[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
MICROVAST AND MORE: OVERSIGHT OF
RESIDENT BIDEN'S ENERGY SPENDING SPREE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
JUNE 21, 2023
__________
Serial No. 118-52
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Published for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
57-575 PDF WASHINGTON : 2024
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COMMITTEE ON ENERGY AND COMMERCE
CATHY McMORRIS RODGERS, Washington
Chair
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio Ranking Member
BRETT GUTHRIE, Kentucky ANNA G. ESHOO, California
H. MORGAN GRIFFITH, Virginia DIANA DeGETTE, Colorado
GUS M. BILIRAKIS, Florida JAN SCHAKOWSKY, Illinois
BILL JOHNSON, Ohio DORIS O. MATSUI, California
LARRY BUCSHON, Indiana KATHY CASTOR, Florida
RICHARD HUDSON, North Carolina JOHN P. SARBANES, Maryland
TIM WALBERG, Michigan PAUL TONKO, New York
EARL L. ``BUDDY'' CARTER, Georgia YVETTE D. CLARKE, New York
JEFF DUNCAN, South Carolina TONY CARDENAS, California
GARY J. PALMER, Alabama RAUL RUIZ, California
NEAL P. DUNN, Florida SCOTT H. PETERS, California
JOHN R. CURTIS, Utah DEBBIE DINGELL, Michigan
DEBBBIE LESKO, Arizona MARC A. VEASEY, Texas
GREG PENCE, Indiana ANN M. KUSTER, New Hampshire
DAN CRENSHAW, Texas ROBIN L. KELLY, Illinois
JOHN JOYCE, Pennsylvania NANETTE DIAZ BARRAGAN, California
KELLY ARMSTRONG, North Dakota, Vice LISA BLUNT ROCHESTER, Delaware
Chair DARREN SOTO, Florida
RANDY K. WEBER, Sr., Texas ANGIE CRAIG, Minnesota
RICK W. ALLEN, Georgia KIM SCHRIER, Washington
TROY BALDERSON, Ohio LORI TRAHAN, Massachusetts
RUSS FULCHER, Idaho LIZZIE FLETCHER, Texas
AUGUST PFLUGER, Texas
DIANA HARSHBARGER, Tennessee
MARIANNETTE MILLER-MEEKS, Iowa
KAT CAMMACK, Florida
JAY OBERNOLTE, California
------
Professional Staff
NATE HODSON, Staff Director
SARAH BURKE, Deputy Staff Director
TIFFANY GUARASCIO, Minority Staff Director
Subcommittee on Oversight and Investigations
H. MORGAN GRIFFITH, Virginia
Chairman
MICHAEL C. BURGESS, Texas KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky Ranking Member
JEFF DUNCAN, South Carolina DIANA DeGETTE, Colorado
GARY J. PALMER, Alabama JAN SCHAKOWSKY, Illinois
DEBBIE LESKO, Arizona, Vice Chair PAUL TONKO, New York
DAN CRENSHAW, Texas RAUL RUIZ, California
KELLY ARMSTRONG, North Dakota SCOTT H. PETERS, California
KAT CAMMACK, Florida FRANK PALLONE, Jr., New Jersey (ex
CATHY McMORRIS RODGERS, Washington officio)
(ex officio)
C O N T E N T S
----------
Page
Hon. H. Morgan Griffith, a Representative in Congress from the
Commonwealth of Virginia, opening statement.................... 1
Prepared statement........................................... 4
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, opening statement..................................... 10
Prepared statement........................................... 12
Hon. Cathy McMorris Rodgers, a Representative in Congress from
the State of Washington, opening statement..................... 14
Prepared statement........................................... 16
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 20
Prepared statement........................................... 22
Witness
David Howell, Principal Deputy Director, Office of Manufacturing
and Energy Supply Chains, Department of Energy................. 24
Prepared statement........................................... 27
MICROVAST AND MORE: OVERSIGHT OF PRESIDENT BIDEN'S ENERGY SPENDING
SPREE
----------
WEDNESDAY, JUNE 21, 2023
House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 2:27 p.m. in
room 2322, Rayburn House Office Building, Hon. H. Morgan
Griffith (chairman of the subcommittee) presiding.
Members present: Representatives Griffith, Guthrie, Duncan,
Palmer, Armstrong, Rodgers (ex officio), Castor (subcommittee
ranking member), DeGette, Schakowsky, Tonko, Ruiz, and Pallone
(ex officio).
Staff present: Sean Brebbia, Chief Counsel; Lauren Eriksen,
Clerk; Christen Harsha, Senior Counsel; Peter Kielty, General
Counsel; Emily King, Member Services Director; Austin Flack,
Minority Junior Professional Staff Member; Waverly Gordon,
Minority Deputy Staff Director and General Counsel; Liz Johns,
Minority GAO Detailee; Constance O'Connor, Minority Senior
Counsel; Christina Parisi, Minority Professional Staff Member;
Harry Samuels, Minority Oversight Counsel; and Caroline Wood,
Minority Research Analyst.
Mr. Griffith. The Subcommittee on Oversight and
Investigations will now come to order.
The Chair now recognizes himself for 5 minutes for an
opening statement. All right, back to where I was.
OPENING STATEMENT OF HON. H. MORGAN GRIFFITH, A REPRESENTATIVE
IN CONGRESS FROM THE COMMONWEALTH OF VIRGINIA
Welcome to today's hearing on the Energy and Commerce
Subcommittee on Oversight and Investigations. Today, for the
first time, this committee welcomes the head of the Department
of Energy's new Office of Manufacturing and Energy Supply
Chains, or MESC.
In February of 2022, as part of the Department's newest
reorganization plan, three new program offices, including MESC,
were created. MESC was set up with the goal of strengthening
energy supply chains and increasing the domestic manufacturing
base. This is intended to support what the DOE characterizes as
a clean and equitable energy transition. MESC is currently
administering about a dozen programs funded through the
Infrastructure Investment and Jobs Act and the so-called
Inflation Reduction Act. Almost all of MESC's programs have
been created recently.
In short, a brand-new office will give out billions in
funding for numerous new programs over the course of just a
couple of years. Now, I don't care what party you are in, this
scenario, no matter what the department or the administration,
deserves increased oversight.
Not long after its creation, MESC came to the attention of
then-Republican Leader Rodgers and myself after it announced
$2.8 billion in financial awards to 20 companies under its
Battery Manufacturing and Recycling Grants Program in October
of last year. As a part of these announcements, Microvast
Incorporated was selected to receive a $200 million grant for a
battery manufacturing plant in Tennessee.
Shortly after the announcement, Microvast's association
with the Chinese Communist Party became apparent. Microvast
produced its battery components in China, the bulk of its
revenue was generated in China, and according to Microvast's
own SEC filings, the government--referring to the People's
Republic of China--``exerts substantial influence over the
manner in which we must conduct our business activities, and
may intervene at any time with no notice.''
After learning of Microvast's concerning ties to China,
then-Republican Leader Rodgers and I sent a letter to Secretary
of Energy Jennifer Granholm on December 14 of last year
requesting a briefing to include specific information about the
Microvast award. The Department has yet to answer our specific
questions, provide any documents or sufficient information
about the vetting processes behind the battery manufacturing
recycling grant awards.
In response we asked, with two weeks' notice, that the
appropriate official from the DOE testify before this
subcommittee on May 23. Unfortunately, the Department refused
to attend, citing inadequate time to prepare. However,
strangely enough, the night before the hearing the Department
announced it was canceling its tentative award to Microvast. It
is unclear whether these events are related.
To date, the Department has still not shared with Congress
the reason for this decision or any details of additional due
diligence the Department may or may not have conducted. We had
an informative discussion with witnesses who did join us on May
23 to talk about general challenges facing our energy sector
supply chains. The witnesses talked at length about threats
posed by foreign rivals to our energy security, including
government programs.
The main point is we don't want Chinese companies getting
American taxpayer money to create more Chinese jobs and Chinese
technology, even if some of those jobs might end up being in
the United States.
My colleagues and I have lots of questions on--have lots of
questions only the Department of Energy can answer.
MESC's goal is to boost domestic industry and secure energy
supplies. However, the Microvast misstep has increased our
doubt as to whether this mission is being successfully
completed out.
While I commend the Office for canceling the Microvast
award, it shouldn't take a news story and multiple
congressional letters for MESC not to award grants to
problematic companies. The main cloud of haze here concerns due
diligence and vetting processes at the DOE. We are aware of at
least one other selectee besides Microvast that is also no
longer moving forward with the awards process. The detailed
reason for the Amprius grant cancellation is unknown.
While we were disappointed in the Department's refusal to
originally participate in our hearing last month, I am glad to
finally have them here today. As such, we welcome Dr. David
Howell, Principal Director--Deputy Director of MESC. Mr. Howell
has previously served as MESC's Acting Director as well as
Director of the Vehicle Technologies Office for the DOE.
Today we hope to learn more about this new office. This
committee also hopes to gain some insight on how it is
prioritizing its awards and how seriously it takes its domestic
manufacturing charter.
I thank Principal Deputy Director Howell for joining us
today, and I look forward to our discussion.
[The prepared statement of Mr. Griffith follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Griffith. And with that, I yield back. I now recognize
the ranking member of the subcommittee, Ms. Castor, for 5
minutes for her opening statement.
OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Ms. Castor. Well, thank you, Mr. Chairman, for calling this
important hearing.
Welcome, Dr. Howell. I look forward to hearing your
testimony.
We continue to hear good news about opportunities that are
emerging across the country thanks to the Bipartisan
Infrastructure Law and the Inflation Reduction Act and, of
course, the CHIPS and Science Act. These laws are already
having an incredible impact creating good-paying jobs, lowering
energy costs for our neighbors, and bringing manufacturing back
to the United States.
These investments are smart. They are accelerating the use
of American-made clean energy that is cheaper and more
sustainable, and shifting away from supply chains controlled by
foreign adversaries like the Chinese Communist Party. And we
are freeing ourselves from big oil companies and utilities that
keep fuel prices high and put profits over people. Through our
targeted investments, we are building a clean energy economy
that benefits everyone.
Today we have an opportunity to learn more about
implementation of parts of the IRA and the infrastructure law
at the U.S. Department of Energy. The Office of Manufacturing
and Energy Supply Chains, or MESC, is a new office tasked with
managing some of the crucial investments that Democrats made
last Congress. MESC oversees initiatives to boost critical
minerals, to process minerals in the U.S. rather than China, to
manufacture batteries in America, and recycle those batteries
here.
Meanwhile, local workforce development initiatives,
apprenticeships are also underway so workers can learn updated
skills and trades because we have got to make sure that
American workers are ready to take advantage of career
opportunities created by these investments. That is why
Democrats included so many Buy American and Build American
policies in the IRA and the infrastructure law.
And good news: It is working. The IRA and the
infrastructure law have already attracted over $240 billion in
new investments across 31 States, like new battery plants,
electric vehicle manufacturing plants, 142,000 jobs created so
far. And these are good-paying jobs that often do not require a
college degree. We are strengthening communities at the same
time.
So it is a little ironic that most of these investments and
jobs are happening in areas represented by Republicans who
oppose the IRA and the infrastructure law. But that is OK. We
are all in this together, and I trust that over the next decade
businesses and companies will invest more to support new
manufacturing in the U.S. and modernize our infrastructure.
That will give our neighbors back home more stability and
security.
It is important to recognize that offshoring manufacturing
jobs and supply chains did not happen overnight, and bringing
them back will not happen overnight either. For decades, the
Chinese Communist Party poured resources into their
manufacturers to build an early lead in the global clean energy
supply chain. America did not make the same investments, which
resulted in missed opportunities.
But we are making up for that now with smart, long-term
investments in critical mineral production and processing and
advanced manufacturing. These investments and American
ingenuity will not only allow us to catch up to the CCP but
will make us the world leader in clean and renewable energy--
new electric cars and trucks and industrial manufacturing to
lower climate pollution that is wreaking havoc and--wreaking
havoc back home in our communities and costing our neighbors a
lot.
Thankfully, DOE is no stranger to managing and mitigating
investment risk. MESC uses a rigorous and efficient vetting
process to comprehensively analyze project-specific risks and
tailor measures to mitigate those risks. MESC continues to
conduct the proper due diligence to protect taxpayer funds, and
it is working how it should.
Unfortunately, I don't think my Republican colleagues
agree, and I am concerned that they have already given up on
supporting American workers and competing in the global clean
energy supply chain. Just last month, Republicans held a
hearing where they simultaneously expressed satisfaction about
Microvast's rejected application and skepticism that the United
States could never compete with companies that are beholden to
the Chinese Communist Party.
Well, it is disappointing, after years of complaining about
our country's reliance on the CCP, that Republicans are betting
against investments in the future and against American workers
and manufacturers. Instead of trying to find ways to undermine
important Federal programs or holding our economy hostage
through a manufactured crisis, let's turn the page and work
together to help our neighbors back home and the American
people. Together we can do the constructive oversight that
helps Federal initiatives succeed.
Unless we invest in our future, we will continue to fall
behind and miss yet another opportunity to be a leader in clean
energy supply chains.
[The prepared statement of Ms. Castor follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Castor. Thank you, Mr. Chairman, and I yield back.
Mr. Griffith. The gentlelady yields back. I now recognize
the Chair of the full committee, Mrs. McMorris Rodgers, for her
5-minute opening statement.
OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mrs. Rodgers. Thank you, Mr. Chairman. We should all be
proud that America is the leader, the leader in clean,
renewable energy. We have done more to lift people out of
poverty, we have done more to reduce carbon emissions than any
other country in the world. And we have done it through
American innovation and technology. It is not China. China
continues to build two coal-fired plants every week. That is
not the future that I want in the United States of America.
We should all be able to agree that our country must have a
stable, secure supply chain, though. It is a matter of national
security. We have seen the consequences of overreliance on
supply chains from adversaries. It is playing out in Europe,
where Putin has weaponized Russia's control over the
continent's natural gas supply. That is our future if we
continue to cede our energy and supply chain security to China.
That is not the future I want, ladies and gentlemen.
Unfortunately, President Biden's rush-to-green agenda puts
China more firmly in control of our energy supply. This weakens
American energy and national security, and wastes American
taxpayer dollars which should be going to supporting more
American jobs and innovation.
Beginning in March of this year, we requested that Federal
agencies, including the Department of Energy, provide monthly
accounting of the funds they received under these major
spending bills last Congress, the Infrastructure Investment and
Jobs Act and the Inflation Reduction Act. To date we have
received one response from Department of Energy, and it was
incomplete. That is unacceptable. We are the oversight
committee, and we are the elected representatives of the
people.
Furthermore, on March 29th of this year, this subcommittee
convened a hearing with three inspectors general to discuss the
risks associated with the Biden administration's massive
spending spree. According to the Energy Department's inspector
general, the Department of Energy received $128 billion in
authorizations and appropriations, and an estimated loan
authority of more than 350 billion. And this is--the IG also
testified that, under the IIJA, the IRA, $83.6 billion will be
going into 71 new programs at the Department. Yes, ladies and
gentleman, you heard that right: 71 new programs.
To understand how massive this spending plan is, it is
helpful to point out that Department of Energy's fiscal year
2022 budget was 44.3 billion.
What I found most concerning is that the inspector general
warned that new programs pushing money through untested
processes and newly implemented internal controls are
especially vulnerable.
According to the Department's estimates--Energy
Department's estimates--the Office of Manufacturing and Energy
Supply Chains, which has only existed since February 22, will
administer a $12 billion portfolio of projects under the IIJA
and the IRA. I have serious concerns about a brand-new office
having the procedures and the staff in place to distribute such
a gigantic sum in a responsible way, and these concerns have
only intensified in recent months.
Under one of the programs, the Battery Manufacturing and
Recycling Grants Program, the Department announced it had
selected Microvast to receive $200 million. We now know
Microvast performs the bulk of its battery production in China.
According to the company's own SEC filings, and I quote, ``The
PRC Government exerts substantial influence over the manner in
which we must conduct our business activities, and may
intervene at any time and with no notice.''
It is deeply troubling that a grant for hundreds of
millions of American, hard-earned taxpayer dollars was approved
for a company like Microvast. So that is why, last December,
Chair Griffith and I wrote to the Secretary of Energy, Jennifer
Granholm, and requested more information on this grant as well
as the procedures and the processes that led to the selection
of Microvast.
While it is true that the Department recently decided not
to move forward with the Microvast grant, it remains unclear
how the grant was approved in the first place. Time and again,
we have requested information and testimony on how this has
happened. And then time and again, the Department has failed to
be accountable and transparent. This lack of transparency
undermines the public's trust and raises doubts as to whether
or not we are safeguarding taxpayer dollars.
Americans deserve to know what the Department is doing to
screen applicants, scrutinize their foreign ties, and keep
funding that is supposedly supporting domestic industry from
enriching our global adversaries. We must have transparency,
and we must be assured that these taxpayer dollars are not
being funneled to the Chinese, and we are going to continue our
work to demand transparency and accountability on this.
Since day one my colleagues and I have led to celebrate
American innovation and energy dominance, and we are continuing
that efforts today. This is just another step in that goal.
Mr. Howell, I appreciate you being with us here today. I
look forward to hearing more about the new program office.
[The prepared statement of Mrs. Rodgers follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mrs. Rodgers. I yield back.
Mr. Griffith. The gentlelady yields back. I now recognize
the ranking member of the full committee, Mr. Pallone, for his
5-minute opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman.
Last Congress, President Biden and congressional Democrats
delivered with the Inflation Reduction Act and the Bipartisan
Infrastructure Law. These two laws include major investments
that are helping us grow our economy, create millions of clean
energy jobs, lower energy prices for Americans, bolster
domestic manufacturing, and help us lead the global transition
to a clean energy economy.
This aggressive action is necessary now. Extreme weather
events are becoming more and more frequent with the worsening
climate crisis. These events are costing our Nation hundreds of
billions of dollars every year. They are destroying whole
communities, tragically taking lives, homes, and livelihoods.
And that is why the investments made by the Inflation Reduction
Act and the Bipartisan Infrastructure Law are so important.
These laws match the magnitude of the challenge we face, and
represent the largest investments ever made in America's
future.
Americans across the country are already beginning to take
steps towards using cleaner vehicles and energy sources, but we
need to dramatically boost our domestic supply chains and
manufacturing capacity in order to meet growing demand. For
decades we have become increasingly dependent on other nations,
including China, for both raw materials and the component parts
that go into solar panels, wind turbines, electric vehicles,
and other energy resources. However, thanks to these two new
laws, targeted programs at the Department of Energy and other
Federal agencies are fostering resilient supply chains and
revitalizing domestic manufacturing.
Companies have committed hundreds of billions of dollars to
clean energy investments and have created more than 142,000 new
clean energy jobs. And more commitments are constantly being
made. Earlier this month General Motors announced the second
phase of a $1 billion partnership aimed at rapidly increasing
America's battery manufacturing. All of this is going to help
us catch up to China, which has spent decades investing to
dominate the global clean energy supply chain.
As Federal agencies continue implementing key programs, we
are on track to build on these initial achievements. We can
fight the worsening climate crisis and deliver economic
prosperity for everyone by betting on American ingenuity and
work ethic. And that is why I am pleased we are hearing from
DOE's Office of Manufacturing and Energy Supply Chains today
about how their important work creates jobs and speeds up the
clean energy transition.
I also look forward to hearing about DOE's robust process
for vetting grant applicants and ensuring effective oversight
of awardees for the full duration of projects. These
investments are going to make a big difference.
It is interesting, because for years committee Republicans
have voiced concerns that we are too reliant on overseas supply
chains and manufacturers controlled by China, but they have,
frankly, opposed every Democratic effort to bring those jobs
and supply chains back to the United States. When we had a
hearing on this topic last month, it really sounded like some
committee Republicans had given up on trying to challenge
China's dominance.
But we can't afford to quit. And instead of working with us
to find bipartisan solutions to big problems, Republicans have
spent their time opposing real solutions and then attempting to
undermine them at every turn.
Before the last hearing, they questioned a potential DOE
award to a company called Microvast. Then, when DOE conducted
due diligence and decided not to move forward with an award to
Microvast, Republicans continued to complain about DOE's work.
At the end of the day, Republicans seem to have little interest
in transitioning to a clean energy economy. Instead they want
to prop up big oil companies.
So I am ready to come together and do the constructive
oversight that will help DOE succeed, but I am not willing to
let my Republican colleagues throw in the towel because they
would rather put polluters over people.
So let's work together to realize the full potential of
these laws, so that Federal investments can deliver lower
energy prices, a clean future for our children, clean energy
jobs across the country, and a domestic manufacturing base that
will be the envy of the world. I think it is very possible if
we work together on a bipartisan basis.
[The prepared statement of Mr. Pallone follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Pallone. And with that, Mr. Chairman, I yield back.
Mr. Griffith. The gentleman yields back. That concludes
Member opening statements.
The Chair would like to remind Members that, pursuant to
committee rules, all Members' written opening statements will
be made a part of the record, but please make sure you provide
those to the clerk promptly, so that they can be added to the
record.
We do want to thank our witness for being here today and
taking the time to testify before the subcommittee.
You will have the opportunity to give an opening statement
followed by a round of questions from Members.
Our witness today is David Howell, Principal Deputy
Director of the Office of Manufacturing and Energy Supply
Chains at the Department of Energy.
We appreciate you being here today, and I look forward to
hearing from you about what you are working on.
As you are aware, this--the committee is holding an
oversight hearing, and when doing so we have the practice of
taking the testimony under oath. Do you have any objection to
testifying under oath today?
Mr. Howell. No, sir.
Mr. Griffith. OK. The gentleman does not.
Seeing no objection, we will proceed.
The Chair also would advise you that you are entitled to be
advised by counsel, pursuant to House rules. Do you desire to
be advised by counsel during your testimony today?
Mr. Howell. No, sir.
Mr. Griffith. All right. Again, he has not requested
counsel.
So if you would, please rise and raise your right hand.
[Witness sworn.]
Mr. Griffith. Seeing the witness answered in the
affirmative, you are now sworn in and under oath, and subject
to the penalties set forth in title 18, section 1001 of the
United States Code.
With that, we now recognize Mr. David Howell for 5 minutes
to give an opening statement.
STATEMENT OF DAVID HOWELL, PRINCIPAL DEPUTY DIRECTOR, OFFICE OF
MANUFACTURING AND ENERGY SUPPLY CHAINS, DEPARTMENT OF ENERGY
Mr. Howell. Thank you, Chairman Griffith, Ranking Member
Castor, and distinguished members of the subcommittee. Thank
you for this opportunity to provide an update on the Department
of Energy's efforts to safeguard taxpayer dollars in the
implementation of the Infrastructure Investment and Jobs Act
and the Inflation Reduction Act, also known as the IIRA and the
IRA.
The IIJA and the IRA are truly historic investments in
renewing American infrastructure and supporting American energy
security for decades to come. We at the Department are working
hard to swiftly implement these laws so that we can get these
resources out to communities in your districts and in every
corner of the country as quickly as possible.
We also acknowledge and respect that when Congress
appropriated these resources, you entrusted DOE with
investments using taxpayer dollars. We take this responsibility
incredibly serious, and every day our team of experts and
professionals are working tirelessly to ensure that taxpayer
dollars provided to us by Congress are being spent effectively,
efficiently, and responsibly.
Through the implementation of IIJA and IRA, the Office of
Manufacturing and Energy Supply Chains, MESC, is striving to
install critical supply chain manufacturing capacity, reduce
industrial-based carbon emissions, increase clean energy jobs,
and provide world-class energy industrial sector analysis. This
is to all--this is to ensure that all America is positioned to
lead the world in manufacturing the energy technologies of the
future.
MESC was established in February of 2022 as a new office
reporting to the Under Secretary of Infrastructure. MESC aims
to support scale-up and deployment of the Nation's
manufacturing capacity through programs that are focused on
establishing critical domestic supply chains and increasing
circularity while leveraging private-sector investment.
MESC also works to bolster small and medium enterprises and
communities in energy transition. MESC catalyzes the
development of an energy sector industrial base through
investments that establish and secure domestic clean energy
supply chains and manufacturing, and by engaging with private-
sector companies, other Federal agencies, and key stakeholders
to collect, analyze, respond to, and share data about energy
supply chains to inform future decision making and investment.
With funds and authorities provided by the Bipartisan
Infrastructure Law, the Inflation Reduction Act, and the
Defense Production Act, MESC supports $20 billion in programs
that further these goals.
In addition, MESC is partnering on behalf of DOE with the
U.S. Department of Treasury and the Internal Revenue Service to
support the qualifying Advanced Energy Project Credit Program,
also known as 48C. We are in the competition phase for a range
of programs now, but we have completed selections under the
Battery Materials Processing and Battery Manufacturing and
Recycling funding opportunity. This program represents a
tremendous opportunity to reduce our supply chain vulnerability
in a critical energy sector.
For the battery supply chain currently, virtually all
lithium, graphite, battery-grade nickel, electrolyte salt,
electrode binder, and iron phosphate cathode materials are
produced abroad, and China controls the supply chain for many
of these inputs. The portfolio of selected projects under the
funding opportunity will support developing enough battery-
grade lithium to supply approximately 2 million EVs annually.
In addition, our selectee Solvay will build a major battery
binder facility in Augusta, Georgia. Our selectee Ascend
Elements will build a facility in Kentucky to produce high-
nickel cathode material from recycled black mass. Our selectee
Talon Metals will develop a facility in North Dakota that will
produce enough battery-grade nickel to supply 400,000 EVs. Our
selectees Silent and Group 14 plan to develop commercial-scale
domestic silicon anode materials production facilities in
Washington State. These facilities will supply anode materials
for over 600,000 electric vehicle batteries annually.
In closing, as the Department continues our implementation
of the IIJA and the IRA, we will remain steadfast in our
commitment to be responsible stewards of taxpayer dollars and
continue taking the proactive steps necessary to prevent fraud,
waste, and abuse in our programs while we work to bring about a
clean and secure energy future that is made in America.
On behalf of the Department, I appreciate the
subcommittee's interest in this topic and the opportunity to
provide testimony before you today. Thank you, and I look
forward to your questions.
[The prepared statement of Mr. Howell follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Griffith. Thank you very much. I thank you for your
testimony, and we will now move into the question-and-answer
portion of the hearing, and I will begin the questioning and
recognize myself for 5 minutes.
So as I mentioned in my opening statement, we sent a letter
in December--Cathy, Chairwoman Cathy McMorris Rodgers, and I--
then in her ranking position--and I sent the letter to
Secretary Granholm requesting a briefing including specific
information on the Department's efforts to scrutinize
Microvast.
On February 1 we got a letter back saying that you all were
carrying out the review process for the project, and the
Department ``would be pleased to provide more information on
the status of Microvast and other selectees under the battery
materials funding opportunity announcement when the due
diligence phase has been completed.''
Now, at least as far as Microvast was concerned, that due
diligence phase was completed on May 22. So the question is,
when are we going to get the answers to the questions we asked
in December basically dealing with, you know, what is the
process, what are you doing, and how do you vet these various
companies that are coming in?
And you can appreciate, I hope, the concern that when you
see a company that says in its SEC filing that they are an arm
of the Chinese Communist Party, that something wasn't going
right then. Later it became right. So I would like to hear that
process, if you would tell us, the process for the vetting of
these companies to make sure that they are going to actually be
making things in America for Americans by Americans and with
American technology being used here, or at least us having the
capability of getting that technology.
Mr. Howell. Thank you for your question, Congressman
Griffith. Can you hear me? Is this on?
Mr. Griffith. I can hear you. Go.
Mr. Howell. Oh, good. So the vetting process in terms of
the BIL awards that you mentioned--in particular, Microvast--as
you know, the selections were made through a competitive
solicitation that went through the summer. And part of that
vetting process started with that solicitation process, where
we identified companies that were compelling in terms of
selecting them for the negotiation of award.
Once selections are made, that is when detailed
negotiations are started.
Mr. Griffith. OK. And in fairness, most of us did not
understand that, because it appeared from the press statements
that these people were awardees. But you are telling me that is
when the vetting actually--the in-depth vetting began.
Mr. Howell. The in-depth vetting began the day after those
announcements. There was also in-depth vetting in terms of the
technical capacity and capabilities of the companies before
that to actually make those selections. But those were
selections for negotiation of award.
Mr. Griffith. And what were the reasons, then, for denying
the Microvast?
Mr. Howell. OK. So thank you for your concerns about
Microvast, the company selected for the negotiation of an award
under the funding opportunity.
So Microvast is a majority U.S.-owned company traded under
Nasdaq, and headquartered in Stafford, Texas, with additional
locations in Tennessee, Florida, and Colorado.
With DOE funding, the company's matching financial
investment--with the company's matching financial investment,
Microvast proposed to build a polyaramid separator material
production plant in Clarksville, Tennessee.
Mr. Griffith. OK, I got all that.
Mr. Howell. OK.
Mr. Griffith. But how do you square that with their
statement to the Securities and Exchange Commission----
Mr. Howell. So part of the----
Mr. Griffith. If they are majority U.S.-owned, how can the
Chinese Communist Party, through its government, the Chinese
Government, say--why would they say that they could be stopped
or changed course because of what the government said in China?
Mr. Howell. So simply because Microvast's major production
operations are in China.
Mr. Griffith. OK.
Mr. Howell. Ninety percent of their production operations
are in China.
Mr. Griffith. All right. And you vetted----
Mr. Howell. Our----
Mr. Griffith. Next question, because--and I apologize, we
only get 5 minutes. So my next question would then be--and so
all of the other companies that you vetted do not have that
problem.
Mr. Howell. That is correct.
Mr. Griffith. So all the rest of these companies are--if we
go in and pick out any one of the ones you named or some
others, we are going to find that they don't have these ties to
the Chinese Communist Party and the Chinese Communist
Government.
Mr. Howell. They don't have what, sir?
Mr. Griffith. The ties.
Mr. Howell. So there was one company that we were concerned
with, additional to Microvast, as you have mentioned.
Mr. Griffith. Amprius.
Mr. Howell. Amprius. And we--after the vetting process, we
agreed mutually not to go forward----
Mr. Griffith. OK.
Mr. Howell [continuing]. With an award.
Mr. Griffith. All right. So the vetting process is working,
at least in that regard.
Mr. Howell. It is working very well, and we are actually
enhancing that vetting process. And so it is--I would say it is
an enhanced vetting process at this point.
And one of the things that we have changed is part of the
vetting that we do right after the award, like SEC filings we
will do before award--before selection now. So we will do more
vetting before selection on these awards as we go forward. That
was the typical DOE process that, after selection of award,
then we go into detailed negotiations, which includes SEC
filings, look at the SEC filings of the company. And so we will
actually be doing that before selection of award from now on.
Mr. Griffith. Yes, I didn't--as my Democrat colleagues are
so apt to point out, I did not agree with the way things were
done and some of the focus of the bill, so I didn't vote for
it. But now that we are here, I want to make sure the American
taxpayer dollars are spent correctly. And I appreciate your
testimony here today.
And I yield back. I now recognize the gentlewoman from
Florida, Ms. Castor, the ranking member of the subcommittee.
Ms. Castor. Well, thank you, Mr. Chairman. I think that is
our intent, too, to make sure that the Department of Energy has
the tools it needs to vet these projects.
You have an enormous responsibility. I mean, already the
Inflation Reduction Act, the infrastructure law have created
kind of this new domestic manufacturing boom. It is hard to
keep up with the announcements that come so quickly on battery
plants, recycling opportunities, electric cars, and trucks.
What have you put in place now to really monitor--you have
said this is enhanced vetting. Maybe go into a little more
detail. We have learned some lessons from the Recovery Act of a
decade ago. What has changed in--that is bringing enhanced
vetting and processes?
And do you have all the tools you need to get the job done?
Mr. Howell. So thank you, Congresswoman, for that question.
And so, in terms of what has changed in the vetting
process, we actually have developed a research technology and
economic security team at the Department.
Mr. Griffith. Hang on a second. We have stopped the time.
Our technical people tell us you need to move the microphone a
little bit closer so that they can pick it up for C-SPAN. We
could hear you fine.
Mr. Howell. Can you hear me now?
Ms. Castor. And point it up.
Mr. Griffith. Yes.
Mr. Howell. How is this?
Mr. Griffith. That is much better.
Ms. Castor. Better.
Mr. Griffith. Thank you. All right.
And we didn't take that time away from you, so if you want
to start that question----
Ms. Castor. I think he is going to get into enhanced
vetting.
Mr. Griffith. OK, go ahead.
Mr. Howell. Enhanced vetting. So our enhanced vetting
process actually cuts across all of the Department of Energy.
It is not that we were not doing vetting in the past, but
because of the language, particularly in the Bipartisan
Infrastructure Law, that included language on priority given to
nonforeign entities of concern, that was actually the first
time that the Department of Energy actually received that type
of language in an appropriation.
So MESC received that, and are sort of the ones that are
actually out there----
Ms. Castor. OK. Let me follow up on that, because Microvast
is a U.S. company. The owner is a U.S. citizen, as far as I
know, information that has been provided. They want to move
business out of China and build more jobs and factories in the
U.S. I am sure there are a lot of American companies that are
doing business in China that are not arms of the Chinese
Communist Party. How are you analyzing?
Because we want these jobs to be American jobs. We want to
build our supply chains. And we don't--but I am sure that there
are quite a number of companies that do business in China that
may not be attached to the Chinese Government.
Mr. Howell. And that is correct. So we took the time to
determine the appropriate metrics to use in order to determine
what the influence is from the Chinese Communist Party,
particularly. And that would include, you know, intellectual
property positions for that company and the particular
technology that is being pursued.
It also includes ownership of the company, not only
investment ownership, ownership by the Government itself,
ownership by other Chinese entities, including investment
companies and individuals, and also--and the percent of
ownership, and key suppliers, as well. And then, of course, key
personnel, those that are on their board of directors, those
that are voting members of the board of directors.
And again, lastly, though, any concerns with the talents
programs that may provide concerns for us.
Ms. Castor. So after you go through this enhanced vetting
with all of those metrics, do companies get some transparency?
Do you respond and tell them, ``Well, you were not awarded
because you hit these markers''?
Mr. Howell. So the Department reserves the right to back
out of negotiations without explanation.
Ms. Castor. And the companies understand that as they go in
for those applications.
Mr. Howell. That is written into the funding opportunity
announcement, and it is also given to the company, as well.
They are actually entitled to back out of the negotiations at
any time for no reason.
Ms. Castor. OK. Oversight and Investigations is going to be
very important because of the significant responsibilities and
resources to the Department of Energy. We heard from the
Department of Energy inspector general on how they--she and her
office--very constrained.
So I was very concerned to see what was coming out of the
Appropriations Committee for the Department of Energy inspector
general. It is $92 million below the President's request. And I
would hope this is an area where we could work together. We
know that those monies invested often save taxpayers money. The
Department of Energy has been--IG has been funded at a lower
level than other agencies.
Does that hamstring what you need to do on oversight, Dr.
Howell?
Mr. Howell. So we have actually worked hand in hand with
the Office of Inspector General early in this process to make
sure that all of the oversight levers that we have already
established throughout the Federal Government through DOE on
these types of awards are in place and are strong and that we
have a plan in implementing the programs, whether it is
detection, whether it is mitigation of any issues.
We are always appreciative and collaborative with the
Office of Inspector General, but we have worked with them to
make sure that not only that MESC has the resources in place as
we go forward with these awards, not only to select these
awards and negotiate them, but actually to execute them and
oversee them.
Ms. Castor. Thank you very much.
Mr. Griffith. I thank--the gentlelady yields back. I now
recognize the gentleman from North Dakota, Mr. Armstrong, for
his 5 minutes of questioning.
Mr. Armstrong. Thank you, Mr. Chairman.
The Department of Energy's budget has ballooned to a size
that we just simply have never seen before. Since 2021 the
Department has injected with hundreds of billions in new funds
and loan authority: 62 billion through the IIJA, 67 billion
through the CHIPS Act, 35 billion through the IRA, and 1
billion through the 2023 omnibus.
To understand what this means, you only have to see how the
budget has increased since fiscal year 2022, when it was 44
billion. Combined, the IIJA, the IRA, CHIPS Act, and omnibus
have authorized or appropriated nearly 130 billion to the
Department of Energy, which, to be honest, has stumbled through
program implementation and engaged in negotiations with at
least one company with questionable foreign ties.
I have serious questions about staffing capacity and
overall management of the budget. Deputy Director Howell, the
Office of Manufacturing and Energy Supply Chains has been
entrusted with operating several new programs and administering
more than $15 billion. How many staff does your office
currently have?
Mr. Howell. We have almost five dozen staff on board as of
this week. We also have memorandums of agreement with our
procurement and acquisition team at the National Energy
Technology Laboratory and our procurement and acquisition team
at the Golden Field Office. We have also established a
memorandum of agreement with the Department of Treasury.
Mr. Armstrong. Do you know the rough breakdown between
Federal employees and contractors?
Mr. Howell. All six dozen or five dozen for MESC are all
Federal contractors.
Mr. Armstrong. OK. In your----
Mr. Howell. I am sorry, I am sorry. Are all----
Mr. Armstrong. Federal employees.
Mr. Howell [continuing]. Federal employees.
Mr. Armstrong. OK. We both knew the answer.
In your testimony, you state your office has been focused
on hiring sufficient staff, including program oversight
specialists, grant management and contracting specialists, and
financial audit oversight staff. What percentage of your staff
are dedicated to vetting applications under financial award
programs for issues such as problematic foreign ties of
applicants?
Mr. Howell. So we have teams of staff for each funding
opportunity, and the percentage of our staff is probably about
70 percent to 75 percent that are dedicated to the
procurement--for the funding opportunity, technical evaluation,
selection. And then we use the National Energy Technology
Laboratory Procurement and Acquisition Team. That is roughly
around 20 FTEs that we use across the procurement and legal
system and contracting system at the NETL Morgantown, and a
smaller effort at the Golden Field Office. So we have a large
contingent.
Some of our activities actually depend on other offices, by
the way, general counsel, our Committee on Foreign Investment
in the U.S., counterintelligence team----
Mr. Armstrong. I am meeting with CFIUS on Thursday morning,
tomorrow morning.
Mr. Howell. CFIUS, yes.
Mr. Armstrong. So----
Mr. Howell. So we do actually tap into other teams within
the Department of Energy.
Mr. Armstrong. Are you at full staff?
Mr. Howell. No, we are not.
Mr. Armstrong. What additional staff do you need to reach
those levels?
Mr. Howell. So our target is to get to 88 employees this
calendar year to implement both the BIL and the IRA provisions.
Mr. Armstrong. And you are trying to get there by the end
of?
Mr. Howell. By the end of this calendar year.
Mr. Armstrong. Can you provide an approximate percentage of
what staff are new to DOE versus those moving from other
programs?
That is not a really fair question.
Mr. Howell. So I can get back to you on that. I don't have
that number, but it is--from within the Department of Energy we
do have a fairly large contingent of folks--key program
management people who have joined MESC, but we have also tapped
into outside resources that are outside the Federal Government,
as well, and then some resources that are in other agencies.
Mr. Armstrong. On February 21, 2023, Ranking Member
Barrasso of the Senate Energy and Natural Resources Committee
wrote to the Deputy Secretary Turk, expressing concern that
DOE's October 19, 2022, statements regarding selections under
the funding opportunities were misleading.
Are you aware of that?
Mr. Howell. I am aware of that.
Mr. Armstrong. The Senate letter noted that October
statement made references to projects that suggested awards
were final, and of the 20 companies selected for the award,
share prices of those companies that were publicly traded
increased an average of about 14 percent between the day before
and the day of the Department's announcement.
There are real-world market implications that accompany the
awards process, which appear to be at best mismanaged and at
worst misleading. Does your office plan to make any changes to
its applicant vetting process or procedure for announcing
selections, considering these notification concerns?
Mr. Howell. We will emphasize that any selections are the
selections for negotiation of award.
Now, we do have feedback in any one funding opportunity
with the Department of Energy, particularly one of this size.
You could get hundreds of applications, and our private-sector
investors actually would rather us to announce the selection so
that they can free up their own resources that were tied to
applications.
Mr. Armstrong. I would like the announcement, too, if my
stock was going to go up 14 percent.
Mr. Howell. Well, I am thinking of those that were not
selected because they have actually committed funds to their
application and committed resources in case that they are
selected to negotiate.
It is also a signal to those that are selected to--that we
are going to go into deep negotiations, and so they need to set
aside their resources in order to meet the need for that
negotiation and also to provide the foundation for their cost
share, because their cost share is really what drives the
award.
Mr. Armstrong. Thanks. I yield back.
Mr. Griffith. The gentleman yields back. I now recognize
Ms. Schakowsky for her 5 minutes of questioning.
Ms. Schakowsky. So thanks to the Inflation Reduction Act,
we have already seen 142,000 new jobs that have been created.
It is estimated that between the IRA and the CHIPS and Science
Act that by 2030 we should see nearly half a million new jobs,
which is what we need in this country. And yet we see from the
Republicans that they want to reverse the progress that we have
seen and cut these programs, which I think is a serious
mistake.
But I have to tell you that I have been surprised in the
discussions about this, the pessimism about the ability of us
to have the kind of innovation that we need to create the jobs
and help our economy. And so what I am concerned about is that,
you know, we will not be able to achieve it if we have those
kinds of reductions.
So I wanted to ask you, Acting Director Howell--what I--I
wanted to ask you about the creation of jobs that we need and
to hopefully set the record straight on our ability to reach
that. And so is your office helping to bring back jobs that
have been sent overseas in the past for decades?
Mr. Howell. Thank you, Congresswoman, and that is such an
important question, because that is really what this is all
about, not only now but in the future. These are future
technologies that we are investing in, and we have to do that
as a nation in order to secure American jobs in the future.
So in terms of American innovation, innovation is what has
gotten us here at this point with the battery program. And that
is the longstanding research and development support from
Congress for many decades. Many of the key technologies that
have been developed in the battery program that has actually
launched this revolution were developed with U.S. Federal funds
through the Department of Energy, whether it is new cathode
materials, new anode materials, new battery technologies.
So we see that, we have done that very well, and we will
continue to do that, to go to the next generation that--it will
even drive down costs, improve performance, and improve our
competitiveness.
There is no reason why our U.S. industry cannot stand up
and actually compete on a world market here. We can do this
whether it is in minerals, whether it is in refined materials,
whether it is in battery production or recycling. So this is a
bright spot. And so we should really be--number one, applaud
the work that we have done already to get to this spot, but
also take on the challenges that we need in order to make sure
that we are successful in the future.
One of the things that I have the privilege of being is the
Chair of the Federal Consortium for Advanced Batteries. It is a
Federal consortium of about 17 different Federal agencies,
about 60 different offices within those Federal agencies that
have banded together to collaborate, to coordinate, and to help
each other to make sure that we are supporting this robust,
this resilient domestic battery supply chain.
Ms. Schakowsky. Let me ask you a question about developing
the workforce that we need and is--anything that MESC is doing
to make sure, after we have all these innovations, that we have
the workforce to do the job?
Mr. Howell. Right, understand that building strong supply
chains for the United States is more about people than it is
about product.
So, for example, in the Manufacturing Energy Supply Chains
office, part of--one of our programs is the Industrial
Assessment Centers, which is used to--actually, to assess ways
in which small and medium-sized enterprises across the country
can improve their productivity, can reduce emissions, can
reduce energy use. At 37 universities across the Nation, we are
using their engineering students to go out and actually provide
these assessments.
We have also--supporting pilot centers, manufacturing
centers for battery manufacturing that we are building across
the Nation, as well.
The Federal consortium that I mentioned--which DOE is a
member--across the Department of Energy--MESC is the anchor
tenant--has a workforce task force for batteries, as well. So
we are working with folks like the Department of Labor,
Department of Commerce, Department of Defense, as well, to
stand up the manufacturing workforce.
We are--also have launched a----
Ms. Schakowsky. My time is actually expired, but go ahead.
Finish the sentence, if that is all right, Mr. Chairman.
Mr. Howell. Launched a private-sector partnership called
Li-Bridge that is also part of that. That includes about 300
different industry members that is focused on workforce
development, as well. So we are working hand in hand with
industry on this.
Ms. Schakowsky. Well, thank you for your work and for your
presentation.
And I yield back.
Mr. Griffith. I thank the gentlelady for yielding back. I
now recognize the gentleman from Kentucky, Mr. Guthrie, for his
5 minutes.
Mr. Guthrie. Thank you very much. Thank you for the
recognition. Thank you for being here.
You know, the concern isn't on our side of the aisle, at
least not for me, that American companies won't be innovative
and create the technology that is going to move us forward. My
concern is that corporate America is just investing for the
subsidies right now.
And if we didn't get the subsidy, if the people in Congress
didn't get the subsidies right, we are going to--our supply
chain is going to be completely--is going to be off kilter over
the next decade or so, because we have demanded by EPA that
two-thirds of all cars will be electric within 10 years. It
takes 5 to 7 years to create a new car. So that is where all
the investment is going.
So let's go a few years down the road. We can't do two-
thirds that--we can't do 10--that is 10 million cars. And so
what the issue is, is that we just completely dismiss--any time
we bring up any issues, they just get completely dismissed--way
out of it. You are subsidizing one side of it, not the other,
and quite honestly, putting in roadblocks for what is the most
important thing--is generating power.
We have had--we have blackouts in Kentucky and--we have
blackouts in Kentucky. TVA had a myriad of reasons, and one
said they didn't realize so many people were using heat pumps.
So now we have all these heat pumps that demand more
electricity, which is how it should be. However, you got to
build the electricity to support them.
And then, in the IRA or the Jobs Act--I can't remember
which one--subsidizes heat pumps. So we are going to have more
of those. We are also mandating electric cars. We are going to
have more of those. But it seems like the administration is
mandating all of that, but any effort to try to generate more
reliable, sustainable, and dispatchable electricity doesn't
seem to be moving forward.
Does that seem to be very incongruent, that we are going to
have more demand--batteries don't produce electricity,
batteries don't generate it, batteries store it. Does that not
seem incongruent to you, the policies of this administration of
demanding more electric but not wanting to produce it?
Mr. Howell. Thank you, Congressman, for your concern. I am
going to put my hat on as former Director of the Vehicle
Technologies Office, where we had a partnership with U.S.
industry, both the automotive sector, the fuel sector, and the
electric utility sector. They were all on board with
electrification, particularly from the electric utility
perspective. It provides----
Mr. Guthrie. Well, they want to sell it, they just won't be
able to generate it.
Mr. Howell. Well, they are--actually have plans, many of
them. We actually did a study on scale-up EVs--we called it EVs
at Scale--to look at the progress of the market entry of
electric vehicles and what needs to be done on the electric
side to make sure that the electric utility is capable of
supplying the load.
Mr. Guthrie. And so we can support 10 million cars a year
being produced in 9 years?
Mr. Howell. Yes, given time. There has been times in----
Mr. Guthrie. Or in 9 years. That is what the rule is.
Mr. Howell. Given time. Now, this report was before 2020,
so that was 10 years at the time. So given time----
Mr. Guthrie. Well, the rule just came.
Mr. Howell. Given--well, this was actually working on
scenarios with the utilities and in terms of EV penetration
scenarios and what the utility needs would be for those. So----
Mr. Guthrie. We have had a lot of them come to our office,
and they are concerned about the ability. I mean, it is not
just dismissible.
Mr. Howell. It is not.
Mr. Guthrie. And, you know, you can build--I think it is--
somebody told me 70, I have heard 90 plug-in hybrid--plug-in
hybrid electric vehicles for plug-in hybrid than you can for
one solid electric vehicle. And you also have--don't have a
problem with range if you have plug-in hybrids. You have lower
carbon. You don't have zero carbon, you have lower carbon.
And it just seems like we are incentivizing technology.
That is why we are not being innovative, because--and let me
tell you, when you sit a bunch of companies down and say,
``Here is a bunch of Federal subsidies if you want to do what
we ask you to do,'' they don't say no. They don't turn down
money. They don't turn down money.
Let me get to the other. But we also know a lot of the
technology is coming from the Communist Party. So a lot of
the--how do we ensure--what processes do you have in place to
make sure that the Chinese Communist Party does not benefit
from Jobs Act money or IRA money?
Mr. Howell. So we do have the new vetting process,
particularly that looks specifically at Chinese ownership of
companies. But also, we--part of that RTES program is to
provide what we call enhanced protections for IP. And so we
actually put that into all the awards, those enhanced
protections.
We also--in these awards we added the requirements to have
a cybersecurity plan for each----
Mr. Guthrie. I only have about 30 seconds, so let me just
get to this point. I am sorry. But in your testimony you say,
``should those oversight mechanisms uncover direct or--in
support of the Chinese Communist Party,'' so you say it is
possible. So you are saying in your testimony, should you
uncover it, you will take appropriate action. What is
appropriate action?
Mr. Howell. Well----
Mr. Guthrie. Is it zero, zero American dollars going to the
Chinese Communist Party-supported enterprises?
Mr. Howell. Yes.
Mr. Guthrie. Zero. And that is the case now?
Mr. Howell. For dollars going to the Chinese Communist
Party.
Mr. Guthrie. Well, every business in China is related to
the Chinese Comm--you can't separate the two. If you do, you
don't understand China.
Mr. Howell. But however, you can look at a U.S. company and
determine what the percentage of Chinese ownership is and what
the control----
Mr. Guthrie. So the answer is not zero Chinese ownership.
Mr. Howell. Chinese influence or control?
Mr. Guthrie. Any ownership in a--or any joint venture with
a Chinese-owned company that is not zero, there--can get
subsidies under these job acts?
Mr. Howell. If they are not--if they do not control the
entity. So that draws back into percentage of ownership.
Mr. Guthrie. So some percentage can go to the Chinese-owned
business----
Mr. Howell. Some percentage would go to a U.S. company that
may have a percentage of Chinese ownership.
Mr. Guthrie. OK, thank you for----
Mr. Howell. So it is going to a--I just want to emphasize
it would be going to a U.S. company. Some of the U.S. companies
are actually publicly traded.
Mr. Guthrie. And they are pairing with China.
Mr. Howell. Yes.
Mr. Griffith. The gentleman yields back.
Mr. Guthrie. So they can get the money. Yes, thank you.
Mr. Ruiz. Nuances, nuances.
Mr. Griffith. The gentleman yields back. I now recognize
Dr. Ruiz of California for his 5 minutes of questioning.
Mr. Ruiz. Thank you, Mr. Chairman.
In my district sits Lithium Valley, one of the largest
lithium sources in the world. You guys are going to hear a lot
about Lithium Valley. The United States Geological Survey
projects that the Salton Sea area alone could produce 600,000
metric tons of lithium annually, which is 6 times the current
global consumption rate. That has the potential to supply 40
percent of the global lithium demand.
Companies in Imperial Valley, in which the Lithium Valley
resides, will have the opportunity to extract lithium,
manufacture, and assemble batteries because of the Inflation
Reduction Act. The Inflation Reduction Act makes the single
largest investment ever in combating climate change while
bringing clean energy manufacturing jobs to local communities.
Since its enactment, companies have announced over $242 billion
in new clean energy capital investments.
Additionally, this law has already created over 3,300 jobs
and invested $5.45 billion in clean energy projects in
California alone. In fact, the IRA has given companies like
Statevolt in Imperial the opportunity to purchase land for a
gigafactory, which will be used for 54 gigawatt hours lithium
ion battery production. This will become one of the largest
gigafactories in North America and will produce enough
batteries to power 650,000 electric vehicles per year.
Additionally, companies like Berkshire Hathaway and General
Motors are investing in projects in Lithium Valley, and this is
just the start of a public-private relationship that both
Democrats and Republicans have been striving for.
Lithium Valley will become the hub for domestic battery
market manufacturing that will revitalize the region and our
country. And these investments will help communities that have
been left behind for generations, or at least that is the
intent. And we will fight to ensure that that happens, because
as we move toward a clean energy economy, it is important to
ensure that supply chain investments strengthen local
communities by creating good-paying jobs and taking steps to
minimize the environmental impacts of these industries.
So, Mr. Howell, how might DOE investments in clean energy
projects benefit local communities, especially those that have
been left behind in the past?
Mr. Howell. Thank you for your congressman and--thank you,
Congressman, for your question. And it is so important, and I
will start with Lithium Valley.
I had the privilege of taking a team, a Federal team, to
Lithium Valley in April. We had over 15 people from the
Department of Energy and the Department of Defense to actually
tour the area and to get firsthand not only knowledge of the
source there and the potential for that source, but also we
reached out into the community to talk to the community on how
the Department of Energy can actually help those communities
that have been left behind. So that is so important.
I look forward to working with you and the California
Energy Commission, who hosted us on this visit, in the future
to make sure that we are providing the support we need to tap
into that--that really, really important resource for us.
Lithium is a future energy----
Mr. Ruiz. All too frequently, communities of color and low-
income families shoulder the burden of pollution, environmental
hazards. Moving to cleaner energy sources will lower
emissions--which will lower emissions is a step in the right
direction, but we need to make sure that our investments
building up clean energy and critical mineral supply chains
that--are not inflicting new harms on communities already
impacted by past pollutions, especially in terms of battery and
the recycling of batteries.
So as we work to stand up these new industries nationwide,
what steps is MESC taking to ensure federally funded projects
minimize negative environmental and health impacts?
Mr. Howell. So part of our selection criteria is a
reduction in those--part of the impact evaluation is how much
reduction in negative impacts could that particular project
actually achieve, whether that is greenhouse gas emissions,
criteria emissions, water use, energy use.
We also have part of a sort of a unique activity within
these awards to actually reach out to the communities--we call
it the Community Benefits Plan--to discuss how these awards can
actually increase jobs in the area, training, and address
community concerns and issues that that specific community may
have with that award.
Mr. Ruiz. OK, so I look forward to meeting with you
separate from this hearing to discuss the opportunities----
Mr. Howell. Yes, sir.
Mr. Ruiz [continuing]. Specifically for the economic and
well-being of the local residents with this incredible
opportunity not just for our country, the State, but also
specifically for those communities that for too long have been
the most underresourced, the most underserved in the State of
California.
Mr. Howell. I look forward to it.
Mr. Ruiz. Thank you.
Mr. Griffith. The gentleman yields back. I now recognize
the gentleman from South Carolina, Mr. Duncan, for his 5
minutes of questioning.
Mr. Duncan. Thank you, Mr. Chairman. I am not going to hold
my breath until California allows lithium mining to happen in
that State and the EPA allows it with their threat on mining
across the country. And without baseload generation, you are
not going to have the energy produced to make all the EVs work.
So we need baseload generation. And then you also need copper
mining for the motors. You have to wind copper around and make
the motors that go in the EV.
So, you know, why is there a threat on--an assault on
mining in this country? It is just baffling that we are talking
about mining here.
Mr. Howell, will you commit to answering the questions
raised in our December 14 letter regarding DOE's grant awarded
to Microvast?
Mr. Howell. Would you ask that question again, sir?
Mr. Duncan. Will you commit to answering the questions that
we raised in this December 14 letter to you--or to Secretary
Granholm----
Mr. Howell. So----
Mr. Duncan [continuing]. About Microvast?
Mr. Howell. Thank you. I will take that back to the
Department of Energy. That is actually handled by another
office. I am actually not----
Mr. Duncan. So you are just committing to taking that
question that I just asked you back. You are not committing to
answering the question.
Mr. Howell. The Department of Energy is in the process of
answering those questions.
Mr. Duncan. Since December 14? Wow, they--you know, that is
over 6 months.
You know, the rush to green has resulted in new efficiency
standards with marginal efficacy and that would increase our
reliance on foreign manufacturers. We heard from others already
about critical components, from distribution transformers to
capacitors for HVDC transmission lines. New efficiency
standards have required different manufacturing processes we
have in limited supply domestically. I guess the Lithium Valley
will solve all that.
Unfortunately, instead of utilizing the few manufacturers
we have here at home, we see contracts go abroad. I heard the
ranking member of the full committee talk about Republicans.
Republicans wanted to onshore industry. We were called fascists
and nationalists, wanting to make America great again, wanting
to bring manufacturing back to this country to provide jobs and
the critical components that we need to make it all work.
So does MESC provide any advice or coordination with other
Department programs such as the Office of Energy Efficiency and
Renewable Energy to advise on how proposed efficiency standards
will impact domestic supply chains?
Mr. Howell. We do have partnerships with--across the
Department of Energy. In terms of actually advising, it would
be in the manufacturing capacity of our expertise rather than
the efficiency capacity expertise. So in terms of manufacturing
of transformers and high voltage DC components and things of
that nature, that is where our expertise would lie.
Mr. Duncan. Shouldn't those be made here in the United
States?
Mr. Howell. Absolutely.
Mr. Duncan. Right now we are relying on Italy and Germany.
Mr. Howell. We have----
Mr. Duncan. For the first phase of transmission line
infrastructure build-out, it is a European company that is
sourcing capacitors from Siemens and a company in Italy.
Shouldn't those be made here? These are critical, right?
Mr. Howell. Yes, sir.
Mr. Duncan. Sixty thousand needed for the infrastructure.
Mr. Howell. And we ask your support to help MESC to
actually develop programs----
Mr. Duncan. There is a company in South Carolina that
actually can make the capacitors, but yet they are competing
with a European company because the company that got awarded
the contract is from Europe. What if Europe decides they are
going to build out their infrastructure and, hey, they need all
the capacitors? Then we don't have a supply chain here, 60,000
that are needed.
Mr. Howell. I am not aware of the specific award you are
talking about.
Mr. Duncan. Well, it--in your testimony you mentioned the
Department is standing up a $65 million program, battery and
critical material recycling retailers as collection points and
State and local programs. Who do you think should be
responsible for the disposal of EV batteries at the end of
their life?
Mr. Howell. Well, it could cut across the owner of the
vehicle and the actual----
Mr. Duncan. So we are putting the burden on the owner to
know where to dispose these, or to dispose them themselves?
Mr. Howell. Typically, vehicles are already disposed of,
salvaged. And so we would see that--we would be working with
those salvage dealers and companies and associations to
actually collect the vehicles, like they do today, and safely
transport key components like the battery to a recycling
center.
Mr. Duncan. See, I see the mechanics having to dispose of
them, not knowing where to put them and taking them to their
local landfill.
Mr. Howell. They are actually--well, they would not be
compatible with the local landfill. And--however, they are
actually valuable and worth money. So I don't think--I would
hope that a----
Mr. Duncan. Well, that is assuming you have recyclers out
there that will actually pay somebody for them.
Should the taxpayer bear the cost of recycling the EV
batteries?
Mr. Howell. EV batteries right now are actually profitable
to recycle because of the cobalt and the nickel and the
lithium.
Mr. Duncan. I know of one company that is doing it.
Mr. Howell. There are several companies, actually, doing
it.
Mr. Duncan. All right. I would love to know who they are.
Mr. Howell. OK.
Mr. Duncan. Has MESC consulted States and localities or
received any feedback about the potential role in the recycling
process?
Mr. Howell. Oh, we have, and we have worked with the
Environmental Protection Agency, as well, and their consumer
electronics programs. So we are working with EPA, we are
working with the NHTSA, and the Pipeline Hazardous Materials
Agency to make sure that we put in process the capability to
safely collect batteries, to store them, and to transport them
to a recycling center.
Mr. Duncan. Lord, I hope so, because, you know, these are
highly toxic. And I know of a case--I am glad the Environment
Committee is having a brownfield hearing this week, because I
know of one instance where a transformer was thrown into a
landfill in New Jersey, and the company that manufactured it on
behalf of the DoD--because they were required to during World
War II--ended up having to pay millions of dollars in fines.
They didn't throw it in the landfill, they were just the
manufacturer. Somebody did.
If the consumer throws a lithium battery in a landfill, who
is responsible for the cleanup?
Mr. Chairman, I yield back.
Mr. Griffith. I thank the gentleman for yielding. And in
regards to my neck of the woods, if there isn't a positive
value, it is going into the next holler over.
With that, I yield to the gentlelady from Colorado, Ms.
DeGette, for her 5 minutes.
Ms. DeGette. Thank you so much, Mr. Chairman. So we all
agree on this committee in a bipartisan way that lithium and
cobalt are going to be essential for the clean energy
transition.
And as we heard from Mr. Ruiz, we--you know, we do have
reserves of some of these minerals, and--but many of the
largest deposits of these minerals are in other countries. And
that is not our fault. That is Mother Nature and just the
nature of geography. So we can't control where the minerals
naturally occur.
But what we can do is we can do something about where we
are refining the minerals. So that is what I wanted to ask you
about, Mr. Howell, because this is one thing China has invested
very heavily in, critical mineral refining. They capture about
90 percent of the rare earth element processing and 70 percent
of the lithium and cobalt processing. And I know the Department
knows this, because last Congress the Democrats invested more
than $6 billion to build domestic critical mineral processing
and recycling through programs administered by the Office of
Manufacturing and Energy Supply Chains.
So here is my question. I have got a couple of questions.
Number one, will these investments help us compete with China
on critical mineral processing and build up domestic processing
capability irrespective of where the deposits are?
Mr. Howell. Thank you, Congresswoman. And to answer your
question point blank, it is yes, that is exactly what our
mission is. That is exactly what we are trying to actually
execute. We have come a long way, even with these first awards
with lithium and nickel, and--but we have a long way to go.
Ms. DeGette. OK. So my other question is, you--now Congress
has allocated $6 billion for this. Is that going to help speed
up the timeframe to be able to process this? Because that is
what we need to do, and pronto.
Mr. Howell. It will help speed up, for example, the
selections for award. We selected 2.8 billion of the 6 billion
for negotiation of award. The private sector actually invested
an additional $6 billion in those awards. So that was a $9
billion effort to stand up refining capability.
Ms. DeGette. And how fast are we going to start--be able to
start standing it up, would you estimate?
Mr. Howell. So we are--we have made three awards already.
Ms. DeGette. OK. How long is it going to take them to start
doing it?
Mr. Howell. Typically, these factories take around 36 to 42
months to----
Ms. DeGette. OK. So maybe 3, 3\1/2\, 4 years. And how much
was that expedited by the investment that we made?
Mr. Howell. By 3 or 4 years----
Ms. DeGette. OK. So maybe it was cut in half, the amount of
time it would take.
Mr. Howell. Yes.
Ms. DeGette. That is excellent. Why would you say it is
important to invest in both critical mineral processing and
recycling, particularly in the battery supply chain?
Mr. Howell. The minerals and materials and the refined
materials that are contained in the batteries represent about
50 to 60 percent of the value. And when you are talking about--
of an electric vehicle battery. And you are talking about a
potential market of 100 to 200 billion dollars. We can't just
walk away from half of that because we do not install the
refining capability and the precursor capability.
Ms. DeGette. You are exactly right. It seems like a good
investment for us.
So we keep hearing from our friends on the other side of
the aisle about DOE's ability to oversee Federal investments.
Now, the job of the Oversight and Investigations Subcommittee
is to make sure that we are--that these investments are being
overseen. So you have been at DOE for at least a couple of
decades, so I want you to talk about this for the record.
Does DOE take seriously its obligation to responsibly use
taxpayer money?
And what kinds of protocols does DOE have in place to make
sure that you are doing that?
Mr. Howell. Absolutely. The Department of Energy takes
extreme serious the--our role of overseeing the execution of
taxpayer dollars. And we do work with the--with offices
throughout the agency to ensure that we have the right
oversight on these projects, including the Office of Inspector
General, our procurement offices, our acquisition offices, and,
of course, our technology--our technical program managers, as
well.
Typically, once we have an award in place, we have a
working team that will actually monitor and shepherd that
program through its life cycle, all the way through the end of
the award to even the disposition of equipment. And we use many
different processes to monitor the award.
The first thing is to definitize the actual project, to
make sure that we have the right milestones, budget periods,
and tasks in place as we launch.
Ms. DeGette. OK, I am out of time. If there is more you
want to say, you can supplement.
Thank you, and I yield back, Mr. Chairman.
Mr. Griffith. I thank the gentlelady, she yields back. I
now recognize the gentleman from Alabama, Mr. Palmer, for his 5
minutes of questioning.
Mr. Palmer. Thank you, Mr. Chairman.
What components for an ion lithium--lithium ion batteries
are made in the United States?
Mr. Howell. What components?
Mr. Palmer. Yes, what components of your--say an EV
battery.
Mr. Howell. So almost----
Mr. Palmer. Not assembled, made.
Mr. Howell. In almost--OK. So the battery--let's start with
the battery cell technology, the battery cell production.
In 2020 the United States had 60 gigawatt hours of capacity
installed.
Mr. Palmer. No, no. Let's simplify this----
Mr. Howell. OK.
Mr. Palmer [continuing]. Because there are people watching
this, and we need to simplify it. You have technical expertise,
I worked in engineering, so I don't want to get down in those
weeds.
Let's say 90-something percent of all of the battery is
manufactured in China, the component parts. So when you are
talking about battery production in the United States, what you
are really talking about is assembly of the components
manufactured in China.
Mr. Howell. Not totally.
Mr. Palmer. Well, I didn't say totally. I said 90-something
percent.
Mr. Howell. In some areas it is 90 percent. In some areas
it is less than that.
Mr. Palmer. OK.
Mr. Howell. Right.
Mr. Palmer. But the vast majority of batteries that are
being assembled in the United States, the component parts are
manufactured in China.
And back to--I think my colleagues across the aisle have
raised some interesting points about the minerals that are
required. Obviously, we have huge reserves of lithium, but we
just took off, made off limits the largest cobalt reserve in
the entire country in Minnesota. It is also a major reserve of
nickel. You have to have cobalt, you have to have nickel. And
78 percent of the cobalt is sourced in China that you have to
have for this, 100 percent of the graphite. And we have got
graphite reserves here in the United States.
And with all due respect to my friend from California,
there's substantial lithium reserves in Arkansas.
But the problem is to utilize those reserves, we have to
mine them, we have to refine them, and we have to manufacture
the--whatever the component parts are that we need from those
minerals. And we are not doing that. We are dependent on China.
Do you disagree with that?
Mr. Howell. So we are dependent on China today on many of
the aspects of materials and refined materials.
Mr. Palmer. It will be 25 years minimum before we can catch
up with China. That is how far ahead of us they are in battery
production.
Mr. Howell. OK, I am going to say that is debatable.
Mr. Palmer. Well, it is debatable only because you--it
doesn't fit your narrative.
Mr. Howell. No, that is not true. For instance, these
awards that we just awarded, we awarded enough capacity----
Mr. Palmer. Let me suggest to you that if you had all of
the components, everything you needed in minerals right now,
you might be correct. But you can't even get a mine permitted
in the next decade under the--under current conditions. So I
just think people need to understand how far behind we are and
how dependent we are on China.
There is another issue that I want to raise in the time I
have left, and it has to do with battery technology that was
described as breakthrough technology. There are about a dozen
scientists in the State of Washington--it is a vanadium redox
flow battery. And I don't know what you know about this, but
this was--this would have been a battery about the size of a
refrigerator. It would have, I think, powered a whole
household. It could have been recharged with a solar panel. I
mean, this was truly breakthrough stuff, and in 2021 the
Department of Energy gave the license to China.
I think NPR was trying to do an investigative report on
this. The DOE has not been forthcoming with information. What
do you have to say about that? What do you know about that?
Mr. Howell. So I am familiar with the vanadium redox flow
battery. It is for stationary applications, for grid
applications. There was some IP developed at the Department of
Energy's Pacific Northwest National Laboratory that eventually
was licensed to a Chinese company.
Mr. Palmer. But that is money--that work was funded with
U.S. taxpayer dollars.
Mr. Howell. Yes, it was.
Mr. Palmer. And you gave the license to China.
Mr. Chairman, I think this is something we need to look
into a little bit further. So with that, I yield back.
Mr. Griffith. I thank the gentleman. I appreciate the
gentleman yielding back. I now recognize the ranking member of
the full committee, Mr. Pallone, for 5 minutes of questioning.
Mr. Pallone. Thank you, Mr. Chairman.
You know, I said in my opening--and I--you know, just based
on what I heard--and I am not trying to be, you know,
disrespectful, but it just seems like, you know, on the
Republican side there is this notion that we are so far behind
China it is almost like there is nothing we can do to catch up,
and maybe there is no use even trying. I don't want to put
words in my colleagues' mouths, but, you know, I am just
worried that these--you are getting these mixed partisan
signals.
You know, on the one hand Democrats are saying let's make
investments, let's try to do things that will make a difference
here in terms of competition with China and then, you know,
colleagues on the other side suggesting maybe it is hopeless. I
mean, doesn't that--doesn't--don't these mixed signals, you
know, about long-term funding for these DOE programs have a
negative impact on companies' willingness to make investments
in the United States?
If you could just briefly answer that, and then I will get
to my second--the real questions I have.
Mr. Howell. I will say that long-term, disciplined
investment strategy for the United States, both on the Federal
level and the private sector, is going to be very important
going forward. And mixed signals can cause confusion in the
industry and also can cause a lot of start/stops with the
Federal programs.
Mr. Pallone. All right. Now, before our last hearing on
this topic, Republicans spent months questioning a potential
DOE award to Microvast. It was mentioned again today. And then,
when press reports indicated that DOE would not move forward
with an award to Microvast after conducting due diligence,
Republicans still looked to undermine DOE. So I just think you
are in--essentially, in a no-win situation here with what the
Republicans are doing to you today and elsewhere. And
ultimately, it is going to undermine any actions or investments
that you make.
So I just wanted to give you an opportunity to walk through
the process of selecting companies for negotiation and your due
diligence process.
Let me ask two questions. From the time that a company
applies for an award for one of the programs in your office,
what due diligence does DOE conduct, and what other agencies do
you partner with in that process?
Mr. Howell. So from the time that the selection is made for
negotiation--so even before that time, we have worked with
other agencies to evaluate these applications and selected the
most compelling applications, whether it is technical merit,
whether it is market potential, investment and resources that
the company has proposed.
Once those selections are made, we deep dive into the
negotiation process to really definitize those awards. So we do
work--in this case, it is--typically falls on our procurement
and acquisition team, our technical leaders at the Department
of Energy to move through that process. We do use other teams
like the general counsel, like the counterintelligence, like
the CFIUS team to look at any sensitivities for that particular
company or company team, and then develop potential--whether
those sensitivities warrant us walking away from that award or
are providing mitigation strategies to overcome barriers or
gaps or concerns that we might have.
Mr. Pallone. So what kinds of concerns would keep DOE from
actually providing a company an award?
Mr. Howell. Well----
Mr. Pallone. Maybe you have answered that, but if you----
Mr. Howell. Well, sure. So ownership by a Federal entity of
concern, as defined in the regulations and in the
appropriation, the control that a Federal entity of concern
could actually exhibit over a U.S. company. That control could
be shares in the company, it could be the parent company
ownership as well, and it could also be, as I mentioned, voting
members on the board. It could be key personnel being part of a
talent program, it could be an IP position.
Mr. Pallone. OK. All that. Well, look, let me just thank
you, Mr. Howell, thank you for the work that DOE has taken on
in making these programs a success and ensuring that taxpayer
dollars are well spent.
So I just hope, again, that Republicans will join us in
helping DOE succeed, because I do think this is important. I
don't think it is too late. And I think we have to do whatever
we can to move, you know, our country forward and be
competitive with China. Thank you.
Thank you, Mr. Chairman.
Mr. Griffith. The gentleman yields back. I now recognize
the gentleman from New York, Mr. Tonko, for 5 minutes of
questioning.
Mr. Tonko. Thank you, Mr. Chair, and thank you to our
ranking member for cohosting this hearing. And thank you to our
witness, Deputy Director Howell. Thank you for sharing your
very informed voice and experience, and grounding us in facts.
I appreciate that.
Our clean energy transition needs to move quickly to
prevent the worst consequences of climate change. We also must
move quickly to experience the economic benefits of being the
global leader in this transition. The U.S. has already missed
out on some earlier opportunities to invest in clean energy,
while other countries like China invested aggressively to give
their industries a lead. But now we have that opportunity to
reverse that trend. Major investments made by legislation like
the Inflation Reduction Act and the Bipartisan Infrastructure
Law are helping bring manufacturing jobs back to the U.S. and
build those supply chains.
My Republican colleagues often call for ending our reliance
on global supply chains, in part to protect human rights, but
they have opposed these major legislative efforts that would
help us build ethical and resilient supply chains right here in
the U.S.
So Deputy Director Howell, the MESC is overseeing billions
of dollars in investments to build domestic clean energy supply
chains and manufacturing. I hope your testimony helps everyone
better understand how effectively these investments will
advance American interests, including by protecting human
rights.
So how will the investments made through the Inflation
Reduction Act and the Bipartisan Infrastructure Law make clean
energy supply chains that much more transparent?
Mr. Howell. Thank you for your question, Congressman, and
just--you know, I do want to emphasize that the MESC commission
cuts across many different parts of the energy sector
industrial base.
We have talked a lot about the battery and electric vehicle
space today, but there's things like the grid, you know,
particularly on transformers, high-voltage DC circuits, solar,
hydrogen fuel cells, platinum group metals, things of that
nature that's very important. And we have programs in place or
are being executed that would actually fill key gaps within the
manufacturing supply chain in the United States across those
sectors, plus more.
I will want to emphasize, too, we have a lot of focus on
small and medium-sized enterprises, manufacturing enterprises
across the Nation. When we really think about small and medium-
sized enterprises, you are really talking about 99 percent of
the jobs in the United--manufacturing jobs in the United
States. So it is so important for us to support our
entrepreneurs in the small and medium enterprise--manufacturing
enterprises, as well.
So, you know, our support cuts across the energy sector
industrial base. We are continuing to do the modeling, mapping,
and analysis necessary to understand where we should focus our,
you know, our resources.
And I am thankful for the billions of dollars we have, but
we need to also understand that this is a long-term play, and
we need a consistent effort for decades to make sure that we
seize this moment and capture as much of the clean energy
manufacturing base as we possibly can as a nation.
Mr. Tonko. Right, that is a very good point.
And last year DOE published a clean energy supply chain
strategy with pillars aimed at improving supply chains,
including enhancing traceability and other steps to better
protect human rights. So how is MESC implementing this strategy
and working with interagency partners to ensure awardees are
upholding labor and environmental standards and protecting
human rights?
Mr. Howell. So, you know, part of--particularly in the
battery manufacturing grant program, which actually has support
in the minerals and refined materials area, and particularly
separating key minerals from extracted feedstocks, part of our
evaluation process is to understand where those extracted
feedstocks come from, and that they are environmentally
sustainable, that they--wherever those feedstocks come from,
that it is--you know, those feedstocks are procured by, you
know, groups that value human rights in the extraction process.
So that is part of our evaluation.
We also have a Federal consortium for advanced batteries
that is--that has a working group on battery materials and
minerals that is also looking at environmentally sustainable
governance of extracted feedstocks.
And we are launching--the President has launched the
Advanced Battery Materials Initiative, which has a focus for
accelerating permitting in an environmentally sustainable and
safe way.
Mr. Tonko. Well, thank you.
With that, I believe I yield back. I have other questions.
I will submit those to the subcommittee.
And with that, I yield back. Thank you.
Mr. Griffith. I thank the gentleman for yielding back.
Seeing no further Members wishing to ask questions, I would
like to thank our witness for being here today.
I would also hope to get your commitment that you will
answer the questions that we had about the vetting process,
since they said, ``We will let you know after the vetting
process is over.'' That appears to be over for at least those
first--that first tranche. And if you could get us that
information, I would appreciate it.
Also, you are probably going to get a written question
about how do we get the lithium out of the water, because both
Ms. Castor and myself--the ranking member--have areas in our
region that are known as the Lithia Springs. And if it is that
valuable, how do we get it out of the water? Because unlike the
Salton Sea, ours is not evaporating and staying, ours is going
downstream if we don't catch it.
Anyway, that being said, and pursuant to committee rules, I
remind Members that they have 10 business days to submit
additional questions for the record, and I ask that witnesses
submit their response within 10 business days upon receipt of
the questions.
Did you have something, since I made a comment? Did you
have another comment?
Ms. Castor. I do not, thank you.
Mr. Griffith. OK. And without objection, the subcommittee
is adjourned.
[Whereupon, at 3:57 p.m., the subcommittee was adjourned.]
[all]