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