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S. HRG. 114–368 

S. 2031, THE AMERICAN SODA ASH 

COMPETITIVENESS ACT 

HEARING 

BEFORE THE 

SUBCOMMITTEE ON PUBLIC LANDS, 

FORESTS, AND MINING 

OF THE 

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 1, 2015 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 

Available via the World Wide Web: http://www.fdsys.gov 

(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

LISA MURKOWSKI, Alaska, Chairman 

JOHN BARRASSO, Wyoming 

JAMES E. RISCH, Idaho 

MIKE LEE, Utah 

JEFF FLAKE, Arizona 

STEVE DAINES, Montana 

BILL CASSIDY, Louisiana 

CORY GARDNER, Colorado 

ROB PORTMAN, Ohio 

JOHN HOEVEN, North Dakota 

LAMAR ALEXANDER, Tennessee 

SHELLY MOORE CAPITO, West Virginia 

MARIA CANTWELL, Washington 

RON WYDEN, Oregon 

BERNARD SANDERS, Vermont 

DEBBIE STABENOW, Michigan 

AL FRANKEN, Minnesota 

JOE MANCHIN III, West Virginia 

MARTIN HEINRICH, New Mexico 

MAZIE K. HIRONO, Hawaii 

ANGUS S. KING, JR., Maine 

ELIZABETH WARREN, Massachusetts 

SUBCOMMITTEE ON PUBLIC LANDS, FORESTS, AND MINING

JOHN BARRASSO, Chairman 

SHELLEY MOORE CAPITO 

JAMES E. RISCH 

MIKE LEE 

STEVE DAINES 

BILL CASSIDY 

CORY GARDNER 

JOHN HOEVEN 

JEFF FLAKE 

LAMAR ALEXANDER 

RON WYDEN 

DEBBIE STABENOW 

AL FRANKEN 

JOE MANCHIN III 

MARTIN HEINRICH 

MAZIE K. HIRONO 

ELIZABETH WARREN 

KAREN K. BILLUPS, Staff Director 

PATRICK J. MCCORMICK III, Chief Counsel 

HEIDI HANSEN, Counsel 

ANGELA BECKER-DIPPMANN, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

SPENCER GRAY, Democratic Professional Staff Member 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Barrasso, Hon. John, Chairman, and a U.S. Senator from Wyoming ................. 1 

WITNESS 

Leiter, Amanda, Deputy Assistant Secretary, Land & Minerals Management, 

U.S. Department of the Interior ......................................................................... 7 

Douville, Christopher, President, American Natural Soda Ash Corporation 

(ANSAC) ................................................................................................................ 11 

Finn, Rick, Federal Affairs Manager, Port of Portland (Oregon) ........................ 22 

von Ahrens, Fred, Vice President, Manufacturing, Tronox Alkali ...................... 26 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED 

American Natural Soda Ash Corporation (ANSAC): 

China: Importance of VAT Rebate Elimination for U.S. Soda Ash Exports 

dated April 7, 2009 ....................................................................................... 104 

About ANSAC and the U.S. Soda Ash Industry ............................................ 108 

Letter to Hon. Ron Kirk, U.S. Trade Representative, dated April 15, 

2009 ................................................................................................................ 109 

Letter to Hon. Hillary Clinton, Secretary of State, and Hon. Timothy 

Geitner, Secretary of the Treasury, dated July 17, 2009 .......................... 111 

Letter to Hon. Timothy Geithner, Secretary of the Treasury, dated October 1, 2010 ..................................................................................................... 112 

Letter to Hon. Ron Kirk, U.S. Trade Representative, date April 2, 2012 ... 115 

Letter to Ms. Claire Reade, Assistant U.S. Trade Representative for 

China Affairs, Office of the U.S. Trade Representative, and Mr. Craig 

Allen, Deputy Assistant Secretary for Asia, U.S. Department of Commerce dated August 21, 2013 ....................................................................... 117 

Barrasso, Hon. John: 

Opening Statement ........................................................................................... 1 

CNBC article dated September 16, 2105 entitled ‘‘Why China’s yuan 

may be set for 15% devaluation’’ by Dhara Ranasinghe ............................ 3 

Wall Street Journal article dated September 30, 2015 entitled ‘‘Export 

Weakness Hampers Growth’’ ....................................................................... 6 

Beer Institute: 

Letter for the Record ........................................................................................ 139 

Congress of the United States Letters to: 

Hon. Ron Kirk, U.S. Trade Representative, dated May 5, 2009 ................... 119 

Hon. Hillary Clinton, Secretary of State, dated July 16, 2009 ..................... 121 

Hon. Ron Kirk, U.S. Trade Representative, dated January 28, 2010 .......... 123 

Letter to Hon. Gary Locke, Secretary of Commerce, and Hon. Ron Kirk, 

U.S. Trade Representative dated May 31, 2011 ......................................... 125 

Hon. Jacob Lew, Secretary, Department of the Treasury, dated February 

25, 2015 .......................................................................................................... 127 

Douville, Christopher: 

Opening Statement ........................................................................................... 11 

Industrial Minerals article dated September 2015 entitled ‘‘Chinese Soda 

Ash: Mission Creep’’ ...................................................................................... 13 

Written Testimony ............................................................................................ 17 

Responses to Questions for the Record ........................................................... 147 

Finn, Rick: 

Opening Statement ........................................................................................... 22 

Written Testimony ............................................................................................ 24 

Page

IV 

Finn, Rick—Continued 

Responses to Questions for the Record ........................................................... 162 

Freudenthal, Hon. David: 

Letter for the Record ........................................................................................ 133 

Glass Packaging Institute: 

Letter for the Record ........................................................................................ 137 

International Longshore & Warehouse Union: 

Letter for the Record ........................................................................................ 163 

Leiter, Amanda: 

Opening Statement ........................................................................................... 7 

Written Testimony ............................................................................................ 9 

Responses to Questions for the Record ........................................................... 145 

Mead, Hon. Matthew: 

Letter for the Record ........................................................................................ 132 

Natural Soda LLC: 

Statement for the Record ................................................................................. 135 

S. 2031, the American Soda Ash Competitiveness Act: ........................................ 143 

Union Pacific Railroad: 

Letter for the Record ........................................................................................ 140 

United Steelworkers: 

Letter for the Record ........................................................................................ 164 

von Ahrens, Fred: 

Opening Statement ........................................................................................... 26 

IMA–NA Soda Ash Life Cycle Assessment ..................................................... 27 

Written Testimony ............................................................................................ 95 

Wyden, Hon. Ron: 

Statement for the Record ................................................................................. 165 

(1) 

S. 2031, THE AMERICAN SODA ASH COMPETITIVENESS ACT, A BILL TO REDUCE TEMPORARILY THE ROYALTY REQUIRED TO BE 

PAID FOR SODIUM PRODUCED ON FEDERAL 

LANDS, AND FOR OTHER PURPOSES 

Thursday, October 1, 2015 

U.S. SENATE SUBCOMMITTEE ON PUBLIC LANDS, FORESTS, AND MINING

COMMITTEE ON ENERGY AND NATURAL RESOURCES

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:40 p.m. in Room 

SD–366, Dirksen Senate Office Building, Hon. John Barrasso, 

Chairman of the Subcommittee, presiding. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM WYOMING 

Senator BARRASSO. The Committee will come to order. Senator 

Wyden is unavoidably detained. 

This afternoon the Subcommittee on Public Lands, Forests, and 

Mining will hold a hearing on S. 2031, the American Soda Ash 

Competitiveness Act. 

Last month the Subcommittee’s Ranking Member, Senator 

Wyden, and I introduced this bipartisan legislation along with Senators Enzi and Merkley. The purpose of our bill is to help America’s natural soda ash producers compete in the global market. Natural soda ash is also known as sodium carbonate. It is the raw material used to manufacture glass, chemicals and other industrial 

goods. 

Natural soda ash is produced from Trona, a mineral found in 

high concentrations primarily in California and Wyoming. The production of soda ash supports thousands of jobs across the country 

in a variety of industries including mining, shipping and manufacturing. In my home State of Wyoming, soda ash production directly 

employs over 2,300 people. 

In 2014, the United States exported nearly 58 percent of all soda ash produced for a total of $1.3 billion. Last year soda ash was our 

nation’s second largest inorganic chemical export. Soda ash exports 

help reduce America’s trade deficit and grow our nation’s economy, 

but we must not assume that soda ash exports will increase. America’s soda ash producers continue to battle unfair trade practices 

imposed by other nations. 

For example, China has aggressively moved to help its synthetic 

soda ash producers capture market share from America’s soda ash 

2 

producers. Since 2009, China has given its synthetic soda ash producers a nine-percent rebate on China’s value-added tax, its V-AT, it is VAT. More recently China devalued its currency, the Yuan, 

by 4.4 percent to boost exports. 

It is estimated that China’s value added tax rebate and currency devaluations give soda ash and China producers roughly a $27 per 

metric ton benefit. This unfair benefit is only expected to grow over 

the next year. 

CNBC reported recently that China may devalue its currency by 

a total of 15 to 20 percent by the end of 2016. 

[The information referred to follows:] 

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CNBC cited a source that said, ‘‘Engineering a devaluation of 

this magnitude would not be easy.’’ However, they talk about the 

People’s Bank of China, ‘‘has the mechanism to achieve a creeping 

devaluation and maintain the appearance of it being market led.’’ 

This report and China’s track record on currency devaluation 

make me very skeptical and suspicious of any communications or 

any commitments that China’s president allegedly made last week. 

China’s unfair trade practices threaten America’s soda ash producers, and it is important that Congress respond. 

That is why we have introduced the American Soda Ash Competitiveness Act. Our bipartisan bill will help level the playing field 

for America’s soda ash producers. Specifically, our bill maintains a 

competitive royalty rate for soda ash produced from Federal land. 

Tomorrow the Bureau of Land Management, the BLM, is expected to increase the royalty rate on soda ash. I strongly disagree 

with this decision. The Administration should not raise costs on 

America’s soda ash producers without first ensuring that China 

and other countries scrap their unfair trade practices. 

So I want to thank Senator Wyden for his support of this bipartisan legislation. Senator Wyden knows the importance of the soda 

ash industry to Oregon, Wyoming and communities throughout the 

country. He also knows that America’s natural soda ash has a significantly lower environmental impact when compared to China’s 

synthetic soda ash. 

I also want to thank Senators Enzi and Merkley for their support 

of this bill. 

On July 29th, the House Natural Resources Committee approved 

identical legislation on a bipartisan vote. I will encourage members 

of this Committee to advance our legislation as quickly as possible. 

I would also like to point out a front page story in yesterday’s 

Wall Street Journal entitled, ‘‘Export Weakness Hampers Growth.’’ 

According to the study, hopes for an American export boom are 

wilting. U.S. exports are on track to decline this year for the first 

time since the financial crisis, undermining a national push to 

boost shipments abroad. The article goes on to say that the weak 

trade performance is restraining overall economic growth. The article also discusses the challenges that Portland, Oregon has faced 

in trying to increase its exports. 

I will enter this article in today’s hearing record. 

[The information referred to follows:] 

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Senator BARRASSO. As we await other members of the Committee, we will hear at this time from our witnesses. 

Joining us this afternoon is Ms. Amanda Leiter, Deputy Assistant Secretary for Land and Minerals Management at the Department of Interior. Thank you for being with us. Mr. Chris Douville, 

who is the President of ANSAC, the American Natural Soda Ash 

Corporation. Mr. Rick Finn, Federal Affairs Manager for the Port 

of Portland. And Fred von Ahrens, who is Vice President of Manufacturing for Tronox, who came here from Green River, Wyoming 

today. 

Welcome to all of you. I look forward to your testimony. 

Ms. Leiter, let’s start with you. 

STATEMENT OF AMANDA LEITER, DEPUTY ASSISTANT SECRETARY, LAND & MINERALS MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR 

Ms. LEITER. Chairman Barrasso, absent members of the Committee, thank you for the opportunity to testify on S. 2031, the 

American Soda Ash Competitiveness Act. 

As you just stated this bill would reinstate for five years the soda 

ash royalty rate reduction enacted in 2006 that expired in October 

2011. 

The Department of the Interior cannot support S. 2031 because 

the act would not provide a fair return to the American public, and 

the economic evidence from 2006 to 2011 does not indicate that this 

sort of royalty reductions substantially increases soda ash production, jobs or exports. 

As you noted, soda ash is a key ingredient in many products including glass, detergents and baking soda. It is refined from the 

mineral Trona or it can be manufactured synthetically. The United 

States is a leading producer of soda ash with the world’s largest 

natural deposit of Trona in Southwestern Wyoming. 

As of Fiscal Year 2014, there were 78 Federal sodium leases 

spanning nearly 99,000 acres across five states, Wyoming, California, Colorado, Arizona and New Mexico. Fifty-five of the leases 

were in Wyoming. 

The soda ash industry contributes substantially to U.S. gross domestic product. In 2014, the total value of the domestic soda ash 

produced was about $1.7 billion and the industry directly supplied 

2,500 jobs. 

S. 2031 would reinstate the two-percent royalty rate established 

by the Soda Ash Royalty Reduction Act of 2006, which expired in 

October 2011. From October 2011 to October 2013, royalty rates returned to the rates set in each individual lease. In 2013, the Helium Stewardship Act included a provision that, again, waived 

lease terms and set a four-percent royalty rate for two years, and 

that provision expires today. 

As mandated by the 2006 act, the BLM reported to Congress on 

the impact of the royalty reduction between 2006 and 2011. That 

2011 report found that the 2006 act resulted in a substantial loss 

of royalty revenues to the Federal Government, $150 million, far 

exceeding congressional estimates from 2006. 

The BLM also found that the rate reduction did not appear to 

have significantly contributed to the creation of new jobs in the inVerDate Nov 24 2008 08:01 Oct 17, 2016 Jkt 098910 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\98910\98910.TXT 98910
8 

dustry nor to have created, excuse me, nor to have increased exports nor to have notably increased the industry’s capital expenditures to enhance production. 

The report did find that a significant amount of production had 

shifted from state and private leases on to Federal leases. 

As a steward of America’s public lands, the Department of the 

Interior takes seriously our responsibility to receive a fair return 

for the mineral resources we manage on behalf of the American 

people. S. 2031 would waive the requirements of the Federal Land 

Policy and Management Act of 1976 which states that it is United 

States’ policy to receive fair market value for the use of public 

lands and resources. 

In a 1996 study, the BLM found that in Wyoming’s Green River 

Basin the soda ash royalty rate was eight percent on most private 

lands and five percent on state lands. As a result of the study the 

BLM determined that the fair market value royalty rate for all 

then existing Federal leases in Wyoming would be increased from 

five to six percent, and the royalty rate on all new leases in Wyoming would be eight percent. We have no reason to believe that 

state and private royalty rates have changed from five and eight 

percent, respectively. 

In Fiscal Year 2014 under the Helium Stewardship Act four per- cent rate, the soda ash industry paid almost $42 million in royalty 

for production from Federal lands. If the royalty rate had been just 

two percent during Fiscal Year 2014, the royalty revenue for that 

year would have been 50 percent lower representing a loss of $21 

million to Federal and State taxpayers. 

Current United States Geological Survey data indicate that the 

soda ash industry has increased production, exports and job numbers over the last four years regardless of the changing royalty 

rate. These data provide no economic justification for a rate reduction. 

For these reasons, and especially because S. 2031 would not provide a fair return for the use of public resources, the Department 

of the Interior cannot support this bill. 

Mr. Chairman, thank you for the opportunity to testify today. I’d 

be happy to answer any questions. 

[The prepared statement of Ms. Leiter follows:] 

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Senator BARRASSO. Thank you very much, Ms. Leiter, I appreciate your testimony. 

As I mentioned earlier, Senator Wyden is unavoidably detained. 

Breaking news out of Oregon is there has been a shooting, with ten 

people killed, and as many as 20 others injured at a community 

college. I know that Senator Wyden has other pressing issues affecting him. 

Mr. Douville, if you could please give your testimony. 

STATEMENT OF CHRISTOPHER DOUVILLE, PRESIDENT, 

AMERICAN NATURAL SODA ASH CORPORATION (ANSAC) 

Mr. DOUVILLE. Chairman Barrasso, thank you for the opportunity to testify on S. 2031, the American Soda Ash Competitiveness Act. I am Chris Douville, President of ANSAC, which is the 

world’s largest soda ash exporter. 

ANSAC was established in 1984 as the export arm of the U.S. 

national soda ash industry. We handle the sales, marketing and logistics operation in global export territories for three leading producers of soda ash in the United States, Tronox, Tata Chemicals 

and OCI. 

I join my industry colleagues today in voicing support for this 

legislation. With U.S. soda ash exports facing the combined 

headwinds of a shaky global economy and increasingly aggressive 

foreign competition, a reduction of the royalty rate is needed now 

more than ever. 

I would like to highlight several issues as you consider this legislation. First, the U.S. soda ash industry, thanks in part to previous 

royalty reductions, has increasingly expanded exports. Second, U.S. 

natural soda ash is facing growing competition in developing countries from China’s synthetic soda ash. Third, the outlook for exports 

is expected to worsen in the year ahead as global soda ash demand 

growth in emerging markets is in decline. 

From the perspective of ANSAC enactment of this legislation is 

absolutely critical to maintain U.S. jobs and export competitiveness. At the quantities of 6.7 million metric tons, valued at $1.3 billion in 2014, U.S. natural soda ash exports have directly contributed to thousands of high paying, U.S. jobs and served to put a 

dent in the U.S. trade deficit. In 2014, 58 percent of U.S. natural 

soda ash production was exported compared to 42 percent in 2005, 

the year before the royalty rate was first reduced. Thus, the royalty 

rate reduction has greatly helped to support additional export 

growth. 

The U.S. is not only the leading soda ash export in the world, 

it is also the most efficient and environmentally friendly. U.S. natural soda ash consumes far less energy and produces fewer global 

greenhouse gas emissions on a delivered basis than synthetic soda 

ash. Despite the efficiency and environmental advantages of U.S. 

natural soda ash production, China has overtaken the United 

States as the world’s largest soda ash producer, now making 115 

percent more soda ash than the U.S. 

The percentage of Chinese soda ash exports is on the rise as evidenced by the September 2015 Industrial Minerals article titled, 

‘‘Chinese Soda Ash Mission Creep,’’ which I would like to submit 

for the record. 

12 

Senator BARRASSO. Without objection. 

[The information referred to follows:] 

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Mr. DOUVILLE. China’s domestic demand growth has fallen to its 

lowest level since 2009. As Chinese producers seek an outlet for 

their excessive annual production capacity, we forecast the Chinese 

exports could increase 22 percent in 2015. 

Since 2009, China has promoted the export of soda ash by offering its producers a nine-percent rebate of the country’s 17 percent 

VAT on their exports. More recently, the government’s 4.4 percent 

devaluation of China’s currency in August 2015 has provided Chinese soda ash producers with an additional price advantage. Together the VAT rebate and currency devaluation give Chinese soda 

ash exporters a $27 per metric ton benefit based on an average export price of $200 per metric ton. This equates to approximately 

$60 million in benefit for Chinese exporters. 

Recent media reports, as you’ve cited, indicate that China is considering a further 15 to 20 percent devaluation of its currency by 

the end of 2016. China has reduced export prices by $30 to $40 per 

metric ton in the past six months. Chinese soda ash exporters are 

now prime to take market share from the U.S. throughout Asia and 

beyond. 

China competes directly with U.S. natural soda ash in Asian 

markets where U.S. exports have grown in recent years. Unfortunately, China enjoys preferential access to markets such as Vietnam, Taiwan, Pakistan and the Philippines. U.S. natural soda ash 

faces tariffs in all these countries, but China has none due to regional free trade agreements. Adding to industry concerns is the 

fact that demand for soda ash has weakened in key markets in 

Asia and Latin America. 

If China continues to benefit from unfair trade practices, economic growth is stalled in many emerging economies. Glass production, especially for the use in construction in automotive markets, 

is expected to decline. The consequences are likely to be felt by 

U.S. soda ash exporters. 

The last time there was a decline of U.S. soda ash exports was 

in 2009, a result of the global recession. At that time, the two-percent royalty rate on soda ash was the key to our competitiveness 

and helped to ensure that U.S. exports could rebound quickly. 

Mr. Chairman, now more than ever a royalty policy that factors 

in the competitiveness of U.S. soda ash exports is needed. The current convergence of an increasingly aggressive government supported competition from China combined with a weak outlook for 

foreign demand poses a high risk for U.S. soda ash exports. If we 

are not careful, a bright spot on the U.S. economy, the $1.3 billion 

soda ash trade surplus, is in jeopardy. 

Thank you very much for the opportunity to provide our views 

and we urge your support of S. 2031. 

[The prepared statement of Mr. Douville follows:] 

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Senator BARRASSO. Thank you very much, Mr. Douville. 

Mr. Finn? 

STATEMENT OF RICK FINN, FEDERAL AFFAIRS MANAGER, 

PORT OF PORTLAND (OREGON) 

Mr. FINN. Thank you, Mr. Chairman. The Port of Portland appreciates this opportunity to express our support for S. 2031, the 

American Soda Ash Competitiveness Act. 

The Port of Portland is a consolidated public port authority in 

Portland, Oregon that owns and operates marine, aviation and industrial park facilities. Our marine assets consist of four marine 

terminals on the Willamette and Columbia Rivers and a large pipeline dredge. In addition, the Port owns and operates Portland 

International Airport, two general aviation airports and several industrial parks. 

Together with several other ports on the Columbia Snake River 

navigation system, the Port of Portland is an export gateway for 

products from the Pacific Northwest and the interior of Canada 

and the United States. Agricultural products and mineral products 

dominate our export trade. And one of the most important mineral 

products that we export is soda ash. 

The Port of Portland has been exporting soda ash since 1987 

when we built a marine terminal dedicated exclusively to the handling of this cargo. 

In 2014, 75 ships or about one ship every five days docked at the 

Port of Portland to load soda ash. We exported about 2.8 million 

short tons of the product, primarily to Pacific Rim countries. In 

fact, about 40 percent of all soda ash exports from the United 

States whether exported by marine or by land go through the Port 

of Portland, so it obviously comprises a very important cargo for us. 

All of the activities associated with receiving soda ash at the Port 

of Portland by rail and then loading on board ships generates significant local economic benefits. We estimate that about 200 direct, 

indirect and induced jobs are associated with the handling of this 

cargo. And each of those direct jobs pays an average of $50,400. 

I might just add that these are very important blue collar jobs 

with benefits that are available to a variety of people, some of 

whom cannot go to college or for whatever reason, choose not to go 

to college. So it’s the very kind of blue collar job that the Portland 

region has historically tried to support and cultivate. 

Another important but unquantifiable benefit from the handling 

of soda ash in Portland is that it helps to maintain and improve 

our local, regional, rail network. The Union Pacific railroad transports soda ash from Wyoming to Portland. And the long haul, 

steady, reliable nature of this business encourages the Union Pacific to invest and improve the regional rail network in Portland. 

As a result other domestic and international exporters and importers than have nothing at all to do with soda ash benefit from the 

rail improvements that the Union Pacific makes to facilitate its 

soda ash business. 

So for a variety of reasons, especially the local economic benefits 

that this cargo provides to Portland, the Port of Portland is happy 

to join with our colleagues in the U.S. soda ash industry to urge 

you to support S. 2031. 

23 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Finn follows:] 

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Senator BARRASSO. Thank you very much, Mr. Finn. 

Mr. von Ahrens? 

STATEMENT OF FRED VON AHRENS, VICE PRESIDENT, 

MANUFACTURING, TRONOX ALKALI 

Mr. VON AHRENS. Thank you. 

Good afternoon, Chairman Barrasso. My name is Fred von 

Ahrens. I’m the Vice President of Manufacturing for Tronox Alkali 

in Green River, Wyoming. I’m here representing Tronox Alkali and 

the four other U.S. producers of natural soda ash, Tata Chemicals, 

OCI, Solvay, Searles Valley Minerals, in support of S. 2031. 

I’m pleased to report that the soda ash industry is the country’s 

largest inorganic chemical export by volume contributing more 

than one billion dollars annually to our trade balance. Combined, 

the five U.S. natural soda ash producers employ more than 3,000 

full time, skilled workers with an average salary of more than 

$122,000. Approximately 1,000 of these workers are represented by 

the United Steel Workers. 

More than 18,000 indirect jobs are also dependent on the U.S. industry including the railroads, glass packaging, window manufacturing, the auto industry and port workers in Washington State 

and Oregon, California and Texas. The five companies also have 

corporate offices in Connecticut, New Jersey, Oklahoma, Pennsylvania and Texas with a staff totaling more than 500 employees. 

Recent history has demonstrated that a two-percent Federal royalty rate can have positive impacts. First, it fosters robust export 

growth consistent with the President’s National Export Initiative. 

Second, it leads to expanded domestic manufacturing capacity and 

job growth. Third, it results in an increase rather than a decrease 

in Federal royalty revenues by spurring development of the resource. 

Mr. Chairman, today, approximately 58 percent of our production 

is exported primarily to the Pacific Rim and Latin America. The 

2006 and 2013 royalty rates enacted by Congress came out of recognition that global economic conditions, specifically the emergence 

of subsidized Chinese competition, were eroding America’s natural 

soda ash advantage. 

There are two methods of producing soda ash, the natural method, utilizing Trona ore employed by the five U.S. companies, and 

a synthetic process. China is the largest producer and exporter of 

the synthetic process. The natural process is the more efficient way 

of making soda ash and has significant environmental advantages 

over the synthetic process, which generates a larger carbon footprint and has other negative environmental impacts. 

Mr. Chairman, I would like to submit for the record a life cycle 

assessment commissioned by the IMANA that demonstrates that 

U.S. soda ash is better for the world than Chinese synthetic soda 

ash. 

Senator BARRASSO. Without objection. 

[The information referred to follows:] 

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Mr. VON AHRENS. Thank you. 

The new synthetic soda ash facilities in countries such as India 

and Vietnam, lack the environmental regulation and the associated 

cost of manufacturing that we have in the United States. Emissions from a recently commissioned plant in Vietnam have 

poisoned local waters, resulting in mass fish kills, and have lowered air quality to unhealthy levels in surrounding communities. 

Mr. Chairman, from 1996 to 2006 and 2011 to 2013 when the 

royalty rate was six percent approximately, 1,000 jobs were lost, 

the global market share declined, and China went from importing 

more than one billion tons of soda ash to being a major exporter, 

and is now the United States’ largest competitor. 

When the royalty was lowered to two percent from 2006 to 2011, 

in the midst of a global recession, a number of positive things happened. Royalties to the government rose to more than $80 million. 

The industry not only retained jobs, it created 100 new jobs. The 

industry nearly doubled its rate of investment in spending to nearly $150 million annually to expand capacity and much needed improvements. The program continued to support education systems 

as confirmed by the current and past Governors of Wyoming. 

Congress has the opportunity to increase global competitiveness, 

increase jobs and reduce global greenhouse gases by passing this 

bill. 

Thank you for your consideration of our views. I’d be pleased to 

take any questions. 

[The prepared statement of Mr. von Ahrens follows:] 

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Senator BARRASSO. Thank you very much to each of you. 

Mr. Finn, I would like to start, if I could, with you because I 

mentioned yesterday’s Wall Street Journal article. Would you discuss some of the challenges that the Port of Portland is facing in 

trying to boost exports? 

Mr. FINN. Yes, Mr. Chairman. 

Historically the Port of Portland and other ports on the Columbia 

Snake River system have been an export gateway for products from 

the Pacific Northwest and the interior of the United States and 

Canada. And we continue, actually, to grow in that capacity. Bulk 

products, in particular, continue to be very strong from the Port of 

Portland and other Columbia River ports. 

The challenge we face at the Port of Portland is with one particular kind of cargo and that is containerized cargo. We have always operated a medium-sized niche container terminal, primarily 

for containerized products from Oregon, Washington and Idaho. 

Due to some differences between labor and management over the 

operation of that container terminal, we have lost almost all of our 

container service for the time being. 

Efforts are underway to try to restore that container service, but 

for the time being we only have one, very limited, container carrier 

calling at the Port of Portland. 

Senator BARRASSO. So then what role does soda ash play in Portland’s strategy going forward? 

Mr. FINN. Going forward, Mr. Chairman, soda ash is one of the 

many bulk products that form the foundation, really, for our marine business. Since 1987, soda ash has been a steady cargo at the 

Port of Portland, and it’s very important, actually, to our financial 

foundation that we maintain and try to grow these kinds of 

foundational cargos while at the same time trying to address this 

other issue. 

Senator BARRASSO. Ms. Leiter, in your testimony you state, ‘‘The 

royalty rate reductions from 2006 to 2011 did not appear to have 

contributed in a significant way to the creation of new jobs.’’ 

I would note that the royalty rate reduction was in effect during 

one of the worst recessions in decades. I am just wondering if you 

think how did the royalty rate reduction, maybe, help save or preserve existing jobs within the soda ash industry? 

Ms. LEITER. Thanks for the question. 

As we say in the written testimony we don’t, actually, have the 

data to assess. The job rate stayed approximately constant through 

those six years, five years, and we don’t have the data to assess 

what would have happened in the industry during the recession in 

the absence of that. 

Senator BARRASSO. Mr. Douville and Mr. von Ahrens, I wonder 

if you have some thoughts and would like to respond to that same 

idea of preserving jobs since things have stayed stable in a time, 

economically, when our own economy was having significant challenges? 

Mr. VON AHRENS. Mr. Chairman, we were not only allowed or not 

only able to protect jobs, but we added over 100 jobs during that 

time period. Exports were up, production is up, and Federal revenues are up. Our capital access, as I said in my testimony, was also 

up. 

101 

Senator BARRASSO. Yes. 

Is there anything you would like to add, Mr. Douville? 

Mr. DOUVILLE. Yeah, during the window, exports were up about 

640,000 tons from 2007 through 2011. In the year 2009, exports 

were actually down almost 900,000 tons year over year. So we were 

able to come back from the dip in 2009, in large part, because of 

the royalty rate reduction that we had received, and the fact that 

we were able to readjust our position in a number of these marketplaces. 

Senator BARRASSO. Okay. 

Mr. von Ahrens, in your testimony you stated that during the 

royalty rate reduction from 2006–2011, the U.S. soda ash industry 

nearly doubled its rate of investment spending more than $158 million to expand capacity and make needed improvements, and that 

approximately 58 percent of your production is exported. Ten years 

ago this export to domestic ratio was the reverse with more than 

60 percent of it being used here at home domestically. 

You then explained this change is directly correlated to the historic fluctuation in the royalty fees that the U.S. companies pay for 

mining in Federally-owned lands as an impact. 

Mr. Douville, you also say that the royalty rate reduction has 

greatly helped to support additional export growth. 

This afternoon, Ms. Leiter testified that the royalty rate reduction from 2006–2011 did not appear to have contributed in a significant way to increased exports or a notable increase in capital 

expenditures. 

Would any of you like to respond to that testimony? 

Mr. VON AHRENS. Mr. Chairman, we believe that the BLM takes 

a narrow view to this. When we look at our investments from a 

trade perspective, over $300 million of additional trade balance for 

the increase from 2007 and 2011, and the numbers do not include 

tax revenues resulting in increased production. 

Senator BARRASSO. Mr. Douville, is there anything else you 

would like to add? Then I will give Ms. Leiter an opportunity to 

respond. 

Mr. DOUVILLE. At the same time as I talked about before, we 

were up 640,000 tons during the window, and that equated to 

about $300 million in trade balance improvement during that time. 

So as Mr. von Ahrens said, we were able to find some real positives 

in other areas during that time. 

Senator BARRASSO. Ms. Leiter, anything on that? I do have another question for you. 

Ms. LEITER. I would like to add two things. 

The first is that our understanding is that we have seen a 

growth in exports and that has largely been due to the close of 

Trona or, excuse me, soda ash manufacturing facilities in various 

other countries and the U.S. has absorbed that manufacture. 

I’d also like to note that the quantity of U.S. exports appears to 

have trended upward from 2011 to the present even as the royalty 

rates initially from 2011 to 2013 were restored to the lease rates 

and then from 2013 to the present as those rates were set at four 

percent. So we’ve seen a fairly steady trend upward in exports even 

as the royalty rate fluctuates in the background. 

102 

And that, I think, is also what I would like to point out about 

the job growth as well. It is true that jobs held steady from 2006 

to 2011 but jobs have continued to hold steady and fluctuate only 

around 100 jobs even from 2011 to the present as the royalty rates 

returned to the lease rates. 

Senator BARRASSO. Yes, you mentioned the fluctuation in rates 

because it was two percent from 2006 to 2012; Congress enacted 

legislation and it was four percent from 2013 to 2015. Your testimony discusses the Department’s views on these effects of the royalty rate reductions. 

I am wondering what your thoughts are on the rate reduction 

from 2013 to 2015. We heard about the previous years but what 

about these last couple of years? 

Ms. LEITER. So the figures that I have are for 2000. I don’t have 

any figures for 2015. The figures that I have for 2013 and 2014 

suggest that production has continued to trend slightly upward. 

Exports have continued to trend slightly upward, and jobs have 

stayed approximately constant. And that was true in 2010 and 

2011 at the background lease rates of about 5.6 percent, on average, and also in 2013 and 2014 under the four-percent rate. 

Senator BARRASSO. Does the Department believe it actually 

helped save or create jobs, increase investment, boost production, 

and promote exports of soda ash? And you do not have the numbers for 2015. 

Ms. LEITER. Does the Department believe that reducing royalty 

rate does those things? 

Senator BARRASSO. Yes. Help? 

Ms. LEITER. No. I think I’d have to say not. [Laughter.] 

Senator BARRASSO. Would either of you like to respond on that? 

Mr. DOUVILLE. If you look at the period of time, and I’ll let Mr. 

von Ahrens talk about the—any capital that may have been invested in 2011 going into 2012. 

If you look at what’s happening today, today is very similar to 

what we saw back in 2009. The Chinese are trying to export their 

way to achieve some of their GDP objectives, and we’ve seen a significant reduction in pricing and a significant market share grab. 

As I mentioned in my testimony, we anticipate this year that the 

Chinese will be exporting about 22 percent more than they did a 

year ago. So as you look at where we are today, our position is 

that, again, we need this support more than ever so that, again, 

the benefits that we saw back in ’09 we can see those benefits as 

we continue to carry forward because the industry certainly does 

need to continue to grow. 

Senator BARRASSO. Yes. Anything you would like to add? 

Mr. VON AHRENS. Thank you, Chairman. 

In the front part of the question is that exports are up. Jobs are 

up. Production is up. Federal revenues are up, and our capital investment is up. 

But, as Mr. Douville mentioned in his testimony, with the 

headwinds, there’s a lag in the impact to our business and we’re 

starting to see that impact now as the yuan is revalued and the 

consistent support that the Chinese get on export. We are seeing 

those exports go up, and that will impact us as we go forward. 

103 

Senator BARRASSO. Well since you mentioned devaluation and 

the currency, if we could just spend a couple minutes on this: China’s unfair trade practices. 

Since 2009, China has given its synthetic soda ash producers a 

nine percent rebate on China’s value added tax. More recently, 

China devalued its currency by 4.4 percent. It seems that these actions give Chinese soda ash producers what has been described as 

a $27 per metric ton benefit. 

Could you explain what that actually means so people understand how that fits into all of this, this $27 per metric ton benefit? 

Mr. DOUVILLE. Yeah. 

Senator BARRASSO. Whoever is the best on the panel? 

Mr. DOUVILLE. Thank you, I can take that. 

If you look at the current market pricing, it’s around $200 per 

metric ton, FOB China. So the nine-percent rebate that they get 

would be about $18 of the $27. The 4.4 percent devaluation of the 

currency would be another $8.80, so that’s how we get to the approximately $27 benefit. 

This year, they’re going to export around 2.2 million tons, so together when you multiply that out it’s around a $60 million benefit 

for the Chinese industry. And we saw directly, after the August 

11th devaluation, an immediate response from the Chinese producers into the marketplace looking to increase exports. And our 

market share is definitely at risk. 

Senator BARRASSO. To what extent would our bill, if enacted, reduce this unfair benefit? 

Mr. DOUVILLE. From what I understand, the CBO has scored this 

at about $16 million per year and certainly not the full $60 million 

that the Chinese exporters are seeing today. And if there’s a devaluation, again at that $200 number, for every one percent that’s 

devalued it’s another $2 per ton. So the 15 to 20 percent could be 

another $30 to $40 per ton. 

Senator BARRASSO. That is the question then if in recent media 

reports that we have seen, China is considering a further 15 to 20 

percent devaluation in the currency. 

Mr. DOUVILLE. Yeah. 

Senator BARRASSO. So additive, you would have another 30 to 40 

based on the $2 per ton. 

Mr. DOUVILLE. Right. 

Senator BARRASSO. Okay. 

I want to ask you about ANSAC for a second. 

You have written at least five letters to the Administration asking them to encourage China to eliminate the value added tax rebate to its soda ash producers. Since 2009, members of the House 

and Senate have also sent letters to the Administration urging the 

elimination of China’s value added tax rebate for soda ash producers. 

I am going to enter these letters into the records after today’s 

hearings. 

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Senator BARRASSO. Would you elaborate on the efforts that 

ANSAC and others in the soda ash industry have taken to eliminate China’s rebate, China’s value added tax rebate? 

Mr. DOUVILLE. Yeah. It’s in support of the, with the Industrial 

Minerals Association which represents all of the soda ash companies here in the U.S., as you said, have sent letters to the U.S. 

Trade Representative’s Office, to the Secretary of State and to the 

Secretary of Commerce, I believe, I’m sorry, Secretary of the Treasury, the three of those, over the last five, six years. To date, we 

have received from the USTR a commitment that it will be included in JCCT discussions, and to date we are still pushing hard 

for that to happen. 

Senator BARRASSO. Could I ask you about any other unfair trade 

barriers that are out that countries, other than China, have imposed on American soda ash exports? 

Mr. DOUVILLE. Yeah, that’s a great question. There’s three in 

particular I’d like to talk about. 

India has a market of around three million tons of demand. If 

you look at the future growth opportunities for U.S. soda ash, the 

Indian per capita consumptions are on five pounds per person. In 

the U.S., it’s around 35. As India matures and that number grows 

from five to 35, you’re talking about a 14 million ton opportunity. 

The Indian market has both import tariffs on U.S. soda ash as well 

as significant dumping duties for very diminimus quantities that 

have been shipped there. 

In Vietnam, Mr. von Ahrens talked about the issue there with 

the soda ash plant that started up in June of this year with no environmental controls for a synthetic plant with a mass kill of fish 

for local fisherman. The government’s response was we will look at 

relocating individuals and not so much as we will look at, you 

know, including environmental controls. But the two-percent that 

was added into the import duty for Vietnam started only about 12 

months ago. So that was totally to support this new plant that 

came on. 

In Taiwan, there’s a 3.5 percent import duty with no soda ash 

operation there. And because of the Chinese trade agreements with 

Vietnam and Taiwan, they don’t have import duties on either Vietnam or Taiwan. 

Senator BARRASSO. Yes, and what steps have you taken to reduce 

these unfair trade practices? 

Mr. DOUVILLE. We’ve sent letters to the Office. I don’t have the 

name here, unfortunately, but to one of the offices within Taiwan, 

within Taipei. The responses we have gotten back are that they’d 

be interested in a larger free trade agreement but they’re not interested in talking about individual products. 

On a larger level, the Trans Pacific Partnership, we’ve been very 

supportive of that as well as the Trade Promotion Authority. If that 

were to happen, we would see benefits in both Vietnam and Japan, 

which could amount to a significant benefit for us. 

Senator BARRASSO. Thank you. 

Mr. von Ahrens, U.S. natural soda ash producers, according to 

your testimony, employ more than 3,000 full-time, skilled workers. 

About 1,000 of these are represented by the United Steel Workers. 

You go on to explain the production of soda ash from U.S. natural 

130 

resources in Wyoming and California is done by skilled workers 

with an average salary, I just want to make sure I got it right, an 

average salary of more than $85,000 per year and in very small 

rural communities. 

Mr. VON AHRENS. Yes, and that number has actually gone up to almost $122,000 now. 

Senator BARRASSO. Could you explain the importance of the soda 

ash industry, the jobs the industry provides to rural communities 

in Wyoming and in California? 

Mr. VON AHRENS. During the last recession we actually did not 

even lose jobs in Sweetwater County. They look at us as a very stable employer. The industry, by far, is valued by the region as well 

as the state. They are some of the best jobs in the world. 

Senator BARRASSO. Mr. Finn, would you explain the importance 

of the jobs that soda ash, the soda ash industry, supports at the 

Port of Portland? 

Mr. FINN. Yes, Mr. Chairman. 

As I mentioned in my remarks, we estimate that the average salary of those jobs to be about $50,400, which constitutes a good, 

healthy family wage job with benefits. The people employed by the 

soda ash, handling it at the Port of Portland include longshore 

labor, railway men, tugboat operators, river and bar pilots and several other occupations that depend on the export of soda ash. 

Senator BARRASSO. Mr. von Ahrens, we talked a little bit about 

the two methods of producing soda ash, the natural method, utilizing Trona, and the synthetic process. The natural process, with 

significant environmental advantages over the synthetic process, it 

has always appeared that way to me. The synthetic process, I 

know, generates a large carbon footprint and has negative environmental impacts. I understand that all soda ash producers in the 

United States produce natural soda ash while China is the largest 

producer of synthetic soda ash. 

Would you elaborate on some of the environmental advantages 

that natural soda ash has over synthetic soda ash? 

Mr. VON AHRENS. Yes. 

The primary is energy. To make the conversion from Trona to 

soda ash it takes about 30, just under 40 percent less energy to 

make that conversion as opposed to all synthetic manufacturing. In 

addition, there’s other chemicals used in the process which leads to 

liquid and air emissions. 

Senator BARRASSO. Also is it fair to say that for people who want 

to reduce the carbon emissions, they really ought to support taking 

steps to ensure the U.S. soda ash producers grow our market over, 

say, China synthetic soda ash producers? 

Mr. VON AHRENS. Absolutely, including our customers who are 

looking at buying natural soda ash because of the natural lower 

greenhouse gas footprint as submitted in life cycle analysis. They 

see it as a benefit as well. 

Senator BARRASSO. I want to go ahead and start now with Ms. 

Leiter and then ask any of the other witnesses if there is anything 

else you would like to add. 

Ms. LEITER. I think I’d just like to emphasize that our mandate 

is to provide a fair return to the American taxpayer, and the best 

evidence we have in front of us of that fair market rate is the averVerDate Nov 24 2008 08:01 Oct 17, 2016 Jkt 098910 PO 00000 Frm 00134 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\98910\98910.TXT 98910
131 

age of the private and state lease rates which is about 5.6. This 

would reduce the royalty rate for soda ash produced on Federal 

lands significantly below that fair market rate. It would reduce royalties to the Federal and State treasury. 

And all of the data we have suggests that its only impact is that 

manufacturers of soda ash, quite sensibly, shift their production 

from private and state over to Federal leases but that it does not 

have the beneficial impacts on soda ash production, jobs and exports that the Committee is looking for. 

Senator BARRASSO. Mr. Douville, is there anything you would 

like to add? 

Mr. DOUVILLE. During the window from ’06 through 2014—I 

talked before about just the window from ’07 to ’11. But during the 

window from ’06 to ’14 is about 1.4 million tons of increased exports during that window, the majority of which came during the 

times when the soda ash royalty was reduced. So the benefit on the 

export side has certainly been there. 

Senator BARRASSO. Okay. 

Mr. Finn, anything you would like to add? 

Mr. FINN. No, sir. All I want to do is thank you for introducing 

us to S. 2031, and we urge the Committee to approve it. 

Senator BARRASSO. Thanks. 

Mr. von Ahrens? 

Mr. VON AHRENS. My one request is that when we look at the 

data, we don’t look at any single year. Our mine plans are 20 years 

long. Our business plans are five years long. 

As we see the royalty rate potentially going up tomorrow, it will 

have an impact that will show up a year or two from now. And as 

Mr. Douville talked about, the headwinds are already upon us. 

That’s all I have to say, sir. 

Senator BARRASSO. Well, thank you. 

I want to thank all of you for being here. Before concluding the 

hearing I would like to enter into the record letters and testimony 

in support of the bill from the Governor of Wyoming, Matt Mead, 

his predecessor, Governor Dave Friedenthal, Natural Soda LLC, 

the Glass Packaging Institute, the Beer Institute and Union Pacific 

Railroad. 

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Senator BARRASSO. I want to thank each of you for being here 

today. Thank you for your time. 

Some of the other members may submit written questions. I ask 

that you please promptly respond. The hearing record will be open 

for two weeks. 

With that, the hearing is adjourned. 

[Whereupon, at 3:25 p.m. the hearing was adjourned.] 

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