Rare Elements Policy Offers a Lesson

American Association of Petroleum Geologists (AAPG)

Let’s face it, most geology news in the popular press is event driven. Soaring oil prices was last year’s headline. Earthquakes and volcanic eruptions grabbed media attention this year.

Rarely, however, do the media talk about the role geosciences play in everyday life, delivering such necessary things as fuel, raw materials and clean water. These are taken for granted.

But this summer the New York Times and U.S. News and World Reportboth published stories about rare earth elements and the increasingly tough competition for a limited supply of these elements.

Rare earth elements are not something I think about regularly. In fact, I had to pull my freshman chemistry textbook for a quick refresher.

Rare earth elements are not rare at all in terms of being scarce. They are the Lanthanides, and are usually separated from a standard periodic table right after lanthanum and placed below the chart. They begin with cerium (atomic number 58) and include neodymium, gadolinium, dysprosium and others, ending with lutetium (atomic number 71).

Maybe it’s just me, but terbium (atomic number 65) rarely rises into my consciousness. Why then am I reading articles about it in the New York Times?

It turns out these rare earth elements are needed for, among other things, green energy and military technologies. They are essential components of magnets used in wind turbines and electric motors, such as those found in the Toyota Prius.

Increases in alternative energy production and more efficient use of fossil fuels through hybrid and plug-in hybrid technologies are driving significant demand for these elements. Yet today the majority of these elements are produced by only one nation: China.

One day after the August Leadership Conference in Tulsa, the New York Timespublished an article titled, “China Tightens Grip on Rare Minerals.” Author Keith Bradsher reported that China currently produces 93 percent of the world’s rare earth minerals and 99 percent of the world’s dysprosium and terbium.

China is now reducing export quotas for these elements, both to ensure it has sufficient supply for its own needs but also to attract foreign direct investment. When manufacturers move their production facilities close to the raw material source it brings technology, investment and jobs to China.

Predictably, most articles about this issue discuss it within the geopolitical context of China, an economic powerhouse, ensuring that its resource needs are met – the implication being that other economies will not be able to secure the resources they need. A July 2009 U.S. News and World Reportarticle titled, “America’s New Energy Dependency: China’s Metals,” by Kent Garber, presents the current situation and how we got here.

Notwithstanding the title of the article, what emerges from Garber’s analysis is less a story of the haves and have-nots – recall that rare earth minerals are not scarce – but rather one of strategic intent in China and no strategy elsewhere.

According to Garber, the United States was the principal producer of these minerals in the 1970s and 1980s. But China’s fabled leader Deng Xiaoping recognized his country’s potential and articulated strategic intent: “The Middle East has oil; we have rare earths,” he said. “We must develop these rare earths.”

That is what they did, eclipsing the U.S. producers and forcing many of them to close or to move.

Fundamentally, this is a story of policy makers in the United States and elsewhere not understanding the long-term and collective impacts of individual policy decisions (or lack thereof). This is, in part, due to the nature of our two-party system. But it also is due to policy- makers lacking a framework for thinking about these issues.

The U.S. National Research Council recognized this deficiency. In 2008 its Committee on Earth Resources issued a report titled “Minerals, Critical Minerals and the U.S. Economy,” that seeks to present a framework for policy makers to use in evaluating minerals and their relationship to the U.S. economy.

The study urges policy-makers to begin assessing the criticality of all minerals, enhance the data collected and analyzed by U.S. agencies and fund research to improve our understanding of global mineral resources.

In my mind, the rare earth minerals story has strong parallels with issues confronting the oil and gas community.

As Congress considers opening or restricting access to public lands for exploration and development, restrictions on well stimulation techniques like hydraulic fracturing, or tax policies that discourage rather than encourage production, are they considering the long-term effect these decisions will have?

Please join me on the GEO-DC blog to discuss this further. Look for the October Washington Watch post and share your ideas in the comment section of what these long-term effects for rare earth minerals, energy technologies, the economy and oil and gas might be.

As a scientific and professional association this is an area where members can provide valuable information and expertise. Come join the conversation.

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