Push Toward Renewables Requires Mining and Fossil Fuels

23 Feb 2022, Posted in All Posts, Blog Posts

The current push to electrify the U.S. transportation sector along with homes and businesses means that massive amounts of raw material will be needed to build out a more robust and smarter grid, deploy new renewable technology, and facilitate power storage. This electrified future that many long for will require extensive mining operations, which themselves are heavily dependent on fossil fuels. This blind spot for environmentalists may be intentionally kept out of sight, out of mind, but the reality is stark: more renewables can only come through the doorway of more mining and more fossil fuels.

While electric vehicles are hailed as greener roadway model, they draw their charge from the electric grid, which in the United States currently comes overwhelmingly from coal and natural gas. Plastics, parts, and lubricants in the EV are also derived from oil and natural gas. A few steps prior in the supply chain, fossil fuels facilitated the transport of raw materials and finished products to market. Even before this, critical metals, minerals, and other elements must be extracted from the earth. Not only does this have deep environmental impacts on its own, but relies exclusively on heavy machinery, enormous vehicles, and other energy-intensive equipment that all utilize fossil fuels. Of course, electric vehicles are in good company, with solar panels, wind turbines, and other renewables also reliant on similar processes.

Setting aside the criticality of fossil fuels for a moment, there is a more fundamental issue to consider: the raw materials in the ground. Power generation and energy storage devices require a number of rare earth metals. These rare earth elements (REEs) occur abundantly across the globe, however they are often mixed in with other minerals which requires time, energy, and money to process and separate.

These metals, largely composed of dysprosium, neodymium, terbium, europium, and yttrium for solar panels and neodymium, dysprosium, and praseodymium for wind turbines, are essential to building up a domestic renewable energy industry. Lithium batteries also require cobalt and lithium in its manufacturing process. Developing renewable energy sources is a top priority for the Biden administration in order to combat climate change. However, building up a domestic renewable energy industry is dependent on an unprecedented supply of these REEs along side fossil fuels for energy and drastically increased mining activity.

Currently, the U.S. is a 100 percent net importer of rare earth metals with 80 percent of total rare earth imports originating from communist China. In order to be able to build a cleaner energy grid, domestic sources of REEs will need to be tapped. The U.S. previously dominated the rare earths market before 1980, but rebuilding the domestic supply chain will require huge investments in mining, building refining facilities to separate out the metals, and the necessary manufacturing centers to produce the end products.

A primary hurdle in terms of political inconvenience is the drive towards reducing carbon emissions, but also rebuilding the rare earths industry in the U.S., which will require more mines, processing facilities, and manufacturing processes to use even more fossil fuel energy. If this electrified renewable future is to be achieved, it can only come with fossil fuels. And the U.S. also has abundant fossil resources ready to be tapped, but federal policy increasingly limits production and exploration and hamstrings transportation of these materials. This does not diminish demand for fossil resources, only domestic supply. That in turn requires import of oil and natural gas from countries with lower environmental standards, and it requires dirty transport of those fuels across oceans.

By investing significant resources into creating a renewed domestic supply chain for rare earths, there will be offsets to the domestic adoption of clean energies more broadly. Due to existing regulations that establish health and safety standards, a crucial part of protecting U.S. workers, production and refinement of rare earths in the U.S. is very uncompetitive when compared to China.

It takes five times as long to open a mine in the U.S. than in neighboring Canada or even Australia, another supplier of rare earths. Regulations would need to be loosened before any such mining would begin, as many mines need to function for years to account for large start-up costs. Because of widespread REE utilization in most military systems, the U.S. government could also insulate the domestic market from Chinese manipulation by agreeing to purchase REE used in military and renewable energy development from domestic manufacturers. The only American refinery for rare earths went bankrupt in 2015, so ensuring that the domestic industry can grow by reducing regulatory and red tape costs, while also protecting it from foreign price manipulation can ensure a steady supply of rare earths.

Regardless of whether REE are used for military or renewable energy purposes, the supply chain is the same. The total rare earth element supply chain begins with mining and extraction of rare earth elements, preparation and separation of mixed rare earths into individual oxides and blends, manufacturing of chemical products and specific alloys and metals, and manufacturing of final products needed in renewable power generation and storage technology.

The U.S. possesses vast reserves of rare earth elements. However, massive aversion to mining in the U.S., especially in government agencies, runs up against the fact that large-scale implementation of clean energy technologies will require massive amounts of mining. There is also opposition towards minerals that are remotely close to “radioactive” materials (as thorium and uranium in monazite ore are) from environmental and anti-nuclear activists and constituencies that are opposed to environmentally intensive mining.

That mining will be done. The only question is whether it is done under American labor and environmental laws, where the outcome is cleaner, safer, and more economically empowering, or whether it is done oversees where the environment is disrupted to a greater extent. Moreover, by utilizing domestic mines, we minimize the transportation emissions and supply chain choke points of international imports.

Paradoxically, the largest supporters of renewable energy, decarbonization, and preparing the U.S. for an energy transition are also the strongest opponents of domestic mining of the same materials needed for clean energy technologies. Renewable advocates also fail to understand or choose to ignore the vital nature of fossil fuels in ushering in the electrified future they hope to build. There is a great realignment of values and policy needed to achieve these climate-oriented environmental goals. It starts with understanding the factors at play: the necessity of mining and the importance of fossil fuels. Next, assessing where and when those resources will be tapped requires sound judgement, then action.

Domestic mining, refining, and manufacturing of rare earths and other renewable energy technology raw materials can be done with minimal environmental impact, unlike their Chinese counterparts. Further educating the public on the current dependence of the U.S. on foreign rare earth mining will be essential for developing a domestic industry.

There will be no energy transition or renewable electrification if rare earth minerals are limited or unobtainable. By developing a domestic rare earths mining industry, and freeing the fossil fuel industry as a critical partner and facilitator of that renewable future, the U.S. can be in command of its own energy transition and clean energy technology, without the security threat posed by China’s current monopoly on rare earth resources.


Written by Roy Mathews, Public Policy Associate and Benjamin Dierker, Director of Public Policy


The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.