The United States of Schizophrenia
Metals 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.
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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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