The “Green” Treason

It’s the same old story: The U.S. has abundant natural resources, but refuses to extract and produce them, as usual, because of environmental restrictions and regulatory costs. In the meantime, we are exporting our energy security, job security, and now, national security to China and other emerging markets.

Since 2002, the U.S. has not mined any rare earth elements (REEs) — today used in U.S. smart bombs, silent helicopter blades, night vision, missiles, and tank guns, as well as computers, cell phones, DVD players, and other civilian technologies.

These metals are not even that rare. The nation as a whole has about 13 million metric tons in reserves according to the U.S. Geological Survey. We could make them ourselves. But we don’t.

Leaving that aside for a moment, a modern military, and many common conveniences we today take for granted, would not be possible without these metals. They are essential.

Which is why China has rapidly developed its rare earth element mining sector, with over 55 million metric tons in reserves and 130,000 metric tons of annual production. It now controls over 97 percent of REE mining and refinement in the entire world. China is largely able to do so because it holds about 36 percent of global reserves, has lower labor costs, and because it largely ignores the environmental impact of the REEs. Finally, it lacks competition since the U.S. dropped out of the market.

With the rise of China’s REE near-monopoly, concerns have emerged that the communist dictatorship has too much control over these metals that have become critical to defense and other high technology needs.

So, how could China, an adversary, gain so much control over such a strategically critical industry? Call it the green treason.

image - Molycorp

Molycorp rare-earth mine and processing facilities - Mountain Pass, California (Photo credit: Alan M.)

The problem is that nearly all of the nation’s production of REEs was done by a single company, Molycorp, at a single mine in California, Mountain Pass. From 1965 to 1985, Molycorp was the world’s leader in this industry, but because of a series of main wastewater pipeline spills from the mine, state and federal environmental regulators all but shut it down.

As reported by the Washington Independent, “Mining at Mountain Pass stopped soon after the spills came to light. Industry sources say Union Oil of California, which bought Molycorp in 1977, couldn’t afford to comply with environmental rules and felt that it couldn’t compete with China.” In other words, the environmental regulatory costs made it cost-prohibitive to produce the metals at a competitive price versus the Chinese.

But, rather than help the industry out with the regulatory problems, the government acted punitively against Molycorp. The regulators were indifferent if domestic production was completely turned off. It made sure production of REEs in the U.S. was severely hindered, even though shortages would disrupt the defense supply chain.

Just like that, a few faceless bureaucrats shut down an entire domestic industry — essential to national security — just as the Chinese overseas competitor was emerging. And it was all in the name of radical environmentalism.

Fears of Chinese manipulation in the market have subsequently been confirmed in July when China once again reduced its export quotas for these metals. Since 2005, it has reduced these quotas from over 65,000 metric tons to just over 30,000, according to the Department of Energy. This has caused prices of the metals to skyrocket.

Already, the scarcity of the REEs is having an impact on U.S. defense capabilities. According to a Governmental Accountability Office (GAO) summary, “A 2009 National Defense Stockpile configuration report identified lanthanum, cerium, europium, and gadolinium as having already caused some kind of weapon system production delay and recommended further study to determine the severity of the delays.” Which, unless the U.S. ramps up production, will only get worse as China tightens the entire world’s supply of REEs.

The GAO report notes the decline of the nation’s capabilities in this area: “The United States previously performed all stages of the rare earth material supply chain, but now most rare earth materials processing is performed in China, giving it a dominant position that could affect worldwide supply and prices.” The Department of Defense is undergoing several other evaluations to determine its dependency on these metals, but we already know that it is high.

So, what can be done to ramp up new domestic production? Right now, the U.S. imports about 10,000 metric tons of these metals, or 7.6 percent of global production, according to the USGS.

Unfortunately, the Mountain Pass mine has been gutted. According to the GAO, it “currently lacks the manufacturing assets and facilities to process the rare earth ore into finished components, such as permanent magnets.” It also lacks “substantial amounts of heavy rare earth elements” used in industry and defense. Nonetheless, Molycorp intends to begin mining again this year, and in July offered a successful $393.75 million IPO to rebuild its capabilities.

According to Dr. Madan Singh, director of the Department of Mines and Mineral Resources (DMMR) in Arizona, it could take up to two years to get the mine back online.

But to get the heavy rare earths, we’ll also need to mine in Idaho, Montana, Colorado, Missouri, Utah, and Wyoming. Again, the GAO report is not comforting: “Once a company has secured the necessary capital to start a mine, government and industry officials said it can take from 7 to 15 years to bring a property fully online, largely due to the time it takes to comply with multiple state and federal regulations [emphasis added].”

So, barring regulatory waivers being granted to companies to begin extraction immediately, it won’t be until 2020 at least before the nation’s REE capabilities can be fully reconstituted. In the meantime, it is likely that China will continue to reduce its export quotas, ratchet up prices, and hoard the REEs for its own defense stockpiles.

It’s bad enough that environmental radicalism has made the nation more dependent on foreign sources of fuel, and has exported hundreds of thousands of jobs. Now, it is harming our security as a nation.

It is up to Congress to urgently enact legislation that will cut through the red tape and help this domestic industry get its feet back on the ground. We have to make sure we’re not dependent on a hostile nation like China or a single mine in California in order to maintain first-rate defense capabilities. And our security must not be held hostage to onerous environmental regulations. This green treason must be stopped.

Bill Wilson is the President of Americans for Limited Government. Americans for Limited Government is dedicated to putting the principles of limited government into action. They work with local groups across the nation to promote freedom, limited government, and the principles of the U.S. Constitution. Their goal is to harness the power of American citizens and grassroots groups in order to put the people back in charge in states across the country.

6 Responses to “The “Green” Treason”

  1. Echoing and expanding on Bill Wilson’s comments on rare-earth policies, the folly of closing-off ever-expanding areas of geologically prime U.S. mineral- and energy-bearing lands absolutely boggles the mind. One thing that was pounded into me as a former exploration geologist is that all of the government money in the world cannot buy the TIME that has been squandered by the Congress in allowing our national resource lands to remain untested and off-limits for decades at the behest of environmentalists and those offended by the so-far successful application of the doctrine of “peace through strength”. Proponents of ever-expanding wilderness withdrawals are apparently unconcerned that we must import large quantities Chinese rare-earth elements , which we could possibly produce here if our scientists were allowed the time and access to explore for them, The US reportedly is going to appeal to the World Trade Organization with our concerns regarding China’s rare-earth policies. The very idea of appealing to the WTO for relief from China’s export policies is absolutely ludicrous—China’s Premier Wen Jiabao, reportedly a former geologist, knows exactly how the game works and how important onshore minerals and energy are to the security of his nation; the lesson of our dangerous dependency on imports, reflected in the USGS’s table–2010 U.S.Net Import Reliance for Selected Nonfuel Mineral Materials, is one that our feckless politicians and distracted and shamefully partisan educators and news media have chosen to deliberately ignore in favor of some perverse utopian scheme where bread and circuses and the idea of the U.S. as one big eco-park trumps the well-being and security of the Nation.

  2. Bob,
    Thanks for bringing this up. I heard rumors of possible talks about rare elements recently with the Chinese President, I wondered why elements or minerals? – makes sense now. I found this blogpost that shows even dems have some concerns with rare earth elements, okay it shows at least one democrat.

    Sen. Kirsten Gillibrand (D-N.Y.) is urging Obama to raise issues of access to rare earth elements at the G20 summit.

    “It is critical to America’s national security interests, jobs in many of our existing and emerging industries, and our global climate change goals that fair, sustainable, and open access to [rare earth elements] be ensured. As you know, actions by China have raised concerns around the world that trade in rare earths might be significantly curtailed,” she wrote in a letter to Obama Thursday.,0

  3. I read an article on this issue sometime in the last 6-9 months which revealed that Chinese mining operations for these rare earth minerals is a disaster area compared to ours. Ecological ruin in the area nearby, not to mention unhealthy working conditions for the Chinese workers. Granted, as an American I think it’s better that the damage be over there than here, but I would think an environmentalist would weep where ever the damage to the earth was worst. And even if we’re not perfect here, we’ll still do a darn sight better than the Chinese are doing.

    Remember how, after the Iron Curtain fell, we learned what an ecological ruin the Marxists had made of the environment in the worker’s paradise? Well, if you don’t, it’s because the “mainstream” media did precious little coverage of that little nugget of truth.

  4. Good point Bob. I wish these different groups would join the Tea Party movement – I have heard of some herbal/vitamin groups are upset with the Health Care Bill, too. ENERGY INDEPENDENCE AND STATE SOVEREIGNTY IS THE ANSWER, you know it, I know it, half the country knows it, but our state and national leaders have other ideas that are not in the interest of the People, but protecting themselves, if/when our economy falls – so they will not be blamed.

  5. We should be able to pollute wherever we please, squander at will, and despoil as destiny. That’s our right, no matter what those people downwind and downstream want to scream about. BROWN FOREVER!