Mr. Speaker, I yield myself such time as I may consume. I rise in support of H.R. 1022, the Securing Energy Critical Elements and American Jobs Act of 2014. I want to thank Chairman Smith for working with me on this bill for over a year.…
Mr. Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 1022, the Securing Energy Critical Elements and American Jobs Act of 2014.
I want to thank Chairman Smith for working with me on this bill for over a year. We introduced this in March 2013. We have talked a number of times about this bill, and I appreciate the attention the majority staff has shown to get this bill to the floor. I also appreciate the work of our ranking member, Ms. Johnson, on the minority side, and that of Congressman Hultgren, as well as the work of Mrs. Lummis, the chair of the Energy Subcommittee. We have truly worked in a bipartisan manner to move this bill to the floor.
Did you know, Mr. Speaker, that energy critical elements are crucial to powering our cell phones? to powering our airplanes and to producing renewable energy?
They include elements, many of which I never learned about in my chemistry class in high school, like cobalt, lanthanum, and helium. These elements are critical to the innovation economy and to our national defense, but here is the problem. Today, almost entirely all of them are imported from other countries like China. It is time to get America into the game.
I introduced this bill to help ensure that the United States continues to have access to materials that are essential to technologies we rely upon every day. These materials are also crucial to developing new technologies that will help make us leaders in the clean energy economy of the future, helping to create good jobs here in America.
I also want to note an important distinction from this bill and a bill that passed in the House in the 111th Congress in 2010. There are three big differences: one, this bill does not have any loan guarantees; two, this bill does not spend a single new dollar; and three, this bill does not create a new program. Those are important distinctions from the bill that passed in the 111th Congress.
Many Americans may not realize just how dependent we are upon energy critical elements. One of these elements, No. 3 on the periodic table and represented here on this poster, is lithium. The cell phones, laptops, and other mobile devices upon which we all greatly rely and use--not to mention the energy storage systems for many commercial aircraft--all require lithium to function effectively. To make
these products here in America and not cede leadership across the world, we need to have access to lithium.
We also can't lose sight of how important these elements are in enabling a new era of energy production and use. From advanced solar energy technologies to natural gas and wind turbines, nuclear reactors, and state-of-the-art batteries for electrical and hybrid vehicles, a series of specific elements in limited supply are currently irreplaceable, and we need to ensure continued access to them even as we work to develop substitute materials wherever possible.
It is not just about commercial products and explicit energy production. Rhenium, No. 75 on the periodic table, which is represented here on this poster, is used to make parts for jet engines, including the jets that provide America's air superiority for our Air Force and Navy. Having access to this metal, thus, has an important national security component.
A subset of these critical elements, with names like neodymium and terbium, is what are considered rare earth elements. Incidentally, there is nothing rare about these elements in the sense that they are only found in one or two places in the world but, rather, that, in many instances, they aren't found in sufficient quantities to make them minable and, where they are, doing so would be cost prohibitive and a very long-term endeavor.
As one example, I have a poster here representing terbium, No. 65 on the periodic table. It is a silvery metal. Most people probably have never heard of it, but it is used in high-efficiency lighting and, as exemplified on this poster, in wind turbines, among many other energy uses.
One country, China, has recognized the importance of these rare earth elements, and it has put vast amounts of resources into becoming the world's leading supplier of them. As a result, China is currently responsible for the mining and distribution of 97 percent of rare earth elements. Predictably, China hasn't been shy about using this monopoly as leverage against its international competitors. In fact, just a few years ago, China temporarily cut off rare earth supplies to Japan, the European Union, and the United States, further highlighting the potential consequences of relying so heavily upon a single nation for rare earth production and driving up the costs for American manufacturers.
The bipartisan version that we are discussing here today, H.R. 1022, provides a strong and sustainable path forward for helping ensure that the United States maintains a sufficient, reliable supply of energy critical elements. It explicitly authorizes in law the Critical Materials Energy Innovation Hub--a collaboration among national laboratories, universities, research institutes, and private companies that has been up and running since early last year--and subjects this hub to a rigorous merit review process prior to renewal for an additional 5 years. Essentially, there are tight controls in place to make sure we always have the oversight of this hub.
Let me pause here and emphasize this point as there seems to be some confusion. There are tight controls that will be in place in authorizing this hub. Again, I want to remind the Speaker that there are no new programs, no loan guarantees, and not a new dollar spent.
My bill requires the Department of Energy to develop and regularly update a strategic plan in this area, and it authorizes the hub to maintain a critical materials information center to aid in the collection and dissemination of data to ensure that all of our Nation's researchers in the public and private sectors have access to the most up-to-date information. Finally, my bill charges the National Science and Technology Council with ensuring the appropriate interagency coordination with research activities.
With that, I reserve the balance of my time.
Mr. Speaker, I yield 5 minutes to the gentlewoman from Texas (Ms. Eddie Bernice Johnson), the ranking member of the Science, Space, and Technology Committee.
Mr. Speaker I will include an article from The Wall Street Journal in support of H.R. 1022 in the Record. This is a December 5, 2013, Wall Street Journal article titled, ``China Still Dominates Rare-Earth Processing.''
[From the Wall Street Journal, Dec. 5, 2013]
China Still Dominates Rare-Earth Processing
(By James T. Areddy)
Shenzhen, China.--When U.S. Rare Earths Inc. begins mining
on the border of Montana and Idaho about two years from now,
the U.S. will gain a new domestic, non-Chinese source of
minerals essential to making electronic devices and weaponry
components.
But at the moment, there's virtually no place for these
minerals to be processed into something useful--except China.
China's share of global rare-earth output has been
shrinking recently as miners elsewhere capitalized on fears
the country controls too much global supply. Even so, China
still dominates the complex--and often polluting--middle
steps that turn mined material into useful ingredients,
including metals and magnets. For example, China supplies
about 80% of the specialized magnets produced with rare-earth
ingredients like neodymium that are used in everything from
elevators to cruise missiles.
``It's amazing people haven't connected these dots,'' said
U.S. Rare Earths Chief Executive Kevin Cassidy. His company
plans to build facilities in the U.S. to handle difficult
middle-stage processes, but that will be expensive and
require numerous regulatory approvals.
Three years ago China shocked high-technology industries by
tightening export controls on a group of 17 elements called
rare earths that sent their prices rising as much as tenfold,
prompting then-U.S. Secretary of State Hillary Clinton to dub
the scare a ``wake up call.''
Miners responded by racing to find new rare-earth sources
in the U.S. and elsewhere. Industry authority Dudley
Kingsnorth says those new sources already cut China's share
of global supply to 86% from 93% between 2011 and 2012.
China's export policies are the subject of a continuing
dispute between Beijing, Washington and others before the
World Trade Organization. The WTO in October ruled illegal
certain restrictions on Chinese rare-earth exports, though
Beijing is expected to appeal the largely symbolic decision.
But when it comes to processing rare earths, China faces
little competition--and Wang Qin's greasy hands illustrate
why. The 45-year-old machinist for Feller Magnets Corp. in
the southern city of Shenzhen runs dozens of machines that
slice magnetic blocks made with rare earth into razor-thin
discs that his company says will be installed in mobile
phones.
While his computerized saws can meet precision
specifications for Feller's high-technology customers, the
machines also slick its factory floors with oil. Basins of
acids and extreme heat feature in other parts of the
facility. The company, which says half its output is sold in
China compared with only 30% in recent years, didn't respond
to a request for comment on factory conditions.
China's dominance in a field with a poor environmental
record illustrates one way it plays key roles more generally
in global manufacturing. China tops world output of chemicals
and fertilizers, as well as making lead-acid batteries and
harvesting of scrap computer parts for metal. Business
executives say that China's backbone in intermediate
industries, including rare-earth processing, allows it to
draw in related businesses that depend on the products and
thereby deepening its importance to production supply chains
from computers to automobiles.
In 2010 Beijing significantly crimped exports of rare-earth
minerals citing environmental reasons to clean up a chaotic
industry. Seeing prices of the elements soar, investors
funded dozens of mine exploration projects around the world.
Since then, a California mine and one in Australia have
ramped up, with others in South Africa, Vietnam, India and
Kazakhstan now in the construction phase, according to Gareth
Hatch, an industry investor and principal at Illinois-based
Technology Metals Research LLC. But he said many prospectors
who rushed after 2010 to bring new supplies to market wrongly
assumed, ``if you build the mine, the downstream supply chain
will magically appear outside of China.''
A number of U.S. defense contractors declined to comment on
industry trends. Northrop Grumman Corp. and Lockheed Martin
Corp. referred questions to the Aerospace Industries
Association, which pointed to a September report from the
U.S. Congressional Research Service that said ``most rare
earth materials' processing is performed in China, giving it
a dominant position that could affect world-wide supply and
prices.''
A Defense Department spokesman said the military
continually monitors the situation while citing an
``increasingly diverse and robust domestic and global supply
chain for rare earth materials.'' A March 2012 military
report highlighted positive trends ``for a market capable of
meeting future U.S. Government demand.''
While Mr. Kingsnorth, executive director of Industrial
Minerals Company of Australia, estimates China's share of
world production could slide to 63% by 2016, he points out
that China continues to dominate the nine steps between
mining rare earths and producing something with the material.
After ore is pried from the ground and unwanted minerals
are sifted away to make a concentrate of minerals, complex
acid and chemical treatments are required to separate
individual rare earths into quantities that are useful. Many
of the 17 rare earths share such similar physical properties
that separating individual elements can require several
months and 1,000 chemical treatments.
Outside China, few places have the industrial capacity to
separate the elements. Companies in the U.S., Russia, France,
Japan and elsewhere handle some of these steps, but China is
the only place that has the industrial capacity to do them
all.
Among those producing fresh output is U.S.-based Molycorp
Inc. Yet Molycorp exports some of the neodymium and samarium
from its giant deposit in California's Mojave Desert to its
processing facilities in China.
``The downstream does take longer to develop,'' says
Constantine Karayannopoulos, who until this month was
Molycorp's interim chief executive officer and is now vice
chairman.
Molycorp said it spent $1.5 billion to build a separation
facility in California, and Mr. Karayannopoulos estimates a
quarter to a third of that cost is related to ensuring the
plant operates to high environmental standards, which include
recycling wastewater. Still, Molycorp says it is cheaper to
make some of its materials at its facilities in China. Mr.
Karayannopoulos also estimates around 60% of that output is
sold to multinational companies already in China.
``I can't overemphasize how complex supply chains are,''
said Mr. Karayannopoulos.
A big effort to reduce China's role in the intermediate
steps of processing rare earths is being undertaken by
Australia's Lynas Corp. with a plant opened last year in
Malaysia to handle separation processes. But local
environmentalists decry the facility as dangerous, and Lynas
says it has processed only a fraction of its output there
this year. Lynas says none of its material is being sent to
China for separation.
Increasingly, China is taking steps to expand into more
profitable aspects of the rare-earth business that follow the
separation processes, instead of exporting those raw
materials. Mr. Kingsnorth likens such efforts to European
winemakers: ``France doesn't sell any grapes,'' he said.
Mr. Speaker, efforts that went into bringing this bill to the floor reflect what our constituents at home want to see from us here in Washington, a bill that was introduced in March of 2013, a bill where revisions were made, compromises were made. The loan guarantee part of the bill was taken out at the request of the majority staff so that we could bring this bill to the floor in a bipartisan way.
I am proud that I can go home and tell my constituents I was able to work with my colleagues on a bill that will advance American innovation, American energy security, and national security.
So, Mr. Speaker, I urge my colleagues to support this bill. If you want to go home and tell your constituents that you were part of a bipartisan bill that protects American innovation, manufacturing, energy security, and national security, vote for this bill.
If you want to go home and tell your constituents that you are a part of seeing jobs go over to China and ceding leadership in energy, critical elements, then you should vote against this bill.
But I think this Congress wants to take back leadership when it comes to where we get our energy. That is why I am supporting this bill. That is why I am grateful that the chairman brought this bill to the floor, and I urge my colleagues to support this bipartisan H.R. 1022.
Mr. Speaker, I yield back the balance of my time.