Copper, The New Gold

We have been dazzled by gold since the dawn of civilization - partly because it polishes up to a nice shine, partly because it is so rare. Compare that with copper - which has, with much less fanfare, also reached its own record price in the past few weeks, at nearly $4 a pound.

It doesn't sound like a lot, but tell that to the two dozen people that have been killed in America in the past two years while engaged in copper theft - daredevil attempts to strip mobile phone towers and motorway lighting of copper cables. Or the passengers on the hundreds of trains disrupted in Britain every year because of stolen copper cables - described as the most serious threat to their railways apart from terrorism.

Copper crime is not yet the stuff of glamorous heist movies, but it has become widespread worldwide and has become the cause of enormous losses to electric utilities.

Why? The price of copper has quintupled since 1999, reflecting the world's - and in particular China's - need for such a useful metal. Its talent is for conducting things, like heat or electricity, and as a country's living standards improve, its need for copper grows, unlike gold - the demand for yellow baubles goes up only when people feel insecure about the economy or their love life.

Among the hardest hit victims of copper theft are electrical utility substations because of the large amounts of copper wire they use for electrical grounding and transmission, and because these facilities are often located remotely where theft is hard to detect.

The effect of copper theft on utility companies is both costly and dangerous due to loss of materials, damage to transformers, electrocution, and possible loss of power to customers. Damaged transformers and substations can cost anywhere from $500,000 to $11 million to repair or replace.

In the US itself, the past one year has seen a 100% increase in copper theft at utilities. Copper thieves are getting more and more daring and innovative, and have caused electrical outages in many areas. Stolen copper can be easily turned into cash, with junk dealers paying up to 85% of retail price for stolen or recycled copper wire. In Las Vegas, long stretches of highway in the valley have no working street lights for several miles. The copper wiring has been ripped from the poles and crooks take it to scrap yards to cash in. It costs the city of Las Vegas more than 1 million a year to replace the copper. In Minneapolis, copper ground wire from utility poles are being increasingly stolen, causing power outages. In San Diego, more than 100 times since January 2007, power substations owned by San Diego Gas & Electric have been broken into and looted of grounding and transmission wiring.

Whether raising the penalty from four to five years and giving utilities special protection in the penal code would solve the problem is open to question. And requiring scrap dealers to retain scrap metal items for 15 days as well as keep records could make doing business for them very difficult. Local units of government in some instances already have ordinances governing scrap dealers. State record-keeping requirements could improve things, as well as making the knowing receipt of stolen scrap metal a crime.

As new state bills and laws are being considered to tighten control on copper and metal theft, it has been suggested metal theft sentencing be changed from a misdemeanor to a felony. On January 1, 2008, Illinois passed a new state law that requires scrap metal processors maintain records of those individuals who sell scrap metal valued at $100 or more and that the information be made available to law enforcement.

Though many states and local municipalities have laws in place to deter copper theft, some stakeholders believe more stringent policies are needed to crack down on this epidemic. In fact, an increasing number of state legislatures and local policy makers have made an effort to deal with the problem by introducing legislation to harden the penalties that copper thieves receive and by regulating the scrap metal industry.

In one noteworthy example, California State Senator Ron Calderon introduced SB651, which would require scrap metal facilities to photograph and fingerprint individuals attempting to sell copper. The bill would also require payments made by scrap yards to be made by check rather than cash. California scrap metal yards are already required, by law, to check identification and record the names of sellers. In December 2007, Missouri State Senator Rob Mayer hosted a copper theft forum to educate citizens on the potential risk of copper theft.

Electric utilities have undertaken a number of efforts to deter, prevent, and prosecute copper wire theft. A review of the web sites of the hundred largest utilities revealed 14 who were active in these efforts. Efforts ranged from issuing press releases to setting up toll-free hotlines and offering rewards for information leading to the arrests of perpetrators for specific crimes. Whether all these efforts will deter copper thieves is yet to be determined, and utilities will need to protect their valuable commodity better.