NCPA - National Center for Policy Analysis

Will Green Energy Make the United States Less Secure?

November 2, 2011

Environmentalists have long cited the environmental harms caused by fossil fuels as evidence of the need to move to green sources of energy such as wind and solar power.  Recently, some conservatives have joined their cause, citing national security concerns.  However, key components of renewable energy technologies are made from a small number of rare earth elements, and other rare minerals.  Despite the name, these elements are relatively abundant, but they are rarely found in economically exploitable concentrations.  The exception to this is the People's Republic of China, where the concentration of the minerals is so high that the country has a de facto monopoly on their trade, according to H. Sterling Burnett, a senior fellow at the National Center for Policy Analysis.

The intensifying push to adopt renewable energy technologies that require rare earths will require tradeoffs, including swapping one form of dependence for another, much more restrictive one.

As America relies more on green technology, it will be increasingly dependent on China's good will.

For example, the Obama administration has touted solar panel manufacturing as a green-job growth sector.  However, China has a near monopoly on the element required to make solar panels, making it virtually impossible for American solar power companies to compete with Chinese-owned firms.  Consider:

  • In 2003, China produced only 1 percent of the world's solar panels but by 2009 its share had grown to 38 percent.
  • In 2003, U.S. production of solar panels accounted for 14 percent of the world total, but by 2009 the U.S. share had fallen to just 4 percent.
  • Production in countries other than China fell from 85 percent of the world market in 2003 to 58 percent in 2009.

The boom in China's solar panel production has driven down the prices of similar U.S. products by around 50 percent, which is good for consumers in the short run but not good for U.S. manufacturing jobs.

China is increasing domestic consumption of rare earth elements and rare minerals, and has already demonstrated a willingness to use its near monopoly of the market for these critical resources to force geopolitical concessions from other countries.  As a result, the push for green energy is likely to reduce U.S. economic and geopolitical security rather than enhance it.

Source: H. Sterling Burnett, "Will Green Energy Make the United States Less Secure?" National Center for Policy Analysis, November 2, 2011.

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