[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]



 H.R. 1937, ``NATIONAL STRATEGIC AND CRITICAL MINERALS PRODUCTION ACT 
                               OF 2015''

=======================================================================

                          LEGISLATIVE HEARING

                              BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 OF THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        Thursday, June 25, 2015

                               __________

                           Serial No. 114-14

                               __________

       Printed for the use of the Committee on Natural Resources
       
       
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                     COMMITTEE ON NATURAL RESOURCES

                        ROB BISHOP, UT, Chairman
            RAUL M. GRIJALVA, AZ, Ranking Democratic Member

Don Young, AK                        Grace F. Napolitano, CA
Louie Gohmert, TX                    Madeleine Z. Bordallo, GU
Doug Lamborn, CO                     Jim Costa, CA
Robert J. Wittman, VA                Gregorio Kilili Camacho Sablan, 
John Fleming, LA                         CNMI
Tom McClintock, CA                   Niki Tsongas, MA
Glenn Thompson, PA                   Pedro R. Pierluisi, PR
Cynthia M. Lummis, WY                Jared Huffman, CA
Dan Benishek, MI                     Raul Ruiz, CA
Jeff Duncan, SC                      Alan S. Lowenthal, CA
Paul A. Gosar, AZ                    Matt Cartwright, PA
Raul R. Labrador, ID                 Donald S. Beyer, Jr., VA
Doug LaMalfa, CA                     Norma J. Torres, CA
Jeff Denham, CA                      Debbie Dingell, MI
Paul Cook, CA                        Ruben Gallego, AZ
Bruce Westerman, AR                  Lois Capps, CA
Garret Graves, LA                    Jared Polis, CO
Dan Newhouse, WA                     Vacancy
Ryan K. Zinke, MT
Jody B. Hice, GA
Aumua Amata Coleman Radewagen, AS
Thomas MacArthur, NJ
Alexander X. Mooney, WV
Cresent Hardy, NV
Vacancy

                       Jason Knox, Chief of Staff
                      Lisa Pittman, Chief Counsel
                David Watkins, Democratic Staff Director
             Sarah Parker, Democratic Deputy Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                       DOUG LAMBORN, CO, Chairman
            ALAN S. LOWENTHAL, CA, Ranking Democratic Member

Louie Gohmert, TX                    Jim Costa, CA
Robert J. Wittman, VA                Niki Tsongas, MA
John Fleming, LA                     Matt Cartwright, PA
Glenn Thompson, PA                   Donald S. Beyer, Jr., VA
Cynthia M. Lummis, WY                Ruben Gallego, AZ
Dan Benishek, MI                     Lois Capps, CA
Jeff Duncan, SC                      Jared Polis, CO
Paul A. Gosar, AZ                    Vacancy
Raul R. Labrador, ID                 Vacancy
Paul Cook, CA                        Vacancy
Garret Graves, LA                    Vacancy
Ryan K. Zinke, MT                    Vacancy
Jody B. Hice, GA                     Vacancy
Alexander X. Mooney, WV              Raul M. Grijalva, AZ, ex officio
Cresent Hardy, NV
Rob Bishop, UT, ex officio
                               --------                                

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, June 25, 2015..........................     1

Statement of Members:
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................     1
        Prepared statement of....................................     3
    Lowenthal, Hon. Alan S., a Representative in Congress from 
      the State of California....................................     4
        Prepared statement of....................................     6

Statement of Witnesses:
    Amodei, Hon. Mark E., a Representative in Congress from the 
      State of Nevada............................................     7
    Fellows, Mark, SNL Metals & Mining, Metals Consulting, on 
      Behalf of the National Mining Association, London, United 
      Kingdom....................................................     9
        Prepared statement of....................................    11
    Green, Jeffery A., President, J.A. Green & Company, 
      Washington, DC.............................................    24
        Prepared statement of....................................    25
    Kalen, Sam, Winston S. Howard Distinguished Professor of Law, 
      Co-Director, Center for Law and Energy Resources in the 
      Rockies, University of Wyoming College of Law, Laramie, 
      Wyoming....................................................    19
        Prepared statement of....................................    20
    Russell, Luke, Vice President, External Affairs, Hecla Mining 
      Company, Coeur d'Alene, Idaho..............................    12
        Prepared statement of....................................    13

Additional Materials Submitted for the Record:

    List of documents submitted for the record retained in the 
      Committee's official files.................................    36
                                     


 
   LEGISLATIVE HEARING ON H.R. 1937, TO REQUIRE THE SECRETARY OF THE 
 INTERIOR AND THE SECRETARY OF AGRICULTURE TO MORE EFFICIENTLY DEVELOP 
DOMESTIC SOURCES OF THE MINERALS AND MINERAL MATERIALS OF STRATEGIC AND 
CRITICAL IMPORTANCE TO UNITED STATES ECONOMIC AND NATIONAL SECURITY AND 
   MANUFACTURING COMPETITIVENESS, ``NATIONAL STRATEGIC AND CRITICAL 
                   MINERALS PRODUCTION ACT OF 2015''

                              ----------                              


                        Thursday, June 25, 2015

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to notice, at 11:09 a.m., in 
room 1334, Longworth House Office Building, Hon. Doug Lamborn 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Lamborn, Labrador, Cook, Zinke, 
Hardy; and Lowenthal.
    Mr. Lamborn. The Subcommittee on Energy and Mineral 
Resources will come to order. We are meeting today to hear 
testimony on H.R. 1937, introduced by Representative Amodei, 
the ``National Strategic and Critical Minerals Production Act 
of 2015.''
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman and Ranking Member and the 
Vice Chairman and a designee of the Ranking Member. This will 
allow us to hear from our witnesses sooner, and help Members 
keep to their schedules. Therefore, I ask unanimous consent 
that all other Members' opening statements be made part of the 
hearing record if they are submitted to the Subcommittee clerk 
by 5:00 p.m. today.
    [No response.]
    Mr. Lamborn. Hearing no objection, so ordered. I now 
recognize myself for my opening statement.

    STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Lamborn. Today the subcommittee is meeting to discuss 
H.R. 1937, the National Strategic and Critical Minerals 
Production Act of 2015, that was introduced on Wednesday, April 
22, by Congressman Mark Amodei, and 37 original co-sponsors. 
The bill currently has 45 co-sponsors, including myself.
    The legislation requires the Secretary of the Interior and 
the Secretary of Agriculture to more efficiently develop 
domestic sources of the minerals and mineral materials of 
strategic and critical importance to the United States' 
economic and national security and manufacturing 
competitiveness.
    Earlier versions of this bill passed the House in both the 
112th and 113th Congresses by wide margins. H.R. 4402 passed on 
July 12, 2012 by a bipartisan vote of 256 yeas to 160 nays, and 
H.R. 761 passed on September 18, 2013, with bipartisan support 
of 246 to 178, and as part of H.R. 4, the ``Jobs for America 
Act,'' on September 18, 2014, with bipartisan support of 253 to 
163.
    The legislation addresses a significant problem hindering 
domestic production of solid mineral resources, which is the 
prolonged permitting timelines of 7 to 10 years to obtain the 
necessary permits to build a mine. In some cases that we will 
hear about today, the time required to obtain a permit can be 
almost 20 years. In comparison, mine projects in Canada and 
Australia can obtain the necessary permits in 2 to 3 years.
    Critics of the legislation have raised concerns about the 
broad definition of ``strategic and critical minerals'' in the 
bill. The definition was written broadly to capture the 
diversity of the Nation's mineral endowment. This includes rare 
earth minerals that were featured in a 60 Minutes special in 
March of this year.
    Last year, at an oversight hearing on supply and demand of 
critical minerals, the Minority witness, Dr. Eric Peterson, 
with the Center for Advanced Energy Studies at the Idaho 
National Laboratory, was asked whether lead was a critical 
mineral. He replied, ``Criticality is in the eye of the 
beholder . . . If it is needed for your process, then yes, it 
is critical.''
    Now let's take a look at copper, a mineral commodity the 
United States produces and has significant reserves and 
resources of, yet we still import 31 percent of what our 
society needs. It is also a mineral that is crucial for 
renewable energy and alternative fueled vehicles.
    [Slide]
    Mr. Lamborn. And if you take a look at Slide 1, you will 
see the information behind saying that. You can see from this 
slide that a hybrid vehicle requires twice as much copper as a 
vehicle that runs on gasoline. At 165 pounds of copper per 
vehicle, the electric car requires almost three times as much.
    [Slide]
    Mr. Lamborn. Demand for copper is projected to outstrip 
supply sometime after 2017 with a deficit increasing to 10 
million tons by 2028. And you can see that on Slide 2.
    [Slide]
    Mr. Lamborn. The third slide illustrates the problem we are 
here to discuss today: long permitting timelines. Currently, 
the average timeline from discovery to production is 20 years 
for large copper deposits. Worldwide, there are not enough 
large copper prospects in the pipeline to address the supply 
shortfall that is projected for the near future.
    One might ask how long permitting timelines affect the 
economics of a given deposit and a company's ability to 
maximize the quantity of the resource they are able to recover.
    A study commissioned by the National Mining Association 
released this morning found that a typical mining project in 
the United States loses more than one-third of its value as a 
result of the delays in obtaining the various permits required 
for mine construction and production. The cost and increased 
risk associated with these delays can cut the expected value of 
a mine in half and, in some cases, make the project uneconomic. 
This drives investors to fund overseas projects, even in places 
like the Democratic Republic of Congo--as you know, a very 
unstable country.
    Mr. Amodei's legislation goes a long way to address this 
problem, and is a first step in addressing the Nation's 
troublesome dependence on foreign sources of mineral resources.
    I want to thank the witnesses for being here, and look 
forward to hearing from them today.
    [The prepared statement of Mr. Lamborn follows:]
Prepared Statement of the Hon. Doug Lamborn, Chairman, Subcommittee on 
                      Energy and Mineral Resources
    Today, the subcommittee is meeting to discuss H.R. 1937, the 
``National Strategic and Critical Minerals Production Act of 2015'' 
that was introduced on Wednesday, April 22, 2015, by Congressman Mark 
Amodei and 37 original co-sponsors. The bill currently has 45 co-
sponsors, including myself.
    The legislation requires the Secretary of the Interior and the 
Secretary of Agriculture to more efficiently develop domestic sources 
of the minerals and mineral materials of strategic and critical 
importance to United States' economic and national security, and 
manufacturing competitiveness.
    Earlier versions of this bill passed the House in both the 112th 
and 113th Congresses by wide margins. H.R. 4402 passed on July 12, 2012 
by a bi-partisan vote of 256 yeas to 160 nays and H.R. 761, passed on 
September 18, 2013 with bipartisan support by 246-178, and as part of 
H.R. 4 the ``Jobs for America Act'' on September 18, 2014 with 
bipartisan support of 253-163.
    The legislation addresses a significant problem hindering domestic 
production of solid mineral resources, which is the prolonged 
permitting timelines of 7 to 10 years to obtain the necessary permits 
to build a mine. In some cases--that we will hear about today--the time 
required to obtain a permit can be almost 20 years.
    In comparison, mine projects in Canada and Australia can obtain the 
necessary permits in 2 to 3 years.
    Critics of the legislation have raised concerns about the broad 
definition of `strategic and critical minerals' in the bill. The 
definition was written broadly to capture the diversity of the Nation's 
mineral endowment. This includes the `rare earth minerals' that were 
featured in a 60 Minutes special in March of this year.
    Last year at an oversight hearing on supply and demand of critical 
minerals, the minority witness, Dr. Eric S. Peterson with the Center 
for Advanced Energy Studies at the Idaho National Laboratory, was asked 
whether lead was a critical mineral replied. He replied, ``Criticality 
is in the eye of the beholder . . . if it's needed for your process 
then yes it is critical. . .''
    Now let's take a look at copper, a mineral commodity the United 
States produces and has significant reserves and resources of, yet we 
still import 31 percent of what our society needs. It's also a mineral 
that is crucial for renewable energy and alternative fueled vehicles 
(Slide 1).
    You can see from this slide that a hybrid vehicle requires twice as 
much copper as a vehicle that runs on gasoline. At 165 lbs. of copper 
per vehicle, the electric car requires almost three times as much.
    Demand for copper is projected to outstrip supply sometime after 
2017 with a deficit increasing to 10 million tonnes by 2028 (Slide 2).
    The third slide illustrates the problem we're here to discuss 
today--long permitting timelines. Currently the average timeline from 
discovery to production is 20 years for large copper deposits. World-
wide there are not enough large copper prospects in the pipeline to 
address the supply shortfall that is projected for the near future.
    One might ask how long permitting timelines affect the economics of 
a given deposit and a company's ability to maximize the quantity of the 
resource they're able to recover.
    A study commissioned by the National Mining Association released 
this morning found that a typical mining project in the United States 
loses more than one-third of its value as a result of the delays in 
obtaining the various permits required for mine construction and 
production.
    The cost and increased risk associated with these delays can cut 
the expected value of a mine in half and in some cases make the project 
uneconomic. This drives investors to fund overseas projects even in 
places like the Democratic Republic of Congo.
    Mr. Amodei's legislation goes a long way to address this problem 
and is a first step in addressing the Nation's troublesome dependence 
on foreign sources of mineral resources.
    I want to thank the witnesses for being here and look forward to 
hearing from them today.

                                 ______
                                 

    Mr. Lamborn. In a moment I am going to recognize the 
Ranking Member for an opening statement. In the meantime, I am 
going to hand the gavel over to one of the fine members of our 
committee, Colonel Paul Cook of California, and at this point 
recognize the Ranking Member for his statement.

 STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Dr. Lowenthal. Thank you, Mr. Chair. Before I begin, I ask 
unanimous consent to introduce into the record a letter from 
many, many groups on behalf of thousands of mining-impacted 
communities.
    [No response.]
    Mr. Cook [presiding]. Without objection, so ordered.
    Dr. Lowenthal. Thank you, Mr. Chairman, for holding this 
hearing. Critical minerals are indeed vital to many high-tech 
U.S. industries, and I support the goal that the United States 
have a steady supply of these important materials. We are 
currently very much dependent on Chinese imports for many of 
these critical minerals, maybe not as much as a few years ago, 
but any situation in which one source is relied upon too 
heavily creates an inherent supply risk.
    I think there is a lot of opportunity for us to work 
together on this issue to evaluate and secure the Nation's 
critical mineral needs. However, I believe that H.R. 1937 
misses the mark on this opportunity. Despite its title, the 
bill has little to do with critical minerals. Instead, it aims 
to simply speed the access that mining companies will have to 
royalty-free taxpayer resources.
    The Department of Energy and the National Academy of 
Sciences, among many others, have defined critical minerals as 
elements that are vital to U.S. industry and that also have a 
high risk of supply disruption. These organizations concluded 
that rare earth minerals, platinum group metals, and lithium, 
are critical minerals, based upon their industrial importance 
and our dependence on foreign sources.
    But H.R. 1937 ignores this well-established definition. 
Instead, it offers one of its own, which is so broad that it 
even encompasses sand and gravel. I am not saying that these 
minerals are unimportant. They are certainly essential in 
construction, manufacturing, and building infrastructure, but 
they aren't critical because there is no risk of a shortage. We 
import less than half of a percentage point of all our sand and 
gravel needs. We have a diverse domestic supply. There is no 
risk of being held hostage by some foreign dictator for our 
sand and gravel needs. And there is no evidence that our 
construction industries are suffering from an acute shortage of 
rocks.
    Yet, under the guise of critical need, this bill would 
exempt sand, gravel, and all other hard rock mines from full 
review under the National Environmental Policy Act (NEPA), 
putting our public lands at risk and eliminating important 
opportunities for public comment. Further, the bill would 
overturn the principle of multiple land use management, by 
requiring that resource extraction take priority over all other 
uses of our public lands.
    These changes over-ride our bedrock environmental laws, 
leaving in their place thin assurances that environmental 
impacts will be mitigated while resource development is 
maximized. The reason for this, the Majority argues, is that 
review under NEPA is too time consuming, and unnecessarily 
delays mine permitting. They try to claim that the 
Administration is on their side in this argument by pointing to 
an executive order aimed at expediting the permitting of 
critical infrastructure projects. Yet this order was written to 
work within the guidelines of NEPA to improve coordination, not 
to strip away the entire process. We cannot throw away the NEPA 
process simply because it takes too long.
    What really adds insult to injury in this bill is the fact 
that once these hard rock mines are permitted, taxpayers don't 
see a dime for the resources extracted from their lands. Under 
the Mining Act of 1872, there are no royalties charged on the 
resources extracted, no matter how valuable they may be. Over 
$300 billion of gold, silver, copper, and other valuable 
minerals have been taken from public lands without one dime in 
royalties returning to the American taxpayer.
    This 1872 law, passed when Ulysses S. Grant was the 
President, which is still in effect, was designed primarily to 
attract settlers to the West. I have late-breaking news: I am 
from California, and I can assure you the West has been 
settled. It is now safe to update this law.
    That is why I have introduced the Hardrock Mining Reform 
and Reclamation Act with Ranking Member Grijalva and other 
colleagues from this committee. Mining reform should focus on 
bringing revenues to taxpayers, and protecting the American 
public from environmental damage and the cost of reclaiming 
waste mine land.
    By weakening environmental review, H.R. 1937 is designed to 
make this situation even worse for mining in this country, 
which has already left a legacy of environmental cleanup that 
is costing American taxpayers billions of dollars.
    I cannot support any mining legislation that would not seek 
to improve existing law, never mind supporting one that makes 
conditions worse.

    Thank you, Mr. Chair, and I yield back my time.

    [The prepared statement of Dr. Lowenthal follows:]
   Prepared Statement of the Hon. Alan S. Lowenthal, Ranking Member, 
              Subcommittee on Energy and Mineral Resources
    Thank you, Mr. Chairman, and thank you for holding this hearing.

    Critical minerals are indeed vital to many high-tech U.S. 
industries, and I support the goal of ensuring that the United States 
has a steady supply of these important materials. We are currently very 
dependent on Chinese imports for many of these critical minerals--not 
as much today as a few years ago--but any situation where one source is 
still relied upon too heavily creates an inherent supply risk. So I do 
think that there is a lot of opportunity to work together on this 
issue, and for us to find agreement on ways to evaluate and secure the 
Nation's critical mineral needs.

    I believe that H.R. 1937, however, misses the mark on this 
opportunity. Despite its title, the bill has very little to do with 
critical minerals. Instead, it aims to simply speed royalty-free access 
for mining companies to the taxpayer's natural resources.

    The Department of Energy and the National Academy of Sciences, 
among many others, have defined critical minerals as elements that are 
vital to U.S. industry AND that have a high risk of a supply 
disruption. These organizations concluded that rare earth elements, 
platinum group metals, and lithium are critical minerals based on their 
industrial importance and our dependence on foreign sources. But H.R. 
1937 ignores this well-established definition and instead offers one of 
its own, which is so broad that it even encompasses sand and gravel.

    Not that these materials are unimportant--they are certainly 
essential in construction, manufacturing, and building infrastructure--
but they aren't critical because there is no risk of a shortage. We 
import less than half of a percentage point of all of our sand and 
gravel needs. We have a diverse and abundant domestic supply. You may 
not have seen any platinum in your back yard as a kid (and if you did, 
you are rich now), but I imagine we've all seen sand and gravel . . . 
everywhere.

    Thus, there's no risk of being held hostage by some foreign 
dictator for our Nation's sand and gravel needs. And again, there's no 
evidence that our construction industries are suffering from an acute 
shortage of rocks.

    Yet, under the guise of ``critical need,'' this bill would exempt 
sand, gravel, and all other hard rock mines from full review under the 
National Environmental Policy Act (or NEPA), putting our public lands 
at risk and eliminating important opportunities for transparency and 
public comment. Further, the bill would overturn the principle of 
multiple use land management by requiring that resource extraction take 
priority over all other important uses of our public lands.

    These changes would over-ride our bedrock environmental laws, 
leaving in their place thin assurances that environmental impacts will 
be mitigated while resource development is maximized.

    The reason for this, the Majority argues, is that review under NEPA 
is too time consuming and unnecessarily delays mine permitting. They 
try to claim that the Administration is on their side in this argument 
by pointing to an executive order aimed at expediting the permitting of 
critical infrastructure projects. Yet this order was written to work 
within the guidelines of NEPA to improve coordination, not strip the 
entire process away. We cannot throw away the NEPA process simply 
because it takes too long.

    What really adds insult to injury about this bill is the fact that, 
once these hard rock mines are permitted, taxpayers don't see a dime 
for the resources extracted from their lands. Under the Mining Law of 
1872, there are no royalties charged on the resources extracted, no 
matter how valuable they may be. Over $300 billion of gold, silver, 
copper, and other valuable minerals have been taken from public lands 
without one dime in royalties returning to the American taxpayer.

    This outdated 1872 Law, which is still in effect, was designed to 
attract settlers to the West.

    I'm from California. I can assure you, the West is settled.

    It's safe to update this law now.

    This is why I introduced the Hardrock Mining Reform and Reclamation 
Act with Ranking Member Grijalva and other colleagues from this 
committee. Mining reform should focus on bringing revenues to 
taxpayers, and protecting the American people from environmental damage 
and the costs of reclaiming waste mine land.

    Unfortunately, by weakening environmental review, H.R. 1937 is 
designed to make the situation even worse for mining in this country, 
which has already left a legacy of environmental cleanup that is 
costing American taxpayers billions of dollars. I cannot support mining 
legislation that does not try to fix existing law, never mind one that 
would make conditions worse.

    I yield back the balance of my time.

                                 ______
                                 

    Mr. Cook. Thank you. I will now recognize the author of 
H.R. 1937, Representative Amodei, for a brief statement about 
his bill.

   STATEMENT OF THE HON. MARK E. AMODEI, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF NEVADA

    Mr. Amodei. Thank you, Mr. Chairman, Mr. Ranking Member. 
For your record, Mark Amodei, representing Nevada's original 
congressional district.
    What H.R. 1937 seeks to do is provide some predictability 
and stability to the permitting process. There is nothing in 
H.R. 1937 which requires Federal land managers to approve an 
application to mine on public land. That is a very important 
point, that it doesn't require a yes, it requires a specific 
timeline in which to go through the NEPA process.
    Now, let's talk about the timeline for the NEPA process. In 
the bill, it is 30 months. That is longer than you serve after 
you are elected by your constituents to come here, by one-and-
a-half times. That is much longer than it takes you to get 
elected to serve here. That is a period of time that, in 
previous testimony on this bill, when it was pointed out that 
the Administration indicated, ``We're doing real good, and it 
only requires us 17 months to process a typical land use 
application,'' you say, ``Well, then, what is your objection to 
more than doubling that time frame? ''
    There is also an extension provision in H.R. 1937 which 
says, ``If you need more time, and everybody agrees to that, 
then you can extend that process for an additional 6 months.'' 
By one-sixth you can extend that, so that if there are issues 
that need to be worked out--in what sense, committee members, 
in a NEPA sense--that you have one-sixth more time to go do 
that.
    Now, why are we talking about time at all in the context of 
permitting mining on Federal lands? Because there is a de facto 
track record that is very clearly demonstrable, that in this 
industry, which requires the investment of money to develop 
these projects, there has been a very effective de facto 
culture that says, ``If we can just delay, delay, delay, those 
investors will go elsewhere.'' And, Mr. Chairman and committee 
members, they are going elsewhere.
    And you sit there and say, ``Well, what is the damage in 
that? '' To refer to the environmental track record of the 
minerals extraction industry in my neck of the woods is a 
historical statement. The stories on reclamation and 
responsible operation for minerals extraction, in terms of 
restorations of land that is mined and also historical ones 
that, because these people are there, they picked up those 
watershed restorations, those property restorations, are indeed 
excellent.
    I can tell you that the Nevada Department of Environmental 
Protection, who supervises these things directly, has an 
excellent record in modern times, over the last three decades, 
of making folks do the right thing by the environment. There is 
nothing in this legislation that says, ``Let's ignore NEPA, 
let's trash the environment.'' It says, ``Listen. If somebody 
files an application for minerals extraction on public 
property, here is the amount of time you've got. So plan 
accordingly. Bureau of Land Management, set up your schedule. 
Tell people that if they want to participate in the process, 
here are their opportunities.'' And there you go.
    Now, if you get to the end of that process and that land 
manager says, ``I think the permit should be denied,'' this 
does nothing to change that discretion and that compliance with 
NEPA. It merely says you cannot sit there and delay the thing 
until the investors or the prospect dies of old age--my words, 
nobody else's. But it is an important thing, in terms of--we 
just want a limit on how long you study this thing to death.
    I know that is a novel concept in the organization we are 
all in, since we are not famous for swift action on much of 
anything. But let's change for a minute to too broad. I find it 
interesting to say, ``Well, it is too broad, and it needs to be 
this.'' I think there was a statement made earlier that is 
indeed the truth--it is in the eyes of the beholder. I think 
back to the Loma Prieta earthquake in California, when we had 
freeways that all of a sudden were no longer freeways. So you 
needed to get those back up and operating again. Well, guess 
what? Sand and gravel supply was critical at that point in 
time. I am not saying there should be a blanket everything on 
it, if there is an amendment that says you have to do some 
special showing under the context to get into this. But I can 
tell you sand and gravel supply, when you are trying to replace 
a freeway system in a major metropolitan area in California, is 
a critical thing, in the eyes of those beholders.
    I will also indicate that when you talk about the 
royalties, you have totally ignored the fact that this is an 
industry which pays one of the highest average wages, pays 
number one in my state in state and local taxes, and also the 
income taxes on those wages are significant. So, if you want to 
just judge it on straight up, if after 30 months or before 30 
months the land manager thinks that the permit ought to be 
denied, then they should deny it. But we shouldn't have to find 
out that the time frame for deciding is whatever it happens to 
be on a certain case without any limits.
    Thank you, Mr. Chairman, for your indulgence, and I yield 
back.
    Mr. Cook. Thank you very much. We are playing Beat the 
Clock today. So, right now, while we have the author, does 
anyone--Ranking Member, other Members--have any brief 
questions?
    Dr. Lowenthal. I don't believe so.
    Mr. Cook. OK. Anyone else?
    [No response.]
    Mr. Cook. Thank you. I know you have other commitments, we 
are all running around. Chicken Little would be proud of you. 
Thank you, Mr. Amodei.
    Dr. Lowenthal. Chicken Little?
    Mr. Cook. I am Chicken Little today, the sky is falling.
    At this point, I would like to invite the witnesses to come 
forward, be seated at the witness table. Mr. Labrador, I see 
that you are there. Would you like to briefly introduce the 
witness from Idaho, once he is seated?
    Mr. Labrador. Thank you, Mr. Chairman. I am pleased to 
introduce Luke Russell. Luke serves as a Vice President of 
External Affairs for Hecla Mining Company. He has over 30 years 
of experience in mine permitting in the United States and 
abroad. He has a Master of Science in Mine Land Rehabilitation 
from Montana State University, and a Bachelor of Science in 
Landscape Architecture from the University of Wisconsin, 
Madison. Hecla Mining Company has a rich history in Idaho, and 
in my district, and will be celebrating its 125th anniversary 
next year.
    Thank you for being here, Luke, and we look forward to 
hearing your testimony.
    Mr. Cook. Thank you. So I don't get confused, the way it is 
seated right now, I am going to introduce everyone that is 
there.
    We have Mr. Mark Fellows, we have Mr. Sam Kalen--if I 
pronounced that correctly, Mr. Jeffery Green, and Mr. Luke 
Russell.
    Let me remind the witnesses that, under our Committee 
Rules, they must limit their testimony to 5 minutes, and then 
you will hear this little tap, tap, tapping. But your entire 
statement will appear in the hearing record.
    When you begin, the lights on the witness table will turn 
green. After 4 minutes, the yellow light will come on. Your 
time will have expired when the red light comes on. If you are 
color-blind, we are all in trouble.
    I will ask you to please complete your statement. I will 
also allow the entire panel to testify before questioning the 
witnesses.
    So, right now we will start off with Mr. Fellows. Thank you 
for being here.

    STATEMENT OF MARK FELLOWS, SNL METALS & MINING, METALS 
   CONSULTING, ON BEHALF OF THE NATIONAL MINING ASSOCIATION, 
                     LONDON, UNITED KINGDOM

    Mr. Fellows. Thank you very much, Mr. Chairman, the 
committee, for having me here to speak today.
    SNL Metals & Mining is a subsidiary of SNL Financial, which 
is a U.S.-based data, news, and consulting business focused on 
the financial, real estate, media, energy, and mining sectors. 
In early 2015, the National Mining Association commissioned SNL 
to carry out a study aiming to quantify the impact of 
permitting delays on the economic value of mining projects. 
This study is published today, and I would like to submit it to 
the committee for the record.
    We embarked upon this assignment in the hope of creating a 
piece of unique research which would demonstrate empirically 
the destruction of value which results from unnecessary, 
extended delays to project development. What we found is that, 
on average, a typical mining project loses over one-third of 
its economic value as a result of protracted delays in 
receiving the numerous permits needed to begin production. The 
longer the wait, the more the value of the investment is 
eroded, even to the extent that the project ultimately becomes 
an unviable investment. Even a large, high-grade deposit will 
remain unmined if the balance between cost, revenue, and 
timetable are not favorable.
    This inefficient permitting system has partially blocked 
the pipeline along which projects advance to become productive 
mines. We found that although mining companies continue to 
invest in exploration, a greater proportion of projects are 
stuck in the earlier phases of development, despite evidence 
that a healthy mining sector is an important component of the 
economy. This has left the United States dependent on active 
mines whose remaining life is declining or leaving the country 
reliant on mineral resources from abroad.
    It takes, on average, 7 to 10 years to secure the permits 
needed to commence operations in the United States. To put that 
into perspective, in Canada and Australia, countries with 
similarly stringent environmental regulations, the average 
permitting period is 2 years. In the United States, the 
requirement for multiple permits and multiple agency 
involvement is the norm, as is the involvement of other 
stakeholders, including indigenous groups, the general public, 
and non-governmental organizations.
    In Canada and Australia, the timeline for government to 
respond is more clearly outlined, the specification of lead 
agencies is clearer, and the responsibility for preparing a 
stringent environmental review lies with the mining company, 
not the government.
    Our study examines several real-world examples of mines 
where delays have eroded value. The Rosemont Copper project in 
Arizona continues in its attempt to secure permits, 5 years 
after the originally planned start date of 2010. Over this 
period, the value of the project has fallen from $18 billion to 
$15 billion, despite much higher copper prices.
    The Kensington gold mine in Alaska was plagued by 
permitting issues during development. It commenced production 
in 2010, 17 years after the originally planned start date of 
1993. By the time the mine opened, the capital cost of building 
it had increased by 49 percent, and the company had reduced 
planned gold production by nearly one-third, to focus mining 
operations on the most profitable part of the deposit only.
    Earlier research conducted by SNL in 2014 established why a 
healthy mining sector is important for the U.S. economy. There 
is a mismatch between mineral supply and demand in the United 
States. It ranks as only the seventh largest mining nation, 
globally, although it is the world's largest manufacturer.
    Another key finding of our previous research was that 
manufacturing activity is returning to the United States, 
driven by manufacturers' desire to reduce the risks in their 
supply chains, and consumers' increasing concerns regarding 
corporate accountability. Consumers want to see evidence of 
sustainable production processes, use of recycled materials, 
and sound environmental practices. Made in USA gives them that 
assurance.
    Our third key conclusion was that, relative to their global 
peers, U.S. miners are highly efficient, often exemplifying 
best practices with regards to productivity, sustainability, 
and safety. The United States remains highly prospective, from 
a geological point of view, with abundant, diverse mineral 
resources. A duplicative, inefficient permitting system 
presents a significant barrier to American companies' access to 
minerals.

    Thank you very much for your time.

    [The prepared statement of Mr. Fellows follows:]
Prepared Statement of Mark Fellows, Director of Consulting, SNL Metals 
                                & Mining
    I would like to start by thanking the committee for inviting me to 
speak here today.
    SNL Metals & Mining is a subsidiary of SNL Financial, a U.S.-based 
data, news and consulting business focused on the financial, real 
estate, media, energy and mining sectors.
    In early 2015, the National Mining Association commissioned SNL 
Metals & Mining to carry out a study aiming to quantify the impact of 
permitting delays on the economic value of mining projects. We embarked 
upon this assignment in the hope of creating a piece of unique 
research, which would demonstrate empirically the destruction of value 
which results from unnecessary, extended delays to project development.
    What we found is that on average, a typical mining project loses 
over one-third of its economic value as a result of protracted delays 
in receiving the numerous permits needed to begin production. The 
longer the wait, the more the value of the investment is eroded, even 
to the extent that the project ultimately becomes an unviable 
investment. Even a large high-grade deposit will remain unmined if the 
balance between costs, revenue and timetable are not favorable.
    This inefficient permitting system has partially blocked the 
pipeline along which projects advance to become productive mines. We 
found that although mining companies continue to invest in exploration, 
an ever-greater proportion of projects is stuck in the earlier phases 
of development, despite evidence that a healthy mining sector is an 
important component of the economy. This has left the United States 
dependent on active mines whose remaining life is declining or on 
mineral resources from abroad.
    It takes on average 7 to 10 years to secure the permits needed to 
commence operations in the United States. To put that into perspective, 
in Canada and Australia, countries with similarly stringent 
environmental regulations, the average permitting period is 2 years. In 
the United States, the requirement for multiple permits and multiple 
agency involvement is the norm, as is the involvement of other 
stakeholders, including local indigenous groups, the general public and 
nongovernmental organizations. In Canada and Australia the timeline for 
the government to respond is more clearly outlined, the specification 
of lead agencies is clearer, and the responsibility for preparing a 
stringent environmental review lies with the mining company, not the 
government.
    Our study examines several real-world examples of mines where 
delays have eroded value.
    The Rosemont Copper project in Arizona continues in its attempts to 
secure permits, 5 years after the originally planned start date of 
2010. Over this period the value of the project has fallen from $18 
billion to $15 billion despite much higher copper prices.
    The Kensington gold mine in Alaska was plagued by permitting issues 
during development. It commenced production in 2010, nearly 20 years 
after the originally planned start date of 1993. By the time the mine 
opened, the capital cost of building the mine had increased by 49 
percent, and the company had reduced planned gold production by nearly 
one-third, to focus mining operations on the most profitable part of 
the deposit only.
    Earlier research conducted by SNL in 2014 established why a healthy 
mining sector is important for the U.S. economy: there is a mismatch 
between mineral supply and demand in the United States; it ranks as 
only the seventh largest mining nation, although it is the world's 
largest manufacturer. Another key finding of our previous research was 
that manufacturing activity is returning to the United States, driven 
by manufacturers' desire to reduce the risks in their supply chains and 
consumers' increasing concerns regarding corporate accountability. 
Consumers want to see evidence of sustainable production processes, use 
of recycled materials and sound environmental practices.
    Our third key conclusion was that relative to their global peers, 
U.S. miners are highly efficient, often exemplifying best practices 
with regard to productivity, sustainability and safety. The United 
States remains highly prospective, from a geological point of view, 
with abundant, diverse mineral resources of high quality. A 
duplicative, inefficient permitting system presents a significant 
barrier to American companies' access to minerals.

                                 ______
                                 

    Mr. Cook. Thank you very much. Right on schedule. The Chair 
now recognizes Mr. Russell to testify.

 STATEMENT OF LUKE RUSSELL, VICE PRESIDENT, EXTERNAL AFFAIRS, 
           HECLA MINING COMPANY, COEUR d'ALENE, IDAHO

    Mr. Russell. Good morning, Mr. Chairman, Ranking Member 
Lowenthal, other members of the committee. As Representative 
Labrador said, I am Luke Russell with Hecla Mining Company. 
Hecla is the oldest precious metals mining company in North 
America. We currently have U.S. projects in Alaska, Idaho, 
Colorado, Nevada, and Montana.
    My experience includes more than 30 years in mine 
permitting in western states, as well as internationally. In my 
international experience, mine projects are commonly permitted 
in 2 to 3 years. This is not due to lower international 
standards. Far from it. The countries I have worked in 
generally have requirements that are at least as protective as 
those in the United States. What these countries do have are 
predictable permitting processes. If the regulatory 
professionals in Canada and Australia can get the job done in 2 
to 3 years, so can we, here in the United States.
    To be clear, valid concerns about environmental protection 
need to be fully considered and addressed. At the same time, 
frivolous matters should not serve as an excuse to trap mining 
projects in limbo of unpredictable and endless review. We 
should not confuse the length of the process with the rigor of 
the review.
    I would like to share a couple of examples of some lengthy 
permitting processes I have been involved with.
    Before working with Hecla, I worked with Coeur Mining, 
which owns the Kensington mine in southeast Alaska. Permitting 
of that mine started in 1988. Over the next 17 years, it went 
through three permitting efforts to gain Federal and state 
approvals, only to be followed by 5 years of litigation. It 
ultimately went to the U.S. Supreme Court, which ruled in favor 
of the agency's original decision to approve the project. 
Unfortunately, during the litigation period more than 100 
workers were idle. The permitting and litigation delay did not 
only cost the company a significant amount of money, it also 
impacted the community of Juneau, due to uncertainty and loss 
of high-paying jobs during the construction period.
    Another example. Hecla recently acquired the Rock Creek 
project in northwestern Montana. Rock Creek is the largest 
undeveloped silver-copper deposit in the United States. The 
first permit application for that project was submitted in the 
late 1980s. While over a decade in the process, an EIS was 
finally issued in 2001, followed by appeals and litigation 
which continued through 2012, or over 11 years. In response to 
a court decision in 2010, the Forest Service initiated a 
supplemental Environmental Impact Statement. Today, some 5 
years later, a draft Supplemental Impact Statement has not yet 
been developed for public comment.
    H.R. 1937 will significantly improve the permitting 
process. Similar to other legislative efforts of commerce, like 
the 2012 MAP-21, Moving Ahead for Progress in the 21st Century 
Act and the 2014 Water Resources Reform and Development Act, 
the bill seeks to streamline the U.S. permitting process 
specifically for strategic and critical minerals, without 
compromising the process.
    The bill will coordinate the actions of Federal agencies to 
eliminate duplication, outline the responsibilities of the lead 
permitting agency, address unending legal challenges to mine 
projects by requiring civil actions to be filed within set time 
frames, and establish clear and predictable permitting time 
frames. And when I say streamline permitting, the bill does not 
advocate skipping of steps, but combining steps and doing 
things in parallel, rather than in sequence. This is how 
effective permitting managers have completed the process in a 
shorter time frame.
    I have seen U.S. projects that have completed the NEPA 
process within the 30-month period proposed in this 
legislation. Some recent examples: the BLM completed an 
environmental assessment for an expansion of the Rochester mine 
in Nevada in 16 months; an EIS for the Pan mine in less than 2 
years; and an EIS for the Hycroft mine in less than 20 months.
    In establishing a firm timeline to complete the NEPA 
process, the bill does not ask the permitting agencies to do 
something that has not already been demonstrated to be possible 
in the United States, as well as major mineral-producing 
countries of Canada, Australia, and Chili. H.R. 1937 is 
legislation that will encourage and facilitate the domestic 
production of strategic and critical minerals without lessening 
the robust environmental standards of the United States.
    On behalf of Hecla Mining, I thank you for this opportunity 
to testify, and appreciate your consideration of these 
comments.
    [The prepared statement of Mr. Russell follows:]
Prepared Statement of Luke Russell, V.P. External Affairs, Hecla Mining 
                                Company
                              introduction
    Chairman Lamborn, Ranking Member Lowenthal and members of the 
committee, my name is Luke Russell and I am V.P. of External Affairs 
for Hecla Mining Company. Hecla Mining Company (NYSE:HL) is the oldest 
precious metals mining company in North America and was established in 
1891 in northern Idaho's Silver Valley. We are the United States' 
largest primary silver producer and third largest producer of lead and 
zinc. We currently have U.S. operations and projects in Alaska, Idaho, 
Colorado and Nevada and just last week completed the acquisition of the 
Rock Creek project in Montana.
    My experience includes more than 30 years in mine permitting, mine 
reclamation and environmental compliance in several western states 
including: Idaho, Alaska, Nevada, South Dakota, and now Montana. In 
addition I have permitted mines internationally in Chile, Argentina, 
New Zealand, Mexico and Bolivia. I have served as Trustee and past-
President of the American Exploration & Mining Association. In addition 
to my industry experience I also have worked inside government serving 
as Remediation Manager with the Idaho Department of Environmental 
Quality.
    In my experience, permitting a mine in the United States is by far 
the most challenging. This is not due to a lower international standard 
of environmental requirements--the countries listed above have 
environmental standards that are at least as protective as the U.S. 
standards. What these other countries have are permitting processes 
that are much more clearly defined and that have the expectation that a 
decision will be made within a given time frame. The U.S. process is 
fraught with duplication, inefficiencies, a lack of reasonable time 
frames/sideboards, a lack of coordination among Federal agencies and 
multiple, never-ending litigation. It is by far the most arduous and 
tortuous process in the world. While the rule of law generally favors 
the Americas, this long and uncertain process is no incentive to invest 
here.
    Time is money and unnecessary delays and duplication in the 
permitting process strands capital and discourages long-term 
investments in producing domestic minerals. Compare our exceedingly 
long permitting time with Chile, Canada and Australia where the average 
permitting time is between 2 and 3 years while incorporating 
essentially the same environmental and engineering standards as the 
United States. If land managers and environmental regulatory 
professionals in these countries can get the job done in 2 to 3 years, 
so can the United States.
    Demand for minerals is also increasing across the spectrum of 
modern technology from electronics and electrical systems applications, 
aerospace and defense, to the energy industry. For example, a modern 
computer chip contains more than half of the elements in the periodic 
table and even though they may be present in very small amounts, each 
is essential to function and performance.\1\ My daughters would say 
their phone is strategic and critical to their way of life, and 40 key 
minerals in their smartphones includes tantalum, tungsten, copper, 
iron, nickel, aluminum, tin, silver, chromium, gold, and palladium and 
nine separate rare earth elements.
---------------------------------------------------------------------------
    \1\ T.E. Graedel, E.M. Harper, N.T. Nassar, and Barbara K. Reck: On 
the Materials Basis of Modern Society, School of Forestry and 
Environmental Studies, Center for Industrial Ecology, Yale University, 
October 2013.
---------------------------------------------------------------------------
    Many of the uses of critical and strategic minerals overlap and 
converge in the field of renewable energy. Wind turbines would not be 
possible without mined materials. Just one turbine contains 335 tons of 
steel and almost 5 tons of copper. Similarly, solar panels cannot be 
made without mined materials like steel, copper, silicon, aluminum and 
the unique metal that we at Hecla produce, silver.
    Silver has the highest electrical and thermal conductivity of all 
metals, and is the most reflective. These physical properties make it a 
highly valued industrial metal, especially when used in solar cells. 
Silver paste is actually a primary ingredient in 90 percent of the most 
common solar panels. Overall, the solar industry uses about 5 percent 
of the world's annual silver supply, or an estimated 52.4 million 
ounces. However, as demand for solar increases, especially in China, 
the demand for silver used in solar energy could double. As a result it 
is estimated the solar industry may use 100 million ounces of silver 
this year.\2\
---------------------------------------------------------------------------
    \2\ http://www.usatoday.com/story/money/markets/2014/08/29/no-
silver-no-solar/14756397/.
---------------------------------------------------------------------------
    The United States has become increasingly dependent on foreign 
sources of strategic and critical minerals and this vulnerability has 
serious national defense and economic consequences. According to the 
U.S. Geological Survey, the United States is more than 50 percent 
import reliant for 43 critical minerals (the United States is roughly 
40 percent import reliant on crude oil) and 100 percent import reliant 
for 19 critical and strategic minerals despite having the third largest 
source of mineral wealth in the world. Our growing dependence on 
imports leaves many key domestic industries unnecessarily vulnerable to 
disruptions from extended, complex and fragile supply chains. The 
length of time it takes to secure permits in the United States is a key 
reason behind this dependency on foreign sources.
                            permitting delay
    The United States has one of the longest permitting processes in 
the world for mining projects. A 2014 Behre Dolbear report ranking the 
25 leading mining countries noted that permitting delays are the most 
significant risks to mining projects in the United States with an 
average 7- to 10-year period required before mine development can 
begin. Consequently, the United States lags in attracting job-creating 
exploration dollars. The Metals Economics Group reports that the United 
States, despite having significant mineral resources, attracts only 7 
percent of total worldwide exploration dollars. In the mid-1990s, the 
United States attracted approximately 20 percent of worldwide 
exploration dollars. Permitting delays and security of tenure issues 
are the major reasons why the U.S. share has dropped by two-thirds.
    To be clear, valid concerns about environmental protection need to 
be fully considered and addressed. At the same time, frivolous matters 
should not serve as an excuse to trap mining projects in a limbo of 
duplicative, unpredictable and endless review without a decision point. 
We should not confuse the length of the process with the rigor of 
review.
    I would like to share a few examples of what I think are lengthy 
permitting processes I have been involved with.
Greens Creek--Alaska
    Hecla is one of the largest private employers in southeast Alaska, 
and our Greens Creek mine is responsible for approximately 415 
permanent, full-time jobs. The mine near Juneau, Alaska started 
production in 1989 producing almost 200 million ounces of silver so far 
and will produce more than 100 million additional ounces over its 
remaining life. Over 7.8 million ounces of silver were produced last 
year and is projected to produce a similar amount this year. The mine 
has provided over \3/4\ billion dollars in economic contributions to 
the southeast Alaska economy in just over the last 5 years alone. It is 
one of the world's largest silver mines and produces gold, lead and 
zinc in important quantities as well. The mine has had an exemplary 
environmental record and is located, in part, in a national monument 
area devoted to the largest concentration of brown bears in the world.
    With this history and a plan to only expand the existing tailings 
facility, one would expect the receipt of the permits to be done 
quickly. In 2010 Hecla submitted an application and the U.S. Forest 
Service (USFS) commenced preparation of an environmental impact 
statement (EIS). Understanding how long permitting can take the 
application was submitted 5 years before construction had to begin to 
avoid shutting down the mine due to lack of tailings capacity. 
Interestingly, the NEPA process could not begin until approval was 
received from the Secretary of Agriculture's office in Washington, DC. 
This step had not been required in any of the previous permitting 
efforts at the mine.
    The final EIS was issued in the third quarter of 2013 and following 
appeals the ROD was finalized in December 2013. However, all the other 
required state and Federal permits, chiefly the 404 permit from the 
Corps of Engineers, were not received until the first part of 2015 or 
about 5 years after original permit submission. The final EIS selected 
alternative approved only an 18 acre expansion of the 62 acre existing 
facility even though the company had proposed a 150 acre expansion. 
This decision allows only about 9-10 more years of mining. As the 
current reserves extend the mine life beyond this time, this chosen 
alternative will lead to additional time consuming, costly and 
unnecessary bureaucratic processes. Thus, the company is being forced 
to already begin the planning process for its next permitting effort 
because of the long permitting lead times required.
Kensington Mine--Alaska
    Prior to working with Hecla, I worked with Coeur Mining which owns 
the nearby Kensington mine in southeast Alaska. Permitting of the 
Kensington mine started in 1988. In July of 1992, the USFS approved a 
Plan of Operations for the Kensington Gold Project--a 4-year permitting 
effort. The plan called for underground mining and surface facility 
construction for ore processing (via cyanidation) and other ancillary 
operations. The mine did not receive all Federal permits due to 
regulatory process delay and did not proceed.
    In 1994, the company submitted a revised plan of operation designed 
to reduce the environmental footprint and address water quality 
concerns and in August 1997, the USFS approved a revised Plan of 
Operations--an additional 3 years permitting effort. The plan still 
called for underground mining but changes to the tailings management 
system were proposed. While the required permits were obtained the 
price of gold had decreased and so the project economics were no longer 
favorable to commence construction.
    In November 2001, the company submitted a plan amendment to the 
USFS for its approved 1998 Plan of Operations. The amendment again 
modified the proposed tailings management system. In December of 2004, 
the USFS finalized the Supplemental Environmental Impact Statement and 
issued the Record of Decision for the modified Kensington project.
    In the first half of 2005, the other state and Federal permits were 
obtained and construction commenced--another 4-year permitting effort. 
Permit appeals and litigation followed. The administrative appeal to 
the USFS was denied, which then lead to a lawsuit filed with the 
District Court. Plaintiffs lost in District Court but an appeal to the 
9th Circuit led to a stay of construction in 2006 and more than 100 
workers were idled. The 9th Circuit then overturned the District Court. 
The case was then appealed to the U.S. Supreme Court which heard the 
case in early 2009. In June of that year, the Court ruled 6-3 in favor 
of the agencies and the company was able to resume construction. The 
first gold production occurred in 2010.
    The permitting process for the Kensington project lasted nearly 16 
years. The final 4-year leg of the permitting process was then followed 
by a 4-year period of litigation. The permitting and litigation delay 
came at significant cost to the company and the community of Juneau due 
to uncertainty in the project and temporary loss of high paying jobs 
during the construction period.
Rock Creek--Montana
    Hecla recently acquired the Rock Creek project in northwestern 
Montana. Rock Creek is the largest undeveloped copper-silver project in 
the United States containing an estimated 220 million ounces of silver 
and over 2 billion pounds of copper. The project has a long permitting 
history dating back to the first application for a mining permit in 
1987. Following a change in ownership of the project the Forest Service 
and Montana Department of Environmental Quality (DEQ) jointly completed 
a FEIS and Record of Decision (ROD) in 2001.This was followed by 
several appeals and litigation. The Fish and Wildlife Service (FWS) 
withdrew its Biological Opinion (BO) in 2002 to settle a lawsuit 
causing the USFS to withdraw its part of the 2001 ROD. A new BO and ROD 
were issued in 2003. Once again numerous appeals and litigation were 
filed, leading to a new BO in 2006 which was further supplemented in 
2007. Additional litigation followed and in 2010 the U.S. District 
Court confirmed the Biological Opinion but remanded the 2003 FEIS back 
on to the Forest Service on very narrow NEPA procedural issues for 
further action. Litigants appealed the BO decision to the Ninth Circuit 
Court which in 2012 confirmed the agencies decision.
    Following the 2010 District Court decision the Kootenai National 
Forest commenced a Supplemental Environmental Impact Statement (SEIS) 
review to respond to the U.S. District Court Decision on the very 
narrow remanded NEPA issues. Now, after 5 years the Forest Service has 
still not yet released a draft SEIS for public comment.
                 why the permitting process is so slow
    In my experience, permitting delays are frequently caused by 
ineffective agency project management, unnecessary bureaucratic red 
tape, inefficient workforce issues within the Bureau of Land Management 
(BLM) and U.S. Forest Service (USFS), and multiple appeals and 
litigation.
    Poor project management skills by Federal agencies: the management 
of the multi-faceted aspects of NEPA for a mining project requires good 
project management skills. The ability to develop a work breakdown 
structure, schedule assigned responsibility and hold people accountable 
for deliverables. A successful project has consistency in management--a 
good project manager, who stays with the project.
    Training on minerals and mining and NEPA process: many Federal 
agency resource professionals are experienced in grazing, timber and 
recreation, but are not informed on minerals and mining development. 
Additional training on the NEPA process and the role of lead agency is 
critical to improving the Federal permitting process. The lead agency 
must lead; in many cases I have seen it defer to cooperating agencies 
or other stakeholder interests, instead of taking charge and leading 
the permitting process. H.R. 1937 addresses this inefficiency without 
compromising environmental standards.

    Fear of Litigation: We often hear BLM and USFS say they must make 
these documents legally ``bullet proof.'' This makes all issues 
potentially significant which is counter to NEPA which clearly 
envisioned the lead agency following scoping would focus on those truly 
significant issues that could affect the environment (40 CFR 1502.2).

    Litigation: Many mining projects ``die from a 1,000 cuts'' through 
multiple appeals and litigation. The Rock Creek example illustrates how 
litigation can delay and string out project development. Anti-mining 
groups have sued multiple times and continue to litigate on ESA and 
NEPA issues in separate litigation efforts. This legal process grinds 
down both the agencies that must defend their permitting decisions and 
the company's in hopes they will simply walk away from the project. 
While the company has millions of dollars and hundreds of high-paying 
jobs at risk, project opponents risk nothing with a chance to profit 
significantly by recovering their attorney fees through the Equal 
Access to Justice Act (EAJA). H.R. 1937 addresses this inequity by 
providing that all issues must be litigated in one lawsuit.

    Inefficient personnel system: Unfortunately, too often there are 
changes in management personnel during the project, changes in District 
Rangers, Forest Supervisors, BLM District Managers and with the Corps 
of Engineers all which leads to re-education, re-evaluations and loss 
of time in the permitting process. In addition, simply staffing a NEPA 
process can be difficult. For example, the Rare Element Resources 
project in Wyoming required over 11 months to simply get an EIS project 
manager assigned to the project. Clearly a more efficient personnel 
system can be implemented to get people in place to manage projects. 
This factor is compounded by the fact that in the USFS performance 
reviews, promotions and raises do not include an employees' performance 
in managing mineral projects.

    Federal Register Notice Delay: Substantial delays result from a BLM 
Instruction Memorandum (IM) issued on December 23, 2009 (IM 2010-043) 
requiring all Federal Register Notices be sent to the BLM Washington 
Office for review and approval prior to publication in the Federal 
Register. This IM also implemented a 12- to 14-step review and approval 
process that is taking approximately 4 months per Notice, prior to 
publication. Notices are required for intent to start the NEPA process 
and public scoping, for a draft EIS and the final EIS. This Federal 
Register notice process can add almost a year to the permitting 
timeline for a simple administrative notice filing. Prior to 2000, 
these routine notices were processed and published in 30 to 45 days.
             how h.r. 1937 can help improve a broken system
    H.R. 1937 is well thought-out legislation that will encourage and 
facilitate the domestic production of strategic and critical minerals 
without lessening the robust environmental standards of the United 
States. H.R. 1937 will address key issues behind the delay in the 
permitting process:

     Includes domestic mines that provide strategic and 
            critical minerals within the scope of ``infrastructure 
            projects'' as described in Executive Order 13604, the goal 
            of which is to significantly reduce the review and 
            permitting time frames for infrastructure projects;

    Specifically the objective of this executive Order includes:

    Reviews and approvals of infrastructure projects can be delayed due 
to many factors beyond the control of the Federal Government, such as 
poor project design, incomplete applications, uncertain funding, or 
multiple reviews and approvals by state, local, tribal, or other 
jurisdictions. Given these factors, it is critical that executive 
departments and agencies (agencies) take all steps within their 
authority, consistent with available resources, to execute Federal 
permitting and review processes with maximum efficiency and 
effectiveness, ensuring the health, safety, and security of communities 
and the environment while supporting vital economic growth.

    To achieve that objective, our Federal permitting and review 
processes must provide a transparent, consistent, and predictable path 
for both project sponsors and affected communities. They must ensure 
that agencies set and adhere to timelines and schedules for completion 
of reviews, set clear permitting performance goals, and track progress 
against those goals. They must encourage early collaboration among 
agencies, project sponsors, and affected stakeholders in order to 
incorporate and address their interests and minimize delays.\3\
---------------------------------------------------------------------------
    \3\ https://www.whitehouse.gov/the-press-office/2012/03/22/
executive-order-improving-performance-federal-permitting-and-review-
infr.

     Addresses permitting delays for strategic and critical 
            mineral development by coordinating the actions of Federal 
            agencies to eliminate duplication, bureaucratic 
            inefficiency and decade-long delays without compromising 
---------------------------------------------------------------------------
            environmental protection; and,

     Outlines the responsibilities of the lead permitting 
            agency to ensure efficient permitting such as establishing 
            binding time frames, coordinating with other agencies, 
            relying on existing data, establishing any required 
            financial assurance and allowing case-by-case adoption of 
            the functional equivalence doctrine in lieu of separate 
            NEPA analysis;

    We encourage the Federal agencies to consider the Alaska Large Mine 
permitting coordinator approach as an example of a state process that 
works to help streamline the permitting timeline while maintaining the 
integrity of the process. This provides a coordinated, efficient 
approach to mine permitting and oversight that benefits from multi-
disciplinary expertise of team members to enable the public, agencies 
and applicant to view the project as whole. The large mine permitting 
coordinator participates in the NEPA scoping process, participates in 
public meeting and public hearings, and approves baseline data 
collection plans.
    Attachment 1 illustrates how the large mine permitting approach in 
Alaska was designed to ensure the processes are done in parallel rather 
than in sequence.\4\ As permitting requirements continue to evolve, 
this process ensures all steps are completed but in a parallel manner 
that streamlines the process and reduces duplication and inconsistency. 
When we say streamline permitting, it is these sort of administrative 
approaches that can greatly reduce the permitting time frame with no 
impact on the quality of the evaluation. We are not advocating skipping 
of steps, but combining steps and doing things in parallel rather than 
in sequence. This is how effective NEPA project managers have completed 
the process in a shorter time frame.
---------------------------------------------------------------------------
    \4\ http://mric.jogmec.go.jp/kouenkai_index/2010/
briefing_100721_3.pdf.

     Establishes clear timelines to complete the permitting 
            process.
    While my experience includes examples of very long permitting 
timelines, I have also been involved with, and seen, projects that have 
completed the NEPA process within the 30-month period proposed in this 
legislation. Some recent examples:

    --  The BLM completed an Environmental Assessment for an expansion 
            for the Rochester mine in Nevada in about 16 months. Key 
            issues included groundwater quality and evaluation of a pit 
            lake or pit backfill,

    --  The USFS completed an Environmental Assessment for the Mt. 
            Hamilton mine in Nevada in about 17 months. Key issues 
            included geochemistry, reclamation and Sage Grouse,

    --  The BLM completed an EIS for the Pan mine in Nevada in less 
            than 2 years. Key issues were Sage Grouse and groundwater, 
            and,

    --  The BLM completed an EIS for the Hycroft mine in Nevada in less 
            than 20 months. Key issues included quality and quantity, 
            visual effects and cultural resource.

    In establishing a firm timeline to complete the NEPA process the 
bill does not ask the permitting agencies to do something that has not 
already been demonstrated as achievable in the United States as well as 
major mineral producing countries Canada, Australia and Chile.

     Addresses the Department of Interior's bureaucratic 
            Federal Register review process for NEPA notices by 
            delegating processing of such notices back to state 
            offices; and,

     Aims to reduce delays posed by litigation over permitting 
            decisions by requiring challenges to be filed within 60 
            days of the final agency action in a single challenge and 
            eliminates the ability of project opponents to recover 
            attorney fees through EAJA.
                               conclusion
    H.R. 1937 is legislation that will encourage and facilitate the 
domestic production of strategic and critical minerals without 
lessening the robust environmental standards of the United States. On 
behalf of Hecla Mining Company we appreciate the opportunity to testify 
here today and thank you for consideration of these comments.

                              ATTACHMENT 1

    Alaska Large Mine Environmental Permitting and Oversight Process

                  July 21, 2010--JOGMEC--Tokyo, Japan

                               Slide #31
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 

                                 .eps__
                                 

    Mr. Cook. Thank you very much. The Chair now recognizes Mr. 
Kalen to testify.

    STATEMENT OF SAM KALEN, WINSTON S. HOWARD DISTINGUISHED 
   PROFESSOR OF LAW, CO-DIRECTOR, CENTER FOR LAW AND ENERGY 
RESOURCES IN THE ROCKIES, UNIVERSITY OF WYOMING COLLEGE OF LAW, 
                        LARAMIE, WYOMING

    Mr. Kalen. Thank you, Mr. Chairman, members of the 
committee, thank you for the opportunity to appear before you 
today. As a former attorney at the Interior Department, a 
private practitioner, and presently as a law professor, I am 
particularly interested in the management of our Nation's 
public lands. Today my testimony focuses on three principal 
issues.
    First, while I appreciate the important objective of 
promoting economic and national security interests and believe 
that most will agree that mere delay in process for process' 
sake is undesirable, careful management of our public lands is 
critical. H.R. 1937, rather than reforming our public land 
management system to ensure that they remain vibrant and 
sustainable, could do the converse. For example, its approach 
toward NEPA, or by mandating as a priority in Section 103 if 
the mineral resource development should be maximized. Indeed, 
that mandate alone would threaten to disrupt long-settled 
principles of Federal land management under, for instance, the 
Federal Land Policy and Management Act.
    Second, the bill's functional equivalency approach toward 
the National Environmental Policy Act is conceptually and 
pragmatically problematic. Conceptually, at the outset, the 
bill sets forth what it identifies as six critical aspects of 
NEPA, and then charges the appropriate agency with deciding 
whether those aspects have been satisfied. How that might be 
accomplished, though, is uncertain. Courts have struggled for 
quite some time with the idea of NEPA functional equivalency. 
And, indeed, they have concluded in only a few rare instances, 
primarily involving the Environmental Protection Agency, that 
the standard has been satisfied. With that said, EPA though is 
different, as a consequence of its mission and its programs. 
And indeed, EPA, through Section 309 of the Clean Air Act, as 
well as the Council on Environmental Quality, have a role in 
NEPA's implementation that seemingly could be diminished under 
the alternative process prescribed by H.R. 1937.
    Pragmatically, though, moreover, it would be quite 
difficult for the appropriate agency to make that determination 
up front, whether in any particular case, or whether there is a 
sufficiently robust alternative process. The agency is charged 
with making that determination within 90 days of an 
application, provide an explanation for its decision, include 
the facts from a record, then show how those facts from the 
record justify the agency's decision. Yet, at that juncture in 
the process, unless the agency has rendered a generic decision 
on a programmatic basis, there will not be any adequate record 
for the decisionmaker to even use.
    As such, I would suspect that the litigation risk would be 
too great for many to accept. Consequently, it would appear 
that the bill would likely trigger Section 102(e), and the 
ability of a project proponent to mandate entering into a 
schedule. But that standardized schedule and approach is too 
optimistic, because it requires too much knowledge before the 
process has begun, may be unwieldy in practice, and might 
create litigation risk if it were enforced.
    Finally, many other aspects of H.R. 1937 would likely 
become problematic for the agencies to implement, and then for 
the judiciary to review. Take for instance the approach toward 
what constitutes strategic and critical minerals. The bill 
provides no definition, only a process that allows the agency 
to determine whether any ``mineral,'' a term that is not as 
self-defined as necessary to achieve one of the four listed 
objectives.
    I would add here that the hearing memo correctly notes that 
the process would allow for including even such things as sand 
and gravel. Yet neither, under Federal law nor most state laws, 
say sand and gravel are considered a ``mineral.'' With that 
said, however, the bill does not address how the agency will 
make that type of determination. On a case-by-case basis? On a 
programmatic basis? At what intervals, or what type of public 
input, if any? And if the determination is made, what then?
    If, for instance, the determination is rendered in a 
particular mineral exploration or mine permit application, then 
it might be an issue that could surface in any possible 
lawsuit, in which case a court might invalidate the decision 
and render the particular use of the H.R. 1937 process invalid, 
and force the agency and the applicant back to the drawing 
board. If the determination is made generically, outside any 
particular project, will that determination be reviewable 
separately and independent of the mineral exploration or mine 
permit? If so, then on what basis will it be reviewed by the 
courts? And with what administrative record? For these reasons 
alone, if I were advising a client, I might even suggest that 
it would not be worth the litigation risk to proceed under the 
H.R. 1937 process.
    Again, I thank you, Mr. Chairman and the committee, for 
allowing me to testify. And I would be glad to answer any 
questions that you might have.
    [The prepared statement of Mr. Kalen follows:]
   Prepared Statement of Sam Kalen, Winston S. Howard Distinguished 
         Professor of Law, University of Wyoming College of Law
    Thank you, Mr. Chairman, for the opportunity to appear before the 
Subcommittee on Energy and Mineral Resources of the House Committee on 
Natural Resources. My name is Sam Kalen, and I am a Professor of Law at 
the University of Wyoming College of Law. I am honored to accept this 
committee's invitation to testify on H.R. 1937, the National Strategic 
and Critical Minerals Production Act of 2015.
    For most of my career, I have focused on the administration of our 
Nation's public lands, whether as an attorney in private practice, as 
an attorney in the Solicitor's Office of the Department of the 
Interior, or more recently as a law professor. Because of this 
background, I am acutely interested in proposals that address whether 
and how mineral activity occurs on public lands.
    My testimony addresses five principal issues associated with H.R. 
1937. At the outset, H.R. 1937 has the laudable goal of promoting 
economic and national security and interests, and meaningful efforts to 
explore reforming aspects of public land management--such as efforts to 
examine the 1872 Mining Law--are worthy endeavors. Indeed, Congress in 
the Mining and Minerals Policy Act of 1970 employs language about 
``foster[ing] and encourage[ing] certain private enterprise[s].'' 30 
U.S.C. Sec. 21a. So too, in the policy statement for the Federal Land 
Policy Management Act, Congress noted the ``Nation's need for domestic 
sources of minerals.'' 43 U.S. Sec. 1701(a)(12). Yet H.R. 1937's 
attempt to expand upon these notions is neither workable in 
administration nor desirable; indeed, it would most likely be quite 
difficult for agencies to implement aspects of H.R. 1937, and the bill, 
moreover, risks allowing mining activities on the public lands to 
proceed without ensuring that those activities are thoroughly vetted by 
the public and reviewed by the appropriate agency or agencies for their 
possible adverse effects.
    But most importantly whether, where, and how mining occurs is 
critical, in order to ensure that the public lands are managed in a 
sustainable and environmentally sound manner that protects these lands 
for the future, prevents harming areas of ``critical environmental 
concern,'' and avoids ``unnecessary or undue degradation.'' 17 U.S.C. 
Sec. 1732(b). Mining, after all, can require the use of important and 
potentially scarce water resources, can contaminate water resources, 
affect wildlife, and cause considerable damage to the landscape. See 
generally National Research Council, Hardrock Mining on Federal Lands 
27 (1999) (Potential Environmental Impacts of Hardrock Mining); Envt'l 
Protection Agency, EPA's National Hardrock Mining Framework (Sept. 
1997); see, e.g., South Fork Band Council of Western Shoshone of Nevada 
v. U.S. Dep't of the Interior, 588 F.3d 718 (9th Cir. 2009) (discussing 
BLM's analysis of groundwater impacts for gold mine); Idaho 
Conservation League v. United States, 2012 WL 3758161 (D. Idaho 2012) 
(discussing Forest Service's treatment of groundwater impacts from 
proposed project). Historically, after all, the Bureau of Land 
Management reports that 60 percent of all hazardous waste sites on 
public lands have resulted from ``commercial uses''--and roughly 50 
percent of those from ``[l]andfills, mines and mill sites, airstrips, 
and oil and gas'' activities. BLM, Public Land Statistics 2014 241 (May 
2015). See, e.g., Gordon M. Bakken, The Mining Law of 1872: Past, 
Politics, and Prospects 82-105 (2008) (one historical account). The 
Department, moreover, has been engaged in litigation over cleaning up 
public lands, often seeking recovery (when a potentially responsible 
party is still available) in the millions of dollars. E.g., U.S. v. 
Newmont USA, Ltd., 2008 WL 4621566 (E.D. Wash. Oct. 17, 2008).\1\ Not 
surprisingly, therefore, the urgency of reforming the program for 
hardrock mining and particularly protecting the public lands from 
environmental damage has been widely recognized, at least since the 
1970s. See generally Council on Environmental Quality: 8th Annual 
Report 89 (1977) (noting then President's request to draft reform 
legislation); U.S. General Accounting Office, GAO/RCED-89-72, The 
Mining Law of 1872 Needs Revision (March 1989); John D. Leshy, The 
Mining Law: A Study in Perpetual Motion (1987); Charles F. Wilkinson, 
Crossing the Next Meridian: Land, Water, and the Future of the American 
West 57-8 (1992). Indeed, when digesting the Public Land Law Review 
Commission's report, almost exactly 45 years ago to the day, the New 
York Times reported how ``all mineral interests known to be of value 
should be reserved with exploration and development discretionary in 
the Federal Government and a uniform policy adopted relative to all 
reserved mineral interests.'' Digest of the Commission's Report and 
Recommendations on Public Land Use, New York Times, June 24, 1970.
---------------------------------------------------------------------------
    \1\ Historically, various regulatory gaps contributed to fewer 
controls over operations on the public lands, with statutes such as the 
Resource Conservation and Recovery Act including provisions exempting 
certain wastes from hazardous waste regulation. See 42 U.S.C. Sec. 6921 
et seq., Sec. 6921(b)(3)(C). At least until recently, the Clean Water 
Act too had limited ability to affect operations that principally 
impacted groundwater and involved simply withdrawals. See Great Basin 
Mine Watch v. Hankins, 456 F.3d 955 (9th Cir. 2006) (withdrawals); cf. 
Klamath Siskiyou Wildlands Center v. U.S. Forest Serv. (E.D. Cal. 2014) 
(noting that withdrawal examined in NEPA document). See generally U.S. 
Congress, Office of Technology Assessment, Managing Industrial Solid 
Wastes from Manufacturing, Mining, Oil and Gas Protection, and Utility 
Coal Combustion--Background Paper, OTA-BP-0-82 (GPO Feb. 1992) 
(examining management of solid wastes).
---------------------------------------------------------------------------
    Second, H.R. 1937's approach toward the National Environmental 
Policy Act of 1969 (NEPA), 42 U.S.C. Sec. Sec. 4321-4347, while 
understandably seeking to reduce unnecessary duplication and avoiding 
unnecessary delay, presents several issues warranting careful 
consideration. Rather than strengthening the ability to protect the 
Nation's public lands, it could do the converse. When it passed NEPA, 
Congress established an environmental charter that ensured that 
proposed major Federal actions ``significantly affecting the quality of 
the human environment'' would be examined through a broad lens; and, 
while the Supreme Court has since held that the act imposes only 
procedural not substantive obligations on Federal agencies, it provides 
a now well-trodden procedural path for ensuring that agencies take a 
hard look at the environmental consequences of the proposed action, 
seek public input, and render informed decisions. To the extent, 
therefore, that H.R. 1937 would diminish NEPA's role and function in 
assisting the agencies' decisionmaking process for whether, when, and 
how activities, such as mining, occur on the public lands is 
problematic. Indeed, in one instance where the court rejected a 
challenge to an expansion of mining operations, the court nevertheless 
emphasized the importance of the NEPA process: ``The NEPA process 
worked here as it was designed to work. Plaintiffs, the public, and 
other state and Federal agencies had the opportunity to comment on the 
mine expansion. As a result of those comments and the agencies' 
response, the ultimate action is more protective of the environment 
than it would have been without the process.'' Greater Yellowstone 
Coalition v. Larson, 641 F. Supp.2d 1120, 1151 (D. Idaho 2009), aff'd 
628 F.3d 1143 (9th Cir. 2011). Indeed, the National Research Council 
had earlier noted how it believed ``that the NEPA process and its 
various state equivalents provide the most useful and efficient 
framework for evaluating proposed mining activities.'' National 
Research Council, supra at 110.
    Third, section 102(b)(1) of H.R. 1937 is likely to create 
significant problems by employing a functional equivalence standard for 
satisfying NEPA. This section seemingly allows a waiver of NEPA when 
the appropriate Federal agency determines that any Federal agency's 
process or any accompanying state process examines six factors drawn 
from the NEPA process. This presumably adopts the concept from some 
NEPA cases sanctioning avoiding NEPA when the agency's process is 
functionally equivalent--albeit it is not clear that these six factors, 
moreover, parallel what an adequate NEPA document would explore. The 
functional equivalency idea first surfaced with respect to certain 
actions by the Environmental Protection Agency (EPA), some of which 
were incorporated into legislation.\2\ For these courts, EPA's special 
role as an environmental agency presumably influenced their decision, 
but even so there often was hesitation surrounding the ``functional 
equivalence'' notion. E.g., Merrill v. Thomas, 807 F.2d 776, 781 (9th 
Cir. 1986). Courts, therefore, generally declined to extend the concept 
beyond EPA, and instead constructed other ideas such as lack of 
discretion, ``displacement,'' or congressional intent involving 
decisions designed specifically to protect environmental values.\3\ And 
EPA, acting pursuant to specific congressional charges, operates quite 
differently than land managers who must decide how best to manage, 
given the array of considerations, our Nation's public lands. While 
many of these decisions may well be problematic, they nonetheless 
collectively underscore the importance of applying NEPA to decisions by 
agencies other than the EPA or that are not specifically designed by 
Congress as intended to protect environmental values. Indeed, when 
Congress considered NEPA, a concern by some legislators was whether the 
NEPA process could be entrusted to agencies such as Federal land 
managers whose mission was not necessarily perceived of at the time as 
limited to environmental protection. Yet Congress chose to trust the 
agencies, but in doing so relied on NEPA (and invested the Council on 
Environmental Quality [CEQ] with certain responsibilities) and shortly 
thereafter bolstered its decision by adopting section 309 of the Clean 
Air Act affording EPA a role in reviewing environmental impact 
statements (EIS)--a function that H.R. 1937 would obviate (along with 
possibly the role of CEQ). Consequently, H.R. 1937's provision for 
allowing land managing agencies to determine whether another process is 
functionally equivalent with the NEPA process is troubling and ignores 
Congress' choices in NEPA as well as the judiciary's struggle with 
functional equivalence.
---------------------------------------------------------------------------
    \2\ Certain EPA actions under the Clean Air Act were an example, 
later codified. See Am. Trucking Ass'n v. U.S. EPA, 175 F.3d 1027, 1041 
(D.C. Cir. 1999), rev'd and aff'd in by part by Whitman v. Am. Trucking 
Ass'n, 531 U.S. 457 (2001); see also Mun. of Anchorage v. United 
States, 980 F.2d 1320, 1329 (9th Cir. 1992) (Clean Water Act); W. Neb. 
Res. Council v. U.S. EPA, 943 F.2d 867, 871 (8th Cir. 1991).
    \3\ Compare, e.g., Douglas Cnty v. Babbitt, 48 F.3d 1495 (9th Cir. 
1995), with Catron Cnty. Bd. of Comm'rs, N.M. v. U.S. Fish and Wildlife 
Serv., 75 F.3d 1429 (10th Cir. 1996).
---------------------------------------------------------------------------
    Fourth, sections 102(e)-(g) of the H.R. 1937 would, likewise, not 
only impair some of the goals and objectives of NEPA but also might 
become unwieldy. This section apparently seeks to ensure that project 
proponents and the appropriate land-managing agency agree to a 
structured process for complying with NEPA. For those who have been 
involved in such projects, the idea of outlining how a process might 
unfold for particular activities has some merit. The difficulty, of 
course, is in how to achieve such a result without compromising NEPA 
and any other statutory processes and objectives. Take, for instance, 
the concept of determining up front the ``scope of any'' NEPA 
document--if that document is an EIS then such a process would conflict 
with the idea of ``scoping'' under NEPA, where the interested public is 
able to assist in exploring the range of issues that should be 
addressed. Similarly, while currently the agencies and project 
proponents do enter into agreements, such as for funding of an EIS, 
those agreements are more limited than what is contemplated by this 
section and this section could limit public participation in the 
process. Or, section 102(e)(1) would require an agreement on whether 
and what type of NEPA document to prepare, and yet the decision under 
NEPA is ultimately a Federal decision and it is not clear what happens 
if the project proponent and the Federal agency cannot agree even 
though section 102(e)(1) appears to require an agreement (``shall enter 
into an agreement''). Also, section 102(e)(6) would require an 
agreement presumably covering consultations under laws other than NEPA, 
and yet is not clear how that would occur pursuant to the Endangered 
Species Act, the National Historic Preservation Act, or other laws.
    Finally, several aspects of H.R. 1937 are potentially vague and 
could become problematic in implementation. To begin with, the 
definition of ``strategic and critical minerals'' is not established in 
the usual fashion for definition-type language and what is included may 
too easily change with little defining contours, depending upon broad 
determinations by an agency about whether a particular mineral is 
``necessary'' for ``national defense,'' or ``for the Nation's energy 
infrastructure,'' to ``support'' certain industries, or ``for the 
Nation's economic security and balance of trade.'' And, it is unclear 
how an agency will make any such determination, whether for rare 
earths, solid and hard rock minerals, or even for sand and gravel, and 
then how any court would have the ability to review that decision 
because the language does not necessarily the leave the court with any 
law to apply--thus leaving the decision potentially within the agency's 
sole discretion.
    A similar problem could surface with the agency's determination 
under section 102(b)(2). It will be quite difficult, at the outset, for 
any agency to conclude that other processes are functionally equivalent 
with the six identified factors in section 102(b), because that would 
force the agency to examine and interpret the scope of other 
authorities, assess the breadth of those authorities, and conclude that 
they mirror the six factors--all within 90 days. And then the agency 
would need to document that conclusion in a written finding that, 
presently, it is not clear whether that determination would be a final 
agency decision immediately capable of judicial review (aside from 
whether the matter would be ripe), but nevertheless would likely be 
reviewable at some point. And how during this process the agency will 
examine ``facts'' in the record before any administrative record is 
established is unclear. The following are a few additional 
observations:

     It is not clear whether section 102(f) was intended to 
            refer to section 102(d) or 102(e);

     Section 102(h) would appear to cap financial assurances 
            unnecessarily by adopting a potentially unworkable third 
            party standard that may lead to litigation;

     Section 104 on preparing Federal Register notices appears 
            vague and it is not clear how it would work in practice, 
            particularly because it would require that the notice 
            originate in any office where any meeting has occurred, 
            where--and it is not clear whether some or all--documents 
            are housed, or the activity has been initiated, and the 
            requirement to publish the notice within ``30 days after 
            its initial preparation'' may similarly be unworkable and 
            not provide sufficient time for intra and/or interagency 
            review, and could simply delay having the agency prepare in 
            writing any ``initial preparation'';

     Section 203 on intervention as of right would 
            unnecessarily trump well-defined principles under F.R.C.P. 
            24, a right that generally most project proponents are 
            afforded currently under the rule;

     Section 205 limiting prospective relief unnecessarily 
            intrudes into the role of the judiciary, under well-defined 
            principles for awarding preliminary and injunctive relief, 
            and could easily cause appellate courts difficulty when 
            reviewing lower court decisions allegedly violating the 
            proscription in section 205; and

     Section 206 limiting recovery of attorney fees is contrary 
            to the notion that citizens ought to be rewarded when they 
            prevail in lawsuits that, in particular, protect 
            congressionally decided principles--whether in enforcing 
            agency organic statutes, NEPA, or the APA.

    Again, thank you for the opportunity to present my views on H.R. 
1937 to the subcommittee. I welcome your comments and questions.

                                 ______
                                 

    Mr. Cook. Thank you very much. The Chair now recognizes Mr. 
Green.

STATEMENT OF JEFFERY A. GREEN, PRESIDENT, J.A. GREEN & COMPANY, 
                         WASHINGTON, DC

    Mr. Green. Mr. Chairman, Ranking Member Lowenthal, 
distinguished members of the committee, thank you for inviting 
me to articulate my thoughts on the National Strategic and 
Critical Minerals Production Act of 2015, a much-needed bill 
that will help improve our Nation's strategic and critical 
materials policy. In the interest of time, I intend to offer 
brief oral remarks, and ask that my written testimony be 
incorporated into the record.
    Having dedicated my career to national security issues, 
specifically supply chain security and defense industrial-based 
challenges, I firmly believe strategic and critical materials 
are essential to our national security. Over the past 5 years, 
the U.S. Government has adopted meaningful strategies to 
support the substitution and recycling of strategic materials, 
and undertook several successful trade actions. Unfortunately, 
far too little has been done to support production of these 
materials, which in my view creates unacceptable national 
security risk.
    The bill under consideration today will help balance the 
need to support production with appropriate oversight and a 
streamlined regulatory regime. This balance, absolutely 
essential to ensure the political viability of the bill, 
ultimately will help improve our national security environment. 
Without a doubt, our Nation is increasingly reliant on imports 
for a growing number of materials that are critically important 
to the basic functionality of U.S. weapons systems, from armor 
plating to electro-optical targeting, from precision-guided 
munitions and stealth technology to ship drives.
    To see the adverse impact of over-reliance, we need only to 
look at our Nation's recent experience. In my written 
testimony, I provide three real-world examples of the nexus 
between strategic materials and national security. Looking at 
germanium, tantalum, and rare earths--in many of these cases 
associated with these materials we have seen potentially 
unreliable foreign nations exert near-monopolistic power, using 
state-owned enterprises to enforce export embargoes and to 
manipulate prices.
    In other cases, materials come from extremely violent 
regions with ongoing structural challenges and problematic due 
diligence schemes. Tantalum, designated a conflict mineral 
within U.S. law, is one such material.
    In all of these cases, import over-reliance, coupled with a 
supply chain interruption, either accidental or deliberate, can 
create real national security risk. In light of this nexus 
between strategic materials and national security, it only 
makes sense that the United States should take common-sense 
steps, such as those in the bill under consideration. 
Streamlining the permitting process and reducing bureaucratic 
red tape is one simple step that can remove a self-inflicted 
wound when it comes to strategic materials. The economics to 
keep competing with the rest of the world are tough enough 
without self-imposed artificial barriers to entry.
    That said, removing those barriers upstream, such as mine 
permitting, is just a first step. We also need to create an 
environment that promotes competitiveness at each value-added 
downstream step of the supply chain. From basic research to 
recycling, opportunities abound to support production of 
strategic and critical materials throughout the supply chain. 
This bill offers a chance at increasing our competitiveness and 
mitigating this growing national security risk. That requires a 
bipartisan and bicameral commitment to an approach that 
recognizes that these issues have key implications for our 
national security.
    Again, I thank the Chairman, Ranking Member Lowenthal, and 
members of this committee, for allowing me to offer my 
thoughts. I stand ready to answer any questions you may have.

    [The prepared statement of Mr. Green follows:]
 Prepared Statement of Jeffery A. Green Esq., President, J.A. Green & 
                                Company

    Chairman Lamborn, Ranking Member Lowenthal, and distinguished 
members of the committee, thank you for inviting me to offer my 
thoughts on H.R. 1937, the National Strategic and Critical Minerals 
Production Act of 2015. I have spent the last two decades in the 
private sector and government--including on active duty in the U.S. Air 
Force, in the Air Force Reserve, and as a senior professional staff 
member on the House Armed Services Committee--focusing on national 
security issues. In that time, I've observed the nexus between our 
natural resource policy and national security.

    Of particular concern to me is our import reliance on a growing 
number of strategic and critical materials. These materials often are 
produced in small quantities with opaque markets, and many are 
controlled by our Nation's potential adversaries. These strategic and 
critical materials are vital and enabling components of many of our 
most technologically advanced weapon systems. In recognition of these 
risks, the U.S. Government adopted a strategy to promote mitigation 
measures such as thrifting, substitution, recycling, and the use of 
trade remedies. However, much remains to be done to establish an 
environment that supports production of these materials in an 
increasingly competitive global market.

    Thus, I endorse the legislative intent underpinning the National 
Strategic and Critical Minerals Production Act of 2015. This bill 
represents an essential component in a strategic and critical materials 
policy that balances production and regulatory concerns.

       the link between strategic materials and national security

    As the committee considers the bill, I strongly recommend a focus 
on the implications of our increasing reliance on imports of strategic 
and critical materials. This import reliance creates a real national 
security risk.

    Many of these materials, including the case studies that I will 
explore later in this testimony, play a critically important role in 
the basic functionality of essential U.S. weapons systems, as well as a 
critically important role in the defense industry. First, when 
processed, strategic and critical materials provide unique physical 
characteristics required by U.S. weapon systems. For example, tungsten 
is a very hard metal that has several commercial applications (e.g., 
cutting tools); for the same reason, tungsten also is valuable for 
armor-piercing munitions and armor plate--an application it has served 
since the Second World War. Other materials, such as beryllium, have 
relatively few commercial uses, but military demand in nuclear weapons 
and electro-optical targeting systems is significant. Second, in 
aggregate, the use of strategic and critical materials in U.S. weapons 
systems allows our Nation to equip, train, mobilize, and sustain modern 
military forces with cutting-edge capabilities. Finally, production of 
strategic and critical materials naturally creates high-paying jobs, 
spanning the value chain from research and development and exploration 
to primary extraction and end-of-life recycling. This economic activity 
boosts gross domestic product (GDP) and tax revenues to state and local 
governments.

    Challenges associated with accessing reliable supplies of strategic 
and critical materials result in sometimes illogical and 
counterproductive business decisions. Because commercial supply chains 
generally do not tolerate high levels of risk, commercial companies 
often try to economize use of expensive or ``high risk'' materials in 
their product development efforts, rather than focus on maximizing the 
potential of a materials technology. In other circumstances, internal 
research and development dollars are diverted from product development 
toward material substitution. As a result, rather than focusing on 
utilization of the most advanced materials available to support 
innovation, scare research dollars are diverted to support substitution 
that can often be a technological step backward.

    What truly concerns me is the impact that U.S. reliance of 
importing these materials can have on the defense supply chain. Foreign 
governments have deliberately disrupted supplies of strategic and 
critical materials in peacetime and wartime with remarkable effects, 
resulting in severe supply restrictions and prohibitive price 
increases.

    For example, embargos are a well-known tool used to deprive a 
target country of strategic and critical materials by prohibiting the 
export or sale of such materials. Select instances involving the United 
States include the Soviet embargo of manganese and chromium during the 
Berlin Blockade (1949) and the Chinese embargo on rare earth minerals 
(2010). Preclusive purchasing also is a form of economic warfare 
whereby one country purchases resources for the purpose of reducing the 
ability of a target country to purchase the same resources. All other 
variables constant, this action increases demand, prices skyrocket, and 
supply shortages may result.

             real-world examples of national security risks

    We have learned about the national security risks of over-reliance 
on importing strategic and critical materials and supply chain 
interruptions through experience with numerous materials including 
germanium, tantalum, and rare earths. For example, germanium is a rare 
metal that occurs in very low concentrations in the Earth's crust. 
Because of this rarity, germanium is recovered as a byproduct of zinc 
or coal mining. Today, the largest mineral producers of germanium are 
in China, Canada, Russia, and, to a much lesser extent, the United 
States. However, companies ship much of this germanium mineral 
concentrate to Russia and China for processing into ingots and other 
high value-added products. The combination of limited availability of 
germanium concentrates and high prices for germanium has led to 
significant amounts of germanium recycling outside of China and Russia 
as one risk mitigation measure and business opportunity. Nevertheless, 
at this time these programs are unlikely to produce a sufficient amount 
of recycled material to meet our national security needs.

    From a military perspective, the most relevant germanium-related 
products include fiber optics, infrared optics, and solar cells. Nearly 
every surface vessel and fixed- and rotary-wing aircraft in the U.S. 
arsenal has large, forward-looking infrared systems or search-and-track 
systems. Many aircraft also carry ``heat-seeking'' missiles, which 
contain germanium lenses. In addition, many small arms and light 
weapons sights include infrared optics, and U.S. military satellites 
use highly efficient germanium-based solar cells. These military 
applications formerly accounted for the vast majority of the U.S. 
market, but now infrared optics and solar products represent about half 
of U.S. demand.

    The risks associated with the germanium market are two-fold. First, 
there is generally limited primary production of germanium, and to the 
extent that it occurs, much of that material is redirected to smelters 
in China and Russia. A great deal of the secondary materials market 
(i.e., scrap) meets a similar fate because: (1) it is cheaper to 
conduct these activities in China and Russia and (2) Chinese and 
Russian companies bid very aggressively for such material when it 
becomes available. Second, even though companies based in the United 
States and NATO countries have advantages in the high value-added 
manufacturing of germanium components, their competition in Russia and 
China consists of state-owned enterprises that simultaneously receive 
millions of dollars per year in price subsidies and other government 
grants to support downstream research and development. As these 
companies' product lines mature, it is likely that much of China's and 
Russia's current semi-finished germanium exports will be consumed 
domestically.

    Tantalum is a very hard metal that is highly resistant to corrosion 
and deformation at high temperatures. Like many other metals, tantalum 
can be extracted by typical industrial methods, such as underground or 
open pit mining. However, because of tantalum's natural hardness, 
artisanal mines are very common. At some deposits, the gangue material 
around tantalum-bearing minerals has eroded over the past millennia, 
leaving a relatively high-grade concentrate at surface. Artisanal 
collection and beneficiation of the latter is typical of Central 
African and some South American tantalum mines.

    In addition to the characteristics noted above, tantalum also is an 
excellent conductor of electricity, and nearly 75 percent of tantalum 
demand is focused on electronic materials and capacitors. As such, 
tantalum capacitors are one of the key building blocks of nearly every 
piece of high-tech equipment operated by U.S. armed forces. Separate 
from electronics, another important demand segment for tantalum is the 
turbine engine market, particularly for single-crystal nickel 
superalloys. In third-generation nickel superalloys, tantalum content 
ranges from about 6 percent to 8 percent. Smaller military applications 
for tantalum include explosively formed projectiles in anti-tank 
missiles.

    The principal risk associated with the tantalum supply chain lies 
at the furthest upstream portions of the supply chain, and under the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-
203), tantalum is a conflict mineral. According to U.S. Geological 
Survey statistics, more than two-thirds of global tantalum production 
emanates from the ``covered countries'', which include the Democratic 
Republic of Congo and those countries that border it. Though there are 
many public and private sector initiatives aimed at alleviating this 
problem, extreme violence in the region and ongoing structural problems 
within upstream due diligence schemes remain highly problematic and may 
result in some future supply disruption.

    Rare earth materials consist of 17 elements (yttrium, scandium, and 
the lanthanide series). With regard to U.S. national defense, rare 
earth elements are a force multiplier. The aerospace industry uses 
yttrium for the investment casting of titanium parts, and yttrium-based 
ceramics act as thermal barrier coatings in jet engines. Yttrium, 
neodymium, and dysprosium are additives to magnesium alloys that 
compose the transmission and gearbox casings for fixed- and rotary-wing 
aircraft. When one of these aircraft elects to place a munition on a 
target, the fin actuators and seeker head of that munition likely will 
be powered by neodymium-iron-boron or samarium-cobalt magnets. If that 
munition is laser-guided, a target designator using a neodymium-doped 
yttrium-aluminum garnet may be used. If that munition uses radar 
guidance, then the microwave-sensing devices incorporated in that 
munition likely will be powered by samarium-cobalt magnets.

    The primary concern associated with the rare earth supply chain is 
the near complete dominance of China at every stage of the value chain. 
The Chinese rare earth industry is in the midst of consolidation into 
six large, state-owned enterprises, which receive considerable direct 
and indirect government subsidies and benefits that, like germanium, 
are targeted at downstream, valued-added manufacturing. Moreover, 
prolonged inactivity within the U.S. industrial base already has led to 
a massive intellectual capital deficit; even now there is a very 
limited pool of experienced rare earth plant operators and engineers 
outside of China. Though the use of rare earths in defense applications 
is relatively minor in volume, their criticality to the functionality 
of many key weapons technologies is indisputable, and the dominance of 
Chinese supply remains virtually unchanged nearly 5 years after the 
2010 embargo.

                               conclusion

    These examples--germanium, tantalum, and rare earths--illustrate a 
continuum of risk to the defense industrial base as a result of 
strategic and critical material supply chains. In the case of tantalum, 
the central risk is isolated at the mine site and the trade routes 
along which those materials flow into the global market. For germanium, 
upstream mining risk is showing signs of creeping into downstream, 
value-added manufacturing segments. In the rare earth sector though, we 
continue to witness the complete dominance by China of an enabling 
technology for many weapon systems.

    To date, the U.S. Government has initiated a number of programs 
that address these risks focused on increased due diligence, trade 
enforcement, research and development grants for substitution and 
recycling, optimized material use, and a dogged belief that the free 
market will diversify the supply chain. As the rare earth market shows, 
the global market for strategic and critical materials is highly 
competitive, with often insurmountable barriers to entry. Therefore, a 
myopic and unshakeable belief in market solutions ignores global 
reality and national security risk. What has been lacking in our 
approach to these challenges is any encouragement of production of 
strategic and critical materials in the United States.

    The legislation introduced by Congressman Amodei provides common-
sense steps that will allow the United States to streamline the 
permitting process and reduce bureaucratic red tape. The economics of 
competing with the rest of the world in strategic and critical 
materials is difficult enough without self-imposing barriers to entry. 
Removing those barriers at points that are upstream in the value chain 
is an excellent first step.

    It is, however, just a first step. I encourage the members of this 
committee to evaluate the definition of strategic and critical 
materials, beginning the necessary work that we, as a country, need to 
undertake to create a framework for focusing national-level activities 
and promoting true competitiveness at each value-added downstream 
segment of the supply chain. Only then will our Nation have the 
opportunity to increase our competitiveness and mitigate our growing 
national security risks associated with import over-reliance.

                                 ______
                                 

    Mr. Cook. Thank you very much. The Ranking Member, Mr. 
Lowenthal, has been magnanimous enough--you like that word? You 
gave it to me. I can't spell it, but I can pronounce it, I 
think--to allow Mr. Labrador--he has to run--for some 
questions.
    You are recognized.
    Mr. Labrador. Thank you, Mr. Chairman. Thank you, Mr. 
Lowenthal.
    Mr. Russell, again, thanks for being here today. Can you 
please explain how Hecla's longstanding experience in northern 
Idaho and with the other mines might be helpful in permitting 
the Rock Creek mine in Montana?
    Mr. Russell. Mr. Chairman, Congressman, Hecla--I think 
there are two opportunities there. First, our Lucky Friday mine 
in north Idaho is a 70-year-old mine. And what that has done 
has made Hecla an integral part of the community of Mullan and 
Wallace. And we would bring that sort of perspective to Rock 
Creek, which has the potential to be a 30- or 40-year project.
    More importantly I think, is our Greens Creek project, 
located in southeast Alaska. Greens Creek is located in 
Admiralty Island. It is partially located within a national 
monument, adjacent to a wilderness, on national forest and 
private lands. The mine has been operating for 27 years. 
Admiralty Island is home to more brown bears than anywhere else 
in the Lower 48, and the mine and the bears--same species as 
the grizzlies in western Montana--have operated successfully 
together for 27 years. The island is also home to five species 
of Pacific salmon, and the mine has operated without 
significant impact to the fish. So the issues that we have 
dealt with in Alaska on bears and fish and sensitive 
environments are the same issues that we would deal with in 
Montana, and we would bring those lessons learned and those 
experiences to successfully operate the Rock Creek project.
    Mr. Labrador. Excellent, thank you. Do the other countries 
that you have worked in to permit mines, do they have high 
environmental standards?
    Mr. Russell. Mr. Chairman, Representative Labrador, most of 
the countries that I have worked in do, in fact, have very 
similar environmental requirements to the United States. As an 
environmental professional, I feel good about that. So the 
standards that we have had to meet internationally--Australia, 
Chili, New Zealand, Argentina--are essentially the same.
    What I have seen in those countries is that their 
permitting process distinguishes the environmental compliance. 
What you do on the ground--complying with air, water, solid 
waste requirements--those are almost the same as the United 
States. Their permitting process is much more predictable. You 
can get through that process in a 2- to 3-year period. The 
agencies, the public process, all goes through that process in 
a much, much shorter time. So those countries are more effects-
driven--what is the effect of this? The United States tends to 
be more on a process, and we get bogged down on the process 
rather than really what the true effects are.
    Mr. Labrador. So their high standards are not delaying the 
permits.
    Mr. Russell. They are not, no.
    Mr. Labrador. I lived in Chili for 2 years, and I actually 
happened to live in the city of Rancagua for 5 months, which is 
where the biggest copper mine in the world seems to be. I don't 
know if it still is the biggest copper mine in the world. Tell 
me a little bit about Chili. My experience with the Chilean 
government is that they worked pretty swiftly through these 
permits, and I understand that they continue to do that. Is 
that correct?
    Mr. Russell. Yes, Mr. Chairman, Representative, yes. My 
experience in Chili--the local region in Chili, which would be 
like the state or province here, is the primary permitting 
agency or authority. Then there is also the national, which is 
somewhat similar to Canada. The national will accept or review, 
or not accept, the provincial permitting process and review, 
but they are involved. Typically, that local province or region 
takes the lead. Yet that process is done very predictably, and 
it is in a very strong relationship between the applicant and 
the government, and then the public being a part of that 
process, so----
    Mr. Labrador. The Chileans don't really care about their 
cities and their environment, right, because they don't have 
any kind of tourism, they don't believe in environmental 
tourism, isn't that what we seem to hear all the time, that we 
need to make things longer, because we actually care about the 
environment? It seems to me the people of Chili rely on 
tourism, especially environmental tourism, quite a bit. Isn't 
that true?
    Mr. Russell. That is absolutely true, and we should not 
confuse the length of the process to the rigor of the analysis. 
I think Chili is an example where it is a rigorous process, it 
is just done in a more timely fashion.
    Mr. Labrador. In your testimony you mentioned that the fear 
of litigation can lead to agency staff addressing every issue 
as if it were potentially significant, instead of focusing on 
the truly significant issues. Has agency staff specifically 
mentioned that fear of litigation to you, and does this fear of 
litigation lead them to do better analysis of the issues?
    Mr. Russell. Mr. Chairman, Representative, yes. In my 
experience, I have heard repeatedly that we have to make these 
documents legally bulletproof.
    So, under NEPA, there is a requirement that the agencies 
look at issues that have a potential significant impact on the 
environment, and that those get analyzed. I think, in other 
countries, that is what they do. Here in the United States, 
because of the fear of any possible stumble in the legal 
procedure, the agencies then say, ``We have to look at these 
issues in more depth, and more depth, in an effort to try to 
build our case, so that when it does go to court, we can defend 
it.'' And that is a major cause to permitting delays.
    Mr. Labrador. Thank you very much; I yield back my time.
    Mr. Cook. Thank you, Mr. Labrador.
    Mr. Lowenthal.
    Dr. Lowenthal. Thank you, Mr. Chair. And I enjoy calling 
you Mr. Chair.
    Mr. Kalen, the Hard Rock Mining Reform and Reclamation Act 
that Ranking Member Grijalva and I introduced earlier this year 
would make a number of reforms to the Mining Law of 1872, 
including putting a royalty on hard rock production from public 
lands, permanently ending the system that gives away public 
lands for less than $5 an acre, establishing strong reclamation 
and bonding requirements, giving clear authority to Federal 
land managers to reject a proposed mine if the negative impact 
of that mine would be too severe, and more.
    Do you think that these reforms would be a positive step in 
the right direction?
    Mr. Kalen. Mr. Chairman, Representative, yes, I do. If we--
--
    Dr. Lowenthal. Is your microphone on? Bring it closer to 
yourself, Mr. Kalen.
    Mr. Kalen. Mr. Chairman, Mr. Representative, sorry. Is this 
better?
    Dr. Lowenthal. Yes, much better.
    Mr. Kalen. Sorry. Yes, I do. I think that, at least since 
the early part of the 1900s, we have engaged in re-looking at 
how we deal with our public lands and the management of our 
public lands. So beginning in the last century, we started to 
look at things like leasing, and identifying lands right up 
front for what kind of valuable resources--whether it is 
recreation, whether it is oil and gas, whether it is coal, or 
whether it might be some other kind of potash.
    So what we have done historically is, in other programs, 
engaged in looking at bidding for those, and then engaged in 
leasing with royalties. So the hardrock mining program is 
anachronistic. It doesn't really fit with any of the modern 
programs. So I think that, without a doubt, it is in need of 
reform.
    Dr. Lowenthal. Thank you. I want to talk now about the 
definition of critical minerals. First I want to go back to 
something that Chairman Lamborn mentioned in his opening 
statement. He mentioned an answer from last year's witness in a 
hearing that we had last July, and a question that I had asked 
Mr. Eric Peterson from the Center for Advanced Energy Studies 
at the Idaho National Laboratory. In his opening statement, he 
implied that the witness said that lead is a critical mineral.
    We asked Mr. Peterson to clarify that response. His written 
response back made it very clear--he said, ``Due to its rather 
large supply with multiple sources, I do not see lead as being 
a critical element.'' And, remember in my opening statement, 
what I said was that the definition that we use for critical 
minerals, what is critical, is based upon the National Research 
Council, the U.S. Geologic Survey, the Department of Energy, 
all have definitions, and they all say they have to have three 
conditions: they have to be essential, there have to be poor 
substitutes to be considered critical, and there has to be a 
risk to supply chain disruptions, in terms of procuring these 
minerals. And it has to meet all three.
    In the legislation that we have before us, it changes that 
to the minerals that are necessary for national defense, for 
energy infrastructure, to support domestic manufacturing, 
agriculture, housing, telecommunications, health care, and 
transportation infrastructure. That is the definition now.
    I ask the members of the panel, is there any mineral that 
doesn't--given this new definition, that is not a critical 
mineral? And, can you tell me what mineral does not meet 
these--that we are giving this expedited process to, because 
they are critical? It seems to me that every single mineral out 
there now meets the definition. Can you tell me what doesn't? 
What would not meet--I am just asking you. What would not meet 
the definition of a critical mineral in this legislation?
    Mr. Fellows. OK. So, as a mineral economist, I spend an 
awful lot of my time looking at that balance between supply and 
demand for a whole range of commodities. And you are absolutely 
correct in that, in many instances, supply or potential supply 
is currently sufficient to meet demand. But what I would point 
out is that criticality, or the degree of criticality, changes 
over time. Right now, for some minerals, the degree of 
criticality is very low. For some minerals it is indisputably 
very high. That----
    Dr. Lowenthal. Again, I am running out of time, and I just 
want to ask you. Name the minerals that do not meet this 
definition of critical mineral. Now, given the new definition 
that is being proposed of what is a critical element that we 
are going to give this expedited--what doesn't meet the 
definition?
    Mr. Fellows. From the point of view of abundant supply, you 
are quite correct that something like sand and gravel is 
abundant. So, from that point of view, criticality would be----
    Dr. Lowenthal. Thank you, Mr. Chair. I will submit my 
questions.
    Mr. Cook. Thank you very much.
    Mr. Zinke.
    Mr. Zinke. Thank you, Mr. Chair. As the lone Congressman 
from Montana, I also am a former geologist. First of all, I 
commend you for your investment in Montana. I have some 
experience, because I grew up in Montana, which is not very 
far. And I can tell you, in Sanders County and Lincoln County, 
it is dire. The unemployment rate is far above the national 
average, somewhere around 7.5 percent. Montana used to be known 
as the Treasure State, and now most people refer to it as the 
Big Sky State. It is hard to feed a family on sky.
    I commend you for this process, the process in my mind 
when--during your testimony, you were talking about timelines. 
Well, I graduated high school in 1980, when the process first 
began. And your reference to 2001 was when 9/11 occurred. I 
spent 23 years as a Navy SEAL, and I remember 9/11. Yet we have 
been going through a process, and as a country, we have become 
process-orientated and not results-driven. When a process is 
years and years and years without end, as a business model, how 
can one invest in our future? Because it has become so 
uncertain that it will ever have a path to get there.
    Many of you--I would say there is no one in this room that 
has been to the Yaak, perhaps, other than you. The Yaak was the 
last place in this country to receive power. And the Yaak is a 
distant place in Montana. Matter of fact, there is a TV show 
that looks at isolated places in America, and the Yaak is one 
of them. Yet there isn't a job to be found in the sea of forest 
because our forest policy has not allowed trees to be cut, and 
a vast array of natural resources in a place where jobs are 
desperately needed, and the process has been shown over and 
over to be reasonable, environmentally prudent, and yet you 
cannot pull a permit.
    So, how long, Mr. Russell, without this bill, do you see an 
estimate of when a permit would be given?
    Mr. Russell. Mr. Chairman, Representative Zinke, appreciate 
your question. The long permitting timeline for the Rock Creek 
project is especially frustrating, when just 15 miles away is 
the Troy mine that has been there for 30 years, has had no 
significant impact on the environment, and is adjacent to the 
proposed Scotchman's Peak new wilderness area. Obviously, 
mining, environmental values, recreation, and wilderness values 
can co-exist.
    The Rock Creek project has been 5 years since the 
supplemental EIS was started. The Forest Service will not give 
us an updated timeline for when that project would see a draft. 
Hecla has come into that project with a long-term view. We are 
a 124-year-old company. We know it is going to take time. We 
are not happy that it is going to take time, but we know that 
it will. We have an approach of patience and persistence to 
push that project forward. I think if we could get it done in 
10 or 15 years under the current system, we would be fortunate, 
to answer your question specifically.
    Mr. Zinke. So 10 to 12 years is where you think we would 
be? I am looking at--let's see, that would make a process of 40 
years, from 1980 to when we expected completion on this?
    I support this bill because I think we have lost our mind 
as a country, when the amount of litigation, and frivolous 
litigation, and stacks of it have become where we can't be 
prosperous any more. And I commend you for your level of 
investment, and we will do whatever we can, from the delegation 
of Montana. I speak with one voice from Montana.
    [Laughter.]
    Mr. Zinke. But thank you, Mr. Chairman.
    Mr. Cook. Thank you very much. The rules of the committee 
are such that the next senior Member speaks--even though Mr. 
Hardy came in earlier, and if you want to be magnanimous and 
yield time, I will leave that up to you. I am going to play 
Pontius Pilate and recognize Mr. Hice.
    Dr. Hice. Thank you, Mr. Chairman. I appreciate this 
hearing, as well. And each of the panelists, thank you for 
being here.
    Mr. Green, let me ask you just a couple of real quick 
questions. What do you see are the potential risks to our 
national security, if we lose the strategic and critical 
materials?
    Mr. Green. Mr. Hice, thank you for the question. I think it 
is best answered in two parts, both a near-term risk and a 
long-term risk. And I think, as a nation, we need to be very 
conscious of that.
    In the near term, if we look at the rare earth example back 
in 2010, we saw what that means: a supply disruption via the 
actions of a near-peer adversary, disruption in the supply 
chain, quick reactions in the market. But, ultimately, that 
settled out. So there are folks, for example in the Department 
of Defense, who don't feel that that was a crisis because 
supply chains and delivery in my world of weapons systems were 
never affected. But the potential was there. So some in the 
Administration will say, ``So there is really no issue here.''
    But I think we have to be more conscious in thinking about 
the longer term. What I mean by that is that if you lose access 
to things at the furthest upstream point in the process--so, at 
the mine as this committee looks at it--we tend to see, in 
markets such as rares, the collocation of the downstream 
products closer to the source of supply.
    So, in rare earths, you have seen migration of metal 
producers to the oxide markets in China, so they can gain 
access to that material. Then you have seen the downstream 
alloy producers chase the metal. Eventually, the magnet 
producers chase the alloy. And that creates a real risk, where 
the next steps--which are viable, and we are seeing them now--
are eventually assemblies, components, and ultimately, end 
items.
    I think that is a horrible long-term prospect for our 
manufacturing base, and that goes right back to the intent of 
this bill, which is making sure we have access to that first 
step in the supply chain.
    Dr. Hice. Well, I thank you for that. I take it you are 
familiar with the RAND Report that came out a couple of years 
ago.
    One of the alarming things in that report was China, as you 
just mentioned, and how their market share of global production 
of critical materials has grown dramatically over the past 
couple of decades, from a strong position to an overwhelming 
position of dominance.
    Do you think that position of China, of dominance, poses a 
risk to the United States, be it national security or economic 
security?
    Mr. Green. Mr. Hice, absolutely. I would liken this to a 
disconnect between our policy as a Nation, as it relates to 
strategic materials, and the ability of the market to react to 
take advantage of opportunity.
    So, again, using the rare earth example, there was a time 
and a period where prices skyrocketed. You saw 300 to 400 
companies try to enter this space in a very small window. Only 
one company in the United States was able to capitalize on that 
opportunity in the market, and that was a previously permitted 
mine.
    We have since seen a decrease in the price of those 
materials, and that economic window has closed in a 2- to 3-
year period. So we really never had a chance to try to 
challenge China's dominance.
    Dr. Hice. OK, Mr. Chairman, I would like unanimous consent 
to enter the RAND study into the record.
    [No response.]
    Mr. Cook. Without objection, so ordered.
    Dr. Hice. Thank you, sir.
    Mr. Russell, let me go to you real quickly. You have been 
involved in permitting for a long time, 30 years or so. How 
many different types of permits are required for a typical 
mining project?
    Mr. Russell. Mr. Chairman, Representative, a typical mine 
will have 40 or more permits. Our Greens Creek mine has 85 
different permits, approvals, authorizations that we have to 
comply with.
    Dr. Hice. All right. Forty permits is a lot of hoops to 
jump through. I am assuming that that process has changed over 
the years since you have been involved.
    Mr. Russell. Yes, certainly it has. If you kind of go back 
to when I started this, in the first early days of NEPA, the 
guidance from CEQ would be an environmental assessment that 
would take 6 months and be about a 15-page document. An 
environmental impact statement would be 18 months and about 150 
pages. The----
    Dr. Hice. Let me stop you, if I can, right there. I get the 
picture. A lot of changes have taken place. But, besides the 
permitting, there are some other issues facing the delays and 
all the problems. What are some of the other issues facing the 
industry?
    Mr. Russell. Mr. Chairman, certainly key to development of 
mining in the United States is access to the ground. Mineral 
withdrawals on the sage grouse, over 10 million acres are being 
proposed to be withdrawn from mineral entry. Three million 
acres in my state of Idaho--and the state of Idaho has 10,000 
acres that have been affected by mining--yet 3 million acres 
are proposed to be withdrawn. Yet fire is the main culprit of 
risk to habitat for sage grouse.
    The second would be the ever-moving goal post of regulatory 
requirements. The rules are always changing, and it is 
difficult to hit a moving target.
    Dr. Hice. Thank you, Mr. Chairman.
    Mr. Cook. Mr. Hardy.
    Mr. Hardy. Thank you, Mr. Chairman. Mr. Fellows, Mr. 
Russell, I have a mine in my district--a number of mines, 
actually--but I have a mine called Round Mountain. Are any of 
you aware of that place? Round Mountain has been working on a 
permit that is still within the envelope that it was permitted 
almost 80 years ago. It is not going outside its boundaries, it 
is just trying to expand the hole that it is working on. They 
have been working for over 2 years to obtain a permit. This is 
due to start the closure process of this mine in 2018. Without 
the expansion of this, that is close to 2,900 jobs it would 
cost our state, some of the highest-paying jobs anywhere.
    Can anybody give me an idea why it would take so long to do 
an environmental assessment within the same area that has 
already been assessed for over 80 years, and why it has taken 
the process--anybody care to tell me why that takes so long?
    Mr. Fellows. I genuinely struggle to see, from a purely 
technical point of view, how it could take that long. There has 
to be something procedural going on there.
    Mr. Hardy. Engineering has been done, everything has been 
done, the study has been done, been submitted. And it is still 
within the same envelope. But because of the environmental 
process, we continue to have to fight issues like these 
studies.
    Mr. Russell, we talk about the fact that America's 
significant mineral resources currently attract 7 percent of 
the worldwide exploration dollars, as compared to 20 percent 
back in the 1990s. Given our wealth of materials and minerals, 
would it be likely that we might change that back to that 20 
percent, which would change the trade deficit we have in this 
country today if those were accessible, were expedient in the 
process of doing that, and would that attract more of that 
exploration?
    Mr. Russell. Mr. Chairman, Representative, the short answer 
is yes. If there was a more reliable and predictable process 
that would encourage and instill confidence to the business 
decisions to come to the United States and to be able to say, 
``Through this--we know that we can get through a rigorous 
process, but once we have that, that the rule of law will hold 
in the United States, and that we can rely on our access and 
our rights of tenure,'' I believe that the answer is yes.
    But because it takes so long, there are other countries 
where projects can go to be done and develop quicker, and the 
return on investment is much, much quicker. I think the answer 
is yes, if we can get through this issue of long, long times to 
develop a permit or mine.
    Mr. Hardy. Mr. Fellows, do you believe that there is access 
to, or are there minerals out there that are of high-grade 
quality that could be gone after if the process was a little 
quicker, that would solve some of the issues?
    Mr. Fellows. Absolutely. One of the key findings from our 
study is that right now the United States receives around 7 
percent of global exploration expenditure, which was actually a 
surprisingly high figure to me, given how difficult it is to 
actually advance projects through the development pipeline 
here.
    What that tells you, I believe, is that geologists, mining 
companies, explorers, still regard this country as being highly 
prospective for a whole range of minerals. So, the issue really 
is not the geological availability of these things here in the 
United States, it is really a case of getting them developed.
    Mr. Hardy. Thank you.
    Mr. Green, in your comments earlier we talked about the 
Federal Government. Is it not its responsibility to make sure 
of the safety and security of its citizens within its borders 
and outside its borders? Isn't it also maybe responsible for 
the economic security of individuals?
    Mr. Green. I am sorry, I couldn't agree more, and I think 
there is a close nexus between that. Having studied the 
industrial base and supply chain for many years, a bill such as 
this, creating a positive economic--that environment just has a 
flowdown effect through the supply chain. And I have worked 
with many industries who say, ``It is the business climate in 
the United States, it is either the inability to get a permit, 
the inability to find downstream customers that are preventing 
us from doing the production here, so we are simply going to 
have to look to other places.''
    So I think the two, economic and national security, are 
inextricably linked.
    Mr. Hardy. Thank you. I would just like to make a little 
statement, real quick. I would like to concur with my colleague 
there, Ranking Member Lowenthal, that these are all precious 
metals. Gravels, which I work with--there has to be a certain 
density in order for a quality gravel to work on a highway or 
in concrete. Wyoming itself has one of the hardest materials, 
PR&R use it on their tracks all the way across their system. 
They haul it for many miles because it is one of the most hard 
or dense products, in order to keep the safety of our citizens 
through that process. So, thank you.
    Mr. Cook. Thank you. The Ranking Member has a short 
statement.
    Dr. Lowenthal. I just want to say that I found this 
discussion fascinating, about some of the issues around mining 
in the United States, but this is not germane to the topic of 
this bill. This bill was about minerals that are critical and 
strategic to the United States, and how they would get an 
expedited process. What this bill does is eviscerate that 
definition, and says that all minerals now meet that 
definition, which I think is really not appropriate. We are 
talking about those that really are at risk, that put our 
supply chain at risk.
    And with that, I again reiterate my opposition to H.R. 
1937.
    Mr. Cook. Thank you very much. Before I wrap it up, I am a 
co-sponsor to this bill. Obviously, I have a different 
viewpoint. I am not going to go into my questions, or anything 
like that.
    Right now I want to thank the panel. Obviously, I was 
trying to move things along. They have called votes. I 
appreciate your professionalism and your patience in being here 
with us. It was a great, great hearing, at least from my 
standpoint.

    This meeting is now adjourned.

    [Whereupon, at 12:16 p.m., the subcommittee was adjourned.]

            [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S 
                            OFFICIAL FILES]

  --  A Study by the Rand Corporation, ``Critical Minerals: 
            Present Danger to U.S. Manufacturing''

  --  A Study by SNL Metals & Mining prepared for The National 
            Mining Association, ``Permitting, Economic Value 
            and Mining in the United States''

  --  Statement in opposition to H.R. 1937 from various 
            environmental groups

  --  Statement in support of H.R. 1937 from the Interstate 
            Mining Compact Commission (IMCC)

  --  Statement in opposition to the Bill in its current form 
            from the Honorable Joseph Holley of the Battle 
            Mountain Band of the Te-Moak Tribe of Western 
            Shoshone Indians

                                 [all]