Arbitrary Decision Making Means More Stalled Mine Projects on Federal Lands

Environmental reformers in Congress and the Biden administration seem to think that giving federal agencies greater discretion to block mining projects is somehow good for the nation’s critical mineral strategy. Recent draft bills, regulatory rule makings, and agency reports have repeatedly proposed changes to allow permitting agencies to deny mine permits or prohibit mining on federal lands based on a variety of vague criteria with wide latitude for interpretation. Such proposals would only enable future administrations to block proposed mines for short-term political gains, while further increasing policy uncertainty for domestic mineral projects. Improving community engagement practices and industry social license may ostensibly motivate these reforms. However, arbitrary, expanded agency decision-making power will only further impede national efforts to diversify critical mineral supply chains and achieve leadership in clean energy technologies, without providing any additional environmental or social protection relative to the existing, already rigorous, permitting processes.

Under the current permitting regime, the Federal Land Policy Management Act recognizes mining as an allowable use of public land alongside others including conservation, recreation, and timber. Regulations ensure that mines operate safely, within an acceptable degree of physical impact to their sites, and adhere to various performance standards like those under the Clean Water Act, for example. Finally, agencies conduct National Environmental Policy Act (NEPA) reviews to determine if a proposed mine meets these criteria. If so, then agencies grant permits. If not, then the project cannot proceed. Developers may alter their plans or withdraw their proposal if the requisite design changes render the project infeasible, but agencies do not outright deny projects.

The proposed regulatory changes, however, depart from this relationship by granting agencies discretionary and often vague authority to block individual mines irrespective of objective criteria. Agencies could then deny mines not based on their effect on public lands, but rather on administrative technicalities. This threatens to shift the fundamental role of federal oversight of mining on public lands from a system where permitting agencies decide whether mines can proceed based on pre-established criteria to a system that wavers in response to public opinion. In other words, agencies could prohibit mining not because it causes some impermissible damage, but because it is politically salient to do so.

For instance, the Clean Energy Minerals Reform Act of 2023 (S.1742, Section 306) redefines acceptable mine site impacts from impacts that are ‘reasonably incident’ to mining to impacts that do not cause ‘substantial irreparable harm’. The current definition recognizes the practical reality that mining leaves some physical impact on the mining site. However, agencies could use the new, broader definition to deny projects on the grounds they cause any impact whatsoever. Regulators at the Department of the Interior historically attempted the same change of definition in 2000. In response to court challenges, the DOI reverted on the basis that regulators could wield the definition to disallow mining activities entirely, thus conflicting with the Federal Land Policy Management Act.

Similarly, the Biden administration’s interagency permitting reform report and several proposed bills (S. 1742, H.R. 7580, and H.R. 2579) also require developers to secure permits for commonplace, low-impact activities like exploratory drilling. Under current regulations, developers only need to give agencies advance written notice for such minor operations. Requiring permit approvals for low-impact activities not only adds to agency workload and further increases permitting inefficiency, but also unnecessarily introduces another avenue for agencies to block even preliminary mining activities.

Multiple Congressional bills (H.R. 7580, H.R. 2579) and the recent interagency permitting reform report have also proposed that federal mine permitting move to a lease system. Mining currently operates under a claim system, which outlines terms that developers must follow in exchange for occupying portions of federal land for mining activities. Developers, for example, must pay annual maintenance fees to retain their claims. A lease system would serve the same function, but would give agencies more ability to dictate requirements for a mine operator to renew their lease, or alternatively revoke leases outright—all actions potentially subject to qualitative legal interpretation.

In some special cases today, agencies use a lease system for mining activities if the federal government acquired the land, as opposed to continually possessing it since its incorporation into U.S. territory. The Twin Metals Minnesota copper-nickel project falls within a lease-based jurisdiction, and consequently offers a cautionary tale of the potential for subjective decision making if Congress were to extend a lease-based system to all federal lands. In 2012, the project developer Antofagasta, applied to renew their project leases. Citing discretionary authority because production had yet to begin, the Obama administration denied the lease renewals in response to public pushback over potential environmental damage to the nearby Boundary Waters recreation area. The Trump administration subsequently reversed course, accepted Antofagasta’s mine proposal, and began the requisite NEPA review. That NEPA review extended into the Biden administration, which unsurprisingly revoked the leases and rejected the project proposal. Antofagasta may have been able to overturn the lease renewal denial in court, had the Biden administration not gone a step farther and prohibited mining in the project area by executing a mineral estate withdrawal.

Agencies use withdrawals to preempt scenarios where any impact from mining might intractably conflict with other allowable uses such as in the creation of Areas of Critical Environmental Concern for conservation purposes, which agencies incorporate into long-term land use plans. In the case of the Twin Metals withdrawal, however, the Boundary Waters recreation area and project leases have existed since the 1960s, and the region has hosted mining since the 19th century, giving agencies ample time to assess potential conflicts between conservation and commercial use prior to Antofagasta’s application to renew its leases. Executing a withdrawal only after the developer pursued permits suggests that the Biden administration used the withdrawal process to prevent the operator from appealing the lease renewal denial. This heavy blow to the Twin Metals project has, for now, concluded a years-long game of political ping-pong that has left a promising U.S. domestic copper and nickel project in limbo while completely overruling the standard environmental permitting process intended to ensure good environmental outcomes in the first place.

Indeed, none of the proposals for strengthening agency decision authority have modified the actual underlying performance standards for permits. Since the proposed regulatory changes would not remove a developer’s obligation to meet these criteria, broadened agency discretion effectively only blocks valid projects that could have secured all of their permits. Such interference could shutter a project before agencies conduct the National Environmental Policy Act reviews that determine potential environmental damage and give developers a chance to revise mine plans to mitigate impacts. Such was the case with the Twin Metals project. Yet, how can revoking a project lease or prohibiting mining in a project’s local area protect the environment if agencies have not even assessed the impacts the project actually might cause?

Proposed increases to agency discretion, therefore, do not help prevent mines that would cause impermissible environmental damage. Were that the goal, then policymakers would have sought to strengthen permitting laws like the Solid Waste Disposal Act or the Clean Water Act that define standards for environmental impacts. Environmentalists might argue that blocking a mining project outright always protects the environment the most, but this only betrays their interest in obstructing any and all new mining anywhere in the nation—an agenda clearly in conflict not only with national interests, but with the functioning of any modern industrial society. Deviating from an objective, criteria-based system only gives future federal administrations more political flexibility to stop mine projects in response to public pressure.

This profound shift in permitting practice only makes public land use decisions more arbitrary, threatening dysfunctional management, limiting domestic production of key industrial minerals to a modicum of national needs, and exposing the U.S. economy to any resulting geopolitical and supply chain vulnerabilities.

Rejecting arbitrary agency veto powers isn’t to say that the public should have no say in public land use. Americans have good reason to take pride in how both Congress and the federal executive branch can, in response to public attitudes, prohibit mining and other commercial activities to preserve culturally valuable areas, such as by creating a national monument. Furthermore, the National Environmental Policy Act guarantees public notification, input, and legal challenge should citizens or their local elected officials feel agencies granted permits in error. Proper management of public lands should welcome and indeed require public participation, but mechanisms for oversight must strive to remain purposeful and deliberate. Inviting constant petitions to powerful agency officials to exercise veto authority on every potential mine project, on the other hand, only renders public lands all but off-limits for mineral production.

The Biden administration’s permitting reform report provides some insight into why some policymakers have sought more agency power in direct opposition to policy efforts to strengthen U.S. mineral supply chains in earnest. While the Bipartisan Infrastructure Law directed permitting efficiency improvements, some staff appear to see domestic regulatory burdens as positive changes, noting that “[t]he American public must have confidence that the minerals and materials used in our electric vehicle batteries, smartphones, solar panels, and other technology are sourced under responsible social, environmental, and labor standards.” This perspective, however, suggests that pursuing critical minerals strategies requires a comprehensive regulatory overhaul despite agencies enforcing already world-class safeguards and permitting standards. If the true goal of the report is to improve community engagement and social license, then the federal government can accomplish this through better ways than crude strengthening of agency discretion. Such a selective approach to regulating globally-mined critical minerals runs counter not only to national strategic goals, but also both more holistically responsible supply chain sourcing and established federal policies on allowable, regulated use of public lands.