EDITOR: | September 24th, 2013 | 8 Comments

The United States of Schizophrenia

| September 24, 2013 | 8 Comments

WashingtonDCMetals Policy, this week in Washington. It’s one of the givens when you operate from Washington:  No discussion on resource development progresses very far before I’m asked – “but what’s the Government’s policy?” I used to say, it depends on what part of the U.S. Government you’re talking about.

Now, based on the last few weeks, I’d say it depends on what day it is.

The Friday before last, Anglo American announced it was pulling out of the partnership to develop the Pebble Mine in Alaska – a multi-metal mine that might single-handedly close the copper gap, America’s current copper import dependency, when it reaches full production. The company stated the move was a business decision, driven by a new CEO’s mandate to review all development projects and focus more sharply on operating mines. But no risk review of the Pebble project could fail note the adverse impact of the Environmental Protection Agency’s Bristol Bay Watershed Study with its hypothetical mine review – and the risk that EPA might use the study to justify a unilateral pre-emptive veto of the project even before it was presented for permitting.

Score one for anti-mining advocates like Earthworks, whose director admitted under Congressional questioning this spring that she could name no mine in operation anywhere that had met with the organization’s approval. Northern Dynasty, now the sole owner of Pebble, says it is “99% ready” with the mine plan. You can be sure the anti-mining groups are 100% ready for the next round.

Then came last Wednesday. The U.S. House passed Congressman Mark Amodei’s Strategic and Critical Minerals Production Act, aimed at streamlining the U.S. permitting process, which now averages a world-worst 7 to 10 years.

The bill passed, 246-178, or, in percentage terms, by 57-41% (2% “Did Not Vote”). But that topline does not tell the story of the ideological fault line that marks mining issues in the U.S., and hampers mature discussion of the relation of mining to our manufacturing prowess – and to the technology revolution that all U.S. politicians tout as uniquely American.

To see what I mean, let’s take a closer look at the vote.

In the West Coast states plus the Northeast and Mid-Atlantic, House members opposed the Amodei bill, 73-27%. In the Mountain States plus the Midwest and South – the mining and manufacturing belt, if you will – the bill passed, 72-28%. In the latter, apparently, there is still some appreciation for the ground truth that if we want to see things Made in America, it helps to have metals Mined in America.

On the coasts, however, these niceties are lost – as is the irony that non-mining (and increasingly, non-manufacturing) states feel completely comfortable saddling America’s mining states with a federal “Thou Shalt Not” when it comes to actually digging metals out of the ground. It’s as if the fly-over states need to be preserved – protected from their short-sighted inhabitants – in pristine, development-free conditions, perhaps for that week or two every few years that the bi-coastal set might want to drop in for a quick commune with Nature.  Then back to LaGuardia or LAX, on a return ticket to civilization.

This schizophrenia is captured perfectly at the White House, which early this year launched the Critical Materials Initiative, which aims to “cut in half” the time it takes to develop new materials needed for advanced technologies – and then issued a statement “strongly opposing” the Amodei bill, which aims to streamline the process for metal and mineral mining (the very stuff that makes new materials possible) easily twice as long as other industrialized mining nations.

“Very well, then I contradict myself. I am large:  I contain multitudes:” the sentiment may work in a Whitman poem, but it’s less effective as a federal minerals policy.

I may come as a shock to coastal state legislators, but the lands atop America’s mineral wealth aren’t a theme park for the elites. They are places people live – people who have long understood the need to extract a living from and under the land, in ways that allow them to live on the land. Along the way, they feed the American manufacturing machine – providing the metals and minerals that keep our factories going, send electrons whizzing between our techno-gadgets, and help the U.S. military design and maintain the most formidable war machines in the world.

Or at least they used to.

The rest of the world, of course, spins on, without a worry about America’s gridlock.  Looking at a growing world with scarce resources, China’s state owned enterprises gobble up hard rock projects wherever they can, from Africa to South America and (once again) Australia. Russia’s Kremlin-directed “state capitalism” now puts rare metals portfolios in the hands of favored industries and oligarchs. Industrial democracies like Japan and South Korea – with less aversion than America to symbiotic public-private sector collaboration – seek JVs, off-takes and strategic stockpiles. Canada’s Yukon Territory offers a mining incentive program to spur exploration and development, while Quebec crafts its own Plan Nord to develop the province’s resources north of the 49th Parallel.

Only the U.S. Government swings back and forth between recognizing that mining is critical to economic development and the view that we’ve entered a post-industrial age where mucking metals and minerals from the earth is someone else’s business.

Which way will the U.S. go? As a bellwether, watch the House vote this Thursday on H.R. 687, a bill to approve a federal land swap that would allow a major copper mine to go forward in Arizona. The swap — a compromise to make federal land available for copper mining while the mining company puts land with significant conservationist qualities into the hands of the Bureau of Land Management and the U.S. Forest Service — is an earnest attempt to balance competing “public goods.”  Will U.S. resource policy revisit reality, or head for another bout of schizophrenia?

We’ll find out Thursday what a difference a day makes.



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  • hackenzac

    When it comes to Bristol Bay, the fish are more valuable than copper. With the largest proposed earthen dam in the world in a premier earthquake zone standing between commerce and catastrophe, I can understand some of the opposition to Pebble. Bristol Bay is one of the finest fisheries in the world, a fact not to be taken lightly. When it comes to natural resources, fish trump minerals in a truly rational analysis. Besides. I don’t see copper on anyone’s critical and strategic short supply list for America.

    September 25, 2013 - 3:49 PM

  • Eric M. Klier

    Mr. McGroarty, as always an excellent analysis, right on target. Thank you for stating the truth and continuing to fight this battle although I fear that it may not be winnable given our current political structure. I wish Texas or some other entity would just “exit stage left” so somebody could get on with some real economic development…or maybe our leaders could just pass out fishing poles.

    September 25, 2013 - 6:13 PM

  • Daniel McGroarty

    hack & erik, thanks for the comments. Erik, the biggest danger is that Alaska will “exit stage north” and leave us without the single state with the widest range of metals and minerals. (Thanks, Seward!) hack, you’ve made your decision on the Pebble Mine. My point is that others may prefer to wait for the actual mine plan, and hear all manner of community comment and expert opinion and analysis — in short, the NEPA permitting process. That’s how we do it for all the other mines in the U.S. Pebble should be no different.

    September 25, 2013 - 7:51 PM

    • Eric M. Klier

      I really fail to see the connection between an entity, say Alaska, departing the Union and the loss of all its resources to the Union. On the contrary, unshackling Alaska from the whims of folks on the coasts telling them what they can and can’t do with their own private property, and freeing them from out of control EPA regulations, would allow them to produce more product…which would be for sale to other countries, states, etc. that need them…thereby ultimately increasing the supply of our much needed critical materials. However, given the visceral hatred for states like Texas, perhaps the Union would prefer to continue buying from China.

      September 26, 2013 - 7:40 AM

      • hackenzac

        I don’t hate Texas, just most of their politicians, especially puffed up “patriots” who also call for secession. If you’re a Texan more than a American, I say so long. Those of us here in the deep blue won’t miss you. Good day from Washington State. I’m smoking marijuana right now and you guys think that you’re so libertarian down there trading clean air and water for chemical plants that explode and obliterate city blocks. If Texas wants to be its own country, I am totally OK with that as long as there’s a border fence.

        September 27, 2013 - 3:54 PM

  • hackenzac

    Better to be agnostic than an evangelist. I like the idea of Texas secession. I see many advantages for the remaining 49, more if you take Oklahoma with you. We’re keeping Alaska. Dan, I bet you could get Jennifer Krill of Earthworks behind Bokan if you really pour on the charm. Give her a call. In truth, I am not being facetious at all. In other words, let’s see what you got and for Texas, don’t let the door hit you on the ass on the way out. You’ll make a good buffer especially with the new fence.

    September 26, 2013 - 3:29 AM

    • Eric M. Klier

      Yes, definitely, many advantages for the other 49 states! For example, a North American source for desperately needed minerals…a place to move to where they could get a decent job…or they could just stay with the 49 and go fishing in Bristol Bay when they get hungry.

      September 26, 2013 - 6:06 AM

  • Daniel McGroarty

    I think I’ll leave this for the two of you to hash out, Cross-fire style.

    September 26, 2013 - 8:21 AM

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