Friday Focus: Incoherent Energy Policy 

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Today’s Key Takeaway: “As progressive environmentalism prioritizes the procedural over the substantive, it undermines the development of battery minerals. And because the president has simultaneously squeezed fossil energy—he risks courting energy insecurity.”

Self-Defeating Environmentalism
Jordan McGillis, City Journal, July 26, 2023

As governments in the developed world try to coax their economies away from fossil fuels, commodities that enable alternative energy sources have become more vital. One such commodity, nickel, has seen record pricesspectacular crashes, and warehouse intrigue in recent months.

Nickel is a key to the “energy transition”: along with lithium, cobalt, and graphite, it facilitates the battery production that will theoretically support electric grids and transportation without coal, oil, or natural gas. Yet the very advocates of that transition have pursued policies that make it harder to acquire or process the metal.

According to a study on critical minerals from the International Energy Agency, energy-sector demand for nickel has jumped 40 percent in five years. Global exploration for nickel increased 45 percent in 2022 alone. Amid the scramble, the U.S. Geological Survey (USGS) included nickel in its critical mineral list for the first time last year.

Is the U.S. ready for a world in which nickel matters? As part of the Infrastructure Investment and Jobs Act, the Department of Energy allocated $3 billion to fund domestic production of materials needed for the battery supply chain. In 2022, President Biden issued an order pursuant to Section 303 of the Defense Production Act “to secure the supply” of “lithium, nickel, cobalt, graphite, and manganese for large-capacity batteries.” The U.S., the administration stated, depends for the minerals on “unreliable foreign sources”—principally China.

Yet President Biden has proved averse to the digging and processing of raw materials that his energy vision would entail. The administration quashed a domestic mining project that would have produced nickel ore from one of the largest fields ever discovered. Though the Army Corps of Engineers granted the project a crucial clean-water permit in 2019, the NewRange mine in Minnesota fell afoul of the preferences of a tribal group.

Then, at the behest of the EPA, the Corps revoked its previous approval this year on the grounds that the project “does not ensure compliance with water quality requirements of the Fond du Lac Band of Lake Superior Chippewa.”  

The decision exemplifies an incoherent energy agenda. Biden’s executive order on energy security stipulated that all energy projects must satisfy “strong environmental, sustainability, safety, labor, Tribal consultation, and impacted community engagement standards.” Such vague standards open the door for a parade of complaints, rendering resource development prohibitively expensive and time-consuming. NewRange is reported to have spent $200 million solely in its doomed effort to obtain the requisite permits.

As progressive environmentalism prioritizes the procedural over the substantive, it undermines the development of battery minerals. And because the president has simultaneously squeezed fossil energy—for example, by tightening Corporate Average Fuel Economy requirements and power-sector emissions limits—he risks courting energy insecurity.

Meantime, China has sought to expand its critical-mineral empire. Its latest target is the ocean floor, a mining arena set for pioneering exploration in the coming years. According to USGS estimates, a portion of the Pacific Ocean southeast of Hawaii called the Clarion–Clipperton Zone alone holds three times as much nickel as do all of the world’s land-based reserves.

As for the Biden administration’s seabed-mining policy, envoy John Kerry said last year that his colleagues were “very wary of procedures that could disturb the ocean floor.”President Biden is doing everything in his power to electrify America—except, that is, approving the necessary mining expansions.

As the International Energy Agency warns, global demand for nickel and other critical battery minerals will more than double by 2030.

Progressives nod to the importance of resource development, but their policies endanger the secure supply of minerals needed for the battery-centric economy they seek.