One proposed solution to manage short-term disruptions in availability is to vigorously pursue domestic mining. That may sound appealing, but the U.S. can’t mine its way to rare minerals independence. Aside from the absence of sufficient deposits in the U.S., the approach carries risk: a supplier in another country could produce the minerals more cheaply and drive U.S. mines out of business. It wouldn’t be the first time. The major U.S. rare earth mine that is now restarting was driven out of business years ago by low-cost Chinese competition.

We can’t rely on stockpiling either. Stockpiling is a disincentive to innovation because it anchors us to the status quo. Stockpiles are also a terrible means for the government to try to moderate price fluctuations and stabilize markets. When the U.S. government began to sell off the helium reserve a few years ago, it assumed that the price of helium would drop, but it went up instead.

So, what’s the best way to increase availability of energy-critical elements (ECEs)? Take a lesson from industry.

In 2006, General Electric projected that demand for rhenium — an element critical to its advanced turbines — would outpace worldwide supply within a few years.  Instead of stockpiling, GE reduced the company’s reliance on rhenium by combining recycling with an intensive research program to develop an alternative alloy. 
GE succeeded, but many smaller U.S. companies may not be aware of an impending supply disruption, can’t afford to carry out substitutional research, and can’t engage in extensive recycling. A federal role in some of these areas could be critical to the competitiveness of smaller U.S. companies and our domestic scientific enterprise.

For example, the government could closely monitor worldwide resources and make that information accessible to U.S. industries and laboratories. Accurate information about availability will allow industries and investors to see beyond the price spikes and plan their futures. 

The government could also promote fundamental research into ECE substitutes. It can take years to identify an appropriate alternative, so it is important that research into the functional properties of a suite of potential replacements begin now. The goal should be a broad understanding of the advantages and disadvantage of technologies based on alternative materials, in order to enable U.S. manufacturers to more smoothly shift to a substitute in the event of supply disruptions.

Many ECEs are rarer than gold, but we’re treating them like trash. Cell phones and iPods end up discarded in the back of sock drawers or in garbage dumps, yet they all contain ECEs in concentrations that exceed the richest ores. Those dispersed products could be gathered into a resource – an urban mine – so the ECEs can be extracted for reuse. There are various paths to achieve this: It would be best if industry could stimulate recycling by providing consumer incentives. In addition the government could help increase recycling by promoting greater consumer awareness.

The supply of ECEs can be stabilized by creating options that both expand availability and reduce dependence. A triad of information gathering, recycling, and research will provide the U.S. with the best safeguard against disruptions.

Robert Jaffe is the Morningstar Professor of Physics at MIT and the chair of a recent technical and economic study on the nation’s energy-critical elements. Kenneth P. Green is a Resident Scholar at the American Enterprise Institute.