Legislature(2023 - 2024)BARNES 124
01/17/2024 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HB169 | |
| HB177 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 177 | TELECONFERENCED | |
| += | HB 169 | TELECONFERENCED | |
HB 177-CRITICAL NATURAL MINERALS PLAN AND REPORT
1:37:57 PM
CHAIR MCKAY announced the final order of business would be HOUSE
BILL NO. 177, "An Act relating to critical and essential
minerals and the global energy transition." He said this is the
first hearing on HB 177 in House Resources and there would be
invited testimony with the intent to hold the bill in committee
until the following week.
1:38:40 PM
REPRESENTATIVE SADDLER, as prime sponsor, introduced HB 177 the
critical and essential minerals legislation. He offered HB 177
as a means for Alaska to be the lead in providing critical and
essential minerals to the global market. He defined "essential
minerals", as those that are necessary for industry and national
defense; "critical minerals" are limited and don't have enough
of or don't have reliable or a secure source of. He provided
examples of essential minerals like: copper; tin; gold; zinc;
graphite; lead; and silver. He also identified several more,
lesser-known, essential minerals such as: molybdenum and
chromium. He read the rest of the sponsor state [original
punctuation provided]:
These minerals are fundamental components of many of
today's ubiquitous technologies, such as computers and
household appliances. To keep our economy and our day-
to-day lives moving forward, we need to ensure we have
a plan for accessing these critical resources.
Demand for critical and essential minerals has
increased in recent years and is likely to continue
to increase, possibly exponentially as the demand
for renewable energy sources grows. Critical and
essential minerals are a key element of many emerging
energy technologies, ranging from electric vehicles to
solar panels.
What's more, critical and essential minerals are also
increasingly essential components of the high-
technology industrial processes and weapons systems
that play increasingly important roles in maintaining
a strong national defense.
Currently, China is home to most of the global market
for processing and refining critical minerals, which
has concerning implications for the health of our
nation's economy, and the strength of our nation's
armed services and defense capabilities. It is vitally
important that our nation be able to reliably produce
such minerals and use them to manufacture technology-
forward products and systems.
HB 177 helps meet that imperative. It directs the
Alaska government to assess the state's potential as
an alternative source of these minerals, identify
strategies to attract industry investment, and review
the possible impacts of potential regulatory regimes.
This proposal has the potential to not only decrease
our reliance on imported critical minerals, but also
increase investment in Alaska's natural resource
industry.
Alaska has an opportunity to position itself as a
competitive source of critical and essential minerals
in the global supply chain. HB 177 requires the
Departments of Natural Resources and Commerce,
Community, and Economic Development to provide the
information that industry experts and state officials
need to take the next steps toward making Alaska a
globally competitive source of critical and essential
minerals.
1:42:41 PM
KATIE MCCALL, Staff to Rep. Saddler, on behalf of Representative
Saddler, gave the sectional analysis for HB 177 as follows
[original punctuation provided]:
Section 1, Subsection (a) Page 1, Lines 3-15 & Page
2, Lines 1-4
Subsection (a) of HB 177 adds a new section of
uncodified law to direct the Office of the Governor to
develop a plan for the state to encourage exploration,
production, and refining of the minerals needed to
support emerging renewable energy technologies.
The plan must specifically identify strategies to
attract industry investment and position the state's
critical mineral production at the center of U.S.
production and manufacturing initiatives employing
critical minerals. The plan must also review the
impacts of various regulatory frameworks on mineral
development.
Section 1, Subsection (b) Page 2, Lines 5-18
Subsection (b) of HB 177 directs the Department of
Natural Resources to provide a report to the
Legislature by the start of the legislative session in
January 2026 that compares the state's current mineral
production and potential future production to national
and global production of critical and essential
minerals.
The report must identify strategies to increase
industry exploration and state production of critical
and essential minerals in the next three, five, and 10
years. The report must also compare the state's
permitting timelines and exploration incentives to
those in other jurisdictions.
The department may consult with other state and
federal agencies, the University of Alaska, industry
representatives, and advocacy organizations to compile
the required information for the report.
Section 1, Subsection (c) Page 2, Lines 19-31 & Page
3, Line 1
Subsection (c) of HB 177 directs the Department of
Commerce, Community, and Economic Development to
provide a report to the Legislature by the start of
the legislative session in January 2026
that identifies the state's role in the global energy
transition. The report must include the potential role
of Alaska's mineral resources in the supply chain for
electric batteries, solar panels, wind turbines, and
consumer devices.
The department may consult with the appropriate state
and federal agencies to compile the required
information for the report.
The report must include the value of the state's
location in the global supply chain and identify
strategies for in-state innovation, manufacturing, and
transportation for the next three, five, and 10 years.
1:45:38 PM
REPRESENTATIVE ARMSTRONG was curious why working with local
communities wasn't explicitly written into the HB 177 draft.
1:46:28 PM
REPRESENTATIVE SADDLER believed it was written into HB 177 from
existing system of legislation but did not see any reason to
leave out language that included input from local communities.
1:46:57 PM
REPRESENTATIVE ARMSTRONG followed up with the suggestion of
adding, "other relevant products that may come up" into HB 177.
1:47:28 PM
REPRESENTATIVE SADDLER said he thought it was a good idea in
order to keep up with the rate of technology.
1:47:41 PM
CHAIR MCKAY opened invited testimony on HB 177.
1:48:15 PM
BRENT SHEETS, Director, Petroleum Development Lab, University of
Alaska Fairbanks, joined invited testimony via Teams. He
explained they are heavily involved in resources issues in
addition to petroleum. He informed the committee that the lab
is involved in carbon capture and sequestration, small-scale
coal technology, and rare-earth mineral projects. He updated
the committee that the petroleum engineering program is
transitioning to the energy resources engineering program.
1:49:34 PM
MR. SHEETS moved to slide 2, titled "Mineral Resources," with a
map showing current mines and advanced mineral exploration
projects with potential mines highlighted in red. He also
emphasized the partnership between the University of Alaska
Fairbanks (UAF) and the Division of Geological and Geophysical
Surveys (DGGS). He imparted Alaska has numerous untapped
mineral resources that could be developed. He cited the recent
finds of world-class Germanium and Gallium deposits in Ray
River, near the Yukon River, which would be attractive for the
state to lease to developers.
1:51:41 PM
MR. SHEETS moved to slide 3, titled "Background-Alaska's
Critical Mineral Potential," that displayed a bar chart of the
underdeveloped critical minerals in Alaska. He said Alaska has
the potential to supply most of the commodities shown on the
graph, especially zinc, which Alaska in leads market production
thanks to Red Dog Mine.
1:53:06 PM
MR. SHEETS advanced to slide 4, titled "Applications/Products,"
that proposed the use of these minerals for magnetic products,
metal alloys, defense mechanisms, catalysts, glass and polishing
compounds, ceramics and phosphors.
1:53:50 PM
MR. SHEETS described slide 5, titled "Carbon Ore, Rare Earth, &
Critical Minerals," which outlined the vision to bring Alaska's
Carbon Ore, Rare Earth-Critical Minerals (CORE-CM) into
perspective and echo the mission to establish a CORE-CM industry
in Alaska by working with industry and other stakeholders to
identify opportunities and address challenges.
1:54:45 PM
MR. SHEETS moved to slide 6, titled "Budget By Phase" outlined
three phase of how to compete with China. He posited, Phase 1
is a planning period, Phase 2 and 3 will be a cost challenge but
with the partnership and funding with DGGS, UAF can count on an
in-kind match. He stressed the importance of that partnership
and suggested bringing in the Department of Environmental
Conservation for additional input.
1:56:30 PM
MR. SHEETS moved to slide 7, titled "Overview," that outlined
the Department of Energy and equivalent UAF/DGGS tasks such as
[original punctuation provided]: Task 2: Basinal Assessments;
Task 3: Waste Stream Reuse; Task 4: Strategies for
Infrastructure, Industries and Businesses, Task 5 Technology
Assessment, Development and Field Testing; Task 6: AK-TIC and
Task 7: Stakeholder Outreach and Education.
He pointed out that rare earth elements (REE) are not that rare,
but they are difficult to mine economically.
2:02:53 PM
MR. SHEETS moved to slide 8, titled "REE Value Chain," that
illustrates the progress of value from exploration, to mining,
to on-site concentrations, to separation, to metal making and
finally, alloy production.
2:05:15 PM
MR. SHEETS moved to slide 9, titled "Additional Assets,"
highlighting additional resources from DGGS such as: ICP-MS
installation, hyperspectral imaging, an advanced instrumentation
laboratory, bioreactors to separate elements from ores without
the use of acids, and the UAS/UAF effort to expand mining
training.
2:07:15 PM
CHAIR MCKAY thanked Mr. Sheets and expressed his excitement
about the subject matter especially for those having visited
Iceland and toured the energy infrastructure of that country.
2:08:21 PM
REPRESENTATIVE MEARS asked Mr. Sheets if there were requirements
for continuing through the phases that would need support from
the legislature.
2:08:48 PM
MR. SHEETS replied the main one would be able to meet matching
funds with DGGS to progress through all of the phases of the
budget. He said the department has a 20 percent cost match.
2:10:05 PM
REPRESENTATIVE MEARS noticed there wasn't a fiscal note with HB
177.
2:10:31 PM
MS. McCALL replied to Representative Mears there are two fiscal
notes with the HB 177 legislation.
2:10:49 PM
REPRESENTATIVE DIBERT directed her comment towards Mr. Sheets
and expressed her excitement and where HB 177 is heading. She
asked specifically about the critical minerals in Ray River; if
the communities and workforce have a bridge between them to
provide local jobs moving forward.
2:12:18 PM
CHAIR MCKAY invited more questions; seeing none, he introduced
the next presenter Ms. Karen Matthias.
2:13:03 PM
KAREN MATTHIAS*, Executive Director*, Alaska Metal Mines*,
Anchorage, Alaska {testified in support of HB 177.} She
reiterated the increasing demand for essential and critical
metals in several sectors of the economy. She warned imports
from adversarial countries are a risk, therefore, the United
States need more domestic mineral production and Alaska should
be part of the solution. She contended the term, "critical
minerals", are defined differently by DGGS, DNR and other
departments and change through time. Ms. Matthias pointed out
the copper is not on the United States Geological Survey (USGS)
critical mineral list as an example opposed to the United States
Department of Energy. Ms. Matthias emphasized the amount of
copper needed to produce clean energy is insufficient to meet
the federal government goals. In addition, Ms. Matthias
highlighted the rich goal and silver deposits in Alaska.
2:15:30 PM
MS. MATTHIAS said there are only a small number of mines which
have economic challenges to develop; she suggested a diverse
mining economy for the state to succeed. Ms. Matthias advocated
for HB 177 to encourage investment, exploration, and production.
2:17:57 PM
DEANTHA SKIBINSKI*, Executive Director, Alaska Miners
Association*, Anchorage, Alaska {introduced herself to the
committee.}
2:20:33 PM
CHAIR MCKAY invited questions from the committee for Ms.
Skibinski.
2:20:42 PM
REPRESENTATIVE MCCABE asked Ms. Skibinski about the weather in
Big Lake today.
2:20:53 PM
MS. MATTHIAS answered the weather was cold but not as cold as
the Lower 48.
2:21:02 PM
REPRESENTATIVE MCCABE appreciated this suggestion for the change
from transition to expansion and would offer it as an amendment.
2:21:37 PM
REPRESENTATIVE SADDLER was amenable to Representative McCabe's
amendment and offered the term, "energy addition" as an
alternative.
2:21:50 PM
CHAIR MCKAY invited online testimony but there was none. He
then asked Mr. Sheets to further explain slide 6, "Budget By
Phase" expenditures and asked if he was looking for funds from
the legislature.
2:23:13 PM
MR. SHEETS said the slide pointed out what the "DOE" should be.
He attested the State will have to contribute a $1.7 million
match in order to meet the proposed 20 percent requirement.
2:24:53 PM
CHAIR MCKAY concluded the budget subcommittee work on DNR, we
will look under DGGS budget.
2:25:28 PM
REPRESENTATIVE BAKER asked Mr. Sheets or the HB 177 sponsor
[Representative Saddler] how landowners will be incorporated and
wanted to make sure local traditional ecological knowledge is
being put into it the legislation.
2:26:38 PM
REPRESENTATIVE SADDLER answered DNR has worked very well with
local communities, listened to input from tribal organizations
and was confident those voices have been heard and incorporated.
2:27:25 PM
CHAIR MCKAY thanked the committee, set the amendment deadline
for 12:00 p.m. Monday January 22, 2024 and will hold HB 177 in
committee for further consideration.