in crypto IRAs.
Like iTrustCapital, Alto also launched in 2018 and plans to use its new funding to grow its operations (Satz said it’s aiming to more than double its 50-person product and engineering team by the end of 2022). The firm currently serves more than 15,000 IRA investors and holds $1 billion of assets under custody.
Bitcoin IRA co-founder and COO Chris Kline.
Sherman Oaks-based Bitcoin IRA, meanwhile, recently expanded its crypto offerings to focus on digital tokens with a market capitalization greater than $200 million—including Cardano (ADA) and Solana (SOL)—and to provide its clients with more options to hedge against market fluctuations, according to co-founder and COO Chris Kline.
“At the end of the day, the crypto industry is growing up,” Kline told dot.LA. “More and more clients are looking for options.” Bitcoin IRA’s strategy is to embrace “legitimate players” offering digital assets with larger market caps, Kline said, in order to avoid potential pitfalls in the market.
As an example, he pointed to the Securities and Exchange Commission’s December 2020 complaint against Ripple Labs and two of the crypto firm’s executives. The SEC alleged that Ripple raised more than $1.3 billion through an unregistered securities offering—the securities being Ripple’s XRP crypto token.
“You don’t want to be putting a coin in [an account] that could basically not be able to be sold at some point,” Kline said. “We’ve dealt with that—with things like what happened at Ripple at the end of 2020, and with the SEC basically making us tell our clients, ‘Hey, this asset may not be liquid again in the future. Beware.’ And a lot of them sold it off, some held it and they’re waiting to see what happens.”
As a result, not everyone is jumping on the crypto IRA bandwagon. Noticeably absent from the market are popular brokerages like Robinhood, E-Trade and TD Ameritrade—though Ameritrade has made overtures indicating that it could dip its toe in the crypto IRA market, according to sources interviewed.
“We are always monitoring and evaluating new products developing in the space, but we don’t have any specific plans to share at this time,” a TD Ameritrade spokesperson told dot.LA.
As more investors gravitate toward cryptocurrencies in search of financial gains, it makes sense that the sector continues to diversify its investment offerings. But for some who are responsible for clients’ savings, the notion of a crypto-focused retirement fund is simply too much risk to bear.
Financial planner Anjali Jariwala, who leads Torrance-based FIT Advisors, told dot.LA that she would be concerned with someone’s decision to use a self-directed IRA to invest in crypto.
“I believe in diversification and prefer IRA-type accounts to be invested in the markets,” she said. “If there is extra money that is in cash or sitting in a brokerage account, that may be used towards more speculative investments like Bitcoin—but I wouldn't try to find a way to invest retirement money.”
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Pat Maio
Pat Maio has held various reporting and editorial management positions over the past 25 years, having specialized in business and government reporting. He has held reporting jobs with the San Diego Union-Tribune, Orange County Register, Dow Jones News and other newspapers in Ohio, West Virginia, Maryland and Washington, D.C.
Here's How To Get a Digital License Plate In California
03:49 PM | October 14, 2022
Photo by Clayton Cardinalli on Unsplash
Thanks to a new bill passed on October 5, California drivers now have the choice to chuck their traditional metal license plates and replace them with digital ones.
The plates are referred to as “Rplate” and were developed by Sacramento-based Reviver. A news release on Reviver’s website that accompanied the bill’s passage states that there are “two device options enabling vehicle owners to connect their vehicle with a suite of services including in-app registration renewal, visual personalization, vehicle location services and security features such as easily reporting a vehicle as stolen.”
Reviver Auto Current and Future CapabilitiesFrom Youtube
There are wired (connected to and powered by a vehicle’s electrical system) and battery-powered options, and drivers can choose to pay for their plates monthly or annually. Four-year agreements for battery-powered plates begin at $19.95 a month or $215.40 yearly. Commercial vehicles will pay $275.40 each year for wired plates. A two-year agreement for wired plates costs $24.95 per month. Drivers can choose to install their plates, but on its website, Reviver offers professional installation for $150.
A pilot digital plate program was launched in 2018, and according to the Los Angeles Times, there were 175,000 participants. The new bill ensures all 27 million California drivers can elect to get a digital plate of their own.
California is the third state after Arizona and Michigan to offer digital plates to all drivers, while Texas currently only provides the digital option for commercial vehicles. In July 2022, Deseret News reported that Colorado might also offer the option. They have several advantages over the classic metal plates as well—as the L.A. Times notes, digital plates will streamline registration renewals and reduce time spent at the DMV. They also have light and dark modes, according to Reviver’s website. Thanks to an accompanying app, they act as additional vehicle security, alerting drivers to unexpected vehicle movements and providing a method to report stolen vehicles.
As part of the new digital plate program, Reviver touts its products’ connectivity, stating that in addition to Bluetooth capabilities, digital plates have “national 5G network connectivity and stability.” But don’t worry—the same plates purportedly protect owner privacy with cloud support and encrypted software updates.
5 Reasons to avoid the digital license plate | Ride TechFrom Youtube
After the Rplate pilot program was announced four years ago, some raised questions about just how good an idea digital plates might be. Reviver and others who support switching to digital emphasize personalization, efficient DMV operations and connectivity. However, a 2018 post published by Sophos’s Naked Security blog pointed out that “the plates could be as susceptible to hacking as other wireless and IoT technologies,” noting that everyday “objects – things like kettles, TVs, and baby monitors – are getting connected to the internet with elementary security flaws still in place.”
To that end, a May 2018 syndicated New York Times news service article about digital plates quoted the Electronic Frontier Foundation (EFF), which warned that such a device could be a “‘honeypot of data,’ recording the drivers’ trips to the grocery store, or to a protest, or to an abortion clinic.”
For now, Rplates are another option in addition to old-fashioned metal, and many are likely to opt out due to cost alone. If you decide to go the digital route, however, it helps if you know what you could be getting yourself into.
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Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
steve@dot.la
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