Securing Energy Supply Chains Act

This bill, HR6853, requires the Secretary of Energy to establish an 'Energy Non-Procurement List' within 90 days of enactment. This list will identify entities engaged in activities detrimental to U.S. national security, energy security, economic security, public safety, or foreign policy. The Secretary must prioritize entities involved in critical materials and battery production, including battery components. This directly impacts companies that currently source these materials or components from entities likely to be placed on this list, particularly those with ties to 'foreign entities of concern' as defined in the Infrastructure Investment and Jobs Act. The money trail indicates a forced redirection of procurement. U.S. companies will be compelled to shift their supply chains away from listed foreign entities towards domestic or allied sources. This creates a competitive advantage for U.S. critical material miners and processors, such as Albemarle ($ALB), Lithium Americas, and Livent, and battery manufacturers like FREYR Battery. Conversely, companies heavily reliant on Chinese or other 'foreign entity of concern' suppliers for critical minerals (e.g., rare earths, lithium, cobalt) or battery cells will incur significant costs in re-establishing supply chains. This will impact electric vehicle manufacturers like Tesla ($TSLA), General Motors ($GM), and Ford ($F) if their current battery suppliers are affected. Historically, similar actions have led to significant market shifts. When the U.S. government imposed restrictions on Huawei in 2019, U.S. semiconductor companies like Qualcomm ($QCOM) and Intel ($INTC) saw immediate revenue impacts from lost sales, while domestic competitors or those with diversified supply chains gained. The CHIPS and Science Act of 2022, aimed at bolstering domestic semiconductor manufacturing, saw companies like Intel ($INTC) and Micron Technology ($MU) receive substantial government incentives, leading to increased investment in U.S. facilities. This bill creates a similar dynamic, incentivizing domestic energy supply chain development and penalizing reliance on restricted foreign entities. For example, when the Department of Defense added companies to its Chinese Military Company List, it signaled future restrictions, leading to divestment pressures on U.S. investors from those listed entities. Specific winners include U.S. and allied critical material producers and battery manufacturers. Companies like Albemarle ($ALB), Lithium Americas, and Livent stand to gain from increased domestic demand for lithium. FREYR Battery and other U.S.-based battery cell manufacturers will see increased demand. Losers are foreign entities of concern, particularly Chinese critical material suppliers like Ganfeng Lithium ($GNENF) and Tianqi Lithium ($TQLCF), and battery manufacturers like CATL and BYD ($BYDDF), as U.S. companies are forced to divest from these supply chains. U.S. companies with deep integration into these foreign supply chains, such as electric vehicle manufacturers, will face higher costs and potential production delays. This bill has been referred to the House Committee on Energy and Commerce. Given the sponsor, Rep. Pat Fallon (R-TX), a Republican from a state with significant energy interests, and the current bipartisan focus on supply chain security, the bill has a moderate chance of advancing. If enacted, the Secretary of Energy must establish the list within 90 days, leading to immediate supply chain re-evaluations by affected companies. The impact will be felt within 3-6 months of enactment as companies adjust procurement strategies.