Of late I’ve been talking with all sorts of folks about energy, climate, and Indian tribes. These are folks from federal agencies, tribal governments, mining companies, utilities, and grassroots organizations. I’ve also been reading all manner of technical reports, documents, and articles from professional journals and the popular press. What follows is a rough take on these readings and conversations.
Here’s something from the January 15, 2011 New York Times:
BEIJING — Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.
But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.
A little heavier is the December 2010 Atlantic article by James Fallows, Dirty Coal, Clean Future which makes the argument I’ve been making, that Indian tribes and the U.S. cannot afford to abandon coal. He maintains that that coal can be used in less damaging, more sustainable ways than it is now and further, that it must be used in those ways, because there is no plausible other way to meet what will be, absent an economic or social cataclysm, the world’s unavoidable energy demands. The article is at: http://www.theatlantic.com/magazine/print/2010/12/dirty-coal-clean-future/8307/.
A couple of years ago when I was in Albuquerque talking with the board of the Diné Power Authority I stated that a mine-mouth, coal-fired generating facility was not going to fly. The fact that the Sithe technology was state-of-the-art wouldn’t matter. My point was that the Desert Rock Energy Project had to be a test bed for clean coal and carbon capture and carbon sequestration technologies. I said that Indian country and the U.S. could not afford to have the project fail. To do so would mean we (the Navajo Nation, Indian country, and the U.S.) would lose the opportunity to use a state-of-the-art facility as a test bed for these and related technologies. Fallows says pretty much the same thing. The generating facilities in the U.S. are not suitable test beds for such R&D, but the Chinese ones are and will be.
Then there are much more weighty readings. For example, the European Commission has identified 14 mineral raw materials, including several metals and metal groups, which have high supply risks and could face shortages resulting from limited production sources and high demand.
An expert group assembled by the Brussels-based commission studied 41 minerals and metals groups to compile the “critical” supply list. Minerals on the critical list are antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium (also known as columbium), platinum group metals (PGMs), rare earths, tantalum and tungsten. The experts concluded that demand might more than triple for some of the minerals between 2006 and 2030 and released forecasts of demand growth from emerging technologies for nine of the minerals as well as silver and copper. They said the growing demand for raw materials is driven both by the growth of developing economies and new emerging technologies. The EC report can be accessed at: http://ec.europa.eu/enterprise/policies/raw-materials/critical/index_en.htm.
In a similar vein, the U.S. Department of Energy developed a Critical Materials Strategy to examine and address the vulnerability of supplies of these rare earth elements that are crucial to so many new and emerging clean energy technologies. That report is at: http://democrats.science.house.gov/Media/file/Reports/DOE_CriticalMaterialsStrategy.pdf.
Here’s a passage from the report:
Current global materials markets pose several challenges to the growing clean energy economy. Lead times with respect to new mining operations are long (from 2–10 years). Thus, the supply response to scarcity may be slow, limiting production of technologies that depend on such mining operations or causing sharp price increases. In addition, production of some materials is at present heavily concentrated in one or a small number of countries. (More than 95% of current production capacity for rare earth metals is currently in China.) Concentration of production in any supplier creates risks for global markets and creates geopolitical dynamics with the potential to affect other strategic interests of the United States. Value-added processing and some patent rights are also concentrated in just a few countries, creating similar risks. (p.12)
The report provides an example of such value-added processing and patent rights concentrations.
Master patents on NdFeB or neodymium magnets constructed of an alloy of neodymium, iron, and boron (a key component of wind turbines and hybrid vehicles) are controlled by two firms: Hitachi Metals (formerly Sumitomo) in Japan and Magnequench, a former U.S. firm that was sold to a Chinese-backed consortium in 1995 (Dent 2009). Hitachi has used this intellectual property protection to capture a large portion of the market for high-quality magnetic materials, while the Magnequench sale gave Chinese companies access to the intellectual property and technology necessary to establish production plants and further increase supply chain integration. Licensed production of sintered NdFeB magnets is currently limited to 10 firms in China, Japan and Germany. (p.16)
Here’s why I think this tribal leaders should read this report:
- It demonstrates that these days jobs follow the market. China is the world’s largest energy market and is thus able to require technology providers to locate plants in China and to share intellectual property. This is happening with wind, solar, nuclear, and coal.
- It demonstrates that jobs follow the intellectual property–an equivalent to the golden rule, i.e., him that has the gold makes the rules.
- It demonstrates that these days and for certain materials, jobs follow the resource. But see no. 5 below.
- It demonstrates that, notwithstanding the popularity of the slogan in Indian country, everything really is connected but it takes a lot of vision, effort and political acumen to make the connections.
- And most importantly, it demonstrates that need for tribes to impose their vision on energy development in Indian country.
Let me use the Desert Rock Energy Project as an example.
- The Navajo Nation sold the Project as economic development, employment and tax revenues. There was some discussion of sovereignty and self-determination but I do not recall seeing anything that spoke to the human rights, indigenous rights, or nation building implications. The Desert Rock Energy Project was viewed as a Navajo Nation problem although it had national and even international implications. More importantly, the Desert Rock Energy Project was conceived and sold as a coal project.
- Sithe viewed the Project as a business proposition begetting amongst other things, permitting issues. Navajo Nation was a commercial partner. They build and operate power plants so it’s understandable that they took this view. They never considered themselves a partner of the Navajo Nation in a nation building exercise, but they were.
- Elouise Brown and Dooda Desert Rock did a terrific job organizing against the Desert Rock Energy Project. However, they were helped immeasurably by convergence of three phenomena. First, the economic meltdown which hit California especially hard drove down the demand for power. Also aiding their cause was California’s Renewables Portfolio Standard, one of the most ambitious renewable energy standards in the country. And finally, scarce and expensive natural gas—one of the primary justifications for the Desert Rock Energy Project turned out to be not so scarce and not so expensive after all.
So what would the Desert Rock Energy Project look like if it had been shaped using a nation building, intellectual property and value-added frame? Here are some ideas—not a complete and comprehensive program, but a good place to start.
- It would start off as a Navajo Nation sustainable energy production, research, development, and training program. Although not geographically co-located, energy production, R&D, supply chain opportunities, workforce development, environmental restoration, long-term monitoring, education, and related activities would be administered centrally. It would be, in short, the Navajo Nation Energy Program.
- The Sithe-Navajo Nation Desert Rock Project would be a major part of the program because coal is an important Navajo Nation resource. Also a major part would be research on clean coal technologies; coal-to-liquids; carbon capture and sequestration; coal gasification; coal bed methane.
- The Navajo Nation Energy Program would be subject to a programmatic environmental impact statement that would take a comprehensive look at the costs and benefits with benefits being defined much more comprehensively than revenues and jobs, i.e, what those revenues and jobs would mean to the social, cultural, health, educational, and other interests of the Navajo Nation and the Navajo people.
- Based on much consultation, it would carve out possible roles for the National Laboratories; entities like the Energy & Environmental Research Center, universities, private sector, tribal organizations, NGOs, and other tribal and non-tribal stakeholders. Exactly what kind of near term and long term relationship does the Navajo Nation contemplate having with SCE and APS? What do kind of relationship do they contemplate?
- It would contemplate the establishment of a cadre of Navajo experts in facilitating public participation; public information; project negotiations; right of way and easement negotiations; risk assessment; energy project financing; and other aspects of energy development on the lands of indigenous peoples. These are the kinds of operations that can just as easily operate out of Phoenix, Albuquerque, Denver, Sao Paulo, and Sydney as they could in Window Rock.
- It would link energy development with environmental restoration. Energy developers move dirt. The Environmental Protection Agency assesses and regulates. The Navajo Nation needs strong relations with both. This means working and collaborating with energy companies and their associations to define exactly what corporate social responsibility policies should play out on Navajo.
- It would take a very hard look at the wide range of economic, social, cultural, political, and other opportunities that might be realized by working on the waste management and environmental restoration aspects of energy development.
- The program would include a strong intergovernmental-relations component that would represent Navajo Nation views and policies in state capitals, the U.S. Congress, as well as national and international tribal and other indigenous forums. For example, how does Navajo leverage its transmission corridors to gain waivers from California’s Renewables Portfolio Standard?
Time for Indian country to get serious about energy policy. That bustling green economy of solar panel manufacturers, blade fabricators, and the like is a chimera. I stated this on my Facebook page. Federal agencies, Indian tribes, and tribal organizations need to cut through all the PC, faddishness, and get down to the serious business of Indian energy.