Legislature(2023 - 2024)BUTROVICH 205
02/02/2024 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB118 | |
| Eo 132:eliminating the Alaska Chilkat Bald Eagle Preserve Advisory Council | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 118 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
SB 118-CRITICAL NATURAL RESOURCES; REPORTS
3:31:31 PM
CO-CHAIR GIESSEL announced the consideration of SENATE BILL NO.
118 "An Act relating to critical and essential minerals and the
global energy transition."
3:32:12 PM
SENATOR KELLY MERRICK, District L, Alaska State Legislature,
Juneau, Alaska, provided the following sponsor statement for SB
118:
[Original punctuation provided.]
Senate Bill 118, version A
Sponsor Statement
"An Act relating to critical and essential minerals
and the global energy transition."
The purpose of Senate Bill 118 is to acknowledge the
crucial role of critical and essential minerals to our
state. As we navigate toward a more sustainable energy
future, it is imperative that we position Alaska as a
key player in the production and manufacturing of
these vital minerals.
Alaska could be at the center of U.S. production
through the strategic plans outlined in this bill.
Critical and essential minerals comprise a wide range
of elements, including lithium, copper, platinum,
zinc, and more. These minerals are fundamental
components of much of today's everyday equipment, like
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
crucial resources as their demand increases. More and
more renewable energy sources require components made
of these materials as well, and that demand is likely
to increase, possibly exponentially. Critical and
essential minerals are key elements of emerging energy
technologies, ranging from electric vehicles to solar
panels.
The strategic plans that come out of SB 118 analyze
the impacts of different regulatory frameworks on
mineral development, and include considerations for
economic viability, environmental sustainability, and
efficient production processes. Alaska's commitment to
advancing renewable energy is pivotal for a
sustainable future and our commitment to production of
critical minerals is pivotal for our own economy.
Senate Bill 118 is a forward-looking initiative that
recognizes the critical role Alaska can play in
advancing the global energy transition through
industry and resources that have played such important
roles in our state's past and present.
She added that Communist China is home to the world market for
the extraction and processing of critical minerals and dominates
with 60 percent of the world's production. She opined that it is
unacceptable. Alaska should reduce reliance on adversarial
nations and increase its investment potential rather than rely
on other nations.
3:33:41 PM
KERRY CROCKER, Staff, Senator Kelly Merrick, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 118.
[Original punctuation provided.]
Senate Bill 118, version A
Sectional Analysis
"An Act relating to critical and essential minerals and the
global energy transition
Section 1: Adds a new section to uncodified law to
produce three reports: 1. The Office of the Governor
shall generate a plan for the exploration, production,
refining, and development of critical and essential
minerals used in emerging technology.
2. The Department of Natural Resources shall compare
Alaska's current and potential critical mineral
production to national and international production,
including regulation, permitting, and incentives. The
report should identify strategies to increase
exploration and development over the next three, five,
and ten years.
3. The Department of Commerce, Community, and Economic
Development shall identify the state's role in
innovation, manufacturing, and transportation to
support the global green energy transition.
3:35:05 PM
BRENT SHEETS, Director, Petroleum Development Lab, University of
Alaska Fairbanks (UAF), Fairbanks, Alaska, invited testimony for
SB 118, conveyed that teams at the Petroleum Development Lab
engage with the petroleum industry to identify and address
challenges that hinder private sector investment and resource
development in Alaska, including technical infrastructure and
environmental issues. Current lab projects include the
development of technology to enable production of the North
Slope's vast heavy oil resources. The lab recently received an
award from the Department of Energy (DOE) for carbon capture
utilization and sequestration (CCUS) to examine depleting gas
2
fields in the Cook Inlet area for potential carbon (CO) storage.
It also focuses on the demonstration of coal-plant technology to
promote affordable energy necessary to build industrial and
manufacturing capacity in Alaska. He noted that he is also the
principle investigator for the DOE-funded carbon ore rare earth
and critical minerals project and it is in that capacity that he
is testifying.
3:36:33 PM
MR. SHEETS moved to slide 2 which shows a map of exploration
projects and prospective locations. He pointed out that Alaska
Division of Geological and Geophysical Surveys (DGGS) is in
partnership with UAF on initiatives funded by DOE. Alaska has
long been a major source for some of the world's most valuable
resources. Alaskan Geologists have been active in characterizing
the state's mineral resources and comprehensive in their efforts
within the capabilities of the characterization technology and
budgets available at the time of specific studies. Much of the
information provided was pulled from archives of rare earth
elements and critical minerals characterization. He noted that
he would use the two phrases interchangeably during his
presentation. Despite documented past findings, rare earth
elements and critical minerals have had minimal commercial
potential. Department of Natural Resources' (DNR) Division of
Geological and Geophysical Surveys (DGGS) is examining this
large body of legacy work and conducting preliminary
examinations of some of the vast archive of minerals samples
that are retained in the Geological Materials Center in
Anchorage, a world-class sample repository. The work has already
yielded results confirming abundant, untapped critical mineral
resources in the state. Rare earth elements can be found at most
known mine sites throughout the state and future discoveries are
anticipated. He pointed out that potential rare earth elements
are coded in red on the map. Ray River is an example shown that
was brought to light by the DOE-funded Carbon Ore, Rare Earth
and Critical Minerals (CORE-CM) program. DGGS reviewed old
reports and subsequently collected samples several miles from
the Ray River near the Yukon River Bridge on the Dalton Highway,
where world class geranium deposits are believed to be held.
Preliminary studies at the Usibelli Coal Mine (UCM) demonstrate
a promising future with its critical mineral concentrations. The
lab is in the early stages of discussions with UCM on a
potential project to concentrate material on site to improve
economics and potentially produce minerals from the coal mine.
He said his teams have also engaged with several other mines in
Alaska and foresee high potential for the production of critical
minerals.
3:39:25 PM
MR. SHEETS moved to slide 3, which shows a chart of critical
minerals imports the United States relies on and Alaska's past,
present, and future potential to produce those minerals. He
stated that while critical minerals in Alaska are vastly
underdeveloped and underexplored, it continues to be a producer
of rare elements and critical minerals. Historic rare earth
element production includes antimony, barite, chromium,
platinum, and tin. Current production includes zinc and
germanium, with the Red Dog Mine being the largest producer of
zinc globally. Germanium is contained in the same ore as zinc
and separated during the smelting process. A company-owned
smelter in Canada receives credit for Alaskan geranium
production, not the Red Dog mine, and produced so the quantity
of geranium produced by the Red Dog mine is unknown. Many
critical minerals needed for economic and national security are
supplied by countries with adversarial relationships with the
U.S. Most of the 34 critical minerals highlighted on the chart
are defined as strategic minerals that Alaska could potentially
supply.
3:40:27 PM
MR. SHEETS moved to slide 4 and listed critical mineral
applications and products. He said critical minerals can be used
for purposes other than renewable energy and provided examples
from the slide:
• Magnetics
• Metal alloys
• Defense
• Catalysts
• Ceramics
• Glass and polishing
• Phosphors
3:41:18 PM
MR. SHEETS moved to slide 5 and elaborated on the lab's vision:
[Original punctuation provided.]
CARBON ORE, RARE EARTH & CRITICAL MINERALS
Vision: Bring Alaska's CORE-CM potential into
perspective
Mission: Establish a CORE-CM industry in Alaska by
working with industry and other stakeholders to ID
opportunities & address challenges
He said the CORE-CM center seeks to not only mine and export
critical minerals, but also establish an industry in the state.
This would be consistent with the vision of DOE to accelerate
research that would enable the commercial development of
advanced processing and production of rare earth and critical
minerals, as well as high-value non-fuel coal products
throughout the country. DOE is also funding the CORE-CM
initiative to support the engagement of public and private
partnerships and would allow self-funding through private funds.
The goal is to advance new and innovative technology
development, and advance opportunities for the education and
training of the next generation of technicians, skilled workers,
and science, technology, engineering, and mathematics (STEM)
students.
3:42:28 PM
MR. SHEETS moved to slide 6 and explained project funding by
phase. DOE established 13 CORE-CM centers that are currently all
in phase 1. The Petroleum Development Lab is one of those 13
centers. All the centers have the same funding amount and tasks.
There will be a downselect from thirteen to eight centers for
phase 2, and later narrowed to five for phase 3 - which is
expected to be competitive and there is a significant funding
increase for each phase. DOE is expected to issue the Funding
Opportunity Announcement (FOA) for phase 2 in March.
He said that the cautionary requirements will be challenging for
the project teams to meet, but DGGS maintains great partners
that support this effort. The Petroleum Development Lab is
working closely with industry, which is where some of the
funding match will come from. Also, any expenditures by DGS on
work within the state can be counted as an in-kind match.
3:44:21 PM
MR. SHEETS moved to slide 7 which lists National Energy
Technology Laboratory (NETL) objectives. He said DOE developed
six objectives that all thirteen Core-CM centers must address to
catalyze regional economic growth and job creation. The table
demonstrates each objective that the project is pursuing.
The list below equates NETL Objective from the Funding
Opportunity Announcement (FOA) to the UAF/DGGS task equivalent:
[Original punctuation provided.]
1. Basinal Assessment of CORE-CM Resources = Task 2:
Basinal Assessments
2. Basinal Strategies for Reuse of Waste Streams =
Task 3: Waste Stream Reuse
3. Basinal Strategies for Infrastructure, Industries
and Businesses = Task 4: Strategies for
Infrastructure, Industries and Businesses
4. Technology Assessment, Development and Field
Testing = Task 5: Technology Assessment,
Development and Field Testing
5. Technology Innovation Centers = Task 6: AK-TIC
6. Stakeholder Outreach and Education = Task 7:
Stakeholder Outreach & Education
MR. SHEETS said SB 118 would enable DGGS to further its efforts
under the CORE-CM program to meet DOE objectives. He stated that
rare earth elements are not typically sought, so one aim is to
help the mines consider the potential for rare earth production.
3:51:16 PM
MR. SHEETS moved to slide 8, which illustrates all components
involved in the critical minerals value chain. He said the
default in Alaska is to focus on the exploration and mining
value of the chain, but a mine alone may not hold the same value
as it would paired with other steps in the process. There is
higher value in achieving multiple steps of the Rare Earth
Element (REE) Value Chain in the state. Mined critical minerals
must be separated and refined to develop the final product. If
it could overcome logistical challenges and high energy costs,
it could become a mining and processing mecca of rare earth
elements in the country. Utah currently has robust mining,
processing, and tourism industries that exist simultaneously.
3:53:10 PM
MR. SHEETS moved to slide 9 and reviewed UAF initiatives:
[Original punctuation provided.]
ADDITIONAL ASSETS
• UAF INE: Installing an ICP-MS
• UAF GI: Operates a hyperspectral imaging facility in
the state
• UAF GI: Advanced instrumentation Laboratory
• UAA is developing bioreactors to separate elements
from ores without the use of acids
• UAS and UAF are expanding their respective efforts to
provide mine training
MR. SHEETS said appropriations UAA made to UAF last year have
expanded critical mineral development efforts. The Institute of
Northern Engineering (INE) is using funds to invest in
inductively coupled plasma mass spectrometry (ICP-MS)
technology, an instrument that identifies specific elements
within ore samples. The measurements are considered the only
acceptable data DOE accepts. There are two ICP-MS units in
Alaska, but due to contamination concerns, their use in mining
is often prohibited. Measurements using ICP-MS are considered
the only acceptable data by DOE. Companies often refuse to work
on analysis samples from UCM and entities associated with coal
or carbon. However, he believes the technology will be a huge
asset for the state and anticipates a high volume of customers
and the technology can be sued for a wide variety of purposes
outside of mining. The Geophysical Institute's (GI) HyLab
airborne cameras and spectrometers provide an exceptionally
detailed map of an area's geologic makeup by measuring surface
reflectivity in a variety of wavelengths, which reveals the
mineral composition of the ground surface. The Geophysical
Institute's advanced instrumentation lab has many assets for use
in determining rare earth element composition of minerals. Its
equipment also reveals how an element is bound to the ore, which
helps to determine the best method for the separation of an
element from the ore.
3:55:16 PM
MR. SHEETS briefly moved to slide 10, which lists phase 1
objectives and concluded his presentation.
[Original punctuation provided.]
PHASE 1
- Basin Resources Assessment & Planning
- Carbon ore REE and critical mineral basin-focused
critical mineral resource assessments
- Assessment of technology needs and initial testing
- Understand industrial and energy needs for development
- Develop strategy for integrating regions resources,
infrastructure, needs and opportunities
3:55:32 PM
CO-CHAIR GIESSEL announced invited testimony.
3:55:51 PM
DEANTHA SKIBINSKI, Executive Director, Alaska Miners
Association, Anchorage, Alaska, invited testimony for SB 118.
She expressed support for SB 118 and offered recommendations on
behalf of the Alaska Miners Association. She said it is
unfortunate that the majority of essential minerals are sourced
from foreign adversarial relationships and unacceptable
environmental and social values. SB 118 would direct the state
government to identify strategies to attract investment
opportunities. These directives send a powerful message to
investors that the state of Alaska is a jurisdiction of choice
in which to invest. She opined that Alaska cannot rely solely on
renewable energy, and only reliable fuels can bring reliable
power to businesses in the state.
3:58:37 PM
KAREN MATHIAS, Executive Director, Alaska Metal Mines,
Anchorage, Alaska, invited testimony for SB 118. She
acknowledged the increase in global demand for responsibly-
produced metals and minerals, and the nation's dependence on
these resources. Alaska currently depends on foreign-imported
minerals, which poses as a national security risk. Considering
the abundance of minerals in the state and its rigorous
regulatory process, she proposed that Alaska should be part of
the solution. She listed three key points from the perspective
of Alaska Metal Mines:
1. There is a risk in exclusively focusing on the term "critical
minerals" given there are three federal mineral lists that
change annually. For example, zinc was only recently listed. The
Department of Defense (DOD) reviews current supply and risk,
whereas DOE focuses on supply, demand, and risk to that supply.
There is widespread agreement that the amount of copper needed
for clean energy technologies over the next decade greatly
surpasses supply. While these lists draw attention, Alaska's
focus should be on the production of its own minerals. The state
has one of the greatest zinc mines in the world, tremendous
copper resources, and several other minerals.
2. There is a limited number of mines in the state due to high
energy costs and a lack of infrastructure that make it difficult
to turn deposits into producing mines. Industry clusters are
mutually beneficial and bring together companies, suppliers,
research and development, and workforce development. Alaska
needs a diverse mining industry in order to create mutual
support. Gold may not be in short supply, but the state's gold
mines are key to the health of the industry.
3. Many of the listed critical minerals are not economically
feasible to develop on their own and are often produced as
byproducts. The exceptionally high-grade deposit made it
possible to build the Red Dog Mine in a remote Alaska location.
The mine also produces a substantial amount of germanium, which
is used in electronics and optical industries. It is not
feasible to have a geranium mine, but the zinc mine permits its
production in Alaska.
MS. MATHIAS concluded that SB 118 calls for the state to
investigate strategies to encourage investment, increase
exploration, and the production of critical and essential
minerals.
4:04:03 PM
SENATOR MERRICK said SB 118 would attract investment, create
jobs, boost the state economy, and keep the U.S. safe.
4:04:14 PM
CO-CHAIR GIESSEL held SB 118 in committee.