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. She opined Alaska should 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. 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 Resource 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 glass 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. A company-owned smelter in Canada receives credit for Alaskan geranium production, but the quantity 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. 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. 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. 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 using 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. 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. 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.