[House Report 118-22]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 118-22
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SECURING AMERICA'S CRITICAL MINERALS SUPPLY ACT
_______
March 23, 2023.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mrs. Rodgers of Washington, from the Committee on Energy and Commerce,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1068]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 1068) to amend the Department of Energy
Organization Act to secure the supply of critical energy
resources, including critical minerals and other materials, and
for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 3
Committee Action................................................. 5
Committee Votes.................................................. 5
Oversight Findings and Recommendations........................... 7
New Budget Authority, Entitlement Authority, and Tax Expenditures 7
Congressional Budget Office Estimate............................. 7
Federal Mandates Statement....................................... 7
Statement of General Performance Goals and Objectives............ 7
Duplication of Federal Programs.................................. 7
Related Committee and Subcommittee Hearings...................... 7
Committee Cost Estimate.......................................... 8
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 8
Advisory Committee Statement..................................... 8
Applicability to Legislative Branch.............................. 8
Section-by-Section Analysis of the Legislation................... 9
Changes in Existing Law Made by the Bill, as Reported............ 9
Minority Views................................................... 10
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Securing America's Critical Minerals
Supply Act''.
SEC. 2. AMENDMENT TO THE DEPARTMENT OF ENERGY ORGANIZATION ACT.
The Department of Energy Organization Act (42 U.S.C. 7101 et seq.) is
amended--
(1) in section 2, by adding at the end the following:
``(d) As used in sections 102(20) and 203(a)(12), the term `critical
energy resource' means any energy resource--
``(1) that is essential to the energy sector and energy
systems of the United States; and
``(2) the supply chain of which is vulnerable to
disruption.'';
(2) in section 102, by adding at the end the following:
``(20) To ensure there is an adequate and reliable supply of
critical energy resources that are essential to the energy
security of the United States.''; and
(3) in section 203(a), by adding at the end the following:
``(12) Functions that relate to securing the supply of
critical energy resources, including identifying and mitigating
the effects of a disruption of such supply on--
``(A) the development and use of energy technologies;
and
``(B) the operation of energy systems.''.
SEC. 3. SECURING CRITICAL ENERGY RESOURCE SUPPLY CHAINS.
(a) In General.--In carrying out the requirements of the Department
of Energy Organization Act (42 U.S.C. 7101 et seq.), the Secretary of
Energy, in consultation with the appropriate Federal agencies,
representatives of the energy sector, States, and other stakeholders,
shall--
(1) conduct ongoing assessments of--
(A) energy resource criticality based on the
importance of critical energy resources to the
development of energy technologies and the supply of
energy;
(B) the critical energy resource supply chain of the
United States;
(C) the vulnerability of such supply chain; and
(D) how the energy security of the United States is
affected by the reliance of the United States on
importation of critical energy resources;
(2) facilitate development of strategies to strengthen
critical energy resource supply chains in the United States,
including by--
(A) diversifying the sources of the supply of
critical energy resources; and
(B) increasing domestic production, separation, and
processing of critical energy resources;
(3) develop substitutes and alternatives to critical energy
resources; and
(4) improve technology that reuses and recycles critical
energy resources.
(b) Critical Energy Resource Defined.--In this section, the term
``critical energy resource'' has the meaning given such term in section
2 of the Department of Energy Organization Act (42 U.S.C. 7101).
PURPOSE AND SUMMARY
H.R. 1068, Securing America's Critical Minerals Supply Act,
was introduced by Rep. Larry Bucshon (R-IN) and Rep. Randy K.
Weber (R-TX) on February 27, 2023. H.R. 1068 amends the
Department of Energy Organization Act by establishing that a
purpose of the Department of Energy is to ensure there is an
adequate and reliable supply of critical energy resources that
are essential to the energy security of the United States and
by including new functions of the Department relating to
securing critical energy resource supplies.
To carry out these functions, which include identifying and
mitigating effects of a critical energy resource supply
disruption on the development and use of energy technologies
and the operation of energy systems, H.R. 1068 requires the
Secretary to conduct ongoing assessments of the nation's supply
of critical energy resources, the vulnerability of the critical
energy resource supply chain, and the criticality of energy
resources to the development of energy technologies. H.R. 1068
requires further that the Secretary facilitate development of
strategies to strengthen critical energy resource supply chains
by diversifying sources and increasing domestic production,
refining, and processing of resources and that the Secretary
develop substitutes and alternatives and improve technology
that reuses or recycles critical energy resources.
BACKGROUND AND NEED FOR LEGISLATION
The United States maintains one of the most advanced and
complex energy systems in the world. This includes an extensive
system for producing and transporting oil, natural gas, and
refined product; vast, complex electricity systems that produce
and deliver uninterrupted power; and the supply chains of the
energy resources and materials necessary for these energy
systems and technologies to be built, maintained, operated. Our
nation's economy, security, and the health and safety of its
citizens depend upon the reliable and uninterrupted supply of
fuels and electricity, as well the secure supplies of energy
resources and materials necessary for this to happen.
When the Department of Energy (DOE) was organized in 1977,
energy security concerns revolved around oil supply shortages.
As a result, energy security emergency functions in the
Department of Energy Organization Act focused on distributing
and allocating fuels in an emergency. Other functions focused
on developing plans and programs for dealing with domestic
energy production and import shortages and the provision of an
adequate and reliable supply of energy at the lowest reasonable
cost.
Over time, these functions in DOE's organic statute have
remained largely unchanged, but DOE's responsibilities and
authorities have evolved substantially beyond what was
envisioned forty years ago. As energy technologies and delivery
systems have advanced, including with the growing use of
advanced solar, wind, and battery technologies, focus on the
supply chains of these technologies and the materials--the
minerals and metals and other components--making up or enabling
the operations of these technologies has become more important.
The need for updating the functions of DOE is necessary to
provide a durable, Cabinet-level focus on critical energy
resource supplies and to serve the broader missions of the
Department to coordinate national energy policy that will help
assure the reliable supply of energy for the public.
The urgency of supply chains for advanced and renewable
energy systems is underscored by the materials intensive nature
of these systems. For example, as outlined in Committee
testimony during the 117th Congress, ``the materials extracted
from the earth to fabricate everything, including wind
turbines, solar panels, and batteries (to store grid
electricity or power electric vehicles) are typically out of
sight, located at remote quarries, mine sites, and mineral
processing facilities around the world. Those locations matter
in terms of geopolitics and supply-chain risks.''\1\
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\1\See testimony of Mark P. Mills before the Subcommittee on
Environment and Climate Change hearing ``Back in Action: Restoring
Federal Climate Leadership,'' February 9, 2021. Hearing Print Serial
No. 117-4.
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Add to this the sheer scale of critical materials needed
for these ``clean tech'' energy technologies, and the
importance of security supplies becomes clear. Projections on
the mineral requirements for ``green'' energy all show massive
increases in minerals and related processing. The mining of
indium, used in fabricating electricity generating solar
semiconductors, for example, will need to increase 8,000%.
Cobalt for batteries will need to grow 300% to 800%. Lithium
production will need to increase 2,000%. Some 14 metals
essential for building clean-tech machines will require
increased supplies of elements such as nickel, dysprosium, and
tellurium of 200% to 600%.\2\
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\2\Ibid.
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As recently as 1990, the United States was the world's
number-one producer of minerals. By 2018, the United States had
fallen to 12th overall in global non-fuel minerals
production.\3\ A 2022 DOE assessment of critical energy
resource supply chain risks notes that China's control of key
materials in renewable energy is ``across the board,'' with
China in control of ``80% of rare earths production and
refining that are key for components in technologies such as
direct drive generators in wind turbines, and China also
controls 61% of global lithium refining key for battery storage
and electric vehicles. China also controls 100% of the
processing of natural graphite used for battery anodes.''\4\
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\3\See testimony of Michelle Michot Foss before the Subcommittee on
Environment and Climate Change hearing ``Building a 100 Percent Clean
Economy: Opportunities for and Equitable, Low-Carbon Recovery,''
September 16, 2020. (https://docs.house.gov/meetings/IF/IF18/20200916/
111008/HHRG-116-IF18-Wstate-MichotFossM-20200916-U1.pdf).
\4\See Department of Energy ``America's Strategy to Secure the
Supply Chain for a Robust Clean Energy Transition,'' February 2022, p.
13).
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The severity of this overdependence on other countries for
critical minerals was brought to the public's attention by the
report released during the Trump administration, which found
the United States relies on imports for 31 of the 35 critical
minerals necessary for the U.S. defense and economy.\5\ For 14
of the listed critical minerals, the United States relies
completely on imports from other countries; having no U.S.
production at all. (As indicated in the above DOE assessment,
recent Biden administration reviews confirm U.S.
vulnerability.)
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\5\See Testimony by the Honorable Mark W. Menezes at the Joint
Energy, Climate, and Grid Security Subcommittee and Environment,
Manufacturing, and Critical Materials Subcommittee Legislative Hearing,
``Unleashing American Energy, Lowering Energy Costs, and Strengthening
Supply Chains,'' February 7, 2023. (energycommerce.gov).
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Against this backdrop, while Congress has taken action to
support research and development, incentives, and interagency
planning, this is not enough, given the extent of current
dependence on foreign supplies and increasing demand for
minerals and materials heavy energy resources. As former DOE
Deputy Secretary Mark Menezes has testified before the
Committee: ``we need to designate an agency with clear
authority to address these issues and to serve as the experts
in the interagency process for energy.''\6\
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\6\Ibid.
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The Committee finds that H.R. 1068 would further enhance
DOE's existing responsibilities over ensuring secure and
affordable delivery of energy, by providing durable authority
to assess the vulnerability of the critical energy resource
supply chain, and the criticality of energy resources,
particularly minerals and materials necessary in the
development of energy technologies and including the supply
chains for renewable energy technologies. The Committee finds
the provisions of H.R. 1068 that facilitate the development of
strategies to diversify sources of supply, by increasing
domestic production, separation, and processing of critical
energy resources, and by pursing the technological development
of critical resource alternatives and of reuse and recycling is
consistent with DOE's energy security mission, and unique
capabilities in the United States government.
COMMITTEE ACTION
On February 7, 2023, the Subcommittees on Energy, Climate,
and Grid Security and Environment, Manufacturing, and Critical
Materials held a joint legislative hearing entitled,
``Unleashing American Energy, Lowering Energy Costs, and
Strengthening Supply Chains,'' on 17 pieces of legislation,
including H.R. 1068. The Subcommittees received testimony from:
The Honorable Mark Menezes, Former United
States Deputy Secretary of Energy, Department of
Energy;
The Honorable Bernard McNamee, Former
Commissioner, Federal Energy Regulatory Commission;
Jeffrey Eshelman, II, President and Chief
Executive Officer, Independent Petroleum Association of
America;
Katie Sweeney, Executive Vice President and
Chief Operating Officer, National Mining Association;
Raul Garcia, Legislative Director for
Healthy Communities, Earthjustice; and
Tyson Slocum, Director of the Energy
Program, Public Citizen.
On February 28, 2023, the Subcommittee on Energy, Climate,
and Grid Security met in open markup session and forwarded H.R.
1068, without amendment, to the full Committee by a record vote
of 15 yeas and 8 nays. On March 9, the full Committee on Energy
and Commerce met in open markup session and ordered H.R. 1068
favorably reported, as amended, to the House by a record vote
of 26 yeas and 22 nays.
COMMITTEE VOTES
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. The following reflects the record votes taken during
the Committee consideration:
OVERSIGHT FINDINGS AND RECOMMENDATIONS
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee held a hearing and made findings that
are reflected in this report.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that H.R. 1068 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Pursuant to clause 3(c)(3) of rule XIII, at the time this
report was filed, the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 was not available.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to ensure
there is an adequate and reliable supply of critical energy
resources that are essential to the energy security of the
United States.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 1068 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
RELATED COMMITTEE AND SUBCOMMITTEE HEARINGS
Pursuant to clause 3(c)(6) of rule XIII,
(1) the following hearings were used to develop or consider
H.R. 1068:
On January 31, 2023, the Committee on Energy and Commerce
held a hearing entitled, ``American Energy Expansion:
Strengthening Economic, Environmental, and National Security.''
The Committee received testimony from:
The Honorable Paul Dabbar, Former Under
Secretary of Energy, Department of Energy;
Robert McNalley, President, Rapidan Energy
Group, LLC;
Donna Jackson, Director of Membership
Development--National Center for Public Policy
Research, Project 21; and
Ana Unruh Cohen, Former Majority Staff
Director, U.S. House Select Committee on the Climate
Crisis.
On February 16, 2023, the Subcommittee on Energy, Climate,
and Grid Security held a field hearing in Midland, Texas,
entitled, ``American Energy Expansion: Improving Local
Economies and Communities' Way of Life.'' The Committee
received testimony from:
The Honorable Lori Blong, Mayor of Midland,
Texas, and President of Octane Energy;
Adrian Carrasco, Chairman Midland Hispanic
Chamber of Commerce, and President of Premier Energy
Services;
Steven Pruett, President and CEO, Elevation
Resources, and Chairman of the Board for Independent
Petroleum Association of America; and
Dr. Michael Zavada, Professor of Biology and
Geosciences, and Chair, Department of Geosciences at
The University of Texas--Permian Basin.
(2) The following related hearings were held:
On February 7, 2023, the Subcommittees on Environment,
Manufacturing, and Critical Materials and Energy, Climate, and
Grid Security jointly held a hearing on 17 separate pieces of
legislation, including H.R. 1068. The Subcommittee received
testimony from:
The Honorable Mark Menezes, Former U.S.
Deputy Secretary of Energy, Department of Energy;
The Honorable Bernard McNamee, Former
Commissioner, Federal Energy Regulatory Commission;
Jeffrey Eshelman, II, President and Chief
Executive Officer, Independent Petroleum Association of
America;
Katie Sweeney, Executive Vice President and
Chief Operating Officer, National Mining Association
Raul Garcia, Legislative Director Healthy
Communities, Earthjustice; and
Tyson Slocum, Director of the Energy
Program, Public Citizen.
COMMITTEE COST ESTIMATE
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974. At the time this report was
filed, the estimate was not available.
EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 1068 contains no earmarks, limited
tax benefits, or limited tariff benefits.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
Section 1 provides the short title of ``Securing America's
Critical Minerals Supply Act''.
Section 2. Amendment to the Department of Energy Organization Act
Section 2 amends the Department of Energy Organization Act
to define critical energy resources as energy resources
essential to the U.S. energy sector and energy systems, the
supply chains of which are vulnerable to disruption, and by
establishing that a purpose of the Department of Energy is to
ensure there is an adequate and reliable supply of critical
energy resources that are essential to U.S. energy security and
by including new functions of the Department relating to
securing critical energy resource supplies.
Section 3. Securing critical energy resource supply chains
Section 3 provides that, in carrying out the requirements
of Department of Energy Organization Act, the Secretary, in
consultation with appropriate agencies, States, and
stakeholders, shall conduct ongoing assessments of the nation's
supply of critical energy resources, energy resource
criticality based on importance to the development of energy
technologies and energy supply, and to facilitate development
of strategies to strengthen critical energy resource supply
chains by diversifying sources and increasing domestic
production, refining, and processing of resources, and that the
Secretary develop substitutes and alternatives and improve
technology that reuses or recycles critical energy resources.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
With respect to the requirement of clause 3(e) of rule XIII
of the Rules of the House of Representatives, changes in
existing law made by the bill, as reported, this section was
not made available to the Committee in time for the filing of
this report.
MINORITY VIEWS
H.R. 1068, the ``Securing America's Critical Minerals
Supply Act,'' amends the Department of Energy Organization Act
to assert the Department of Energy's (DOE) role in securing
critical energy resource supply chains. The bill directs DOE to
conduct ongoing assessments and facilitate the development of
strategies to strengthen critical energy resource supply
chains.
While the majority claims H.R. 1068 targets and supports
the development of critical minerals, including those needed
for the development of clean and renewable energy resources,
H.R. 1068 uses the term ``critical energy resource'' instead of
``critical minerals'' or ``critical materials.'' The bill
defines ``critical energy resource'' to mean ``any energy
resource that is essential to the energy sector and energy
systems of the United States.'' This definition is not
restricted to critical minerals and could be interpreted to
include a range of resources, including those that are carbon-
emitting or that support the fossil-fuel industry. The bill
also does not specify or prioritize the securing of supply
chains related to clean or renewable energy, even though the
majority claims the bill will support these industries. Without
a clear prioritization of clean energy supply chains, H.R. 1068
risks devoting additional DOE resources to supporting carbon-
emitting industries. Additionally, there is ambiguity
surrounding the definition of ``critical energy resource'' in
H.R. 1068, and how it will interact with existing DOE efforts
in the critical minerals and critical materials space. For
example, the Department of Energy is currently drafting a list
of critical materials using the definition established in the
Energy Act of 2020.\1\ H.R. 1068 does not attempt to reconcile
definitions with existing directives, and additional
specificity would be needed.
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\1\Department of Energy, Critical Minerals and Materials
(www.energy.gov/critical-minerals-materials) (accessed Mar. 21, 2023).
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The Biden Administration, through the Bipartisan
Infrastructure Law and the Inflation Reduction Act, has taken
steps to develop and onshore clean energy supply chains. For
example, the Bipartisan Infrastructure Law included $3 billion
for Battery Materials Processing Grants and $3 billion for
Battery Manufacturing and Recycling Grants.\2\ Additionally,
the Inflation Reduction Act established a series of incentives
that prioritize clean energy technologies with specific
critical minerals and manufacturing requirements, including
domestic content requirements.\3\ As a result of these
investments, DOE is already playing an important role in
securing clean energy supply chains.
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\2\The White House, A Guidebook to the Bipartisan Infrastructure
Law for State, Local, Tribal, and Territorial Governments, and Other
Partners (May 2022) (www.whitehouse.gov/wp-content/uploads/2022/05/
BUILDING-A-BETTER-AMERICA-V2.pdf).
\3\The White House, Building a Clean Energy Economy: A Guidebook to
the Inflation Reduction Act's Investments in Clean Energy and Climate
Action (Jan. 2023) (www.whitehouse.gov/wp-content/uploads/2022/12/
Inflation-Reduction-Act-Guidebook.pdf).
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Given the climate crisis, we acknowledge that additional
work is needed to meet increasing demand for clean energy.
However, rather than focusing this bill and the DOE's efforts
on critical minerals needed for the clean energy transition,
H.R. 1068 obscures the application of this language to
potentially include fossil fuel industries.
We support DOE's ongoing role in developing and securing
critical mineral supply chains needed for clean energy, but are
concerned that this bill is too vague. Additionally, we
acknowledge the urgent need to onshore and secure critical
minerals for the clean energy transition. However, this bill is
not the best approach. We question the assertions made in the
majority's report, which state that this bill will help the
clean energy transition. While a narrow interpretation of this
bill will help the clean energy transition, we oppose this
legislation as drafted due to the ambiguity of the term
``critical energy resource.''
Frank Pallone, Jr.,
Ranking Member, Committee on Energy and Commerce.
[all]