DV Journal

As new energy technologies increase demand for rare earth elements and materials, one local congressman is touting a proposal to increase domestic production.

U.S. Rep. Brian Fitzpatrick (R-Bucks) and New Jersey Democrat Rep. Josh Gotthemier recently announced the Restoring Essential Energy and Security Holdings Onshore for Rare Earths (REEShore) Act. The legislation is a companion to a bipartisan bill introduced in the Senate.

It seeks to strengthen the Department of Defense’s rare earth element reserves, according to a statement from Fitzpatrick’s office. Backers of the bill hope to decrease reliance on China. In 2021, 78 percent of rare earth imports were from China, according to the U.S. Geological Survey.

“We cannot let the Chinese Communist Party continue to benefit from supplying our country with necessary rare earth materials,” Fitzpatrick said. “We will decrease our reliance on the CCP for these resources and will allow the United States to resume its rightful position as a leader in rare earth elements production.”

China’s dominance in the production of rare earth elements has made a once-sleepy issue prominent, according to Bojeong Kim, associate professor at the Earth and Environmental Science Department at Temple University.

“China has been a really big player for rare earth elements,” she said. “The awareness is that now the U.S. government has started to realize to rely on China on these issues is not reliable.”

The concern is that if China were to cut countries off of their rare earth supply, it could spark a crisis. The U.S. Geological Survey reported China accounted for 60 percent globally of rare earth mining production in 2021, up slightly from 2020. So boosting domestic production is a national security issue on the minds of legislators.

Rare earths are especially in demand right now as the U.S. looks toward different renewable energies. They are essential in wind turbines, solar cells, and electrical vehicle creation. The material is also important in smartphone, television, and computer production.

“These elements are good for high-performance applications,” Kim said. “Magnets, aircraft engines, something that’s part of our lives. It’s just that we don’t think that they require the presence of rare-earth elements.”

The Senate version of the bill looks to establish a strategic rare earth metal and products reserve. Additionally, it seeks to restrict rare earth metals processed or refined in China from entering the country.

Conor Bernstein, a spokesperson for the National Mining Association, called the REEShore Act an important first step in making the U.S. more resource independent.

“Now is the moment to take strong action to re-shore this critical piece of our industrial base,” Bernstein told DVJournal. “While this legislation focuses on rare earths, we hope Congress will acknowledge and act quickly to address our unnecessary dependence on imports for a wide range of minerals that are domestically available.”

Bernstein’s additional statement reflects the battle currently ongoing at the national level. Many environmentalists want to protect lands from harmful mining procedures, while simultaneously many of the minerals needed for renewable energy processes that environmentalists support, must be mined.

That was why Kim said a focus of research right now is discovering a new mining technique that would be more environmentally friendly.

“We are trying to come up with different ways of mining, which is not as effective as the traditional mining processes that we have,” she said. “We have these elements, but we are not going to mine them in the way we used to.”

Kim added governments are looking into localized reservoirs to see how mining can be facilitated at individual locations.

Fitzpatrick is not the first local representative to elevate the issue of rare earth minerals. Congresswoman Chrissy Houlahan (D-Chester) introduced the Securing America’s Rare Earths Supply Act of 2019 in the previous Congress and supported an amendment to the FY2021 National Defense Authorization Act surrounding rare earths.

While a spokesperson for Houlahan could not say if she would support the bill or not until the legislation’s text is available, she reaffirmed Houlahan’s focus on the issue and expressed interest in the proposal.

“Rep. Houlahan is committed to securing our supply chains, and ensuring that critical resources like rare earths can’t be monopolized by China,” the spokesperson said. “The bill co-leads are colleagues of Rep. Houlahan on the Problem Solvers Caucus, and she looks forward to seeing final text and working with them in a bipartisan fashion.”

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A country incapable of providing for itself isn’t much of a great power. To ensure America stays strong for generations to come, we need to bring production of goods essential to our national security back home. That starts with re-shoring rare earth manufacturing.

For some, “industrial policy” is a dirty term associated with planned economies. But Americans have long accepted government action to help maintain domestic manufacturing in critical industries. It makes sense that we buy ships from General Dynamics, airplanes from Boeing, and missiles from Raytheon –– even if it would be cheaper to import them from abroad –– because it is clear they are goods vital to our national security. Well, the last two years have taught us that the list of such goods needs to be expanded.

One urgent addition to that list is rare earth minerals. In the 21st-century economy, rare earth minerals are crucial for powering advanced electronics. They form essential components of everything from batteries and household computers to wind turbines and military weapon systems. Without them, our modern way of life and capacity for self-defense would be crippled.

North America contains a considerable quantity of unprocessed rare earth minerals. However, the vast majority of rare earth manufacturing occurs in China. Even rare earth minerals mined in America are shipped to China for processing. In the wake of COVID-19, the invasion of Ukraine, and the supply chain disruptions that followed, it should be clear to everyone that relying on hostile regimes for basic goods is dangerous.

Just look at Western Europe’s predicament. Nations like Germany remain addicted to Russian natural gas, giving Vladimir Putin leverage over them. Cutting off Russian energy will require tremendous sacrifice on their part.

With expansive energy reserves, America is better positioned to counter Putin. But if China cut us off from rare earth products –– which Beijing has restricted in the past and could easily do again –– the effects would be catastrophic. That’s why I have introduced legislation to bring rare earth manufacturing back to America.

If passed into law, the Obtaining National and Secure Homeland Operations for Rare Earth (ONSHORE) Manufacturing Act will provide financial assistance to entities building rare earth manufacturing plants on U.S. soil and create initiatives to secure our international rare earth supply chain from foreign disruption. The ONSHORE Manufacturing Act will also prohibit taxpayer dollars from funding rare earth manufacturing in designated “entities of concern.” Americans’ hard-earned money should not be used to prop up the industrial capacity of China, Russia, or Iran.

I hope my colleagues in the Senate will join me in passing this piece of legislation, which is vital to keeping our country safe. However, we can’t stop with rare earth metals. There are other industries equally essential to our national and economic security that need re-shoring. In the coming months, it is critical that we begin rebuilding our capacity to produce pharmaceuticals, semiconductors, and more.

This is the kind of targeted industrial policy America needs to maintain its status as a great power. The threats we face from our adversaries, especially China, are wide-ranging and immense. We will need a whole-of-society effort to ensure the 21st century is another American century, and securing supply chains will have to be a part of it.

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Delaware Valley U.S. Reps. Chrissy Houlahan (D-Chester) and Madeleine Dean (D-Montgomery) are celebrating the billions of federal dollars the new bipartisan infrastructure bill will bring to Pennsylvania. And they reject the argument that trillions in new federal spending will add to the nation’s rising inflation problems.

“This [spending] is the answer to that problem,” Houlahan said.

The two Democrats held a press conference with local officials at the Paoli Train station on Saturday to tout the $1.2 trillion Infrastructure Investment and Jobs Act, now signed into law.

“As a former teacher and engineer, I’m a particularly grade and data-driven person,” said Houlahan. “Pennsylvania now has a grade of C minus for roads and bridges and a grade of D for inlands waterways, according to the American Society of Civil Engineers report card, she said. “And those grades are simply unacceptable. And the data show that must change and we must make changes for safety and for a better way of life.”

The IIJ Act, sometimes referred to as the “bipartisan infrastructure bill,” will provide $11 billion for highways in Pennsylvania; $1.6 billion for bridge replacement and repairs over the next five years; $2.8 for the Amtrak corridor that serves the Delaware Valley region; and $5 billion in grants for rail safety.

“These historic investments will transform our nation and this region so we can better meet the demands of the 21st century with upgraded roads, bridges, modernized transportation, clean drinking water and reliable internet access,” said Dean.  The act includes $18 billion for the commonwealth, she said. There is also $244 million to help low income families with weatherizing their homes and $355 million for airport improvements.

And, Houlahan added, the funding will help area communities “ravaged” by flooding from Hurricane Ida last summer. The act provides money to rebuild, along with mitigation to prevent future flooding.

Polling shows Americans in general and Pennsylvanians in particular are more worried about rising inflation than they are the state of roads and rail. The Consumer Price Index reached a 6.8 percent annual rate in November, the highest since June 1982. Just days before Saturday’s presser, the Producer Price Index numbers were released “showing the biggest annual gain since the series was revamped 11 years ago,” according to Reuters.

Asked about the impact of this spending on inflation, Houlahan denied there was a problem.

“Well, I think this is actually the exact opposite of that concern,” she said. “We have an issue with inflation right now and we need to be attentive to it. But we also have an issue where we need to be creating jobs and opportunity for people. Where we need to be able to provide pathways literal and figuratively to be able to create those jobs and opportunities to be able to expand…This is the answer to that problem.”

Polls show most Americans don’t agree. A new Fox Business poll released last week found 47 percent of Americans believe the Biden administration’s policies are  “hurting” the country’s ability to fight inflation. And 46 percent say the Build Back Better social spending bill Dean and Houlahan helped pass last month will just drive inflation even higher.

DVJournal also asked about the infrastructure bill’s spending on electric vehicles (EVs), whose production is reliant on rare earth metals like lithium and cobalt. China is the dominant processer of these elements and, critics say, would overwhelmingly benefit from spending on green tech like EVs.

Houlahan said that as a former chemistry teacher, “I geek out on the periodic table and I serve on the armed services committee and actually passed a lot of legislation on rare earth elements.”

She called the term “rare earth” a “misnomer,” saying those minerals are everywhere but “China, amongst others, has a pretty big corner on the market on those processes and that mining, because it is also a very dirty process. And this is something understandably that here in the United States, we are more reticent to do. We do have a lot of work that needs to be done on rare earth elements. We need to become less reliant on China.”

Houlahan said she plans a trip to Australia, Japan, and South Korea to investigate how those countries deal with China and are able to “to diversify their reliance on rare earth elements and their reliance on China. That being said, we can’t walk away from the importance of electric vehicles.”

State Secretary of Transportation Yassmin Gramian, who attended the press conference, discussed how the increase in electric vehicles has decreased the state’s revenue from the gasoline taxes that funds road and bridge repairs.

Gramian said the new act provides the largest amount of funds earmarked for transportation since the Eisenhower administration.

“We have unmet needs of $8.1 billion annually in our highway and bridge program,” said Gramian. “And $9.3 billion altogether for all modes of transportation,” Gramian said. “We are so excited to see more electric vehicles on the road, we are so excited to see that the cars are becoming efficient…But that has really, truly impacted the revenue that’s been generated for our transportation system.

“Seventy-eight percent of our revenue for highways and bridges comes from gas taxes and it’s been going down month after month to the tune of $15 to $10 million. Last year around this time, we came very close to shutting down our transportation projects. We were down in our revenue by $600 million. We did not have enough cash to pay for our construction projects and pay our bills. That’s how bad the situation was at PennDOT because we are so much relying on gas taxes.”

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