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                                                     Calendar No. 423
115th Congress      }                                  {       Report
                                 SENATE
 2d Session         }                                  {      115-255

======================================================================



 
           RARE EARTH ELEMENT ADVANCED COAL TECHNOLOGIES ACT

                                _______
                                

                  May 22, 2018.--Ordered to be printed

                                _______
                                

        Ms. Murkowski, from the Committee on Energy and Natural
                   Resources, submitted the following

                              R E P O R T

                         [To accompany S. 1563]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1563) to authorize the Office of Fossil 
Energy to develop advanced separation technologies for the 
extraction and recovery of rare earth elements and minerals 
from coal and coal byproducts, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                PURPOSE

    The purpose of S. 1563 is to authorize the Department of 
Energy's Office of Fossil Energy to develop advanced separation 
technologies for the extraction and recovery of rare earth 
elements and minerals from coal and coal byproducts.

                          BACKGROUND AND NEED

    Rare earth elements (REEs) are a group of 17 chemical 
elements (the so-called ``lanthanides,'' the elements numbered 
57 to 71 in the periodic table, plus elements 21 and 39, which 
tend to occur with the lanthanides in ore bodies). Their 
economic importance and demand for them is increasing because 
their electrochemical properties make them useful in a wide 
range of consumer products, including: cell phones, computer 
drives, and GPS devices; clean energy technologies, including 
electric motors for hybrid vehicles and wind turbines; and 
numerous industrial, medical, and defense applications, 
including high-temperature superconductors, aerospace 
components, oil refining, fiber optics, lasers, cancer 
treatment, and medical imaging. For this reason, they are often 
referred to as ``critical minerals'' or ``technology metals.'' 
Further, the entire class of REEs was officially classified as 
a critical mineral on May 18, 2018 (83 F.R. 23295), pursuant to 
Executive Order 13817 (82 F.R. 60835).
    REEs highlight our nation's foreign mineral dependence. In 
2017, the United States imported 100 percent of 21 different 
minerals (including REEs), and at least 50 percent of 50 
different minerals. The Mountain Pass Mine in California 
supplied most of the world's demand for REEs from the 1960s to 
the 1980s. But the Mountain Pass Mine closed in 2002 and its 
owner filed for bankruptcy in August 2015, removing the only 
known domestic mine of REEs. The Mountain Pass Mine was 
acquired by a Chinese-led consortium in 2017. The mine's 
closure has left the nation 100 percent dependent on foreign 
suppliers--predominantly China. China now supplies over 80 
percent of the world's demand, with Australia supplying much of 
the rest. The United States also has limited processing 
capabilities for REEs. The nation faced the dangers of 
extensive dependence on foreign supply of REEs when China began 
reducing its exports in 2006. The average cost of REEs imports 
from China rose 2,432 percent from 2002 to 2011, and by 723 
percent in 2011 alone.
    U.S. mineral import dependence and the concentration of 
mineral supply from certain countries are broadly recognized as 
growing threats to economic growth, competitiveness, and 
national security. The resulting price and supply chain 
volatility has prompted a greater focus on policies related to 
mineral security and critical minerals that are important in 
use, susceptible to supply disruption, and for which no 
substitutes are readily available.
    According to the National Energy Technology Lab (NETL), and 
based on annual estimates, acid mine drainage sludge in West 
Virginia and Pennsylvania represents approximately 45,000 tons 
per year of rare earth elements.
    NETL has been examining the concept of extracting rare 
earth elements from coal and coal byproducts since 2010. 
Congress appropriated funding in 2014 for NETL to develop 
extraction technologies for rare earth elements from coal 
byproducts. Additional legislation is needed to spur 
development of advanced separation technologies for the 
extraction and recovery of REEs from coal and coal byproducts.

                          LEGISLATIVE HISTORY

    S. 1563 was introduced by Senator Manchin on July 13, 2017. 
On December 5, 2017, the Subcommittee on Energy held a 
legislative hearing on S. 1563. In addition, on March 28, 2017, 
the Committee held an oversight hearing that examined U.S. 
foreign mineral dependence and ways to rebuild and improve the 
mineral supply chain in the United States (S. Hrg. 115-183).
    The Committee on Energy and Natural Resources met in open 
business session on March 8, 2018, and ordered S. 1563 
favorably reported.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on March 8, 2018, by majority voice vote 
of a quorum present, recommends that the Senate pass S. 1563. 
Senator Lee asked to be recorded as voting no.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    Section 1 sets forth a short title for the bill.

Section 2. Findings

    Section 2 sets forth Congressional findings for the bill.

Section 3. Program for extraction and recovery of rare earth elements 
        and minerals from coal and coal byproducts

    Section 3(a) directs the Secretary, acting through the 
Assistant Secretary for Fossil Energy, to carry out a program 
to develop advanced separation technologies for the extraction 
and recovery of REEs and minerals from coal and coal 
byproducts.
    Subsection (b) authorizes $20 million for each of fiscal 
years 2018 through 2025.

Section 4. Assessment and report

    Section 4(a) requires the Secretary, in consultation with 
the Secretary of Defense, to produce an assessment of REEs and 
advanced separation technologies, along with a report analyzing 
any additional resources needed for second generation 
technologies and the market impact of sludge-derived 
treatments, within one year of the Act's enactment.
    Subsection (b) requires the Secretary to focus on REEs 
determined to be most critical to the national security of the 
United States in carrying out the assessment and report.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of the costs of this measure has 
been provided by the Congressional Budget Office:

    Summary: S. 1563 would authorize appropriations for the 
Department of Energy (DOE) to develop technologies to lower the 
cost of recovering rare earth elements and other materials from 
coal and coal byproducts.
    Assuming appropriation of the authorized amounts, CBO 
estimates that implementing S. 1563 would cost $60 million over 
the 2018-2023 period. Enacting the bill would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    CBO estimates that enacting S. 1563 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    S. 1563 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 1563 is shown in the following table. 
The costs of the legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars
                                                      ----------------------------------------------------------
                                                        2018    2019    2020    2021    2022    2023   2018-2023
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Authorization Level..................................      20      20      20      20      20      20       120
Estimated Outlays....................................       0       3       9      14      16      18        60
----------------------------------------------------------------------------------------------------------------
The bill would authorize the appropriation of $20 million in 2018. CBO does not estimate any outlays for that
  authorization because appropriations for 2018 have already been enacted.

    Basis of estimate: For this estimate, CBO assumes that S. 
1563 will be enacted near the start of fiscal year 2019 and 
that authorized amounts will be provided each year beginning in 
2019.
    S. 1563 would authorize the appropriation of $20 million 
annually over the 2018-2025 period for DOE to carry out 
research related to rare earth elements and minerals and to 
develop advanced technologies to improve the economic viability 
of separating, extracting, and recovering those materials from 
coal and coal byproducts. The bill also would require DOE to 
assess the importance of rare earth elements and minerals to 
U.S. consumers, evaluate technologies developed under the bill, 
and analyze other factors related to the costs and economic 
effects of implementing such technologies.
    For 2018, the Congress has provided $15 million for DOE's 
research activities related to rare earth elements and 
minerals; for this estimate, CBO assumes no further funding 
will be provided this year. Assuming appropriation of the 
authorized amounts over the 2019-2025 period, CBO estimates 
that outlays would total $60 million over the 2018-2023 period 
covered by this estimate. (Additional outlays after 2023 would 
total $80 million.) That estimate is based on historical 
spending patterns for existing activities.
    Pay-As-You-Go considerations: None.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting S. 1563 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2029.
    Mandates: S. 1563 contains no intergovernmental or private-
sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Megan Carroll; 
Mandates: Jon Sperl.
    Estimate reviewed by: Kim Cawley, Chief, Natural and 
Physical Resources Unit; H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1563.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1563, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 1563, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the Department of Energy at the 
December 5, 2017, hearing on S. 1563 follows:

 Testimony of Under Secretary Mark Menezes, U.S. Department of Energy, 
   Before the U.S. Senate Committee on Energy and Natural Resources 
                         Subcommittee on Energy

S. 1563--Rare Earth Element Advanced Coal Technologies Act
    It's likely the development of a domestic supply of rare 
earth elements (REEs) that is economically competitive will 
help fuel our nation's economic growth, secure our energy 
independence, and increase our national security. The bill 
appears to authorize $20 million per year from 2018 through 
2025 for the Department of Energy (specifically the Office of 
Fossil Energy) to develop advanced separation technologies for 
the extraction and recovery of REEs and minerals from coal and 
coal byproducts. It appears the bill also requests that DOE, in 
consultation with the Department of Defense, within 1 year 
after date of enactment, submit a report that assesses the 
importance of REEs to the United States, evaluates the 
development of new separation technologies, and analyzes the 
market impact of new technologies. Due to the complexities of 
the research and scope of the report, Congress may want to 
consider extending the due date of the initial assessment.
    The bill appears to acknowledge the current ongoing efforts 
within DOE to advance separation technologies for the recovery 
of REEs. Thus, DOE appreciates the proposed legislation as it 
incorporates its ongoing R&D. DOE is developing technologies 
with the goal of enabling additional domestic supplies of REEs, 
reducing environmental impact of coal and REE production, and 
delivering technologies that can be manufactured within the 
United States. DOE has accomplished much in this area, 
including the evaluation of pilot-scale processing options, and 
the nature and distribution of REEs in U.S. coal deposits.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 13 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by S. 1563, as ordered 
reported.

                                  [all]