“The COVID-19 pandemic has brought renewed attention to the fact that our nation is heavily dependent on imports for a wide array of goods and technologies that are essential to our health, economy, and security. We need to reverse our damaging dependence on China and other nations and rebuild domestic supply chains for everything from personal protective equipment to clean energy technologies,” U.S. Senator Lisa Murkowski (R-AK), sponsor of the American Mineral Security Act, July 27, 2020
In what should be America’s biggest “it’s time to wake up” moment for 2020:
Specifically, this relates to the ongoing transition to a far less carbonized energy complex. As America stands today, we are unwisely laying the foundation for another huge energy problem: over relying on outsiders for the essential components of the energy world of tomorrow.
This would be our growing need to import the various rare earth minerals and other materials that are essential to the development of cleaner sources of energy. These vital natural resources are used to manufacture windmills, solar panels, and electric car batteries, not to mention many of them are used in oil and gas technologies, medical equipment, computers, cellphones, and even military and national defense systems.
After an Executive Order by President Trump in 2018, the Interior Department released a list of 35 minerals the administration considers to be “critical.” The U.S. is fully dependent on imports for 14 of them, and imports 75% of its supplies of another 10 or more. As stated by the great Mark P. Mills: “As recently as 1990, the U.S. was the world’s number-one producer of minerals. Today, it is in seventh place.”
This mounting reliance on foreign suppliers puts us in a very precarious position in our goal to win the energy race, a glaring climate vulnerability that must be addressed. Not surprisingly, China has a firm grip over many of these supply chains, such as crucial materials like lithium, cobalt, and rare earths.
Whether its for $2 trillion or $5 trillion, Joe Biden’s climate plan for huge amounts of wind and solar farms and electric vehicles will surely require huge amounts of rare earths and other materials. We could thus transfer trillions of dollars of wealth into China and even further increase U.S. dependence on the Chinese Communist Party.
In fact, the U.S. gets around 80% of its rare earths from China, which became an obvious concern when the trade war kicked off back in June 2018. Unfortunately, even though we realize that China could severely disrupt our high tech sector and green energy economy, we continue to do very little about a very big problem: from 2010, “Why is China still hoarding its rare earths?”
At the time, then U.S. Secretary of State deemed it a “wake-up call.”
And as the world continues to deploy more renewable energy systems and electric cars, the competition for the essential materials that comprise them will be increasingly (and dangerously) fierce. For rare earths, China has “a market share of between 80% and 90% of the mining, processing and manufacturing of the minerals and their end-use products,” holding some 40-45% of rare earth deposits.
Just imagine electric cars, an emerging market where China will have every strategic reason to hoard vital materials.
The International Council on Clean Transportation reports that global electric car sales surpassed 2 million for the first time ever in 2018, with the bulk of that coming from China. Bloomberg New Energy Finance forecasts that China will account for half of the 30 million electric cars globally by 2030.
And farther out, unless we act now, our situation will become even worse – and the transition to renewables and electric cars could elude us. In May, the World Bank estimated that the “production of minerals, such as graphite, lithium and cobalt, could increase by nearly 500% by 2050, to meet the growing demand for clean energy technologies.”
This explains why our OECD energy advisor, the International Energy Agency, affirms “Clean energy progress after the Covid-19 crisis will need reliable supplies of critical minerals.” No kidding: “If You Want ‘Renewable Energy,’ Get Ready to Dig.”
Looking forward, gaining full access to America’s domestic resources will be essential to our ability to grow, defend ourselves, and dominate in the energy world of tomorrow. We must finally get serious about America’s need for a mining revolution to give the wind, solar, and electric car revolutions a real opportunity to materialize.
Many of our environmental groups and politicians claiming that we must get deadly serious about combating climate change are, themselves, not being serious by not promoting this critical development of America’s mining industry.
In fact, simply wanting the mining to “be done over there” could lead to environmental calamity. Not just for more American jobs and government tax income, mining such critical materials here is a climate change necessity: we have more stringent environmental laws and safeguards than almost all other suppliers. And there is an obvious moral component to all of this too. Others, such as cobalt leader Congo, deploy child and slave labor.
Installing an energy transition that depends on outside supply chains riddled with such clear problems would be a dangerous reversal for a U.S. energy security ranking that has continued to be lifted since the shale oil and natural gas revolution took flight in 2008.
The good news is that we know that we have a world-class resource base: “The U.S. is home to more than $6.2 trillion worth of minerals and metals.” U.S. Energy Secretary Dan Brouillette confirms “How America Can Win the Critical Minerals Battle Against China.”
And like the shale revolution has shown, the more we explore, the more we realize how much we have. Bear Lodge in Wyoming and Mountain Pass in California are just two key areas. And thankfully, legislation is winding its way through Congress to ease exploration efforts, such as Senator Murkowski’s American Mineral Security Act.
In a variety of areas, we have no choice but to emerge from COVID-19 more self-sufficient, and those blocking our required mining revolution to shift to the energy world of tomorrow are playing right into China’s hands – again.