Geoscience Policy Monthly Review
july 2014
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natural resources
Rep. Peter DeFazio introduces legislation to update 1872 Mining Law
July 10, 2014
Rep. Peter DeFazio (D-OR) introduced legislation intended to change the royalty structure for non-coal mining operations in the United States. The proposal aims to update the 1872 Mining Law, the long-lasting legislation that governs hardrock mining in the United States.
Under the proposed legislation, an eight percent royalty on gross revenue would be applied to new mines and a four percent royalty would be assessed to existing mines. Mining companies currently pay no royalties on metals, such as gold and silver, mined on federal lands. Rep. DeFazio, Ranking Member of the House Committee on Natural Resources, said the bill would require mining companies to pay taxes on minerals extracted from public lands, something mining companies have not had to do under the 1872 Mining Law.
The royalties collected would fund mine reclamation projects. The Bureau of Land Management (BLM) currently requires that mining companies pay fees, called bonding requirements, to cover future cleanup costs, but the Government Accountability Office issued a report stating that these bonding requirements frequently prove insufficient.
The National Mining Association (NMA) expressed skepticism toward the legislation, pointing out the $30 billion in taxes that the mining industry pays every year. NMA also voiced concern on the effect of increased royalties on mining companies, warning that such actions may drive down investment in the mining industry.
The legislation also seeks to make it easier for state and local governments to declare certain areas as “off-limits” for mining in order to protect drinking water, wildlife habitat, and historic resources.
Sources: E&E News, Government Accountability Office, Representative Peter DeFazio
Updated 8/8/14
House committee questions Bureau of Land Management on implementation of Helium Stewardship Act
July 15, 2014
On July 15, the House Natural Resources Subcommittee on Energy and Mineral Resources held an oversight hearing to examine the implementation of the Helium Stewardship Act of 2013 (HSA). The hearing focused on efforts undertaken by the Bureau of Land Management (BLM) to ensure that taxpayers receive fair value for federal helium resources.
Under the HSA, helium refiners are required to report excess refining capacity to the BLM, as well as refine, or toll, crude helium for other non-refiners. This tolling would have to occur at what the legislation calls “commercially reasonable rates.” Chairman Doug Lamborn (R-CO) said that this legislation represents a change in the long-standing policy, whereby BLM would collaborate with an exclusive group of refiners and sell the federal resource at below-market prices, as well as actively deny non-refiners access to helium pipelines.
Rep. Bill Flores (R-TX) said that he wants to see more work from the agency to guarantee access to the pipelines for non-refiners, while Rep. Matt Cartwright (D-PA) expressed concern regarding the ability of BLM to ensure that refiners accurately report excess refining capability. Linda Lance, Deputy Director of Programs and Policy at the BLM, replied that the BLM has issued forms defining excess refining capacity and affirmed the agency’s commitment to providing access to the pipelines and effectively implementing the HSA.
Committee Chairman Doc Hastings (R-WA) and Rep. Lamborn plan to introduce a discussion draft of legislation, the American Helium Security Act of 2014, that will secure and encourage future production of domestic helium and create a federal leasing program for helium on federal lands.
Sources: House Natural Resources Committee
Updated 8/8/14
Critical minerals bill fails to pass House without Republican support
July 22, 2014
On July 22, the House failed to achieve the two-thirds majority vote required to pass the Securing Energy Critical Elements and American Jobs Act of 2013 (H.R. 1022), which supported federal investment in research and development for energy critical materials. Despite bipartisan support for the bill, many Republicans withdrew their support after the conservative group Heritage Action voiced opposition, saying a vote in favor of the legislation would count against legislators in the group’s annual vote scorecard.
The legislation would have called on the White House Office of Science and Technology Policy (OSTP) to coordinate actions across federal agencies to secure the domestic supply of critical minerals, and the Department of Energy (DOE) to improve methods for the exploration, processing, and recycling of energy critical elements. The bill would have also created a Research and Development Information Center within DOE to “collect, catalogue, disseminate, and archive information on energy critical elements.” The bipartisan bill, introduced by Rep. Eric Swalwell (D-CA) and supported by House Science, Space, and Technology Committee Chair Lamar Smith (R-TX), would have authorized $25 million in spending between 2015 and 2019 using previously appropriated funds.
Sources: E&E News, U.S. Geological Survey