The United States has, since the return of President Trump to the White House, seen a nascent renaissance in the country's energy sector. Following four years of Biden administration inaction, America is back, "drill, baby, drill" is once again the order of the day. And it's not just petroleum and natural gas; America is kick-starting development of rare earths and other strategic minerals. All this takes time, but we're off to a good start.
All this is making the energy and mining industries, and the agencies that regulate them, take a step back to determine exactly where we are now regarding America's energy and mineral wealth. That's important. It tells planners, both in the industries and in government, what needs attention, what needs technological development, and what needs deregulation. No, not more regulation; deregulation.
Two industry experts, Iddo K. Wernick, PhD, and Stephen D. Eule, of the National Center for Energy Analytics, have some thoughts.
The National Center for Energy Analytics U.S. Energy Security Index (ESI) offers a single, transparent measure of how the nation’s energy security is faring and where it might be headed. The factors impacting the composite ESI score offer insight to policymakers on the emerging vulnerabilities. Over the last five and a half decades, the contours of the ESI follow the wars in the Middle East of the 1970s, the breakup of the Soviet Union, and the Shale Revolution of the late 2000s. The ESI also shows the impact of new energy technologies in the last decade and their potential impact on U.S. energy security over the next decade.
Productivity gains from innovative technologies like advanced seismic imaging, horizontal drilling, and hydraulic fracturing drove the Shale Revolution that shook international energy markets more than anything in a half century and turned America into an energy superpower. The growth of new energy producing and consuming technologies in the last decade has introduced new vulnerabilities for U.S. energy security, this time not from fuels but from minerals.
Note that the shale revolution has made enormous differences in America's energy picture. It has yielded benefits for Canada, too, as the Great White North has ample reserves of oil-bearing shale and tar sands. Those sources require more refining than the "light, sweet" crude that comes from places like the Persian Gulf, but they are here, they are reliable, and we can use them. Those resources cannot easily be turned off by a hostile power.
Minerals, though, are still another problem.
How well situated is America to meet the demand for these minerals securely? Not very. The United States has ample mineral reserves but presently lacks the capacity to mine and process them into finished metals. Decades of disputes over land rights and onerous environmental regulations have discouraged mining investment. The need to compete with state owned and government subsidized mining concerns that distort international markets have also had their effect. The steady decline in the American mining and mineral processing sector since the 1970s has left the U.S. (and other OECD countries) largely dependent on foreign suppliers for most of the minerals and metals used by energy producers and consumers, often embedded within industrial equipment and manufactured products.
After years of restrictions and underinvestment in mining and mineral processing, today China controls between 50% and 80% of world production for finished aluminum, crude steel, graphite, and rare earths. By comparison, in 1973 the Organization of the Petroleum Exporting Countries (OPEC) cartel produced about 53% of the world’s oil and produces less than 40% today.
Capacity, then, is the problem. There is another problem - I'll get to that in a moment - but industrial capacity is one of the major bottlenecks in claiming America's mineral wealth. There are already industrial solutions in the works, not the least of which is artificial intelligence.
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The problem is that the major technological breakthroughs that enabled the sudden expansion of American gas and oil, like horizontal drilling, increased effectiveness of fracking, and so on, simply don't apply to minerals, which must be dug out of the ground, not pumped out. But, as I'm fond of pointing out, we solve today's problems with tomorrow's technologies, and the sudden resurgence of attention on domestic sources of mineral wealth will be resolved in time; since the start of the Industrial Revolution, it's always happened that when a new technology is needed most, someone will invent it.
The profit motive is a wonderful thing.
No, the problem, as Wernick and Eule put it, is regulation.
The most effective way to reduce the risks to U.S. energy security associated with future minerals supplies must come from regulatory reform and the reindustrialization of America’s mining and minerals processing industries. President Trump issued detailed Executive Orders during both his first and second administration outlining coordinated government actions to encourage the development of domestic mineral supply chains. To reduce the burden of permitting for new mines, the White House Council on Environmental Quality has reformed NEPA regulations clearing a path to reform NEPA procedures in all federal agencies many of which had not been updated in decades.
This is all to the good, but an executive order is only as good as long as the president who signed it is in office. Imagine for a moment what a prospective President Gavin Newsom (shudder) would do to these executive orders; our energy and mineral sectors would, once more, be effectively shut down. We would, more so than ever, be dependent on foreign sources, especially for strategic minerals.
No, for any lasting regulatory reform, Congress has to act. That may be a problem, even now, given the GOP's narrow grip on both houses, especially the House of Representatives. A deregulation scheme passed by Congress and signed into law is much more difficult to undo than one simply put in place with the stroke of a president's pen.
Then again, we are looking at a political party - Democrats - 190 of whom, only on Thursday, voted in the House of Representatives in favor of illegal aliens over police dogs.
Our nation stands at a crossroads. We are in a spiral of development. As our lifestyles grow ever more dependent on technology, we grow ever more dependent on petroleum, cheap energy, and minerals. And when Democrats are in power, in control, they make every effort to squash our petroleum development, our energy sector, and mineral development - mining. Our needs for these materials will only increase. Democrats' desire to squash domestic production will only harden. That makes every election, mid-term, presidential, congressional, local, everyone, more critical than ever.
