Read This Now: DOE's Critical Materials Strategy

I’m winding down work on a new minerals report that we’re
set to release in a few months. In my frantic dash to meet some writing
deadlines and much else on the work front, I’ve neglected to do a full post on
the Department of Energy’s “Critical Materials Strategy” released last
December.

In a quick post when the report first dropped, I claimed
that the big news was less in its content (with its limited scope) but in that
DOE has conducted this work. They did what we’ve been urging: explore and
understand the issue so that we’re not blindsided by countries wielding their
power of export domination.

I was wrong. It is true that DOE conducting this work is a
huge step in and of itself, but the content of this report is phenomenal and
deserves credit for more than just the act of completing it. This is the single
most useful document on minerals I’ve ever read from the U.S. government. This
comes from a gal who’s read through microfiches and aged binders of government
documents on minerals going back to 1903.

First, this report is one of the most extensive analysis on our
mineral supply chain dependencies that the government has made public. The U.S.
Geological Survey obviously compiles vast amounts of data and assessed
information. It is usually left to the reader, however, to piece together this
data with government policy and private sector activity to extract meaning. DOE’s
report includes well-composed sections that everyone in this space should know:
the basics of supplies, production, historical demand and projected demand
needs for clean energy manufacturing.

Second, it’s stunning that an initial report on just four sectors – permanent magnets, advanced
batteries, thin-film
semiconductors and phosphors
– is more than 160 pages long. And this, admit the authors, is with
incomplete information available for an array of details.

I’ll mention a few of my favorite highlights. Page 61
launches an entire section on the materials strategies of other countries.
These lessons learned from other developed countries with global supply chains
are invaluable to improving U.S. policy. When speaking to some officials at
Japan’s Ministry of Economy, Trade & Industry (METI) last year, I was
astounded that understanding their country’s mineral needs beyond just fossil
fuels was such a regular, ongoing part of their work. It seemed that in a very
fundamental way, the United States was being left in the dust. The Department
of Energy definitely has made great strides in catching up with countries like
Japan in the intervening year. But this section still can’t help but leave you
with a lingering feeling that we’re lagging behind, and the consequences of
that include providing mineral supplier countries with easy and unnecessary
political leverage.  

On page 53, the report notes that the Energy Information Administration
(EIA), which is considered one of the most credible collectors of energy information,
is working on adding information on rare earth elements to its public
databases. This will be a great step for DOE better understanding the supply
chain needs of the transitioning energy economy. Yet this should be seen as only
the first step in the full federal government better understanding how mineral
supply vulnerabilities can affect U.S. interests.  I’d like to see this effort expanded beyond
the energy department’s purview in the coming years.

Implicit in considering this report is an important question: where is DOD? And why do they seem so starkly at odds with lawmakers on the Hill and other government agencies on minerals? I think the answer is simply narrow scope: DOD's primary offices that look at this issue are mostly in the business of looking for large-scale supply chain disruptions. I can't disagree that scoping the issue this way would give me a lukewarm interest in minerals. But scarcity rarely has to settle in before resource issues become strategic and politically important. Hopefully the rift between DOD and the Hill on this will be shrinking in the coming months.

As I assess in our forthcoming report, DOE’s work on
minerals should serve as the model for other government agencies. It is
proactive where many other efforts have been reactive; this is the essence of
how we’re going to have to safeguard U.S. security within a more constrained
budget. We have to mitigate problems before they blow up into major foreign
policy messes, trade conflicts or tense disputes.