```

[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]

                      MICROVAST AND MORE: OVERSIGHT OF 
                   RESIDENT BIDEN'S ENERGY SPENDING SPREE

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT AND 
                               INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 21, 2023

                               __________

                           Serial No. 118-52
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           

     Published for the use of the Committee on Energy and Commerce

                   govinfo.gov/committee/house-energy
                        energycommerce.house.gov
                        
                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
57-575 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------                             
                   
                    COMMITTEE ON ENERGY AND COMMERCE

                   CATHY McMORRIS RODGERS, Washington
                                  Chair
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio                  Ranking Member
BRETT GUTHRIE, Kentucky              ANNA G. ESHOO, California
H. MORGAN GRIFFITH, Virginia         DIANA DeGETTE, Colorado
GUS M. BILIRAKIS, Florida            JAN SCHAKOWSKY, Illinois
BILL JOHNSON, Ohio                   DORIS O. MATSUI, California
LARRY BUCSHON, Indiana               KATHY CASTOR, Florida
RICHARD HUDSON, North Carolina       JOHN P. SARBANES, Maryland
TIM WALBERG, Michigan                PAUL TONKO, New York
EARL L. ``BUDDY'' CARTER, Georgia    YVETTE D. CLARKE, New York
JEFF DUNCAN, South Carolina          TONY CARDENAS, California
GARY J. PALMER, Alabama              RAUL RUIZ, California
NEAL P. DUNN, Florida                SCOTT H. PETERS, California
JOHN R. CURTIS, Utah                 DEBBIE DINGELL, Michigan
DEBBBIE LESKO, Arizona               MARC A. VEASEY, Texas
GREG PENCE, Indiana                  ANN M. KUSTER, New Hampshire
DAN CRENSHAW, Texas                  ROBIN L. KELLY, Illinois
JOHN JOYCE, Pennsylvania             NANETTE DIAZ BARRAGAN, California
KELLY ARMSTRONG, North Dakota, Vice  LISA BLUNT ROCHESTER, Delaware
    Chair                            DARREN SOTO, Florida
RANDY K. WEBER, Sr., Texas           ANGIE CRAIG, Minnesota
RICK W. ALLEN, Georgia               KIM SCHRIER, Washington
TROY BALDERSON, Ohio                 LORI TRAHAN, Massachusetts
RUSS FULCHER, Idaho                  LIZZIE FLETCHER, Texas
AUGUST PFLUGER, Texas
DIANA HARSHBARGER, Tennessee
MARIANNETTE MILLER-MEEKS, Iowa
KAT CAMMACK, Florida
JAY OBERNOLTE, California
                                 ------                                

                           Professional Staff

                      NATE HODSON, Staff Director
                   SARAH BURKE, Deputy Staff Director
               TIFFANY GUARASCIO, Minority Staff Director
              Subcommittee on Oversight and Investigations

                      H. MORGAN GRIFFITH, Virginia
                                 Chairman
MICHAEL C. BURGESS, Texas            KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky                Ranking Member
JEFF DUNCAN, South Carolina          DIANA DeGETTE, Colorado
GARY J. PALMER, Alabama              JAN SCHAKOWSKY, Illinois
DEBBIE LESKO, Arizona, Vice Chair    PAUL TONKO, New York
DAN CRENSHAW, Texas                  RAUL RUIZ, California
KELLY ARMSTRONG, North Dakota        SCOTT H. PETERS, California
KAT CAMMACK, Florida                 FRANK PALLONE, Jr., New Jersey (ex 
CATHY McMORRIS RODGERS, Washington       officio)
    (ex officio)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. H. Morgan Griffith, a Representative in Congress from the 
  Commonwealth of Virginia, opening statement....................     1
    Prepared statement...........................................     4
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, opening statement.....................................    10
    Prepared statement...........................................    12
Hon. Cathy McMorris Rodgers, a Representative in Congress from 
  the State of Washington, opening statement.....................    14
    Prepared statement...........................................    16
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................    20
    Prepared statement...........................................    22

                                Witness

David Howell, Principal Deputy Director, Office of Manufacturing 
  and Energy Supply Chains, Department of Energy.................    24
    Prepared statement...........................................    27

 
  MICROVAST AND MORE: OVERSIGHT OF PRESIDENT BIDEN'S ENERGY SPENDING 
                                 SPREE

                              ----------                              

                        WEDNESDAY, JUNE 21, 2023

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:27 p.m. in 
room 2322, Rayburn House Office Building, Hon. H. Morgan 
Griffith (chairman of the subcommittee) presiding.
    Members present: Representatives Griffith, Guthrie, Duncan, 
Palmer, Armstrong, Rodgers (ex officio), Castor (subcommittee 
ranking member), DeGette, Schakowsky, Tonko, Ruiz, and Pallone 
(ex officio).
    Staff present: Sean Brebbia, Chief Counsel; Lauren Eriksen, 
Clerk; Christen Harsha, Senior Counsel; Peter Kielty, General 
Counsel; Emily King, Member Services Director; Austin Flack, 
Minority Junior Professional Staff Member; Waverly Gordon, 
Minority Deputy Staff Director and General Counsel; Liz Johns, 
Minority GAO Detailee; Constance O'Connor, Minority Senior 
Counsel; Christina Parisi, Minority Professional Staff Member; 
Harry Samuels, Minority Oversight Counsel; and Caroline Wood, 
Minority Research Analyst.
    Mr. Griffith. The Subcommittee on Oversight and 
Investigations will now come to order.
    The Chair now recognizes himself for 5 minutes for an 
opening statement. All right, back to where I was.

OPENING STATEMENT OF HON. H. MORGAN GRIFFITH, A REPRESENTATIVE 
         IN CONGRESS FROM THE COMMONWEALTH OF VIRGINIA

    Welcome to today's hearing on the Energy and Commerce 
Subcommittee on Oversight and Investigations. Today, for the 
first time, this committee welcomes the head of the Department 
of Energy's new Office of Manufacturing and Energy Supply 
Chains, or MESC.
    In February of 2022, as part of the Department's newest 
reorganization plan, three new program offices, including MESC, 
were created. MESC was set up with the goal of strengthening 
energy supply chains and increasing the domestic manufacturing 
base. This is intended to support what the DOE characterizes as 
a clean and equitable energy transition. MESC is currently 
administering about a dozen programs funded through the 
Infrastructure Investment and Jobs Act and the so-called 
Inflation Reduction Act. Almost all of MESC's programs have 
been created recently.
    In short, a brand-new office will give out billions in 
funding for numerous new programs over the course of just a 
couple of years. Now, I don't care what party you are in, this 
scenario, no matter what the department or the administration, 
deserves increased oversight.
    Not long after its creation, MESC came to the attention of 
then-Republican Leader Rodgers and myself after it announced 
$2.8 billion in financial awards to 20 companies under its 
Battery Manufacturing and Recycling Grants Program in October 
of last year. As a part of these announcements, Microvast 
Incorporated was selected to receive a $200 million grant for a 
battery manufacturing plant in Tennessee.
    Shortly after the announcement, Microvast's association 
with the Chinese Communist Party became apparent. Microvast 
produced its battery components in China, the bulk of its 
revenue was generated in China, and according to Microvast's 
own SEC filings, the government--referring to the People's 
Republic of China--``exerts substantial influence over the 
manner in which we must conduct our business activities, and 
may intervene at any time with no notice.''
    After learning of Microvast's concerning ties to China, 
then-Republican Leader Rodgers and I sent a letter to Secretary 
of Energy Jennifer Granholm on December 14 of last year 
requesting a briefing to include specific information about the 
Microvast award. The Department has yet to answer our specific 
questions, provide any documents or sufficient information 
about the vetting processes behind the battery manufacturing 
recycling grant awards.
    In response we asked, with two weeks' notice, that the 
appropriate official from the DOE testify before this 
subcommittee on May 23. Unfortunately, the Department refused 
to attend, citing inadequate time to prepare. However, 
strangely enough, the night before the hearing the Department 
announced it was canceling its tentative award to Microvast. It 
is unclear whether these events are related.
    To date, the Department has still not shared with Congress 
the reason for this decision or any details of additional due 
diligence the Department may or may not have conducted. We had 
an informative discussion with witnesses who did join us on May 
23 to talk about general challenges facing our energy sector 
supply chains. The witnesses talked at length about threats 
posed by foreign rivals to our energy security, including 
government programs.
    The main point is we don't want Chinese companies getting 
American taxpayer money to create more Chinese jobs and Chinese 
technology, even if some of those jobs might end up being in 
the United States.
    My colleagues and I have lots of questions on--have lots of 
questions only the Department of Energy can answer.
    MESC's goal is to boost domestic industry and secure energy 
supplies. However, the Microvast misstep has increased our 
doubt as to whether this mission is being successfully 
completed out.
    While I commend the Office for canceling the Microvast 
award, it shouldn't take a news story and multiple 
congressional letters for MESC not to award grants to 
problematic companies. The main cloud of haze here concerns due 
diligence and vetting processes at the DOE. We are aware of at 
least one other selectee besides Microvast that is also no 
longer moving forward with the awards process. The detailed 
reason for the Amprius grant cancellation is unknown.
    While we were disappointed in the Department's refusal to 
originally participate in our hearing last month, I am glad to 
finally have them here today. As such, we welcome Dr. David 
Howell, Principal Director--Deputy Director of MESC. Mr. Howell 
has previously served as MESC's Acting Director as well as 
Director of the Vehicle Technologies Office for the DOE.
    Today we hope to learn more about this new office. This 
committee also hopes to gain some insight on how it is 
prioritizing its awards and how seriously it takes its domestic 
manufacturing charter.
    I thank Principal Deputy Director Howell for joining us 
today, and I look forward to our discussion.
    [The prepared statement of Mr. Griffith follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Griffith. And with that, I yield back. I now recognize 
the ranking member of the subcommittee, Ms. Castor, for 5 
minutes for her opening statement.

  OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Ms. Castor. Well, thank you, Mr. Chairman, for calling this 
important hearing.
    Welcome, Dr. Howell. I look forward to hearing your 
testimony.
    We continue to hear good news about opportunities that are 
emerging across the country thanks to the Bipartisan 
Infrastructure Law and the Inflation Reduction Act and, of 
course, the CHIPS and Science Act. These laws are already 
having an incredible impact creating good-paying jobs, lowering 
energy costs for our neighbors, and bringing manufacturing back 
to the United States.
    These investments are smart. They are accelerating the use 
of American-made clean energy that is cheaper and more 
sustainable, and shifting away from supply chains controlled by 
foreign adversaries like the Chinese Communist Party. And we 
are freeing ourselves from big oil companies and utilities that 
keep fuel prices high and put profits over people. Through our 
targeted investments, we are building a clean energy economy 
that benefits everyone.
    Today we have an opportunity to learn more about 
implementation of parts of the IRA and the infrastructure law 
at the U.S. Department of Energy. The Office of Manufacturing 
and Energy Supply Chains, or MESC, is a new office tasked with 
managing some of the crucial investments that Democrats made 
last Congress. MESC oversees initiatives to boost critical 
minerals, to process minerals in the U.S. rather than China, to 
manufacture batteries in America, and recycle those batteries 
here.
    Meanwhile, local workforce development initiatives, 
apprenticeships are also underway so workers can learn updated 
skills and trades because we have got to make sure that 
American workers are ready to take advantage of career 
opportunities created by these investments. That is why 
Democrats included so many Buy American and Build American 
policies in the IRA and the infrastructure law.
    And good news: It is working. The IRA and the 
infrastructure law have already attracted over $240 billion in 
new investments across 31 States, like new battery plants, 
electric vehicle manufacturing plants, 142,000 jobs created so 
far. And these are good-paying jobs that often do not require a 
college degree. We are strengthening communities at the same 
time.
    So it is a little ironic that most of these investments and 
jobs are happening in areas represented by Republicans who 
oppose the IRA and the infrastructure law. But that is OK. We 
are all in this together, and I trust that over the next decade 
businesses and companies will invest more to support new 
manufacturing in the U.S. and modernize our infrastructure. 
That will give our neighbors back home more stability and 
security.
    It is important to recognize that offshoring manufacturing 
jobs and supply chains did not happen overnight, and bringing 
them back will not happen overnight either. For decades, the 
Chinese Communist Party poured resources into their 
manufacturers to build an early lead in the global clean energy 
supply chain. America did not make the same investments, which 
resulted in missed opportunities.
    But we are making up for that now with smart, long-term 
investments in critical mineral production and processing and 
advanced manufacturing. These investments and American 
ingenuity will not only allow us to catch up to the CCP but 
will make us the world leader in clean and renewable energy--
new electric cars and trucks and industrial manufacturing to 
lower climate pollution that is wreaking havoc and--wreaking 
havoc back home in our communities and costing our neighbors a 
lot.
    Thankfully, DOE is no stranger to managing and mitigating 
investment risk. MESC uses a rigorous and efficient vetting 
process to comprehensively analyze project-specific risks and 
tailor measures to mitigate those risks. MESC continues to 
conduct the proper due diligence to protect taxpayer funds, and 
it is working how it should.
    Unfortunately, I don't think my Republican colleagues 
agree, and I am concerned that they have already given up on 
supporting American workers and competing in the global clean 
energy supply chain. Just last month, Republicans held a 
hearing where they simultaneously expressed satisfaction about 
Microvast's rejected application and skepticism that the United 
States could never compete with companies that are beholden to 
the Chinese Communist Party.
    Well, it is disappointing, after years of complaining about 
our country's reliance on the CCP, that Republicans are betting 
against investments in the future and against American workers 
and manufacturers. Instead of trying to find ways to undermine 
important Federal programs or holding our economy hostage 
through a manufactured crisis, let's turn the page and work 
together to help our neighbors back home and the American 
people. Together we can do the constructive oversight that 
helps Federal initiatives succeed.
    Unless we invest in our future, we will continue to fall 
behind and miss yet another opportunity to be a leader in clean 
energy supply chains.
    [The prepared statement of Ms. Castor follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Castor. Thank you, Mr. Chairman, and I yield back.
    Mr. Griffith. The gentlelady yields back. I now recognize 
the Chair of the full committee, Mrs. McMorris Rodgers, for her 
5-minute opening statement.

      OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

    Mrs. Rodgers. Thank you, Mr. Chairman. We should all be 
proud that America is the leader, the leader in clean, 
renewable energy. We have done more to lift people out of 
poverty, we have done more to reduce carbon emissions than any 
other country in the world. And we have done it through 
American innovation and technology. It is not China. China 
continues to build two coal-fired plants every week. That is 
not the future that I want in the United States of America.
    We should all be able to agree that our country must have a 
stable, secure supply chain, though. It is a matter of national 
security. We have seen the consequences of overreliance on 
supply chains from adversaries. It is playing out in Europe, 
where Putin has weaponized Russia's control over the 
continent's natural gas supply. That is our future if we 
continue to cede our energy and supply chain security to China. 
That is not the future I want, ladies and gentlemen.
    Unfortunately, President Biden's rush-to-green agenda puts 
China more firmly in control of our energy supply. This weakens 
American energy and national security, and wastes American 
taxpayer dollars which should be going to supporting more 
American jobs and innovation.
    Beginning in March of this year, we requested that Federal 
agencies, including the Department of Energy, provide monthly 
accounting of the funds they received under these major 
spending bills last Congress, the Infrastructure Investment and 
Jobs Act and the Inflation Reduction Act. To date we have 
received one response from Department of Energy, and it was 
incomplete. That is unacceptable. We are the oversight 
committee, and we are the elected representatives of the 
people.
    Furthermore, on March 29th of this year, this subcommittee 
convened a hearing with three inspectors general to discuss the 
risks associated with the Biden administration's massive 
spending spree. According to the Energy Department's inspector 
general, the Department of Energy received $128 billion in 
authorizations and appropriations, and an estimated loan 
authority of more than 350 billion. And this is--the IG also 
testified that, under the IIJA, the IRA, $83.6 billion will be 
going into 71 new programs at the Department. Yes, ladies and 
gentleman, you heard that right: 71 new programs.
    To understand how massive this spending plan is, it is 
helpful to point out that Department of Energy's fiscal year 
2022 budget was 44.3 billion.
    What I found most concerning is that the inspector general 
warned that new programs pushing money through untested 
processes and newly implemented internal controls are 
especially vulnerable.
    According to the Department's estimates--Energy 
Department's estimates--the Office of Manufacturing and Energy 
Supply Chains, which has only existed since February 22, will 
administer a $12 billion portfolio of projects under the IIJA 
and the IRA. I have serious concerns about a brand-new office 
having the procedures and the staff in place to distribute such 
a gigantic sum in a responsible way, and these concerns have 
only intensified in recent months.
    Under one of the programs, the Battery Manufacturing and 
Recycling Grants Program, the Department announced it had 
selected Microvast to receive $200 million. We now know 
Microvast performs the bulk of its battery production in China. 
According to the company's own SEC filings, and I quote, ``The 
PRC Government exerts substantial influence over the manner in 
which we must conduct our business activities, and may 
intervene at any time and with no notice.''
    It is deeply troubling that a grant for hundreds of 
millions of American, hard-earned taxpayer dollars was approved 
for a company like Microvast. So that is why, last December, 
Chair Griffith and I wrote to the Secretary of Energy, Jennifer 
Granholm, and requested more information on this grant as well 
as the procedures and the processes that led to the selection 
of Microvast.
    While it is true that the Department recently decided not 
to move forward with the Microvast grant, it remains unclear 
how the grant was approved in the first place. Time and again, 
we have requested information and testimony on how this has 
happened. And then time and again, the Department has failed to 
be accountable and transparent. This lack of transparency 
undermines the public's trust and raises doubts as to whether 
or not we are safeguarding taxpayer dollars.
    Americans deserve to know what the Department is doing to 
screen applicants, scrutinize their foreign ties, and keep 
funding that is supposedly supporting domestic industry from 
enriching our global adversaries. We must have transparency, 
and we must be assured that these taxpayer dollars are not 
being funneled to the Chinese, and we are going to continue our 
work to demand transparency and accountability on this.
    Since day one my colleagues and I have led to celebrate 
American innovation and energy dominance, and we are continuing 
that efforts today. This is just another step in that goal.
    Mr. Howell, I appreciate you being with us here today. I 
look forward to hearing more about the new program office.
    [The prepared statement of Mrs. Rodgers follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Rodgers. I yield back.
    Mr. Griffith. The gentlelady yields back. I now recognize 
the ranking member of the full committee, Mr. Pallone, for his 
5-minute opening statement.

OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    Last Congress, President Biden and congressional Democrats 
delivered with the Inflation Reduction Act and the Bipartisan 
Infrastructure Law. These two laws include major investments 
that are helping us grow our economy, create millions of clean 
energy jobs, lower energy prices for Americans, bolster 
domestic manufacturing, and help us lead the global transition 
to a clean energy economy.
    This aggressive action is necessary now. Extreme weather 
events are becoming more and more frequent with the worsening 
climate crisis. These events are costing our Nation hundreds of 
billions of dollars every year. They are destroying whole 
communities, tragically taking lives, homes, and livelihoods. 
And that is why the investments made by the Inflation Reduction 
Act and the Bipartisan Infrastructure Law are so important. 
These laws match the magnitude of the challenge we face, and 
represent the largest investments ever made in America's 
future.
    Americans across the country are already beginning to take 
steps towards using cleaner vehicles and energy sources, but we 
need to dramatically boost our domestic supply chains and 
manufacturing capacity in order to meet growing demand. For 
decades we have become increasingly dependent on other nations, 
including China, for both raw materials and the component parts 
that go into solar panels, wind turbines, electric vehicles, 
and other energy resources. However, thanks to these two new 
laws, targeted programs at the Department of Energy and other 
Federal agencies are fostering resilient supply chains and 
revitalizing domestic manufacturing.
    Companies have committed hundreds of billions of dollars to 
clean energy investments and have created more than 142,000 new 
clean energy jobs. And more commitments are constantly being 
made. Earlier this month General Motors announced the second 
phase of a $1 billion partnership aimed at rapidly increasing 
America's battery manufacturing. All of this is going to help 
us catch up to China, which has spent decades investing to 
dominate the global clean energy supply chain.
    As Federal agencies continue implementing key programs, we 
are on track to build on these initial achievements. We can 
fight the worsening climate crisis and deliver economic 
prosperity for everyone by betting on American ingenuity and 
work ethic. And that is why I am pleased we are hearing from 
DOE's Office of Manufacturing and Energy Supply Chains today 
about how their important work creates jobs and speeds up the 
clean energy transition.
    I also look forward to hearing about DOE's robust process 
for vetting grant applicants and ensuring effective oversight 
of awardees for the full duration of projects. These 
investments are going to make a big difference.
    It is interesting, because for years committee Republicans 
have voiced concerns that we are too reliant on overseas supply 
chains and manufacturers controlled by China, but they have, 
frankly, opposed every Democratic effort to bring those jobs 
and supply chains back to the United States. When we had a 
hearing on this topic last month, it really sounded like some 
committee Republicans had given up on trying to challenge 
China's dominance.
    But we can't afford to quit. And instead of working with us 
to find bipartisan solutions to big problems, Republicans have 
spent their time opposing real solutions and then attempting to 
undermine them at every turn.
    Before the last hearing, they questioned a potential DOE 
award to a company called Microvast. Then, when DOE conducted 
due diligence and decided not to move forward with an award to 
Microvast, Republicans continued to complain about DOE's work. 
At the end of the day, Republicans seem to have little interest 
in transitioning to a clean energy economy. Instead they want 
to prop up big oil companies.
    So I am ready to come together and do the constructive 
oversight that will help DOE succeed, but I am not willing to 
let my Republican colleagues throw in the towel because they 
would rather put polluters over people.
    So let's work together to realize the full potential of 
these laws, so that Federal investments can deliver lower 
energy prices, a clean future for our children, clean energy 
jobs across the country, and a domestic manufacturing base that 
will be the envy of the world. I think it is very possible if 
we work together on a bipartisan basis.
    [The prepared statement of Mr. Pallone follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pallone. And with that, Mr. Chairman, I yield back.
    Mr. Griffith. The gentleman yields back. That concludes 
Member opening statements.
    The Chair would like to remind Members that, pursuant to 
committee rules, all Members' written opening statements will 
be made a part of the record, but please make sure you provide 
those to the clerk promptly, so that they can be added to the 
record.
    We do want to thank our witness for being here today and 
taking the time to testify before the subcommittee.
    You will have the opportunity to give an opening statement 
followed by a round of questions from Members.
    Our witness today is David Howell, Principal Deputy 
Director of the Office of Manufacturing and Energy Supply 
Chains at the Department of Energy.
    We appreciate you being here today, and I look forward to 
hearing from you about what you are working on.
    As you are aware, this--the committee is holding an 
oversight hearing, and when doing so we have the practice of 
taking the testimony under oath. Do you have any objection to 
testifying under oath today?
    Mr. Howell. No, sir.
    Mr. Griffith. OK. The gentleman does not.
    Seeing no objection, we will proceed.
    The Chair also would advise you that you are entitled to be 
advised by counsel, pursuant to House rules. Do you desire to 
be advised by counsel during your testimony today?
    Mr. Howell. No, sir.
    Mr. Griffith. All right. Again, he has not requested 
counsel.
    So if you would, please rise and raise your right hand.
    [Witness sworn.]
    Mr. Griffith. Seeing the witness answered in the 
affirmative, you are now sworn in and under oath, and subject 
to the penalties set forth in title 18, section 1001 of the 
United States Code.
    With that, we now recognize Mr. David Howell for 5 minutes 
to give an opening statement.

STATEMENT OF DAVID HOWELL, PRINCIPAL DEPUTY DIRECTOR, OFFICE OF 
  MANUFACTURING AND ENERGY SUPPLY CHAINS, DEPARTMENT OF ENERGY

    Mr. Howell. Thank you, Chairman Griffith, Ranking Member 
Castor, and distinguished members of the subcommittee. Thank 
you for this opportunity to provide an update on the Department 
of Energy's efforts to safeguard taxpayer dollars in the 
implementation of the Infrastructure Investment and Jobs Act 
and the Inflation Reduction Act, also known as the IIRA and the 
IRA.
    The IIJA and the IRA are truly historic investments in 
renewing American infrastructure and supporting American energy 
security for decades to come. We at the Department are working 
hard to swiftly implement these laws so that we can get these 
resources out to communities in your districts and in every 
corner of the country as quickly as possible.
    We also acknowledge and respect that when Congress 
appropriated these resources, you entrusted DOE with 
investments using taxpayer dollars. We take this responsibility 
incredibly serious, and every day our team of experts and 
professionals are working tirelessly to ensure that taxpayer 
dollars provided to us by Congress are being spent effectively, 
efficiently, and responsibly.
    Through the implementation of IIJA and IRA, the Office of 
Manufacturing and Energy Supply Chains, MESC, is striving to 
install critical supply chain manufacturing capacity, reduce 
industrial-based carbon emissions, increase clean energy jobs, 
and provide world-class energy industrial sector analysis. This 
is to all--this is to ensure that all America is positioned to 
lead the world in manufacturing the energy technologies of the 
future.
    MESC was established in February of 2022 as a new office 
reporting to the Under Secretary of Infrastructure. MESC aims 
to support scale-up and deployment of the Nation's 
manufacturing capacity through programs that are focused on 
establishing critical domestic supply chains and increasing 
circularity while leveraging private-sector investment.
    MESC also works to bolster small and medium enterprises and 
communities in energy transition. MESC catalyzes the 
development of an energy sector industrial base through 
investments that establish and secure domestic clean energy 
supply chains and manufacturing, and by engaging with private-
sector companies, other Federal agencies, and key stakeholders 
to collect, analyze, respond to, and share data about energy 
supply chains to inform future decision making and investment. 
With funds and authorities provided by the Bipartisan 
Infrastructure Law, the Inflation Reduction Act, and the 
Defense Production Act, MESC supports $20 billion in programs 
that further these goals.
    In addition, MESC is partnering on behalf of DOE with the 
U.S. Department of Treasury and the Internal Revenue Service to 
support the qualifying Advanced Energy Project Credit Program, 
also known as 48C. We are in the competition phase for a range 
of programs now, but we have completed selections under the 
Battery Materials Processing and Battery Manufacturing and 
Recycling funding opportunity. This program represents a 
tremendous opportunity to reduce our supply chain vulnerability 
in a critical energy sector.
    For the battery supply chain currently, virtually all 
lithium, graphite, battery-grade nickel, electrolyte salt, 
electrode binder, and iron phosphate cathode materials are 
produced abroad, and China controls the supply chain for many 
of these inputs. The portfolio of selected projects under the 
funding opportunity will support developing enough battery-
grade lithium to supply approximately 2 million EVs annually.
    In addition, our selectee Solvay will build a major battery 
binder facility in Augusta, Georgia. Our selectee Ascend 
Elements will build a facility in Kentucky to produce high-
nickel cathode material from recycled black mass. Our selectee 
Talon Metals will develop a facility in North Dakota that will 
produce enough battery-grade nickel to supply 400,000 EVs. Our 
selectees Silent and Group 14 plan to develop commercial-scale 
domestic silicon anode materials production facilities in 
Washington State. These facilities will supply anode materials 
for over 600,000 electric vehicle batteries annually.
    In closing, as the Department continues our implementation 
of the IIJA and the IRA, we will remain steadfast in our 
commitment to be responsible stewards of taxpayer dollars and 
continue taking the proactive steps necessary to prevent fraud, 
waste, and abuse in our programs while we work to bring about a 
clean and secure energy future that is made in America.
    On behalf of the Department, I appreciate the 
subcommittee's interest in this topic and the opportunity to 
provide testimony before you today. Thank you, and I look 
forward to your questions.
    [The prepared statement of Mr. Howell follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Griffith. Thank you very much. I thank you for your 
testimony, and we will now move into the question-and-answer 
portion of the hearing, and I will begin the questioning and 
recognize myself for 5 minutes.
    So as I mentioned in my opening statement, we sent a letter 
in December--Cathy, Chairwoman Cathy McMorris Rodgers, and I--
then in her ranking position--and I sent the letter to 
Secretary Granholm requesting a briefing including specific 
information on the Department's efforts to scrutinize 
Microvast.
    On February 1 we got a letter back saying that you all were 
carrying out the review process for the project, and the 
Department ``would be pleased to provide more information on 
the status of Microvast and other selectees under the battery 
materials funding opportunity announcement when the due 
diligence phase has been completed.''
    Now, at least as far as Microvast was concerned, that due 
diligence phase was completed on May 22. So the question is, 
when are we going to get the answers to the questions we asked 
in December basically dealing with, you know, what is the 
process, what are you doing, and how do you vet these various 
companies that are coming in?
    And you can appreciate, I hope, the concern that when you 
see a company that says in its SEC filing that they are an arm 
of the Chinese Communist Party, that something wasn't going 
right then. Later it became right. So I would like to hear that 
process, if you would tell us, the process for the vetting of 
these companies to make sure that they are going to actually be 
making things in America for Americans by Americans and with 
American technology being used here, or at least us having the 
capability of getting that technology.
    Mr. Howell. Thank you for your question, Congressman 
Griffith. Can you hear me? Is this on?
    Mr. Griffith. I can hear you. Go.
    Mr. Howell. Oh, good. So the vetting process in terms of 
the BIL awards that you mentioned--in particular, Microvast--as 
you know, the selections were made through a competitive 
solicitation that went through the summer. And part of that 
vetting process started with that solicitation process, where 
we identified companies that were compelling in terms of 
selecting them for the negotiation of award.
    Once selections are made, that is when detailed 
negotiations are started.
    Mr. Griffith. OK. And in fairness, most of us did not 
understand that, because it appeared from the press statements 
that these people were awardees. But you are telling me that is 
when the vetting actually--the in-depth vetting began.
    Mr. Howell. The in-depth vetting began the day after those 
announcements. There was also in-depth vetting in terms of the 
technical capacity and capabilities of the companies before 
that to actually make those selections. But those were 
selections for negotiation of award.
    Mr. Griffith. And what were the reasons, then, for denying 
the Microvast?
    Mr. Howell. OK. So thank you for your concerns about 
Microvast, the company selected for the negotiation of an award 
under the funding opportunity.
    So Microvast is a majority U.S.-owned company traded under 
Nasdaq, and headquartered in Stafford, Texas, with additional 
locations in Tennessee, Florida, and Colorado.
    With DOE funding, the company's matching financial 
investment--with the company's matching financial investment, 
Microvast proposed to build a polyaramid separator material 
production plant in Clarksville, Tennessee.
    Mr. Griffith. OK, I got all that.
    Mr. Howell. OK.
    Mr. Griffith. But how do you square that with their 
statement to the Securities and Exchange Commission----
    Mr. Howell. So part of the----
    Mr. Griffith. If they are majority U.S.-owned, how can the 
Chinese Communist Party, through its government, the Chinese 
Government, say--why would they say that they could be stopped 
or changed course because of what the government said in China?
    Mr. Howell. So simply because Microvast's major production 
operations are in China.
    Mr. Griffith. OK.
    Mr. Howell. Ninety percent of their production operations 
are in China.
    Mr. Griffith. All right. And you vetted----
    Mr. Howell. Our----
    Mr. Griffith. Next question, because--and I apologize, we 
only get 5 minutes. So my next question would then be--and so 
all of the other companies that you vetted do not have that 
problem.
    Mr. Howell. That is correct.
    Mr. Griffith. So all the rest of these companies are--if we 
go in and pick out any one of the ones you named or some 
others, we are going to find that they don't have these ties to 
the Chinese Communist Party and the Chinese Communist 
Government.
    Mr. Howell. They don't have what, sir?
    Mr. Griffith. The ties.
    Mr. Howell. So there was one company that we were concerned 
with, additional to Microvast, as you have mentioned.
    Mr. Griffith. Amprius.
    Mr. Howell. Amprius. And we--after the vetting process, we 
agreed mutually not to go forward----
    Mr. Griffith. OK.
    Mr. Howell [continuing]. With an award.
    Mr. Griffith. All right. So the vetting process is working, 
at least in that regard.
    Mr. Howell. It is working very well, and we are actually 
enhancing that vetting process. And so it is--I would say it is 
an enhanced vetting process at this point.
    And one of the things that we have changed is part of the 
vetting that we do right after the award, like SEC filings we 
will do before award--before selection now. So we will do more 
vetting before selection on these awards as we go forward. That 
was the typical DOE process that, after selection of award, 
then we go into detailed negotiations, which includes SEC 
filings, look at the SEC filings of the company. And so we will 
actually be doing that before selection of award from now on.
    Mr. Griffith. Yes, I didn't--as my Democrat colleagues are 
so apt to point out, I did not agree with the way things were 
done and some of the focus of the bill, so I didn't vote for 
it. But now that we are here, I want to make sure the American 
taxpayer dollars are spent correctly. And I appreciate your 
testimony here today.
    And I yield back. I now recognize the gentlewoman from 
Florida, Ms. Castor, the ranking member of the subcommittee.
    Ms. Castor. Well, thank you, Mr. Chairman. I think that is 
our intent, too, to make sure that the Department of Energy has 
the tools it needs to vet these projects.
    You have an enormous responsibility. I mean, already the 
Inflation Reduction Act, the infrastructure law have created 
kind of this new domestic manufacturing boom. It is hard to 
keep up with the announcements that come so quickly on battery 
plants, recycling opportunities, electric cars, and trucks.
    What have you put in place now to really monitor--you have 
said this is enhanced vetting. Maybe go into a little more 
detail. We have learned some lessons from the Recovery Act of a 
decade ago. What has changed in--that is bringing enhanced 
vetting and processes?
    And do you have all the tools you need to get the job done?
    Mr. Howell. So thank you, Congresswoman, for that question.
    And so, in terms of what has changed in the vetting 
process, we actually have developed a research technology and 
economic security team at the Department.
    Mr. Griffith. Hang on a second. We have stopped the time. 
Our technical people tell us you need to move the microphone a 
little bit closer so that they can pick it up for C-SPAN. We 
could hear you fine.
    Mr. Howell. Can you hear me now?
    Ms. Castor. And point it up.
    Mr. Griffith. Yes.
    Mr. Howell. How is this?
    Mr. Griffith. That is much better.
    Ms. Castor. Better.
    Mr. Griffith. Thank you. All right.
    And we didn't take that time away from you, so if you want 
to start that question----
    Ms. Castor. I think he is going to get into enhanced 
vetting.
    Mr. Griffith. OK, go ahead.
    Mr. Howell. Enhanced vetting. So our enhanced vetting 
process actually cuts across all of the Department of Energy. 
It is not that we were not doing vetting in the past, but 
because of the language, particularly in the Bipartisan 
Infrastructure Law, that included language on priority given to 
nonforeign entities of concern, that was actually the first 
time that the Department of Energy actually received that type 
of language in an appropriation.
    So MESC received that, and are sort of the ones that are 
actually out there----
    Ms. Castor. OK. Let me follow up on that, because Microvast 
is a U.S. company. The owner is a U.S. citizen, as far as I 
know, information that has been provided. They want to move 
business out of China and build more jobs and factories in the 
U.S. I am sure there are a lot of American companies that are 
doing business in China that are not arms of the Chinese 
Communist Party. How are you analyzing?
    Because we want these jobs to be American jobs. We want to 
build our supply chains. And we don't--but I am sure that there 
are quite a number of companies that do business in China that 
may not be attached to the Chinese Government.
    Mr. Howell. And that is correct. So we took the time to 
determine the appropriate metrics to use in order to determine 
what the influence is from the Chinese Communist Party, 
particularly. And that would include, you know, intellectual 
property positions for that company and the particular 
technology that is being pursued.
    It also includes ownership of the company, not only 
investment ownership, ownership by the Government itself, 
ownership by other Chinese entities, including investment 
companies and individuals, and also--and the percent of 
ownership, and key suppliers, as well. And then, of course, key 
personnel, those that are on their board of directors, those 
that are voting members of the board of directors.
    And again, lastly, though, any concerns with the talents 
programs that may provide concerns for us.
    Ms. Castor. So after you go through this enhanced vetting 
with all of those metrics, do companies get some transparency? 
Do you respond and tell them, ``Well, you were not awarded 
because you hit these markers''?
    Mr. Howell. So the Department reserves the right to back 
out of negotiations without explanation.
    Ms. Castor. And the companies understand that as they go in 
for those applications.
    Mr. Howell. That is written into the funding opportunity 
announcement, and it is also given to the company, as well. 
They are actually entitled to back out of the negotiations at 
any time for no reason.
    Ms. Castor. OK. Oversight and Investigations is going to be 
very important because of the significant responsibilities and 
resources to the Department of Energy. We heard from the 
Department of Energy inspector general on how they--she and her 
office--very constrained.
    So I was very concerned to see what was coming out of the 
Appropriations Committee for the Department of Energy inspector 
general. It is $92 million below the President's request. And I 
would hope this is an area where we could work together. We 
know that those monies invested often save taxpayers money. The 
Department of Energy has been--IG has been funded at a lower 
level than other agencies.
    Does that hamstring what you need to do on oversight, Dr. 
Howell?
    Mr. Howell. So we have actually worked hand in hand with 
the Office of Inspector General early in this process to make 
sure that all of the oversight levers that we have already 
established throughout the Federal Government through DOE on 
these types of awards are in place and are strong and that we 
have a plan in implementing the programs, whether it is 
detection, whether it is mitigation of any issues.
    We are always appreciative and collaborative with the 
Office of Inspector General, but we have worked with them to 
make sure that not only that MESC has the resources in place as 
we go forward with these awards, not only to select these 
awards and negotiate them, but actually to execute them and 
oversee them.
    Ms. Castor. Thank you very much.
    Mr. Griffith. I thank--the gentlelady yields back. I now 
recognize the gentleman from North Dakota, Mr. Armstrong, for 
his 5 minutes of questioning.
    Mr. Armstrong. Thank you, Mr. Chairman.
    The Department of Energy's budget has ballooned to a size 
that we just simply have never seen before. Since 2021 the 
Department has injected with hundreds of billions in new funds 
and loan authority: 62 billion through the IIJA, 67 billion 
through the CHIPS Act, 35 billion through the IRA, and 1 
billion through the 2023 omnibus.
    To understand what this means, you only have to see how the 
budget has increased since fiscal year 2022, when it was 44 
billion. Combined, the IIJA, the IRA, CHIPS Act, and omnibus 
have authorized or appropriated nearly 130 billion to the 
Department of Energy, which, to be honest, has stumbled through 
program implementation and engaged in negotiations with at 
least one company with questionable foreign ties.
    I have serious questions about staffing capacity and 
overall management of the budget. Deputy Director Howell, the 
Office of Manufacturing and Energy Supply Chains has been 
entrusted with operating several new programs and administering 
more than $15 billion. How many staff does your office 
currently have?
    Mr. Howell. We have almost five dozen staff on board as of 
this week. We also have memorandums of agreement with our 
procurement and acquisition team at the National Energy 
Technology Laboratory and our procurement and acquisition team 
at the Golden Field Office. We have also established a 
memorandum of agreement with the Department of Treasury.
    Mr. Armstrong. Do you know the rough breakdown between 
Federal employees and contractors?
    Mr. Howell. All six dozen or five dozen for MESC are all 
Federal contractors.
    Mr. Armstrong. OK. In your----
    Mr. Howell. I am sorry, I am sorry. Are all----
    Mr. Armstrong. Federal employees.
    Mr. Howell [continuing]. Federal employees.
    Mr. Armstrong. OK. We both knew the answer.
    In your testimony, you state your office has been focused 
on hiring sufficient staff, including program oversight 
specialists, grant management and contracting specialists, and 
financial audit oversight staff. What percentage of your staff 
are dedicated to vetting applications under financial award 
programs for issues such as problematic foreign ties of 
applicants?
    Mr. Howell. So we have teams of staff for each funding 
opportunity, and the percentage of our staff is probably about 
70 percent to 75 percent that are dedicated to the 
procurement--for the funding opportunity, technical evaluation, 
selection. And then we use the National Energy Technology 
Laboratory Procurement and Acquisition Team. That is roughly 
around 20 FTEs that we use across the procurement and legal 
system and contracting system at the NETL Morgantown, and a 
smaller effort at the Golden Field Office. So we have a large 
contingent.
    Some of our activities actually depend on other offices, by 
the way, general counsel, our Committee on Foreign Investment 
in the U.S., counterintelligence team----
    Mr. Armstrong. I am meeting with CFIUS on Thursday morning, 
tomorrow morning.
    Mr. Howell. CFIUS, yes.
    Mr. Armstrong. So----
    Mr. Howell. So we do actually tap into other teams within 
the Department of Energy.
    Mr. Armstrong. Are you at full staff?
    Mr. Howell. No, we are not.
    Mr. Armstrong. What additional staff do you need to reach 
those levels?
    Mr. Howell. So our target is to get to 88 employees this 
calendar year to implement both the BIL and the IRA provisions.
    Mr. Armstrong. And you are trying to get there by the end 
of?
    Mr. Howell. By the end of this calendar year.
    Mr. Armstrong. Can you provide an approximate percentage of 
what staff are new to DOE versus those moving from other 
programs?
    That is not a really fair question.
    Mr. Howell. So I can get back to you on that. I don't have 
that number, but it is--from within the Department of Energy we 
do have a fairly large contingent of folks--key program 
management people who have joined MESC, but we have also tapped 
into outside resources that are outside the Federal Government, 
as well, and then some resources that are in other agencies.
    Mr. Armstrong. On February 21, 2023, Ranking Member 
Barrasso of the Senate Energy and Natural Resources Committee 
wrote to the Deputy Secretary Turk, expressing concern that 
DOE's October 19, 2022, statements regarding selections under 
the funding opportunities were misleading.
    Are you aware of that?
    Mr. Howell. I am aware of that.
    Mr. Armstrong. The Senate letter noted that October 
statement made references to projects that suggested awards 
were final, and of the 20 companies selected for the award, 
share prices of those companies that were publicly traded 
increased an average of about 14 percent between the day before 
and the day of the Department's announcement.
    There are real-world market implications that accompany the 
awards process, which appear to be at best mismanaged and at 
worst misleading. Does your office plan to make any changes to 
its applicant vetting process or procedure for announcing 
selections, considering these notification concerns?
    Mr. Howell. We will emphasize that any selections are the 
selections for negotiation of award.
    Now, we do have feedback in any one funding opportunity 
with the Department of Energy, particularly one of this size. 
You could get hundreds of applications, and our private-sector 
investors actually would rather us to announce the selection so 
that they can free up their own resources that were tied to 
applications.
    Mr. Armstrong. I would like the announcement, too, if my 
stock was going to go up 14 percent.
    Mr. Howell. Well, I am thinking of those that were not 
selected because they have actually committed funds to their 
application and committed resources in case that they are 
selected to negotiate.
    It is also a signal to those that are selected to--that we 
are going to go into deep negotiations, and so they need to set 
aside their resources in order to meet the need for that 
negotiation and also to provide the foundation for their cost 
share, because their cost share is really what drives the 
award.
    Mr. Armstrong. Thanks. I yield back.
    Mr. Griffith. The gentleman yields back. I now recognize 
Ms. Schakowsky for her 5 minutes of questioning.
    Ms. Schakowsky. So thanks to the Inflation Reduction Act, 
we have already seen 142,000 new jobs that have been created. 
It is estimated that between the IRA and the CHIPS and Science 
Act that by 2030 we should see nearly half a million new jobs, 
which is what we need in this country. And yet we see from the 
Republicans that they want to reverse the progress that we have 
seen and cut these programs, which I think is a serious 
mistake.
    But I have to tell you that I have been surprised in the 
discussions about this, the pessimism about the ability of us 
to have the kind of innovation that we need to create the jobs 
and help our economy. And so what I am concerned about is that, 
you know, we will not be able to achieve it if we have those 
kinds of reductions.
    So I wanted to ask you, Acting Director Howell--what I--I 
wanted to ask you about the creation of jobs that we need and 
to hopefully set the record straight on our ability to reach 
that. And so is your office helping to bring back jobs that 
have been sent overseas in the past for decades?
    Mr. Howell. Thank you, Congresswoman, and that is such an 
important question, because that is really what this is all 
about, not only now but in the future. These are future 
technologies that we are investing in, and we have to do that 
as a nation in order to secure American jobs in the future.
    So in terms of American innovation, innovation is what has 
gotten us here at this point with the battery program. And that 
is the longstanding research and development support from 
Congress for many decades. Many of the key technologies that 
have been developed in the battery program that has actually 
launched this revolution were developed with U.S. Federal funds 
through the Department of Energy, whether it is new cathode 
materials, new anode materials, new battery technologies.
    So we see that, we have done that very well, and we will 
continue to do that, to go to the next generation that--it will 
even drive down costs, improve performance, and improve our 
competitiveness.
    There is no reason why our U.S. industry cannot stand up 
and actually compete on a world market here. We can do this 
whether it is in minerals, whether it is in refined materials, 
whether it is in battery production or recycling. So this is a 
bright spot. And so we should really be--number one, applaud 
the work that we have done already to get to this spot, but 
also take on the challenges that we need in order to make sure 
that we are successful in the future.
    One of the things that I have the privilege of being is the 
Chair of the Federal Consortium for Advanced Batteries. It is a 
Federal consortium of about 17 different Federal agencies, 
about 60 different offices within those Federal agencies that 
have banded together to collaborate, to coordinate, and to help 
each other to make sure that we are supporting this robust, 
this resilient domestic battery supply chain.
    Ms. Schakowsky. Let me ask you a question about developing 
the workforce that we need and is--anything that MESC is doing 
to make sure, after we have all these innovations, that we have 
the workforce to do the job?
    Mr. Howell. Right, understand that building strong supply 
chains for the United States is more about people than it is 
about product.
    So, for example, in the Manufacturing Energy Supply Chains 
office, part of--one of our programs is the Industrial 
Assessment Centers, which is used to--actually, to assess ways 
in which small and medium-sized enterprises across the country 
can improve their productivity, can reduce emissions, can 
reduce energy use. At 37 universities across the Nation, we are 
using their engineering students to go out and actually provide 
these assessments.
    We have also--supporting pilot centers, manufacturing 
centers for battery manufacturing that we are building across 
the Nation, as well.
    The Federal consortium that I mentioned--which DOE is a 
member--across the Department of Energy--MESC is the anchor 
tenant--has a workforce task force for batteries, as well. So 
we are working with folks like the Department of Labor, 
Department of Commerce, Department of Defense, as well, to 
stand up the manufacturing workforce.
    We are--also have launched a----
    Ms. Schakowsky. My time is actually expired, but go ahead. 
Finish the sentence, if that is all right, Mr. Chairman.
    Mr. Howell. Launched a private-sector partnership called 
Li-Bridge that is also part of that. That includes about 300 
different industry members that is focused on workforce 
development, as well. So we are working hand in hand with 
industry on this.
    Ms. Schakowsky. Well, thank you for your work and for your 
presentation.
    And I yield back.
    Mr. Griffith. I thank the gentlelady for yielding back. I 
now recognize the gentleman from Kentucky, Mr. Guthrie, for his 
5 minutes.
    Mr. Guthrie. Thank you very much. Thank you for the 
recognition. Thank you for being here.
    You know, the concern isn't on our side of the aisle, at 
least not for me, that American companies won't be innovative 
and create the technology that is going to move us forward. My 
concern is that corporate America is just investing for the 
subsidies right now.
    And if we didn't get the subsidy, if the people in Congress 
didn't get the subsidies right, we are going to--our supply 
chain is going to be completely--is going to be off kilter over 
the next decade or so, because we have demanded by EPA that 
two-thirds of all cars will be electric within 10 years. It 
takes 5 to 7 years to create a new car. So that is where all 
the investment is going.
    So let's go a few years down the road. We can't do two-
thirds that--we can't do 10--that is 10 million cars. And so 
what the issue is, is that we just completely dismiss--any time 
we bring up any issues, they just get completely dismissed--way 
out of it. You are subsidizing one side of it, not the other, 
and quite honestly, putting in roadblocks for what is the most 
important thing--is generating power.
    We have had--we have blackouts in Kentucky and--we have 
blackouts in Kentucky. TVA had a myriad of reasons, and one 
said they didn't realize so many people were using heat pumps. 
So now we have all these heat pumps that demand more 
electricity, which is how it should be. However, you got to 
build the electricity to support them.
    And then, in the IRA or the Jobs Act--I can't remember 
which one--subsidizes heat pumps. So we are going to have more 
of those. We are also mandating electric cars. We are going to 
have more of those. But it seems like the administration is 
mandating all of that, but any effort to try to generate more 
reliable, sustainable, and dispatchable electricity doesn't 
seem to be moving forward.
    Does that seem to be very incongruent, that we are going to 
have more demand--batteries don't produce electricity, 
batteries don't generate it, batteries store it. Does that not 
seem incongruent to you, the policies of this administration of 
demanding more electric but not wanting to produce it?
    Mr. Howell. Thank you, Congressman, for your concern. I am 
going to put my hat on as former Director of the Vehicle 
Technologies Office, where we had a partnership with U.S. 
industry, both the automotive sector, the fuel sector, and the 
electric utility sector. They were all on board with 
electrification, particularly from the electric utility 
perspective. It provides----
    Mr. Guthrie. Well, they want to sell it, they just won't be 
able to generate it.
    Mr. Howell. Well, they are--actually have plans, many of 
them. We actually did a study on scale-up EVs--we called it EVs 
at Scale--to look at the progress of the market entry of 
electric vehicles and what needs to be done on the electric 
side to make sure that the electric utility is capable of 
supplying the load.
    Mr. Guthrie. And so we can support 10 million cars a year 
being produced in 9 years?
    Mr. Howell. Yes, given time. There has been times in----
    Mr. Guthrie. Or in 9 years. That is what the rule is.
    Mr. Howell. Given time. Now, this report was before 2020, 
so that was 10 years at the time. So given time----
    Mr. Guthrie. Well, the rule just came.
    Mr. Howell. Given--well, this was actually working on 
scenarios with the utilities and in terms of EV penetration 
scenarios and what the utility needs would be for those. So----
    Mr. Guthrie. We have had a lot of them come to our office, 
and they are concerned about the ability. I mean, it is not 
just dismissible.
    Mr. Howell. It is not.
    Mr. Guthrie. And, you know, you can build--I think it is--
somebody told me 70, I have heard 90 plug-in hybrid--plug-in 
hybrid electric vehicles for plug-in hybrid than you can for 
one solid electric vehicle. And you also have--don't have a 
problem with range if you have plug-in hybrids. You have lower 
carbon. You don't have zero carbon, you have lower carbon.
    And it just seems like we are incentivizing technology. 
That is why we are not being innovative, because--and let me 
tell you, when you sit a bunch of companies down and say, 
``Here is a bunch of Federal subsidies if you want to do what 
we ask you to do,'' they don't say no. They don't turn down 
money. They don't turn down money.
    Let me get to the other. But we also know a lot of the 
technology is coming from the Communist Party. So a lot of 
the--how do we ensure--what processes do you have in place to 
make sure that the Chinese Communist Party does not benefit 
from Jobs Act money or IRA money?
    Mr. Howell. So we do have the new vetting process, 
particularly that looks specifically at Chinese ownership of 
companies. But also, we--part of that RTES program is to 
provide what we call enhanced protections for IP. And so we 
actually put that into all the awards, those enhanced 
protections.
    We also--in these awards we added the requirements to have 
a cybersecurity plan for each----
    Mr. Guthrie. I only have about 30 seconds, so let me just 
get to this point. I am sorry. But in your testimony you say, 
``should those oversight mechanisms uncover direct or--in 
support of the Chinese Communist Party,'' so you say it is 
possible. So you are saying in your testimony, should you 
uncover it, you will take appropriate action. What is 
appropriate action?
    Mr. Howell. Well----
    Mr. Guthrie. Is it zero, zero American dollars going to the 
Chinese Communist Party-supported enterprises?
    Mr. Howell. Yes.
    Mr. Guthrie. Zero. And that is the case now?
    Mr. Howell. For dollars going to the Chinese Communist 
Party.
    Mr. Guthrie. Well, every business in China is related to 
the Chinese Comm--you can't separate the two. If you do, you 
don't understand China.
    Mr. Howell. But however, you can look at a U.S. company and 
determine what the percentage of Chinese ownership is and what 
the control----
    Mr. Guthrie. So the answer is not zero Chinese ownership.
    Mr. Howell. Chinese influence or control?
    Mr. Guthrie. Any ownership in a--or any joint venture with 
a Chinese-owned company that is not zero, there--can get 
subsidies under these job acts?
    Mr. Howell. If they are not--if they do not control the 
entity. So that draws back into percentage of ownership.
    Mr. Guthrie. So some percentage can go to the Chinese-owned 
business----
    Mr. Howell. Some percentage would go to a U.S. company that 
may have a percentage of Chinese ownership.
    Mr. Guthrie. OK, thank you for----
    Mr. Howell. So it is going to a--I just want to emphasize 
it would be going to a U.S. company. Some of the U.S. companies 
are actually publicly traded.
    Mr. Guthrie. And they are pairing with China.
    Mr. Howell. Yes.
    Mr. Griffith. The gentleman yields back.
    Mr. Guthrie. So they can get the money. Yes, thank you.
    Mr. Ruiz. Nuances, nuances.
    Mr. Griffith. The gentleman yields back. I now recognize 
Dr. Ruiz of California for his 5 minutes of questioning.
    Mr. Ruiz. Thank you, Mr. Chairman.
    In my district sits Lithium Valley, one of the largest 
lithium sources in the world. You guys are going to hear a lot 
about Lithium Valley. The United States Geological Survey 
projects that the Salton Sea area alone could produce 600,000 
metric tons of lithium annually, which is 6 times the current 
global consumption rate. That has the potential to supply 40 
percent of the global lithium demand.
    Companies in Imperial Valley, in which the Lithium Valley 
resides, will have the opportunity to extract lithium, 
manufacture, and assemble batteries because of the Inflation 
Reduction Act. The Inflation Reduction Act makes the single 
largest investment ever in combating climate change while 
bringing clean energy manufacturing jobs to local communities. 
Since its enactment, companies have announced over $242 billion 
in new clean energy capital investments.
    Additionally, this law has already created over 3,300 jobs 
and invested $5.45 billion in clean energy projects in 
California alone. In fact, the IRA has given companies like 
Statevolt in Imperial the opportunity to purchase land for a 
gigafactory, which will be used for 54 gigawatt hours lithium 
ion battery production. This will become one of the largest 
gigafactories in North America and will produce enough 
batteries to power 650,000 electric vehicles per year.
    Additionally, companies like Berkshire Hathaway and General 
Motors are investing in projects in Lithium Valley, and this is 
just the start of a public-private relationship that both 
Democrats and Republicans have been striving for.
    Lithium Valley will become the hub for domestic battery 
market manufacturing that will revitalize the region and our 
country. And these investments will help communities that have 
been left behind for generations, or at least that is the 
intent. And we will fight to ensure that that happens, because 
as we move toward a clean energy economy, it is important to 
ensure that supply chain investments strengthen local 
communities by creating good-paying jobs and taking steps to 
minimize the environmental impacts of these industries.
    So, Mr. Howell, how might DOE investments in clean energy 
projects benefit local communities, especially those that have 
been left behind in the past?
    Mr. Howell. Thank you for your congressman and--thank you, 
Congressman, for your question. And it is so important, and I 
will start with Lithium Valley.
    I had the privilege of taking a team, a Federal team, to 
Lithium Valley in April. We had over 15 people from the 
Department of Energy and the Department of Defense to actually 
tour the area and to get firsthand not only knowledge of the 
source there and the potential for that source, but also we 
reached out into the community to talk to the community on how 
the Department of Energy can actually help those communities 
that have been left behind. So that is so important.
    I look forward to working with you and the California 
Energy Commission, who hosted us on this visit, in the future 
to make sure that we are providing the support we need to tap 
into that--that really, really important resource for us. 
Lithium is a future energy----
    Mr. Ruiz. All too frequently, communities of color and low-
income families shoulder the burden of pollution, environmental 
hazards. Moving to cleaner energy sources will lower 
emissions--which will lower emissions is a step in the right 
direction, but we need to make sure that our investments 
building up clean energy and critical mineral supply chains 
that--are not inflicting new harms on communities already 
impacted by past pollutions, especially in terms of battery and 
the recycling of batteries.
    So as we work to stand up these new industries nationwide, 
what steps is MESC taking to ensure federally funded projects 
minimize negative environmental and health impacts?
    Mr. Howell. So part of our selection criteria is a 
reduction in those--part of the impact evaluation is how much 
reduction in negative impacts could that particular project 
actually achieve, whether that is greenhouse gas emissions, 
criteria emissions, water use, energy use.
    We also have part of a sort of a unique activity within 
these awards to actually reach out to the communities--we call 
it the Community Benefits Plan--to discuss how these awards can 
actually increase jobs in the area, training, and address 
community concerns and issues that that specific community may 
have with that award.
    Mr. Ruiz. OK, so I look forward to meeting with you 
separate from this hearing to discuss the opportunities----
    Mr. Howell. Yes, sir.
    Mr. Ruiz [continuing]. Specifically for the economic and 
well-being of the local residents with this incredible 
opportunity not just for our country, the State, but also 
specifically for those communities that for too long have been 
the most underresourced, the most underserved in the State of 
California.
    Mr. Howell. I look forward to it.
    Mr. Ruiz. Thank you.
    Mr. Griffith. The gentleman yields back. I now recognize 
the gentleman from South Carolina, Mr. Duncan, for his 5 
minutes of questioning.
    Mr. Duncan. Thank you, Mr. Chairman. I am not going to hold 
my breath until California allows lithium mining to happen in 
that State and the EPA allows it with their threat on mining 
across the country. And without baseload generation, you are 
not going to have the energy produced to make all the EVs work. 
So we need baseload generation. And then you also need copper 
mining for the motors. You have to wind copper around and make 
the motors that go in the EV.
    So, you know, why is there a threat on--an assault on 
mining in this country? It is just baffling that we are talking 
about mining here.
    Mr. Howell, will you commit to answering the questions 
raised in our December 14 letter regarding DOE's grant awarded 
to Microvast?
    Mr. Howell. Would you ask that question again, sir?
    Mr. Duncan. Will you commit to answering the questions that 
we raised in this December 14 letter to you--or to Secretary 
Granholm----
    Mr. Howell. So----
    Mr. Duncan [continuing]. About Microvast?
    Mr. Howell. Thank you. I will take that back to the 
Department of Energy. That is actually handled by another 
office. I am actually not----
    Mr. Duncan. So you are just committing to taking that 
question that I just asked you back. You are not committing to 
answering the question.
    Mr. Howell. The Department of Energy is in the process of 
answering those questions.
    Mr. Duncan. Since December 14? Wow, they--you know, that is 
over 6 months.
    You know, the rush to green has resulted in new efficiency 
standards with marginal efficacy and that would increase our 
reliance on foreign manufacturers. We heard from others already 
about critical components, from distribution transformers to 
capacitors for HVDC transmission lines. New efficiency 
standards have required different manufacturing processes we 
have in limited supply domestically. I guess the Lithium Valley 
will solve all that.
    Unfortunately, instead of utilizing the few manufacturers 
we have here at home, we see contracts go abroad. I heard the 
ranking member of the full committee talk about Republicans. 
Republicans wanted to onshore industry. We were called fascists 
and nationalists, wanting to make America great again, wanting 
to bring manufacturing back to this country to provide jobs and 
the critical components that we need to make it all work.
    So does MESC provide any advice or coordination with other 
Department programs such as the Office of Energy Efficiency and 
Renewable Energy to advise on how proposed efficiency standards 
will impact domestic supply chains?
    Mr. Howell. We do have partnerships with--across the 
Department of Energy. In terms of actually advising, it would 
be in the manufacturing capacity of our expertise rather than 
the efficiency capacity expertise. So in terms of manufacturing 
of transformers and high voltage DC components and things of 
that nature, that is where our expertise would lie.
    Mr. Duncan. Shouldn't those be made here in the United 
States?
    Mr. Howell. Absolutely.
    Mr. Duncan. Right now we are relying on Italy and Germany.
    Mr. Howell. We have----
    Mr. Duncan. For the first phase of transmission line 
infrastructure build-out, it is a European company that is 
sourcing capacitors from Siemens and a company in Italy. 
Shouldn't those be made here? These are critical, right?
    Mr. Howell. Yes, sir.
    Mr. Duncan. Sixty thousand needed for the infrastructure.
    Mr. Howell. And we ask your support to help MESC to 
actually develop programs----
    Mr. Duncan. There is a company in South Carolina that 
actually can make the capacitors, but yet they are competing 
with a European company because the company that got awarded 
the contract is from Europe. What if Europe decides they are 
going to build out their infrastructure and, hey, they need all 
the capacitors? Then we don't have a supply chain here, 60,000 
that are needed.
    Mr. Howell. I am not aware of the specific award you are 
talking about.
    Mr. Duncan. Well, it--in your testimony you mentioned the 
Department is standing up a $65 million program, battery and 
critical material recycling retailers as collection points and 
State and local programs. Who do you think should be 
responsible for the disposal of EV batteries at the end of 
their life?
    Mr. Howell. Well, it could cut across the owner of the 
vehicle and the actual----
    Mr. Duncan. So we are putting the burden on the owner to 
know where to dispose these, or to dispose them themselves?
    Mr. Howell. Typically, vehicles are already disposed of, 
salvaged. And so we would see that--we would be working with 
those salvage dealers and companies and associations to 
actually collect the vehicles, like they do today, and safely 
transport key components like the battery to a recycling 
center.
    Mr. Duncan. See, I see the mechanics having to dispose of 
them, not knowing where to put them and taking them to their 
local landfill.
    Mr. Howell. They are actually--well, they would not be 
compatible with the local landfill. And--however, they are 
actually valuable and worth money. So I don't think--I would 
hope that a----
    Mr. Duncan. Well, that is assuming you have recyclers out 
there that will actually pay somebody for them.
    Should the taxpayer bear the cost of recycling the EV 
batteries?
    Mr. Howell. EV batteries right now are actually profitable 
to recycle because of the cobalt and the nickel and the 
lithium.
    Mr. Duncan. I know of one company that is doing it.
    Mr. Howell. There are several companies, actually, doing 
it.
    Mr. Duncan. All right. I would love to know who they are.
    Mr. Howell. OK.
    Mr. Duncan. Has MESC consulted States and localities or 
received any feedback about the potential role in the recycling 
process?
    Mr. Howell. Oh, we have, and we have worked with the 
Environmental Protection Agency, as well, and their consumer 
electronics programs. So we are working with EPA, we are 
working with the NHTSA, and the Pipeline Hazardous Materials 
Agency to make sure that we put in process the capability to 
safely collect batteries, to store them, and to transport them 
to a recycling center.
    Mr. Duncan. Lord, I hope so, because, you know, these are 
highly toxic. And I know of a case--I am glad the Environment 
Committee is having a brownfield hearing this week, because I 
know of one instance where a transformer was thrown into a 
landfill in New Jersey, and the company that manufactured it on 
behalf of the DoD--because they were required to during World 
War II--ended up having to pay millions of dollars in fines. 
They didn't throw it in the landfill, they were just the 
manufacturer. Somebody did.
    If the consumer throws a lithium battery in a landfill, who 
is responsible for the cleanup?
    Mr. Chairman, I yield back.
    Mr. Griffith. I thank the gentleman for yielding. And in 
regards to my neck of the woods, if there isn't a positive 
value, it is going into the next holler over.
    With that, I yield to the gentlelady from Colorado, Ms. 
DeGette, for her 5 minutes.
    Ms. DeGette. Thank you so much, Mr. Chairman. So we all 
agree on this committee in a bipartisan way that lithium and 
cobalt are going to be essential for the clean energy 
transition.
    And as we heard from Mr. Ruiz, we--you know, we do have 
reserves of some of these minerals, and--but many of the 
largest deposits of these minerals are in other countries. And 
that is not our fault. That is Mother Nature and just the 
nature of geography. So we can't control where the minerals 
naturally occur.
    But what we can do is we can do something about where we 
are refining the minerals. So that is what I wanted to ask you 
about, Mr. Howell, because this is one thing China has invested 
very heavily in, critical mineral refining. They capture about 
90 percent of the rare earth element processing and 70 percent 
of the lithium and cobalt processing. And I know the Department 
knows this, because last Congress the Democrats invested more 
than $6 billion to build domestic critical mineral processing 
and recycling through programs administered by the Office of 
Manufacturing and Energy Supply Chains.
    So here is my question. I have got a couple of questions. 
Number one, will these investments help us compete with China 
on critical mineral processing and build up domestic processing 
capability irrespective of where the deposits are?
    Mr. Howell. Thank you, Congresswoman. And to answer your 
question point blank, it is yes, that is exactly what our 
mission is. That is exactly what we are trying to actually 
execute. We have come a long way, even with these first awards 
with lithium and nickel, and--but we have a long way to go.
    Ms. DeGette. OK. So my other question is, you--now Congress 
has allocated $6 billion for this. Is that going to help speed 
up the timeframe to be able to process this? Because that is 
what we need to do, and pronto.
    Mr. Howell. It will help speed up, for example, the 
selections for award. We selected 2.8 billion of the 6 billion 
for negotiation of award. The private sector actually invested 
an additional $6 billion in those awards. So that was a $9 
billion effort to stand up refining capability.
    Ms. DeGette. And how fast are we going to start--be able to 
start standing it up, would you estimate?
    Mr. Howell. So we are--we have made three awards already.
    Ms. DeGette. OK. How long is it going to take them to start 
doing it?
    Mr. Howell. Typically, these factories take around 36 to 42 
months to----
    Ms. DeGette. OK. So maybe 3, 3\1/2\, 4 years. And how much 
was that expedited by the investment that we made?
    Mr. Howell. By 3 or 4 years----
    Ms. DeGette. OK. So maybe it was cut in half, the amount of 
time it would take.
    Mr. Howell. Yes.
    Ms. DeGette. That is excellent. Why would you say it is 
important to invest in both critical mineral processing and 
recycling, particularly in the battery supply chain?
    Mr. Howell. The minerals and materials and the refined 
materials that are contained in the batteries represent about 
50 to 60 percent of the value. And when you are talking about--
of an electric vehicle battery. And you are talking about a 
potential market of 100 to 200 billion dollars. We can't just 
walk away from half of that because we do not install the 
refining capability and the precursor capability.
    Ms. DeGette. You are exactly right. It seems like a good 
investment for us.
    So we keep hearing from our friends on the other side of 
the aisle about DOE's ability to oversee Federal investments. 
Now, the job of the Oversight and Investigations Subcommittee 
is to make sure that we are--that these investments are being 
overseen. So you have been at DOE for at least a couple of 
decades, so I want you to talk about this for the record.
    Does DOE take seriously its obligation to responsibly use 
taxpayer money?
    And what kinds of protocols does DOE have in place to make 
sure that you are doing that?
    Mr. Howell. Absolutely. The Department of Energy takes 
extreme serious the--our role of overseeing the execution of 
taxpayer dollars. And we do work with the--with offices 
throughout the agency to ensure that we have the right 
oversight on these projects, including the Office of Inspector 
General, our procurement offices, our acquisition offices, and, 
of course, our technology--our technical program managers, as 
well.
    Typically, once we have an award in place, we have a 
working team that will actually monitor and shepherd that 
program through its life cycle, all the way through the end of 
the award to even the disposition of equipment. And we use many 
different processes to monitor the award.
    The first thing is to definitize the actual project, to 
make sure that we have the right milestones, budget periods, 
and tasks in place as we launch.
    Ms. DeGette. OK, I am out of time. If there is more you 
want to say, you can supplement.
    Thank you, and I yield back, Mr. Chairman.
    Mr. Griffith. I thank the gentlelady, she yields back. I 
now recognize the gentleman from Alabama, Mr. Palmer, for his 5 
minutes of questioning.
    Mr. Palmer. Thank you, Mr. Chairman.
    What components for an ion lithium--lithium ion batteries 
are made in the United States?
    Mr. Howell. What components?
    Mr. Palmer. Yes, what components of your--say an EV 
battery.
    Mr. Howell. So almost----
    Mr. Palmer. Not assembled, made.
    Mr. Howell. In almost--OK. So the battery--let's start with 
the battery cell technology, the battery cell production.
    In 2020 the United States had 60 gigawatt hours of capacity 
installed.
    Mr. Palmer. No, no. Let's simplify this----
    Mr. Howell. OK.
    Mr. Palmer [continuing]. Because there are people watching 
this, and we need to simplify it. You have technical expertise, 
I worked in engineering, so I don't want to get down in those 
weeds.
    Let's say 90-something percent of all of the battery is 
manufactured in China, the component parts. So when you are 
talking about battery production in the United States, what you 
are really talking about is assembly of the components 
manufactured in China.
    Mr. Howell. Not totally.
    Mr. Palmer. Well, I didn't say totally. I said 90-something 
percent.
    Mr. Howell. In some areas it is 90 percent. In some areas 
it is less than that.
    Mr. Palmer. OK.
    Mr. Howell. Right.
    Mr. Palmer. But the vast majority of batteries that are 
being assembled in the United States, the component parts are 
manufactured in China.
    And back to--I think my colleagues across the aisle have 
raised some interesting points about the minerals that are 
required. Obviously, we have huge reserves of lithium, but we 
just took off, made off limits the largest cobalt reserve in 
the entire country in Minnesota. It is also a major reserve of 
nickel. You have to have cobalt, you have to have nickel. And 
78 percent of the cobalt is sourced in China that you have to 
have for this, 100 percent of the graphite. And we have got 
graphite reserves here in the United States.
    And with all due respect to my friend from California, 
there's substantial lithium reserves in Arkansas.
    But the problem is to utilize those reserves, we have to 
mine them, we have to refine them, and we have to manufacture 
the--whatever the component parts are that we need from those 
minerals. And we are not doing that. We are dependent on China. 
Do you disagree with that?
    Mr. Howell. So we are dependent on China today on many of 
the aspects of materials and refined materials.
    Mr. Palmer. It will be 25 years minimum before we can catch 
up with China. That is how far ahead of us they are in battery 
production.
    Mr. Howell. OK, I am going to say that is debatable.
    Mr. Palmer. Well, it is debatable only because you--it 
doesn't fit your narrative.
    Mr. Howell. No, that is not true. For instance, these 
awards that we just awarded, we awarded enough capacity----
    Mr. Palmer. Let me suggest to you that if you had all of 
the components, everything you needed in minerals right now, 
you might be correct. But you can't even get a mine permitted 
in the next decade under the--under current conditions. So I 
just think people need to understand how far behind we are and 
how dependent we are on China.
    There is another issue that I want to raise in the time I 
have left, and it has to do with battery technology that was 
described as breakthrough technology. There are about a dozen 
scientists in the State of Washington--it is a vanadium redox 
flow battery. And I don't know what you know about this, but 
this was--this would have been a battery about the size of a 
refrigerator. It would have, I think, powered a whole 
household. It could have been recharged with a solar panel. I 
mean, this was truly breakthrough stuff, and in 2021 the 
Department of Energy gave the license to China.
    I think NPR was trying to do an investigative report on 
this. The DOE has not been forthcoming with information. What 
do you have to say about that? What do you know about that?
    Mr. Howell. So I am familiar with the vanadium redox flow 
battery. It is for stationary applications, for grid 
applications. There was some IP developed at the Department of 
Energy's Pacific Northwest National Laboratory that eventually 
was licensed to a Chinese company.
    Mr. Palmer. But that is money--that work was funded with 
U.S. taxpayer dollars.
    Mr. Howell. Yes, it was.
    Mr. Palmer. And you gave the license to China.
    Mr. Chairman, I think this is something we need to look 
into a little bit further. So with that, I yield back.
    Mr. Griffith. I thank the gentleman. I appreciate the 
gentleman yielding back. I now recognize the ranking member of 
the full committee, Mr. Pallone, for 5 minutes of questioning.
    Mr. Pallone. Thank you, Mr. Chairman.
    You know, I said in my opening--and I--you know, just based 
on what I heard--and I am not trying to be, you know, 
disrespectful, but it just seems like, you know, on the 
Republican side there is this notion that we are so far behind 
China it is almost like there is nothing we can do to catch up, 
and maybe there is no use even trying. I don't want to put 
words in my colleagues' mouths, but, you know, I am just 
worried that these--you are getting these mixed partisan 
signals.
    You know, on the one hand Democrats are saying let's make 
investments, let's try to do things that will make a difference 
here in terms of competition with China and then, you know, 
colleagues on the other side suggesting maybe it is hopeless. I 
mean, doesn't that--doesn't--don't these mixed signals, you 
know, about long-term funding for these DOE programs have a 
negative impact on companies' willingness to make investments 
in the United States?
    If you could just briefly answer that, and then I will get 
to my second--the real questions I have.
    Mr. Howell. I will say that long-term, disciplined 
investment strategy for the United States, both on the Federal 
level and the private sector, is going to be very important 
going forward. And mixed signals can cause confusion in the 
industry and also can cause a lot of start/stops with the 
Federal programs.
    Mr. Pallone. All right. Now, before our last hearing on 
this topic, Republicans spent months questioning a potential 
DOE award to Microvast. It was mentioned again today. And then, 
when press reports indicated that DOE would not move forward 
with an award to Microvast after conducting due diligence, 
Republicans still looked to undermine DOE. So I just think you 
are in--essentially, in a no-win situation here with what the 
Republicans are doing to you today and elsewhere. And 
ultimately, it is going to undermine any actions or investments 
that you make.
    So I just wanted to give you an opportunity to walk through 
the process of selecting companies for negotiation and your due 
diligence process.
    Let me ask two questions. From the time that a company 
applies for an award for one of the programs in your office, 
what due diligence does DOE conduct, and what other agencies do 
you partner with in that process?
    Mr. Howell. So from the time that the selection is made for 
negotiation--so even before that time, we have worked with 
other agencies to evaluate these applications and selected the 
most compelling applications, whether it is technical merit, 
whether it is market potential, investment and resources that 
the company has proposed.
    Once those selections are made, we deep dive into the 
negotiation process to really definitize those awards. So we do 
work--in this case, it is--typically falls on our procurement 
and acquisition team, our technical leaders at the Department 
of Energy to move through that process. We do use other teams 
like the general counsel, like the counterintelligence, like 
the CFIUS team to look at any sensitivities for that particular 
company or company team, and then develop potential--whether 
those sensitivities warrant us walking away from that award or 
are providing mitigation strategies to overcome barriers or 
gaps or concerns that we might have.
    Mr. Pallone. So what kinds of concerns would keep DOE from 
actually providing a company an award?
    Mr. Howell. Well----
    Mr. Pallone. Maybe you have answered that, but if you----
    Mr. Howell. Well, sure. So ownership by a Federal entity of 
concern, as defined in the regulations and in the 
appropriation, the control that a Federal entity of concern 
could actually exhibit over a U.S. company. That control could 
be shares in the company, it could be the parent company 
ownership as well, and it could also be, as I mentioned, voting 
members on the board. It could be key personnel being part of a 
talent program, it could be an IP position.
    Mr. Pallone. OK. All that. Well, look, let me just thank 
you, Mr. Howell, thank you for the work that DOE has taken on 
in making these programs a success and ensuring that taxpayer 
dollars are well spent.
    So I just hope, again, that Republicans will join us in 
helping DOE succeed, because I do think this is important. I 
don't think it is too late. And I think we have to do whatever 
we can to move, you know, our country forward and be 
competitive with China. Thank you.
    Thank you, Mr. Chairman.
    Mr. Griffith. The gentleman yields back. I now recognize 
the gentleman from New York, Mr. Tonko, for 5 minutes of 
questioning.
    Mr. Tonko. Thank you, Mr. Chair, and thank you to our 
ranking member for cohosting this hearing. And thank you to our 
witness, Deputy Director Howell. Thank you for sharing your 
very informed voice and experience, and grounding us in facts. 
I appreciate that.
    Our clean energy transition needs to move quickly to 
prevent the worst consequences of climate change. We also must 
move quickly to experience the economic benefits of being the 
global leader in this transition. The U.S. has already missed 
out on some earlier opportunities to invest in clean energy, 
while other countries like China invested aggressively to give 
their industries a lead. But now we have that opportunity to 
reverse that trend. Major investments made by legislation like 
the Inflation Reduction Act and the Bipartisan Infrastructure 
Law are helping bring manufacturing jobs back to the U.S. and 
build those supply chains.
    My Republican colleagues often call for ending our reliance 
on global supply chains, in part to protect human rights, but 
they have opposed these major legislative efforts that would 
help us build ethical and resilient supply chains right here in 
the U.S.
    So Deputy Director Howell, the MESC is overseeing billions 
of dollars in investments to build domestic clean energy supply 
chains and manufacturing. I hope your testimony helps everyone 
better understand how effectively these investments will 
advance American interests, including by protecting human 
rights.
    So how will the investments made through the Inflation 
Reduction Act and the Bipartisan Infrastructure Law make clean 
energy supply chains that much more transparent?
    Mr. Howell. Thank you for your question, Congressman, and 
just--you know, I do want to emphasize that the MESC commission 
cuts across many different parts of the energy sector 
industrial base.
    We have talked a lot about the battery and electric vehicle 
space today, but there's things like the grid, you know, 
particularly on transformers, high-voltage DC circuits, solar, 
hydrogen fuel cells, platinum group metals, things of that 
nature that's very important. And we have programs in place or 
are being executed that would actually fill key gaps within the 
manufacturing supply chain in the United States across those 
sectors, plus more.
    I will want to emphasize, too, we have a lot of focus on 
small and medium-sized enterprises, manufacturing enterprises 
across the Nation. When we really think about small and medium-
sized enterprises, you are really talking about 99 percent of 
the jobs in the United--manufacturing jobs in the United 
States. So it is so important for us to support our 
entrepreneurs in the small and medium enterprise--manufacturing 
enterprises, as well.
    So, you know, our support cuts across the energy sector 
industrial base. We are continuing to do the modeling, mapping, 
and analysis necessary to understand where we should focus our, 
you know, our resources.
    And I am thankful for the billions of dollars we have, but 
we need to also understand that this is a long-term play, and 
we need a consistent effort for decades to make sure that we 
seize this moment and capture as much of the clean energy 
manufacturing base as we possibly can as a nation.
    Mr. Tonko. Right, that is a very good point.
    And last year DOE published a clean energy supply chain 
strategy with pillars aimed at improving supply chains, 
including enhancing traceability and other steps to better 
protect human rights. So how is MESC implementing this strategy 
and working with interagency partners to ensure awardees are 
upholding labor and environmental standards and protecting 
human rights?
    Mr. Howell. So, you know, part of--particularly in the 
battery manufacturing grant program, which actually has support 
in the minerals and refined materials area, and particularly 
separating key minerals from extracted feedstocks, part of our 
evaluation process is to understand where those extracted 
feedstocks come from, and that they are environmentally 
sustainable, that they--wherever those feedstocks come from, 
that it is--you know, those feedstocks are procured by, you 
know, groups that value human rights in the extraction process. 
So that is part of our evaluation.
    We also have a Federal consortium for advanced batteries 
that is--that has a working group on battery materials and 
minerals that is also looking at environmentally sustainable 
governance of extracted feedstocks.
    And we are launching--the President has launched the 
Advanced Battery Materials Initiative, which has a focus for 
accelerating permitting in an environmentally sustainable and 
safe way.
    Mr. Tonko. Well, thank you.
    With that, I believe I yield back. I have other questions. 
I will submit those to the subcommittee.
    And with that, I yield back. Thank you.
    Mr. Griffith. I thank the gentleman for yielding back. 
Seeing no further Members wishing to ask questions, I would 
like to thank our witness for being here today.
    I would also hope to get your commitment that you will 
answer the questions that we had about the vetting process, 
since they said, ``We will let you know after the vetting 
process is over.'' That appears to be over for at least those 
first--that first tranche. And if you could get us that 
information, I would appreciate it.
    Also, you are probably going to get a written question 
about how do we get the lithium out of the water, because both 
Ms. Castor and myself--the ranking member--have areas in our 
region that are known as the Lithia Springs. And if it is that 
valuable, how do we get it out of the water? Because unlike the 
Salton Sea, ours is not evaporating and staying, ours is going 
downstream if we don't catch it.
    Anyway, that being said, and pursuant to committee rules, I 
remind Members that they have 10 business days to submit 
additional questions for the record, and I ask that witnesses 
submit their response within 10 business days upon receipt of 
the questions.
    Did you have something, since I made a comment? Did you 
have another comment?
    Ms. Castor. I do not, thank you.
    Mr. Griffith. OK. And without objection, the subcommittee 
is adjourned.
    [Whereupon, at 3:57 p.m., the subcommittee was adjourned.]

                                 [all]
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