Congress tightens rules on US manufacturing after battery technology ends up in China

A new federal law passed after the Energy Department authorized the export of taxpayer-funded battery technology to China aims to tighten restrictions on sending such government discoveries abroad.

Initially, the Invent Here, Make Here Act will only apply to programs within the Department of Homeland Security. But the law’s sponsors in Congress say they plan to expand it to the DOE and other agencies.

Sen. Tammy Baldwin, D-Wis., said she and then-Sen. Rob Portman, Republican of Ohio, sponsored the measure after an NPR investigation into how breakthrough battery technology from a US government lab ended up at a company in China. The bill passed with broad support in December as part of the National Defense Authorization Act.

“The Invent Here Make Here Act focuses on making sure that when we invest American taxpayer dollars, the breakthroughs will actually be manufactured here,” Baldwin said.

NPR, in partnership with public radio’s Northwest News Network, found that the Department of Energy allowed cutting-edge technology to be transferred overseas from its Pacific Northwest National Laboratory with little oversight. The lab spent six years and more than $15 million developing a new battery recipe using vanadium.

Scientists thought the batteries would change the way Americans powered their homes. Instead, China just brought the world’s largest battery farm online using American technology.

NPR and N3 found that the Department of Energy and the lab granted a license to a company that moved manufacturing overseas on two separate occasions, even though the contract required the company to “substantially manufacture” the batteries in the U.S.

In a letter to Energy Department Secretary Jennifer Granholm, Florida Republican Sen. Marco Rubio requested information and criticized the department’s actions.

“Too long, [China] has captured vital American technology through illegal means and the negligence of government agencies…” he wrote.

Baldwin said she and her colleagues focused the new law first on the Department of Homeland Security to see what kind of response it would get. Now that she has bipartisan support, she said they intend to introduce legislation targeting the DOE and additional federal agencies.

“So many of our legacy laws have huge loopholes,” she said. “There are many additional actions we can take.”

After NPR’s report, the DOE revoked the license it had given the battery company and launched an internal investigation. The department has not publicly shared its findings. In response to NPR’s public records request under the Freedom of Information Act, officials sent 233 fully redacted pages — several public documents and NPR’s own emails.

But according to the website E&E, which obtained a copy of the report, investigators found that the department and the lab failed to adequately monitor the license. They found that frequent staff turnover and inadequate record-keeping prevented the lab from tracking the battery’s license despite years of “non-compliance”.

“Although there have been laws on the books for decades designed to ensure that these patents are used in the United States by American manufacturing, unfortunately they have been largely ignored,” said Scott Paul, president of the Alliance for American Manufacturing, a nonprofit political organization group.

Paul said federal agencies are finally getting around to protecting the investment of U.S. taxpayers. For decades, the US has been losing out on some of its best inventions, such as solar panels, drones, telecommunications equipment and semiconductors.

“I’m optimistic about the outlook for production,” he said. “But we have to stop making these gross, unintended mistakes like giving our technology to companies that are just going to manufacture in China.”

Energy officials did not respond to NPR’s written questions. Department spokeswoman Charisma Troiano said only that she did not believe the law “had anything to do with” the Department of Energy.

In June 2021, the department applied stricter guidelines to a 1984 law that required American manufacturing except in special circumstances. But Paul said recent congressional legislation and possible new laws carry more weight.

“We’ve been on our heels for too long,” he said. “The political momentum is with these efforts. It’s good that lawmakers are responding.”

Paul said he believes bipartisan support in Congress for the additional laws will lead to new American factories in the next few years.

Courtney Flatt, a reporter for the Northwest News Network, contributed to this story.

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