Thank you Lynn Scarlett - Mining Subsidies

Thank you in advance, Lynn Scarlett
"Industry-friendly interior chief quits...[Gale] Norton leaves office at a time when her agency was increasingly tied to disgraced lobbyist Jack Abramoff....Until Bush appoints a successor, Deputy Interior Secretary Lynn Scarlett will take the helm of the Interior Department. A Santa Barbara resident, Scarlett is former president of the Reason Foundation, a Los Angeles think tank with libertarian leanings. She has worked to promote free-market solutions to environmental problems." San Jose Mercury News 3/11/06
March 11, 2006: Starting soon, Lynn Scarlett, former executive of the Reason Foundation, will become Acting Secretary of the USA Interior Dept., replacing Gale Norton. Scarlett wrote reports on recycling and solid waste in the 1990s, and was a source for the mid 1990's diatribe, "Recycling is Garbage" by NYTimes' John Tierney. In a 1997 editorial in Reason Magazine, Scarlett wrote, ``Environmentalism is a coherent ideology that rivals Marxism in its challenge to the classic liberal view of government as protector of individual rights.''
Lynn Scarlett's criticism of recycling was best summed up in her quote from Tierney's article: "In a purely market-driven situation, people would still recycle according to what makes sense in their area."
It will be wonderful to finally have this free market, level playing field advocate finally in charge of the federal agency responsible for collecting fees on federal land mining and forestry projects. The agency is arguably the de facto administrator of the Superfund (technically overseen by EPA, but bankrupted by cleanup costs at federal copper and gold mining sites on federally "leased" land).
Ms. Scarlett has already been in charge of the Bureau of Land Management for several years. The BLM administers land leases to mining companies under USA's 1872 General Mining Act, at a rate unchanged from the $5/acre set during the 1872 Apache Indian wars. Her failure thus far to reform extraction subsidies may be explained by the cozy relationship between lobbyist Jack Abramoff and former Interior Secretary Gale Norton ties (a possible explanation for Norton's early retirement).
If the cost of recycling and waste disposal were still administered in 1872 dollars, the former Reason Foundation president would be outraged. Now Ms. Scarlett is completely in charge of the federal mining and forestry land lease and cleanup enforcement. What can we expect?
Implicit in her 1995 article "Solid Waste Recycling Cost" is a criticism of government interference in raw material commodity supply and demand. The article made valid points about exaggerated landfill closure rates.
Now, under Ms. Scarlett's tenure, we should expect the price of copper, gold, aluminum, silver, palladium and other metals used in electronics manufacture to be unshackled from the 1872 GMA / Superfund subsidy system. As mining and refining bear an increasing share of their true costs, we can expect electronics recycling to achieve a great leap forward, as it has already in countries without federal mining subsidies. The “wild, wild east” has a truly free market for raw materials, making it a magnet for recycled metal.
The subsidies by the Interior Department were a major focus of the GAO's recent report to Congress on the underachievement of electronics recycling in the USA. It is easier, more energy efficient, and cleaner to get a pound of copper out of used electronics than out of a mountain in Montana. With reform of the BLM, it can be a less expensive source of copper as well.
Even free market environmentalists shouldn't demand complete reform of the BLM subsidy programs in the first year. Perhaps, as a starter, the Interior Department can implement a "user fee" for mining companies obtaining federal land leases. Added to the $5/acre, 0% royalty system, the User Fee can cover the salaries of the federal workers who actually administer mining and forestry land leases. Afterwards, these "user fees" might even cover the overhead of these federal agencies, or to pay for the development of access roads put in by the federal government to provide access to the mining and timber industry.
We shouldn't expect a profit from leases or "user fees" on federal lands any more than we demand a profit from public recycling programs. But perhaps primary smelting and mining may one day pay enough into the system to cover its own Superfund costs, as recycled smelters are forced to do. Seven of seven of America’s secondary copper smelters have been closed, with the biggest factor being failure to pay their cleanup and remediation costs.
China, which has no BLM subsidies, has been more than happy to take over the secondary copper market. America is left with mining and primary smelting. If you owe Superfund ten million dollars, like recycled smelters, Superfund can go after you. If you owe Superfund ten billion dollars, like a virgin smelter, BLM takes over the "leased" site.
The simple fact is that hard rock mining on federal lands accounts for 45% of all toxics pollution released by all USA industries. If we could dump all of America's raw municipal solid waste straight onto the ground on federal land, it would generate less pollution, and would generate more than $5 per acre in revenues. Or another “modest proposal” might be to dump MSW onto an existing mining Superfund site, effectively "sub-letting" the land lease for the fraction of a cost of a regulated lined landfill, a win-win scenario for both extraction and disposal.
The 1872 mining laws have been around so long, that the recycling community doesn't even discuss them any more. But the fact is, reform works.
Canada's small revisions to its 1977 mining cleanup laws are credited with mining-giant Noranda's multi-million dollar investment into electronics recycling the following year. A few months after the reforms, which were opposed by the mining company, Noranda’s president made a major speech on “sustainability” as the future of the industry, and Noranda soon made the largest electronics recycling investments in history. Micrometallics of California is now owned by Noranda.
We eagerly await the anticipated effects of similar small doses of free market reforms to the 1872 General Mining Act and Superfund implementation. Go to it, Lynn Scarlett.
Robin Ingenthron March 11, 2006

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