Science Committee Hearing on Energy Critical Elements

“To succeed in the global market place we need to develop not only our mines, but also our minds.” This observation by David Sandalow, who is the Department of Energy Assistant Secretary for Policy and International Affairs, aptly summarizes the major conclusion from a hearing on energy critical materials. The hearing was held to examine issues regarding the future availability of energy critical materials, including a report by the American Physical Society’s Panel on Public Affairs and the Materials Research Society entitled “Energy Critical Elements: Securing Materials for Emerging Technologies.” APS is a Member Society of the American Institute of Physics; MRS is an AIP Affiliated Society.

The December 7 hearing by the Subcommittee on Energy and the Environment of the House Science, Space, and Technology Committee is one of the latest developments in crafting a strategy to reduce U.S. dependence on Energy Critical Elements (ECE). The APS/MRS report defines ECEs as “a class of chemical elements that currently appear critical to one or more new, energy-related technologies,” such as gallium, germanium, indium, selenium, lithium, and rhenium.

The 23-page APS/MRS report was released in February 2011. Robert Jaffe of the Massachusetts Institute of Technology chaired the 14-member committee, which included academic, national laboratory, and corporate representatives, as well as individuals from the American Physical Society and the Material Research Society.

A key conclusion of the APS/MRS panel was “The present ‘rare earth crisis’ – involving dramatic price escalations and possible shortages - appears to be an example of government policy.” More than 95 percent of all rare earth elements, a subset of ECEs, are extracted and processed in China. To increase the supply of ECEs, the report makes the following recommendations:

Indicative of mounting congressional concern about current and future supplies of ECEs are the ten bills that were introduced in the House and Senate last year dealing with this problem. The recent hearing by the Subcommittee on Energy and Environment reviewed ECEs and H.R. 2090, the Energy Critical Elements Advancement Act of 2011.

H.R. 2090 was introduced last June by Rep. Randy Hultgren (R-IL) and has four cosponsors. The bill would implement the recommendations in the APS/MRS report. The Departments of Interior and Energy would be directed to collaborate “to improve assessments of energy critical elements.” New duties are established for the U.S. Geological Survey. Both departments are authorized to “establish a research program to advance basic knowledge and enable expanded availability of energy critical elements.” A subcommittee of the National Science and Technology Council would be required to issue a report on the recycling of energy critical elements.

The subcommittee’s chairman, Andy Harris (R-MD) supports the bill, telling his colleagues that it “sets forth the appropriate structure and direction” for “reasonable and proper steps the federal government can and should pursue in this area.” In his opening comments, Ranking Member Brad Miller (D-NC) described a rare earth bill passed by an overwhelming vote in the House that was not acted upon by the Senate. He described a bill he introduced in March, H.R. 952, as “very similar” to the previous bill passed by the House. Miller’s bill would authorize the Office of Science and Technology Policy to direct research efforts. This bill has five cosponsors. Harris told Miller that the committee would work together to write a bipartisan bill.

In his testimony, David Sandalow stressed the importance of research on ECEs and the need for close coordination between federal agencies. He said the Administration is now reviewing H.R 2090, and “has no specific comments on it at this time.” Derek Scissors, a Research Fellow at The Heritage Foundation stressed his trust in market forces to remedy shortages and disparaged loan guarantees and subsidies, adding that federal support for applied research is a type of subsidy. He predicted Chinese control of ECEs would be temporary, saying that its market share is already declining. An example of how the market is responding was provided by Luka Erceg, President and CEO of Simbol Materials. His company is commercializing a process to extract lithium, manganese, and zinc from geothermal brines at a California power plant.

“The sky is not falling,” Robert Jaffe assured the subcommittee, while acknowledging that there are serious problems regarding ECEs. He stressed the importance of gathering information to predict when a shortage may occur, the need for fundamental research, and the desirability of ECE recycling. Jaffe said H.R. 2090 reflects the recommendations of the APS/MRS report. Also testifying was Karl Gschneidner of Ames National Laboratory who was a member of the APS/MRS committee. He stressed the importance of ECEs in military applications, described research at Ames Laboratory, and discussed his concerns about the future workforce.

Questions from subcommittee members focused on the proper role of the federal government, with concern about it “picking winners and losers.” Sandalow urged the subcommittee to avoid artificial distinctions in types of research, citing the important role that basic research played in developing shale gas. Erceg spoke of the important role that a federal grant to his company made in sending an “enormous signal” to the market.

There was also discussion about a forthcoming report by the Department of Energy that has since been released, the second in a series that is entitled “Critical Materials Strategy.” A four-page summary explains:

This summary briefly describes DOE’s Strategy, which parallels the APS/MRS study’s recommendations: The report outlines steps that DOE has taken to implement this strategy. Congress is also acting: the recently-passed FY 2012 appropriations bill for DOE includes $20 million for a new energy innovation hub that will focus on critical materials.