[Congressional Record (Bound Edition), Volume 160 (2014), Part 9]
[House]
[Pages 12635-12639]
[From the U.S. 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:

                               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

[[Page 12636]]

     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--
       (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

[[Page 12637]]

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 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.

[[Page 12638]]

  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 
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

[[Page 12639]]

     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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