The People of America's Oil and Natural Gas Indusry

Rare Earth Minerals Stumbling Block to a Green Future

Kyle Isakower

Kyle Isakower
Posted October 1, 2010

Is the United States preparing to switch from one form of dependency to another?

For years, policymakers have wrung their hands over the nation's so-called dependence on imported oil. To lessen that reliance, some members of Congress, including Rep. Edward Markey (D-Mass.), have pushed for legislation that would force America to move away from oil to renewable and alternative sources of energy, including solar panels, hybrid vehicles, wind turbines, and energy efficient lighting. Markey also co-sponsored the Waxman-Markey climate bill aimed at creating a market for carbon credits and creating a near mandate for renewable energy.

Ironically, Markey also is the author of a Sept. 27 letter to the Departments of Energy, Defense and Commerce and the U.S. Trade Representative stating concern over the availability of rare earth minerals, which are an essential component of all of the new energy technologies listed above.

As his letter explains, China produced about 97 percent of the world's rare earth minerals in 2009, and the country appears to be withholding rare earth shipments to Japan and elsewhere for economic or political reasons.

Markey writes, "The United States, once self-reliant in domestically produced rare earth elements, has become completely reliant on imports over the past 15 years and today has no rare earth mine production...this should give us pause to consider what it might take for China to take similar steps against the United States and how vulnerable the U.S. economy is to disruptions in the supply of rare earth minerals."

This concern over China's present monopoly is real. In his letter, Markey says the Chinese Ministry of Commerce is planning to cut rare earth exports by 72 percent in the second half of this year.

Perhaps Markey should have considered U.S. dependency on these elements before he co-authored the Waxman-Markey bill that would, in effect, mandate a U.S. dependency on Chinese rare earth minerals. While Representative Markey undoubtedly would support resumption of U.S. rare earth mining and processing, it does make one wonder why he so strongly pushed for his climate bill before ensuring that we were not reducing a partial reliance on foreign oil for a complete reliance on foreign rare earth minerals.

Policy makers must understand that all forms of energy come with costs and risks - economic, environmental and geopolitical. There is no silver bullet that will solve all our energy problems. As the oil and natural gas industry has been saying for years, the United States needs a broad portfolio of energy sources including traditional fuels and alternatives.

To preserve U.S. energy security and meet the growing demand from American consumers, this nation will need all of the energy it can get from all sources. Any effort by Congress or the administration to pick one form of energy over another puts U.S. energy security at risk, distorts the marketplace, and could do a terrible disservice to consumers.

ABOUT THE AUTHOR

Kyle Isakower is vice president of regulatory and economic policy at the American Petroleum Institute. With 26 years experience, he is the go-to guy for issues regarding energy and environmental policy and oversees the development of API standards and economic analyses. In his past lives, Kyle has worked on issues related to waste management and remediation, NAAQS and air toxics—and led efforts promote the industry's energy efficiency efforts. Transplanted to Washington from north Jersey over 20 years ago, he remains faithful to the New York Giants, and works diligently to ensure his wife and two children do so as well.