November 04, 2009

Reading Old Magazines: Mineral Myths

My colleague Mike pointed me in the direction of this post by Stephen Walt, which considers strategic minerals on a Halloween list of “overblown threats, dubious nightmares, and (mostly) fictitious demons.” There he links to an article that was billed as offering alternative options for dealing with a mineral supply disruption: a 1982 Foreign Policy article by Michael Shafer, the Director of the Center for Global Security and Democracy at Rutgers University. Shafer published this piece, called “Mineral Myths,” (subscription required) to offer an alternative look to the narrative of mineral dependencies and resource wars.

Shafer does not suggest that the implementation of various precautions warrants the blasé rejection of all supply concerns, as Walt seems to portray. While Shafer did reject the notion that the United States would face a true strategic, military problem due to mineral dependencies, he did so in the framework of the Cold War. Shafer went out of his way to explain that while we may face shortfalls, they would not cause second- and third-order effects such as direct confrontation with the Soviet Union or a break with allies who must turn to the USSR for irreplaceable minerals.

It’s easy for threats to become overblown. This is why I enjoyed reading Shafer’s piece; he laid out real, probable vulnerabilities without relying on the world-ending catastrophe scenario to make his point. The impact of any argument should be evaluated in terms of magnitude, probability, and time frame. Too often policy wonks ignore the other two factors and look only at the magnitude of a potential event. Shafer did not deny that mineral supplies are a point of concern and that the domestic political environment of supplier countries matters, but instead used these points to fortify his views that lesser impacts are more likely and should be guarded against.

”Mineral Myths” centered on a variety of possible solutions to what is, in his view, a more likely scenario than war: supply disruption due to internal conflict. The national stockpile, he argued, does not meet this challenge – a conclusion that The National Academy of Sciences recently affirmed in its report “Managing Materials for a Twenty-First Century Military.” While top minerals thinkers today agree, in the era of big power conflicts this was a relatively new idea. He advocated mechanisms for responding to disruptions rather than willful cutoffs of supplies, and he supported private stockpiles that are incentivized by tax breaks in order to avoid an increase in bureaucracy (obviously with the exception of any bureaucratic activity to manage such a system of incentives).

Shafer argued that domestic supplies are an integral part of reducing foreign dependencies, which is true but which assumes no lag time. Production capacity takes years to build in most cases. He further suggested that the United Nations Convention on the Law of the Sea would soon be passed and open up a variety of deep sea resources to the United States. Mike recently reviewed another old journal article that expressed similar hopes, yet in 2009 we have yet to ratify the treaty or find an economic way to extract many of the minerals for which Shafer claimed we could easily increase production.

He also looked at the possibility of building a producer-consumer consortium that would help to stabilize mineral prices from the wild swings they often see. However, neither the United States nor other nations seem to have attempted to follow this recommendation, and with an ever expanding number of minerals used in various defense and civilian capacities, it seems unlikely to develop now.

While I agree with his rejection of scare tactics and his use of pragmatic solutions to counter the real problems we do face, there’s a difference between 1982 and 2009. No, I’m not talking about new hair styles or music (though thank goodness for those), but rather how the end use of many minerals has changed. Shafer’s distinction between oil and non-fuel minerals is no longer the best indicator of a mineral’s importance. With our increased use of rare earth minerals in defense applications, not to mention hybrid cars, wind turbines, and photovoltaic cells, the significance of these minerals outstrips even Shafer’s most liberal estimates. The rise of computers and the ubiquitous presence of cell phones radically altered the environment in ways that could not be foreseen in 1982.

Walt gets it right when he adds more nuance at the end of his description: “with the (partial) exception of oil, strategic minerals are an issue that deserves a modest degree of attention, but are hardly cause for alarm.” Given the evidence we’ve been scouring and the many more historical articles we’ve devoured on the subject, I’d say the issue isn’t cause for alarm as Walt means it, but is certainly cause for some good new thinking.