WASHINGTON, D.C.— Earlier this week, U.S. Senator John Barrasso (R-WY), chairman of the Senate Energy and Natural Resources Subcommittee on Public Lands, Forests, and Mining, delivered the following opening statement at the subcommittee hearing on the American Soda Ash Competitiveness Act (S. 2031).
In September, Senator Barrasso introduced S. 2031 with ranking member of the subcommittee Senator Ron Wyden (D-OR), to maintain a competitive royalty rate on America’s natural soda ash. Soda ash is critical in manufacturing industrial products like glass, chemicals and detergents. The bill will set the royalty rate on sodium compounds produced from federal land at 2 percent for five years.
Wyoming’s Fred von Ahrens, vice president for manufacturing at Tronox in Green River, testified in support of S. 2031 today. Click here for Mr. von Ahren’s written testimony and video of his testimony here.
The hearing also featured testimony from Amanda Leiter, deputy assistant secretary for Land and Minerals Management at the U.S. Department of the Interior; Chris Douville, president of American Natural Soda Ash Corporation; and Rick Finn, federal affairs manager for the Port of Portland. Click here for more information on their testimony.
Senators Mike Enzi (R-WY) and Jeff Merkley (D-OR) are original co-sponsors of the Soda Ash Competitiveness Act.
Senator Barrasso’s opening remarks:
“This afternoon, the Subcommittee on Public Lands, Forests, and Mining will hold a hearing on S. 2031—the American Soda Ash Competitiveness Act.
“Last month, the Subcommittee’s ranking member—Senator Wyden—and I introduced this bipartisan legislation along with Senators Enzi and Merkley.
“The purpose of our bill is to help America’s natural soda ash producers compete in the global market.
“Natural soda ash—also known as sodium carbonate—is a raw material used to manufacture glass, chemicals, and other industrial goods.
“Natural soda ash is produced from trona—a mineral found in high concentrations primarily in California and Wyoming.
“The production of soda ash supports thousands of jobs across the country in a variety of industries, including mining, shipping, and manufacturing.
“In my home state of Wyoming, soda ash production directly employs over 2,300 people.
“In 2014, the United States exported nearly 58 percent of all soda ash produced— for a total of about $1.3 billion.
“Last year, soda ash was our nation’s second-largest inorganic chemical export.
“Soda ash exports help reduce America’s trade deficit and grow our nation’s economy.
“But we must not assume that soda ash exports will increase.
“America’s soda ash producers continue to battle unfair trade practices imposed by other nations.
“For example, China has aggressively moved to help its synthetic soda ash producers capture market share from America’s soda ash producers.
“Since 2009, China has given its synthetic soda ash producers a 9 percent rebate on China’s value-added tax, its VAT.
“More recently, China devalued its currency —the yuan—by 4.4 percent, to boost exports.
“It is estimated that China’s value-added tax rebate and currency devaluation give Chinese soda ash producers roughly a $27 per metric ton benefit.
“This unfair benefit is only expected to grow over the next year.
“CNBC reported recently that China may devalue its currency by a total of 15 to 20 percent by the end of 2016.
“CNBC cited a source that said: ‘Engineering a devaluation of this magnitude will not be easy,…[h]owever, the [People’s Bank of China] has the mechanism…to achieve a creeping devaluation and maintain the appearance of it being ‘market-led.’
“This report and China’s track record on currency devaluation make me very skeptical and suspicious of any commitments that China’s President allegedly made last week.
“China’s unfair trade practices threaten America’s soda ash producers and it’s important that Congress respond.
“That’s why we have introduced the American Soda Ash Competitiveness Act.
“Our bipartisan bill will help level the playing field for America’s soda ash producers.
“Specifically, our bill maintains a competitive royalty rate for soda ash produced from federal land.
“Tomorrow, the Bureau of Land Management, the BLM, is expected to increase the royalty rate on soda ash.
“I strongly disagree with this decision.
“The Administration should not raise costs on America’s soda ash producers without first ensuring that China and other countries scrap their unfair trade practices.
“So I want to thank Senator Wyden for his support of this bipartisan legislation.
“Senator Wyden knows the importance of the soda ash industry to Oregon, Wyoming, and communities throughout the country.
“He also knows that America’s natural soda ash has a significantly lower environmental impact when compared to China’s synthetic soda ash.
“So I want to thank Senators Enzi and Merkley for their support of this bill.
“On July 29th, the House Natural Resources Committee approved identical legislation on a bipartisan vote.
“I will encourage members of this committee to advance our legislation as quickly as possible.
“I would also like to point out a front-page story in yesterday’s Wall Street Journal entitled: ‘Export Weakness Hampers Growth’
“According to this story: ‘Hopes for an American export boom are wilting. U.S. exports are on track to decline this year for the first time since the financial crisis, undermining a national push to boost shipments abroad.’
“The article goes on to say that: ‘The weak trade performance is restraining overall economic growth.’
“The article also discusses the challenges that Portland, Oregon has faced in trying to increase its exports.
“I will enter this article into today’s hearing record.”