Minerals and metals insecurity in the United States is a threat to national security. It doesn’t have to be.
“Semiconductors are a small taste of what we’re going to feel about battery cells over the next two decades.“, RJ Scaringe, CEO of Rivian, April 18, 2022
If we learned one thing from Putin’s illegal war, it’s that energy security is our most valuable strategic advantage.
The Europeans ignored it for decades, and it exploded on them in the worst way.
In fact, energy security is now seen exactly as it always has been: the basis of national security.
Japanese bombing of Pearl Harbor should have taught us this reality more than 80 years ago.
So the silver lining of Putin’s illegal war is that it was a great wake-up call for the West.
The objective of pursuing more and more energy self-sufficiency is a constant.
Energy-climate is an equation, of course, and we’ve had far too many smart, important people ignore the first part.
The catastrophe unfolding in Europe, where supply shortages and incredibly high energy prices continue to take their toll, shows us exactly what happens when energy policy becomes totally unrealistic and overly dependent on precarious external forces. .
It demonstrates the essential of “producing as much as possible at home”.
For the United States, there is no better area for this now than our need to rapidly expand the American mining and processing system.
As the Great Energy Transition progresses, mining will increasingly become the driver of our energy security (i.e. national security).
When thinking of adding many more wind, solar and electric (EV) vehicles, one should immediately think of mining, for the minerals and metals that compose them (hereafter “critical materials”).
By researching renewable energy, electric vehicles and their associated infrastructure (eg charging stations), we have no choice but to develop the industrial base to build them.
Without these critical materials, we risk losing our energy security, just as Europe did.
As energy adviser to the OECD, the International Energy Agency has made clear that the Great Energy Transition in which we are embarking is much more material intensive than our current energy complex built on fossil fuels.
From energy to climate, we truly face a moral imperative to dramatically expand our domestic mining and processing of critical materials.
It’s all horribly wrong.
All of this becomes even more apparent as most nations also compete fiercely in the energy race for the critical materials that will dominate the energy world of tomorrow:”China targets 33% share of renewable energy by 2025.”
The request for a long list of Rare earthlithium, steel, graphite, nickel, copper, graphite and dozens of other essentials are already starting to skyrocket.
Our response to the Energy-Climate challenge must be national because existing supply chains and markets are less secure and present single points of failure.
S&P Global reports on Russia’s strategic hoarding: “Russia hosts 16.8% of the world’s rare earth reserves, yet it contributed less than 1% of global production in 2021.”
The West’s fight against Putin could use a lot more electric vehicles right now: Russia is earning around $20 billion a month from oil sales to fund its illegal war.
We need to position ourselves better because our reliance on critical imported materials is already a clear vulnerability.
According to the US Geological Survey, imports cover more than 50% of US consumption for 47 non-combustible mineral products, and we are 100% dependent on net imports for 17 of them.
China controls the most important supply chains, holding 80% of the global rare earth market and 60% of the lithium market.
The American mining industry, for example, could help erase the lithium shortage it drives up the cost of batteries and slows the electric vehicle revolution.
The key issue is the dangerous lag in mining approvals.
Unfortunately, Natural Resources Chairman Raúl Grijalva (D-Arizona) led a group of lawmakers to overturn the general mining law.
It is a proposal of high taxes, steep fees and duplicative regulations that will block climate progress by blocking domestic extraction of critical materials needed for more renewable energy and electric vehicles.
While we need mining policy reform, we need it to lower barriers and encourage more US production, not the exact opposite.
When it comes to tackling climate change, we all know the clock is ticking.
The demand created for critical materials continues to exceed our ability to bring supply online to meet these needs.
For example, it only takes a few years to build a mega-battery factory, but about a decade to obtain the necessary permits for a mine needed to supply just one of the metals for these batteries.
Our mining policies contradict our clean energy goals: on copper and nickel, “Biden administration revokes Trump-approved Minnesota mining lease.”
The good news is that there is growing bipartisan recognition that the global market will not slow our growing import dependency.
Senators Lisa Murkowski (R-Alaska) and Joe Manchin (D-West Virginia) were those who asked President Biden to invoke the Defense Production Act provide federal funds to help start new mines or expand existing ones, for at least five metals.
But much more is needed.
Ultimately, environmental groups themselves should be the biggest proponents of an American mining revolution.
Our industry is as environmentally friendly as any in the world, with many suppliers lacking even basic climate warranties.
Sector ESG scores will continue to favor us.
Not to mention that “producing more here means the critical materials we use won’t have the emissions associated with transporting them here.”
Fortunately, the estimates are considerable.
We have over $6 trillion in known mineral resources, spread across a number of states.
And more E&P is bound to find more: “Saudi Arabia lithium’ is in Southern California.”