In my last post, I pointed out we weren’t making enough effort to expand supply to curb inflation. Similar to oil, the prospective future product increase will work to lower prices today and into the future. Energy, so essential to the World’s economy, is the starting point, but other building blocks, commonly called commodities, face the same hurdles for expansion.
Blessed with a wealth of minerals and highly productive farms, the U.S. is a commodity powerhouse, or at least it was in the past. Look around and almost everything you see originated in the ground. To expand oil production, you need steel and lots of other stuff. Want clean energy? You have to have everything from rare earths to a mountain of copper.
The same attitude stifling increased oil production is evident in our ability to increase the supply of other commodities. Instead of maximizing our resources, we depend on others, some unfriendly, for basics. We have set up a world-class obstacle course to open a mine in the U.S.
In the past, I’ve pointed to Arizona’s Resolution deposit’s decades-long, unresolved journey to yielding copper. It’s not as if Arizona is new to copper mining. The state is the nation’s leading producer. The Resolution mine is potentially the largest ever in the state. A combination of environmentalists and Indian tribes have litigated the project to a standstill.
Even if the mine went into production, it needs a modern smelter to produce usable metal for our expanding needs. We have only three aging smelters in the U.S., even though we are the World’s fourth-largest producer and a net exporter.
The environmentalists offer a confusing rationale for their opposition to mines and smelters. The claim is they pollute, including added carbon dioxide that contributes to global warming. The fact is, a ton of carbon produced in Arizona is the same as one from China. Just like fossil fuels, it makes no difference where the carbon comes from; it adds to the amount in the atmosphere.
The U.S. is far more serious about reducing pollution than most of the World. To produce the Green World the environmentalists crave, we need much more of the earth’s minerals. We will need them to make the batteries they claim will make electric cars go and the grid stable. They presently are subject to scarcity price pressures and will add to inflation. The cost of electric vehicles reflects this increased cost. Already out of reach of the average American, the gap will grow.
In my last post, I showed how our anti-fossil fuel campaign extends abroad. Not content to limit supply at home, we limit investment worldwide. This Green bias extends to mined commodities abroad. Environmentalists now fight mines everywhere. Even as they mandate windmills, solar panels, and electric vehicles (EVs), we are making it almost impossible to provide the minerals needed to produce them. Under these circumstances, prices have nowhere to go but up.
We face a similar problem with world agriculture. The United States has achieved remarkably increased crop yields, especially corn and soybeans. Genetically Modified Organisms (GMOs) have contributed mightily to this happy circumstance. The average American devotes only 6.4% of their income to food. This largess leaves more to obtain the better things in life. On the other hand, the average Kenyan uses 46.7% of their income for life-sustaining food. Increasing crop yields in Africa with GMOs would seem a no-brainer, but this isn’t so.
Greens led by Greenpeace have waged a worldwide campaign against GMO crops, leading to restrictions and outright bans. Most of the European Union restricts the use of GMO food. These prohibitions make GMO cash crop exports from Africa difficult, if not impossible.
Ironically, wheat is the crop that is least GMO improved and most affected by the Ukraine War. People now facing starvation in today’s World are a testament to failure.
Much like nuclear power, the safety concerns are overblown. The science is on the side of the GMOs. Still, the environmental extremists in the Green movement have managed to curtail the use of these life-enhancing foods.
What is even more galling is the Green opposition to producing the things that would help if they’re right about climate change. Drought and heat-resistant crops can only come from GMOs in time to stave off the crisis they predict.
Reasonable people realize perfection is beyond humans. We can only do the best we can. Often in making choices, we have to ask, “compared to what?” Natural Gas may add more carbon than wind and solar, but it replaces coal, wood, and cow dung which are much worse. It accomplishes this while cheaper, often local or close, and reliable.
Mining, copper, rare earths, and lithium may potentially pollute, but we can mitigate the problems. The alternative is a future so expensive most will suffer.
The opposition to GMOs is the hardest to understand. Often the same people claiming to must follow the science are the ones ignoring it.
Thomas Malthus argued humanity would always be at subsistence or worse. This dire outcome was unavoidable because humans would reproduce faster than the food supply could expand. Thank goodness genetics proved him wrong, and we now have many more people on earth eating better than when he exposed his theory. For some reason, there are those still working to make Malthus correct.
People who demand we achieve specific goals but refuse to figure out how to get there appear to be more religious cults than serious problem solvers.
Not one to drink the cool-aid, I will endeavor to put forth some practical solutions to reduce prices in the next post. Remember, increasing supply is less painful than an economy in recession or painfully slow growth.