[Congressional Record Volume 160, Number 115 (Tuesday, July 22, 2014)]
[House]
[Pages H6592-H6597]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1530
SECURING ENERGY CRITICAL ELEMENTS AND AMERICAN JOBS ACT OF 2014
Mr. SMITH of Texas. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 1022) to develop an energy critical elements program, to
amend the National Materials and Minerals Policy, Research and
Development Act of 1980, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
[[Page H6593]]
H.R. 1022
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Securing Energy Critical
Elements and American Jobs Act of 2014''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate Congressional committees'' means the Committee
on Science, Space, and Technology of the House of
Representatives and the Committee on Commerce, Science, and
Transportation and the Committee on Energy and Natural
Resources of the Senate.
(2) Center.--The term ``Center'' means the Critical
Materials Information Center established under section
102(b).
(3) Department.--The term ``Department'' means the
Department of Energy.
(4) Energy critical element.--The term ``energy critical
element'' means any of a class of chemical elements that have
a high risk of a supply disruption and are critical to one or
more new, energy-related technologies such that a shortage of
such element would significantly inhibit large-scale
deployment of technologies that produce, transmit, store, or
conserve energy.
(5) Hub.--The term ``Hub'' means the Critical Materials
Energy Innovation Hub authorized in section 102(a).
(6) Institution of higher education.--The term
``institution of higher education'' has the meaning given
such term in section 101(a) of the Higher Education Act of
1965 (20 U.S.C. 1001(a)).
(7) Program.--The term ``program'' means the program
authorized in section 101(a).
(8) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
TITLE I--ENERGY CRITICAL ELEMENTS
SEC. 101. ENERGY CRITICAL ELEMENTS PROGRAM.
(a) Authorization of Program.--
(1) In general.--There is authorized in the Department a
program of research, development, demonstration, and
commercial application to assure the long-term, secure, and
sustainable supply of energy critical elements sufficient to
satisfy the national security, economic well-being, and
industrial production needs of the United States. This
program may be carried out primarily by the Critical
Materials Energy Innovation Hub authorized in section 102(a).
(2) Program activities.--The program shall focus on areas
that the private sector by itself is not likely to undertake
because of technical and financial uncertainty and support
activities to--
(A) improve methods for the extraction, processing, use,
recovery, and recycling of energy critical elements;
(B) improve the understanding of the performance,
processing, and adaptability in engineering designs using
energy critical elements;
(C) identify and test alternative materials that can be
substituted for energy critical elements and maintain or
exceed current performance; and
(D) engineer and test applications that--
(i) use recycled energy critical elements;
(ii) use alternative materials; or
(iii) seek to minimize energy critical element content.
(3) Expanding participation.--In carrying out the program,
the Secretary shall encourage multidisciplinary
collaborations of participants, including opportunities for
students at institutions of higher education.
(4) Consistency.--The program shall be consistent with the
policies and programs in the National Materials and Minerals
Policy, Research and Development Act of 1980 (30 U.S.C. 1601
et seq.).
(5) International collaboration.--In carrying out the
program, the Secretary shall collaborate, to the extent
practicable, on activities of mutual interest with the
relevant agencies of foreign countries with interests
relating to energy critical elements.
(b) Plan.--
(1) In general.--Within 180 days after the date of
enactment of this Act and biennially thereafter, the
Secretary shall prepare and submit to the appropriate
Congressional committees a plan to carry out the program.
(2) Specific requirements.--The plan required under
paragraph (1) shall include a description of--
(A) the research and development activities to be carried
out by the program during the subsequent 2 years;
(B) the expected contributions of the program to the
creation of innovative methods and technologies for the
efficient and sustainable provision of energy critical
elements to the domestic economy; and
(C) how the program is promoting the broadest possible
participation by academic, industrial, and other
contributors.
(3) Consultation.--In preparing each plan under paragraph
(1), the Secretary shall consult with appropriate
representatives of industry, institutions of higher
education, Department of Energy national laboratories,
professional and technical societies, other Federal agencies,
and other entities, as determined by the Secretary.
(c) Coordination and Nonduplication.--To the maximum extent
practicable, the Secretary shall ensure that the activities
carried out under this title are coordinated with, and do not
unnecessarily duplicate the efforts of, other programs within
the Federal Government.
(d) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Secretary to carry out this Act the following sums:
(A) For fiscal year 2015, $25,000,000.
(B) For fiscal year 2016, $25,000,000.
(C) For fiscal year 2017, $25,000,000.
(D) For fiscal year 2018, $25,000,000.
(E) For fiscal year 2019, $25,000,000.
(2) Availability. Such sums shall remain available until
expended.
SEC. 102. CRITICAL MATERIALS ENERGY INNOVATION HUB.
(a) Critical Materials Energy Innovation Hub.--To carry out
the program, the Secretary is authorized to maintain a
Critical Materials Energy Innovation Hub.
(b) Critical Materials Information Center.--
(1) In general.--To collect, catalogue, disseminate, and
archive information on energy critical elements, the Hub
shall establish and maintain a Critical Materials Information
Center.
(2) Center activities.--
(A) In general. The Center shall--
(i) serve as the repository for scientific and technical
data generated by the research and development activities
funded under this section;
(ii) assist scientists and engineers in making the fullest
possible use of the Center's data holdings;
(iii) seek and incorporate other information on energy
critical elements to enhance the Center's utility for program
participants and other users;
(iv) provide advice to the Secretary concerning the
program; and
(v) host conferences, at least annually, for participants
in the program and other interested parties to promote
information sharing and encourage new collaborative
activities.
(B) Restriction.--Not more than 2.5 percent of the amounts
made available pursuant to this section may be used for
hosting conferences under subparagraph (A)(v).
(c) Review and Report to Congress.--An award made to
operate the Hub shall be for a period not to exceed 5 years,
after which the award may be renewed, subject to a rigorous
merit review. A Hub already in existence on the date of
enactment of this Act may continue to receive support for a
period of 5 years beginning on the date of establishment of
that Hub. Following this process, if the Secretary determines
that award renewal for the Hub is justified, then the
Secretary must submit a report to the appropriate
Congressional committees at least 30 days prior to the award
renewal which explains the Secretary's determination and
describes the Department's review process.
(d) Prohibition on Construction.--No funds provided
pursuant to this section may be used for construction of new
buildings or facilities for the Hub. Construction of new
buildings or facilities shall not be considered as part of
the non-Federal share of a Hub costsharing agreement.
SEC. 103. SUPPLY OF ENERGY CRITICAL ELEMENTS.
The President, acting through the Critical Material Supply
Chain Subcommittee of the Committee on Environment, Natural
Resources, and Sustainability of the National Science and
Technology Council, shall--
(1) coordinate the actions of applicable Federal agencies
to promote an adequate and stable supply of energy critical
elements necessary to maintain national security, economic
well-being, and industrial production with appropriate
attention to a long-term balance between resource production,
energy use, a healthy environment, natural resources
conservation, and social needs;
(2) identify energy critical elements and establish early
warning systems for supply problems of energy critical
elements;
(3) establish a mechanism for the coordination and
evaluation of Federal programs with energy critical element
needs, including Federal programs involving research and
development, in a manner that complements related efforts
carried out by the private sector and other domestic and
international agencies and organizations;
(4) promote and encourage private enterprise in the
development of an economically sound and stable domestic
energy critical elements supply chain;
(5) promote and encourage the recycling of energy critical
elements, taking into account the logistics, economic
viability, environmental sustainability, and research and
development needs for completing the recycling process;
(6) assess the need for and make recommendations concerning
the availability and adequacy of the supply of technically
trained personnel necessary for energy critical elements
research, development, extraction, and industrial production,
with a particular focus on the problem of attracting and
maintaining high quality professionals for maintaining an
adequate supply of energy critical elements; and
(7) report to the appropriate Congressional committees on
activities and findings under this section.
TITLE II--NATIONAL MATERIALS AND MINERALS POLICY, RESEARCH, AND
DEVELOPMENT
SEC. 201. AMENDMENTS TO NATIONAL MATERIALS AND MINERALS
POLICY, RESEARCH AND DEVELOPMENT ACT OF 1980.
(a) Program Plan.--Section 5 of the National Materials and
Minerals Policy, Research and Development Act of 1980 (30
U.S.C. 1604) is amended--
[[Page H6594]]
(1) by striking ``date of enactment of this Act'' each
place it appears and inserting ``date of enactment of the
Securing Energy Critical Elements and American Jobs Act of
2014'';
(2) in subsection (b)(1), by striking ``Federal
Coordinating Council for Science, Engineering, and
Technology'' and inserting ``National Science and Technology
Council'';
(3) in subsection (c)--
(A) by striking ``the Federal Emergency'' and all that
follows through ``Agency, and'';
(B) by striking ``appropriate shall'' and inserting
``appropriate, shall'';
(C) by striking paragraph (1);
(D) in paragraph (2), by striking ``in the case'' and all
that follows through ``subsection,'';
(E) by redesignating paragraph (2) as paragraph (1);
(F) by redesignating paragraph (3) as paragraph (2); and
(G) by amending paragraph (2), as redesignated, to read as
follows:
``(2) assess the adequacy and stability of the supply of
materials necessary to maintain national security, economic
well-being, and industrial production.'';
(4) by striking subsection (d); and
(5) by redesignating subsections (e) and (f) as subsections
(d) and (e), respectively.
(b) Policy.--Section 3 of such Act (30 U.S.C. 1602) is
amended--
(1) by striking ``The Congress declares that it'' and
inserting ``It''; and
(2) by striking ``The Congress further declares that
implementation'' and inserting ``Implementation''.
(c) Implementation.--The matter before paragraph (1) of
section 4 of such Act (30 U.S.C. 1603) is amended
(1) by striking ``For the purpose'' and all that follows
through ``declares that the'' and inserting ``The''; and
(2) by striking ``departments and agencies,'' and inserting
``departments and agencies to implement the policies set
forth in section 3''.
SEC. 202. REPEAL.
The National Critical Materials Act of 1984 (30 U.S.C. 1801
et seq.) is repealed.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Smith) and the gentleman from California (Mr. Swalwell) each
will control 20 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. SMITH of Texas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days to revise and extend their remarks
and to include extraneous material on H.R. 1022, the bill now under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may
consume.
H.R. 1022, the Securing Energy Critical Elements and American Jobs
Act of 2014, addresses the supply of energy critical elements in the
United States.
I want to thank the gentleman from California (Mr. Swalwell), the
ranking member of the Energy Subcommittee, for his diligent work on
this legislation.
I also want to thank Mr. Hultgren, who introduced his own critical
elements bill in the last Congress, for his initiative on this subject.
Energy critical elements are important to energy-related
technologies, communications technologies, and America's weapons
systems. These technologies range from photovoltaic cells and
fluorescent lighting to fiber optics, aircraft engines and turbines,
computers, and electric vehicles. Energy critical elements encompass a
broad set of the elements, including rare earth elements.
Growth in demand for rare earths in a volatile market warrants
particular attention and concern. China currently produces more than 90
percent of the global supply of rare earths. This is a result of a
deliberate and decades-long strategy to develop its geologic reserves,
undercut market prices, and drive out competition. Testimony before the
Science, Space, and Technology Committee indicated that China has
manipulated the market in recent years. It has reduced its export
quotas and increased levies on rare earth oxides. This has caused wild
price swings, market instability, and supply uncertainty.
This behavior is a potential threat to the United States' ability to
acquire many rare earths that both our energy sector and military rely
upon. While a responsive market will continue to move towards
solutions, there are reasonable and proper steps that the Federal
Government can and should pursue in this area. These are reflected in
this bipartisan bill.
This bill establishes a program under the Department of Energy that
supports activities to improve the methods of extraction, use, and
recycling of energy critical elements. It improves the understanding of
performance, processing, and adaptability in the engineering of these
elements, and it identifies and tests alternative materials that could
replace energy critical elements. However, the legislation stipulates
that the program shall only focus on areas where the private sector is
unlikely to undertake these activities because of technical or
financial uncertainty.
It also authorizes the Secretary of Energy to establish a Critical
Materials Energy Innovation Hub that maintains a critical materials
information center. This center collects, stores, and disseminates
information on energy critical elements for scientists and researchers.
In carrying out this program, the Secretary is directed to ensure that
the activities are coordinated and do not duplicate other programs
within the Federal Government.
Finally, the legislation requires the President, through the National
Science and Technology Council, to coordinate the actions of involved
Federal agencies. The administration also will identify and monitor the
supply of energy critical elements, encourage private sector
development, and promote the recycling of these elements.
This bill helps ensure that the United States remains globally and
economically competitive and that our energy sector and military have
the critical elements that they need.
Once again, I want to thank the gentleman from California (Mr.
Swalwell) and the gentleman from Illinois (Mr. Hultgren) for their
efforts on this legislation.
I encourage my colleagues to support this bill, and I reserve the
balance of my time.
Mr. SWALWELL of California. Mr. Speaker, I yield myself such time as
I may consume.
I rise in support of H.R. 1022, the Securing Energy Critical Elements
and American Jobs Act of 2014.
I want to thank Chairman Smith for working with me on this bill for
over a year. We introduced this in March 2013. We have talked a number
of times about this bill, and I appreciate the attention the majority
staff has shown to get this bill to the floor. I also appreciate the
work of our ranking member, Ms. Johnson, on the minority side, and that
of Congressman Hultgren, as well as the work of Mrs. Lummis, the chair
of the Energy Subcommittee. We have truly worked in a bipartisan manner
to move this bill to the floor.
Did you know, Mr. Speaker, that energy critical elements are crucial
to powering our cell phones? to powering our airplanes and to producing
renewable energy?
They include elements, many of which I never learned about in my
chemistry class in high school, like cobalt, lanthanum, and helium.
These elements are critical to the innovation economy and to our
national defense, but here is the problem. Today, almost entirely all
of them are imported from other countries like China. It is time to get
America into the game.
I introduced this bill to help ensure that the United States
continues to have access to materials that are essential to
technologies we rely upon every day. These materials are also crucial
to developing new technologies that will help make us leaders in the
clean energy economy of the future, helping to create good jobs here in
America.
I also want to note an important distinction from this bill and a
bill that passed in the House in the 111th Congress in 2010. There are
three big differences: one, this bill does not have any loan
guarantees; two, this bill does not spend a single new dollar; and
three, this bill does not create a new program. Those are important
distinctions from the bill that passed in the 111th Congress.
Many Americans may not realize just how dependent we are upon energy
critical elements. One of these elements, No. 3 on the periodic table
and represented here on this poster, is lithium. The cell phones,
laptops, and other mobile devices upon which we all greatly rely and
use--not to mention the energy storage systems for many commercial
aircraft--all require lithium to function effectively. To make
[[Page H6595]]
these products here in America and not cede leadership across the
world, we need to have access to lithium.
We also can't lose sight of how important these elements are in
enabling a new era of energy production and use. From advanced solar
energy technologies to natural gas and wind turbines, nuclear reactors,
and state-of-the-art batteries for electrical and hybrid vehicles, a
series of specific elements in limited supply are currently
irreplaceable, and we need to ensure continued access to them even as
we work to develop substitute materials wherever possible.
It is not just about commercial products and explicit energy
production. Rhenium, No. 75 on the periodic table, which is represented
here on this poster, is used to make parts for jet engines, including
the jets that provide America's air superiority for our Air Force and
Navy. Having access to this metal, thus, has an important national
security component.
A subset of these critical elements, with names like neodymium and
terbium, is what are considered rare earth elements. Incidentally,
there is nothing rare about these elements in the sense that they are
only found in one or two places in the world but, rather, that, in many
instances, they aren't found in sufficient quantities to make them
minable and, where they are, doing so would be cost prohibitive and a
very long-term endeavor.
As one example, I have a poster here representing terbium, No. 65 on
the periodic table. It is a silvery metal. Most people probably have
never heard of it, but it is used in high-efficiency lighting and, as
exemplified on this poster, in wind turbines, among many other energy
uses.
One country, China, has recognized the importance of these rare earth
elements, and it has put vast amounts of resources into becoming the
world's leading supplier of them. As a result, China is currently
responsible for the mining and distribution of 97 percent of rare earth
elements. Predictably, China hasn't been shy about using this monopoly
as leverage against its international competitors. In fact, just a few
years ago, China temporarily cut off rare earth supplies to Japan, the
European Union, and the United States, further highlighting the
potential consequences of relying so heavily upon a single nation for
rare earth production and driving up the costs for American
manufacturers.
The bipartisan version that we are discussing here today, H.R. 1022,
provides a strong and sustainable path forward for helping ensure that
the United States maintains a sufficient, reliable supply of energy
critical elements. It explicitly authorizes in law the Critical
Materials Energy Innovation Hub--a collaboration among national
laboratories, universities, research institutes, and private companies
that has been up and running since early last year--and subjects this
hub to a rigorous merit review process prior to renewal for an
additional 5 years. Essentially, there are tight controls in place to
make sure we always have the oversight of this hub.
Let me pause here and emphasize this point as there seems to be some
confusion. There are tight controls that will be in place in
authorizing this hub. Again, I want to remind the Speaker that there
are no new programs, no loan guarantees, and not a new dollar spent.
My bill requires the Department of Energy to develop and regularly
update a strategic plan in this area, and it authorizes the hub to
maintain a critical materials information center to aid in the
collection and dissemination of data to ensure that all of our Nation's
researchers in the public and private sectors have access to the most
up-to-date information. Finally, my bill charges the National Science
and Technology Council with ensuring the appropriate interagency
coordination with research activities.
With that, I reserve the balance of my time.
Mr. SMITH of Texas. Mr. Speaker, at this time, there are no other
individuals on this side who wish to speak on this bill, so I continue
to reserve the balance of my time.
Mr. SWALWELL of California. Mr. Speaker, I yield 5 minutes to the
gentlewoman from Texas (Ms. Eddie Bernice Johnson), the ranking member
of the Science, Space, and Technology Committee.
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I rise in support of
H.R. 1022 and two other Science, Space, and Technology bills being
considered today.
Earlier this year, all of my Democratic committee colleagues joined
me in introducing H.R. 4159, the America COMPETES Reauthorization Act
of 2014. Two of the bills being considered today are similar or
identical to provisions we included in our COMPETES bill, and the third
bill similarly reflects a longstanding bipartisan effort, and I will
speak briefly about each of the three bills.
First, I would like to speak in support of H.R. 1022, a bill that
would authorize a research and development program to explore ways to
sustain our supply of materials that is critical to a wide range of
advanced energy technologies.
According to a recent study by the American Physical Society and the
Materials Research Society, the U.S. is currently dependent on other
countries for more than 90 percent of most of these types of materials.
We are particularly dependent on China, which has demonstrated a
willingness to at least temporarily cut off our supply of these energy
critical elements in the recent past, so this bill is a timely
contribution to our national, economic, and energy security.
I would like to thank my colleague and friend, Mr. Swalwell, for
introducing this important piece of legislation, as well as Chairman
Smith and his staff for working diligently with us to bring it to the
floor today.
{time} 1545
Next, I want to thank Mr. Bucshon for introducing H.R. 5035, a bill
to reauthorize the National Institute of Standards and Technology.
NIST is our Nation's oldest science agency and plays a very important
role in U.S. innovation and competitiveness through advancing
measurement science and providing unique measurement facilities to
industry.
While we don't often think about measurement science, it is
critically important. Anytime a technology is developed, measurement
science is needed to ensure that the technology is working as intended
and is compatible with existing systems. NIST plays a role in fields
from bioscience to forensics to automobile safety technology.
NIST has also taken leadership roles in crosscutting Federal efforts
in cybersecurity and advanced manufacturing.
H.R. 5035 reauthorizes and makes important updates to the program at
NIST, including the Manufacturing Extension Partnership program, which
helps small- and medium-sized manufacturing companies create and retain
American jobs.
My one concern with H.R. 5035 is the low authorization level. I hope
that when this bill goes to conference with the Senate we can agree to
give NIST an authorization level that allows it to fully realize its
critical role in U.S. innovation and competitiveness. In the meantime,
because the policy changes in this bill are good and important, I
support it.
Finally, I would like to thank Mr. Hultgren and Mr. Kilmer for
introducing H.R. 5120, a bill to provide important new tools to
accelerate commercialization of new technologies developed by DOE
laboratories and programs in partnership with the private sector.
This bill closely mirrors several critical provisions in the America
Competes Reauthorization Act of 2014, as well as the Senate's
bipartisan America INNOVATES Act sponsored by Senators Coons and Rubio.
It also reflects a number of recommendations found in a recent report
produced by the Center for American Progress, the Information
Technology and Innovation Foundation, and The Heritage Foundation,
three groups that you don't often find in the same line of authors.
I want to thank Chairman Smith and many other colleagues on both
sides of the aisle, as well as the other side of the Capitol, for
working with us to produce a strong bill that we can support. All three
of these bills are products of strong bipartisan efforts, and I urge my
colleagues to support them.
Mr. SMITH of Texas. Mr. Speaker, before I yield back, I would like to
[[Page H6596]]
thank the gentlewoman from Texas, the ranking member of the Science,
Space, and Technology Committee, Eddie Bernice Johnson, for the
comments that she just made. They are much appreciated.
Mr. Speaker, I reserve the balance of my time, but I am prepared to
yield back.
Mr. SWALWELL of California. Mr. Speaker I will include an article
from The Wall Street Journal in support of H.R. 1022 in the Record.
This is a December 5, 2013, Wall Street Journal article titled, ``China
Still Dominates Rare-Earth Processing.''
[From the Wall Street Journal, Dec. 5, 2013]
China Still Dominates Rare-Earth Processing
(By James T. Areddy)
Shenzhen, China.--When U.S. Rare Earths Inc. begins mining
on the border of Montana and Idaho about two years from now,
the U.S. will gain a new domestic, non-Chinese source of
minerals essential to making electronic devices and weaponry
components.
But at the moment, there's virtually no place for these
minerals to be processed into something useful--except China.
China's share of global rare-earth output has been
shrinking recently as miners elsewhere capitalized on fears
the country controls too much global supply. Even so, China
still dominates the complex--and often polluting--middle
steps that turn mined material into useful ingredients,
including metals and magnets. For example, China supplies
about 80% of the specialized magnets produced with rare-earth
ingredients like neodymium that are used in everything from
elevators to cruise missiles.
``It's amazing people haven't connected these dots,'' said
U.S. Rare Earths Chief Executive Kevin Cassidy. His company
plans to build facilities in the U.S. to handle difficult
middle-stage processes, but that will be expensive and
require numerous regulatory approvals.
Three years ago China shocked high-technology industries by
tightening export controls on a group of 17 elements called
rare earths that sent their prices rising as much as tenfold,
prompting then-U.S. Secretary of State Hillary Clinton to dub
the scare a ``wake up call.''
Miners responded by racing to find new rare-earth sources
in the U.S. and elsewhere. Industry authority Dudley
Kingsnorth says those new sources already cut China's share
of global supply to 86% from 93% between 2011 and 2012.
China's export policies are the subject of a continuing
dispute between Beijing, Washington and others before the
World Trade Organization. The WTO in October ruled illegal
certain restrictions on Chinese rare-earth exports, though
Beijing is expected to appeal the largely symbolic decision.
But when it comes to processing rare earths, China faces
little competition--and Wang Qin's greasy hands illustrate
why. The 45-year-old machinist for Feller Magnets Corp. in
the southern city of Shenzhen runs dozens of machines that
slice magnetic blocks made with rare earth into razor-thin
discs that his company says will be installed in mobile
phones.
While his computerized saws can meet precision
specifications for Feller's high-technology customers, the
machines also slick its factory floors with oil. Basins of
acids and extreme heat feature in other parts of the
facility. The company, which says half its output is sold in
China compared with only 30% in recent years, didn't respond
to a request for comment on factory conditions.
China's dominance in a field with a poor environmental
record illustrates one way it plays key roles more generally
in global manufacturing. China tops world output of chemicals
and fertilizers, as well as making lead-acid batteries and
harvesting of scrap computer parts for metal. Business
executives say that China's backbone in intermediate
industries, including rare-earth processing, allows it to
draw in related businesses that depend on the products and
thereby deepening its importance to production supply chains
from computers to automobiles.
In 2010 Beijing significantly crimped exports of rare-earth
minerals citing environmental reasons to clean up a chaotic
industry. Seeing prices of the elements soar, investors
funded dozens of mine exploration projects around the world.
Since then, a California mine and one in Australia have
ramped up, with others in South Africa, Vietnam, India and
Kazakhstan now in the construction phase, according to Gareth
Hatch, an industry investor and principal at Illinois-based
Technology Metals Research LLC. But he said many prospectors
who rushed after 2010 to bring new supplies to market wrongly
assumed, ``if you build the mine, the downstream supply chain
will magically appear outside of China.''
A number of U.S. defense contractors declined to comment on
industry trends. Northrop Grumman Corp. and Lockheed Martin
Corp. referred questions to the Aerospace Industries
Association, which pointed to a September report from the
U.S. Congressional Research Service that said ``most rare
earth materials' processing is performed in China, giving it
a dominant position that could affect world-wide supply and
prices.''
A Defense Department spokesman said the military
continually monitors the situation while citing an
``increasingly diverse and robust domestic and global supply
chain for rare earth materials.'' A March 2012 military
report highlighted positive trends ``for a market capable of
meeting future U.S. Government demand.''
While Mr. Kingsnorth, executive director of Industrial
Minerals Company of Australia, estimates China's share of
world production could slide to 63% by 2016, he points out
that China continues to dominate the nine steps between
mining rare earths and producing something with the material.
After ore is pried from the ground and unwanted minerals
are sifted away to make a concentrate of minerals, complex
acid and chemical treatments are required to separate
individual rare earths into quantities that are useful. Many
of the 17 rare earths share such similar physical properties
that separating individual elements can require several
months and 1,000 chemical treatments.
Outside China, few places have the industrial capacity to
separate the elements. Companies in the U.S., Russia, France,
Japan and elsewhere handle some of these steps, but China is
the only place that has the industrial capacity to do them
all.
Among those producing fresh output is U.S.-based Molycorp
Inc. Yet Molycorp exports some of the neodymium and samarium
from its giant deposit in California's Mojave Desert to its
processing facilities in China.
``The downstream does take longer to develop,'' says
Constantine Karayannopoulos, who until this month was
Molycorp's interim chief executive officer and is now vice
chairman.
Molycorp said it spent $1.5 billion to build a separation
facility in California, and Mr. Karayannopoulos estimates a
quarter to a third of that cost is related to ensuring the
plant operates to high environmental standards, which include
recycling wastewater. Still, Molycorp says it is cheaper to
make some of its materials at its facilities in China. Mr.
Karayannopoulos also estimates around 60% of that output is
sold to multinational companies already in China.
``I can't overemphasize how complex supply chains are,''
said Mr. Karayannopoulos.
A big effort to reduce China's role in the intermediate
steps of processing rare earths is being undertaken by
Australia's Lynas Corp. with a plant opened last year in
Malaysia to handle separation processes. But local
environmentalists decry the facility as dangerous, and Lynas
says it has processed only a fraction of its output there
this year. Lynas says none of its material is being sent to
China for separation.
Increasingly, China is taking steps to expand into more
profitable aspects of the rare-earth business that follow the
separation processes, instead of exporting those raw
materials. Mr. Kingsnorth likens such efforts to European
winemakers: ``France doesn't sell any grapes,'' he said.
Mr. SWALWELL of California. Mr. Speaker, efforts that went into
bringing this bill to the floor reflect what our constituents at home
want to see from us here in Washington, a bill that was introduced in
March of 2013, a bill where revisions were made, compromises were made.
The loan guarantee part of the bill was taken out at the request of the
majority staff so that we could bring this bill to the floor in a
bipartisan way.
I am proud that I can go home and tell my constituents I was able to
work with my colleagues on a bill that will advance American
innovation, American energy security, and national security.
So, Mr. Speaker, I urge my colleagues to support this bill. If you
want to go home and tell your constituents that you were part of a
bipartisan bill that protects American innovation, manufacturing,
energy security, and national security, vote for this bill.
If you want to go home and tell your constituents that you are a part
of seeing jobs go over to China and ceding leadership in energy,
critical elements, then you should vote against this bill.
But I think this Congress wants to take back leadership when it comes
to where we get our energy. That is why I am supporting this bill. That
is why I am grateful that the chairman brought this bill to the floor,
and I urge my colleagues to support this bipartisan H.R. 1022.
Mr. Speaker, I yield back the balance of my time.
Mr. SMITH of Texas. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Texas (Mr. Smith) that the House suspend the rules and
pass the bill, H.R. 1022, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. MULVANEY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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