Opinion

The Great Debate

Don’t belittle Congress’s attempts to enhance mineral production

By Colin T. Hayes
January 3, 2014

As someone deeply familiar with Sen. Lisa Murkowski’s leadership on the “Critical Minerals Policy Act,” John Kemp’s recent Reuters column criticizing the bill struck me as a cynically misguided reaction to her important work. Sen. Murkowski introduced the legislation in order to, as she put it, “keep the United States competitive and begin the process of modernizing our federal mineral policies.” This is a laudable goal and an important process, particularly as our foreign reliance increases for materials needed to build semiconductors, skyscrapers, and everything in between.

In Kemp’s view, however, the bill “deserves to die” because it would authorize new federal funding that he views as a sop to “special interests.” With all due respect, he’s wrong.

Murkowski’s legislation is one of the few examples of real bipartisan cooperation amid the dysfunction of Washington, having attracted nine Republican and nine Democrat co-sponsors.

The Critical Minerals Policy Act takes commonsense steps to facilitate increased mineral production here at home. Importantly, the bill authorizes funding to improve the United States’ permitting process, which industry analysts at Behre Dolbear have ranked as worst in the world at getting applicants a timely “yes” or “no” response. Such delays strand capital and have contributed to an ongoing decline in America’s share of private investment in exploration, which dropped from 10 percent in 2000 to 7 percent in 2013 according to the SNL Metals Economics Group. In response, the bill brings some needed accountability and resources to the federal agencies considering these permit applications.

The bill also recognizes the importance of geologic surveys, which can jump-start mining activity. The supply chains for mineral commodities begin with entrepreneurial geologists who go out and find this stuff. Sometimes they do it on their own; other times they use government data to get going. Murkowski’s bill places a particular emphasis on the latter, and it should. Up north, the Prospectors and Developers Association of Canada has found that every public dollar spent on geologic data generates approximately $5 in privately-funded exploration work. That’s a pretty good rate of return, even for those who balk at treating government spending as an investment.

Finally, the bill provides new direction to ongoing federal research. It is in response to these provisions that Kemp hits the mother lode of irony. His column basically block quotes the writing of government-funded scientists as a wind-up to criticizing them. Yet it is largely thanks to their work that we know any of the more salient facts found in Kemp’s column. And it has been public servants at the National Science Foundation, the U.S. Geological Survey, and other federal agencies ringing the alarm bell over our mineral supply problems. At least in part, it is now on Congress to fix them.

America’s reliance on foreign mineral commodities is impeding growth in a wide range of domestic industries, and in some cases it is jeopardizing our national security. Congressional testimony, corporate annual reports, federal agency publications, and news coverage all provide ample evidence of this.

As if to emphasize this point, the same week Kemp’s column ran, the Chinese government announced further restrictions on rare earth exports. That matters because China controls almost the entire global supply of these elements, which are found in just about every form of modern technology.

This is an area where placing some faith in the government to act is warranted. For rare earths, the Obama administration and others recently won a ruling from the World Trade Organization that Chinese export practices violated their rules. And Congress proved its mettle in October by passing legislation to avert a supply crisis for the helium gas used in medical imaging, precision welding, satellite launches, and semiconductor production.

For all the commodity-specific challenges that we face, they are mere symptoms of a broader lapse in policymaking that has seen the U.S. lose control over the very foundation of our innovative energy, computing, vehicle and defense manufacturing capabilities. As the focus on growth through exports persists, it is becoming clear that a country lacking raw materials has a harder time winning the global competition to host the factories that put them to good use.

Just imagine the benefits of replicating America’s natural gas boom for even a fraction of the other commodities needed to keep our economy growing. We can and should pursue that outcome.

I couldn’t agree more with Kemp’s enthusiasm for the free market, but we don’t live in an Ayn Rand novel. In many cases, mineral deposits are literally owned by taxpayers and their government is tasked with ensuring their responsible production. Those activities can have a very real impact on the environment, just as failing to produce these commodities can bring economic activity to a halt. So federal, state and local governments have an important and appropriate role to play.

Congress should keep working to advance the Critical Minerals Policy Act. If anything deserves a dismissive response, it’s not the bill but Kemp’s characterizations of it as “tinkering.” Legislation with 18, bipartisan co-sponsors is a valuable platform for an important debate. Kemp and others should engage in it more constructively.
PHOTO: Didymium oxide, a combination of neodymium and praseodymium, two rare earth elements is shown at at Molycorp Mineral’s Mountain Pass Mine in Mountain Pass, California August 19, 2009. REUTERS/David Becke


Comments
11 comments so far | RSS Comments RSS

Any “…bill [that] brings some needed accountability and resources to [ANY] federal agencies…” should receive bipartisan support and a fast track” to passage, bar NONE.

The federal government is the “natural conservator” of mineral deposits owned by taxpayers. By default it has become the policemen overseeing and interpreting “responsible production” of ALL “natural resources”.

In the latter sense, “we, the people” need to assure that “responsible production” does not become synonymous with “no production”, as has often seemed the case regarding profitable and timely access to the nation’s proven oil resources.

Posted by OneOfTheSheep | Report as abusive
 

Correction: Should have read: ‘Any “…bill [that] brings …accountability…to [ANY] federal agencies…” should receive bipartisan support and a fast track” to passage, bar NONE. Such all but immortal entities have proven more than up to the task of getting more than adequate funding for their activities.

Posted by OneOfTheSheep | Report as abusive
 

I’ve read that most legislative bills passed in state legislatures are drafted by business interests and then handed over to one or more legislators to be passed.

And this is nothing new. It has been like that since the inception of the America. And it is same with Federal legislation. It is a process that reeks of corruption and potential corruption.

My guess is that this article is part of a public relations campaign undertaken by a lobbying firm at the behest of special private interests.

The proposed program is not meant to benefit the American people, but rather to benefit the private interests that stand to profit from such a government program.

Posted by AdamSmith | Report as abusive
 

@AdamSmith, you forgot to mention that this opinion piece is written by a lobbyists flunky and so is much of the main stream medias reporting.

Posted by tmc | Report as abusive
 

Way too little, way too late.

The so-called free market and global economy have already destroyed this nation for the benefit of the wealthy class.

If you want to look for “special interests”, you need look no further than that.

As for the rest of us, “a fool and his money are soon parted”.

Posted by EconCassandra | Report as abusive
 

@EconCassandra,

Gee. Was that REALLY the “wealthy class” that packed the malls and parking lots just recently with privately owned automobiles of every price range and age?

Can you define such changes to the economy of the U.S. of late and what has been “destroyed”, as opposed to the usual ebb and flow of good times/bad times throughout history? The personal computer has greatly increased the productivity of each “desk-person” such that hundreds of thousands of “good, middle class jobs” have disappeared.

The change to “just in time” manufacturing and delivery has eliminated countless warehouses and trucking terminals, Inventory clerks, fork lift drivers, and related management. The same thing has happened to drafting and engineering.

The time value of money has allowed “Design-build” process to dominate construction projects. Untold insurance clerks, Girls Friday, Secretaries and lower management of all possibilities are no longer needed. Untold jobs haven’t been “offshored”, they’re just GONE. Forever!

Welcome to a future where fewer and fewer people will be necessary to do what must be done, and the children of today’s productively employed may have no productive place in their own society. Will the “solution” be a new WPA?

Yes, the economists of the world are going to have to give up their population-growth crystal balls and divine the best way to maintain or increase global prosperity with STABLE or even DECREASING pupulation from today’s SEVEN BILLION (and still climbing).

But, if I’m not mistaken, that’s their JOB (now). If not them, WHO?

Posted by OneOfTheSheep | Report as abusive
 

I would like to know more about this topic but reading this lobbyist’s piece doesn’t help at all.

Posted by QuietThinker | Report as abusive
 

OneWithHisSheep wrote: “Welcome to a future where fewer and fewer people will be necessary to do what must be done, and the children of today’s productively employed may have no productive place in their own society. Will the ‘solution’ be a new WPA?”

I already told you the answer. Remember George Pullman, the man you think was just doing what was right by him?

People will only tolerate being hopelessly unemployed for so long. History is replete with examples of what happens next. Pullman’s employees decided to riot after being squeezed by their selfish employer. The hyperinflation and high unemployment of Germany after WWI led to you-know-who. The Detroit area is rapidly becoming a bastion of militant Islam.

We have three choices.

1) We can manage our society by taxing the wealthy and creating jobs. Perhaps you noticed that our infrastructure is falling apart. A new WPA/CCC could fix that. Our children are ignorant compared to countries like South Korea and Finland. A new educational system could fix that. The government could create corporations to mine and process minerals and provide it to local (I stress, local) companies. And so on.

2) We can create a state where the government puts people in their place by force. No job and no prospects? We’ll just bus you to the middle of Nevada because we simply cannot have you hanging around the city center bothering people who really matter. If you don’t succeed, then you weren’t really trying.

3) We can wait for the riots.

#1 would be considered progressive. #2 would be considered Tea Party. #3 is what we are doing now.

Posted by baroque-quest | Report as abusive
 

@baroque-quest: There is no way the Tea Party would ever consider forcing people to be relocated. They are for smaller government. That sort of thing is for the so-called “progressives”, who like to dictate to people at every turn how they can live.

The solution is not one that many folks will like: back to the basics. Basic government that does only what the Constitution requires (interstate commerce and defense), and social values that place emphasis on equal opportunities, not equal outcomes.

At this point neither is simple. Folks have gotten used to living at the government trough, and for the past 40 years people have been moving towards living in their own reality where they act as if the real world actually works like an ivy league schoolroom. The current President is the first person to gain the high office with this mindset, refusing to adjust in any way to reality. It is promulgated by the school systems as well as the media, but can only last so long.

The America built after WWII has basically been running on the moral fortitude of the “greatest generation”. But time has run out. Either the country changes or the future is grim. I don’t have a lot of confidence in the outcomes, but I do what I can by teaching my children what it means to be an independent American citizen (i.e., using their brains rather than social trends), using my vote to attempt to limit government, and trying to make my own way in life without relying on government support. I don’t see that there is much more the average citizen can do.

Posted by stevedebi | Report as abusive
 

Native Americans were pretty successful at living a life without mining… Actually they did mine a little bit to get stones for their tools..

But those that speak up about mining should realize that the roads you drive on and the locks that protect the computer you blog with all come from mining…

That being said I endorse small scale mining not mountain top mining. I believe that with enough small scale miners you can supply the needs of the population with out destroying the planet…….

Posted by Cleanuptime | Report as abusive
 

@baroque-quest,

“We can manage our society by taxing the wealthy and creating jobs.” Actually, we can’t. We can tax the wealthy MORE (they already pay many, many taxes), but the more you tax them the faster they will leave for greener pastures. An intelligent person with money and competent professional advice will always be two steps ahead of a bureaucrat trying to squeeze them.

Government and/or politicians can’t “create jobs” because there is no such thing as a “job”. Yeah, they can hire more minorities to sit on their butts and shuffle meaningless papers, but that does NOT contribute to GNP. Businesses that are growing have growing NEEDS. They hire people to fill those needs, which may be full time, part time, long term or short term.

There are only two ways government can “create jobs” other than ads in the paper for “make-work”. One is by going to war or onto a wartime economy. The other would be a new WPA/CCC. Those wouldn’t be “good jobs”, but they would do something America needs done and take a load off of soup kitchens and food pantries.

Only by getting rid of the unions and liberals that have a choke-hold on America’s dysfunctional “educational establishment” and mandating UNIFORM NATIONAL STANDARDS can we “fix our schools. Russia has shown the world how government-created corporations work…I don’t think that would be a step forward.

“We can create a state where the government puts people in their place by force. No job and no prospects? We’ll just bus you to the middle of Nevada because we simply cannot have you hanging around the city center bothering people who really matter.”

I’ll admit no one wants the job of telling everyone in this nation who dropped out of high school (and a lot who finished without learning anything) that they HAVE NO PROSPECTS or “future” beyond today. But that’s the truth.

Throughout history there has been “civil society” and the “uncivil” who are “put in their place” so they don’t hang around ANYWHERE and bother productive citizens. It’s really true…one is either “with America” or “against America.” Everyone is free to leave for greener pastures (good luck with that).

We staff and pay our police and military to handle riots. Go ahead…make their day.

Posted by OneOfTheSheep | Report as abusive
 

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