Energy transition or not, it is necessary to enable reform

A reliable energy infrastructure that embraces innovation is essential. Without it, U.S. consumers could lose the ability to cool our homes when needed, run our appliances on demand, and even earn a living. Ensuring continued energy reliability requires reforms that reduce the burdens of federal energy, environmental, and permitting regulations.

Counterproductive, many environmental groups want to limit any benefits of deregulation to politically preferred technologies. There is no doubt that broad-based regulatory reforms are essential to the development of alternative energy technologies, which the Biden administration argues are essential given the risks posed by global climate change.

However, economic and technological reality requires that reforms also apply to traditional energy sources. Limiting benefits to politically preferred resources will jeopardize energy reliability and, ironically, hinder the development of politically preferred alternative technologies.

Electric vehicles, solar panels and wind turbines aren’t magical – they need key minerals to operate or produce electricity. China currently dominates the world’s processing capacity for these key minerals, but not because these resources are exclusively located in China. The U.S. has abundant supplies of these minerals, but national regulations discourage their development, encouraging excessive litigation and imposing costly burdens on companies seeking to access these resources.

Extracting critical minerals requires complex techniques. Moreover, China’s environmental regulations are notoriously inept. Expanding production in the U.S., where producers minimize environmental impact, especially compared to Chinese production, will reduce the global environmental impact of critical metals production. In addition to improving environmental impacts, rising global tensions also create an important geopolitical rationale for reliable domestic supplies of minerals such as copper, nickel, zinc and aluminum.

Given both environmental and political realities, there is a strong case for increasing U.S. production. There are many companies trying to safely exploit U.S.-based resources, including NewRange Copper Nickel in Minnesota, Graphite One in Alaska, NioCorp’s Elk Creek Critical Minerals Project in Nebraska, and Stillwater Critical Minerals in Montana.

But there are those annoying regulations.

Perhaps the biggest obstacle is the outdated National Environmental Policy Act (NEPA) permitting process. Due to significant NEPA delays, it could take nearly 10 years to obtain all necessary permits. Such long delays are costly and create enormous uncertainty, which strongly discourages companies considering potential operations on the domestic market.

Worse yet, just because a company has taken up the challenge and obtained the necessary permits does not guarantee that the process will be completed. For example, once fully operational, the NewRange project in Minnesota – backed by global natural resources company Glencore – is expected to provide enough copper to build 1.4 terawatts of wind farms, palladium to power 38 million catalytic converters to reduce air pollution, and Nickel resources will help build more than 20 million electric vehicles. NewRange also plans to recycle 19,000 tons of steel as it modernizes its existing facility.

Despite the economy’s need for all of these resources and the prior issuance of the necessary water permits, the Army Corps of Engineers revoked the water permits for the project in June 2023. The permits were revoked even though the project had received prior approval, nothing had changed since approval, the plan included significant developments in water monitoring and treatment, which included $100 million in water treatment infrastructure and the annual removal of over 1,500 tons of existing sulfates from the St. River system. Louis.

Add in the obstacles of court delays and jurisdictional complexity, and too many projects will be abandoned before they can get started. The result is our currently underdeveloped mining infrastructure. Unfortunately, these types of problems affect the entire energy infrastructure, so it does not only apply to mining. The generation, distribution and transmission of electricity will also suffer. It is therefore important to address these concerns.

To this end, there are opportunities for reforms to introduce common sense. The bipartisan Mining Regulatory Transparency Act, introduced by Senator Catherine Cortez Masto (D-NV) and Senator Jim Risch (R-ID), would remove a court-imposed restriction that is too burdensome but provides no environmental or safety benefits. In a related bill, Senator Bill Cassidy (R-LA) introduced the Revising and Enhancing Authorizations for Review-Affected Projects (REPAIR) Act to streamline the judicial review process. There is also a bill from Senator Joe Manchin (I-WV), chairman of the Senate Energy and Natural Resources Committee, that would implement mining permitting reform for critical minerals projects.

Just as the fracking revolution has made the United States the world’s leading energy exporter, the United States can be a leader in the metals and minerals that form the basis of cutting-edge technology. We can also modernize our current energy infrastructure to provide a modern grid that ensures people have access to safe, reliable and affordable energy today and in the future.

But energy leadership doesn’t just happen. To realize these benefits, the government must implement reforms that remove government-created obstacles.