Thursday, September 12, 2013

China could lock us out of the thorium race

Whenever I have a chance, I watch videos on thorium at home to learn of the many benefits of the thorium molten salt reactor compared to uranium solid fuel reactors. In the videos I've seen, there are two trends that really stand out. First, thorium advocates have noticed that there isn't really a shortage of rare earth metals here in the US. But when we mine thorium, we also get a bunch of rare earth metals with it, and the waste products from thorium energy production include both stable and radioactive rare earth isotopes, some with medical and scientific uses.

The other trend that I've noticed is that China has been demonstrating leadership in thorium energy production. China is also a leader of rare earth metals production and a byproduct of their rare earth mining activity is some thorium. Cell phones, computers and TVs all need these rare earths to function.

If China remains a leader in thorium energy production and research, they will also remain as the world supplier of rare earths. As long as they maintain that lead in rare earth production, even if wages in China come close to US wages, rare earth production in China will tend to keep electronics production in China. I don't hear this problem discussed in political discourse.

There is another problem on the horizon discussed in the videos I've seen. China is a member of the World Trade Organization, that's not a problem in and of itself. But as a WTO member, China has adopted America's aggressive intellectual property regime. There is some discussion of China amassing a patent thicket so broad and wide on thorium energy production, that they could raise the cost of American use of thorium energy production to the point that we cannot compete as a manufacturer with China.

China intends to acquire and maintain a lead in the technologies that will drive manufacturing to their country. Thorium energy production technologies is one arena that China is well positioned to dominate. I don't see any of our politicians doing anything about it. On the economics side, China buys our bonds to keep our dollar strong so that manufacturing work will land there. That's the only reason they buy our bonds, so I doubt very much they are worried about a default on our debt. Now they can combine two points of leverage to keep manufacturing in China.

By maintaining hegemony in thorium and rare earth production, China can eventually lock the US out of the thorium energy market, either by influencing American energy policy to discourage thorium energy production, or by amassing a patent thicket as a barrier to the market. Either action could give China a competitive advantage in energy production, driving energy costs down while labor costs rise to maintain incentive for manufacturers to locate in China.

American mining companies can find plenty of rare earths on American soil and when they do, they find thorium. Unfortunately, there is no demand for thorium, so American companies have to fill out paperwork to meet the regulatory requirements of disposing of thorium when they find it. Wouldn't it be nice if instead of treating thorium as waste, mining companies could just send thorium to a thorium power plant for processing and get paid for it?

There is enough thorium on this planet to power humankind for at least the next 1000 years. Instead of treating it like waste, we could develop leadership in thorium energy production and achieve energy independence. With a ready market for thorium, we can reduce our costs for rare earth mining and processing and once again lead the world as an energy independent nation.
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