Bernard L. Weinstein is associate director of the Maguire Energy Institute and an adjunct professor of business economics in the Cox School of Business at Southern Methodist University. His email address is bweinstein@cox.smu.edu.
When Americans think of mining, they typically think of coal, oil and natural gas, but dozens of other minerals are extracted by above- or underground mining processes that are critical to our manufacturing and construction industries.
These nonfuel minerals include phosphates, nickel, iron ore, molybdenum, manganese, silver, copper, zinc and rare earth metals, many of which are used in conventional and renewable energy components, consumer electronics and hundreds of other products.
Tesla Motors, whose proposed “gigafactory” that Texas hopes to attract, requires huge amounts of rare earths for its battery packs. Few of us are familiar with rare earths, such as neodymium, samarium and dysprosium, but they are crucial in the manufacturing of jet fighter engines, antimissile systems, night-vision goggles and smart bombs, among other advanced military systems.
Mining contributes mightily to the U.S. economy. According to a recent study by the National Mining Association, in 2011 America’s mining operations contributed $232 billion to gross domestic product. Direct and indirect employment totaled 2.1 million jobs, and the industry paid almost $51 billion in federal, state and local taxes.
In Texas, mining activity adds $13.8 billion to gross state product, supports 129,000 jobs and pays $953 million in state and local taxes.
Most of these minerals can be found in great abundance here at home, but because of cumbersome regulations and permitting processes, we now rely on foreign suppliers for more than half our needs.
More than three dozen environmental laws and regulations impact the mining industry, including the National Environmental Policy Act, the Clean Air Act, the Clean Water Act and the Endangered Species Act.
What’s more, due to a complex and duplicative permitting process for new mineral mines, it can take nearly a decade for a facility to start production — five times longer than in countries with comparable environmental standards, such as Canada and Australia.
This regulatory overburden discourages investment in new domestic projects, sends capital and jobs overseas, and increases our dependence on mineral imports. Consequently, we are 100 percent import-reliant for 19 minerals and more than 50 percent dependent on foreign suppliers for 22.
Further discouraging investment in new mines is the ability of the Environmental Protection Agency to retroactively revoke mining permits issued, reviewed or pending by other federal agencies, a power recently upheld by the U.S. Court of Appeals of the D.C. Circuit.
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