This week, I traveled to Seattle, Washington to attend the Society for Mining, Metallurgy and Exploration’s (SME) annual meeting, and give a presentation titled “Public Policy in the Resource Wars.” A policy speech at a mining conference is a little like topping your banana split with broccoli; mining folks understand chemistry, geology, economics and physics – only to be stumped, and often stopped, by the mysteries of politics.
As a result, I very much felt like the voice from the “other Washington,” coming in “to rain on the SME parade of projects and prospects and a profession that is quite clearly ready to get on with the business of mining — if only the government, at all levels, would stand clear and let the mining proceed.”
The key point I wanted to convey was that, while policy is necessary — as a way to balance competing public goods — the current policy environment for mining in the U.S., which, especially when compared to other leading mining countries (one glimpse at the authoritative Behre Dolbear “Where not to invest” and you’ll have all the proof you need) is deeply flawed and very unfriendly. I highlighted the few bright spots in the form of a handful of Members of Congress who understand what is at stake if we fail to formulate a comprehensive mineral strategy, particularly now — when the rest of the world is clearly pursuing policies focused on securing access to critical metals and minerals.
Here’s a key point I wanted to share with the SME audience, on the impediments to U.S. resource policy reform, excerpted from my remarks:
…But there’s a larger reason for U.S. inaction. To see what it is, you have to get behind the policy to a philosophy.
You may be surprised to hear what’s getting in the way: It’s respect for the free-market ideology.
Some of the natural supporters of resource development – some of the strongest advocates for the private sector – stop short of public policy supporting resource development because they believe it’s incompatible with free-market principles.
The irony is that even Adam Smith – the father of free-enterprise — understood that non-economic factors must play a part in policy. In his hallmark treatise, the Wealth of Nations Smith wrote that when it comes to gunpowder and sailcloth – the 18th Century essentials of British power projection and global dominance – it’s best not to become dependent on foreign supply.
In other words, there are limits to the free-market mentality, and the boundary line is national security.
Today, our gunpowder and sailcloth – read: weapons systems and wind-power – come from the rare earths, and beyond the rares, from a few dozen strategic metals.
Once I’ve cleaned up the last-minute edits I made before taking the podium, I’ll post my remarks in full for the American Resources faithful. As a parting thought from Seattle, the U.S. is fortunate we’ve got so many committed professionals pursuing new resource projects, and advancing the state-of-the-industry — often with little or no support from U.S. public policy.