Mr. Chair and members of the committee, thank you for the opportunity to appear today.
I'm a professor of economics and business at the Colorado School of Mines, specializing in mineral economics.
Since 2013, I've been deputy director of the Critical Materials Institute, a public-private research consortium established by the U.S. Department of Energy. It consists of research collaborations, involving national laboratories, universities and companies and is aimed at accelerating innovation to help secure raw materials and their supply chains, and ensure the development and deployment of clean energy technologies.
I have organized my opening remarks around one central question, and then toward the end, I'll offer a few preliminary thoughts on possible U.S.-Canada collaborations.
My central question is, what kind of industrial policies should the United States, and, separately, Canada, have toward raw material supply chains? Note that I refer to industrial policy. This reference is deliberate. How a nation takes advantage of its mineral wealth as a producer and how it manages it's supply-chain risks as a consumer fundamentally reflect choices they make about how to approach industrial policy.
I would observe that a false dichotomy often exists in discussions of public policy that are organized around two caricature-like, mutually exclusive approaches to policy. At one extreme there's the “let the market decide”, a sector agnostic approach, and then at the other extreme there's the “have government pick winners and losers”. In reality, most, if not all, governments operate in a messier middle ground between these extremes.
The real questions are: first, how can and should governments support market solutions which focus our attention on things like education and basic pre-competitive research; and second, how can and should governments steer more quickly, so that the market might direct commercial activities toward particular sectors and technologies?
For raw material supply chains, the education and basic research approach would focus on the long-term—five years, 10 years or more—and would only provide scene setting strategic analysis, but would focus on the important inputs to commercial activities, such as educated people and knowledge obtained through basic pre-competitive research.
On the second issue of steering more quickly over the short to medium-term, we might focus on specific sectors. If we think about raw material supply chains, things like establishing public-private partnerships to incentivize and accelerate technology deployment and commercial activity in a specific, more narrowly defined, supply chain, these could include magnets, motors, electric vehicles, or rare earth magnets and motors, battery materials, anodes, cathodes and batteries, for example.
The essence of national industrial policy should be determining the right balance of government activities that support private solutions over the long-term and help steer more actively, and aggressively over the short to medium-terms commercial activities of special priority.
In terms of areas of possible collaboration—and these are not exhaustive, I might suggest—there are opportunities for U.S.-Canada. Certainly, information sharing and broad, forward-looking strategic analysis related to raw materials, university to university co-operative programs and exchanges for students and faculty. This could also include government-to-government collaborations to assess unconventional primary resources, the recovery potential of valuable materials from processed waste streams from both historical and ongoing mining, and the potential for circularizing material life cycles.
Anyway, according to my clock, I'm now at five minutes, so I will stop and look forward to discussing these and other possible collaborations or anything else you might like when we get to questions.
Thank you very much.