During a House Energy and Commerce Committee hearing last week, Rep. John Joyce (R-PA) spoke about a 'de-risking compensation program' included in the House budget.
00:02Thank you, Chairman Palmer and Ranking Member Clark for holding this important hearing,
00:06and thank you for our witnesses for testifying.
00:09Critical materials, specifically critical minerals, are required in many areas of manufacturing,
00:17ranging from products simple like a sunscreen to light bulbs to vital energy and to defense applications.
00:24A supply, a steady supply of critical minerals is essential to protect America's economic and our national security.
00:34Unfortunately, for decades, we have ceded our advantage in the production and refining of these materials to other countries, specifically China.
00:43Over the last few years, we have seen the consequences of this domestic inaction
00:49as China bans or severely limits exports to the U.S. of critical minerals essential to our national security.
00:58Let's be clear.
00:59We cannot continue to allow our biggest adversary to control the supply chain for these materials.
01:05That's why President Trump has taken executive action, declaring a national energy emergency
01:12and aiming to increase domestic production and the refining of critical minerals.
01:18However, executive action alone might not be enough to provide a stable environment to attract new investment in the critical mineral supply chain.
01:29Mr. Hammond, in your written statement, you discussed projects that languish indefinitely due to politics,
01:37including a permit to conduct due diligence on a potential mine that took three years under the last administration,
01:44as opposed to the standard three months.
01:47Would you please elaborate on how the priorities of an administration can affect the implementation of the permitting process?
01:56Sure.
01:56Someone can say that critical minerals is important, but if it's not a priority for an administration,
02:02you're not going to make any progress.
02:04In that case, like I said, a project stood still for three years for something that should have taken a matter of weeks.
02:11It was a project to drill sample holes from the back of a truck.
02:16So it took three years.
02:17And this is just exploration.
02:18It's not even a full-blown mine.
02:20It's just to see if we should build a mine there.
02:22Now, the rest of the story of that is even worse.
02:25They were ultimately sued, and even that project is now held up.
02:30Incredibly unfortunate, but revealing information you have provided with us.
02:33How can we ease companies' concerns over the instability in political environments to ensure that the forward momentum of the Trump administration remains through future administrations, Mr. Hammond?
02:46Sure.
02:46I think this Congress needs to look, as we've said earlier, permitting reform.
02:51I don't even like the term permitting reform because it's used so generically now.
02:54So more specifically, we have to look at narrowing the scope of NEPA and looking at exactly what we require of project applicants.
03:02If you wanted to do a project in this committee room, you'd want to study the committee room, right?
03:07You might even study the Rayburn building because it will probably impact the rest of the Rayburn building.
03:12But the way things stand right now in the mining community, you're not only going to be looking at this hearing room, the Rayburn building.
03:18You're probably also looking at the Dirksen Senate building over there as well to see what the impacts are.
03:23It doesn't make any sense.
03:24You have to narrow the focus of what project proponents are required to study.
03:29Recognizing it's a chilling effect that you're describing on instability, how that can affect domestic investments.
03:36This committee included a provision in the reconciliation bill to establishing a de-risking compensation program at the Department of Energy.
03:44Under this program, applicants would be compensated for unrecoverable capital losses resulting from federal actions that previously federal permitting projects made unviable.
03:57How would a program that we're including in this upcoming legislation, which includes critical mineral projects as eligible applicants,
04:05how would that provide certainty to businesses and spur the investment that is so necessary when it comes to critical minerals, Mr. Hammond?
04:13So I think a project proponent would look at that and see that the federal government is making a commitment.
04:19That would build confidence, and that's ultimately what you need before you make any kind of investment decision, and you're de-risking that decision.
04:26So anything we can do to build confidence through a program like that, I think the president's also talked about something similar,
04:33that if a future administration comes along and yanks a project, like in the case of Keystone XL,
04:38there would be compensation involved to make a future administration think twice before they just yanked a project that has already had billions of dollars invested in it.
04:47Under President Trump, and with cooperation from Energy and Commerce, this committee, we look to build that confidence.
04:55We must do more to capitalize on the positive progress that President Trump has achieved in such short time.
05:03And I look forward to working with stakeholders, as well as my colleagues on this committee, to take advantage of this finite opportunity.
