I’ve cooled it a bit on energy related posts because of my position in my company (one that is publicly held and therefore subject to SEC disclosure rules) but I received an email from Sandra Wirtz at the American Resources Policy Network that I think is worth sharing.
Since you regularly cover energy and resource-related issues on your blog, I thought your readership might appreciate some insight into this week’s state visit from China’s Vice-President and the recent WTO ruling on China’s industrial metals export practices, both of which have reignited the debate over the country’s restrictive rare earths elements (REE) policies.
Rare earths were outside the scope of the WTO’s recent case with the Chinese government; therefore, the ruling didn’t touch on the set of 17 elements that we depend on to fuel our smartphones, tablets, and flat screen TVs. In spite of this, some have rushed to the conclusion that now China would be forced to change its REE export policies, too, as the Wizbang blog has also noted.
As we point out on our blog, this is:
a. not the case; and
b. besides the point, as even if the WTO were to rule on REEs in the future, the chances of this affecting China’s policies in our favor would be slim, due to what American Resources Policy Network principal Daniel McGroarty calls “the limits of law in cases of sovereignty.”
While not an official agenda item, as we’re being told, rare earths could find their way into the discussion during this week’s state visit – and McGroarty explains how.
The bottom line, however, is this: we need to get our act together on critical metals – as regardless of what the WTO has ruled or would rule in the event of a new case, and regardless of whether the issue will be touched on in the bilateral talks – we can’t wait for China (and shouldn’t assume that it would be inclined) to change its policies to suit our needs.
We can and we must shape our own strategic and economic future, and maximize our own mineral resource potential – and it is about time Washington created a framework conducive to doing so, rather than adding additional barriers to the responsible exploration and development of the mineral riches we’re blessed to have.
Please help us spread the word by sharing this important issue with your readers, and feel free to contact me with any questions you may have.
Thank you, and best regards,
Director of Research & Staff Blogger
I actually wrote about our exposure to rare earth material shortages and the strategic risk that represents back in October of 2010 at my old blog at Townhall, saying:
During his radio address this past weekend; President Obama said that clean energy reforms were vital for economic recovery and job creation in the United States. He continued to stress that a failure to address climate change in the United States means giving China a competitive edge. He continued:
“Our future as a nation depends on making sure that the jobs and industries of the 21st century take root here in America,” he said in his address. “And there is perhaps no industry with more potential to create jobs now, and growth in the coming years, than clean energy.
We are told that we need “green” energy to stave off the crisis formerly known as “global warming”, now known as “global climate disruption” is modern governmentspeak. We are told that it will create jobs and cut dependence on a foreign resource, namely imported hydrocarbons. As usual with this president and administration, to find the truth, one has to look deeper.
Solar panels and photovoltaic cells used in solar energy recovery are made of rare earth elements. Rare earth elements are incorporated into many modern technological devices, including superconductors, samarium-cobalt and neodymium-iron-boron high-flux rare-earth magnets, electronic polishers, refining catalysts and hybrid car components (primarily batteries and magnets). Erbium-doped fiber amplifiers are significant devices in optical-fiber communication systems.
Who mines the world’s supply of rare earth minerals? China. In 2007, China mined 120,000 metric tons. How many did we mine here in the US? None. Zip. Nada. Zilch.
In a classic Homer Simpson Doh! Moment, our government is scrambling to catch up. According to a September 30th article in Reuters:
Diversifying supplies of the rare metals is important to the Obama administration, because they are used in electric cars, solar panels and wind turbines, all of which the White House is promoting in its overhaul of U.S. energy policy.
China accounts for 95 percent of global production of rare earth metals. Its market dominance came in focus this month when industry sources cited concerns Beijing was apparently holding back shipments to Japan. A Japanese trading firm source has said China ended the de facto ban, but Japanese customers are looking elsewhere for supplies.
One of the reasons that we import oil is because we have put so much potential productive capacity off limits with environmental restrictions. Same story with rare earth minerals, we don’t have them because they aren’t there, we don’t have them because we put them off limits to recovery. Per the same article:
The metals are found in many countries including the United States, Canada and Australia. The United States was the global leader in rare earth metals production in the late 1980s.
The rare metals are often difficult to extract in profitable quantities, which has led their production to be geographically concentrated, said Sandalow.
China holds 37 percent of known rare metal reserves, the United States 13 percent and the rest is in other countries.
Have we traded one cartel for another? Energy analyst Paul Dreisen in an October 3rd article in the Canada Free Press chronicles the arrogance and tunnel vision of the “green” officials:
So here we are, long beholden to foreign powers for petroleum – and newly dependent on foreign powers for “green” energy. National security issues (direct defense needs and indirect dependency issues) once again rise to the fore, and the Defense Department, Government Accountability Office, House Science and Technology Committee and others are busily issuing reports, holding hearings and expressing consternation. Congressman Bart Gordon (D-TN) worries that the United States is being “held hostage.”
As well he should. However, the fault lies not in our stars, but in ourselves – or more precisely in our militant environmentalists.
Back in 1978, I ruined a perfectly pleasant hike in a RARE-II roadless area, by asking an impertinent question. “How do you defend prohibiting any kind of energy or mineral exploration in wilderness study areas?” I asked Assistant Secretary of Agriculture Rupert Cutler and Forest Service Chief John McGuire, “The 1964 Wilderness Act expressly allows and encourages those activities, so that Congress and the American people can make informed decisions about how to manage these lands, based on extensive information about both surface and subsurface values. How do you defend ignoring that provision?”
“I don’t think Congress should have enacted that provision,” Dr. Cutler replied.
“That may be your opinion,” I responded. “But Congress did enact it, and you are obligated by your oath of office to follow the law the way it was written, not the way you think it should have been written.”
“I think we’ve said enough to this guy,” Cutler said to Chief McGuire, and they walked away.
A couple months later, I asked the Denver Sierra Club wilderness coordinator a related question: “Why are you focusing so heavily on areas with the best energy and mineral potential? Isn’t that going to impact prices, jobs and national security?”
“Americans use too much energy, and they’re not going to change voluntarily,” he said. “The only way to make them change is to take the resources away. And the best way to do that is put them in wilderness.”
And every other restrictive land use category that arrogant, thoughtless activists, bureaucrats, judges and politicians can devise, he might have added. Which is how we got where we are today.
It is clear to everyone except the eco-radical bureaucrats that we are simply trading one type of foreign dependence for another: From Saudi oil…to Chinese rare earth metals. Now that we have had our incandescent bulbs legislated out of existence and the last bulb factory in the US closed…
The last major GE factory making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison’s innovations in the 1870s.
The remaining 200 workers at the plant here will lose their jobs.
…we are dependent on the Chinese now for the mercury laden CFL (compact fluorescent) bulbs.
In WW II, we secured “strategic” minerals and now, after years of obstructing the industry, Democrats are now rushing to re-open rare earth metal mines in the face of this national security threat.
Could it be too little, too late?
The last one shut down in 2002 and could take up to 15 years to get it back up and running again. The Democrat/Liberal/Environment lobby “green” agenda has put us on a crash course with strategic dependence on yet another foreign country.