Senate Debate on Critical Materials Begins to Emerge

Senate Debate on Critical Materials Begins to Emerge

Yesterday (June 9), a key Senate subcommittee on energy issues held a hearing on legislative proposals aimed at setting new federal policy on the extraction, recycling and research for many materials, including rare earth elements, that are critical to the manufacturing of many modern energy and communications technologies. The most comprehensive of these proposals, S. 1113, is supported by NEMA and was introduced on May 26 by a bipartisan group headed by Senator Lisa Murkowski (R-AK), ranking Republican member of the Energy and Natural Resources Committee. In summary, Sen. Murkowski's "Critical Minerals Policy Act of 2011" would aggressively jump-start and direct federal policy on 1) assessing U.S. reserves of rare earths, lithium and helium, among others, 2) on prioritizing which of these materials are subject to the greatest supply risk and essential to U.S. economic activity, including manufacturing, and 3) reasonable acceleration of the permitting process for establishing new mining, and 4) launching new research and development into recycling of used products that contain critical materials, potential alternative materials, and more parsimonious use of current supplies. The Natural Resources Committee in the House of Representatives has also held hearings recently on several proposals that have been introduced in that chamber.

Most federal legislators are familiar with the fact that China is currently the dominant miner, processor and supplier (95-97%) of rare earth materials to the world and that the U.S. needs to be taking measures to re-establish a domestic supply chain for rare earths. That said, the prospects for moving to the Senate floor this year a package of critical materials legislation establishing a path to more secure supplies remains murky at this early stage. NEMA supports moving forward, but the some of the Q&A heard yesterday laid on the table some issues at hand. 

For his part, Energy Committee Chairman Jeff Bingaman (D-NM) asserted that the U.S. needs "to diagnose the problem correctly" in order to be able to solve it, and he does not believe the permitting process for new mining, which critics say runs 7-10 years, is the real issue. The problem has been, according to Sen. Bingaman, that it has not been profitable (or potentially profitable) for U.S. firms to establish new mines. He seemed indicate that, with the world prices for many basic materials rising (in major part due to demand and policy factors in China) that problem seems to be ending. However, during the hearing both Senator Jim Risch (R-ID) and Senator Al Franken (D-MN) mentioned that there are potential new mines in their states that are working through the lengthy approval process.  

Subcommittee Chair Maria Cantwell (D-WA) questioned whether new mines are necessary given the potential for "urban mining" of used equipment containing critical materials that could conceivably be extracted and recycled. All present agreed that more research is needed in this area and the federal government should have a leading role there.

In his testimony, Chief Scientist for GE Global Research Dr. Steve Duclos make clear his view that there no one single answer to the critical materials supply problems our industries face and that an aggressive and comprehensive approach, such as that proposed by Sen. Murkowski, is necessary.

NEMA is engaged on critical materials issues for its members and will continue to meet with Senate and House offices to encourage their support for action.


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