6. CLEAN TECH: House approves rare earth, algae biofuel bills (09/30/2010)

Katie Howell, E&E reporter

The House last night passed a measure that would combat a possible supply shortage of minerals critical to the clean energy sector.

The measure, H.R. 6160, from Rep. Kathy Dahlkemper (D-Pa.) passed by a vote of 325-98.

The legislation would address the short- and long-term impacts of a potential domestic supply shortage of rare earth minerals by setting up and funding a research and development program to mine, process and recycle the minerals. It would also broaden an existing federal loan guarantee program to include companies developing the technologies used to produce rare earths.

Rare earths are a group of 17 elements used in wind turbines, energy-efficient light bulbs, catalytic converters for diesel engines and hybrid car components. They are primarily sourced from China, despite vast U.S. reserves, and China has locked up a near monopoly on processing.

"What are the chances that our country becomes energy independent if we cannot produce hybrid cars, wind turbines and other alternative energy products?" Dahlkemper said on the House floor. "These are questions we would have to answer if China cut off our supply of rare earth materials."

The bill passed easily out of the Science and Technology Committee last week, but some Republicans this week questioned whether the policy response was appropriate.

"To the extent that a rare earth supply gap may present national security concerns, such concerns should probably be addressed through the Department of Defense and the Senate Armed Services Committee," Science Committee ranking member Ralph Hall (R-Texas) said.

Rep. Mike Coffman (R-Colo.), a co-sponsor of the bill, praised its passage but urged additional action to beef up the entire rare earth supply chain.

"Fostering increased research and development through the Department of Energy is an important step, but we must take additional action and address the entire supply chain," Coffman said in a statement. "We must also further address the current regulatory environment and the endless stream of environmental litigation hampering exploration and development."

The Senate Energy and Natural Resources Committee today will hear testimony on a Senate bill that would address the rare earth supply chain.

House also passes algae biofuel incentive, BP claims fund audit bills

The House this week also approved a bill that would would boost incentives for the fledgling algae-based biofuels industry.

Lawmakers approved H.R. 4168, by voice vote.

The measure from Rep. Harry Teague (D-N.M.) would expand the definition of cellulosic biofuels to make algae-based fuels eligible for the $1.01-per-gallon cellulosic biofuel producer tax credit.

The algae industry, which had counted cellulosic tax parity among its top legislative goals this year, praised the bill's passage.

"These policies are essential to truly grow green fuel at scale; we need the same tax structure that oil and gas gets today," said Jason Pyle, CEO of algae-based producer Sapphire Energy. "Passage of this bill is the first step in that direction.

Lawmakers also approved by voice vote H.R. 6016, a measure that calls for a Government Accountability Office investigation and audit into the operations of the $20 billion claims fund that BP PLC set up in the wake of the Gulf of Mexico oil spill.