Over the past few weeks, I've written about the risks of dependence on foreign resources that will come with the green energy revolution, at least in the direction favored by the administration. Elements required for critical components cannot be found in massive quantities within the U.S., and many the rare earth elements (REEs) needed for these components are found mainly in China. Today's report from the Financial Times should drive that point home and send up red flags on green mandates, both literally and figuratively:
Prices of some REE metals have doubled in just three weeks amid heavy stockpiling in China that has raised fears over global supplies. . .Japan and the U.S., the world's biggest REE importers, have repeatedly voiced concerns, while complaints from industrial users of REEs have grown. Last year, China cut exports by 40% and temporarily banned exports to Japan during a political dispute.American policymakers should keep China's treatment of Japan in mind. By making our economy entirely dependent on REE imports, the U.S. will be handing Beijing a big, fat veto on American policy, especially in—but not necessarily limited to—foreign policy. Politicians will scoff, but no one wants to be in Congress or the White House when a trade dispute sends the country into recession.
GE and others looking to cash in on the administration's green-energy policies want the White House to take action to guarantee reliable domestic REE sources. Unfortunately, we have no real proven reserves in the U.S., so it will take the kind of exploration and mining that the EPA is attempting to stop in coal and natural gas to find it—if it exists. To produce it on the scale needed if it, we would have to roll back decades of EPA obstacles to American energy production.