The Keystone XL pipeline controversy has had the effect of clearly illustrating to the American people that the Obama ideology concerning green energy trumps economic fundamentals. This is not to say that the President doesn’t understand such basic principles of supply and demand, because he clearly does. It’s simply a matter of priorities. For example, just last June he reversed course on a policy decision and released 30 million barrels of oil from the nation’s 700+ million barrel reserve supply in an effort to lower gas prices due to a tightening of market supply from the Libyan uprising. With Obama, ideology always trumps economic reality. He conducted the now infamous interview with Charlie Gibson of ABC News in which he acknowledged the fact that lowering the capital gains tax rate results in increased overall revenue, yet his reason for supporting the increase anyway was out of a “sense of fairness”.
October of 2011 gave us another classic example of the hypocrisy concerning his publicized reason for not approving the Keystone XL pipeline project. His stated reason is inadequate time for the E.P.A. to conduct an environmental impact study. Apparently three years was inadequate. Yet last October, California based Molycorp received a drilling permit just two months after locating a new heavy rare earth deposit. From the story in the Atlantic.
In October 2011, Molycorp announced that they discovered a heavy rare earth deposit near their Mountain Pass facility and received permission to drill two months later. The heavy rare earths terbium, yttrium, and dysprosium are necessary for manufacturing wind turbines and solar cells, so the government has a particular interest in finding sources of those elements within the US.
Aha! The key phrase “necessary for manufacturing wind turbines and solar cells”. It fits the ideology. Wait, you say, this is only a single mine and not an international pipeline crossing thousands of miles with the potential for environmental disaster all along the way. But we find out in the article that the reason the Molycorp mine was shut down in 1998 was exactly one of those environmental disasters. So this mine already has a proven track record and not just the potential of a spill. Yet the Obama Administration still fast tracked the permit. Again, ideology trumps.
As I said earlier, Obama perfectly understands supply and demand theory. This is why he just filed a complaint, along with the EU and Japan, with the World Trade Organization to protest China’s actions concerning export policy on rare earth minerals. The Congressional Research Study released a report last September covering the rare earth elements global supply chain. Here is a quote on the U.S. policy.
U.S. mineral policy emphasizes developing domestic supplies of critical materials
and encourages the domestic private sector to produce and process those materials
There is no global shortage of rare earth mineral reserves. Far from it. The problem is extraction. In fact, rare earth minerals are a very misleading name. They should be called widely dispersed minerals as they are easily found in the earth’s crust, just not in concentrated deposits. In a somewhat ironic twist, they also play a role in petroleum fracking as Lanthanum is used in fluid catalytic cracking. The Dept. of Energy has released its updated report on Critical Materials Strategy, and the general tone is supply issues.
I bring all this up just to highlight more blatant Obama hypocrisy. Rare earth minerals are considered a national security objective just as oil is publicly stated to be. Yet actions speak louder than words. Obama won’t pursue domestic oil and gas production expansion on a scale that matches the proven reserve availability. Environmental issues are the excuse for slowdowns. However, rare earth mineral mining is extremely dirty and that’s OK because it’s required for his green agenda. It’s funny that China has stated the reason it is slowing rare earth mineral exports is for environmental safety issues, something Obama should certainly be able to get behind. But not if it stands in the way of his windmills, electric cars and solar power here at home. Pathetic.