[Congressional Record Volume 145, Number 138 (Wednesday, October 13, 1999)]
[Extensions of Remarks]
[Pages E2088-E2089]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




INTRODUCTION OF LEGISLATION TO EXPAND THE ACREAGE LIMITATION FOR SODIUM 
                                 LEASES

                                 ______
                                 

                           HON. BARBARA CUBIN

                               of wyoming

                    in the house of representatives

                      Wednesday, October 13, 1999

  Mrs. CUBIN. Mr. Speaker, today I am introducing legislation to amend 
the Mineral Leasing Act (MLA) to grant the Secretary of the Interior 
the discretion to increase the number of federal leases which may be 
held by any one producer in a single State. The present acreage 
limitation for sodium leases of 15,360 acres has been in place for five 
decades--longer than any other existing law. In fact, sodium is the 
only mineral subject to the MLA which has not had an increase in 
acreage since the law was amended in 1948. My bill would increase that 
limitation to 30,720 acres per producer. Frankly, the current limit is 
just out of step with the competitive and technological advances of 
this industry and must be changed as we move into the next century.
  The MLA set forth acreage limits to ensure that no single entity held 
too much of any single mineral reserve. This remains an important 
objective. A lease limitation ensures that there is sufficient 
competition, while providing an incentive for development of these 
reserves and ensuring a reasonable rate of return to the Federal and 
State Treasuries. My bill is consistent with these objectives and seeks 
only to grant the Secretary of the Interior the discretionary authority 
to adjust the present lease limitation to current economic and 
international conditions.
  Mr. Speaker, I offer this bill after carefully reviewing current 
conditions of the trona industry in my State. In the course of that 
review, I have been reminded that U.S. soda ash producers, four of 
which are in Wyoming, are extremely competitive with one another for a 
share of the relatively flat domestic market. They are also faced with 
strong international competition.
  With that in mind, I believe this legislation is critical to the 
domestic industry to sustain its global competitiveness. Wyoming is the 
Saudi Arabia of the world in terms of trona deposits, generating some 
12 million tons of soda ash per year and $400 million to our balance of 
trade. But I have also learned that we cannot take this industry for 
granted. Like so many industries basic to our economy such as steel, 
paper, aluminum, copper and coal, the soda ash producers must take 
measures to stay competitive. Many countries, including China and 
India, with vast supplies of trona, have erected tariff and non-tariff 
barriers to support their own less efficient producers, making it 
difficult to export U.S. soda ash.
  For this reason, U.S. producers have formed the American Natural Soda 
Ash Corporation (ANSAC), a Webb-Pomarene trading association, in 
recognition of the fact that growth of the U.S. soda ash industry is 
directly tied to its ability to effectively export. ANSAC is the sole 
authorized exporter of soda ash and is wholly owned by the six U.S. 
sodium producers. It accounts for the employment of some 20,000 people 
in the U.S. and exports to 45 different countries.
  This is but one example of how our domestic industry has taken the 
steps necessary to compete effectively abroad. In addition, the 
producers in my state are making major investments in modernizing their 
facilities and sustaining the level of capital investment necessary to 
continue to be competitive both at home and abroad. The start up cost 
for a new soda ash operation is estimated to be at least $350 million 
dollars and to develop a world class mine, $150 million. Putting this 
in perspective, our Wyoming soda ash producers invest on average twice 
as much as their counterparts in the Powder River coal basin. This is 
largely due to the fact that soda ash is mined underground and thus 
requires a sophisticated processing plan to turn raw ore into finished 
products. That is simply the reality of what is required to stay 
competitive.
  But more importantly, at these costs, a new entrant, as well as 
existing producers, must have a predictable mine plan. A primary 
component of such a plan is a predictable level of reserves that will 
last several decades. My bill would help provide this predictability by 
giving the Secretary of the Interior the discretion to raise lease 
limits on a case-by-case basis if the producer can show it is in need 
of additional reserves to maintain its operations.
  In short, what discourages new entrants into this process is not 
available acreage, but the realities of capital investment required to 
sustain a competitive soda ash operation. Because domestic consumption 
is only anticipated to grow at about one percent over the next ten 
years, a new producer must have the wherewithal to build an operation 
which can effectively compete in international markets, where a 60 
percent growth rate is expected over the next decade. Soda ash prices 
have

[[Page E2089]]

been declining about 1 percent a year since 1991. Any company coming 
into this industry has to recognize that their investment will take a 
while to realize returns.
  In summary, the bill I am introducing today is necessary for a number 
of reasons. It is consistent with good mining and environmental 
practices and it is good public policy. I commend it to my colleagues 
for their support.

                          ____________________