Witnesses
Panel 1
The Honorable Kay Hagan
U.S. Senate, North Carolina

 

Panel 2
David Sandalow
Assistant Secretary for Policy and International Affairs, U.S. Department of Energy
Marcilynn Burke 
Deputy Director, Bureau of Land Management, U.S. Department of the Interior
Jeff Doebrich
Program Coordinator, Acting, Mineral Resources Program, U.S. Geological Survey

 

Panel 3
Jonathan G. Price
State Geologist and Director, Nevada Bureau of Mines and Geology
Luka Erceq 
President and CEO, Simbol Materials
Steven Duclos
Chief Scientist, GE Global Research Center
Mark Caffarey
Executive Vice President, Umicore, USA

 

Subcommittee Members Present
Maria Cantwell, Chairman (D-WA)
Jim Risch, Ranking Member (R-ID)
Mark Udall (D-CO)
Al Franken (D-MN)
John Barrasso (R-WY)

 

Full Committee Members Present
Jeff Bingaman (D-NM)
Lisa Murkowski (R-AK)

 

Critical minerals legislation continues to gain momentum in Congress. On June 9, 2011, the Senate Energy and Natural Resources Subcommittee on Energy held a hearing to discuss three different critical minerals bills.

 

Subcommittee Chairman Senator Maria Cantwell (D-WA) began the hearing by emphasizing that energy policy has historically received significant attention while minerals have been largely ignored. Cantwell added that rare earths are not the only minerals of concern, as lithium, platinum, and palladium are also critical. She noted that the United States has fallen far behind in the global economy with regards to critical mineral supply and demand. The nation’s mineral industry  fails to reflect the nation’s “innovative spirit of free market enterprise.” Senator Lisa Murkowski (R-AK) followed with an opening statement highlighting how her bill, The Critical Minerals Policy Act of 2011 (S. 1113), would address critical mineral resource development, particularly emphasizing that it would accelerate permitting for mining activities. She explained that the United States ranks last in the amount of time needed to approve permits for mining. Murkowski noted that it is important to regulate but that delays due to bureaucracy are unacceptable.

 

Senator Kay Hagan (D-NC) was the first witness to testify and discussed her bill aimed at lithium development, Powering America’s Lithium Production Act (S.421). Hagan stated that lithium, as a main component of batteries, is critical for clean energy products such as electric vehicles. Investments in lithium development would enhance energy security and make the United States a global leader in clean energy technology. She explained that rapidly climbing gas prices reflect a failure of national energy security and that the same mistake should not be repeated with critical minerals. Senator Mark Udall (D-CO), who supports his own critical minerals legislation, The Critical Minerals and Materials Promotion Act of 2011 (S. 383), commended Murkowski for putting portions of his bill into hers. He added that he had some concerns about her proposed legislation but emphasized that he “ [looks] forward to working with my friend from Alaska.”

 

David Sandalow of the Department of Energy (DOE) began his testimony by stressing that the market for clean energy is growing rapidly around the world, citing examples of clean energy development in China, India and Europe. Last year, DOE issued a request for information from private industries about which critical minerals are most important to manufacture of their products.  From these responses, the DOE designated five rare earth elements as the most critical in terms of cost and supply issues.  Sandalow outlined recommendations for how legislation can address critical mineral development comprehensively and efficiently. Marcilynn Burke of the Department of the Interior (DOI) discussed DOI’s perspective on Udall’s and Murkowski’s bills. Burke stressed that the United States Geological Survey (USGS) activity called for in both bills is already in the scope of her organization and that assessments on rare earth element sources in the U.S. have already been carried out. She raised concerns that Murkowski’s bill did not provide ample time to carry out the requested assessments  and cautioned against expediting permitting.

 

Cantwell began the question and answer period by asking Sandalow if it would be possible to find substitutes for critical minerals in various products. He responded that substitutes are quite feasible and that the government should facilitate basic research and development in this area. Cantwell noted that none of the legislation presented had provisions addressing substitutes. She noted that the government receives royalties for fossil fuel extraction but not for minerals, under the Mining Law of 1872 (30 USC 29), and questioned if this legislation should be overturned.

 

Murkowski asked the witnesses on the government panel to commit to working together to provide specific suggestions to Congress on how the permitting process can be made more efficient. She added that mining corporations must receive permits from at least 30 organizations, a process she thinks should be consolidated. Senator Jeff Bingaman (D-NM) dismissed Murkowski’s concerns about the permitting process stating that he did not see permitting as the core problem. Senator Al Franken (D-MN) inquired further about the alleged 7 to 10 years required to process a permit, a time period that has been cited frequently by proponents of a faster permitting system, including Murkowski. Burke noted that that time period includes discovery and exploration. Franken replied that this seemed misleading, adding curtly that, “The permitting process would be the time in which you process a permit.” 

 

Bingaman concluded that it has not been profitable for U.S. companies to produce these minerals due to China’s control of the industry. He expressed concerns that China is bringing its rare earth industry under consolidated government control making it easier to gain a monopoly on the market. Bingaman added that it is necessary to ensure that a reasonable price for U.S. produced minerals in the global market is maintained. Finding substitutes and decreasing use, he concluded, should be the main goals of critical mineral legislation.

 

Jonathan Price, the state geologist of Nevada, began the second panel session by providing specific recommendations on the bills. He cited a 2008 National Academy of Sciences report which recommended that the USGS be given more authority regarding critical mineral development and suggested that this be added to legislation. Price suggested that the bills should cover a broader research spectrum and address the importance of utilizing information from state geological surveys, which often have useful data. He concluded that the funding provided in Murkowski’s bill was too low to accomplish the outlined tasks. Luka Erceq of Simbol Materials highlighted the importance of federal financial support for driving private investment in critical minerals in his testimony. Steven Duclos of GE  provided several recommendations for how the government can help the critical minerals industry including improving recycling, decreasing waste in production, and developing technology that eliminates the need for critical minerals. Mark Caffarey of Umicore focused his testimony on recycling.

 

Cantwell inquired about the obstacles to critical minerals recycling. Caffarey noted that currently the biggest weakness in the process is the collection of recyclable materials. Cantwell added that there is presently no business model that has been implemented to provide incentives for recycling. She inquired if the issues of efficiency, new materials research and recycling are something that the private sector can handle on its own. Duclos responded that the private sector will play a major role but the government needs to facilitate the fundamental pre-competitive research. Udall agreed about the importance of recycling, stating that “our landfills make us the Saudi Arabia of critical minerals.” Subcommittee Ranking Member Senator Jim Risch (R-ID) was more skeptical arguing that if recycling were economically profitable companies would already be doing it.

 

Caffarey explained that recycling would create jobs for Americans from the entry-level technical side to the metallurgical and engineering side of mineral exploration and extraction. Both Price and Erceq emphasized the importance of providing research funding and opportunities and creating “centers of excellence” to encourage students to pursue science and engineering education related to critical minerals. Cantwell concluded by saying, “I’d assume that we’d need less centers of excellence in geology and more on the technology side.”

 

Written testimony, text of the legislation, opening remarks and an archived webcast is available at the Senate Committee on Energy and Natural Resources web page.