[Senate Hearing 117-294]
[From the U.S. Government Publishing Office]
S. Hrg. 117-294
THE SCOPE AND SCALE OF CRITICAL MINERAL
DEMAND AND RECYCLING OF CRITICAL MINERALS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
APRIL 7, 2022
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
47-936 WASHINGTON : 2024
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
MARTIN HEINRICH, New Mexico STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada JAMES LANKFORD, Oklahoma
MARK KELLY, Arizona BILL CASSIDY, Louisiana
JOHN W. HICKENLOOPER, Colorado CINDY HYDE-SMITH, Mississippi
ROGER MARSHALL, Kansas
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
Zahava Urecki, Professional Staff Member
Peter Stahley, Professional Staff Member
Richard M. Russell, Republican Staff Director
Matthew H. Leggett, Republican Chief Counsel
Kate Farr, Republican Counsel
Jake McCurdy, Republican Professional Staff Member
C O N T E N T S
----------
OPENING STATEMENTS
Page
Barrasso, Hon. John, Ranking Member and a U.S. Senator from
Wyoming........................................................ 1
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West
Virginia....................................................... 3
Cortez Masto, Hon. Catherine, a U.S. Senator from Nevada......... 8
WITNESSES
Howell, David, Acting Director and Principal Deputy Director,
Office of Manufacturing and Energy Supply Chains and Director,
Vehicle Technologies Office, U.S. Department of Energy......... 9
Wood, Dr. Duncan Robert, Vice President, Strategy and New
Initiatives, Wilson Center..................................... 24
Forney III, R. Scott, President, General Atomics, Electromagnetic
Systems Group.................................................. 32
Britton, Joe, Executive Director, Zero Emission Transportation
Association.................................................... 40
Straubel, J.B., Founder and CEO, Redwood Materials............... 49
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Barrasso, Hon. John:
Opening Statement............................................ 1
Chart depicting annual global demand for critical minerals... 2
Britton, Joe:
Opening Statement............................................ 40
Written Testimony............................................ 42
Responses to Questions for the Record........................ 104
Cassidy, Hon. Bill:
Report entitled ``Resetting American Energy and Climate
Policy''................................................... 68
Cortez Masto, Hon. Catherine:
Introductory Statement....................................... 8
Daines, Hon. Steve:
Front pages from ten environmental reports................... 110
Forney III, R. Scott:
Opening Statement............................................ 32
Written Testimony............................................ 34
Questions for the Record..................................... 103
Howell, David:
Opening Statement............................................ 9
Written Testimony............................................ 12
Responses to Questions for the Record........................ 91
IperionX:
Letter for the Record dated April 13, 2022................... 120
Letter for the Record dated April 20, 2022................... 123
Jensen, Mark:
Statement for the Record..................................... 126
Manchin III, Hon. Joe:
Opening Statement............................................ 3
Chart depicting the lithium-based battery supply chain....... 4
Chart showing efficiency of critical mineral recycling....... 7
National Association of Manufacturers:
Letter for the Record........................................ 129
National Mining Association:
Statement for the Record..................................... 131
Straubel, J.B.:
Opening Statement............................................ 49
Written Testimony............................................ 51
Questions for the Record..................................... 109
Wood, Dr. Duncan Robert:
Opening Statement............................................ 24
Written Testimony............................................ 26
Questions for the Record..................................... 102
THE SCOPE AND SCALE OF
CRITICAL MINERAL DEMAND AND
RECYCLING OF CRITICAL MINERALS
----------
THURSDAY, APRIL 7, 2022
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:03 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Joe Manchin
III, Chairman of the Committee, presiding.
The Chairman. The Committee will come to order. We are
going to reverse this a little bit because of all of our votes
coming up. You will be seeing us come and go. So Senator
Barrasso is going to give his opening statement before mine. He
is going to leave and vote, and I will give mine, and we will
get started, and we are going to have you all have yours. So
don't think that we are being disrespectful. We are just so
sorry things--we have to go vote.
So, with that being said, Senator Barrasso.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Well, thank you very much, Mr. Chairman,
and thanks for holding today's very important hearing. You
know, last week, this Committee held a hearing on the supply of
critical minerals. We discussed how President Biden's decision
to cancel leases and delay permits for critical minerals is
putting his own climate goals at risk. His decisions are also
putting America's energy and national security at risk. Today,
we are going to discuss the industries that are driving demand
for critical minerals. When President Biden took office, he
committed the United States to the Paris Climate Accord. When
doing so, he announced sharp greenhouse gas emission reduction
targets. To accomplish these goals, the President wants to
increase, by vast amounts, the number of electric vehicles on
the road and the number of wind turbines, batteries, and solar
panels used to generate electricity.
Whether you agree or disagree with the President's goals,
there is no dispute that they will dramatically increase the
demand for critical minerals. Last year, the International
Energy Agency published a report on the future demand for
critical minerals.
[Chart depicting annual global demand for critical minerals
follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. It projects that by the year 2040, the
demand for rare earth minerals will increase by 700 percent.
The demand for nickel will increase by 1,900 percent. The
demand for cobalt will increase by 2,100 percent. The demand
for graphite will increase by 2,500 percent. And the demand for
lithium will increase by 4,200 percent. If you look at where we
are in terms of annual versus global demand, 2020 to 2040. The
International Energy Agency is not alone. The World Bank
recently looked at future demand for copper. It found that to
meet the world's demand for copper in the next 25 years, the
world will have to mine the same amount of copper that has been
mined in the last 5,000 years. Now, these are astonishing
figures that neither President Biden nor those within his
Administration are willing to face head-on. So, where exactly
would this growth in demand for critical minerals come from?
Well, according to the International Energy Agency, most of it
will come from manufacturers of solar and wind turbines,
manufacturers of electric vehicle batteries and batteries to
store wind and solar energy, and manufacturers of electric
transmission and distribution components.
Another important question to ask is, what does this growth
in demand for these critical minerals mean for existing users
of critical minerals? For example, today the defense sector is
a key source of mineral demand. According to the National
Mining Association, the Department of Defense uses nearly
750,000 tons of minerals each year. These minerals are
absolutely essential to our national security and the security
of our allies. For that reason, I am grateful that Scott Forney
is here today, President of General Atomics, the
Electromagnetic Systems Group, for his willingness to testify.
General Atomics has partnered with the Bear Lodge Rare Earth
mine project located in Northeast Wyoming. Once operational,
the mine and processing plant will be an alternative to Chinese
rare earths. For our national and our economic security, we
cannot afford to rely on countries such as Russia and China for
our mineral mining and for processing needs. Cutting China and
Russia out of global mineral supply chains will not be easy.
Russia's state-run nickel company produces nearly 20 percent of
the world's high-grade, battery-quality nickel supply. China
controls over 90 percent of the global rare earth element
market, including refining and processing.
It is clearly time for us to get serious about expanding
domestic mineral production. So I look forward to discussing
these topics with our witnesses today.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
OPENING STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. We are here today for part two of an
important discussion on how to reverse our increasing
vulnerability associated with a critical supply chain. We are
going to put a map up today to show you what we are dealing
with here, and it gives you an idea of each stage of the supply
chain as we have listed here.
[The chart referred to follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The Chairman. And last week's hearing highlighted the
challenges we face in supplying our own critical minerals in
domestic mining, processing, and refining. Today, we are going
to shift our discussion to what is driving the need for these
minerals in the first place, and what kind of demand that we
expect in the future. I think some of the illustrations and
also some of the numbers you have heard are quite astonishing.
This discussion would not be complete without hearing how
we can leverage the recycling of these products and
technologies at the end of their useful life to increase our
domestic supply and offset some of the increasing demand. From
the technologies needed to support military readiness and
combat climate change, to the cell phones in our pockets or the
cars in our driveways, critical minerals are essential to the
life that we lead and the technologies we have come to depend
on. Accelerating their production and establishing secure and
dependable supply chains is vital to our energy and national
security. That is why I was pleased to see President Biden take
action last week to strengthen our critical minerals supply
chain by invoking the Defense Production Act to address the
minerals needed for advanced batteries. I am also proud of the
work that we did in this Committee to include provisions in the
Bipartisan Infrastructure Law to build up our domestic
manufacturing and recycling capabilities. While these actions
are a crucial step forward, more action is going to be
necessary to get supply chains, including mining, processing,
manufacturing, and more where they need to be domestically to
keep up with the growing demand for these critical minerals
instead of increasing our reliance on China.
Government support and intervention are necessary, but
industry truly needs to be the leader in securing reliable and
ethically sourced supplies for the materials that make up their
products. I repeat the word ethically, because we know where a
lot of it is coming from, and the pain and the hardships on
people. Every company involved in the downstream manufacturing
of products that contain critical minerals has a responsibility
to know where their parts and materials are coming from.
Companies must commit to building partnerships with domestic
producers and material processors, and when they source
overseas, transparency is a prerequisite. Manufacturing should
be done with recycling in mind, and if there are barriers to
that, I want to hear about them so we can get this right sooner
rather than later. I am pleased that we are joined today by
several witnesses who will be able to shed some light on how
the private sector is approaching all of these challenges.
According to the International Energy Agency, stationary and
electric vehicle batteries will account for about half of the
mineral demand growth from clean energy technologies over the
next 20 years. As the sector responsible for the largest
portion of total U.S. greenhouse gas emissions, there is no
question that we need to be doing all that we can to reduce
emissions in the transportation sector.
EVs certainly have a role to play in addressing those
emissions, however, with China's dominance over the critical
minerals required for the EVs, I have grave concerns about
moving too quickly toward an EV-only future. When it comes to
the EV battery supply chain, China is responsible for 80
percent of the world's battery material processing, 60 percent
of the world's cathode production, 80 percent of the world's
anode production, and 73 percent of the world's lithium-ion
battery cell production. They have simply cornered the market.
With numbers like these, it is frustrating to hear calls for a
swifter transition to electrified transportation to reduce our
dependence on foreign oil. We cannot replace one unreliable
foreign supply chain with another and think it is going to
solve our problems. That is why I also continue to advocate for
parallel investment in hydrogen as a clean transportation fuel.
Now, I believe that domestic mining has to play a role in
reducing our reliance on foreign supplies of raw materials, but
it is not the only tool that we have in our toolbox. Recycling
provides a tremendous opportunity to avoid outsourcing the raw
supply of critical minerals that we need while creating new
economic opportunities right here at home. This chart shows
that recycling is a more efficient way to recover these
materials in some cases.
[The chart referred to follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The Chairman. According to the Department of Energy, we can
recover one ton of battery-grade lithium from only 28 tons of
spent lithium-ion batteries compared to 750 tons of brine or
250 tons of ore. And for cobalt, one ton of battery-grade
cobalt only needs 5 to 15 tons of spent batteries compared to
300 tons of ore. And all of this material can feed right back
into the processing--the capacity that we are developing here.
I am pleased that we are joined by Mr. Straubel of Redwood
Materials, who can talk about the opportunities to grow this
promising new industry.
In the 1940s, in the wake of World War II and the Cold War,
started kryptonite. It made its first appearance in a Superman
comic, a rare mineral found only on the fictional planet of
Krypton. Kryptonite is the only thing that can render the
seemingly invulnerable Man of Steel powerless. As tensions grew
during the Cold War, our demand for critical minerals was now
somewhere close to where it is today, but it turns out, DC
Comics was onto something. The more we dive into this topic of
critical minerals, the more I am convinced that Superman is not
the only one who can be brought to his knees by rare minerals.
They were getting creative on this one.
[Laughter.]
The Chairman. If we do not address our dependence problem
and look for innovative ways to ensure the supply chain, it
will compromise our energy security and handicap us in local
marketplaces. We cannot let that happen. Now, you all feel the
same, I am sure. I look forward to hearing from all of our
witnesses today to understand how we can find a realistic path
forward to continue utilizing the technologies we need without
sacrificing our energy and national security.
Now I am going to turn to our panel of witnesses.
We have with us Mr. David Howell, who is Director of the
Vehicle Technologies Office at the Department of Energy as well
as the Department's Acting Director of the Office of
Manufacturing and Energy Supply.
We have Dr. Duncan Wood, who is Vice President for Strategy
and New Initiatives at the Wilson Center.
We have Mr. Scott Forney, President of Electromagnetic
Systems at General Atomics.
We have Mr. Joe Britton, who is Executive Director of the
Zero Emissions Transportation Association.
And we have Mr. J.B. Straubel, who is Founder and CEO of
Redwood Materials.
Before we turn to the witnesses for their remarks, I
understand that Senator Cortez Masto would like to introduce
one of our witnesses.
INTRODUCTORY STATEMENT OF HON. CATHERINE CORTEZ MASTO, U.S.
SENATOR FROM NEVADA
Senator Cortez Masto. Thank you, Mr. Chairman. Thank you
for your creativity, or at least your staff's. Thank you to
Ranking Member Barrasso as well for holding this important
hearing today.
It is my pleasure to be able to introduce J.B. Straubel,
who is the Founder and Chief Executive Officer of Redwood
Materials, a company that is headquartered in Carson City,
Nevada, and focused on the recycling of lithium-ion batteries
and reuse of lithium, cobalt, and other critical minerals in
secondary applications. Mr. Straubel previously worked at Tesla
for 15 years, where he served as the Co-founder and Chief
Technology Officer. In that capacity, he led cell design,
supply chain logistics, and the first Gigafactory concept for
the production ramp of Tesla's Model 3 vehicle. Throughout his
career, J.B. has played an influential role in research and
development, in team building, and operational expansions from
prototype cars to mass production and gigawatt-scale projects.
I am so excited he is here to talk about what incredible
and innovative things they are doing at Redwood Materials. We
are so pleased he is in Nevada with his company, and I am just
grateful, Mr. Chairman, that we are having this important
conversation today.
I look forward to hearing from all the panelists as well.
Welcome.
The Chairman. Thank you, Senator. We have an outstanding
panel.
If you all can indulge us, we are going to have to recess
for about 10 minutes. I know that Senator Cortez Masto has to
go vote. I have to go vote. We are waiting for Senator Barrasso
to come back to convene, and then we will go through with your
statements, if you don't mind.
[RECESS.]
Senator Barrasso [presiding]. Well, thanks so much for all
your patience as we run back and forth and we have a number of
votes that are happening today, but if it's all right with you,
Mr. Howell, we will start with your testimony and then work our
way down the panel.
Mr. Howell. Yes, sir.
Senator Barrasso. Thank you.
OPENING STATEMENT OF DAVID HOWELL, ACTING DIRECTOR AND
PRINCIPAL DEPUTY DIRECTOR, OFFICE OF MANUFACTURING AND ENERGY
SUPPLY CHAINS AND DIRECTOR, VEHICLE TECHNOLOGIES OFFICE, U.S.
DEPARTMENT OF ENERGY
Mr. Howell. Chairman Manchin, Ranking Member Barrasso, and
members of the Committee, thank you for the opportunity to
testify before you today. My name is Dave Howell, and I am the
Director of the Vehicle Technologies Office in the Department
of Energy's Office of Energy Efficiency and Renewable Energy as
well as the Acting Director and Principal Deputy Director of
the Office of Manufacturing and Energy Supply Chains. In
addition to these roles, I also serve as the Chair of the
Federal Consortia for Advanced Batteries (FCAB). FCAB brings
together 12 federal agencies that are collaborating to ensure a
domestic supply of lithium batteries, and are committed to
accelerating the development of a robust and secure domestic
industrial base.
Climate change is one of the greatest challenges facing our
nation and our planet today. DOE stands ready to work to
address both the climate emergency, and also our national and
economic security through improving our domestic supply chain
for critical minerals and materials needed to ensure that the
U.S. builds a 100 percent clean energy economy and reaches net-
zero emissions no later than 2050. Critical materials are a key
building block for a transition to a resilient net-zero energy
future, and are also subject to supply risks. The Department's
critical materials strategy has three pillars: diversification
of supply, development of substitutes, and recycling and
efficient use. The Department's research, development, and
demonstration portfolios, which include EERE's Critical
Materials Institute, promote increasing American access to raw
materials, lessening dependence on imports, and strengthening
competitiveness of our domestic manufacturers at all stages of
the supply chains for these critical materials.
The Institute, led by Ames National Laboratory and a team
of research partners, seeks to accelerate innovative scientific
and technological solutions to develop resilient and secure
supply chains for rare earth metals and other materials
critical to the success of clean energy technologies. The DOE,
along with the Departments of State and Defense, recently
executed a memorandum of agreement that sets the foundation for
a critical minerals stockpile process to support the U.S.
transition to clean energy and national security needs. The MOA
formalizes an interagency partnership to acquire and recycle
selected materials for technologies that range from grid-scale
batteries to wind turbines. Additionally, on March 31st,
President Biden signed a Presidential Determination expanding
the Defense Production Act to include securing a reliable and
sustainable supply of strategic and critical materials, such as
lithium, nickel, cobalt, graphite, and manganese for large-
capacity batteries that are essential for the automotive and
stationary storage sectors and to the national defense. The
Department will work closely with the Departments of Defense,
Interior, Agriculture, and other agencies to plan and carry out
activities necessary to build out a resilient and secure
battery supply chain.
Significant investments across the Department are
addressing critical minerals and materials challenges
associated with the important supply chains, including for
lithium-ion batteries. EERE works to mitigate supply chain
risks through fundamental and cross-cutting RD&D to diversify
supply, develop alternatives, and improve reuse and recycling.
These supply chain risk mitigation strategies are directly
aligned with the federal strategy. The Bipartisan
Infrastructure Law includes more than $6 billion to fund
domestic battery materials, processing, manufacturing, and
recycling that will help improve grid resilience and scale up
the electrification of cars, trucks, and buses.
On February 11th, 2022, DOE issued two notices of intent to
provide $2.9 billion to boost production of the advanced
batteries and materials that are critical to the rapidly
growing clean energy industries of the future, including
electric vehicles and energy storage, as directed by the BIL.
Both the newly established Manufacturing and Energy Supply
Chains Office and the Office of Clean Energy Demonstrations
offer new opportunities to support the development of a
domestic lithium-ion battery supply chain. The Office of Clean
Energy Demonstrations will oversee more than $20 billion in
federal investments in clean energy projects. These projects
will work toward the Biden Administration's goal of reaching
net-zero emissions by mid-century by investing in demonstration
projects to allow the U.S. to test possible clean energy
solutions that can provide innovative and effective solutions
to real-world problems.
Thank you for the opportunity to appear before the
Committee today. I look forward to working with you as the U.S.
transitions to a clean energy economy and reaches net-zero
emissions no later than 2050. I look forward to your questions.
[The prepared statement of Mr. Howell follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Thank you so much, Mr. Howell, for your
testimony.
Dr. Wood.
OPENING STATEMENT OF DR. DUNCAN ROBERT WOOD, VICE PRESIDENT,
STRATEGY AND NEW INITIATIVES, WILSON CENTER
Dr. Wood. Thank you, Ranking Member Barrasso, and greetings
to the other distinguished Committee members, and of course,
Chairman Manchin. I am very grateful to be here today. My
testimony focuses on the exponential demand that is expected
for critical minerals in the next decades as a result of the
move toward a global energy transition. My research and my
remarks today point toward an urgent need for action from the
U.S. Government in conjunction with allies and partners here in
the U.S. and abroad to find ways of satisfying that demand.
I would like to make two main points when addressing
demand. The growth in demand for critical minerals is already
impressive, but will become increasingly daunting as the energy
transition advances. And secondly, policymakers and industry
must work together to find an adequate response to this
daunting reality with priority given to the development of new
resources. The need to secure new lines of supply for the
critical minerals essential to the energy transition is now
firmly embedded in the mindset of policymakers. However, the
urgency of the situation is still not fully understood by many.
This urgency stems from two inescapable realities. First, we
must recognize the scale of future demand for critical
minerals, which in the case of several metals, is shockingly
large. Second comes the question of the pace of rising demand.
Policymakers must embrace the painful truth that the highly
worthy target set for the energy transition can only be met by
a combination of public policy incentives and massive
investment now by the private sector here in the United States
and abroad in new mining activities.
According to recent publications by the World Bank and the
International Energy Agency, we see that the growth for
critical minerals is truly exponential. Whilst there is strong
demand growth for all minerals associated with clean energies,
in the case of minerals such as cobalt, lithium, graphite, and
indium, annual growth rates reach stratospheric levels of
several hundred percent. The IEA has identified in its
publication, ``The Role of Critical Minerals in Clean Energy
Transitions,'' that whereas traditional hydrocarbon-based
energy generation systems are fuel intensive, renewable energy
systems are material-, and specifically mineral-intensive. To
give one example, an onshore wind plant requires nine times
more mineral resources than a gas-fired power plant. The report
goes on--since 2010, the average amount of minerals needed for
a new unit of power generation capacity has increased by 50
percent as the share of renewables has risen. Taking a closer
look at lithium, an essential element in EV battery technology,
it is estimated that by 2030 the global demand for lithium is
expected to surpass two million metric tons of lithium
carbonate equivalent, more than doubling the demand forecast
for 2025. To put this in perspective, total global production
of lithium today is only around 100,000 metric tons.
The scale of the challenge must therefore not be
underestimated. One way to grasp that scale has been put
forward by Guillaume Pitron in ``The Rare Metals War,'' who
notes that with a doubling of demand for rare earth elements
every 15 years, at this rate, over the next 30 years, we will
need to mine more mineral ores than humans have extracted over
the last 70,000 years. To address that demand, we need to have
more than mere tinkering with the critical minerals policy in
this country and globally. What is needed today is a ``whole of
society'' approach that incorporates all levels of government,
the private sector, research and educational institutions, and
end-users of critical minerals. This means adopting a holistic,
open-minded approach to the issue, embracing the development of
new resources, new forms of extraction and processing, new
technologies, energy efficiency models, and recycling and waste
reduction. Ignoring any one of these elements makes it
impossible to build a new energy model and maintain it.
On recycling, it is true, of course, that because minerals
are a component of energy infrastructure and can be recovered
and recycled, recycling will play an important role. However,
there is a simple stark reality that must be addressed.
Although recycling will play an increasingly important role,
materials can only be recycled once they have entered the
system. This means that as demand grows exponentially, it is
logically and practically impossible for recycling to satisfy
that demand until there are more raw materials in the system
than current demand. This is a simple point, but one that must
be stated and restated. The IEA has estimated that by 2040,
recycled quantities of copper, lithium, nickel, and cobalt from
spent batteries could reduce combined primary supply
requirements by around 10 percent. That is not insignificant,
but it is vital to recognize that 90 percent of future demand
growth must be satisfied by newly mined resources. To give an
indication of the potential and limitations of future recycling
for critical minerals, under current conditions, only around 35
percent of available copper is recycled today.
To make matters worse, as the vehicle fleet is electrified,
the minerals that are used to produce batteries will not be
recycled for at least 10 years as car owners get the maximum
use out of their batteries. This time lag means that the full
potential for EV battery recycling will only be realized a
decade after massive electrification begins. It is vital to
recognize once and for all the central and unavoidable role
played by critical minerals extraction in the clean energy
transition. Mining is needed to power that transition in the
same way that oil and gas powered the industrial transformation
of the 20th century. If critical minerals stay in the ground,
the transition will be insufficient. Urgent steps must be taken
soon to address the severe deficit in critical minerals. To
paraphrase an old adage, the best time to have done so would
have been 10 years ago. The second-best time is now.
[The prepared statement of Dr. Wood follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Well, thanks so much, Dr. Wood, we
appreciate your testimony.
Mr. Forney.
OPENING STATEMENT OF R. SCOTT FORNEY III, PRESIDENT, GENERAL
ATOMICS, ELECTROMAGNETIC SYSTEMS GROUP
Mr. Forney. Chairman Manchin, Ranking Member Barrasso, and
members of the Committee, thank you for the opportunity to
contribute to the Committee's exploration of significant global
supply chain issues affecting critical minerals. My name is
Scott Forney, and I am the President of General Atomics
Electromagnetic Systems. General Atomics has a rich history of
research, development, and technology innovation, which has led
to an expanding portfolio of specialized products from
undersea, to space, to weapon systems, and more and more for
critical defense, industrial, and commercial customers
worldwide. I believe General Atomics brings an important
perspective on the criticality of mineral demand to our
national defense sector. I hope to draw your attention to the
many challenges businesses like ours face within the Defense
Industrial Base as we deal with the unique supply chain
challenges.
I am here to highlight how complex and costly managing the
demand for these critical minerals has become. We believe
onshoring certain production capabilities and increasing the
availability of critical minerals will help strengthen and
protect U.S. industries and our military industrial base.
Broader supply challenges have caused ripple effects for all
Americans. Disruptions impact components for space systems,
large structures for submarines or aircraft carriers or other
ships, hypersonic weapon systems, laser weapon systems, fission
reactors, and battery systems for the Department of Defense. We
have experienced dramatic changes in the availability of
critical materials since the beginning of the COVID-19
pandemic, and we have become more cognizant of the strong
reliance the defense industry has on foreign producers and our
vulnerability to supply chain disruption. Given ongoing
geopolitical challenges, disruption will continue to persist,
and more domestic capability is not only an appropriate
response, but a necessary one.
Rather than them making choices based on the engineering
practices that we deem best engineering, unavailability of
special, high-strength alloys has forced design decisions and
changes to complex systems dependent on these materials.
Volatility in the nickel market due to speculators and the
Russian war in Ukraine have effectively shut down the market.
Procurement efforts for submarine-grade materials containing
nickel, including high-strength metals and nickel copper were
temporarily suspended. The future impact on nickel availability
and price due to Russian sanctions is unknown. Lead times for
some of this critical material have increased from months to
years. Many of our suppliers increasingly reserve the right to
reprice their raw stock or forged materials after we place an
order, referencing the volatility of material pricing and the
availability due to market conditions. Planning for multiyear
procurements, which drives our largest, most critical programs,
while also maintaining reasonable margins of schedule and cost
performance and cost risk to maintain contract profitability,
is getting more and more challenging every year.
Members of the Committee may be familiar with the
increasing trend within the Department of Defense to award
fixed-price contracts versus cost-plus contracts. These
contracts do not account for the extreme type of market
volatility we are experiencing today. The Defense Industrial
Base is paying the price for all of this out of pocket.
President Biden's Executive Order of last February, ``America's
Supply Chains'' ordered a review of vulnerabilities in our
critical mineral and material supply chains, including rare
earth elements. The Commerce Department initiated an
investigation to determine effects on U.S. national security
from imports of neodymium-iron-boron permanent magnets.
Critical national security systems rely on neodymium-iron-boron
magnets, including submarine propulsion motors and missile
guidance systems, to say a few.
To support the aims of both these Executive Orders and
investigation, General Atomics is working with the Department
of Energy for the design, construction, and operation of a rare
earth element separation and processing demonstration plant
near Upton, Wyoming. We have already extracted a thousand-ton
sample of Bear Lodge, Wyoming ore in anticipation of the
demonstration facility startup. We expect to demonstrate a
process to separate rare earth oxides into usable elements such
as neodymium and for praseodymium in less time, more
efficiently, with greater purity, and with less environmental
impact than current extraction technologies worldwide. Since
COVID-19, and now with the Russian-Ukraine conflict, rare earth
element prices are triple or more of what they were before
COVID-19. This is all challenging for all of us in the Defense
Industrial Base.
Thank you again for your time and the opportunity to speak
on this important subject. I look forward to your questions.
[The prepared statement of Mr. Forney follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Barrasso. Well, thanks so much, Mr. Forney. We are
appreciative of your testimony.
Mr. Britton.
OPENING STATEMENT OF JOE BRITTON, EXECUTIVE DIRECTOR, ZERO
EMISSION TRANSPORTAION ASSOCIATION
Mr. Britton. Chairman Manchin and Ranking Member Barrasso
and members of the Committee, thank you for the opportunity to
speak with you today. My name is Joe Britton. I am the
Executive Director of the Zero Emission Transportation
Association. We are a coalition of companies that represent the
entire EV supply chain, from battery and vehicle manufacturers
to charging companies to critical mineral developers and
utilities. I recognize that many here today may have already
developed strong opinions about electric vehicles or the
critical minerals needed to power them, so I intend to give you
an honest assessment of the opportunities and the challenges to
expanding EV adoption in the United States.
Ultimately, I believe that EVs will be an American success
story, leading to not only emissions reduction, but a
rejuvenated manufacturing base where everyone is better off,
even those who may never get behind the wheel of an EV. If we
get this right, there will be more Americans who benefit from a
stable career, who avoid breathing polluted air, or whose small
business benefits from a new manufacturing plant opening in
their hometown. Private industry is investing tens of billions
of dollars in new EV manufacturing along a corridor from the
industrial Midwest to states like Arizona and Oklahoma, Georgia
and Alabama, Kentucky, Tennessee, the Carolinas, and most
recently announcements we have seen from GreenPower Bus and
Sparkz batteries, creating 1,200 jobs in West Virginia. These
investments are aimed at helping meet American demand for
electric vehicles, which is important, because the bipartisan
supermajority--71 percent of Americans--are considering an EV
for their next purchase. If we do not rise to the challenge,
these consumers may turn to foreign imports as they did in the
early 2000's.
Ensuring that American companies have the support and
incentives to meet this demand will require a comprehensive
bipartisan strategy to drive both vehicle manufacturing and a
durable North American supply chain for critical minerals.
These minerals are essential, not just for EVs, but traditional
gas-powered vehicles, satellites, missile systems, oil and gas
production, and all consumer electronics, including iPhones and
laptops. Limited production and refining capacity is especially
challenging, though, since nearly all extraction ends up in
Asia for processing. But that doesn't need to be the case, and
it certainly doesn't mean American workers should be counted
out. In fact, North America has greater mineral resources than
China, and we can outcompete, along with our allies, those that
stand in our way.
ZETA represents a host of companies seeking to expand our
domestic critical mineral production and processing as well as
battery manufacturing. Companies like Albemarle, Ioneer, and
Lithium Americas are scaling up lithium production. When their
operations are up and running, they could produce enough
lithium to manufacture nearly four million EVs a year,
representing 25 percent of new car sales. Jervois will begin
producing enough cobalt in Idaho to meet 15 to 20 percent of
today's annual U.S. cobalt demand, with capacity to grow. They
are also expanding--importantly, the processing--in Brazil and
Finland to wrestle away refining capacity from China and
securing a reliable source for our manufacturing base. NOVONIX,
operating in Tennessee, will support 150,000 metric tons of
synthetic graphite production by 2030. This will help power
three million EVs a year. Redwood Materials--joining today, I
will not steal your thunder--is planning to be able to supply
enough materials for a million EVs in the next few years, five
million by the year 2030. U.S. manufacturers like Tesla, Lucid,
Rivian, Proterra, and Arrival, and battery manufacturers like
Panasonic, are seeking to build their cell production work
here, which will further drive domestic critical mineral
production and processing capacity.
The Defense Production Act that the President invoked,
which has already been mentioned, was done at the request of
both Republicans and Democrats on this Committee, and
demonstrated the Administration's intent to expand our
capabilities and signal to the entire Federal Government the
commitment to securing these supply chains. This is important
to get right for not only economic reasons, but to secure a
stable supply chain that meets our values. But it is also
important to limit the unnecessary carbon emissions of shipping
heavy metals around the globe for processing, only to return
and be integrated into American batteries. I recognize that at
times we can talk past each other. Some may say permitting
reform. Some may say refining mining reform. What I think many
of us can agree on, though, is that the permitting process
should protect our communities, but also fairly adhere to a
predictable schedule to reflect the urgency of securing these
critical minerals. Chairman Manchin and Senator Murkowski's
Critical Materials bill, which ZETA endorsed and everybody that
voted for the Bipartisan Infrastructure bill supported, serves
as an example of the direction in which Congress should be
heading to streamline this process.
Today's supply chain is complicated and it has many
challenges. But turning away in the face of these obstacles
only means conceding to foreign commercial interests. We know
how to fight these battles and we have won them before.
American companies are working hard to onshore their supply
chains, but they need federal support through predictable
permitting, battery, vehicle, and charging tax incentives, and
a whole-of-government approach to drive transportation
electrification. Thank you for your time, and I look forward to
your questions.
[The prepared statement of Mr. Britton follows:]
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Senator Barrasso. Thank you so much, Mr. Britton, for your
testimony.
Now, Mr. Straubel.
OPENING STATEMENT OF J.B. STRAUBEL,
FOUNDER AND CEO, REDWOOD MATERIALS
Mr. Straubel. Chairman Manchin, Ranking Member Barrasso,
and members of the Committee, thank you for the opportunity to
testify. I am J.B. Straubel. I am the Founder and Chief
Executive Officer at Redwood Materials. Prior to starting
Redwood, I co-founded and was CTO at Tesla for 15 years. At
Tesla, I led battery cell design and built and scaled the first
Gigafactory and also launched and ran our stationary energy
storage business. It was during this time at Tesla that I had a
front row seat to the challenges and opportunities that the
industry as a whole will face as vehicle and energy markets
electrify.
It became clear that the supply chain around batteries
could gate the entire speed of our energy transition. I started
Redwood Materials to develop a fully closed-loop, domestic
supply chain for lithium-ion batteries. From consumer devices,
electric vehicles, and energy storage systems, refining the
materials and then remanufacturing them back into usable
components for battery manufacturers, both anode and cathode,
these can go directly to cell manufacturers like Ford,
Panasonic, and many others. This Committee has shown tremendous
foresight in recognizing the urgent risk to our nation's
security and energy independence due to shortages of critical
materials. We saw evidence of this leadership just last week
when President Biden announced that he would be enacting the
Defense Production Act to address this issue.
Equally important are the downstream components that these
minerals build. Today, the two most critical and expensive
components in lithium-ion batteries, the anode and the cathode,
are produced via supply chain almost entirely based in Asia, as
we have heard from others. Our current supply chain would
require that metals, whether newly mined or recycled, travel
outside the United States, where this component manufacturing
infrastructure exists. This is because there is a gap in the
U.S. between critical mineral extraction and domestic battery
cell manufacturing. Redwood is working to close this gap by
domestically producing large-scale sources of these anode and
cathode materials produced from as many recycled batteries as
are available, augmented, as has also been noted, with
sustainably mined materials in order to supply this transition.
On a personal note, I flew here directly today from Korea,
where I spent the last few days actually visiting some of the
world's leading cathode manufacturing factories in Korea, some
of them who we are partnering with directly to move technology
and process to the United States. It is a sobering and humbling
experience seeing the scale and investment and speed that is
happening in these Asian countries and what we need to
reproduce here. The United States, today, only accounts for
about 10 percent of global battery cell production. Sixty-five
percent of the cost that goes into those cells is imported,
mainly from Asia. This overall industry is projected to scale
by more than 500 percent in just the coming decade and continue
scaling beyond that.
At Redwood, we aim to manufacture 100 gigawatt-hours per-
year of both anode and cathode materials by 2025, enough to
domestically produce more than one million electric vehicles
per-year. By 2030, we aim to produce 500 gigawatt-hours per-
year of these battery materials, or enough to supply over five
million electric vehicles. As a nation, overall, our increased
battery demand presents an opportunity. Not only does an
investment in producing battery components help capture greater
than $100 billion of economic value from now until 2030 that
would otherwise be lost to battery materials manufacturing
abroad, but additionally, as an increasing number of batteries
reach end-of-life every year, our country has a growing and
very sizable, infinitely recyclable resource at our disposal
right here.
Today, Redwood is already receiving about six gigawatt-
hours per-year of end-of-life batteries annually. This is about
60,000 electric vehicles equivalent worth of material that we
recycle, and we recover more than 95 percent of the metals,
like nickel, cobalt, lithium, and copper, as noted, in critical
demand. We then use these critical materials to remanufacture
anode and cathode components domestically and supply these back
to the battery cell manufacturers without those materials ever
leaving the country. This is our goal. Panasonic, who is co-
located at the Tesla Gigafactory No. 1 in Nevada, will be the
first cell manufacturer to source Redwood's anode copper foil,
making it the first time batteries will be recycled,
remanufactured, and returned to the same factory in a fully
closed-loop, again, without ever leaving the country.
The transition to electric transportation and clean energy
is coming. Creating a domestic circular supply chain for
batteries in the U.S. is a win-win, allowing our country to
create significant economic gains and security, tens of
thousands of jobs, decreasing our risk and reliance on foreign
manufacturing, and ensuring that more than $100 billion will be
used and invested in these American enterprises versus going
overseas. I want to thank the Committee for holding this
important hearing, and I look forward to your questions. Thank
you.
[The prepared statement of Mr. Straubel follows:]
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The Chairman [presiding]. Thank you. Thank all of you, and
I'm so sorry for us going back and forth. We still have two
more votes to go, so we will all be moving in and out a little
bit, if you don't mind. We are going to start with our
questions right now.
In my opening remarks, I made a reference to Superman, and
sticking with the theme of Marvel Comics, Spiderman gave us the
iconic line, ``With great power comes great responsibility.''
So, Mr. Forney, and to Mr. Britton, what concrete steps are
your companies taking to learn more about where your mineral
supplies are coming from and where your company, or member
companies, commit to responsible sourcing? That's all that we
need to know, if you can comment on that.
Mr. Forney. Thank you, Chairman Manchin, for the question.
General Atomics spends a great deal of time on supply chain
challenges. There are requirements, though, imposed on us, on
our contracts from the Department of Defense that require much
of our sourcing to be done domestically, and that challenges us
because of so many products that we need from the international
supply chain. In addition to that, there are things called
DFARS, which is Defense Federal Acquisition Regulation
Supplement, that has clauses that require us to use specialty
materials from U.S.-based domestic supply or from very specific
countries. As a result of that, we have an extensive process
called Approved Supply List that we use to process our
different suppliers around the country and around the world to
provide those materials.
We also try to stockpile as much as we can. So, unusual
probably in our business, we will spend a fair amount of
company internal money to make sure that, when we know we have
long lead challenges, we will get that material in-house for
future contracts, that maybe it takes several years. As an
example, as COVID-19 hit us in March 2020--just my business
within General Atomics--we had 25 million piece-parts in our
Tupelo, Mississippi manufacturing facility. So we didn't hit a
supply-chain challenge for that first year of the pandemic as a
result of that.
But this is a big challenge, which is why we are devoting
50 percent cost share against this Department of Energy
separation facility in Upton, Wyoming so we can get to the rare
earth elements ourselves.
The Chairman. Mr. Britton.
Mr. Britton. We are also producing domestically. We have
companies like Ioneer. I think they are going to be probably
the cleanest lithium production in the world. They are also
going to be doing processing, which is crucial. So right now,
one of the deficits in the critical minerals space is that no
matter where those minerals are extracted, much of that goes to
China for processing. The more that we reshore processing, the
more we can sustainably provide manufacturers here a base for
their critical mineral needs. Others, like Lithium Americas,
are coming online. Albemarle has Silver Peak, which is
producing lithium. They are exploring in Kings Mountain in the
Carolinas. We also have Piedmont Lithium and Livent Lithium.
Jervois is really close to coming online with cobalt
manufacturing in Idaho.
So, together, we see a pathway where we can domestically
source all these key critical minerals for millions and
millions of EVs a year in just a few years.
The Chairman. Let me ask this. Mr. Straubel, I am going to
go to you first on that end, and then I will go to Mr. Howell
and Dr. Wood.
The way I see things playing out right here, you see the
Administration's determination basically with a piece of
legislation they have put out, if we would go down that path
about wanting, by 2035, almost the entire transportation fleet
EVs, if they could. I am concerned about putting our
transportation mode in the whole hands of foreign supply
chains. So okay, now they want to give $2,500 credit to anybody
that buys a car that has a battery that was made in America.
Made in America, and all the resources that go into that
battery is a different story. So I would not be for that unless
the whole thing is sourcing. That means the environmental
community has to get on board, and quit putting on all the
restrictions that every time you want to go to a mine or
processing, you go to court.
So give me an estimate of a time element that we could be
totally self-sufficient from the resources, sourcing, and
basically doing all the refinery and everything--cathodes and
anodes--everything it takes to make a battery. Unless there is
a new source of battery that is going to be made, or new style
of battery.
Mr. Straubel.
Mr. Straubel. Thank you for the question.
It depends a little bit on how fast we are able to invest
in those industries. As we have noted, we do not have many of
those critical manufacturing industries today. They exist
entirely in Asia. About 65 percent of the cost structure of----
The Chairman. What is the reason for that?
Mr. Straubel. Somewhat legacy. This is where those
industries grew. That is where they originated as part of the
consumer electronics industry. Maybe 15 to 20 years ago, Asia
viewed these industries very strategically and invested
strategically as part of long-term plans. So that has
continued, and they have really, as you have noted, dominated
this whole industry.
The Chairman. So for us to get up to speed, just give me an
idea. One year? Three years? Five years? Ten years? Fifteen
years?
Mr. Straubel. I think it is certainly closer to a five-year
to ten-year window before we could recover----
The Chairman. Totally be self-sufficient?
Mr. Straubel. And build enough of these industries to have
that entire supply chain sourcing.
The Chairman. The average time for a permit, just to get a
mining permit and to take the product out of the ground, is 10
years. That is just the permit to mine. That's not to do any of
the processing. Just the mining permit.
I know I am over time here but it is interesting.
What do you have?
Mr. Howell. Thank you for your question, Senator, and your
leadership in this space. It is very important for the
Department of Energy as well. Our effort is to develop a
circular economy for electric vehicles and electric vehicle
batteries by the 2040-2050 timeframe, including significant
recycling for advanced batteries.
The Chairman. Why would we give a $2,500 credit for
something that we do not do and we have to rely on China to do?
Why are we giving a credit for that?
Mr. Howell. We do have capabilities in the lithium space
today, a lot of resources and reserves. Cobalt and nickel--we
are trying to reduce the amount of cobalt needed in these
batteries.
The Chairman. You are changing composition of the battery
itself?
Mr. Howell. Yes, absolutely.
The Chairman. I get it.
Dr. Wood, do you want to say anything real quick?
Dr. Wood. I think that the targets are laudable, but I am
not sure if they are realistic, for a number of reasons--
consumer preferences, but most importantly, I would say that we
are heading towards a cliff edge here, and folks such as the
team at TechMet, a London-based firm, who have looked at this,
say it is almost impossible to get there. Not just in terms of
the United States providing those, but globally. When you look
at just the amount of materials that are going to be needed to
reach 50 percent of the vehicle fleet being electric in the
next decade or so, there just are not enough being produced
globally.
So we either have to make a gargantuan or Herculean task
right now of getting them out of the ground here and around the
world or we have to push that target back a bit.
The Chairman. Go ahead.
Mr. Britton. I was going to just mention while you were
out, we agree on your critical minerals streamlining and
permitting bill. I think there are two reasons to move quickly.
One is, and you asked J.B. about this, why are we not doing the
processing here? The processing investments that are happening
in Asia, we did not make here because there was not a critical
mass of battery cell production. And so, there is a through-
line where if we are creating these products here, we are
building these battery cells and building these vehicles, it
then has follow-on impacts where we are justifying additional
investment in processing, which further secures a North
American supply chain.
The other thing that is really, really important is that
every battery that we have, and this is a reason to move
quickly, becomes--when gas prices are high there is a lot of
discussion about the National Petroleum Reserve. Every vehicle
that we bring to America or that we make here and manufacture
becomes part of a national strategic battery reserve. Those
critical minerals, if they are here in a product, whether
that's in your hand or your driveway, become J.B.'s feedstock
to sustainably source critical minerals for decades to come.
The Chairman. Senator Barrasso.
Senator Barrasso. Well, thanks, Mr. Chairman. I see the
second vote has started. Mr. Forney, in your testimony you note
that General Atomics has partnered with the Bear Lodge Rare
Earth Element Project in Northeast Wyoming. What is unique
about the rare earth element deposits in this area in my home
state and why are you backing the project?
Mr. Forney. Ranking Member Barrasso, thank you for the
question.
It is very important for General Atomics, as a developer
and producer of advanced defense products, that relying very
much on rare earths for components, we rely on rare earths for
our laser weapons, for our hypersonic systems. We have
increasingly relied on high-power permanent magnets for space
components, et cetera.
We and our allies must improve our ability to control rare
earths and the supply chain. If you go back to 1965, 85 percent
of the rare earth elements were provided from the United
States. Look at what has happened to where we are today.
Certainly, when we look at Bear Lodge and 18 million tons of
clean and high-grade rare-earth materials, that is of great
interest to the company. In addition, there is a critical
missing link, and the missing link is the ability to separate
the mixed rare earths that occur in nature into individual
elements because--permanent magnets, for example, require rare
earths such as neodymium, et cetera. Unless these elements or
suitable combinations of them can be separated, magnets cannot
be made. Indeed, the strategic value of the Bear Lodge deposit
can only be achieved if separation is available. That is why
our team and the Department of Energy are cost sharing this
important construction of a facility in Upton, Wyoming that
will demonstrate economic separation from Bear Lodge ore of
rare earths critical to permanent magnet manufacture.
Senator Barrasso. Thank you.
Dr. Wood, in your testimony you said a couple things. You
said the United States and most of the rest of the world find
themselves spectacularly ill-prepared to meet the challenge of
the rising demand for critical minerals, and you call for a
combination of public policy incentives and massive investment
now by the private sector here in the United States and abroad
in new mining activities. You note that permitting remains a
major concern in the United States. Why is it so important for
Congress to fix the permitting process?
Dr. Wood. Thank you, Ranking Member Barrasso, for that.
Yes, in the research we have done at the Wilson Center in
conjunction, in collaboration with the private-sector,
universities, and government, the permitting lag here in the
United States is seen as being one of the most important
impediments to getting minerals out of the ground and to
market. We need to reduce the time needed to open a mine and we
need to get those minerals out of the ground as quickly as
possible to processing plants and obviously to the industry and
end-users that utilize them. And I think the best comparison
that we can make is obviously with countries like Australia and
Canada, which have an average permitting time of two years
compared to the seven to ten years taken here in the United
States. They don't have lower standards than the United States.
I think all of us agree that we need to protect the
environment, but they have found a way to do it.
Now, part of that is because they have different political
systems. Part of that is because the states or provinces play a
less important role in this than their counterparts do here in
the United States. Part of it is that the United States has a
much more litigious culture than other countries and that
causes problems. But I think that addressing this while still
respecting standards has to be one of the priorities if we are
actually going to move on this. And one other thing I will say
there, Senator Barrasso, if I may, which is the discussions
that have been going on recently in the International Seabed
Authority, where the United States is conspicuous by its
absence in the conversation, I think shows us what is possible
in the rest of the world, and where the United States really
needs to take a good look and say, we need to be part of these
conversations. There are enormous amounts of minerals on the
seabed. There are huge environmental implications there, but it
is going to happen anyway and the United States should be part
of that conversation.
Senator Barrasso. Mr. Forney, my final question--you know,
General Atomics is a manufacturer of defense systems for the
U.S. military. It competes with companies which use critical
minerals for commercial purposes, not defense purposes. Now, in
your testimony you say competition with commercial industry has
made procurement of high-quality lithium-ion battery cells
extremely difficult. You go on to state, ``Decisions are being
made based on availability instead of optimum technical
solutions.'' When you refer to commercial industry, do you mean
electric vehicle manufacturers, and what kind of compromises
has General Atomics had to make in light of competition from
commercial industry?
Mr. Forney. Well, thank you for the question, Senator
Barrasso. That question is an interesting one to us because
today, we, General Atomics, are integrating thousands and
thousands of lithium-ion batteries for Department of Defense
undersea applications and of course, the source for those
batteries comes from Asia. Secondly, we are trying to finalize
qualifying batteries for our airborne assets. And
unfortunately, because of the significant demand for lithium-
ion batteries in the electrical vehicle market and others, the
batteries that we had qualified are no longer available and we
had to find another source of manufacture, which, for us, was
in North America, but it is not at the same cost, value, and
that challenges us, like other products, when we have to make
these kinds of decisions due to inavailability of product.
Senator Barrasso. Thanks, Mr. Forney.
Thank you, Mr. Chairman.
The Chairman. Senator Cortez Masto.
Senator Cortez Masto. Thank you, Mr. Chair.
First of all, I just have to thank you again for holding
these important hearings and thank you to the Ranking Member as
well. I think today's hearing further exemplifies the sentiment
that I expressed at last week's hearing that Nevada is a nexus
for our clean energy and critical mineral future. Nevada is the
only state in the country that encompasses every facet of the
lithium-ion battery economy, from the mining of lithium
deposits to the research and development to production,
assembly, and finally, to recycling.
Here's the deal. This is our moonshot, and this is why this
is such an important issue. It is important for the
Administration to stake a goal for all of us to marshal our
resources. Whether we achieve that goal can always be in
question, but at least we are moving in the same direction,
just like Kennedy did when he made his announcement that he was
going to put a man on the moon. This is our moment to focus on
a clean energy economy, taking the technology, taking the
opportunities in the minerals that we have here to build out
that clean energy economy and make it right here in America. We
are the innovators. We are the entrepreneurs. We are the ones
that can do it.
We can sit here and armchair quarterback everything about
it, but at the end of the day, without an Administration and a
focus of all of us moving in that direction, we will never get
there and we will be out--literally, countries will outcompete
us. They already are. We know it. We are talking about it right
now. And so, to me, this is a moment for all of us to marshal
behind this and figure out how we get it done. It is our
future. It is the future for our kids. It is the future for our
planet. And we should be leading this. We should be competitive
internationally, and this is our moment to do it.
I just cannot stress that enough because there are going to
be things that we should be doing in Congress to incentivize us
continuing to move in that direction. And I am going to talk
about a couple of them because right now I am working with
Senator Bennet and other Finance members to introduce a bill to
establish an advanced battery manufacturing investment tax
credit for building new plants or retrofitting existing
manufacturing plants that make high-capacity batteries. I am
also working with Congressman Eric Swalwell to introduce the
Rare Earth Magnet Production Tax Credit Act. This bill supports
the domestic production for rare earth mineral magnets used in
the automotive and renewable energy industries, including in
the motors of over 90 percent of electric vehicles. There are
things that we can do, working together--as long as we are
focused on that ultimate goal, at the end of the day, we can
make this happen. Whether we achieve the specific goal, at
least we are moving in that direction. That is what this is
about to me, and that is why it is so important we are all here
today having this conversation.
Let me start with Mr. Straubel on the recycling. Can you
tell us about the current state of recycling and reuse for
critical minerals? Are the technologies we need to do this
available and ready to be deployed, and how much material can
we harvest this way compared to original sourcing?
Mr. Straubel. Thank you for your question.
The technology to do the recycling and refining is quite
mature today. As I noted in my opening remarks, we are already
doing this at about six gigawatt-hours per-year and more than
60,000 vehicles per-year equivalent of materials. What is not
yet very mature, and does not exist, is the remanufacturing. So
once we recycle and partially refine those materials, we need
to build the industries in North America to keep the materials
here and bring them all the way back into cell manufacture
again. In terms of percentages and how much can we actually
supply, I do agree with some of Dr. Wood's comments earlier
that recycling cannot meet 100 percent of the need. It is
logically not possible when we are growing the whole industry.
However, with regard to some particular elements, like
cobalt, we are able to get much closer to 100 percent of the
need because of the shifting technology in batteries. Today's
batteries that go into an EV or many other advanced
applications use much less cobalt than a generation ago. So
when we recycle and harvest old batteries, we can actually
recover far more cobalt and spread that into a much, much
larger production fleet. So it is different based on element.
Nickel and lithium will need a lot of new demand and we will
have to find ways to sustainably source new mined material,
whether it is from the United States directly or from
neighboring countries or different regions that are doing this
responsibly. Recycling, we believe, can meet maybe 25 to 30
percent of the goals that we plan to do over the next five to
ten years.
Senator Cortez Masto. Thank you.
Then, Dr. Wood, let me ask you, the goal here for Congress
is to continue to incentivize to move in that direction, right?
And we are all going to come up with ideas that, obviously, are
important for not just our states, but for our country. And to
position us competitively so that we can bring that full supply
chain back, we are building here from the extraction all the
way to the processing and mining and getting all of the
products made here and components in America. For purposes of
Congress, is there anything we have done so far or that we are
proposing that is going to hinder it? In other words, if we are
talking about investment tax credits to incentivize an industry
to continue to move in that direction, are there any that we
have proposed right now that are going to hinder that or chill
that somehow?
Dr. Wood. Thank you, Senator.
I am not sure that I am qualified to talk about the impact
of tax credits, honestly, but what I will say is this: I worry
a great deal that when either Congress or the Administration
moves, such as we saw with the DPA announcement, that all of a
sudden people say, `We have done something. Now we can back
off.' As you said very eloquently, it is a moonshot. We have to
keep our eyes on the prize, which is to say that this is not
something that we are going to resolve in a one-and-done
solution. What we have to do is keep moving forward.
I really appreciate J.B.'s comments just now, which is that
it is not an either/or, it is an all-of-the-above. The fact is,
we need recycling. The fact is we need new resources. The fact
is we need tax credits. We need massive investment in human
capital for this. We need to think not just about the United
States, but we need to think about our partners and allies
internationally, where we can have secure supply chains--ally-
shoring, if you will. We exist in the region of North America.
We have to recognize to the north of us is a massive mineral
deposit in Canada, to the south of us is a country which has
impressive mineral resources, perhaps not the easiest country
to work with at this point in time, but we need to think about
how we pull it all together in an integrated and holistic way.
That is the danger here. If we take our eyes off the prize
because we have done something, then we miss, ultimately,
achieving that goal.
Senator Cortez Masto. Thank you.
Thank you, Mr. Chairman.
The Chairman. Senator Cassidy.
Senator Cassidy. Dr. Wood, I think you just called Canada a
massive mineral deposit. So anyway.
Listen, in the 1980s, there was a plant built at the
Gramercy refinery in Louisiana to extract gallium from
Gramercy's aluminum plants process stream--completed. Within
days of starting up, the then-dominant market player paid the
operator not to start up, and they dismantled the plant. In
around 2012, the same refinery is about to enter into a JV with
the world's largest virgin gallium plant. The Chinese knew
about this. Flooded the market. The partner was also creating a
rare earth mining operation in Colorado. It went into Chapter
11 bankruptcy protection because of these predatory practices
by the Chinese.
So now, a group is looking to use the refinery to extract
bauxite and other minerals from the collected waste. So in your
testimony, you spoke of how the U.S. is ill-prepared for the
growing demand. I guess my question is, there is clearly a risk
of dominant players flooding the market to destroy the--just as
I just described--the ability of someone to make ends meet as
they produce these. How do we protect against these practices
as we attempt to scale critical mineral development and
refining?
Dr. Wood. Thank you. It is an excellent question, Senator
Cassidy, and the fact is it comes back to a question that was
raised earlier on. How is it that the Chinese have gotten so
far ahead of us? How is it that Asia is so far ahead of us? It
is because they took the long-term view many years ago. They
saw this as a strategic opportunity and they continue to act
because this is a geopolitical and geoeconomic competition.
Senator Cassidy. But I would argue it is not just a long-
term view, it is also a predatory view.
Dr. Wood. Absolutely. And so, it's about their current
geopolitical and geoeconomic goals as well. And I will give you
another example----
Senator Cassidy. No, but tell me, because I have limited
time. How do we cut? How do we address this so if they are
going to do something in Gramercy, Louisiana, the Chinese don't
flood the market and cut out the knees of their ability to
return a profit?
Dr. Wood. We have to recognize that there are more factors
that need to come into the equation than just price. We need to
recognize that the value of critical minerals here is of
strategic and national interest.
Senator Cassidy. So are you suggesting a greater financial
role to create--by the Federal Government, for example--to
create a critical reservoir of such supplies at a guaranteed
price that would be above their cost of production?
Dr. Wood. Strategic reservoirs are one option. Providing
incentives to purchase U.S.--buy American--is another way to go
about it, and recognizing that you have to keep certain foreign
interests out of strategically important industries here in the
United States is another way of going about it. We do it with
ports and airports----
Senator Cassidy. Let me ask, Mr. Forney, you just spoke
about how your cost of acquiring a product--I'm sorry, I didn't
listen entirely to what you just said--but because you had a
source to another provider, it increased your cost. How
practical is it for the Federal Government to put in a buy-
American clause that would require your company to purchase a
higher cost product mainly because the Chinese will be flooding
the market, but something that would, in the long-term,
stabilize the market?
Mr. Forney. Senator Cassidy, thanks for the question.
First of all, the Federal Government does that to the
Department of Defense already with the DFAR supplement that I
talked about earlier, requiring, especially, metals to be
purchased domestically for the most part. There are metals that
we are allowed to buy elsewhere, but we do that already, and
for many of our programs, we already have domestic supply
requirements. General Atomics is very vertically integrated. We
probably produce, assemble, and manufacture 75 to 85 percent of
anything we provide to the Federal Government. But getting
those piece parts, that is where the challenge is, and yes, I
think we can handle the domestic requirement to buy American.
Senator Cassidy. Sounds great.
Dr. Wood, back to you. I am going to do a little product
placement here. I recently put out something called ``Resetting
America's Energy and Climate Policy'' and in it we talk about
extensive permitting and siting reform in order to accomplish
many of our goals.
[The report referred to follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Cassidy. I will point out right now that if we
enforce our environmental and labor rules and enforce them upon
other treaty partners, it is a race to the bottom, in which
China, by not enforcing, lowers their cost to production, and
therefore gains market share. Again, we have to reverse that
race to the bottom and get a race to the top. So what would you
think about some sort of border carbon adjustment that would
say, okay, if your emissions are above a certain standard
overseas, above that which we would allow here in the United
States, that there would be some fee placed upon your import in
order to hopefully elevate their standard of production, lower
their emissions, and by so doing, frankly, support our mining
activity for critical minerals as opposed to those who pay no
attention whatsoever to environmental considerations in their
mining activity? Thoughts?
Dr. Wood. It is an interesting idea. What I do fear in that
case is that we are going to see interruptions to the supply
chain--further interruptions to the supply chain, further
inflation repressures coming in because of that. Another way to
go about it is to actually engage in the global ESG
conversation in a more meaningful way. We already have the
Extractive Industries Transparency Initiative. Of course, we
have our own initiatives here in the United States. It needs to
be pulled together and those standards need to be----
Senator Cassidy. But the only problem with that, if I may
say, if you have a dominant player providing cobalt, you can do
ESG as much as you want, but if they have all the cobalt, you
have to buy from them.
Dr. Wood. And that is one of the reasons why it is so
important to look at the new technologies and the new ways of
reducing cobalt use. We do not have a substitute for it at this
point in time. Manganese offers us some kind of hope for the
future, but we still need that, you are absolutely right. So
ultimately, we need to have a more strategic vision outside of
the country as well. We need to be there in a lot of these
countries to gain access to those materials in a way that the
Chinese have done over the last 20 years.
Senator Cassidy. I yield. Thank you.
The Chairman. Thank you, Senator.
We have Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair, and thank you
all for all your work you have been doing on this critical,
essential task.
Let me start with Mr. Britton. I am old enough to remember
the oil shocks of the 1970's, and I remember standing in line
to buy gas. Give us some of the fundamental differences between
oil and critical minerals, and then how do these differences
impact the vulnerability that we deal with today? And then
second, speak to the importance of critical minerals as to EVs
as you have, somewhat, but can you speak to some of the steps
policymakers can take to ensure that we have a robust EV
industry, secure against external shocks?
Mr. Britton. I appreciate the question. So I will compare
oil and electricity on two fronts. One is cost and the other is
resilience. So on cost, the ZETA team and network did a
comparison between the AAA gas prices in a number of states,
including Colorado, and compared that to the Energy Information
Administration cost of electricity, and it turns out that in
many states it is four to six times more costly to propel your
vehicle with gasoline. So it is not 20 percent or 30 percent
more, that is 500 to 600 percent more. So there are enormous
savings that can be generated and really help families afford
to, you know, whether that is go to school or church, go about
their daily lives. The other is the resiliency, and I think
this is something--the Chairman asked a question about this
earlier. I think the most important thing, and I am glad that
J.B. and I are both here together, is that when we import a
barrel of oil and it gets burnt, it is gone forever, except for
the lingering impacts from climate change and public health.
The nice thing about critical minerals is that they are
recyclable. We can get 95 percent of the critical minerals back
out of a battery. And that is really important. And there is a
relationship there, because we actually have a refining deficit
of both crude oil and critical minerals. The reason that we
import eight million barrels of oil a day is that our
refineries are designed for heavy imported crude from Russia
and Saudi Arabia and Venezuela. We similarly have a deficit of
critical mineral processing, which requires import. So there is
a similarity there. And the thing that we need to do to address
that--and I think part of it is the Chairman and Senator
Murkowski's critical mineral bill that was included in the
Bipartisan Infrastructure Act--but also there are important
investments that we made in that same law for processing and
for recycling. We are on the right track, but what we need more
than anything is to drive a strong EV sector because, like we
have alluded to, the more we have domestic manufacturing, the
more that becomes an attraction. It is a pull force where we
can then have more of the critical mineral--not only
development, but processing, and have a true, secure supply
chain that doesn't benefit just EVs, but every other consumer
product that requires these minerals.
Senator Hickenlooper. Got it. I could not agree more.
I am going to switch over to Mr. Howell, but maybe Mr.
Straubel and Mr. Britton can both chime in, although I am
almost out of time. I have a couple of minutes, but concision
always matters. As we work to scale up domestic critical
mineral supply chains, obviously, we have to make the most of
what we have. Things like batteries can be multipurpose. So we
are working on legislation in collaboration with the Vehicle
Technologies Office that will encourage vehicle-to-grid
integration, which utilizes vehicle batteries for
transportation, storage, and mobile power. How can your office
and the Department of Energy encourage efficient, effective,
and multipurpose use of our existing critical minerals? And
then, Mr. Straubel, and Mr. Britton, when he finishes, just
briefly chime in on are there other things we should be worried
about when you use batteries for more than just the vehicle it
was intended for?
Mr. Howell. Thank you, Senator Hickenlooper, for your
question, and certainly a priority area is to get the most out
of any battery that we manufacture in the United States,
including vehicle-to-grid, and we call it vehicle-to-X. It
could be vehicle-to-home, vehicle-to-building.
Senator Hickenlooper. Yes.
Mr. Howell. We are working with our partners in industry
and utility partners to develop concepts and analyze the most
profitable way to use, not only electric vehicle batteries in
the car, but second use of those batteries as well. And so, we
have a battery recycling prize to award profitable business
models in order to show how we cannot only recover lithium
batteries, but also profitably use them in a second use. And if
not in a second use, to get them to a recycling center.
Senator Hickenlooper. Right. And I generally do not say
profitably in this context, I say efficiently. It is the same
thing.
Mr. Straubel. I think it is an excellent application and
should be done. I think it will be done using batteries on the
grid, in homes. We have to keep a slight eye on making sure the
lifetime is managed accordingly, but I am optimistic that can
be done as long as it is designed accordingly for the extra
cycles, extra use.
Senator Hickenlooper. Right.
Mr. Straubel. Maybe just one really quick point on the
previous topic of the resources compared to oil. It really is
fundamentally different. There is a lot of comparison of
lithium to petroleum and the new dependency on this, but the
lithium is not consumed in these applications. You know, we
mine it, we refine it, we put it into inventory in the fleet,
and it is there for many, many decades. It is essentially
infinitely reusable. It is very different than recycling
plastic or things like that. We can refine it back to new
quality every single time.
Senator Hickenlooper. Cool. Great.
Mr. Britton. I would just say on vehicle-to-grid, I think
there is an enormous opportunity. We have estimated between
$600 to $800 in value that could be returned to a light-duty
customer. There is even greater potential for banks of school
buses or county or municipal fleets, especially if they are on
the same substation, they are all parked in the same place. And
you do not have the same cycling concerns if you are doing
vehicle-to-grid. Ideally, this is once a quarter, twice a
quarter. I think there is probably some more concern on
vehicle-to-home if you are running your air conditioner and
your washer and dryer off of it constantly, every night, but I
think vehicle-to-grid has enormous promise.
Senator Hickenlooper. Great. Thank you very much. I yield
back to the Chair.
The Chairman. Thank you, Senator.
We have now Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman. I really
appreciate this hearing following on the one that we had last
week. This reality that we face that we have a need--a demand--
that is just going like this [motioning upward] and we have
extraordinary capacity in this country. We know we have the
resources. I know that certainly in my home state we have the
resources. But Mr. Britton, when I walked in, you were talking
about the fact that we don't process anything here. We might
have the minerals, but we also have a 10-year, on average,
permitting process to get a mine online. So we can see this.
And if there are any analogies between oil and critical
minerals, it is in that we saw the growing vulnerability with
oil just as we are seeing this growing vulnerability with
critical minerals. One would like to think that maybe we can
just be a little more proactive here in how we are going to
address this in a meaningful way.
A couple questions for you first, Mr. Howell. The Executive
Order that just came out indicates five minerals, obviously
there was reason for those five, but in addition to those that
were identified in the EO, which minerals do you think that we
need to add, because just saying five is not going to get us to
where we need to go. So we have lithium, manganese, nickel,
cobalt, graphite. What else needs to come next?
Mr. Howell. Thank you for your question, Senator Murkowski,
and it is certainly a very important question to understand the
broadness of the critical materials issues for electrification
in batteries and other areas. So there are other materials that
are very important that we would consider on our watch list, as
we mentioned in the 100-day supply chain report for high-
capacity batteries back in June. That would include copper,
that would also include--you mentioned graphite, manganese,
nickel, cobalt, lithium--rare earth elements are imported as
well. And you know, as we are looking for developing a robust
and resilient supply chain, we want to make sure that aluminum
is an important element as well.
Senator Murkowski. Well, I think there is a lot out there.
You have indicated that this Executive Order is the first step
in the right direction. But I think we need to appreciate that
we need more than step one. So what step two may be is, I
think, something that we do not want to spend a lot of time
just thinking about, but let's actually get moving on it.
I appreciate this discussion about the recycling, and a
note that it is almost like a national battery reserve that you
have with each vehicle out there. It is intriguing to think
about it that way and very stimulating as to, okay, what can we
do with it. But then, I have just a real reality--in my state,
we are are struggling with normal recycling, struggling with
just trash collection. We send all of our recycled products,
effectively, we put them on a barge and we barge them down to
the Pacific Northwest. That is not efficient. That is not a way
to reduce your emissions. So my fear is that when we are
talking about recycling on a large scale, we are still a long
ways from being there, so, how we can help facilitate that?
I want to ask you, Dr. Wood, because you were pretty
emphatic in saying that we are facing a cliff here. You said it
is almost impossible to get there. It is a Herculean task and
we are either going to have to take aggressive steps in what we
are doing now to get the minerals out or we are going to have
to push the target. Talk to me a little bit about which you
think--what would you advise? It seems to me that we need to do
a little bit maybe of both. We need to be honest about what our
target is but we definitely need to be producing more. Can you
just speak to your self-described cliff here and what we do?
Dr. Wood. Yes, absolutely. Thank you for the question.
You know, just a quick thought on what you said about
recycling batteries. We have to recognize that a lot of cars
that were sold here in the United States, as they come to the
end of their life, are probably going to be sold on to Mexico
and batteries are going to be taken out of vehicles there and
they will enter a different ecosystem. So, as you said,
recycling doesn't always stay within the country. Just an
important point there.
I think that the cliff that we are heading toward is a
very, very real one, and you know, to use a phrase that is
common here in Washington, we need to be clear-eyed about the
challenges. And that means that we need to recognize that
unless dramatic action is taken today--massive investment into
the mining sector--not only are we not going to have the
critical minerals that we know we need today, we are not going
to have those critical minerals that we do not know that we are
going to need in the future. The mining industry is
fundamentally important to the clean energy transition. It is
one of the things that too many groups in this country do not
understand. What they say is--they say, now mining is dirty.
Mining is 19th century. No, mining is the basis of the 21st
century clean economy. And that is one thing that we need to
emphasize over and over again.
Now, is my preference for pushing back those deadlines or
those targets? Absolutely not. You know, I am the father of a
20-month-old little girl, who is, you know, hopefully going to
have a bright future in a world that is sustainable. I want
those targets to be met. But we have to recognize how
complicated it is and it is not enough just to say, well let's
have more recycling, let's have more tax credits. We need to
approach this in much more of a strategic way that recognizes
that this is about the future of the United States. This is
about not just our climate goals, but our geopolitical goals.
This is about a global competition that we are currently
engaged in with China. The Chinese recognize it much better
than we do.
Senator Murkowski. Well, I appreciate what you are saying
about being clear-eyed, and I also thank you for bringing up
the discussion about the resources under the seabed--the
National Seabed Authority--and the fact that the United States
really is not at the table in these conversations. I sent a
letter to the Secretary of Energy in February asking why this
is not part of the discussion and shouldn't it be? I think
there is a recognition, as you say, that there are enormous
resources that are there, and others will be accessing them,
and how they do it and perhaps in way and a manner that is not
the best environmental practices. So if we are not going to do
it here, we cannot just close our eyes to extraction in other
countries or under the seabed, where environmental issues may
be something that we wish that we had paid attention to.
I am well over my time, but thank you, Mr. Chair.
Senator Barrasso [presiding]. Thank you, Senator Murkowski.
Senator Cantwell.
Senator Cantwell. Okay, thank you.
Well, continuing on this theme, and I want to, again, thank
Senator Murkowski for her work when she was Chair of this
Committee on these important issues. She did constantly raise
critical minerals, but this theme could not be more specific
because they are important, obviously, for missile guidance
systems, satellites, and microchips. And so, here we are in
this big discussion about what we are going to do to get a
better supply chain on microchips and we are trying to get this
bill right now and get our colleagues to appoint conferees and
get the conference going. But one reason we need them is for
electric vehicles, which we were just discussing. We have been
on this price rollercoaster now, but we want drivers to pay
three to five times less per mile than conventional vehicles
and we know we can do that. So we have to get chips, and we
have to get continuation of the investment in critical
minerals. And while we have a shortage today, the need is going
to double and triple. So we have to get going, and there is no
time to wait with these outrageous prices.
So I wanted to ask and emphasize, to manufacture the number
of EVs we need to reach by 2030, one projection is that the
critical minerals, you know, would create this incredible
demand, and of course, we just discussed that we don't want to
do demand and support by other countries that we are trying to
get off of their agreements. One thing is, I really want to
understand from the witnesses, innovation that is necessary to
drive down the quantity of critical minerals to produce an EV
battery over time. I hear that there is work to be done in this
particular area. I see, Mr. Britton, you are nodding your head.
Maybe you could take that, followed by Mr. Howell and Mr.
Straubel.
I understand that batteries used in EVs have dramatically
increased in density over time, and the average cost of a
lithium-ion battery has decreased by almost 90 percent in the
last decade. How do you see the innovation in material science
breakthroughs giving us an economy of scale to bring down the
critical mineral price?
Mr. Britton. I will be quick and turn it over to Mr.
Howell, but the solid-state batteries, I think, we all have a
lot of hope in. There are companies like QuantumScape, Sparkz,
who just announced 900 jobs in West Virginia. That is a really
important development and it could not come soon enough. The
reason it is important is that one, the charging times may
accelerate dramatically, but also, it doesn't require as much,
if any, cobalt, and I think that is an important part of the
supply chain considerations.
Senator Cantwell. Mr. Howell.
Mr. Howell. Thank you, Senator Cantwell, for that very,
very important question. We have such a wide-ranging portfolio
of research and development and innovations in the pipeline for
next-generation battery chemistries targeted to reduce the
amount of critical minerals that are needed in the future for
those batteries, and increasing the performance and decreasing
cost. So some of the things, such as solid-state batteries,
which would enable lithium metal systems, which would replace
the need for graphite in these batteries, but also coupling
that with earth-abundant materials on the cathode side, such as
lithium-sulfur, are non-cobalt, non-nickel cathodes as well. So
innovation is very, very important. We have a robust R&D
program poised to take advantage of our innovation space here
in the United States, including our national laboratory and
university system, but also our innovators in industry as well.
Senator Cantwell. Thank you.
Mr. Straubel, did you want to add something to that?
Mr. Straubel. Sure, thank you. I am actually on the Board
of Directors at QuantumScape, so I see a lot of that company. I
think while a lot of these advanced technologies have promise,
they often have a chance to shift from one critical material to
another. So I think we have to be a little cautious there.
Solid-state batteries have excellent performance, charge time,
as noted, but they actually use more lithium per kilogram, or
per battery, than maybe some others. We also may end up moving
the nickel consumption a little bit higher. So these definitely
are exciting, but there are a lot of trade-offs, and it is
quite a complex field. I think we need to keep pressure and
keep focus on how we actually secure enough of these materials.
Maybe one other point I would like to highlight is just
that having a manufacturing base of how to refine and convert
these critical materials into the battery components gives us
flexibility. Right now, if we are buying the manufactured
subcomponent from China, for instance, we do not have much
flexibility. That determines the performance of the battery. If
we are able to source various types of nickel concentrate or
lithium concentrate from any one of four or five different
mines or countries, we have a lot more security and a lot more
flexibility to be able to multisource and adjust to problems in
the field.
I would argue that perhaps investing in that manufacturing
base so we can flexibly source is as critical if not more
critical than increasing the supply of just the raw critical
materials.
Senator Cantwell. Well, this is one of the reasons why I
know we are going to have a big debate when we go to conference
on this bill, about supply chain issues, and I think some of my
colleagues will say, `why would you spend any money on supply
chain?' Well, this is why we would spend money on supply chain.
Because you have to figure this out. Individual companies can
do what they are trying to do--to isolate themselves to project
on various minerals. But we really need to have a more
sophisticated plan than that. So I hope our colleagues will
support money and resources for us at the federal level to be
more aggressive here.
Thank you, Mr. Chairman.
Senator Barrasso. Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chairman.
Mr. Howell, at the University of North Dakota, we have the
Energy Environmental Research Center, and they are working with
the Department of Energy on a pilot plant project to extract
rare earth minerals from our lignite coal. As you know, we have
a very robust lignite coal-fired electric industry in North
Dakota. And so, you know, I guess I just want your thoughts and
input on that whole concept of extracting these rare earth
minerals from coal, and what you think we can do to to improve
it, to make it more feasible, make it more cost-effective and
commercially viable, all those things. What are the kinds of
things we can and should be doing to make that happen?
Mr. Howell. Thank you, Senator Hoeven, for your question.
Extracting key materials and critical materials from
unconventional resources like coal, coal mine tailings, and
coal ash is a very important concept that we are pursuing, not
only for rare earth elements, but also for lithium and other
battery materials as well. So we are working closely with the
Office of Fossil Energy Carbon Management within the Department
of Energy to develop demonstration programs to understand what
the opportunity space is for recovering and retrieving critical
minerals from mine tailings and coal and coal ash. That work is
ongoing, and in many cases just getting started. So I am not
really sure what the opportunity is, but that is the next
step--to try to understand, first, how much rare earth can we
extract, and then, can we do it affordably and in a responsible
and sustainable manner?
Senator Hoeven. Mr. Forney, I am going to go down that same
track with you. General Atomics, who, of course, we work with a
lot in North Dakota and appreciate all that you are doing in so
many different areas, but the same kind of question for you. I
see that you are working on a rare earth separation process
demonstration plant in Wyoming, which is also a tremendous
state in terms of energy production and certainly at the very
forefront of utilizing coal. So what elements do you hope to
extract in that project, and back to the same question, how do
we--you know, this is a priority. We need to have a sense of
urgency about getting these rare earth minerals. What do we
need to do to make this happen sooner rather than later?
Mr. Forney. Well, thanks for your question, Senator.
Yes, we are busy in Wyoming with the Department of Energy
and the focus on the plant in Upton, Wyoming is about permanent
magnet material. And if you look at our resources for missile
guidance systems, or critical resources required for new
submarine electric motors--that is a different kind of EV,
obviously, than what is being talked about by panelist members
here. But we are very, very focused on the permanent magnets
today. However, some of that material also is used when we have
to dope some of our crystal for laser technologies. Whether it
is in space or on ground or in air, it doesn't matter, and the
neodymium is critical for that.
By the way, that same material is very critical as the
medical community uses more and more lasers for diagnosis and
treatment. So that material is going to become abundantly
required in the next 10 years, much more than it is today.
Senator Hoeven. So we do a tremendous amount on UAS,
particularly again in the Grand Forks region. We want to
continue to do that. We have partnerships there like none
other. We continue to work to build those. One of the things,
you know, obviously China is, you know, very dominant in that
whole small UAS space. And of course, with General Atomics, you
are very involved with UAS. You are the leading company in the
world in that regard. What can we do, particularly because it
requires so much stored energy, how do we do more in that whole
realm with the small UAS and this whole concept of how we store
energy? It obviously goes to batteries, lithium, all that kind
of stuff, you know? What are your thoughts there?
Mr. Forney. Thanks again for the stimulating question.
General Atomics actually is working on this problem. I spoke
earlier about the fact that we have unavailability of the right
batteries that we had been qualifying for our UASs, so we had
to actually choose a battery that may not be as good. It
doesn't have the same qualities. It doesn't have the same
characteristics that we had previously selected from Asia, but
we did find a battery in North America and we were able to
change the battery management system to be able to use that.
But secondly, we are not stopping there. As you know, we
are a very innovative company, so we are working actually on
some of the raw material requirements, such as using silicon
carbide for cathode development so that we can increase the
amount of energy storage that we get--the capacity of the
battery. And we don't stop there. We are also working on fuel
cell systems and a combination of fuel cell systems and battery
systems. And lastly, of course, you know about our legacy on
nuclear reactors. So fortunately there are many nuclear
activities right now that GA is very involved with, both in
space and terrestrially.
Senator Hoeven. Yes, and I really appreciate what you are
doing, of course, you, on the electromagnetic side, but then
combined with the aviation side. It really is exciting and
incredibly important work. So I appreciate it very much.
Thank you, Mr. Chairman.
Senator Barrasso. Senator Hirono.
Senator Hirono. Thank you. I want to thank the panel. So it
is obvious, if it was not obvious before, that there is a huge
demand for these critical minerals and the scale of the need is
massive. I do not know if some of the minerals that we need can
be met more efficiently through recycling and maybe some of the
other minerals we cannot do it through recycling very well. So
I would like to really focus in on--so what are, maybe, three
or four steps that we should do because we are so behind the
eight ball now? So, for example, and I just toss it out to the
panel, is updating our 150-year mining law--is that one of the
very specific things we can do? We need to modernize, yes? I
see Dr. Wood saying yes. What about the rest of you?
Then, recycling, Dr. Wood, you said recycling will only
enable us to get 10 percent, but you say that is not
insignificant. So what more should government be doing to
encourage recycling to extract some of these critical minerals?
That would be Mr. Howell, you are with DOE?
Mr. Howell. Yes.
Senator Hirono. Anything specific we can do to encourage
recycling?
Mr. Howell. Thank you for that question, Senator Hirono.
Certainly, a very important question. So in terms of updating
our mining laws, that was part of our 100-day supply chain
report on high-capacity batteries. That was one of the needs
and action items for the Federal Government. It is important in
terms of recycling. We have talked a lot about recycling
electric vehicle batteries, and there is that 15-year gap
between a new vehicle and when it is really salvaged. There is
also a large opportunity in consumer electronic batteries,
which almost 100 percent by weight of that cathode is cobalt--
lithium cobalt. So we need to develop more of a national
recycling plan in order to capture, not only electric vehicle
batteries, but consumer electric batteries as well.
Senator Hirono. I think one of the testimonies I went
through said we should have a whole-of-government approach to
what we need to do. It is not just Interior that looks at the
mining law. It is not just DOE that figures out how we are
going to meet the needs of electric vehicles and all that. Is
there a group of people converging within the Administration to
properly address all these issues?
Mr. Howell. Yes, Senator. I chair the Federal Consortium
for Advanced Batteries, which includes 12 federal agencies, and
within those federal agencies, almost 50 offices. And so, we
have banded together, over two years now, to develop the
National Blueprint for Lithium Batteries, which includes a lot
of key actions that we can develop together as federal agencies
in our normal, everyday business to achieve key actions to
develop a robust supply chain for batteries, from minerals to
processing, all the way through battery component production,
cell production, and recycling.
Senator Hirono. Some of these then do not require any
legislative action? You can do it administratively?
Mr. Howell. That is correct. Some of the actions that we
are pursuing do not require legislative action. It requires a
lot of collaboration. For instance, we are developing a
strategic plan to partner with allied nations that could
possibly help us and partner with us in order to supply
critical minerals. And that is led by the Department of State,
but the other agencies are in support of that in developing
those concepts and those strategies.
Senator Hirono. So, has the group that you are talking
about issued a report of some sort?
Mr. Howell. The National Blueprint for Lithium Batteries,
and also that particular group was instrumental in developing
the 100-day supply chain report.
Senator Hirono. What about changes to the 150-year-old
mining law? Has your group come up with any specific changes
that should be considered?
Mr. Howell. We are starting to work with the Bureau of Land
Management and the Department of the Interior to support that.
Particularly from our perspective, they have the lead there.
Our perspective would be to support through technical analysis
and technical assistance as needed.
Senator Hirono. Do you have a sense of urgency about the
need to address our need for critical minerals?
Mr. Howell. Yes.
Senator Hirono. Does that mean that, as you are looking at
the 150-year-old law, is there a time frame for you to provide
us with some suggested changes?
Mr. Howell. We do not--I would defer to my colleagues in
the Department of the Interior first on that. We do not have a
time frame at this point.
Senator Hirono. Well, there needs to be a sense of urgency
across the board, not just from the Administration, but within
those of you who represent--did you want to add something?
Raise your hand.
Mr. Straubel. Yes, if I could, maybe briefly. I think one
thing you asked was, what could we be doing maybe better to
help incentivize some of this. Today, there are no restrictions
or rules against exporting a lot of these same materials. We
are actually readily, frequently exporting all of our devices--
critical minerals back to Asia in the form of, almost, garbage.
Senator Hirono. Yes.
Mr. Straubel. At the same time, it is almost impossible to
import these materials. We have worked to try and import
consumer electronics batteries from South and Central America.
Can't do it. It is hazardous waste. It is unwanted garbage. We
have really asymmetric and incorrect, I would say, import/
export rules around some of these things. And at the same time,
we are focusing on how to expedite mining, but we are
exporting, freely, the stuff that we have already mined, and
are not allowing new imports.
Senator Hirono. Are you suggesting that we prevent the
exportation of these items?
Mr. Straubel. I think it might be worth considering how we
want to incentivize keeping the critical materials in the
country.
Senator Hirono. Okay. So, Mr. Howell, I hope your group is
taking those kinds of suggestions to heart.
One more, if you don't mind?
Senator Barrasso. Go right ahead, Senator Hirono.
Mr. Britton. Senator, thank you. Well, two notes that I
think might be helpful in context--in the USICA, or the America
COMPETES bill, they actually talk about the importance of
preserving those end-of-life batteries for recycling so they
become that critical mineral stockpile. So that is important.
But also, as part of the Bipartisan Infrastructure bill, this
morning I was looking at the critical mineral pieces. There is
actually a report. So, what you are suggesting is what the
bipartisan bill instructed the Administration to do to bring
together that working group. They are due to report a year upon
the date of the passage of the Bipartisan Infrastructure bill,
so your team, I am sure will be looking forward to that date.
Senator Hirono. And you don't need to take a whole year.
[Laughter.]
Senator Hirono. Speed it up, but make sure that it is
something we can rely upon.
Thank you very much.
Senator Barrasso. Thank you, Senator Hirono.
I want to thank all of the witnesses for being here and for
joining us this morning for this very helpful discussion.
Members are going to have until the close of business tomorrow
to submit additional questions for the record.
And the Committee stands adjourned.
[Whereupon, at 11:53 a.m., the Committee was adjourned.]
APPENDIX MATERIAL SUBMITTED
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