Published Wednesday, March 23, 2022 in E&E Daily.
Published Tuesday, March 21, 2017 in E&E Daily.
This year, the U.S. Chamber of Commerce has released statements favoring the repeal of the Interior Department’s coal mining Stream Protection Rule, and praising the Dakota Access and Keystone XL oil pipelines.
When it comes to renewable energy, a recent Chamber blog post about solar energy touts its growth but criticizes state policies that encourage people to install photovoltaic panels by allowing them to sell utilities their excess power.
“While the proponents of rooftop solar may get all the attention, it is really America’s utilities that are leading the way with the proliferation of solar use,” the blog said.
Even though the Chamber — and its Institute for 21st Century Energy — has been talking more about cleaner power sources, critics and even some business leaders say the group appears to be more in sync with the interests of fossil fuels and utilities.
“We have been very disappointed in some of the rhetoric that has gone into some of the blogs,” Dan Whitten, spokesman for the Solar Energy Industries Association, said during a recent interview.
Chamber leaders say they don’t believe it’s an “either-or” issue “whether referring to specific sources of energy, or the question of improving the environment versus utilizing energy sources,” said the business group’s spokesman, Matt Letourneau.
But Dan Dudis, head of left-leaning advocacy group Public Citizen’s Chamber Watch, dismisses the group’s talk of resource impartiality.
“They now have some window dressing about renewables,” he said. “But then you actually look at what they are doing, and they have never supported anything that would be helpful to the renewable industry.”
Letourneau rebutted that statement, pointing to Chamber actions over the years that have benefited renewables, including backing the production tax credit. The American Wind Energy Association cheered the move in 2012.
Still, the Chamber is among many groups that sued U.S. EPA over power plant greenhouse gas limits, which would have encouraged the growth of renewables.
Several companies have quit the Chamber because of its stance on climate action, including one of the world’s largest, Apple Inc., in 2009.
Last year, Greenpeace noted that electronic giant Intel Corp. criticized the “negative position on federal climate legislation” from the Chamber and the National Association of Manufacturers.
Also last year, several Democratic senators, including climate hawk Sheldon Whitehouse of Rhode Island and liberal firebrand Elizabeth Warren of Massachusetts, released a report accusing the Chamber of being out of step with its members.
“I guess it must reflect an overwhelming balance in their membership toward traditional fossil fuels,” said Whitten, who used to be a top communications aide for America’s Natural Gas Alliance. The Chamber has been bullish on the growth of gas production.
‘Show me the money’
Chamber of Commerce board members, according to the group’s website, include executives for oil company ConocoPhillips Co., coal company Alliance Resource Partners LP, gas company Sempra Energy and coal company Peabody Energy Corp.
Other board members include executives of nuclear company NuScale Power LLC; utility Southern Co.; Entergy Louisiana LLC; Florida Power and Light Co., which owns solar energy production; and Virginia contractor Bay Electric Co. Inc., which handles large-scale solar projects.
Dudis described the chamber, under current CEO Thomas Donohue, as staking out strategies and political positions that can help the organization’s cash flow.
“Tom Donohue has been very clear that the Chamber goes where the money is,” said Dudis, noting a plaque on Donohue’s desk that, according to a New York Times profile, says, “Show me the money.”
“We have to raise $5 million a week to run this place,” Donohue told the Times in 2013. The article noted the Chamber’s precarious finances before Donohue took over in 1997.
Renewable sources of energy have been growing exponentially. But Dudis said, “The Exxons and Chevrons still have more money to throw around.”
The Chamber, like the fossil fuel industry, has become more reliably Republican, critics argue, turning away from more bipartisan outreach.
The group went from supporting the Clinton administration’s health care reform effort during the early 1990s to now giving its backing mostly to GOP candidates, according to a review of campaign finance records.
The Center for Responsive Politics said the Chamber spent more than $100 million on lobbying in 2016, more than $300,000 in campaign contributions — only roughly $10,000 of which went for Democrats — and more than $29 million in outside political spending.
The Times profile said Donohue was a registered independent. His repeated commitment to free enterprise and fewer regulations, however, puts him closer to the Republican mainstream.
Karen Harbert, CEO of the Chamber’s Institute for 21st Century Energy, worked as Department of Energy assistant secretary for policy and international affairs during the George W. Bush administration.
A rival chamber
When the U.S. Green Chamber of Commerce launched in 2011, founders saw it as a chance to capitalize on what they saw as the other chamber’s reluctance to fully embrace the green agenda.
“At one time, businesses that focused on sustainability and clean energy did not have a voice in traditional/mainstream business organizations and chambers,” CEO Michelle Thatcher wrote in an email.
“And those traditional organizations certainly do not represent the sustainability-focused economy and the companies that are driving it,” she said.
The U.S. Green Chamber, which grew out of the Green Chamber of San Diego County in California, has more than 1,000 members, Thatcher said. They include companies that focus on clean energy and large diversified corporations.
A 2011 article in Fast Company identified firms like Toyota Motor Corp. and the Kimpton Hotel & Restaurant Group Inc. as being involved.
The U.S. Chamber of Commerce remains much larger, claiming to represent the interests of more than 3 million businesses, according to the group’s website. Thatcher doesn’t think many of their affiliates overlap.
She said the U.S. Chamber of Commerce’s agenda is not sustainable and will cripple the economy, “in addition to the devastating effects they will have on our natural environment and our population’s health and well-being.”
She added: “We are NOT in alignment with their energy and environmental platform and are very grateful to be able to provide a different option for the business community.”
The Solar Energy Industries Association, which supports both Republicans and Democrats and benefits from some U.S. Chamber policies but chafes at others, is remaining a member.
“We are a proud member of the business community. We are increasingly becoming a part of the energy mainstream,” Whitten said.
Letourneau said the Chamber’s fight for less regulation and free enterprise benefits all its members, not just fossil fuel developers.
“One of the areas that is particularly relevant today is our focus on the inability to site and permit facilities of all kinds, including renewable projects, which we see as a major impediment to economic growth,” he said.
Letourneau said that the Chamber’s focus on rolling back regulations affecting coal, oil and gas — the latter of which, he points out, has helped reduce carbon emissions — is because of the past administration’s anti-fossil-fuel agenda.
“Over the past eight years, traditional energy sources have been under assault and seen their potential limited through federal regulations and executive orders,” he said.
“The U.S. Chamber is an advocate for market-driven solutions that provide affordable and reliable energy, which is why we’ve pushed back on some of these economically harmful rules.”
Still, Whitten would rather not see the Chamber take such a negative view of policies like net metering, which allows people to make money from installing solar power.
Regarding claims the practice hurts consumers, Whitten said, “We have considerable consumer protection materials that we would happily share with them.”
He said, “There is some sense you can force positive change through engagement. We would just like them to be energy agnostic.”
Dudis doesn’t see it happening — yet. “I do think Donohue leaving is a big piece of that,” he said. “I can’t see it changing while he’s still there.”
SHIPROCK, N.M. — This Navajo Nation town of 8,000 people — named for the towering rock formation that looms in the distance — is a living monument to uranium mining’s deadly legacy.
At the end of Uranium Boulevard here is a 100-acre waste dump overseen by the U.S. Department of Energy. This former uranium mill — which helped build the atomic bombs that ended World War II and fueled the United States in its arms race against the Soviet Union — has dealt the Navajo homeland, or Dinétah, a particularly hard blow.
Navajo mine workers and others on the reservation have suffered high rates of disease linked to contamination.
“That legacy that we relied on has had a big burden on this nation, the Navajo Nation,” U.S. EPA Regional Administrator Jared Blumenfeld told a conference last month in Farmington, N.M., that focused on uranium cleanups.
Despite an ongoing five-year plan to coordinate cleanup efforts among federal and tribal agencies, one high-priority site is now clean and more than 500 polluted mine sites remain. In northeast New Mexico, the Navajo tribe must grapple with dirty water, contaminated land and even radioactive homes, some of which were built with uranium mining waste.
“It’s an untold story,” said Blumenfeld, who leads the Region 9 office in San Francisco. “The biggest hurdle is the sheer number of sites. We’re diligently going down our list.”
Miners extracted almost 4 million tons of uranium ore from Navajo lands between 1944 and 1986, EPA says. While military demand for uranium for bomb manufacturing shrank by the 1960s, nuclear power plants quickly picked up the slack. In 1971, the federal government allowed uranium to be sold on the open market for the first time.
“We need to put our heads together and get rid of those holes that are still open,” Navajo Nation President Ben Shelly told the cleanup conference. “We need to do that right away.”
EPA, which has been helping coordinate the five-year plan, is moving forward with cleaning up the largest abandoned uranium mine on the Dinétah. Decontaminating the Northeast Church Rock Mine will require the removal of 1.4 million tons of dirty soil, an effort expected to take several years.
“This is where the milling took place, right here,” said Navajo anti-uranium activist Larry King, as he stood beside an isolated highway in Church Rock, a town of about 1,000 people near Gallup, N.M.
King, a former uranium miner, talks about the 1979 waste spill from the United Nuclear Corp. site that polluted Rio Puerco — the largest release of radioactive waste in U.S. history.
The spill happened just a few minutes’ drive from King’s home. There, in a rugged landscape with stunning rock formations, one can see hills made from mining waste.
“Just to warn you,” King said, “there are high readings in this area.”
‘Polluters should pay’
General Electric Co., United Nuclear’s parent company, has tentatively agreed to pay $44 million for the Northeast Church Rock Mine cleanup.
“There are others that we have not found yet,” EPA’s Blumenfeld said. “The polluters should pay. The polluter pay principle is something that is going to have to come to the fore here.”
In her book “Yellow Dirt,” journalist Judy Pasternak, perhaps the most well-known chronicler of the Navajo fight with uranium mining pollution, describes how companies walked away from mining operations and left liability behind.
With the United States desperate for uranium to build atomic weapons to compete with the Soviet Union during the Cold War, she wrote, executives and government officials — including regulators at the former Atomic Energy Commission — paid little attention to environmental damage and radiation exposure.
Navajo President Shelley said a joke here goes like this: “Don’t turn the light off, we’ll glow in the dark.”
In 1978 Congress passed the Uranium Mill Tailings Radiation Control Act to give DOE authority over uranium mill waste sites like the Shiprock facility. The 1980 Superfund law and the Interior Department mine-reclamation program helped address some sites. And in 1990, lawmakers created a program to compensate people affected by radiation at mines and from nuclear weapons tests.
But it wasn’t until 2007 that tribal and federal agencies got together to really tackle the lasting problems of uranium mining on the Navajo Nation. Pasternak’s articles in the Los Angeles Times prompted Rep. Henry Waxman (D-Calif.), then chairman of the House Oversight Committee, to press for immediate action.
“We’re on track to make all the commitments we made in the five year plan,” Clancy Tenley, EPA’s regional tribal coordinator, told the cleanup conference. Tenley was among several federal and tribal leaders touting the achievements of the last several years.
EPA and tribal authorities say they have inspected more than 600 homes and other buildings for uranium contamination. The agency has already torn down 34 of those structures. Displaced Navajo families are eligible for financial compensation and temporary housing. EPA says it has participated in rebuilding 17 residences.
Federal and tribal leaders admit that evicting people can be traumatic. But they say they try to make up for it by making sure Navajos get construction jobs and following traditions. Homes, for example, must face east.
“They are so happy,” Darryl Jimson, planner with the Navajo Nation Community Housing and Infrastructure Department, said of the people given new homes. “Some of them cry.”
It has taken decades for the Navajo to learn about the risk of living on contaminated land.
In the 1970s, workers were using the Shiprock dump to practice with heavy machinery. And to this day, it is hard to convince tribal residents to not drink contaminated water.
Many elderly Navajo don’t speak English and have grown used to living off their land. “They just don’t understand or they don’t believe it,” said Chris Mike, an officer with the Navajo Department of Water Resources. “It’s a tough sell.”
Thirty percent of Navajo residents do not have treated water, and numerous water sources have been deemed too dangerous to drink. One alternative is to truck water to thousands of people around the reservation. Residents meet the trucks at designated locations because many homes are too remote.
“We are 60, almost 70 years into this legacy,” Chris Shuey, uranium program director at the Albuquerque-based Southwest Research and Information Center, said in an interview. “And we have left it to the children and the grandchildren of the original miners. And we are going to end up leaving it to our children and our grandchildren.”
Not only does Shuey lament the time it has taken the federal government to realize the severity of the problem, he is also upset that officials do not yet know the full scope of the health problems the Navajo people face. Researchers next year will begin a federally funded study to determine the impact uranium waste has on pregnancy.
“We’ve essentially just started the human health studies in the last 10 years,” Shuey said. “We’re 30 years behind.”
And there is a long way to go. Cleaning up all the contaminated sites will likely take decades. Federal and tribal agency leaders have already began talking about another five-year plan.
“A lot of community people get exhausted and deflated,” Shuey said. At the same time, they want to fight until the Navajo Nation is clean: “They’re hoping that it’s the next 10- to 20-year plan.”
The current cleanup framework has turned decades of haphazard response into a coordinated effort. Still, it is not hard to spot fissures. Many Navajo, for example, say DOE should be playing a larger role — and spending more money — in the cleanup effort.
“There’s a major gap in the response because they don’t have the authority to deal with mines,” Shuey said. “And they’re right now the biggest problem.”
Stephen Etsitty, executive director of the Navajo Nation EPA, which has dozens of workers participating in the cleanup, has called on DOE to close the Shiprock site and move waste off the reservation. Tribal leaders say waste is seeping off the dump.
But that proposal is expensive and complicated. It is being resisted by the government.
“People would be swearing,” a Navajo Nation EPA official said at a cleanup-conference session, referring to how non-American Indians would react if the government handled a cleanup in their community as they have here. “You treat tribes and other communities off the Nation differently. For me that’s unacceptable.”
The Shiprock disposal cell is bordered by 77 acres of a large-rock barrier called riprap. The site is on a terrace overlooking the floodplain of the San Juan River, a major tributary of the Colorado River.
Water from the site seeps into Many Devils Wash nearby. Experts cannot say whether the puddle of reddish-brown water is contaminated, but DOE officials concede they worry about pollutants like manganese, selenium and, of course, uranium.
“We are trying to trace back the sources of those seeps,” said David Schafer, team leader and manager at DOE’s Office of Legacy Management. “The groundwater at Shiprock is a very, very important issue for us.”
Federal and tribal officials say they take pains to consult with the Navajo people, but that is not a simple task. The Navajo Nation sprawls over more than 24,000 square miles, an area larger than some states.
“We have concerns and we should be the ones to have an input. We are the ones living there,” Bess Tsosie of Mariano Lake, N.M., said in an interview. “It’s our land that’s impacted. It’s our health, our animals, our plants.”
Tsosie leads a community group in her area, one of several that have sprung up to give residents a voice. “It’s not for us,” she said. “It’s for our children and our grandchildren.”
Amid anger and a host of unresolved issues, companies are moving forward with plans to mine for uranium again near the reservation. Navajo President Shelly said executives are reaching out to him with what has become a taboo subject — new mining inside the Navajo Nation.
Shelly stressed the tribe’s uranium mining ban, “The Navajo Nation set a mandate, a no-uranium mandate.”
But, he acknowledged, the pressure won’t easily go away. “The Navajo Nation,” he said, “is sitting on the finest uranium there is.”
CHESTER, W.Va. — The ground here is leaking.
Several neighbors have moved away to escape seeps coming out of the hillside. They say the leaks have dampened their backyards and infested their homes with mold.
Curt and Debbie Havens, who put a trailer on their Pyramus Road lot in the mid-1970s and built their current home in 1979, are ready to pack up, too.
“It’s equivalent to seven fire hoses,” Curt Havens said, describing one outflow. “If you lay seven fire hoses side by side, that’s how much water is coming through there.”
Published Wednesday, September 9, 2015, in Greenwire.
MOUNTAIN PASS, Calif. — One large bag of the element lanthanum in powder form, like the ones littering a warehouse floor at Molycorp Inc.’s facility recently, would have cost roughly $100,000 in 2011, after China decided to clamp down on exports.
These days, the cost of that same 1-ton batch of rare earth oxide, found in dusty white plastic pouches branded with the company’s signature blue and green logo, has plummeted to about $8,000.
Low prices have pushed Molycorp, whose 800-acre facility is nestled between brown ragged mountains near the Mojave Desert, into federal bankruptcy protection.
More recently, the company announced it is planning to idle its flagship open pit mine and adjacent processing plant near the new, massive Ivanpah solar plant.
Geologists found Mountain Pass after World War II while looking for uranium. By the 1980s, it was meeting most of the world’s demand for rare earths. Part of the rare-earth-bearing rocks run under Interstate 15. But mining shut down in 2002 due to market woes and Chinese competition.
In 2010, Molycorp took the company public with significant fanfare in preparation for a new era. The 17 chemical elements are essential in numerous technologies. But many Americans didn’t know anything about them until predicted shortfalls sent policymakers and manufacturers into a frenzy.
This embattled site was then synonymous with America’s rare earths renaissance. Now Molycorp’s woes are evidence that China is not letting go of its grip on the market — and that technology companies are making do with less of the elements.
“This is a pretty sick industry,” Jon Hykawy, president of Stormcrow Capital, said during a gathering this summer of rare earth producers, sellers and users in Las Vegas, about an hour’s drive from Mountain Pass.
Beyond scaling back export controls following a World Trade Organization ruling against the country, China has been unable or unwilling to police its mines despite public efforts aimed at reorganizing and streamlining its lucrative rare earths business.
“I don’t think many of us realized the magnitude of that until last year,” Dudley Kingsnorth, one of the world’s foremost rare earths experts, said about illegal mining in China.
Kingsnorth, based in Australia, said Chinese targets for production of technologies with rare earth elements exceed legal mining supplies.
“So effectively, the Chinese government is mandating illegal mining,” he said.
Even though Molycorp was circumspect about its decision to idle Mountain Pass, a spokesman pointed to illegal mining in China as a principal reason for persistent low prices and the company’s woes.
Spokesman Jim Sims said illegal production benefits from the absence of regulation. “As a result, they can produce rare earths at artificially low prices,” he said, “often at a 50 percent discount to what it costs legitimate producers to make these materials.”
Before Molycorp’s announcement, the rare earths processing plant at Mountain Pass was working around the clock. The open pit mine was working only on a day shift. The company once said it would remain open.
Beyond illegal mining, China has also used its rare earths mining dominance to entice many Western companies to secure a foothold in the country in exchange for access.
Even though analysts disagree about the extent of the problem, Kingsnorth said, “The West is essentially losing those jobs to China.”
Molycorp said it would continue supplying its customers from rare earth production facilities in Estonia and China. At the end of last year, the company had 2,500 workers in roughly two dozen sites in 10 countries.
Hykawy said global technology businesses that rely on rare earths for their products are growing less concerned about Chinese reliance. It’s not what companies hoping to develop new U.S. mines want to hear.
“They’re telling me they’re happy to take it from China,” he said. “There’s a significant new willingness to buy from the Chinese.”
More with less
Many companies are happy taking rare earths from China if they need them at all. The high prices of 2010 and 2011 not only led to new mining but also sent companies scrambling to do more with less. And research efforts have made a difference.
When the Department of Energy was ramping up operations at its Critical Materials Institute in 2013, part of the federal government’s response to shortfall concerns, institute Director Alexander King said leaders wanted the latest in lighting technology.
But the T5 fluorescent lamps were more expensive and harder to access because of concerns about the supply of europium and terbium, two rare earths. DOE, he said, even backed off a rule promoting the use of T5s because of supply concerns.
Instead, the institute decided to use light-emitting diodes to address the shortfall. LEDs have smaller amounts of the hard-to-get rare earth elements.
“Fluorescent lighting is basically going away much faster than we thought,” King said.
When it comes to wind power, most turbines in the United States include a gearbox rather then more advanced and efficient direct-drive units. Developers point to the difficulty in accessing the rare earth elements neodymium and dysprosium needed for direct-drive.
Alexander Pulkert, an executive for German giant Siemens AG’s wind business unit, said rare earth users had a positive view of the world until 2009, when the Chinese first showed signs of clamping down.
“Things changed, as you know,” he said.
Now the company wants to design turbines that don’t have “heavy” rare earths, like dysprosium. They’re heavy because of their atomic signature. The term is also used as shorthand for the harder-to-get rare earths.
Neodymium-iron-boron magnets, which are essential in numerous technologies, use dysprosium to withstand high temperatures and keep magnetism. Pulkert said most of the cost of Siemens’ 2013 magnets came from its rare earths.
“All the heavies should get out of the magnet,” he said at the Las Vegas meeting, hosted by Argus Media. “We don’t like heavies in our magnet in the future.”
Price spikes were also a headache to the automotive industry, which relies on rare earths for everything from magnets and catalytic converters to polishing glass.
“Rare elements are used throughout the vehicle,” said Ford Motor Co. research engineer Leyi Zhu.
Zhu said in June that prices were “relatively stable, but they are still double or triple compared to the price before the crisis.” He added, “We don’t like these unpredictable price fluctuations.”
Among rare earths, Zhu pointed to neodymium and dysprosium as top concerns. For now, most people are fine with driving conventional cars. But hybrids are growing in popularity.
“Dysprosium is the single most expensive element used in our hybrid system,” Zhu said. Alternatives, efficiency or recycling haven’t made enough of an impact, he said.
Even though recycling makes only a small difference in the rare earths supply and demand picture, companies like Urban Mining Co. and REECycle Inc. are looking to capitalize on selling used rare earth materials.
In June, the University of Pennsylvania unveiled a system for obtaining neodymium and dysprosium from electronic waste. And last month, the Critical Materials Institute said U.S. Rare Earths Inc. had licensed its invention for recycling elements like neodymium, dysprosium and praseodymium.
‘A capital issue’
During the high times, rare earth advocates often spoke about restarting the entire rare earths supply chain in the United States “from mine to magnets.” In fact, Molycorp has long described itself as the world’s only mine-to-magnets company.
But like the Obama administration’s World Trade Organization complaint against China, DOE-backed research efforts are necessarily designed to help bring new mines online.
Anthony Marchese, chairman of Texas Rare Earth Resources Corp., says the drive for recycling and substitutes could further hurt new mining efforts. “In theory, the answer is yes,” he said, stressing that increased demand could blunt the impact.
Even with market headwinds and China’s efforts to keep its rare earths lead, Molycorp says it hopes for improved conditions to eventually reopen Mountain Pass. Molycorp’s U.S. rivals, meanwhile, are looking to avoid the company’s mistakes.
Marchese, who wants to develop a deposit on state-owned land in Texas, said Molycorp’s woes don’t necessarily mean other mining operations can’t come online in the coming years. He said prices don’t tell the whole story of Molycorp’s bankruptcy.
“The real story, in my opinion, is they forget to mention that they had a plant which was overdesigned in terms of capacity, was way, way over budget, and even today doesn’t work very well,” he said during an interview.
Marchese said at least some of Molycorp’s problems were evident years ago — mainly the lack of heavy rare earths deposits at Mountain Pass. Companies like Rare Element Resources Ltd., Ucore Rare Metals Inc. and Marchese’s Texas Rare Earth Resources Corp. are all looking to compete in that sphere.
Molycorp has always had a tense relationship with mining hopefuls. They have long wanted the United States to promote mining and reduce China’s dominance, while pointing to Molycorp’s weaknesses.
Stormcrow Capital’s Hykawy thinks they have a point. He asked, “Does anybody really believe with the consolidation in China that we’re free of export restrictions? Come on.”
Now that Molycorp is preparing to shut down Mountain Pass, the company is also touting the importance of government help in promoting diversity of supply. State property taxes while the mine is idle, for example, add stress to the company’s viability.
“This size of the rare earth resource is enormous, it exists right in our backyard,” Sims said, “and we can produce rare earth materials there with a very small environmental footprint.”
Molycorp has spent a fortune to create a rare earth separation and processing system — much more difficult and expensive than mining — with almost no discharges and dry tailings.
Capital expenditures in recent years surpass $1 billion. The company once hoped to process the equivalent of 40,000 tons of rare earth oxide per year. It hasn’t come close.
“Right now, the question for policymakers is how to best protect this national asset and enable it to stay in idle status, which would greatly speed the process and reduce the costs of a restart,” Sims said.
Sims also worries about the hundreds of workers who will likely lose their jobs because of the shutdown. They were also part of the U.S. rare earths renaissance.
“Not only is that a huge impact to each of the families involved, but it also represents a loss to the U.S. of intellectual capital and workforce skills that is difficult to measure,” Sims said.
Pro-mining lawmakers in the House have long backed legislation, H.R. 1937, to speed up mining permits. In the Senate, Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) is pushing legislation, S. 883, to address permit delays but also reform the country’s mineral laws and boost technology.
Asked about potential help from the administration or Congress, Marchese said, “They don’t need to put any capital. It would help, but they don’t need to put any capital. What they can do is spotlight the effort.”
The Pentagon or defense committees on Capitol Hill could sound the alarm about securing a domestic supply for weapons systems. That could at least help some projects get elusive financing.
“It’s as simple as that,” said Marchese said about the difficulty of getting money during the down market. “It’s a capital issue.”
‘Industry in peril’
Analysts are divided on the future of rare earths outside China and whether any new mines can come online in the coming years — with or without government backing.
Low prices for a number of commodities have hurt mining economies like Canada and Australia and killed or delayed U.S. projects.
Still, rare earth pushers are not giving up. The company Mineria Activa is promoting a deposit in Chile, and a California entrepreneur is talking up a site near Twentynine Palms.
Ford’s Zhu is bullish on demand, essential to helping mining and processing inside and outside China. He pointed to research suggesting a 700 percent demand increase for neodymium and 2,600 percent demand increase for dysprosium in the coming years.
A big driver will be from technologies meant to reduce global greenhouse gas emissions, said Zhu. “We should have a very strong demand for these two elements in the future,” he said.
Kingsnorth, also a Curtin University professor, said the landscape was “very limited” for producers outside China. “China is dominant,” he said of the global market.
Hykawy said high prices stormed the market. “It worked to reduce or eliminate demand,” he said. “That reduction or elimination has been made quasi-permanent” in some cases. “High prices fix high prices,” the analyst said.
But Hykawy said “low prices are supposed to fix low prices.” The question is how soon and how significantly. “Junior mining outside China, we tell ourselves what we want to hear,” he said.
Elbert Loois, business development manager for Rohstoff Allianz, which focused on the availability of raw materials for industry, said “we don’t do so-called China-bashing.”
At the same time, he said countries and companies have not done enough to secure an “insurance option” for rare earth supplies outside China. “We’re still far away of where we should be,” he said.
Loois called for more cooperation between industrial countries and technology companies to help promote rare earth mining efforts worldwide.
“Market forces will not generate adequate solutions by themselves,” he said, contradicting free marketeers who say the current situation is an example of the market working.
“This industry is in peril. Outside of China. Inside of China, it’s going to be fine,” said Hykawy, especially if prices rise. “We can’t play and try to play on a level playing field with China. We need to innovate. We need to undercut them on cost.”
Kingsnorth described the rare earths business as being in a bunker, but he said, “I hope it’s not too long before we’re in the green and get the ball in the hole.”
Published Friday, October 17, 2014, in Greenwire.
WHITESBURG, Ky. — Sitting at his desk in the Letcher County Courthouse in this Appalachian community of about 2,000 people, Judge Executive Jim Ward frets over the county’s finances.
The sharp downturn in eastern Kentucky coal mining has kicked thousands of workers off the job and slashed severance tax revenues by $3 million during the county’s last spending cycle out of an $11 million budget.
“It has devastated our region, our county,” Ward said during a recent interview. “We are in survival mode,” he said of a county with an unemployment rate above 11 percent, and asked, “What do you do? How do you survive, without making drastic cuts, without having to shut down basic services?”
“We’ve been looking at other avenues and diversifying somewhat, but still the jobs that are coming here now are not going to be the high-paying jobs like the mining jobs.”
The coal downturn, which has been particularly painful in central Appalachia, has become a key talking point in several highly contested political races. And President Obama’s mining and climate change policies have given Republicans ammunition and angered many area Democrats — enough for the party to forever lose parts of its base in this part of the world.
“I feel like the national party has run off and left me. And that’s being honest,” said Ward, a Democrat elected to his post as the county’s top leader. “I just feel like they have forgotten the grass-roots Democrats that put them where they are.”
For more than a decade, Appalachia has been trending Republican because of national Democratic views on things like guns and social issues. For many residents, coal is another strike against a party they’ve been relying on — and voting for — since the New Deal.
“Our county is probably 3-1 Democrat but probably not going to vote that way,” Ward said. “That’s just an opinion from what I hear people say.”
Indeed, there are 11,954 registered Democrats in Letcher County, compared with 3,870 Republicans. Democrats also have a significant registration advantage in the nearby coal field counties of Harlan and Pike.
Democrats top Republicans in voter registration statewide, too. But a new Gallup Inc. poll released today showed more Kentuckians identified as Republicans or leaned toward the GOP, a change from previous years.
If Democrats decide to stay home or vote Republican, it could make a difference for Kentucky Secretary of State Alison Lundergan Grimes, the Democrats’ nominee to take on Senate Republican Leader Mitch McConnell.
Al Cross, a University of Kentucky journalism professor and longtime political observer, said Democrats are indeed risking Appalachian votes to protect the environment and stop climate change. “They are risking them for a worthy cause,” Cross said during an interview.
The problem, Cross said, is that many people feel the rules are coming down like a “sledgehammer.” The Obama administration touts dialogue and flexibility for states, but Cross said it is “sadly mistaken” if it thinks that will change the political repercussions.
Administration officials also point to market issues for coal’s woes. Politicians often blame the White House for all of Appalachia’s problems, but even climate skeptics and GOP sympathizers here understand the problem is not that simple.
Still, they see the administration as having turned a deaf ear to their concerns. And even though Obama talked about giving “special care to people and communities” affected by the clean energy transition during his Georgetown University climate speech last year, Appalachians feel forgotten.
“We really haven’t seen any direct evidence of that,” Cross said. “It does not seem like the administration has delivered on that explicit promise.”
The long-standing Appalachian Regional Commission has since 2010 been working with other federal agencies to coordinate efforts at boosting the area’s economy. In Congress, Reps. David McKinley (R-W.Va.) and Peter Welch (D-Vt.) are pushing legislation to aid displaced miners.
In Kentucky last year, a bipartisan group of politicians launched the Shaping Our Appalachian Region (SOAR) initiative. And in West Virginia, lawmakers are touting the Southern Coalfields Organizing and Revitalizing the Economy (SCORE) effort.
But regulations, not diversifying the economy, have been the main focus on the campaign trail, particularly among Republican candidates.
Speaking to a roomful of community and business leaders at the posh Griffin Gate Marriott Hotel in Lexington last week, McConnell said, “We have a depression here in eastern Kentucky.” The Senate’s GOP leader said turning back Obama administration regulations was at the “top of my list.”
And speaking at a packed rally in rural Estill County, about an hour’s drive away from Lexington, Grimes stressed a point she’s had to repeat numerous times: “Barack Obama is not on the ballot, it’s Alison Lundergan Grimes.”
Fifth District Rep. Hal Rogers (R) has long represented Kentucky’s eastern coal field counties — and his district gave Obama a stunningly low 23 percent of the vote in 2012. The neighboring 6th District, which includes Lexington and Estill, was in Democratic hands between 2004 and 2013, and Obama took 42 percent there two years ago.
But even though the area is far from most of the eastern mines, the coal debate helped new GOP Rep. Andy Barr grab the district last cycle. Estill, which has more registered Democrats than Republicans, favored Barr by a significant margin.
GOP close to taking W.Va. House
Kentucky is a divided state. Most of its congressional delegation is Republican. So is the state Senate. But the House and the governor’s mansion are in Democratic hands.
In neighboring West Virginia, the GOP rise is a more recent trend. During the 1990s the state’s entire congressional delegation was Democratic.
Unless current momentum shifts, Republicans are likely to see Rep. Shelley Moore Capito (R) replace retiring Sen. Jay Rockefeller (D), and former Maryland state Sen. Alex Mooney (R) replace Capito in the 2nd District.
But Republican hopes don’t stop there. In Oak Hill, a small city north of Beckley, several GOP candidates gathered in a tight white-and-beige room in a community center last week to discuss what could be.
Evan Jenkins, the Republican state senator campaigning to unseat 19-term Democratic Rep. Nick Rahall, scoffed at the national Democratic agenda.
“There’s nothing about that agenda that sits well with the people of West Virginia,” he said confidently. “It’s time for a change.”
Jenkins switched from Republican to Democrat early in his political career in the early 1990s. It was probably a good choice. Back then, Democrats were more than 65 percent of the electorate, according to registration statistics.
“When I turned 18, my dad was a Democrat and his dad was a Democrat,” Jenkins said during an interview. “My father obviously lived through the Great Depression, and there’s a lot of legacy from the ’30s and the ’40s.”
But while Democrats still dominate, especially in the southern coal fields, more voters are switching to the Republican column or declaring themselves members of no party. There were roughly 687,000 Democrats statewide in November 2008. Late last year the number was closer to 638,000. It’s now around 607,000.
Jenkins switched back to Republican last year. “The issue of Second Amendment, the issue of health care, the issue of immigration, the issue of the coal industry,” he said. “This agenda has been so devastating to the values and beliefs and the jobs of who we are in West Virginia.”
West Virginia’s new Republican attorney general, Patrick Morrisey, joined Jenkins in Oak Hill and spoke about pushing the state’s Democratic leaders to embrace more litigation against Obama administration rulemaking.
A number of local GOP candidates joined the pair, hoping to ride their coattails. House of Delegates candidate William Hughes spoke about his community of Pax having lost much of its population and now dealing with coal layoffs. Another candidate, Tom Fast, called for a fundamental change in the way things are done in the Democratic-controlled state capital of Charleston.
“I’ve had countless people say they are registered Democrat but are not going to vote Democrat,” said Jenkins. “We are five [candidates] away from having the House of Delegates change parties for the first time in 83 years.”
The last time both Kentucky and West Virginia voted for a Democrat for president was during the Clinton years in the 1990s. Still, Democrats had an edge in Appalachian coal field counties. In 2000 and 2004, several of them went for Democratic candidates.
But when Obama was first on the ballot in 2008, coal field counties in Kentucky and most in West Virginia voted for Sen. John McCain (R-Ariz.). And in 2012, Obama lost every single West Virginia county.
Analysts and area residents will say race has at least something to do with Obama’s deep unpopularity in West Virginia and elsewhere in Appalachia.
“There’s enough people around here who are prejudiced and don’t like him because he’s black,” said longtime Democratic activist Dolores Rozzi, who has lived around the country but settled in Huntington, W.Va., about a decade ago.
Cross said Appalachians would have been upset with any politician who hurt coal. “There would have been upset, concern and people would have been dismayed and they would have felt let down,” he said. “But with Obama, they already didn’t like the guy. I don’t think this is primarily about race, but I think race is an element.”
Rozzi was manning the information desk the other day at the area’s Democratic headquarters downtown, a large room full of signs for candidates like Rahall. There was also a picture of Obama on the wall, one Rozzi put up herself.
“I think the Republicans were sick and tired of losing elections. I think they’ve geared up. They think they’re going to win this one,” said Rozzi. Asked whether she was feeling pessimistic, the fiercely loyal Democrat said, “We’re not feeling bad about anything right now.”
In Kentucky, Shayne Puckett, Estill County Democratic chairman, was also optimistic about his party’s chances. “In the political world right now, there is so much momentum behind the Democrat Party,” he said during the Grimes rally. “The Republican Party, all they have done for the last six, eight, 10 years is say no, no, no.”
What about Obama’s impact on local races? “I think that horse has been beaten enough,” Puckett said. “And American voters are waking up and realizing that may not be the wagon they want to jump on.”
Democrats say they may regain momentum in Appalachia after Obama leaves office. During the 2008 Democratic presidential primaries, both Kentucky and West Virginia picked Hillary Clinton over Obama by significant margins. If she runs for president again in 2016, Clinton will try to woo those voters back into the fold.
Rozzi thinks Clinton can make inroads in her community. “I think it will be a new air to have a woman president,” she said. “Women do things so well.”
But both pro-coal advocates and environmentalists see the Clintons with skepticism. Former President Clinton has spoken in favor of Obama’s climate agenda but has campaigned with pro-coal Grimes. Hillary Clinton, who campaigned with Grimes on Wednesday, made pro-coal statements during her failed presidential run.
“I think the Clintons believe they can carry Kentucky and West Virginia. But it’s going to take some work,” Cross said. “And they may not be willing to work that hard for that small number of electoral votes.”
Even though pro-coal votes may still matter in local races, they didn’t make enough of a difference in the past presidential election, where the industry was counting on an Obama defeat.
Phil Smith, government affairs chief for the United Mine Workers of America, which is supporting a variety of pro-coal Democrats but has distanced itself from Obama, said the importance of pro-coal voters to Appalachian races doesn’t seem to be part of the administration’s political calculation.
“People who live in rural areas are like people everywhere else. They want a secure job, a decent standard of living for their families, safe and robust communities, and the ability to live in peace,” Smith said.
“To the extent that a future Democratic Party can project the message that it stands for those things, it can be competitive. But as things stand right now in rural America, and especially in Appalachia, this administration and the national Democratic Party is not sending that message. And that leaves state and local candidates vulnerable.”