The IIJA’s objective of achieving Net Zero through growing renewables contradicts Congress’s current Build Back Better legislation. BBB, if approved, would restrict access to, raise the cost of, or limit the production of low-priced oil and mining goods. The United States requires mining and petroleum to supply critical minerals to be healthy and productive.
Even though oil and natural gas contribute over 80% of the world’s energy, the BBB repeals leases on the ANWR on Alaska’s North Slope. In addition, the measure raises the minimum bid on new federal leases from $2 to $10 per acre. The new expenses are in addition to the production and severance taxes that each state now imposes.
BBB raises yearly mining claim costs to $200 per claim and imposes a new seven-cents-per-ton levy on mine waste rock. It also adds an 8 percent royalty on gross profits of minerals generated on federal territory. Mines already pay property and severance taxes to states and municipalities. Therefore these operations are already covered by state legislation. BBB imposes extra and unneeded costs on business when raw materials and metals are in short supply to construct renewable energy installations.
Massive amounts of iron, copper, cobalt, nickel, lithium and the rare earth elements neodymium and dysprosium are required to build a system to generate power from wind turbines (Nd-Dy). Mining, which is the source of these minerals, is penalized by BBB since they must produce electric vehicles, and these metals come from mines.
By 2040, a 100-fold increase in electric vehicles on the road will reduce world oil demand by 5%. Renewable energy must grow ninefold to replace oil and natural gas in two decades. Over the lifetime of a $1 million investment in utility-scale wind or solar, 50,000 MWh of electricity will be generated.
The magnitude and quantity of necessary materials pose the foremost hurdle to developing renewables. Wind turbines must be installed over a 350 to 450 square mile region to match the output of a single natural gas or coal-fueled power station. US utilities utilize oil- and gas-burning reciprocating engines (large cruise-ship-like diesel) to compensate for intermittent wind/solar output. Since 2000, three times as many have been introduced to the grid than in the previous 50 years.
In the United States, cobalt, copper, nickel, lithium, and rare earth metals are required for powertrains, batteries, wiring in electric cars, and copper for wind turbines. To recharge EV batteries, about 100,000 1.5 MW wind turbines with a 40 percent efficiency are necessary. 6.6-kilogram cobalt, 8.4 kg lithium (as LCE), 0.5 kg Nd-Dy rare Earth metals, and 90 kg copper are the average requirements per vehicle. BBB’s planned fees are excessive and will put a halt to mining.
The proposed fees are so high that mines in the United States will be closed and shut down. The combined supra-excessive waste and royalty payments equal 147 percent of total income (exceeding income by 47 percent) before spending a dime on capital or operational expenditure at the current metals price. 2,079,900 career non-supervisory professional workers may lose their employment due to this law.