Freeman

ARTICLE

A Mineral Alert

FEBRUARY 01, 1976 by PAUL L. POIROT

Have we withdrawn so much land from mineral exploration and development as to seriously affect the long-term mineral position of our country ? That is the key question explored by Gary Bennethum and L. Courtland Lee, young professionals in the Department of the Interior, in an article "Is Our Account Overdrawn?" in the September 1975 issue of the Mining Congress Journal.

President of the American Mining Congress, J. Allen Overton, Jr., introduces the article:

Bit by bit, acre by acre, vast tracts of the public lands of the United States are being withdrawn from entry for mineral exploration. The various federal bureaus and agencies have sharply accelerated this withdrawal process since 1968, without coordination and without regard for the cumulative effect on future production of metals and minerals from domestic sources.

Unbelievable as it may seem, an area larger than that encompassing 25 of the 27 states east of the Mississippi River is no longer accessible even for mineral exploration, not to mention development for mining.

Much of this withdrawn land is in regions where mineral deposits of economic significance are most likely to occur – in the western United States and Alaska especially.

Lots of laws and governmental agencies are involved in this story but the essence of the situation is that of 824 million acres of public lands potentially available for mineral leasing, 24 per cent were withdrawn as of 1968 and 73 per cent withdrawn as of 1974 ; and of 742 million acres of public lands subject to the Mining Law of 1872, 17 per cent had been withdrawn from possible use in 1968 and 67 per cent as of 1974. Much of the problem developed in Alaska over the Native Claims Settlement Act of 1971. But other significant withdrawals have been made in the name of National Parks, Military Claims, Wilderness Areas, Wild and Scenic Rivers, Fish and Wildlife Refuges, Utility Corridors, and Primitive and Roadless Areas, among others.

Special interest groups have gained political power to have lands set aside exclusively for their own purpose, thus precluding any other possible use of such land – even if two or more purposes might have been served simultaneously. At any rate, mining interests are deeply concerned about this recent trend of land withdrawal from mineral exploration and use.

Lest this be construed as special pleading by mining interests, let us view the matter in broad perspective. Of the total land area of 2,264 million acres in the 50 states, approximately one-third is federally owned/controlled – and not quite half of the latter is in Alaska. Private owners may have personal problems or difficult decisions about the sale or use of their property, but there is no public or general problem over mineral rights or withdrawals on privately-owned land. The problem arises in the public sector – on land not subject to market regulation and control.

This is the old, old problem of the wasteful use of scarce resources under a system of ownership in common ; the ancient problem of chronic famine and starvation that still plagues people dedicated to socialism; the problem of over-grazing the commons in old England, and in the early days in New England where all produce went into a common storehouse for withdrawal by "each according to his needs"; the problem that has only been solved in comparatively modern times in those comparatively few places where the people have understood and respected the institutions of private ownership, specialized production, and voluntary exchange in open competition. This is the problem that currently perturbs mining interests with respect to exploring and developing mineral deposits on government lands. But on those same government holdings is the same problem with respect to grazing rights, water rights, timber rights or any other potential use the market might indicate.

Private owners of land and other scarce resources are free to waste them as they choose, of course, but always strictly at their own expense. If a private owner chooses to hold a given area as a park or preserve or for some other limited use, the market demand for other potential uses makes that owner painfully aware of the opportunity costs he bears to satisfy his particular purpose. And he may be tempted, even persuaded, to allow a small mine opening or an oil drilling rig or pump or even some supervised timber harvesting on his otherwise scenic preserve. It is to his selfish interest to develop and use as economically as possible every scarce and marketable resource available on his property. There is every incentive for him to conserve rather than waste what he owns.

Not so on "the commons" – on that third of the land area of the United States remaining under Federal ownership and control. Not the bids and offers of potential buyers and sellers but only the numbers of voters favoring or deploring a given use have real meaning to the government official in charge of the land. To open such land to the highest bidder in the market place would be to bring it under private ownership – and that would diminish or even close out entirely the job of that government official. So his only incentive is to continue the land in some politically palatable but economically wasteful use – some purpose that millions pretend to applaud though unwilling to support it with their own resources.

Yet, when public officials dictate the disposition of scarce and valuable resources, the millions who applaud are nonetheless obliged sooner or later to foot the bill.

And that bill is falling due far sooner than many had supposed -next week, or next month (or was it yesterday?) for New York City.

The bill already has fallen due and is being paid for government mismanagement of natural gas and petroleum prices, production, marketing, and wasteful consumption.

The bill has fallen due and is being paid in countless "downtowns" laid waste in the name of zoning and rent control and public housing and urban renewal and related objects of urban planning. And there will be additional bills to be paid for urban and rural land utilization schemes and regulations.

Whenever scarce and valuable resources are taken out of private ownership and control – withdrawn from the market – and thrown into "the commons" there is a cost and the taxpayer will be obliged to pay. So let us beware the plans and controls and withdrawals we applaud, for most certainly we will pay for them.

No one knows precisely what the price will be or how long before the bill falls due for the recently accelerated withdrawal of a major part of the public domain from mineral exploration and use. But we should be grateful to Messrs. Bennethum and Lee for the early warning.

 

ASSOCIATED ISSUE

February 1976

ABOUT

PAUL L. POIROT

Paul L. Poirot was a long-time member of the staff of the Foundation for Economic Education and editor of its journal, The Freeman, from 1956 to 1987.

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