[ASSURAS] Precious minerals. Rare earths buried underground. They make our gadgets work and help power our clean energy. And one country is making them a priority.

[MARK SMITH] The premier of China told us in a roundabout way that they understood just how strategic these minerals were when he said, "The Middle East may have oil, but China has rare earths."

[ASSURAS] Why that threatens America's energy security. Plus, solving our energy troubles with the help of video games.

[SULLIVAN] Take away the oil plant and build wind turbines.

[SEAN HAGLER] It's solving some problems but it's creating rolling blackouts in other areas.

[ASSURAS] And, charging up the holidays with energy efficient gifts. We'll show you what's hot. This is "energyNOW!"

Hello, everyone. I'm Thalia Assuras. Welcome to "energyNOW!", a weekly look at America's energy challenges and what we're doing about them. At this time of year, one of the biggest challenges for many of us is figuring out how to make the holiday season fun, with family and friends, decorations, lights and gifts. When it comes to the things we buy -- and we'll have some energy-efficient gift suggestions later on -- we're used to seeing the words "made in China." More and more of those items, though, as well as many of the clean energy technologies we use, could also read "mined in China." And that could create some big problems for the U.S. down the road. Chief Correspondent Tyler Suiters explores what our dependence on certain types of minerals could mean to our high-tech lifestyles and our energy independence, in this "energyNOW!" Spotlight.

[SUITERS] Computers, smart phones, military jets, rocket systems, electric cars, wind turbines, energy-efficient light bulbs, MRI machines, flat-screen TVs -- none of them can function nearly as well without rare earths -- elements that are essential for making some of the strongest, smallest magnets in the world.

[JOHN BURBA] This rock has some rare earths in it.

[SUITERS] John Burba is an expert on these minerals.

[BURBA] Scandium, yttrium, lanthanum, cerium, praseodymium, neodymium -- promethium is artificial, so nobody has that -- samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium.

[SUITERS] That's 17.

[BURBA] That's it.

[SUITERS] The catch being that there is actually a rare earth inside your iPhone.

[BURBA] Yeah, that's what's generating the colors in the screen.

[SUITERS] Burba is the chief technical officer of Molycorp, the company that owns the Mountain Pass mine in California, the only active rare earths mine in the United States.

[BURBA] Rare earths are actually quite prevalent in the Earth's crust. You could probably go out in your garden and find rare earths if you have good instrumentation. But it's going to be such low concentrations, you can't do anything with it.

[SUITERS] But 97% of rare earths on the market are mined and produced in just one place -- China.

[JACK LIFTON, TECHNOLOGY METALS RESEARCH] The big issue or danger -- if it's a danger -- is that China will totally control the production of all devices containing these rare earths.

[SUITERS] Jack Lifton is a technology metals consultant. His concern is that China's craving for more rare earth products will produce a rare earths crisis.

[LIFTON] China, unless it increases the production of rare earths, will simply consume all of the rare earths it produces.

[BURBA] The Chinese dominated the entire industry.

[SUITERS] When John Burba joined Molycorp in 2003, he felt it was critical to revitalize rare earths production in the U.S.

[BURBA] They were very effectively using their control over the rare earth industry to force high-tech manufacturing into China. And I could look and see how fast it was leaving the United States.

[SUITERS] And that could impact more than just iPhones.

[SENATOR LISA MURKOWSKI, (R) ENERGY & NATURAL RESOURCES CMTE] I believe it absolutely is an issue of national security. Just as oil is an issue of national security.

[SUITERS] Lisa Murkowski is the ranking Republican on the Senate Energy and Natural Resources Committee. One of her biggest concerns -- clean energy technology consumes about 20% of the world's rare earths. There's a thin coating of rare earths in compact fluorescent light bulbs and there are rare earths in the magnets that help turn hybrid electric vehicle engines, and in the electrical generators that go into wind turbines, what allows them to produce power. One manufacturer says the biggest turbines can use two tons of rare earths materials.

[MURKOWSKI] When it comes to our renewable energy potential and being energy independent, all of that could really be limited because of our reliance on foreign sources -- particularly China.

[SUITERS] Molycorp hopes to alleviate some of that reliance, aiming to produce 40,000 tons a year by 2013, enough rare earths, says CEO Mark Smith, to meet U.S. demand.

We have the supply here?

[SMITH] It's right here in our own backyard.

[SUITERS] From the 1960s into the 1980s, Mountain Pass was the world leader in rare earths production, providing minerals that, among other things, gave color to television sets and powered the catalytic converters in automobiles. And those rare earths minerals are still in the ground here. Why haven't we been mining them?

[SMITH] Well, it's been a cost problem, a technology development problem, and it took us time to revamp our business.

[SUITERS] Revamp, because Mountain Pass closed in 2002. There had been a series of environmental accidents. That, along with the drop in rare earths prices, made it impossible to compete with China.

[SMITH] Back in the early '80s, the premier of China, I think, told us in a roundabout way that they understood just how strategic these minerals were when he said, "The Middle East may have oil, but China has rare earths."

[SUITERS] So does the U.S., but producing them competitively is a challenge.

In all honesty, Mark, it's hard to believe that you can produce at a lower cost than China can.

[SMITH] We can. A facility of this size in China would probably require 3,000 to 4,000 people to operate. We'll have 300 or 400.

[SUITERS] What's the difference?

[SMITH] The difference is we use a lot of automation. We use a lot of computers and we use technology.

[SUITERS] Another possible solution -- finding replacements. That's what GE's Global Research team in New York is working on, searching for rare earth substitutes.

[KIRUBA HARAN] So, this is a coil for a magnetizer.

[SUITERS] And is this rare earth free?

[HARAN] This is completely rare earth free.

[SUITERS] A significant accomplishment for Kiruba Haran's lab, because GE is the biggest wind turbine supplier in the U.S.

So, once this is perfected, will this eliminate the need for rare earths industry wide for wind turbines?

[KIRUBA HARAN] Exactly, that's right. But a word of caution -- this is very early stages.

[SUITERS] Can those substitutes perform as well as the real thing?

[HARAN] They perform better. Even if rare earth wasn't an issue, if this was available today, we would actually use this.

[SUITERS] Haran's research isn't ready for the market yet, and to make a serious dent in America's reliance on foreign rare earths supplies... Jack Lifton says the U.S. will need more than substitutes.

[LIFTON] If the United States does not restructure, reshore, so to speak, their rare earth industry at this moment, and we haven't made any significant moves by 2015, we will simply no longer be a nation with any hope of doing so.

[SUITERS] And we'll continue to be dependent on yet another foreign source for critical energy supplies.

[MURKOWSKI] Trading our reliance on oil for reliance on rare earth minerals is an equally untenable position, and that's where we're going.

[SUITERS] Especially if the U.S. wants clean energy and all of our high-tech toys. In Mountain Pass, California, Tyler Suiters, "energyNOW!"

[ASSURAS] Toyota, which makes the Prius hybrid, is also looking for rare earth replacements after China briefly halted exports of the minerals to Japan last year. The Japanese car company is working on a new electric motor that doesn't need rare earth minerals. It will be lighter and more energy-efficient, too.

Still to come, just in time for the holidays, high-tech, energy-efficient gifts for your family and friends. But first, gamers going green.

[MAN] In 2070, sea levels are rising and land is disappearing. With scarce natural resources, each decision has a consequence.

[ASSURAS] Video games that could make perfect presents and challenge energy views.

[BREAK]

[ANNOUNCER] "energyNOW!" is celebrating its first anniversary. Thanks to you, our show now reaches over 150,000 TV and Web viewers every week. From Washington to Beijing, from Houston to Tel Aviv, we tell you about new energy jobs, breakthrough technologies, climate action, and how to cut back America's dangerous reliance on foreign oil, which is costing our economy roughly $300 billion a year.

[T. BOONE PICKENS, CEO, BP CAPITAL] We've got to get on our own resources.

[DON CHEADLE, ACTOR, ACTIVIST] When are we going to make this jump?

[ANNOUNCER] But the in-depth reports you see on "energyNOW!" also have a price tag. So to keep "energyNOW!" growing, we want to form new partnerships with foundations and corporations who are equally concerned about America's energy future.

[ZEPPS] What we do right here has a direct impact on what happens here.

[ANNOUNCER] Join us in bringing "energyNOW!"'s message to more and more viewers. Please have your company or foundation contact us today.

[TEXT ON SCREEN] Please contact our General Manager, Hardy Spire, 202-621-2916 sponsor@energynow.com.

[ASSURAS] It's holiday shopping time, and no doubt, many of you have video games on your list. Mindless fun, right? Not according to "energyNOW!"'s Lee Patrick Sullivan, who spent some time with game designers and players gripping their controllers and taking charge of their energy decisions.

[SULLIVAN] If you're of a certain age -- namely mine -- you remember the birth of the video game. This was actually state-of-the-art at the time. This was my game -- Atari basketball. At the time, it was really lifelike. I still hold the record on my block for most points scored in a game. Now today these games are so advanced that you can experience warfare, be a gridiron hero, as well as a guitar hero. Now some of those same developers are using that creative energy to make games about energy.

[MAN] With scarce natural resources, each decision has a consequence.

[SULLIVAN] No, that's not a trailer for an upcoming James Cameron film. It's a preview for a video game. Celia Pearce is a video game designer and digital media professor at Georgia Tech.

[PEARCE] People learn more by making things. So, if you want someone to learn about the environment, have them build a power plant. Give them something to make. And right away, that's fun.

[SULLIVAN] Take the recently released game ANNO 2070. Players build cities and get to choose the energy source. As the game progresses, players witness the outcome of their choices.

[MAN] Rapid growth or harmony with nature -- What will you decide?

[SULLIVAN] It's not the first game to tackle energy and environmental issues. In fact, the guys at this video-game themed bar near Atlanta have been building virtual energy systems for years.

[SEAN HAGLER] You have to kill an enemy within 3 seconds.

[SULLIVAN] Sean Hagler is the general manager at Battle & Brew in Marietta, Georgia. He's showing me the urban planning simulation game Sim City 4.

When you have cities, you need power, correct?

[HAGLER] Sure.

[SULLIVAN] How does that work into this game?

[HAGLER] You start off with just nothing. And you have to create a residential area, but it doesn't have any power. It's this huge residential area.

[SULLIVAN] That's what those little lightning bolts are?

[HAGLER] All the lightning bolts indicate that there's no power going.

[SULLIVAN] Sim City lets players build power plants with a variety of fuel options.

[HAGLER] If we did a coal power plant, out in this area here, and then ran our electrical lines from there... to there, we've powered the area.

[SULLIVAN] What if we got rid of the coal plant and put up two or three wind turbines?

[HAGLER] Put up a wind turbine, we'd have to put one here. And, as you can see, some of those went away. And some of them are going away and then they pop back up. It's solving some problems but it's creating rolling blackouts in other areas. And now it's, "Disaster looming. Power plants are over capacity!" Because it's like, you have too many people here. You can't just run it on just that.

[SULLIVAN] Hagler says playing Sim City 4 has given him a greater appreciation of where energy comes from and what it costs.

[HAGLER] It makes you educate yourself more about what's going on in a city environment, power wise. It makes you think and it makes you realize what your impact on energy is.

[SULLIVAN] In a world of networked gaming, Georgia Tech's Celia Pearce says large numbers of players can work together and possibly create real-world energy solutions.

[PEARCE] And what games allow us to do is try things, to rehearse things. They allow us to engage with dynamic systems in an interactive way, to experiment, to fail.

[SULLIVAN] Pearce says gamers aren't afraid to experiment and possibly fail, because, well, that's how they get good at video games -- they try and fail over and over again until they succeed.

And gamers have already solved at least one real-world mystery. After struggling for years to map out the structure of a key enzyme in the fight against HIV and AIDS, researchers turned the problem into a video game. They put it on the Internet, and within weeks, gamers had cracked the code.

[MS. COKELER] Where did you see the solar panels that were giving energy to the building?

[SULLIVAN] At the Epstein School in Sandy Springs, Georgia, students in Miss Cokeler's 4th-grade class are playing a game called Planet Zero, which teaches kids about alternative fuels. These 4th-graders were already looking at ways to improve the game, like adding explosions.

[STUDENT] It would be cool if they added in the game like a gasoline thing, and then you could just like destroy it so you could get rid of all of the fossil fuels and gasoline. That would be sort of cool.

[SULLIVAN] Or have some sort of laser that turns it into a solar panel.

[STUDENT] Yeah, that would be pretty cool, or a windmill, or one of those sources of electricity.

[SULLIVAN] And it's not just conventional video games.

[MAN] One way or the other, we're all in this together.

[SULLIVAN] These are scenes from an online interactive game called "World Without Oil." It simulated a worldwide oil shortage.

[MAN] Gas prices jumped to over $4.00 a gallon.

[SULLIVAN] Sound familiar? This game was played online for about a month in 2007. That's the year before oil prices hit a record high of $147 a barrel. Ken Eklund is the game's developer.

[EKLUND] Energy is one of those themes that really lends itself to a collaborative game. It really is a subject where we're all involved in our own way. Any sort of solution is going to be a collaborative, widespread solution.

[SULLIVAN] If you were a gambling man, would you think that gamers are going to solve the energy crisis?

[MAN] I say that there's a good chance, yeah.

[SULLIVAN] So, parents, take heart. All that time your kids spend playing video games may not be a total waste of time -- or energy. In Atlanta, Georgia, Lee Patrick Sullivan, "energyNOW!"

[ASSURAS] If you're wondering how much energy it takes to run all those video games, the Natural Resources Defense Council says there are more than 60 million game consoles in the U.S., using as much electricity as the city of San Diego every year. The video game industry is now making its products more energy-efficient, though, by letting users save their games more often, so they can be switched off during breaks.

There was a time when cars were the new toys, and even back then, there were concerns about the availability of oil. So one very ambitious American took it upon himself to reinvent the automobile, using an abundant but not-so-clean energy source, as you'll see in this energyTHEN from 1932.

[Film projector running]

[MAN] Something new. A car that combines the best features of an automobile, locomotive and the old kitchen stove. Very easy to coal up for a trip with the wife and kiddies. And there isn't a knock in a bucketful.

[Whistle blowing]

There she goes, pumping merrily along. Mr. Mershon, its builder, puts lots of steam into traffic. The wonder of the age -- a loco automobile.

[ASSURAS] George Mershon, the man behind the coal car, was an inventor and furnace grate maker from Philadelphia. The car got about 100 miles on a few pounds of coal.

Okay, excited about the holiday season? We'll help you get even more charged up with new gadgets that will power your lifestyle and add some zip. Energy-efficient gift ideas, when we come back.

[BREAK]

[TEXT ON SCREEN] Can I recycle a beer bottle with a lime wedge suck inside?

Natch. But limes make good compost. Just sayin'. www.grist.org

Laugh now or the planet gets it.

[MONIQUE O'GRADY] Hi, I'm Monique O'Grady, with a smart homeowner energy-efficiency tip from the Alliance to Save Energy and "energyNOW!" Use technology to keep your cooling and heating costs down. Heating and cooling a house uses a lot of energy, close to half your home's entire annual energy cost, according to the Department of Energy. One way to reduce those costs is by using a programmable thermostat. It remembers to adjust the temperature when you're at work or at night when you're sleeping, so you don't have to set it manually each time. Programmable thermostats can cost as little as $25, not including any installation costs, but they can save up to $110 or more a year. That's a very smart and easy investment. Programmable thermostats -- just one simple step you can take to save energy now. When you throw away money on wasted electricity, you're throwing away everything you could have bought with it. Saving energy saves you money.

[TEXT ON SCREEN] ENERGY STAR saves you MONEY. ENERGYSAVERS.GOV.

[END BREAK]

[ASSURAS] Time now to get into the holiday spirit, and those energy-efficient gift suggestions we've been promising to show you. If you're considering big ticket items like TVs or smart phones, maybe a tablet, well, those are real energy hogs. There are items, though, that can save energy -- potential presents that "energyNOW!"'s Patty Kim ferreted out and tested and is here to share with us, and I know you had a lot of fun.

[KIM] I did, that's me, the ferreting out person around here. I love that verb. We've got a bunch of great gadgets, but we'll start with this one from a Berlin-based startup and it's called the Changers Starter Kit. And it's basically a personal charging station. You can produce and consume your own renewable energy wherever you are as long as you've got a little bit of sun to help you along. You can see it's idiot-proof, that's why I love it. There's two main components -- a flexible solar module, which you hang on a window or any sunny spot. You're doing a beautiful Vanna White for me. You plug this into this Pac-Man shaped battery and basically a green light will start to blink and tell you that it's actually charging. Takes about four hours, roughly, of direct sunlight to fully charge this 16-watt-hour battery. If that's all Chinese to you, if that's all Greek to you, basically, that means you can charge your iPhone twice over. So this is for all your handhelds, your iPhone, your iPod, your Android, your Kindle, yourself. Out in the woods, you might have a cell phone signal but you might not have juice, so tilt that against a rock, let that get at some sun, break out the trail mix and you're back in business.

[ASSURAS] How much?

[KIM] $149 -- but the twist on this is that you can actually, on the changers.com Web site, track the amount of energy that you produce. The results will be tweeted automatically. And you can redeem that amount of energy into credits which you can spend on their marketplace.

[ASSURAS] Boy, that's really serious stuff, okay. Next one.

[KIM] Voltaic solar backpack. This is a backpack on steroids, man. Three 3.4-watt solar panels... Do you like the "man"? ...attached to this universal laptop battery. "Laptop" is the operative word. Not a lot of devices can actually slake the thirst of a laptop. This will do a laptop, a handheld tablet, digital camera. One hour of direct sunlight can run your laptop for 30 minutes. An hour and a half of direct sunlight will do a complete cell phone charge. The caveat here is, it's lightweight. The panels are, anyways. Waterproof, durable, but check this out, baby. This thing weighs 5.5 pounds without anything in it. It is a big, roomy bag. You can throw lots of stuff in there, lots of textbooks.

[ASSURAS] That is heavy. That's heavier than my purse when it's full.

[KIM] You might want to switch it out. Instead of the Gucci or the Coach, you just take the Voltaic.

[ASSURAS] You know me so well.

[KIM] $389 is what you'd be paying for this baby.

[ASSURAS] Yeah, that's a lot.

[KIM] But some people would say, for the ability to power up on the go, that's priceless.

[ASSURAS] What about this thing? This thing is beautiful.

[KIM] It is gorgeous. Santa is getting a lot of weird requests this year for a thermostat, and no wonder. This is the Nest Learning Thermostat. This comes to us from the makers of the iPod and the guy who oversaw the launch of the last three iPhones. It's kind of like the iPhone of the thermostat world.

[ASSURAS] Pretty.

[KIM] Exactly. You can't mess with that design. This is a learning thermostat because after a week of having been installed in your home, it will remember your cooling and heating preferences.

[ASSURAS] It learns -- I don't have to learn anything.

[KIM] And you just sit back and let it do its thing. You can tweak and make adjustments. A couple nights in a row, say you want it to be a little cooler at night. You make that adjustment and it will learn to do that for you. And the design, as you can see, it borrows heavily from the Genius iPod brand. So it's simple and intuitive to use. You turn it up when you want to turn it up. Turn it down when you want to turn it down.

[ASSURAS] Price?

[KIM] It does come at a cost. It's $249. It's currently on back order. But there are a lot of fun, energy-saving features.

[ASSURAS] Can't get it then? Sorry, honey. And you did bring a toy.

[KIM] Of course, you have to have a toy in this group. This is a great gift for a kid, or maybe the big kid in you. I'm thinking husband. This is the H-Racer 2.0, and it's basically a remote-control toy car. Just like any toy car on the market, but it runs on hydrogen fuel. Here's how it works, Thalia. You basically insert a hose into the gas tank and pour water into this itty-bitty refueling station. And you activate the solar panel that it comes with. The bubbles rise in the water and you know that it's working. Oxygen's going out one way, hydrogen's going into the gas tank. It takes about a minute for it to bubble up and get ready. Then, zoom, the H-Racer is off. It can run for several minutes at a time. I tested it out and saw it myself. I need a license for this.

[ASSURAS] You need a license for a lot of things.

[KIM] It's a great educational gift for parents who want to teach their kids about alternative energies, but I have to say, for 8-year-olds, as it's recommended for... maybe for slightly older kids who have an interest in science. This retails at $119.

[ASSURAS] I know which one is your favorite.

[KIM] If you put that under the tree for me, Thalia, we will be BFFs forever. This is the Stromer electric bike. It's a Swiss-made electric bike, one of the most powerful ones of its kind on the market. It's got a 600-watt rear-hub motor. Most e-bikes top out at about 500. And also what makes this so special, it's got two modes of power -- pedal assist and power on demand. Pedal assist is when, the bike has sensors and it can tell when you're pushing hard up that hill, which would be the case for me, and it gives you that gentle boost from behind. It really feels like someone's pushing you.

[ASSURAS] How fast can you go, though?

[KIM] If you're on power-on-demand, you're cruising, baby. It's like 20 miles per hour. And all thanks to this guy, this purple bar of kryptonite, which is the battery, concealed in the lower tube of the bike. Basically, it's a 36-volt battery that you can charge either onboard or offboard. Takes five or six hours for a full charge, but you can get about 45 miles distance wise when you're on pedal assist, so it's perfect for commuters. You want to go to the office and not look like you just came from the gym, right?

[ASSURAS] Price, though?

[KIM] $3,399, so it's for someone you really love.

[ASSURAS] I'll call your husband for you.

[KIM] By the way, these lights are solar LED lights. These are at Rite-Aid for $14.99. And all of this, you can get more information on our Web site, energynow.com.

[ASSURAS] Patty, thank you, and happy holidays.

[KIM] Oh, you, too.

[ASSURAS] Of course, buying gifts online means shipping them in planes, trains and trucks that mostly run on fossil fuels. So, just how much carbon dioxide is generated sending a typical gift cross-country? Let's check out the "energyNOW!" Reality Meter. Shipping a package that weighs 7 pounds -- say, a laptop computer -- on a direct flight from Raleigh, North Carolina, to Seattle, Washington, produces about 27 pounds of carbon dioxide, almost four times the weight of the laptop. Now, there are less carbon-intensive options. Sending the same package by truck cross-country generates about 6 pounds of CO2. By rail, about half a pound.

The City of Lights is going green, at least with its holiday lighting. So, off to Paris to see what's in this week's "energyNOW!" hotZONE. The trees along the Champs-Elysées are ringed with a million LED lights. ACT Lighting Design says the display is powered by solar panels and will consume 65% less energy than the old lights. Another big difference, as you can see, a neon glow compared to years past.

Now, before we go, the United Nations' two-week-long climate-change conference kicked off this week in Durban, South Africa. And "energyNOW!" is in South Africa to cover the talks. This year's negotiations focus on whether to renew and expand the 1997 Kyoto Protocol. It sets greenhouse gas targets for about three-dozen mostly European countries and those targets expire at the end of 2012. The U.S. never ratified the pact and there are reports that Canada is planning to pull out of Kyoto. Chief Correspondent Tyler Suiters is in South Africa. We'll have updates on our Web site, energynow.com, and complete coverage of what took place at the talks on "energyNOW!" in a couple of weeks.

And that's it for this week's "energyNOW!" In addition to our Durban coverage, you can also check out our blogs, get the latest energy news, watch video extras, and be part of the energy conversation at energyNOW.com. And reach out to us on YouTube, Facebook, or Twitter. Search for us at energyNOWnews. I'm Thalia Assuras. See you next week.

[BREAK]

[ANNOUNCER] Help us make "energyNOW!" a continuing success in our second year. To keep growing, we want to form new partnerships with foundations and corporations who are equally concerned about America's energy future. Join us in bringing our message to more and more viewers. Please have your company or foundation contact "energyNOW!"

[TEXT ON SCREEN] Please contact our General Manager, Hardy Spire, 202-621-2916, sponsor@energynow.com.

[END BREAK]

[END SHOW]