Update on Critical Materials Developments

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Publication date: 
20 August 2014
Number: 
136

Indicative of the awareness of Washington policy makers about the importance of critical materials are an announcement from the Office of Science and Technology Policy, action on the House floor on energy critical elements legislation, and a House subcommittee hearing.

The public has until September 30 to respond to a White House Office of Science and Technology Policy (OSTP) announcement entitled New Request for Information to Inform Strategy on Critical Materials.  First appearing as a Notice in the Federal Register on July 22, the August 8 OSTP announcement states:

“Four years ago, the Administration chartered a new National Science and Technology Council Subcommittee on Critical and Strategic Minerals Supply Chains (CSMSC), which has maintained a responsibility for coordinating critical materials policy development and executing different elements of a mitigation strategy across twelve Federal agencies. . . .
 
“To build on this momentum, the CSMSC is developing a methodology for identifying critical materials and monitoring changes in criticality, delivering ‘early warning’ to policymakers and other stakeholders. Providing earlier awareness about materials that will be critical to the economy and industry enhances policymakers’ ability to plan for the future and to ensure continued growth. Several weeks ago, the White House Office of Science and Technology Policy published a request for information (RFI) soliciting feedback from industry and other stakeholders to inform the CSMSC’s characterization of anticipated future demand for critical materials. This new RFI [Request for Information] gathers information about issues related to mining, demand, supply chain structure, market dynamics and mitigation. Data about which raw materials are of interest to the public are instrumental in safeguarding and preparing the American economy for the future.”

The Notice has the following “Request for Information Categories”: Demand; Exploration, Mining and Smelting/Refining; Supply and Supply Chain; Market Dynamics; Mitigation; Other.  A link to the Request for Information is provided in the OSTP posting. 

Before leaving for its summer recess, the House of Representatives considered but failed to pass H.R. 1022, the Securing Energy Critical Elements and American Jobs Act of 2013.  Although the bill received 260 “yes” votes to 143 “no” votes, it did not pass because 2/3 of those voting were required to support it using an expedited mechanism (called the Suspension of the Rules) under which it was considered.  All but one of the no votes were cast by Republican members.

It is ironic that H.R. 1022 failed to win approval since the July 22 motion to suspend the usual House rules to pass the bill was offered by House Science, Space, and Technology Committee Chairman Lamar Smith (R-TX).  Motions to pass a bill using this procedure are reserved for measures that are viewed as noncontroversial.  They are considered by the House at the discretion of the Speaker.   Seventy-seven Republicans joined Smith in voting to approve his motion.

H.R. 1022 was introduced by Rep. Eric Swalwell (D-CA) in March 2013.  The sixteen page bill, listing 17 rare earth minerals (such as Neodymium and Gadolinium), establishes an Energy Critical Elements Program at the Department of Energy for “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.”   A Research and Development Information Center is authorized.  The total amount of spending authorized for these and other activities is $15 million per year for FY 2014 through FY 2018.  Actual funding would be provided through appropriations legislation.  A different section of the bill authorizes OSTP activities to coordinate federal programs, establish an early warning system for supply problems, promote private enterprise solutions, encourage recycling of energy critical elements, and address workforce issues. 

The bill also includes an amendment to existing legislation for a “Temporary Program for Rare Earth Materials Revitalization” stating “To the maximum extent practicable, the Secretary [of Energy] shall cooperate with appropriate private sector participants to achieve a complete rare earth materials production capability in the United States within 5 years after the date of enactment of the Securing Energy Critical Elements and American Jobs Act of 2013.”

Smith, Swalwell, and House Science Committee Ranking Member Eddie Bernice Johnson (D-TX) spoke in favor of the bill; no member spoke against it.  Smith described China’s current production of more than 90 percent of the world’s supply of rare earths and its manipulation of the market in recent years.  Describing the potential threat this poses to the United States, Smith said “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.”

“We have truly worked in a bipartisan manner to move this bill to the floor” Swalwell said, later adding, “It is time to get America into the game.” Responding to critics of the bill, Swalwell described the tight oversight controls that would be instituted for an existing DOE critical materials innovation hub, saying “there are no new programs, no loan guarantees, and not a new dollar spent.” In her remarks, Johnson referred to a study by the American Physical Society (an AIP Member Society) and the Materials Research Society (an AIP Affiliated Society.)

The next day, the House Subcommittee on Energy and Mineral Resources held a 75 minute oversight hearing entitled “American Metals and Mineral Security: An examination of the domestic critical minerals supply and demand chain.”  Five witnesses testified, representing three companies, an association, and a national laboratory.  Each discussed the importance of critical minerals and their recommendations for assuring a future supply.  Of note were comments made by Subcommittee Chairman Doug Lamborn (R-CO) and Ranking Member Rush Holt (D-NJ) about the House’s action on H.R. 1022 the previous evening.  Lamborn, who voted against the motion, faulted the approach the legislation took in creating, he said, an expensive government program, and criticized the Obama Administration for its policies he contended were “bent on destroying jobs in the mining industry.”  Holt, who voted for the bill, criticized an outside group opposed H.R. 1022 for its “incredibly misleading” information about the legislation.  Holt faulted a bill passed by the House last September with a “meaningless definition” that he contends would classify gravel as a critical mineral.  A “comprehensive strategy” that entails all stages, including mining, recycling, alternative sources and substitution, is needed he said. 

Looking ahead to future action on H.R. 1022, Holt said that the House would “have to make another run at it; I assume we will get this straighten out eventually,” adding that the failure to pass the legislation “doesn’t reflect well on this body.”  Toward the end of the hearing, Swalwell spoke of his interest in working with Chairman Lamborn and other House leaders “to find a way . . . to not cede leadership to China and other countries on this issue.”  Lamborn agreed, saying “how to get there is maybe where the debate comes in.” 

The time remaining to find that way is limited.  After the House returns from its five week summer recess next month it will be in session for about twelve legislative days before the November general election.