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Murkowski statement on lack of domestic rare earth elements mining

Energy Committee Considers Sen. Murkowski's Rare Earths Bill

WASHINGTON, D.C. - The U.S. Senate Committee on Energy and Natural Resources today held a hearing focused on rare earth elements, including legislation Sen. Lisa Murkowski, R-Alaska, introduced in June. The Rare Earths Supply Technology and Resources Transformation (RESTART) Act (S. 3521), promotes the domestic production of rare earth elements crucial to the high-tech and clean energy industries.

"Our reserves represent an opportunity to create many new American jobs, and their production would help facilitate a robust clean technology manufacturing sector," Murkowski said. "Particularly in these tough economic times, we should recognize that mining jobs pay well and provide an excellent career path for those who pursue them."

The United States is estimated to hold 15 percent of the world's rare earth reserves, but is currently 100-percent dependent on foreign nations for their supply.

"Just as we've seen with our reliance on foreign oil, the United States' total dependence on foreign sources of rare earths puts us in a perilous situation," Murkowski said.  "China currently accounts for 97 percent of global production of these incredibly important metals and has repeatedly followed through on plans to restrict export of them. Some have compared China to a one-nation OPEC for rare earths - and China's recent actions signal that they are well aware of their immense power over the supply of this sought-after commodity."

Murkowski's legislation builds on two resolutions passed by the Alaska state Legislature urging Congress to advance development of new rare earth reserves in the United States. Ucore Uranium and its subsidiary, RareEarth One, plan to drill 5,000 feet of new core samples this year at their Bokan Mountain site in Alaska to improve mineral estimates.

Rare earths are a group of 17 elements that are increasingly vital to a host of modern defense and clean energy technologies, including radar systems, modern weaponry, advanced batteries, next-generation vehicles, high-efficiency lighting and wind turbines.

Murkowski's legislation is co-sponsored by five Republican senators: John Barrasso and Mike Enzi of Wyoming; Mike Crapo and Jim Risch of Idaho; and David Vitter of Louisiana.

Statement for the Record
Subcommittee on Energy Hearing on Rare Earth Elements
Senator Lisa Murkowski
September 30, 2010

Thank you, Chairwoman Cantwell, for holding this important hearing and for allowing me to submit my written statement to its Record.  I especially appreciate this Subcommittee's attention to S. 3521, the Rare Earths Supply Technology and Resources Transformation Act of 2010, which I introduced this past June along with five co-sponsors.  

From experience, we know that clean energy technologies face a range of obstacles.  The credit crunch has slowed capital investment, disputes have arisen over which lands are suitable for infrastructure, and the electric grid has sometimes proved incapable of handling new generation.  Most alternative and renewable resources are still much more expensive than their conventional counterparts, and many are also intermittent or unreliable in nature.  

Over the long run, however, our most difficult challenge may be our most fundamental: ensuring a stable supply of the raw materials needed to manufacture clean energy technologies in the first place.  According to the U.S. Geological Survey, our nation's reliance on foreign minerals has "grown significantly" over the past several decades.  In 2009, we imported more than 50 percent of our supply of 38 different minerals and materials, and we were 100 percent dependent on foreign countries for some 19 of those commodities.  That's up significantly from just seven mineral commodities in 1978.

This growing dependence is important because minerals offer our best chance to harness the potential of clean energy.  Even now, we import 100 percent of the quartz crystal used in photovoltaic panels, the indium used in LED lighting, and the rare earth elements used in advanced vehicle batteries and permanent magnets.  The large quantities of minerals required for clean energy technologies only add to the scale of our needs. A large wind turbine can contain more than one ton of rare earth elements - in addition to more than 300 tons of steel, nearly five tons of copper, and three tons of aluminum.

Taken together, recent trends in our nation's mineral consumption signal a little-known, yet rather worrisome, trend: as our demand for minerals has risen, so too has our dependence on foreign nations for their supply.  And even though clean energy technologies currently account for a fraction of worldwide mineral consumption, we're already seeing strains in global supplies.

Many countries have undertaken a 50-year, or longer, view of the world and continue to lock down long-term supply arrangements through investments in Africa, Australia, South America, and other resource-rich locales. These actions will help emerging economies meet their burgeoning demand for raw materials, but it could leave our nation out in the cold at the very moment we realize we most need these minerals.

Just as we've seen with our reliance on foreign oil, the United States' total reliance on foreign sources of rare earths puts us in a perilous situation.  China currently accounts for 97 percent of global production of these incredibly important metals and has repeatedly followed through on plans to decrease export of them.  Some have compared China to a one-nation OPEC for rare earths - and China's recent actions signal that they are well aware of their immense power over the supply of this sought-after commodity.

By cutting rare earth exports, China is seeking to ensure the manufacture of clean technologies within its own borders.  But the implications for energy security and job creation in America are also apparent: we risk a future in which wind turbines, solar panels, advanced batteries, and geothermal steam turbines are not made in the USA, but somewhere else.

Further, what's worse is that some minerals are now being used as a weapon to strike back against vulnerable countries who have failed or who are unable to meet their own needs with domestic production. The latest evidence comes in the form of China's decision to halt rare earth exports to Japan, after Japan arrested a Chinese fishing boat captain involved in a collision with Japanese Coast Guard vessels.

Some experts contend that the lack of a cap-and-trade system is at the root of this emerging crisis.  I disagree - a price on carbon would do little to promote mineral production in the United States, and could actually hurt it.  Instead, I believe that one of the main reasons why our nation is on the verge of falling behind in the development of clean energy technologies is that we have slowly but surely surrendered the front end of the clean energy supply chain.

We're left with quite a paradox.  Even as many of America's political leaders take steps to limit mining, a reliable supply of minerals has become essential to the manufacture of nascent energy technologies.  If allowed to continue, we will simply trade our current dependence on foreign oil for an equally devastating dependence on foreign minerals.

Even our environmental goals could be jeopardized. The widespread deployment of clean energy technologies is not only contingent upon breakthroughs in research and development but also the affordability of the raw materials used in them.  If prices spike because the supply of raw materials is insufficient, entire technologies could fail.

The good news is that the United States has, within its borders, abundant reserves of many critical minerals that we currently choose to import.  These reserves represent an opportunity to create many new American jobs, and their production would help facilitate a robust clean technology manufacturing sector.  Particularly in these tough economic times, we should recognize that mining jobs pay well and provide an excellent career path for those who pursue them.

Understanding that we could soon face a global supply crunch, and that we have significant mineral reserves here at home ready to be developed, I introduced the Rare Earths Supply Technology and Resources Transformation (RESTART) Act on June 22nd, 2010.  Senators Barrasso and Enzi of Wyoming, Senators Crapo and Risch of Idaho, and Senator Vitter of Louisiana have joined me as co-sponsors of this legislation, which would address a number of hurdles standing in the way of a resurgent rare earths industry.    

Specifically, the RESTART Act would:

·         Promote investment in, exploration for, and development of rare earths as U.S. policy;
·         Establish a task force to reform permitting and regulation of rare earth production;
·         Require an assessment of rare earth supply chain vulnerabilities;
·         Seek agency recommendations on procuring and stockpiling critical rare earths;
·         Provide loan guarantees for rare earth production, processing and manufacturing;
·         Seek a review of rare earth projects related to national defense capabilities;
·         Prioritize funding of innovation and job training in the rare earth industry; and
·         Subject the sale of assets supported by taxpayer dollars to Secretarial approval.

In my view, the most important issue for Congress to address is the bureaucratic delays faced by those who wish to develop our domestic production capabilities.  In country rankings, the United States ranks dead last in permitting delays.  This is a problem that must be fixed, and we can do so in a way that maintains the environmental protections that we rightfully demand.

I understand that many people do not want public lands to be used for mineral extraction or any other form of energy development.  The truth, however, is that those views are both short-sighted and counterproductive.  Our standard of living requires us to generate and consume a significant amount of energy, and that energy must be produced somewhere. All resources carry some cost to the environment, whether in carbon content or the raw materials and physical area needed to tap their potential.  We will not see significant progress on clean energy technologies until we are serious about the production of the minerals used to produce them.

Albert Einstein once wrote that "in the middle of difficulty lies opportunity." Our nation faces a great challenge in the form clean energy technology deployment.  But as we struggle to find our way forward, we'll also be presented with new opportunities to strengthen our economy and our security.  

Rare earth production is one of those opportunities.  As this Subcommitee continues to consider ways to promote clean energy, I would encourage you to take the long view - and to recognize that greater domestic production of rare earths and other mineral commodities is vital to the future of our energy supply, our economic wellbeing, and the integrity of the environment.

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