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Dangerous Dependence on China for Critical Materials is No Longer a Hypothetical Washington D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC), and Environment, Climate, and Grid Security Subcommittee Chair Bill Johnson (R-OH) wrote to Department of Energy Secretary Jennifer Granholm regarding recent reports that China was cutting off American access to critical minerals that play a significant role in our national security, economy, and as a critical energy resource. KEY LETTER EXCERPTS:   “According to reports, on August 1, 2023, China began cutting off all access to gallium and germanium, a key mineral used for military and energy technologies. On October 20, 2023, China announced that it would limit the export of raw and synthetic graphite, which is essential to manufacture electric motors and batteries. These adversarial actions by China pose a direct threat to our national security and to our energy security.      “ China controls over eighty percent of the world’s gallium. Gallium is vital in our production of semiconductor chips, next-generation missile defense, and radar systems. The use of gallium in the United States has increased and is expected to continue to increase due to its use in light-emitting diodes, which are used in many technologies. Similar to gallium, germanium is vital to the development of radiation detectors, fiber optic cables, and infrared sensors. Both gallium and germanium are listed as critical, of high importance, and at risk of supply disruption.   “ China controls over sixty percent of the world’s graphite and accounts for over thirty percent of graphite imports for the United States. Graphite is the largest component of the lithium-ion battery and is essential in electric vehicle (EV) battery anodes.”   BACKGROUND:   China controls the vast majority of the world’s processing and refining capabilities for critical minerals.  These materials are vital components for technologies of the future, like semiconductors. Access to them is key to ensuring America’s competitive edge and military dominance, as well as securing our energy and manufacturing supply chains.  With the passage of the Energy Act of 2020, Congress recognized the importance of critical minerals to the energy sector and provided the Department of Energy (DOE) with expanded authorities and responsibilities to address supply chain challenges and import dependencies.  To assist with Energy and Commerce’s review of DOE’s statutory authorities and responsibilities—and to ensure the department is addressing the risks associated with reliance upon China for critical minerals—Members asked Secretary Granholm to respond to the following questions by December 6, 2023. Please describe any actions that DOE has already taken or plans to take to address China’s export restrictions of graphite, gallium, and germanium. Please describe the energy sector uses for graphite, gallium, and germanium. Does DOE believe that the China’s export restrictions on critical minerals will negatively impact the domestic manufacturing of batteries, EVs, or other energy technologies? What actions will DOE take to mitigate potential domestic supply shortages of these minerals? What actions has DOE taken to encourage the diversification and expansion of the supply of critical minerals? What actions has DOE taken to reduce U.S. reliance on China for critical minerals, including graphite, gallium, and germanium? What actions has DOE taken to increase the domestic production, processing, and refining of critical minerals, including graphite, gallium, and germanium? Please describe the status and implementation of Title VII of the Energy Act of 2020. CLICK HERE to read the full letter to Secretary Granholm.

Washington, D.C. — House Energy and Commerce Committee Republicans, led by Chair Cathy McMorris Rodgers, wrote to Ford President and CEO James Farley regarding a new partnership with Chinese-owned Contemporary Amperex Technology Co., Limited (CATL) to build lithium iron phosphate batteries in the United States.  CLICK HERE to read FOX News's coverage: BACKGROUND :  Earlier this year, Ford announced it would invest $3.5 billion to construct a lithium iron phosphate battery plant in Marshall, Michigan.  According to Ford, its wholly-owned subsidiary will manufacture the battery cells using Chinese company CATL’s technology and services.  KEY LETTER EXCERPTS :  “While Ford has labeled this project a ‘commitment to American manufacturing’ and asserts it will create 2,500 new American jobs, we are concerned that Ford’s partnership with a Chinese company could aid China’s efforts to expand its control over United States electric vehicle supply chains and jeopardize national security by furthering dependence on China.”  […]  “Additionally, Members learned at this hearing that Chinese companies often supply their own workers to projects in Latin America and Africa, reinforcing fears that CATL will import workers for this facility rather that creating jobs for United States workers.”  […]  “We seek to learn more about whether this partnership, and others like it, will potentially exacerbate our reliance on China. Should China gain control of domestic electric vehicle production, the United States would be exposed to serious national security risks at a time of escalating geopolitical tensions.”  The Members requested information and answers to the following questions by September 18, 2023:  A copy of the complete licensing agreement between Ford and CATL, including any appendices, amendments, or addenda.  All documents and communications exchanged between Ford officers or employees and officials, appointees, employees, contractors, or consultants of the United States government referring or relating to Ford and CATL’s partnership and eligibility for tax credits and federal incentives.  Did Ford consider making a similar investment in a partnership with a non-Chinese company? If so, why did Ford ultimately decide to partner with CATL? If not, why did Ford not consider other partners?  How many CATL employees will CATL supply to the Facility?  What steps did Ford take to prevent or limit CATL’s ability to halt production unilaterally, such as at the direction of the Chinese government?  CLICK HERE to read the letter. 

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC), and Environment, Manufacturing, and Critical Materials Subcommittee Chair Bill Johnson (R-OH) sent letters to the Department of Energy (DOE), the Environmental Protection Agency (EPA), the Nuclear Regulatory Commission (NRC), and the Federal Energy Regulatory Commission (FERC) regarding their progress implementing National Environmental Policy Act (NEPA) reforms included in the Fiscal Responsibility Act (FRA). BACKGROUND:   FRA, which was signed into law by President Biden on June 3, 2023, included a provision directing DOE, EPA, NRC, and FERC to implement changes to NEPA.  In order to boost energy production and lower energy prices for Americans, it is critical that these agencies implement these changes, which lift regulatory burdens for the construction of more energy infrastructure.  The years-long, complicated reviews involved with NEPA and resulting litigation have sidelined many energy infrastructure projects across the U.S.  The provisions in the FRA would streamline NEPA and improve review times and the overall regulatory efficiency. The purpose of the letter is to ensure that these agencies are following the intent of Congress and adhering to the coordination requirements and deadlines set forth by the FRA. KEY EXCERPT FROM THE LETTER TO ENERGY SECRETARY GRANHOLM: "Section 321 of the FRA includes provisions from H.R. 1577, the BUILDER Act, which also passed the House of Representatives as part of H.R. 1, the Lower Energy Costs Act. The section in the FRA streamlines NEPA and improves federal review times by designating one lead agency, limiting evaluation to a single environmental document, setting page limits on environmental impact statements (EIS) and environmental assessments (EA), establishing deadlines of two years for EISs and one year for EAs, allowing for categorical exclusions, and instituting the E-NEPA unified permitting portal, among other provisions. Depending on the project, DOE could be considered a lead agency or a cooperating agency, both of which would have a key role in the implementation of the corresponding NEPA reforms." Members asked Secretary Granholm to respond to the following questions regarding the FRA NEPA changes by September 18, 2023:  What is DOE’s interpretation of Section 321 of the FRA?    How long will it take DOE to implement fully Section 321 of the FRA?   What changes are being made to DOE’s existing NEPA review processes to ensure that the Agency is following the updated law?    Are you confident that DOE will meet the two-year and one-year statutory deadlines for EIS and EA reviews, respectively?    Will you commit to adhering to the page limits for EIS and EA reviews set forth in the Fiscal Responsibility Act?    Will DOE apply the NEPA changes to projects and reviews that are already in process, or does the Agency plan to apply the NEPA changes just prospectively?  CLICK HERE to read the full letter to DOE. CLICK HERE to read the full letter to EPA. CLICK HERE to read the full letter to NRC. CLICK HERE to read the full letter to FERC.

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC), and Oversight and Investigations Subcommittee Chair Morgan Griffith (R-VA) sent a letter to Hawaiian Electric seeking information regarding the role of electric infrastructure in the August fires that broke out on the island of Maui and in the town of Lahaina. Letters were also sent to the Hawaii Public Utilities Commission and the Hawai’i State Energy Office. KEY EXCERPT: “Our hearts are with the people of Maui as they confront immense grief, sadness, and despair, especially for those who are still searching for their missing loved ones. The pain is unimaginable and the road to recovery is long. We must come to a complete understanding of how this disaster started to ensure Hawaii and other states are prepared to prevent and stop other deadly wildfires.” […] “In our capacity as Chairs of the Committee on Energy and Commerce of the U.S. House of Representatives and its respective energy policy and oversight subcommittees, we are empowered to oversee energy supply, reliability of all power, and regulation of energy resources throughout the country. To that end, we seek a fuller understanding of the role, if any, of the electric infrastructure in this tragic event.” BACKGROUND: On Tuesday, August 8, 2023, a series of deadly fires broke out on the island of Maui and in the town of Lahaina, resulting in the tragic loss of many lives and the destruction of entire communities. The fires are the deadliest in modern U.S. history, with the current death toll at over 100 lives and many hundreds more still missing. Reported evidence of a downed power line sparking dry grass in Lahaina indicates that Hawaiian Electric equipment may have contributed to the fires. Information is also coming to light about actions taken – or not taken – by Hawaiian Electric to harden and modernize the electric grid of Maui in response to the growing risk of wildfires in recent years. Chairs Rodgers, Duncan, and Griffith asked Hawaiian Electric to respond to the following requests for information: What is your understanding of the sequence of events and actions on August 8, 2023, involving the Lahaina fire, including actions taken by Hawaiian Electric? Please describe all actions taken by Hawaiian Electric to address fire risks to the electric grid on Maui prior to August 8, 2023 (going back through 2013). Please describe all actions taken by Hawaiian Electric, Hawaii Public Utilities Commission, Hawai’i State Energy Office and any other applicable entities to mitigate invasive grasses and other vegetation on the island of Maui, in order to prevent or minimize fire risks. Please provide Hawaiian Electric spending on Maui for the past ten years, including, but not limited to, specific spending for utility infrastructure, for energy generation, to meet Hawaii’s renewable energy mandates, and to address identified fire risks. What Hawaiian Electric actions regarding fire risks to the Maui electric grid are pending before the Hawaii Public Utilities Commission? What is the status of those actions? Has the Hawai’i State Energy Office been involved in grid modernization, hardening, and resilience efforts by Hawaiian Electric? If yes, please describe those efforts. In July 2021, the Maui county government assessed and issued a report on the growing threat of fire to the island. Did the report involve any recommendations regarding the electric grid? If yes, what is the status of implementing those recommendations? What orders has the Hawaii Public Utilities Commission issued, or actions taken, since 2018, to address fire risks to the electric grid on Maui? What actions did Hawaiian Electric take after the Maui fires on August 8, 2023, relating to the removal of any equipment, including but not limited to, damaged power lines and poles? Did Hawaiian Electric, Hawaii Public Utilities Commission, and/or the Hawai’i State Energy Office receive any funds from the Infrastructure Investment and Jobs Act of 2021 or the Inflation Reduction Act of 2022? If so, please provide the amount of money, the program under which the funding was awarded, and the type of funding (grant, loan, etc.). CLICK HERE to read the full letter.

Washington, D.C. — House Energy and Commerce Committee Republicans, led by Chair Cathy McMorris Rodgers (R-WA), Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC), and Oversight and Investigations Subcommittee Chair Morgan Griffith (R-VA), today sent a letter to Department of Energy Secretary Jennifer Granholm demanding answers and transparency following reports that the Secretary consulted with the Chinese Communist Party’s top energy official, Zhang Jianhua, days before the Biden administration announced it would release oil from the Strategic Petroleum Reserve in 2021. KEY LETTER EXCERPTS: " We are troubled by recent reports that you, in your official capacity as Secretary of Energy, had multiple conversations with the Chinese Communist Party’s top energy official just days before the Biden administration announced it would release oil from the Strategic Petroleum Reserve (SPR) in 2021. This is concerning given the Department of Energy’s (DOE) mismanagement of the SPR, which has left our country more vulnerable to energy supply disruptions and strengthened the leverage of our adversaries to use energy as a geopolitical weapon." [...] "The Biden administration has helped support China’s national security at the expense of our own security by using our strategic energy supplies to help the Chinese build up their own strategic reserves. The House of Representatives, led by the Committee on Energy and Commerce, has worked to protect against this abuse by passing H.R. 22, the Protecting American’s Strategic Petroleum Reserve from China Act to prohibit the Biden administration from selling any products from the reserve to China, and H.R. 21, the Strategic Production Response Act, to ensure the reserve is adequately available during a true emergency. “ Despite these Congressional efforts to hold the Biden administration accountable for undermining our energy security, the DOE apparently is still looking to China as an example and allegedly coordinating with them prior to SPR releases . China poses one of the greatest economic, security, and geopolitical threats to the United States, while continuing to be one the world’s worst polluters. As a result of this administration’s war on American energy and political abuse of the SPR, Americans have become more vulnerable to true energy and national security emergencies while China has profited.”  The members requested information, including the following, by August 21, 2023:  All communications, and any documents referring to or relating to those communications, between yourself and officials, employees, or representatives of the Chinese government, including the National Energy Administration, regarding the Strategic Petroleum Reserve since February 25, 2021, as well as the following information and documents: The name and job title of all officials, employees, or representatives of the Chinese government who participated in the communications. The name and job title of all United States government officials, employees, or contractors who participated in the communications. The date of such communications. The topics of discussion of such communications. Any notes, summaries, memoranda, or readouts produced regarding communications. All briefing materials, notes, or preparatory documents produced to assist in your preparation for such communications. All documents and communications referring or relating to scheduling a call with Director Zhang Jianhua and yourself. All documents and communications referring or relating to your November 19, 2021, and November 21, 2021, calls with Director Zhang Jianhua. Any and all briefing materials, notes, or preparatory documents produced to assist in your preparation for your November 19, 2021, and November 21, 2021, calls with Director Zhang Jianhua. CLICK HERE to read the full letter. CLICK HERE to read Chair Rodgers’ statement on Secretary Granholm’s secret conversations with the top CCP energy official.  ADDITIONAL BACKGROUND: In June 2022, E&C Republican Leaders demanded answers from Secretary Granholm on her management of the SPR and how China is taking advantage of the Biden administration’s use of our strategic fuel reserves. In November 2022, Chair Rodgers and Senate Energy and Natural Resources Committee Republican Leader John Barrasso (R-WY) sent a letter to Secretary Granholm raising concerns about potential damage to the SPR due to President Biden’s unprecedented drawdowns and DOE’s mismanagement of the national security asset. In January 2023, the House passed H.R 22 , the Protecting American’s Strategic Petroleum Reserve from China Act, led by Chair Rodgers, by a bipartisan vote 331-97. The bill protects our energy security by prohibiting the Biden administration from selling any products from the SPR to China, or any entity that intends to export the products to China. In January 2023, the House passed H.R. 21 , the Strategic Production Response Act , which would help ensure the SPR is available during a true energy emergency and not abused for non-emergency, political purposes. In March 2023, Energy and Commerce Republicans called on Secretary Grandholm to testify immediately following her public comments praising China. In May 2023, House and Senate Republican energy leaders requested that the Government Accountability Office (GAO) evaluate DOE’s mismanagement of the SPR, which has increased our reliance on foreign energy sources.

Washington, D.C. – House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Ranking Member Frank Pallone, Jr. (D-NJ), along with Senate Environment and Public Works Committee Ranking Member Shelley Moore Capito (R-WV) and Chairman Tom Carper (D-DE), today led 20 senators and 44 House members in sending a letter to each member of the Nuclear Regulatory Commission (NRC) urging the commissioners to carefully review and modify, as necessary, the draft licensing framework for advanced nuclear reactor technologies to establish the regulations to enable the deployment of advanced reactors.  “We all agree that a successful Part 53 regulatory framework should reflect congressional intent and be used to license the next generation of nuclear reactors,” the members wrote. “In order to be effective, we urge the Commission to work to address any outstanding issues prior to issuance of a final rule. Your review and modifications of the proposed rule will determine if that success is achieved.”  Read the full letter here or further below.   BACKGROUND:   In 2018, Congress passed the Nuclear Energy Innovation and Modernization Act (NEIMA) with overwhelming bipartisan support. NEIMA directed the NRC to “complete a rulemaking to establish a technology-inclusive, regulatory framework for optional use by commercial advanced nuclear reactor applicants for new reactor license applications” to help enable efficient licensing of advanced nuclear reactor technologies.  On March 1, 2023, the NRC staff sent the Commission the draft proposed rule titled “Risk-Informed, Technology-Inclusive Regulatory Framework for Advanced Reactors,” also known as the Part 53 Rulemaking. That proposal is currently being reviewed by the Commission.  LETTER:   Dear Chairman Hanson [each letter individually addressed to each commissioner], We write to urge you to carefully review and modify, as necessary, the proposed rule titled “Risk-Informed, Technology-Inclusive Regulatory Framework for Advanced Reactors” to enable the successful use of the rule for licensing of advanced nuclear reactors. In 2018, Congress passed the Nuclear Energy Innovation and Modernization Act (NEIMA) with broad bipartisan support. This law reformed the Nuclear Regulatory Commission’s (NRC) fee structure and required regulatory reforms to help enable efficient licensing of advanced nuclear reactor technologies. NEIMA included specific direction for the Commission to “complete a rulemaking to establish a technology-inclusive, regulatory framework for optional use by commercial advanced nuclear reactor applicants for new reactor license applications” by December 31, 2027. To implement this direction, the Commission, with congressional support, directed the NRC staff to develop the rulemaking on an accelerated schedule. This schedule has provided the Commission with sufficient time to address issues identified during the rulemaking drafting process, while still complying with the statutory deadline. Following the Commission’s direction, the NRC staff took an iterative approach that resulted in extensive public interaction as the proposed rule was developed. By September 2022, some 130 public comments were submitted in response to the proposal. On March 1, 2023, the NRC staff provided the Commission with the proposed rule, known as the “Part 53” rule. The proposed rule includes 1,173 pages and is supported by a draft environmental assessment, a draft regulatory analysis, and a staff analysis of alternative approaches to selected topics. We recognize the NRC staff’s efforts to draft a proposal that balances flexibility for different technologies while providing sufficient predictability for applicants. Throughout the NRC’s staff work on the rulemaking, a few key issues were consistently identified that are left for the Commission to resolve. There is general agreement among stakeholders that some of the most important issues that a final Part 53 rule must address include: a two-framework structure that limits the proposed rule’s overall benefit; the use of Quantitative Health Objectives (QHOs) as performance criteria; the inclusion of the principle of “As Low As Reasonably Achievable” (ALARA) as a design requirement; the requirement to protect against “beyond-design-basis-events” (BDBEs) in the design basis; the inclusion of a facility safety program; and inconsistent application of new programs and terminology. Any newly established Part 53 regulations must enable the NRC to fulfill its mission to “provide reasonable assurance of adequate protection of public health and safety and to promote the common defense and security and to protect the environment.” We appreciate the NRC staff’s hard work, but it is incumbent on the Commission to ensure that the final rule meets the intent of the law. We all agree that a successful Part 53 regulatory framework should reflect congressional intent and be used to license the next generation of nuclear reactors. In order to be effective, we urge the Commission to work to address any outstanding issues prior to issuance of a final rule. Your review and modifications of the proposed rule will determine if that success is achieved. We appreciate that all five Commissioners recently agreed that the framework must be usable, and you committed to provide specific direction to resolve outstanding issues. While the initial advanced reactor applications are expected to use existing licensing frameworks, it is critical and urgent that the new framework is established with the capacity to license the large volume of applications necessary to meet our energy and national security priorities, provide grid reliability, and achieve our environmental goals. As you provide your specific revisions to the proposed rule, we urge you to consider previous and ongoing efforts by public stakeholders, and to utilize the public comment portion of the rulemaking process to seek specific information that may be incorporated into the final rule. We thank you for your thoughtful consideration of our request.

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA); Subcommittee on Energy, Climate, and Grid Security Chair Jeff Duncan (R-SC); Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA); and Subcommittee on Environment, Manufacturing, and Critical Materials Chair Bill Johnson (R-OH), on behalf of the Energy, Oversight, and Environment Subcommittees, today sent a letter to Environmental Protection Agency Administrator Michael Regan. The Chairs’ letter raised concerns that loopholes in the so-called “Inflation Reduction Act’s (IRA) electronic vehicle (EV) tax provisions might lead to an increased reliance on China.  KEY EXCERPT:   “We are concerned that EPA potentially overestimates the impact of the IRA’s tax credits in supporting domestic supply chains for critical minerals and electric vehicle batteries. EPA asserts that widespread vehicle electrification ‘will not lead to a critical long-term dependence on foreign imports of minerals or components’ and that increased demand will not threaten national security. However, increased adoption of electric vehicles to meet the demands of this rule could force the United States to rely on foreign adversaries such as China, which dominates much of the electric vehicle supply chain.”  BACKGROUND:   The IRA permits individuals to claim a federal income tax credit for purchasing a qualifying new clean vehicle.  The IRA placed restrictions on which vehicles are eligible for this credit, including:  Critical Minerals Requirement: A certain percentage of the vehicle’s battery be extracted or processed in the United States or any country with which the United States has a free trade agreement, or recycled in North America, starting with 40 percent for vehicles placed in service on or after April 18, 2023, and before January 1, 2024, and escalating to 80 percent for vehicles placed in service after December 31, 2026;  Battery Components Requirement: A certain percentage of the value of the vehicle’s battery components must be manufactured or assembled in North America (battery components requirement), starting with 50 percent for vehicles placed in service on or after April 18, 2023, and before January 1, 2024, and escalating to 100 percent for vehicles placed in service after December 31, 2028; and   Final Assembly Requirement: Final assembly of the vehicle must occur in North America.   The IRA also added a credit for qualified commercial clean vehicles, which allows businesses to claim a federal income tax credit for clean vehicles dedicated to commercial use, and not for resale.   Note: This credit, the Commercial Clean Vehicle Credit, does not include tax credit eligibility limitations—such as the critical minerals requirement, the battery components requirement, or the final assembly requirement.  As Members discussed at a recent hearing on the Committee’s Subcommittee on Oversight and Investigations, car manufacturers may exploit the absence of the critical minerals requirement, the battery components requirement, and the final assembly requirement in the Commercial Clean Vehicle Credit.  Reportedly this “loophole” is “quickly changing the behavior of foreign automakers.”  For example, Hyundai is “direct[ing] many more of its [electric vehicle] customers to leases.”  The Chairs requested that Administrator Regan respond to the following questions by July 10, 2023:  Prior to issuing this final rule, does the EPA plan to analyze the extent to which vehicle manufacturers and retailers may focus on increasing leases of electric vehicles, as compared to those purchased?  If so, how does the EPA plan to do so?  If not, why not?  Has the EPA communicated, or does it plan to communicate, with any other relevant entities or agencies, such as the Department of Treasury, regarding the extent to which stricter requirements for vehicles eligible for the Clean Vehicle Credit than the Commercial Clean Vehicle Credit may lead to an increase in the number of leased electric vehicles, as compared to those purchased?  CLICK HERE to read the full letter. 

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Senate Energy and Natural Resources Committee Ranking Member John Barrasso (R-WY) today requested that the Government Accountability Office (GAO) evaluate the Department of Energy’s (DOE) mismanagement of the Strategic Petroleum Reserve (SPR), which has undermined America’s energy security and increased our reliance upon foreign energy sources. Excerpts and highlights below: “We write to request that the Government Accountability Office (GAO) evaluate the Department of Energy’s (DOE) management of the U.S. Strategic Petroleum Reserve (SPR) and conduct an audit of the SPR modernization program authorized by Section 404 of the Bipartisan Budget Act of 2015. DOE’s mismanagement of the SPR has undermined America’s energy security, leaving the nation more vulnerable to energy supply disruptions, and increasing the ability for OPEC and Russia to use energy as a geopolitical weapon. “Today, the SPR inventory is at the lowest level since 1983. Under President Biden, DOE has overseen the largest SPR drawdown in history, selling off more than 250 million barrels, equivalent to 42 percent of the reserve, with no credible plan to replenish the stockpile. DOE has failed to establish long-term plans for the optimal size, configuration, maintenance, and operational capabilities of the reserve. We are concerned that the rapid depletion of the SPR may have caused structural damage to the SPR’s pipelines and caverns, compromising its ability to meet its energy security mission in the event of a true energy supply disruption. The SPR consists of subterranean salt caverns filled with oil, and a complex system of wells, pipelines, and pumps that use water and brine to direct the flow of oil to where it is needed. Each drawdown has the potential to degrade the SPR’s storage and distribution capabilities, as pressurization, corrosion, and consequences of repeated use erode the SPR’s physical integrity. “In 2015, Congress required DOE to conduct a long-term strategic review of the SPR and authorized an investment of $1.4 billion to conduct a SPR modernization program. We were disappointed to learn that the modernization program, known as Life Extension II, has been put on hold by DOE, resulting in critical delays and cost overruns. DOE also recently created new rules, without Congressional authorization, for ‘fixed-price’ purchases of crude oil, rather than conventional purchase contracts. The failure of DOE to secure contracts to purchase oil under the new ‘fixed-price’ bidding scheme raises serious questions about DOE’s replenishment strategy and the ability of the SPR to protect the American consumers and the economy in times of emergency. “Given the concerns identified and the importance of the SPR as an energy security asset, we request that the GAO conduct a programmatic audit of the SPR modernization program, including the status and budget of the Life Extension II program, and other relevant programs relating to SPR operations, maintenance, modernization, and acquisition and sales relating to the reserve.” Members asked GAO to address the following questions in their final audit report: Has the Biden administration conducted a long-term strategic review of the SPR, and if so, is the review adequate to inform decision making and protect the nation from energy supply disruptions in both current and future scenarios? What damage and increased maintenance requirements, including well remediation, cavern closure, and both pipeline and pump replacements, have resulted from the recent drawdowns? What physical or cybersecurity threats are there to the SPR facilities? How thorough are DOE’s studies and assessments of the SPR’s structural integrity? Has the DOE developed an adequate plan for replenishing the SPR? If so, please explain. CLICK HERE to read the full letter.

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate, & Grid Security Subcommittee Chair Jeff Duncan (R-SC) sent a letter to Acting Federal Energy Regulatory Commission (FERC) Chairman Willie Phillips and the other Commissioners demanding they return the agency to its core mission to help deliver abundant, reliable, and affordable energy for Americans. Excerpts and highlights from the letter: INCREASING BLACKOUT RISKS: “Blackouts, brownouts, and energy rationing have become far too common in the past few years. The primary cause of the electricity shortages Americans have experienced in recent history is a lack of generation capacity. In other words, some regions do not have enough reliable, dispatchable generation to produce the electricity needed to support the bulk power system. These shortages often happen in the cold of winter or the heat of summer. This is due, in no small part, to the premature retirement of dispatchable generation resources, like coal, nuclear, and natural gas, and the rapid expansion of intermittent resources, like wind and solar, onto the bulk power system.” RAPID ELECTRIC GENERATION RETIREMENTS ELEVATE RISKS: “For the past several summers, the California Independent System Operator (CAISO) implements rolling outages to balance its lack of dispatchable generation with increasing demand for electricity. According to an Electric Power Research Institute (EPRI) study conducted in 2020, ‘[t]he CAISO supply deficiency was largely due to a resource adequacy issue.’ In a recent study conducted by the Midcontinent ISO, the grid operator highlighted the pervasive risk of capacity shortfalls across its system by noting it had a ‘1.2 gigawatt (GW) capacity shortage in the planning resource auction […].’ Additionally, the Southwest Power Pool (SPP) could potentially face energy shortfalls. According to the North American Electric Reliability Corporation (NERC), in SPP, ‘outages and reduced output from thermal and hydro generation could lead to energy shortfalls at peak demand.’ “The PJM Interconnection, the nation’s largest grid operator, recently issued a dire warning about the rapid pace of electric generation retirements within its service territory. In a report issued February 24, 2023, PJM notes, ‘[r]etirements are at risk of outpacing the construction of new resources.…’ In the report, PJM projected 40 GW (40,000 MW) of retirements due to economic and policy factors, including   regulations issued by the U.S. Environmental Protection Agency, state climate laws or regulations, as well as private sector Environmental, Social, and Governance commitments.” Committee Republicans asked FERC to respond to the following questions by May 1 0, 2023. In your view, are the current Regional Transmission Organizations (RTO) or Independent System Operators (ISO) the best mechanism to provide reliable electricity? Please explain. Do current market rules allow dispatchable, on-demand generation resources the opportunity to recover sufficient revenues to continue to operate in the RTOs/ISOs? If so, which rules? If not, would you recommend FERC direct RTOs/ISOs to implement such rules? How do RTOs/ISOs compare to traditionally regulated regions in terms of electric reliability? Please provide specific data. What policies, whether federal, state, or market rules, prevent sufficient resource adequacy in RTOs/ISOs necessary to power the grid 24/7/365 regardless of the weather? Gas power generators are not required to procure firm gas transportation in RTO/ISO markets. How will the Commission ensure that market design adequately compensates natural gas generators for the reliability benefits of firm natural gas transportation? CLICK HERE to read the full letter. NOTE: Committee Republicans sent similar letters to FERC earlier this year demanding they abandon the Left’s rush-to-green agenda and return to their core mission.