BY: DELAINE MAYER
The clean energy transition has incentivized change across various sectors. With increased demand for rare earths as a critical input for renewables technologies and smart, digitized systems, scientific and economic opportunity tied to rare earth elements (REE) has been found in an unlikely place: Kentucky coal.
Rare earth elements are essential to the production of many modern and high-technologies due to their magnetic, luminescent, and electrochemical properties, which support technological performance with reduced weight, emissions, and energy consumption. Rare earths are the main operational inputs for energy, military, entertainment, communications, and scientific technology. It is their conductive and magnetic qualities that set REE apart from other minerals; when combined with other metals in some instances, REE produce new materials of exceptional strength and magnetism, ideal for manufacturing, infrastructure, and transportation.
Rare earth extraction and usage is expected to increase as the clean energy transition transforms efficiency metrics across sectors, ushering in a new kind of digital age, a smart one. As the U.S. moves away from coal and oil in the energy sector, renewables technology is increasingly beholden to rare earth markets.
Rare earths and coal both have complicated geopolitics, however.
Rare earths and coal are mined commodities; the physical acts of mining and refining, as much as REE and coal usage, have deep political elements. Navigating the environmental and legal dimensions of starting up new mining projects can take years from confirmation of a site to actual production and yielding of the item. During this time, global pricing of the commodity needs to remain economically viable for investors to continue pursuing the project. These long start-up times disincentivize mining companies from trying new technology, which may increase efficiency or minimize negative environmental impact, for fear that the new technology will not work as promised and will contribute to lower yields or product quality. Investments in mines can be in the billions of dollars, with investors assuming the mine will be open for many years to see a return on investment, then turn a profit. The avoidance of risk, and conservative nature of mining innovation, is a strategic maneuver for companies, since they do not want to be responsible for new technology that contributes to greater environmental degradation.
China, the biggest REE exporter in the world, is willing to absorb the environmental and labor costs of extraction as Western states develop more stringent environmental policies making certain kinds of domestic mining and energy extraction prohibitively expensive. This shift in extraction policy can be felt no harder than Appalachia, where per capita income dropped from $19,204 in 2015 to $19,022 in 2016, with coal jobs in Eastern Kentucky dropping from 14,619 in 2011 to 3,909 in 2018 Q2.
A scientific discovery in the heart of American coal country could shift the geopolitics of rare earths, however. The University of Kentucky’s Mining Engineering chair, Rick Honaker, is leading a U.S. Department of Energy-backed research project to figure out how to recover rare earths from coal and coal byproducts.
The intended impact is two-fold: create a domestic supply of rare earth concentrate and revitalize a dying industry, one whose decline has had negative economic impacts on communities throughout the coal region, contributing to deep political divisions in the country over coal extraction, types of energy production, and how to balance energy and economic needs of populations. The clean energy transition – scaling up of wind, solar, and natural gas while coal production diminishes – has led to creative destruction within the coal industry, one of Kentucky’s foremost economic drivers.
As University of Kentucky’s project advances to stage two of research and testing, if rare earth extraction from coal and its byproducts proves viable, the dying coal industry may see a unique revival as the domestic source of the raw material inputs for clean energy technology. Depending on political leadership, this could mean one of two things for coal’s viability as an energy source.
First, coal could become an ancillary commodity to rare earth production. The fate of coal production would no longer be tied to its burning, and Kentucky’s coal industry could become Kentucky’s rare earth industry. Producing coal solely as a vehicle for rare earth extraction would help those reliant on coal for economic opportunity, opening new opportunities for coal extraction for the support of clean energy tech development, rather than coal for the sake of coal. Coal would be the waste byproduct of rare earth extraction, and although there would still be environmental issues related to its mining and disposal, its carbon footprint would be reduced as it is not being burned. This is an ideal scenario.
The second outcome is that since the extraction of coal for the production of rare earths would reinvigorate the dying coal industry, political leaders may see coal as a cheap, if not free, energy source, and continue burning the rare earth byproduct, contributing to greenhouse gas emissions, air pollution and related public health issues, and environmental degradation.
It remains to be seen how this research project will advance, but University of Kentucky researchers, their funders, and the Appalachian coal economy have a vested interest in continuing coal production. Coal is an industry whose loss places a severe economic burden on communities built around its extraction, but with the political burden to use coal as an energy source eased, rare earths may be the bedfellow needed for coal to become a part of the clean energy transition.
DeLaine Mayer works at Advanced Energy Group, facilitating energy stakeholders’ development of robust, collaborative energy efficiency and carbon reduction strategies. She graduated with distinction from New York University with a Master of Science in Global Affairs, specializing in energy and environmental policy. She wrote her graduate thesis, Extracting Power, on the geopolitics of rare earth elements.
Photo Credit: Shawn Poynter for The New York Times
Please note that opinions expressed in this article are solely those of our contributors, not of Political Insights, which takes no institutional positions.