The proposed Rosemont copper mine to be developed south of Tucson will provide many benefits to the area.  According to studies, the mine will produce over 400 direct jobs and about 1,600 indirect jobs that will provide about $3 billion in increased personal income over the next 20 years.

The mine will provide local governments with tax revenues of about $19 million per year and create $700 million in local economic stimulus in such things as services, real estate, retail purchases, utilities and manufacturing.

The total physical footprint of the Rosemont mine, including the mine itself, the waste and tailings dumps and the physical plant will be about 4,440 acres which is half the size of the Sierrita mine and one-third the size of the Mission mine.   Even thought Rosemont will have a smaller footprint, it will produce more copper than the Mission mine, about 240 million pounds of copper per year versus Mission’s 170 million pounds.  Pima County wasted $13,000 of taxpayer money building its own model of the footprint (see Hugh Holub’s stories on the mine here.)

Among the concerns with the Rosemont mine is water use.  Rosemont is projected to use 6,000 acre-feet of water per year.  To put that in perspective, the Mission mine uses about 7,200 acre-feet, the Sierrita mine uses about 29,000 acre-feet, and agriculture near Green Valley, mainly the pecan grove, uses 32,000 acre-feet per year.  According to Rosemont, “The initial source will be groundwater withdrawn from wells in the Upper Santa Cruz sub-basin of the Tucson AMA basin and replenished by Colorado River water delivered by the Central Arizona Project.”  Rosemont has already stored 45,000 acre-feet of water in the Tucson AMA.  Rosemont’s water conservation and recycling techniques should result in the mine using only 50% of the water compared to older, traditional mining and processing methods.

Rosemont submitted a draft environmental impact study (DEIS) to the U.S. Forest Service in mid-2007.  You can read the study at http://www.rosemontcopper.com/ (Click the Studies tab).  The Forest Service had originally planned to release the study in the spring of 2009, but the bureaucracy has produced delay after delay, possibly due in part to opposition from some local politicians and environmental groups.  (See Local Politicians Against Jobs.)

The Forest Service then promised to release the DEIS by the end of last year, but that was not to be.  Just yesterday, buried deeply within an obscure part of the national Forest Service’s website, the Forest Service announced that they will publish the DEIS in the Federal Register in August, 2011, and publish a decision in January, 2012.  After that there is a 90-day period for public comment.  And then the plan must go to and get approval from so-called “cooperating” agencies which includes Pima County and a bunch of state and federal agencies.

Delays such as this are unconscionable but seem to be the norm with the current administration and its policies of putting all possible impediments in the way of developing our natural resources.

The bureaucracy is exacting the cost of lost opportunity upon us at a time when we could have been enjoying the economic stimulus of a new enterprise.

Disclaimer: I am a retired geologist who was employed by a major copper mining company, but I have no connection to Rosemont Copper.

This book is somewhat troubling. The author, Jason Scorse, makes a few good points, shows a complete misunderstanding of some issues, and tends to explore each issue in sometimes exhaustive and exhausting detail. Rather than economic advice, much of the book is a polemic on Scorse’s view of what constitutes an environmental problem; chief among those is anthropogenic caused climate change.

The seven chapters of the first part of the book deal with determining the optimum amount of pollution, tying to put a value on ecosystems, property rights, and jobs.

Scorse’s main points in part one are:

The world’s oceans and atmosphere are devoid of property rights (this is the tragedy of the commons), therefore no one takes responsibility for the sustainability of the resources. He uses the example of fisheries in which, Scorse says, fisherman take as much as they can, as quickly as they can.

Scorse notes that food production and electricity are really two things we cannot do without and both engender some pollution. He says that zero pollution is not feasible and environmentalists must accept this fact. They have to judge the benefit versus cost. Some pollution can be abated at a relatively low cost. “The optimum level of pollution is the amount where the benefits of abating additional pollution are not worth the added cost.” Scorse offers advice on how to judge that optimum point. He also notes that many U.S. environmental statutes, such as the Clean Air Act, Clean Water Act, and many EPA programs specifically mandate that the agencies are not allowed to use benefit-cost analysis.

Scorse spends many pages bashing the market system, but then he says “Market-based mechanisms have the benefit of allowing firms multiple pathways to compliance, thereby allowing them to choose the cheapest. Market-based mechanisms are also generally much better at promoting innovation because they create incentives for the development of new cleaner technologies.”

Some conflicting statements: As a result of environmental regulations “many forestry industries have experienced significant employment declines” (page 73). “There is no evidence that, overall, environmental regulation leads to job losses” (page 74).

In Part 2, Scorse takes another seven chapters to deal more specifically with climate change, forest and biodiversity conservation, agriculture, chemical pollution, fisheries, population growth, and “demand side interventions”. Scorse says that it is critical that private land owners be provided positive incentives to conserve natural resources. He advocates ending agricultural production subsidies saying these are “a colossal waste of taxpayer money.”

In discussing the ban on DDT, Scorse makes a foolish generalization: “Almost forty years have passed and there is virtually no one in the United States who believes that the ban was the wrong direction.” Apparently Scorse is not familiar with many studies which showed that the ban was unnecessary and has doomed many people, especially children in Africa, to death by malaria. (See 100 things you should know about DDT , The Excellent Powder, and DDT, A Case Study of Scientific Fraud.)

Some other points from the book: “The population issue is largely a distraction.” “The example of ethanol subsidies should be environmentalists’ Exhibit A of how not to craft government policy.”

As I said at the top, this book is troubling, many of Scorse’s economic recommendations are ambiguous platitudes rather than specifics. On the other hand (and Scorse uses many “on-the-other-hands”), “economic theory does not offer black and white answers…”

The author: Jason Scorse received his Ph.D. in Agricultural & Resource Economics, 2005 and M.S., Agricultural & Resource Economics, 2003, from UC-Berkeley and , M.S. in Applied Economics & Finance, 2001 and B.A. in Environmental Studies, 1991, from University of California, Santa Cruz.

The book is available at Amazon.com. I received a free copy from the publisher.

In game theory, a zero sum game is one in which the gains of one are exactly balanced by the losses of another. In economics, a zero sum game is aptly described by the saying, “As the rich get richer, the poor get poorer.” Many assume that our “economic pie” is static, so that if some take more of the pie, there is less for others to share. But capitalism increases the size of the pie, and although some may get bigger pieces than others, all gain.

Wealth is not money. In the economic sense, wealth is created from natural resources to produce capital goods and services. The more goods available to a society, the wealthier that society is. Reasonably unfettered capitalism is the best engine to produce those goods. In a capitalist society, even the poor are better off than those in non-capitalist countries; just compare the U.S. with some African countries.

Many politicians, including the current crop, think the economy is a zero sum game. Hence they attempt to “redistribute the wealth” in the name of fairness. But this attempt to make things “fair” just decreases the size of the economic pie, to the detriment of all.

The federal government, and some state governments, are hindering creation of wealth through a myriad of regulations that make creation of capital goods, and hence wealth, much more difficult than it could or should be.

About 80% of the U.S. economy is now in the service sector. While many services are valuable and may help producers of wealth; services, themselves, are not intrinsically wealth producers. In our economy, about 71% of GDP is made up of consumer spending which is highly sensitive to job creation, personal wealth, and after tax income. As the real wealth creators, the manufacturing and energy sectors decline, the service sector will feed on itself and eventually our economy will become a zero sum game.

The best way out of our economic mess is to unfetter and unleash the capitalists so that our “economic pie” becomes bigger. Government is currently a large part of the problem. It should just get out of the way.