Alaska has begun a sweeping assessment of its rare earth resources in hopes of capitalizing on what state officials expect will be a global rush for minerals used in clean energy technologies.

Gov. Sean Parnell (R) has declared it an administration priority to try to make Alaska a major supplier of rare earths for U.S. tech manufacturers.

"We cannot rely on foreign resources to meet our nation's demand," Parnell said at his State of the State address in January. "And you know what, there may be no reason to. Alaska is a storehouse of rare earth minerals. Let's explore them."

At Parnell's request, state lawmakers agreed to spend $500,000 on rare earths exploration. The state Department of Natural Resources has also published a booklet highlighting the state's mineral wealth.

"One thing that Alaska has is that we are very under-explored," Ed Fogels, DNR deputy commissioner, said in an interview. "It's a huge state. And has very little exploration relative to the other states."

Fogels identified 70 areas with the right kind of mineralization for rare earth mining. And in testimony on Capitol Hill earlier this month, DNR Commissioner Dan Sullivan touted "150 occurrences" of rare earths in his state.

"We want to make it known that Alaska has a lot to offer," Fogels said. "So we're going to increase the knowledge base for Alaska in rare earths."

The rare earths race took off when China, the world's top supplier, recently curtailed exports in an effort to protect its own resources and promote the development from its own tech industries. Companies are exploring potential rare earth mining sites around the world, and Congress and the Obama administration are moving to secure domestic supplies.

In letters to President Obama and Energy Secretary Steven Chu, Parnell urged the U.S. Geological Survey to work with Alaska officials on the assessment of rare earths and other resources. He also touted the University of Alaska as a strong contributor to nationwide efforts to increase research and learning of rare earths.

Playing off his state's motto, "North to the Future," Parnell wrote, "Our Nation can look 'North to the Future' to Alaska for solutions on REE's" Parnell wrote the president, quoting the state's motto.

To be sure, experts are skeptical of what they say is hype around rare earths. In congressional hearings and briefings, these experts have advised that policymakers not panic.

"Demand is mostly speculative," Jack Lifton, founding principal of Technology Metals Research LLC, said at a Washington, D.C., panel discussion earlier this year. "It has not occurred yet."

Of dozens of proposed rare earth projects around the world, experts warn only a small percentage will yield minerals in the near future.

In the United States, Molycorp Inc. has restarted operations at the Mountain Pass, Calif., mine and is set to produce a significant portion of the global community's rare earth needs.

"You really don't need to look for any more," Lifton said. "Start producing the stuff, stop talking about it."

'Highly speculative'

A recent report on technology minerals by the accounting and consulting firm Ernst and Young warned that many projects may be left behind in an extremely competitive environment.

"I think they are highly speculative," Massachusetts Institute of Technology professor Robert Jaffe said in an interview. "That kind of speculation is really important in the world of mineral assets."

But just because the enterprise is speculative, does not mean there is not a real market for rare earths.

Dudley Kingsnorth, executive director of IMCOA, an Australian consultancy on rare earths markets and project development, has predicted a short-term supply crunch and a strong demand increase, particularly from the deployment of clean tech.

Said Jaffe, "The market for these materials is likely to expand dramatically."

Despite numerous projects worldwide, Jaffe is among experts touting Alaska's heavy rare earth resources, which include some of the most coveted of the elements. Heavy rare earths include dysprosium, which can be used in lasers, computer memory drives and magnets.

The U.S. Bureau of Mines, which from 1910 until it was shuttered by Congress in 1995 was the nation's top mining research agency, identified southeast Alaska's Bokan Mountain as containing "vast quantities" of heavy rare earths, according to Ucore Rare Metals Inc., a Canadian company exploring the site.

"Our highest priority is on the advancement of a prospective mine as quickly as possible," Jim McKenzie, Ucore's CEO, said in a statement about his company's 2011 plans.

The Ernst and Young report listed Ucore's Bokan effort as one of the world's advanced rare earth projects, along with Molycorp's Mountain Pass mine, and Rare Element Resources Ltd.'s Bear Lodge project in Wyoming.

Alaska DNR's Fogels also identified Houston-based Contango ORE Inc. as another company active in the state's rare earths race.

"If the private sector wants to explore up here, we welcome that," he said.

Legislation, lobbying

Alaska's efforts to promote more exploration and mining in the state are coinciding with a broader push by Republican lawmakers in Congress to remove what they say are barriers to economic development.

State lawmakers have approved $75 million in bonding authority for infrastructure improvements to help advance mining projects, including roads to more remote areas, DNR Commissioner Sullivan said on Capitol Hill.

"We're also looking at making our permitting systems here even better," Fogels said, describing efforts to increase coordination and speed of project reviews by the state. "That authority doesn't extend to the federal agencies. Quite frankly most of the delays and inefficiencies tend to be on the federal side."

It is no surprise that Alaska Republican Sen. Lisa Murkowski is sponsoring broad legislation on critical materials that includes provisions to address permit delays nationwide.

The governor, Parnell, is also pushing to increase extraction of coal, copper, lead and gold. But he said too many federal lands are off limits to mining, something he is urging Congress to review.

While Obama administration officials are promising to take the issue seriously, some congressional Democrats have expressed concern that some mining projects touted by Parnell may damage natural resources.

The battle in Washington over a proposed Pebble gold and copper mine near Alaska's Bristol Bay is one of the most intense battles over Alaska mining with fishermen and environmentalists wanting U.S. EPA to veto the project before it starts and mining developers promising an economic boost if their project gets off the ground (Greenwire, June 22).

Parnell is clear on where he stands. In his letter to Energy Secretary Chu, the governor emphasized that the federal government "needs to focus on 'turning dirt' on [rare earth element] mines."