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On Rare Earths Not So Rare?

Greg,

You raise some excellent points. Some reassurance comes from a item in the CFR study that I didn't highlight: recycling. As rare earth efficiency in new hardware grows, so does the opportunity to harvest rare earths tied up in outdated equipment. Wind farm repowering is a prime example. It's also worth noting that the supply of some metals that are scarce in stellar production terms isn't determined by the abundance of their single element ores, but rather by the processing of more abundant metals like copper with which they are often found as "tagalongs." Tellurium apparently falls into this category.

July 3, 2015    View Comment    

On Rare Earths Not So Rare?

Lewis,

Thanks very much for that explanation. If we targeted China on rare earth mining and processing pollution impacts, wouldn't we also want to look a bit harder at the PV lifecycle? Would I be cynical to think that these issues will get a pass in the interest of prioritizing CO2 emissions?

 

July 3, 2015    View Comment    

On Rare Earths Not So Rare?

As I pointed out below, if the intent was to bury this technology and these resources, why spin Molycorp off into a standalone company that was able to go public and get the financing to revamp its mine? Oil companies by the nature of the business they are in have large portfolios of unused land and dormant businesses. It would have been far easier, if what you are implying is right, to have quietly added Molycorp to such a list, where it would have soon been forgotten. I don't see any parallel to the Standard Oil/GM/Firestone case of 1949.

July 2, 2015    View Comment    

On Rare Earths Not So Rare?

Roger,

I guess I'd turn that last item around: If we're going to stand up for (more) democratic countries in what Russia considers its "near abroad", then we need to ensure we are not dependent on Russia for crucial supplies and services, including ISS crew transport and the rocket engines used in most of our heavy-lift capability, including military payloads. 

July 1, 2015    View Comment    

On Rare Earths Not So Rare?

Bob,

Perhaps my threshhold for conspiracies is a bit higher than yours, but in any case I think you have made a couple of assumptions here that need revisiting. The biggest is that Molycorp is ceasing operations, leaving Lynas alone to battle Chinese producers. That might still happen, but it's clear from their announcement that the Chapter 11 (reorganization) filing was intended to restructure their debt. From their press release: "the Company expects to exit Chapter 11 with an appropriate financing framework to support our business going forward".

You also suggested that oil companies might want to suppress rare earth mining. According to the company history, from 1977-2008 Molycorp was owned by Unocal and its successor Chevron (which merged with my former employer Texaco in 2001). In 2008 Chevron spun off Molycorp in a transaction that apparently took it private. Seems like either company could have simply shut it down and left it at that. In fact, rare earths are used in oil refining catalysts, which might provide an explanation for why Unocal acquired the operation in the 1970s.

June 30, 2015    View Comment    

On Rare Earths Not So Rare?

Joris,

Perhaps someone more familiar with the relevant WTO provisions can chime in here, but I would think that the kind of tariff you are suggesting would immediately run afoul of these rules.

June 30, 2015    View Comment    

On Where Is the Stimulus from Cheap Oil?

Bruce,

That's correct, as far as it goes. However, US energy use per real dollar of GDP in 1973 was more than double what it is today, and oil accounted for 46% of US energy consumption, compared to 35% last year. All of that adds up to less impact now from an oil price spike at any given level of imports.

June 10, 2015    View Comment    

On EPA's Blown Call on Ethanol

Rick,

Whenever you disagree with me, I've probably missed something. We've discussed the conversion from corn to distillers grains before, and I get the protein uplift. My concern is with the collision between rising quantities of ethanol and fleets and fueling infrastructure that weren't built to handle them. If folks want to pay more (per BTU) to burn E85 in cars equipped to handle it, that's a valid choice in a consumer economy.

However, I wonder if you've done a thorough literature search on the claim that ethanol "cleans up the air".  What do you make of studies showing ethanol blends yield higher emissions of aldehydes and ketones? Nature reported on the increase in ground level ozone connected to the use of large quantities of neat ethanol and high-ethanol blends in Brazil. This effect was previously highlighted in Scientific American.

June 6, 2015    View Comment    

On EPA's Blown Call on Ethanol

Well said. Of course quality over quantity can still result in GDP growth, which hasn't just been about producing more widgets in decades.

June 5, 2015    View Comment    

On EPA's Blown Call on Ethanol

Sean,

I'm afraid you've been absorbing more propaganda than facts. For starters, ethanol in any proportion is banned from petroleum product pipelines for sound safety reasons, to prevent leaking seals and other problems.

As for gas stations, the retail fuel market in the US is overwhelmingly made up of independent businesses. Those carrying a major company brand either have a supply agreement with that company or with a distributor representing that company in a given area. Very few stations are now owned and operated by major oil companies. The reason for that is that it is a low-margin, low return-on-capital business.

Talk to most retailers and they will tell you they make more selling c-store items than fuel--much more. So why should they invest large amounts of their own money to put in additional pumps and tanks to sell products for which demand is small? To make even less money selling fuel than they already do? If you're looking for a "lockout" it's that the business proposition of adding these fuels--especially E15 that no one is begging for--is poor. I am not opposed to expanding opportunities for people to choose alternative fuels. However, if ethanol producers and their trade association want to see these products in more stations, perhaps they should consider investing their own money to issue grants and loans to assist retailers to do so.

June 5, 2015    View Comment    

On EPA's Blown Call on Ethanol

Bob,

The relevance of GDP growth here isn't philosophical but practical. Without the kind of expansion that might drive faster growth in gasoline demand, gasoline sales aren't increasing fast enough to accommodate the added volumes of ethanol EPA is trying to push into the system. That has been the case since the financial crisis.

June 4, 2015    View Comment    

On EPA's Blown Call on Ethanol

Sean,

You make a unique argument that ethanol is costless. Never encountered that one before. MTBE isn't relevant to current ethanol policy, since its use in US gasoline ended in 2006.

As for ethanol depressing oil prices and reducing oil imports, the evidence doesn't support that. Oil prices were rising, not falling, during the period of ethanol's fastest growth, from less than 3 billion gallons/yr in 2003 to over 9 B gpy in 2008. At the energy equivalent of 470,000 bbl/day of oil, 13 B gpy of ethanol isn't sufficient to have a significant impact on oil prices that are set globally. That's in marked contrast to the effect that an incremental 4 million bbl/day of US shale oil has had on the global oil market.

Finally, the gasoline-equivalent volume of ethanol used in US gasoline is roughly equal to the volume of finished gasoline and gasoline blending components exported from US refineries last year. If we used less ethanol we would likely just export less gasoline, rather than importing that much more crude oil.

June 3, 2015    View Comment