A Message from AMA Member Ramona Monroe Energy transition and mining
A s an international studies major in college, I asked myself why some countries are rich while others are poor. I do not recall my international studies classes asking or addressing why some parts of the world developed more quickly than others. Rather, it was a question born from experience. I grew up in western Washington and spent one year of high school as an exchange student in Bogotá, Colom - bia. Despite living in an upper-class area of Bogotá, we sometimes had rolling blackouts. These were not scheduled, and we did not know in advance which evenings our neigh - borhood would be the one with no lights. The blackouts occurred because the supply of electricity was not sufficient to meet the demand. This was in a city where the aver - age year-round temperature was 65 degrees Fahrenheit and homes had neither heating nor air conditioning. Peak demand was in the evening when everyone turned on the lights. It was also the early-to-mid 1980s. Gas prices and inflation were soaring, interest rates were 14% or more, and the news was dominated by tensions in the Middle East that were threatening our economy due to our dependence on foreign oil. The U.S. had created the Strategic Pe - troleum Reserve a decade earlier in response to the OPEC oil embargo. A few years later, war in Iran caused a precipitous drop in global oil supplies and a corresponding price spike. The implications of dependence on for - eign oil and how to address it drew national attention. Based on my own observations and experience, I concluded that what really differentiates life in the United States from life in Colombia and other third world nations is the availability of affordable, reliable energy. When those energy supplies were threatened, it created great up - heaval in the U.S. When those energy supplies did not exist, it prevented Colombia from developing at the same rate as the U.S. Twenty-five years later, not
forced the operator into bankruptcy. The mine eventually resumed oper - ations with produced concentrates exported for separation and process - ing because there were no domestic processing facilities available. The lack of U.S. mineral produc - tion is not because we cannot find mineral deposits or because we lack the knowhow to extract and pro - cess them. The primary impediment to U.S. mining today is regulatory hurdles and permitting timeframes. Competing and conflicting inter - ests in the U.S. between supply chain and environmental protection make it hard to develop, adopt and implement a meaningful national strategy to break our dependence on foreign minerals. Technological innovation and recycling will help reduce the gap between supply and demand, but new mines will still be needed. The U.S. mining renaissance Numerous studies demonstrate that the transition to renewable en - ergy sources will require significantly more minerals than past practices. The International Energy Agency, the World Bank, and others have pub - lished studies showing huge increas - es in the demand for minerals as we address climate change. The more aggressive our climate change goals, the more minerals we need. As de - mand rises, mineral production will increase to meet that demand. If not produced in America, those minerals will be produced in countries that do not impose the high environmental standards, strict safety requirements, and advanced labor laws found in the U.S. The U.S. government and the public are becoming more and more aware of and focused on the risks of dependence on foreign minerals. There is significant debate around policies, laws, and regulations need - ed to support a domestic supply of critical minerals while maintaining environmental standards and com - peting with world markets. There is much work to be done. The greatest challenge to open - ing a new mine in the U.S. today is
RAMONA MONROE
much had changed. Debate on the Energy Policy Act of 2005 featured members of Congress complaining that the proposed law did nothing to address our dependence on for - eign oil. Just 10 years later, Congress repealed the ban on exporting U.S. crude oil. What changed? In large part, technology and innovation brought us horizontal drilling and hydraulic fracturing. As a result of these advancements, the U.S. was able to unlock vast quanti - ties of domestic crude and become a net exporter of crude oil. The U.S. mining industry is, in many ways, in the same position as the oil and gas industry 40 years ago. The U.S. is dependent on foreign sources for many of the minerals we depend on, and geopolitical forces threaten those supplies. Let’s use rare earths as an ex - ample. The Mountain Pass Mine in California is one of the richest deposits of rare earth elements in the world. From the 1960s through the 1980s, the U.S. was the largest producer of rare earth minerals. The Mountain Pass Mine closed in 2002 as a result of two things: the U.S. prioritized environmental protection, and economic globalization allowed Chinese suppliers with little to no environmental restrictions to become the cheapest global source. By 2010, the U.S. produced no rare earth minerals. That same year, China embargoed rare earth exports to Japan. The Mountain Pass Mine in California reopened in 2012 but price declines driven by Chinese supplies
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The Alaska Miner
Summer 2022
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