Energy Shortage and Mineral Dependence

Estimated Reading Time: 5 minutes

Editors’ Note: Although the November 8th election here in Arizona will be focused on economic issues and our southern border invasion, the Inflation Reduction Act should be a central issue for the Senate race between Blake Masters (R) and incumbent Mark Kelly (D). Similarly, incumbent Kyrsten Sinema (D) will attempt to remain in her Senate seat in 2024. Both of these leftist Senators represented a 51st vote that passed the dishonestly named Inflation Reduction Act. It was really a disguised Green New Deal bill passed by reconciliation (50 Democrat votes + the VP) and represents enormous threats to America’s national security and economy. The following article factually describes these threats and the absurdity and danger of Mark Kelly’s and Kyrsten Sinema’s votes. They claim to be voting in Arizona’s interests but the reality is the opposite. Both deserve to be defeated in the November and 2024 elections respectively. In Blake Master’s senatorial quest, be assured he would never support such a bill, including the obscene weaponization of the IRS with 87,000 agents new agents.

 

The Biden Administration got its key legislation through Congress, thanks in large part to Senators Manchin of West Virginia and Sinema of Arizona. Previously, they had opposed key provisions of the larger Build Back Better, but caved to this latest spending travesty. As Bloomberg News put it ” it is a climate bill, just don’t call it that.”

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The misnamed Inflation Reduction Act contains large provisions for suppressing oil and gas production and forcing a change over to so-called “renewables” and electric vehicles. It embraces what has become known as the Green New Deal.

This is coupled with the Biden policy of selling oil from the Strategic Petroleum Reserve, largely to help Democrats in November by temporarily putting pressure downward on gasoline prices.

The typical news report will tell you that sales from the reserve now push America’s reserves back to levels last seen in 1985.

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That is true as far as it goes, except the economy is larger than in 1985, which means the level of reserve is even lower in relative terms to total output and population.

Per capita, oil consumption has fallen from 1985 largely because of increased efficiency. But overall consumption is about  26% greater.

In comparing levels of the reserve with 1985, you must consider the economy is much larger than in 1985, and the population is considerably greater as well.

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Presently, the US uses approximately 19.78 million barrels a day, versus 15.69 million barrels in 1985.

Real Gross Domestic Product, which is GDP adjusted for inflation, a more accurate measure of the size of the economy, was just under $20 Trillion in 2021, versus about $8.5 trillion in 1985. In other words, our economy is almost 2 1/2 times larger. That we have that kind of economic growth and only increased oil consumption by 26% is a remarkable testament to increased efficiency, which of course means less “greenhouse gases.”

The population has grown from 238 million people in 1985 to over 338 million today.

The problem is, that it leaves the country much more vulnerable to energy shocks caused by geopolitical events. The SPR  must support a much larger economy and a substantially greater population. So the result is to leave us much worse off than we were in 1985.

Moreover, all the oil taken from the reserve needs to be replaced, which means all that was provided to the economy to help moderate gasoline prices in the short term for election purposes, will have to be reversed at some point, lest the country is left in a bad state of energy insecurity. This oil needs to be replaced at the same time Biden and his green goblins are reducing production. This obviously adds to demand at some point while production is falling, a formula for higher prices.

Meanwhile, it appears that the forced transition to electric vehicles is hitting some significant snags, that potentially are extremely dangerous. However, no consideration is given to these issues as the legislation pushes demand for electric vehicles through loans, and subsidies,  even while battery production cannot possibly meet demand.

No less than the left-leaning Economist Magazine, a reliably anti-Trump screed, points out the problem in their most recent issue. In a remarkable article, “Could the EV boom run out of juice before it really gets going?”, the magazine points out a total lack of capacity to meet demand and extreme dependence on China for both production and the minerals necessary for production.

To quote from the article:

Most troubling for Western carmakers is China’s dominance of battery-making. The country houses close to 80% of the world’s current cell-manufacturing capacity. Benchmark Minerals forecasts that China’s share will decline in the next decade or so, but only a bit—to just under 70%. By then America would be home to just 12% of global capacity, with Europe accounting for most of the rest.

Other metals such as cobalt come from unstable areas such as Congo, and much of the lithium comes from Chile.  Chile this fall will vote on a revision of its constitution that if passed, will nationalize natural resources.  This recalls the famous quote attributed to Milton Friedman to the effect that “if the government were to take over the Sahara Desert, there would be a shortage of sand in five years.”

Moreover, it takes 5 to 25 years to build new mines, and Chilean production using ponds consumes enormous amounts of water in extremely arid regions.

And then there is the extreme dependence on China, a country that is hostile to the US. As the Economist puts it:

“Even if the West’s EV industry somehow managed to secure enough metals and battery-making capacity, it would still face a giant problem in the middle of the supply chain, refining, where China enjoys near-monopolies. Chinese companies refine nearly 70% of the world’s lithium, 84% of its nickel and 85% of its cobalt… as with battery manufacturers, Chinese refiners gobble up dirty coal-generated electricity. On top of that, according to Trafigura, both European and North American firms are also expected to rely on foreign suppliers, often Chinese ones, for at least half the capacity to convert refined ores into the materials that go into batteries.”

Burning coal to make batteries.  Make sense to you?

Besides battery assembly and raw material supply issues, there is evidence charging stations don’t work.

And when batteries catch on fire, they can electrocute first responders and are almost impossible to extinguish.

Readers need to appreciate that this is not a normal transition in energy sources such as we have had in the past. This is a top-down, politically driven effort based on the dubious science of global warming. Since when have politicians ever designed anything as complex as this without making a complete hash out of it? Rather than adapting to climate change (which is naturally occurring all the time), they are attempting to change the climate of the earth and the very basic way we live.

It would seem appropriate that new systems to replace existing systems should be thoroughly tested before implementation. But the green industrial complex is in a hurry lest we get wind of their failures.

That is dangerous enough. The track record of the Department of Energy is strewn with failures. But clearly, this effort is coupled with a policy to suppress that which we have (domestic oil, gas, and coal capabilities) which in fact makes us very dependent on both production and refining of essential minerals from countries with shaky politics. And in the case of China, the US is made dependent on an outright hostile regime for the production and refining of vital materials. Finally, we are about 80% dependent on battery production itself.

Ironically, if we do get Chinese production, it will be on the back of massive coal consumption. How does that move the needle on global warming, the underlying cause for this incredibly arrogant attempt to alter the climate in 100 years?

Is it wise to leave a nation’s energy grid and transportation sector in the hands of hostile powers? Are there any realists left in the Departments of State and Defense anymore? Is the security of the nation of no consideration here?

We are moving from energy independence to energy dependence, and almost complete production and mineral dependence on a country that is our enemy. Given the nature of the world, as it is, this is a move beyond stupid to suicidal.

Senators Kelly and Sinema, do you care?

 

 

 

TAKE ACTION

Are you fed up? Are you worried that America in rapidly sliding into a neo-Marxist state by the radical left in control of Washington with historically narrow majorities in the U.S. House and Senate and an Executive controlled by unnamed far leftists in place of a clinically incompetent President Biden? They are desperate to keep power and complete their radical progressive agenda that will change America and our liberty forever.

Americans just witnessed the passage of the Inflation Reduction Act of 2022 without one Republican vote in the U.S. Senate and House (just as Obamacare was passed in 2010). The IRS  will be hiring 87,000 new agents, many armed, to terrorize American taxpayers.

Americans witnessed the FBI raid at the Trump Mar-A-Lago home and property of President Trump, truly a first in all of American history. We know what that is about. 

It is undeniable that the Democrat Party and the administrative state (the executive branches of the DOJ, FBI, IRS, et al) are clear and present dangers to our Republic and our liberty as they increasingly veer further away from the rule of law and the Constitution. What is the solution? At this critical juncture, there is only one action we can all take.

The only viable and timely solution at this critical point is to vote – yes, vote correctly and smartly to retake the U.S. House and Senate on November 8th and to prepare the way to retake the White House in two years. Vote and help everyone you know to vote. Please click the TAKE ACTION link below – we must vote correctly and in great numbers to be sure our votes are counted to diminish the potential for the left to rig and steal the midterms and the 2024 elections as they are clearly intending to do after their success in 2020.

 

 

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