Great Decisions 2012 Preview: Energy, Resources and Geopolitics

The Great Decisions briefing book and television series on PBS take a closer look at energy and geopolitics. Who is wining in the competition for the world’s energy resources, and what does this mean for the U.S.? For more in-depth analysis, order the 2012 briefing book and DVD.

 

Current Situation

Humans require more from the Earth than ever before. Rare earth minerals have become the new Gold Rush, as governments explore drilling for deposits of the seventeen elements at the bottom of the periodic table. Countless industries rely on lightweight magnets produced by rare earth minerals, including cell phones, computers, cars, weapons, and other essential technology. Green energy- such as wind turbines and hybrid cars- also requires these minerals. Yet some experts fear that a crisis of depletion is already underfoot. Ninety-five percent of the world’s rare earth minerals are refined in China, but the booming industrial nation has begun to curb exports in order to feed its own domestic needs. Of more pressing concern is the 19 million barrels of oil consumed by U.S. trucks, cars and aircrafts every day. In the face of increasing tension in OPEC countries, shrinking oil reserves, and a growing environmental threat, new technology for alternative energy is essential. With fears of depletion abound, how will the U.S. confront the challenges surrounding the world’s limited natural resources?
 

History

Before China became the world’s leading supplier, rare earth mineral mining was booming in California, and the U.S. held a place at the epicenter of rare earth mineral research and technology. The discovery of the application of europium in the 1940s drove rapid color television production in the U.S. However, when China capitalized on its own resources, exports in the 1990s flooded the market, leaving former U.S. mining companies out of business. Fears of a Chinese monopoly over the market has increased in recent years: in 2010 China shocked international markets by suddenly blocking shipments of rare earths to Japan, announcing a sharp decrease in its export quotas and increasing export taxes. These fears are underscored by an impending energy crisis. The loss of oil from Libya, now under heavy fire, forced the U.S. government and allied Western nations to tap into their emergency oil reserves in June (an act not taken since Hurricane Katrina in 2005). While the move aided an economy struggling to pay for rising gas prices, it highlighted the need, now more than ever, to move away from dependence on an increasingly volatile region. As the world rapidly consumes a limited supply of oil, the urgency required to address decreasing natural resources is immediate.

 


Challenges

In an ironic circle, moving away from oil necessitates creating “green” technology, which requires extraction of rare earth minerals, which in turn begins with mining, a process with which many environmentalists take issue. Furthermore, rare earths’ extraction in the U.S. is hindered in part because of the high costs that come with environmental protection clauses- U.S. companies have trouble competing with China’s low prices. Though Congress has taken steps over the past few years to reinvest in national rare earth mining (such as the proposed RESTART act, which gives loan guarantees and establishes a national stockpile of the resources), little concrete action has been taken. Furthermore, fears are rising that China has been building stockpiles of their mineral reserves, in violation of WTO standards. However, in the wake of Japan’s nuclear plant crisis following the 2011 earthquake, and increasing instability in the Middle East, it is energy concerns that appear ever more pressing. The conflict in Libya has removed approximately 1.5 million barrels of oil a day from the global supply, while OPEC stands firm in keeping prices high. The challenge of switching not only domestic consumption for heat and electricity, but national defense’s reliance on oil, is key to becoming energy independent.


Opportunities

Important steps have been taken towards combating U.S. dependence on Middle Eastern oil. Since 2007, the U.S. has reduced its crude oil imports from OPEC countries by over a million barrels a day. Researchers say that increased automobile fuel efficiency, now mandated by Congress, could further reduce oil imports by one third in the next fifteen years. Domestic and off-shore drilling, though controversial, would gain access to untapped resources, as well as provide thousands of jobs in a lagging economy. Crucially, alternative energy research is increasing: biofuel technology, solar, wind, and nuclear energy could all provide alternative solutions to oil dependence. While fears over a Chinese rare earth mineral monopoly are rising, some argue panic is premature. China only controls half of the world’s rare earth deposits- drilling has already commenced in Northern Canada for alternate sources. Dependence on other minerals, though not discussed here, has led to large scale wars and massive corruption, such as in the D.R. Congo and Nigeria. However, minerals also have the potential to drive reconstruction. It is now believed that Afghanistan’s largely untapped iron reserves could provide a crucial alternative to their prolific narcotic production. It is clear that the world needs to think carefully about the way it consumes its resources. The earth cannot support the rate of pillage that has become commonplace among industrial nations.


Key Questions

  • Does the U.S. have a long-term strategy for dealing with the world’s limited natural resources?
  • What is the most pressing concern for the U.S. regarding natural resources and/or energy?
  • What politics are involved with alternative energy?
  • What steps has the U.S. taken to relieve its dependence on foreign oil? On oil at all?
  • Should the U.S. be concerned with China’s apparent monopoly over rare earth minerals? Should the U.S. invest in domestic extraction?
  • What are the environmental challenges to mineral extraction?
  • Is becoming energy independent important for U.S. foreign policy?
     

This Great Decisions 2012 Brief was written by Sarah Marion Shore


Order Great Decisions