It’s not just energy prices. Over the past year, the prices of a wide range of other commodities are also increasing—most notably the “critical minerals” needed for a wide range of advanced technologies. Lithium prices are up more than tenfold over the past two years, copper is up almost 50%, and nickel has roughly doubled.
Against this backdrop, President Biden is seeking to spur the domestic production of critical minerals that are used in electric vehicle batteries and other politically favored energy technologies, under the guise that somehow these technologies will help displace a large portion of our fossil fuel consumption in the near future and lower energy prices.
Ironically, the actions of his own administration, Congressional Democrats, and environmental activist groups are making it harder to accomplish the goal of increasing domestic energy production and manufacturing. Let’s start with the perverse actions of federal regulators since Biden took office.
Until this week, Biden has not been holding statutorily required lease sales on federal lands because of concerns over greenhouse gas emissions. Furthermore, the current sales saw an increase in the royalty rate for produced oil from 12.5% to 18.75%, the first increase since the 1920s.
Just in the past few weeks, the Biden EPA proposed limiting Permian Basin oil production through ozone restrictions. Such restrictions on domestic energy production will not decrease energy demand. They will simply drive up prices and increase our reliance on foreign energy supplies.
The same goes for the U.S. mineral supply chain, which is a critical part of building the wind, solar, and batteries that the Biden administration is trying to subsidize through the illogical use of the the Defense Production Act. To this day, the administration has not signed off on any large new mines and is pumping the brakes on existing major projects, from the Rhyolite Ridge lithium mine in Nevada to the Twin Metals copper mine in Minnesota, due to opposition from environmentalists and Indigenous groups.
In Congress, powerful Democrats are pushing to update America’s 150-year-old mining law and add more restrictions on mining. The General Mining Act of 1872 allows individuals to stake claims and obtain exclusive rights to the hard rock mineral deposits that belong to the United States without paying royalties to the federal government.
However, in the that is currently being pushed, mining companies would need to start paying royalties. The bill would also set stronger environmental restrictions and require the government to consult with indigenous tribes before mining near tribal communities.
The current shortage of critical minerals also stems from a decades-long push from activist organizations to limit mining activity in the United States, and the Endangered Species Act has long been a favorite cudgel of these groups because of its sweeping powers.
A classic example is a lawsuit from the Center for Biological Diversity challenging an Ioneer Corp. open-pit lithium and boron mine over the impact it was having on a wildflower. A Nevada federal court granted the emergency petition to halt the mining project until the U.S. Fish and Wildlife Service could decide on the endangered status of the wildflower.
What’s even more remarkable is that the same Center for Biological Diversity is driving the Biden administration’s push to use the Defense Production Act to increase domestic manufacturing of battery production, of which lithium is the most critical part.
The green energy paradox is that the wind and solar generation, batteries, and electric vehicles require pose their own environmental obstacles due to the land impacts of mining and the toxins and chemicals used in processing minerals. In activists’ attempts to regulate the mining, they have ironically prohibited the resources needed to further their favored energy sources.
As a result of actions like this, mining projects across the nation are halted, slowing the supply of critical minerals needed for all kinds of energy production. Although America has a substantial amount of mineral resources that could be mined, we are in danger of letting China and other foreign countries take over the mineral industry. A crisis, such as the current tension with Russia, will leave the United States vulnerable to price spikes.
China has already obtained significant influence over the global supply chain through fostering the growth of its chemical processing and battery manufacturing industries. Chinese companies are also snatching mining properties all over Africa and South America. In effect, the domestic push for more “green” energy, without a corresponding increase in domestic production of critical minerals, will make America more dependent on “red” energy materials from China.
Responding to this madness, Republicans are calling for faster permits to allow more critical mineral mining on domestic soil and to expand U.S. influence in foreign mine acquisitions. Another way to increase production would be to streamline environmental reviews. By speeding up this process, the permitting process would still receive a thorough examination to withstand any legal challenges while getting the go-ahead months, if not years faster.
Environmentalists operate under the façade that they are pro clean energy. In reality, they are anti-energy due to a skewed understanding that all human impact is bad. With this in mind, they are determined to put a stop to energy production in the U.S., even though doing so will force America to become reliant upon OPEC, China, and Russia. Americans need to understand that energy is essential to human flourishing and that responsibly impacting the environment is the only way to achieve the goal of prosperity and a clean environment for every person on the planet.