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."
CHAIR MCKAY noted that 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. 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
with no reliable or secure source. He provided examples of
essential minerals: copper, tin, gold, zinc, graphite, lead,
and silver. He also identified several lesser-known, essential
minerals: molybdenum and chromium. He presented the sponsor
statement [included in the committee packet], which read as
follows [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 Representative Saddler, on behalf of
Representative Saddler, prime sponsor, gave the sectional
analysis for HB 177 [included in the committee packet], which
read 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 said he 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
an existing system of legislation and said he 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" to 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 announced 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 the lab 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, via a PowerPoint [hard copy included in the
committee packet], 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 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," and
outlined three phases 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," which listed the
following Department of Energy and equivalent UAF/DGGS tasks:
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
are difficult to mine economically.
2:02:53 PM
MR. SHEETS moved to slide 8, titled "REE Value Chain," which
illustrates the progress of value from exploration to mining to
on-site concentrations to separation to metal making and,
finally, to 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 the ability 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
MS. MCCALL, in response to a comment by Representative Mears,
pointed out there are two fiscal notes for HB 177.
2:10:49 PM
REPRESENTATIVE DIBERT expressed to Mr. Sheets her excitement
regarding where HB 177 is heading and indicated she would like
to know about the critical minerals in Ray River and whether the
communities and workforce have a bridge between them to provide
local jobs moving forward.
2:12:18 PM
KAREN MATTHIAS, Executive Director, Alaska Metal Mines, provided
invited testimony in support of HB 177. She reiterated the
increasing demand for essential and critical metals in several
sectors of the economy. She warned that imports from
adversarial countries are a risk; therefore, the U.S. needs more
domestic mineral production and Alaska should be part of the
solution. She contended the term "critical minerals" is defined
differently by DGGS, DNR, and other departments and changes
through time. Ms. Matthias pointed out that 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's
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, as invited testifier expressed AMA's support of the
bill and made suggestions for its improvement. She echoed that
the majority of the minerals that have been mentioned are being
sourced from foreign nations with tenuous connections with the
U.S. She said passage of legislation such as HB 177 would send
a powerful message to investors that Alaska is "a jurisdiction
of choice" in which to invest. She recommended the committee
remove references to the global energy transition because it
describes "an unrealistic pivot from fossil fuel energy
generation." She emphasized that relying on only renewable
energy "is not a reality for Alaska or the world." She said AMA
suggests the word "expansion" could be used in the discussion.
That said, she concluded that HB 177 outlines how Alaska's
mining industry should play a role in providing the essential
minerals needed to provide energy technology.
2:21:02 PM
REPRESENTATIVE MCCABE expressed appreciation of the suggestion
for the change from transition to expansion and indicated that
he would offer that amendment.
2:21:37 PM
REPRESENTATIVE SADDLER was amenable to such an amendment and
offered the term "energy addition" as an alternative.
2:21:50 PM
CHAIR MCKAY 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 remarked that when work is done in the budget
subcommittee addressing DNR, its members will refer to the DGGS
budget.
2:25:28 PM
REPRESENTATIVE BAKER asked how landowners will be incorporated
under HB 177 and said he wanted to make sure local traditional
ecological knowledge incorporated into the proposed legislation.
2:26:38 PM
REPRESENTATIVE SADDLER answered that DNR has worked well with
local communities and listened to input from tribal
organizations and he said he was confident those voices have
been heard and incorporated.
2:27:25 PM
CHAIR MCKAY thanked the committee and set the amendment deadline
for 12:00 p.m. Monday, January 22, 2024.
CHAIR MCKAY announced that HB 177 was held over.