White House push to reform mining law draws skepticism from opponents, advocates
The White House's push to secure supplies of minerals needed to build batteries, electric vehicles, wind turbines, solar panels, computers, and other key elements in the energy transition is mostly drawing skepticism from mining advocates.
While the push for permitting clarity and certainty is certainly seen as welcome by some mining advocates, other elements of the White House plan, such as seeking royalties for hardrock mining, protecting "special places," and establishing "responsible mining standards," as articulated in a 22 February factsheet, raised eyebrows.
"I don't know whether to call this two steps forward and one step back or one step forward and one step back," Ian Lange, director of the Colorado School of Mines' Mineral and Energy Economics Program, told Net-Zero Business Daily 23 February.
President Joe Biden's principles for responsible mining call for "establishing specific up-to-date, financial assurance, operational, performance, and reclamation standards, which require protection of the environment during exploration, discovery, active mining, reclamation, and post-closure."
To Lange, the White House call to establish "strong, responsible mining standards" simply means opening up a whole new round of debate over what is deemed "responsible" and how to define the term.
What is "responsible"?
In other words, "we are going to argue for a long time over what is responsible," said Lang, who, prior to his current position, served as a natural resources economist for the White House Council of Economic Advisers from December 2019 through April 2021.
Hardrock mining on public lands—which includes gold, silver, copper, uranium, lithium, cobalt, nickel, and nearly all critical minerals—is still governed by the General Mining Law of 1872 that the White House wants reformed. Echoing the White House's 22 February fact sheet, the US Department of Interior said the same day it was establishing an Interagency Task Force that would be charged with making recommendations to the antiquated law, which it described as "a law that was born out of the California Gold Rush."
According to Interior, this law allows mining companies to stake claims on the vast majority of public lands, regardless of potential conflicts with other uses. It also does not require royalties to be paid to the taxpayer for the extraction and sale of valuable minerals, and does not include any financial assurance such as bonding to ensure environmental cleanup and site reclamation.
In a September 2020 blog, the US Government Accountability Office found that "there are 872 authorized mining operations on about 1.3 million acres of federal land as of September 2018—most of which aren't subject to royalties."
Congressional action needed
However, environmental lawyers say these changes will largely require congressional action, not a mere statement of White House intent. And they all acknowledge that the current polarized environment of a US Senate that is equally divided among Republicans and Democrats makes it difficult for any congressional action. This objective is complicated further, according to Lange, because "Democrats themselves are not on the page when it comes to mining."
"We believe the administration is trying to work within the confines of the existing legislative framework as much as it can, but it's acknowledging that it will need to work with Congress to meet some of its goals," Lyndsay Gorton, a Washington DC-based attorney with law firm Crowell & Moring told Net-Zero Business Daily.
Gorton pointed to the interagency task force that the White House has just charged with developing recommendations for Congress by November to consider legislative and regulatory reform of mine permitting and oversight that the 1872 mining law currently governs.
"So without knowing exactly now what the recommendations are going to be, because this was issued on Tuesday, it's hard to know what will require legislative and what will drive regulatory action, but the administration is at least thinking ahead about what they are going to need to do, and they are prepared to work with Congress," Gorton said. "
Existing regulations offer opportunity
Mining opponents such as Earthworks, though supportive of White House efforts, are understandably skeptical too because they want to see whether the administration will deliver on environmental justice promises to protect marginalized communities from the "historic and ongoing injustices of unfettered extraction."
According to Earthworks Senior Policy Counsel Aaron Mintzes, the Biden administration can easily craft regulations to require financial assurances from companies engaged in hardrock mining on federal lands. The group petitioned the Biden administration in September 2021, asking them to update regulations that seek to clarify federal authority to protect tribal and cultural resources and values as well as wildlife, water quality and quantity, exercise authority to verify mining rights and close loopholes that allow the mining industry to escape public review and consultation.
He said the US Congress gave both Interior and the Department of Agriculture authority to regulate hardrock mining on the lands they manage through the Federal Land Policy and Management Act (FLPMA) of 1976 and the Forest Service Organic Act of 1897. The Trump administration initiated rulemakings at both agencies during its four-year tenure from 2017 through 2021, but never completed them.
Just before leaving office, the Trump administration also identified mining as a sector to a federal rule aimed at streamlining infrastructure permitting.
Prior to that, the Obama administration issued a US Environmental Protection Agency rule requiring hardrock mining financial assurances a week before it left office in January 2017. The Trump administration, however, decided against finalizing that rule in February 2018, and a federal court upheld the agency's decision in July 2019.
Mining interests remain unpersuaded
Some vested interests don't see any need for changes to the rule, and they question whether the Biden administration is barking up the wrong tree.
Lange from the Colorado's School of Mines said the White House is sounding all the right words, but it is a different story altogether when you read between the lines.
The National Mining Association (NMA), a trade group for US mining companies, questioned the White House's efforts to reform the mining law as part of its push to boost domestic minerals supply chain.
"We would hope that the administration's examination of minerals supply chain issues would focus on how to restore US mining's competitiveness on the global stage, decrease our import reliance, and ensure that existing federal and state regulations are not duplicated," NMA spokeswoman Ashley Burke said in a statement.
Instead, Burke said, "Interior's language suggests it is using the supply chain review as a thinly veiled attempt to advance misguided mining law reforms that have failed in Congress time and time again."
While Burke did not identify the specific pieces of failed legislation, she said "the US mining industry has long said that it is open to a reasonable royalty, but it is important to understand what the mining law is—and what it isn't."
Burke maintained that the only things secured by the White House efforts will be a duplication of robust environmental and financial assurance regulations that already exist on both the federal and state levels and a ramping up of import dependence and supply chain issues.
Minerals demand on the rise
Ahead of the one-year anniversary of his executive order on securing supply chains, Biden joined California Governor Gavin Newsom and the CEOs of a number of mining and processing companies on 22 February to announce a series of initiatives to boost supply chains for minerals such as lithium and cobalt, for which he said demand will increase by 400-600% over the next several decades.
"And up to now," Biden said, "we've had to import a significant portion of them—close to 100% importation—from other countries, particularly China, Australia, and Chile."
There is no question that US mining production lags behind demand. The US Geological Survey (USGS) in February estimated that 48 million metric tons (mt) of copper can be mined and processed economically domestically, as well as 69 million mt of cobalt, 340 million mt of nickel, and 750 million mt of lithium.
Despite having ample reserves of these four key minerals, USGS mineral commodity summaries for 2022 released 1 February revealed that the US in 2021 imported 48% of its consumption of nickel, 76% of its cobalt, 45% of refined copper, and more than 25% of lithium.
Biden said when he signed the executive order to secure supply chains a year, "I was determined to change all that."
As evidence of progress made toward securing domestic supplies, Biden pointed to the $35 million contract MP Materials secured from the Department of Defense's Industrial Base Analysis and Sustainment program to separate and process heavy rare earth elements at the company's facility in Mountain Pass, California, for use in wind turbines, electric vehicle, and battery magnets.
He also noted the recently announced partnership between Redwood Materials with Ford and Volvo to recycle lithium-ion batteries, and plans by Berkshire Hathaway Energy Renewables to extract lithium from geothermal brines in the Salton Sea in California.
Colorado School of Mines' Lange said the announcements made by Biden are positive steps because the White House is letting companies know "they are going to get things done." However, Lange added the administration is sending muddled messages to companies when they begin discussions about financial assurances.
"What will really be a game changer is permitting certainty," he added.
Neal McAliley, a Miami-based attorney with the law firm Carlton Fields who has been involved in assessing the environmental impacts of projects, agrees with Lange on the need for more certainty in the process.
He told Net-Zero Business Daily that one of the main ways that the federal government can boost mineral production is by streamlining environmental reviews.
The National Environmental Policy Act (NEPA) requires federal agencies to conduct environmental reviews of any permits issued to mine, drill, or build on public lands.
"In theory, the federal government should be able to streamline the review process to accelerate the process, but in practice it is not so easy," McAliley said.
"You can make it go faster, but there are limits," he added.
In an ideal situation, a NEPA review can take at least 90 days, but it can extend out to multiple years, according to a 2008 study of federal agencies.
"If you look at NEPA regulations, most of the time involved in preparing an environmental impact statement (EIS) is the time it takes to pull together the draft and final document, which typically takes many months," McAliley said.
Apart from federal reviews, states carry out their own environmental reviews, which don't always necessarily take place at the same time. For instance, McAliley pointed to Florida, where officials in some cases require that all federally reviewed plans for any activity on public lands be completed in minute detail before a state environmental review can even begin.
Of the 67 lithium mines under development, the Carolina Lithium Project has been held up since last summer because North Carolina's Gaston County Board of Supervisors has refused to grant zoning permits over concerns about the mine's impact on groundwater and air quality. This is despite receiving federal and state approvals.
Channeling US President Dwight Eisenhower's description of the military industrial complex, McAliley said the environmental laws and related complicated procedures have created what is "an environmental administrative complex."
The positive aspect is that each step of the permitting process is thoroughly examined from every possible angle so it can withstand legal challenges, he said. The negative is that the depth of review is slow.
- Australia’s new government to focus on renewable expansion, carbon market reforms
- Critics say agricultural emissions plans in New Zealand ERP lack ambition
- US CFTC eyes greater voluntary carbon markets scrutiny, to open consultation
- California outlines plan to reach net-zero emissions by 2045
- Key climate goal of 1.5 C increase under threat in next five years
- Russian-war-spurred oil spend could kill Paris Agreement hopes: think tank
- China’s national carbon market hits a roadblock with low liquidity, weak data quality
- Europe needs EV recycling revolution to meet net-zero goals: study
RT @SPGlobal: Essential Intelligence from S&P Global helps you dive below the surface. Because a better, more prosperous world is yours for…
Each year, we commemorate Asian American & Pacific Islander Heritage Month to celebrate the rich, diverse culture a… https://t.co/oOU06vryXV