9 May 2008

Radioactive Water

Uranium mining at the Grand Canyon (nice view!) will probably lead to pollution in the Colorado River (glowing tap water for Southern California)
On public lands within five miles of Grand Canyon National Park, there are now more than 1,100 uranium claims, compared with just 10 in January 2003, according to data from the Department of the Interior.

In recent months, the uranium rush has spawned a clash as epic as the canyon's 18-mile chasm, with both sides claiming to be working for the good of the planet.

Environmental organizations have appealed to federal courts and Congress to halt any drilling on the grounds that mining so close to such a rare piece of the nation's patrimony could prove ruinous for the canyon's visitors and wildlife alike.

Mining companies say the raw material they seek is important to the environment, too: The uranium would feed nuclear reactors that could -- unlike coal and natural gas -- produce electricity without contributing to global warming.

And uranium is in short supply. In recent years, mines closed in Canada and West Africa, yet the United States as well as France and other European countries have announced intentions to expand nuclear power. Predictably, the price of uranium has soared -- to $65 a pound as of last week, from $9.70 a pound in 2002.

In the five Western states where uranium is mined in the U.S., 4,333 new claims were filed in 2004, according to the Interior Department; last year the number had swelled to 43,153.
I hope that the Bureau of Land ManagementLivestock and Mining gets top dollar from miners. Pollution should be expensive.

Bottom Line: Scarce resources attract conflict over allocation. Allocation to "special" groups or through administrative procedures means misallocation. Allocation should be frequent (as in annual allocations of water), cautious (as in mines) and competitive (as in markets or auctions). Fail to do this, and you can get long-term and harmful misallocations to special interests. Nature loses, the Public loses.