By Ramona Monroe
As an international studies major in college, I asked myself why some countries are rich while others are poor. I do not recall my international studies classes asking or addressing why some parts of the world developed more quickly than others. Rather, it was a question born from experience. I grew up in western Washington and spent one year of high school as an exchange student in Bogotá, Colombia.
Despite living in an upper-class area of Bogotá, we sometimes had rolling blackouts. These were not scheduled and we did not know in advance which evenings our neighborhood would be the one with no lights. The blackouts occurred because the supply of electricity was not sufficient to meet the demand. This was in a city where the average year-round temperature was 65°F and homes had neither heating nor air conditioning. Peak demand was in the evening when everyone turned on the lights.
It was also the early-to-mid 1980s. Gas prices and inflation were soaring, interest rates were 14% or more, and the news was dominated by tensions in the Middle East that were threatening our economy due to our dependence on foreign oil. The U.S. had created the Strategic Petroleum Reserve a decade earlier in response to the OPEC oil embargo. A few years later, war in Iran caused a precipitous drop in global oil supplies and a corresponding price spike. The implications of dependence on foreign oil and how to address it drew national attention.
Based on my own observations and experience, I concluded that what really differentiates life in the United States from life in Colombia and other third world nations is the availability of affordable, reliable energy. When those energy supplies were threatened, it created great upheaval in the U.S. When those energy supplies didn’t exist, it prevented Colombia from developing at the same rate as the U.S.
Twenty-five years later, not much had changed. Debate on the Energy Policy Act of 2005 featured members of Congress complaining that the proposed law did nothing to address our dependence on foreign oil. Just 10 years later, Congress repealed the ban on exporting U.S. crude oil. What changed?
In large part, technology and innovation brought us horizontal drilling and hydraulic fracturing. As a result of these advancements, the U.S. was able to unlock vast quantities of domestic crude and become a net exporter of crude oil.
The U.S. mining industry is, in many ways, in the same position as the oil and gas industry 40 years ago. The U.S. is dependent on foreign sources for many of the minerals we depend on and geopolitical forces threaten those supplies.
Let’s use rare earths as an example. The Mountain Pass Mine in California is one of the richest deposits of rare earth elements in the world. From the 1960s through the 1980s, the U.S. was the largest producer of rare earth minerals. The Mountain Pass Mine closed in 2002 as a result of two things: (i) the U.S. prioritized environmental protection, and (ii) economic globalization allowed Chinese suppliers with little to no environmental restrictions to become the cheapest global source.
By 2010, the U.S. produced no rare earth minerals. That same year, China embargoed rare earth exports to Japan. The Mountain Pass Mine in California reopened in 2012 but price declines driven by Chinese supplies forced the operator into bankruptcy. The mine eventually resumed operations with produced concentrates exported for separation and processing because there were no domestic processing facilities available.
The lack of U.S. mineral production is not because we cannot find mineral deposits or because we lack the know-how to extract and process them. The primary impediment to U.S. mining today is regulatory hurdles and permitting timeframes. Competing and conflicting interests in the U.S. between supply chain and environmental protection make it hard to develop, adopt and implement a meaningful national strategy to break our dependence on foreign minerals. Technological innovation and recycling will help reduce the gap between supply and demand but new mines will still be needed.
The U.S. mining renaissance
Numerous studies demonstrate that the transition to renewable energy sources will require significantly more minerals than past practices. The International Energy Agency, the World Bank, and others have published studies showing huge increases in the demand for minerals as we address climate change. The more aggressive our climate change goals, the more minerals we need. As demand rises, mineral production will increase to meet that demand. If not produced in America, those minerals will be produced in countries that do not impose the high environmental standards, strict safety requirements, and advanced labor laws found in the U.S.
The U.S. government and the public are becoming more and more aware of and focused on the risks of dependence on foreign minerals. There is significant debate around policies, laws, and regulations needed to support a domestic supply of critical minerals while maintaining environmental standards and competing with world markets. There is much work to be done.
The greatest challenge to opening a new mine in the U.S. today is obtaining the various permits and overcoming legal challenges to obtain both the regulatory approvals and social license necessary to construct and operate a mine. By educating the public about these issues, we can help build support for domestic mining. I highly recommend the independently-produced video found at www.kiteandkeymedia.com/videos/the-truth-about-mining-rare-earth-minerals-and-clean-renewable-energy.
The United States needs to address these regulatory hurdles so that we can produce the minerals we need for national security and economic stability. One possibility might be to form a consolidated appeals process for all permits triggered by an applicant’s published notice of intent to construct a mine, and a deadline to decide all appeals within a specified, limited time period. The United States should look more closely at the procedures used in Australia and Canada to permit a mine in significantly less time than in the U.S. while maintaining robust environmental standards.
Producing these essential minerals in the U.S. prevents dependence on foreign supplies, protects our national security and economy, and ensures some of the highest environmental and labor standards anywhere.