Markey: Rare Earth Disputes Reveal Threat to US Economy and Foreign Policy

Chairman sends letter to Secretaries Chu, Gates, Locke, and Ambassador Kirk

September 27, 2010 - Access to an obscure group of elements and materials, collectively known as rare earths, has become critical to the United States' ability to compete for technology and manufacturing jobs in the clean energy race. Following recent friction between China and Japan, and allegations of Chinese trade violations by the United Steelworkers union, Representative Edward J. Markey (D-Mass), Chairman of the House Select Committee on Energy Independence and Global Warming, has sent a letter to Secretary Chu, Secretary Gates, Secretary Lock, and Ambassador Kirk seeking answers regarding access to these materials and U.S. strategy going forward to ensure secure supplies.

"Most of us may have never heard of dysprosium and other rare earth elements, but our domestic high-tech industries are in for a bad case of dyspepsia if they cannot get access to them. Rare earth elements are indispensable to our military, electronic, and industrial applications, and are critical in clean energy technologies such as wind turbines, hybrid vehicles, solar panels, and energy efficient lightbulbs," said Representative Ed Markey. "If access to rare earth elements is restricted, a level playing field will be impossible to achieve, and the U.S. will lose jobs to China."

To read the letter, please CLICK HERE.

In the past 15 years, the U.S. has become completely reliant on imports of rare earth elements, and 97 percent of the 124,000 tons produced in 2009 came from China. By 2012, global demand is projected to skyrocket to 180,000 tons annually.

It has been widely reported that Chinese officials blocked shipments of rare earth elements from China to Japan in retaliation for Japan's detention of a Chinese fishing boat captain. Meanwhile, the United Steelworkers union petitioned the U.S. Trade Representative earlier this month, alleging that China has used hundreds of billions of dollars in subsidies and other illegal trading practices - including restrictions on exports of rare earth elements - to undermine foreign competitors and dominate the clean energy sector.

"If Japan's release of the Chinese fisherman this week was in any way a reaction to rare earth export restrictions by China, we have a clear demonstration of the unacceptably high strategic value these rare earth materials have reached," said Markey. "A disturbing precedent such as this should give us pause to consider what it might take for China to take similar steps against the U.S. and how vulnerable the U.S. economy is to disruptions in the supply of rare earth elements."

In the letter, Representative Markey asked for responses to the following questions:

1. Is the Chinese government currently, or has the Chinese government at any point since the Chinese fishing boat captain was taken into Japanese custody on September 7, restricted the shipment of rare earth elements to Japan? How were these restrictions implemented and enforced?
2. With so many defense applications dependent upon rare earth elements, what are the national security implications of possible Chinese restrictions of rare earth element exports? What is being done to mitigate these impacts?
3. How much have Chinese exports of rare earth elements to the U.S. changed since the Chinese government implemented export quotas and other measures restricting the flow of rare earth elements out of the country?
4. What has been the impact of these export quotas on the U.S. clean energy industry and other industries dependent upon these materials?
5. When do you anticipate China meeting its 2010 export quota of rare earth elements?
6. What do you anticipate the impact on the U.S. clean energy sector and other sectors dependent upon rare earth materials will be if Chinese exports are halted after that 2010 quota is met?
7. The D.O.E. has announced that it is developing a strategic project concerning rare earth metals and other materials in energy components, products and processes. What is the status of this strategic project and when will it be accessible for review by members of Congress and the public?