[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
                 DEPARTMENT OF THE INTERIOR AND RELATED
                    AGENCIES APPROPRIATIONS FOR 1998

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

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                              FIRST SESSION
                                ________

   SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES

                      RALPH REGULA, Ohio, Chairman

JOSEPH M. McDADE, Pennsylvania         SIDNEY R. YATES, Illinois
JIM KOLBE, Arizona                     JOHN P. MURTHA, Pennsylvania
JOE SKEEN, New Mexico                  NORMAN D. DICKS, Washington
CHARLES H. TAYLOR, North Carolina      DAVID E. SKAGGS, Colorado
GEORGE R. NETHERCUTT, Jr., Washington  JAMES P. MORAN, Virginia
DAN MILLER, Florida                    
ZACH WAMP, Tennessee                   

 NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

Deborah Weatherly, Loretta Beaumont, Joel Kaplan, and Christopher Topik,
                            Staff Assistants
                                ________

                                 PART 9
                                                                   Page
 Secretary of Agriculture.........................................    1
 U.S. Forest Service..............................................   71
 Secretary of Energy..............................................  415
 Office of Fossil Energy..........................................  519
 Office of Energy Efficiency and Renewable Energy.................  649
 Office of Hearings and Appeals...................................  773
 Energy Information Administration................................  783

                              

                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE

 40-622 O                   WASHINGTON : 1997

------------------------------------------------------------------------

             For sale by the U.S. Government Printing Office            
        Superintendent of Documents, Congressional Sales Office,        
                          Washington, DC 20402                          




                       COMMITTEE ON APPROPRIATIONS                      

                   BOB LIVINGSTON, Louisiana, Chairman                  

JOSEPH M. McDADE, Pennsylvania         DAVID R. OBEY, Wisconsin            
C. W. BILL YOUNG, Florida              SIDNEY R. YATES, Illinois           
RALPH REGULA, Ohio                     LOUIS STOKES, Ohio                  
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania        
JOHN EDWARD PORTER, Illinois           NORMAN D. DICKS, Washington         
HAROLD ROGERS, Kentucky                MARTIN OLAV SABO, Minnesota         
JOE SKEEN, New Mexico                  JULIAN C. DIXON, California         
FRANK R. WOLF, Virginia                VIC FAZIO, California               
TOM DeLAY, Texas                       W. G. (BILL) HEFNER, North Carolina 
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland            
RON PACKARD, California                ALAN B. MOLLOHAN, West Virginia     
SONNY CALLAHAN, Alabama                MARCY KAPTUR, Ohio                  
JAMES T. WALSH, New York               DAVID E. SKAGGS, Colorado           
CHARLES H. TAYLOR, North Carolina      NANCY PELOSI, California            
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana         
ERNEST J. ISTOOK, Jr., Oklahoma        THOMAS M. FOGLIETTA, Pennsylvania   
HENRY BONILLA, Texas                   ESTEBAN EDWARD TORRES, California   
JOE KNOLLENBERG, Michigan              NITA M. LOWEY, New York             
DAN MILLER, Florida                    JOSE E. SERRANO, New York           
JAY DICKEY, Arkansas                   ROSA L. DeLAURO, Connecticut        
JACK KINGSTON, Georgia                 JAMES P. MORAN, Virginia            
MIKE PARKER, Mississippi               JOHN W. OLVER, Massachusetts        
RODNEY P. FRELINGHUYSEN, New Jersey    ED PASTOR, Arizona                  
ROGER F. WICKER, Mississippi           CARRIE P. MEEK, Florida             
MICHAEL P. FORBES, New York            DAVID E. PRICE, North Carolina      
GEORGE R. NETHERCUTT, Jr., Washington  CHET EDWARDS, Texas                 
MARK W. NEUMANN, Wisconsin             
RANDY ``DUKE'' CUNNINGHAM, California  
TODD TIAHRT, Kansas                    
ZACH WAMP, Tennessee                   
TOM LATHAM, Iowa                       
ANNE M. NORTHUP, Kentucky              
ROBERT B. ADERHOLT, Alabama            

                 James W. Dyer, Clerk and Staff Director




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


                     U.S. Department of Agriculture

                        Secretary of Agriculture


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



DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR 1998

                              ----------                              

                                          Thursday, March 20, 1997.

                     U.S. DEPARTMENT OF AGRICULTURE

                               WITNESSES

HON. DAN GLICKMAN, SECRETARY, DEPARTMENT OF AGRICULTURE
JAMES R. LYONS, UNDER SECRETARY, NATURAL RESOURCES AND ENVIRONMENT


[Page 4 --The official Committee record contains additional material here.]


    Mr. Regula [presiding]. We'll call the subcommittee to 
order.
    We're pleased to welcome the Secretary of Agriculture and a 
former Member and a colleague, and the Under Secretary, Mr. 
Lyons.
    I have to tell you, Mr. Secretary, in my 23 years on this 
subcommittee this is a first, to have the Secretary of 
Agriculture appear on behalf of one of your important 
functions, and that's the Forest Service. We've never had that. 
We've always had the Under Secretary or the Chief. So I think 
with the growing interest in the Forest Service, and of course 
with freedom to farm, I assume you'll be out of business on the 
farm end of it. [Laughter.]
    [Secretary Glickman shakes his head indicating no.]
    Mr. Regula. You don't think so?
    Secretary Glickman. Show my head is going like this 
[shaking his head indicating no.]
    [Laughter.]
    Mr. Skeen. No comment. [Laughter.]
    Mr. Regula. It's interesting that 40 percent of the 
employees in your Department are Forest Service people, and 
what, about 10 percent of the budget, and a very important 
function. It's kind of unique in that, for whatever reason, 
it's not in Resources, but in Agriculture, but it's in our 
committee for funding purposes.
    We'll put your statements in the record, and any comments 
you'd like to make or summarization we'd welcome.

                            Opening Remarks

    Secretary Glickman. Well, thank you, Mr. Chairman and 
Chairman Skeen. You know, when I saw you, Ralph, I guess it was 
four or five weeks ago, you said you were going to invite me, 
and you commented that the Secretary had not testified in your 
memory, and we have checked back with Steve Dewhurst, our 
Budget Officer, and I do not know how long it has been, but 
people cannot remember when a Secretary has testified before 
this subcommittee. Of course, I owe great allegiance to 
Chairman Skeen, who has always shown great courtesy and 
interest in the general affairs of the Department of 
Agriculture, but I think it is appropriate that we come here, 
and I might make just a couple of off-the-cuff comments.
    One is, as you say, the U.S. Forest Service is the largest 
single part of the Department of Agriculture. It has about 35 
percent of our total employment, because we have a lot of what 
are called county office employees in farm offices who are paid 
for by the Federal Government, but are not classified as 
Federal employees. But, in any event the Forest Service is the 
largest grouping. When you combine land management and 
conservation agencies, we are the largest in the Government. 
When youcombine the Forest Service and the old Soil 
Conservation Service, which is now called the Natural Resources 
Conservation Service, we are the agency responsible for obviously 
managing the nearly 200 million acres in the Forest Service, but we are 
also the agency responsible for conservation efforts on private lands 
in the United States. So when you combine these together, we often do 
not get the attention for it, but we are the largest land management 
agency in Government. So, obviously, we work closely with the Interior 
Department, which has the other very big piece of it, but, for historic 
reasons, the Forest Service was put in the Department of Agriculture. 
Actually, it was in the Department of Interior, I think, initially----
    Mr. Regula. Oh, is that right?
    Secretary Glickman [continuing]. And then it was put in the 
Department of Agriculture. I am not sure of all the historical 
reasons, but I think that a lot of those stay with us until 
today in terms of functions and roles and relation to 
production agriculture and how we viewed trees back then as a 
crop in some respects, as opposed to other functions. But, be 
that as it may, it is a very significant part of USDA.
    I would also say that it has, certainly in my nearly two 
years I have been in this job, it is a very controversial part 
of the Department. As you know, issues regarding timber and how 
much we cut and issues regarding salvage have become very 
important during the last two years. The role of the Secretary 
in managing the Forest Service has received a lot of national 
attention, a lot of congressional attention, a lot of Executive 
branch attention. We have been through a very tough period of 
time, and trying to figure out, I think as much as anything, 
what is the appropriate function of this agency in a changing 
world. We are moving from an agency that focused almost 
exclusive on--let us say not almost, but rather significantly--
on the harvesting of timber to one that does that, but also 
does recreation, habitat protection, and resource management. 
You know, it is a multiple-use agency. It does a lot of 
different things; it affects a lot of communities.
    This has been an extremely controversial issue as we try to 
figure out where we ought to be going and what we ought to be 
doing. We are fortunate to have a new Chief of the Forest 
Service. I don't know if he's testified--he follows me, Mike 
Dombeck----
    Mr. Regula. Yes.
    Secretary Glickman [continuing]. Who himself has extensive 
land management experience, and was originally in the Forest 
Service. Then he was in the Bureau of Land Management, where he 
was Acting Director. So I think it is an important time for us, 
and I think when you suggested I come here, it was important 
because I can honestly say to you that in terms of size and 
employees and everything else, this is a very significant part 
of the Department of Agriculture. It is not some separate 
organization in a line item budget sense. It has nothing to do 
with the rest of what we do, and so I think to some extent over 
the last 50, 60, 70 years, it has tended to operate as a 
separate entity.
    Mr. Regula. True.
    Secretary Glickman. And I think that that has maybe been a 
phenomenon of the historical nature of the Forest Service. It 
may have been a phenomenon of congressional interest. It may 
have been a phenomenon of how the Forest Service perceived 
itself as kind of a professional cadre of land management 
people that were separate and apart from the political 
functions of the Department of Agriculture.
    But, be that as it may, I think that Mr. Dombeck, Mr. 
Lyons, and I working with you, understand that this is an 
important part of the Department of Agriculture. We intend to 
give it the priority that it needs to have.
    As I mentioned, Jim Lyons is with me, and I have a couple 
of comments I would like to make more specifically, and my full 
statement will be in the record.
    Mr. Regula. Right.

                        secretary's policy role

    Secretary Glickman. There are a couple of things I wanted 
to make sure you are aware of: One is that while my office is 
engaged in the operations of the Forest Service from a policy 
perspective, it is my belief that the Chief is the manager of 
the Forest Service, not the Secretary of Agriculture. I am not 
in the position of micromanaging day-to-day decisions, and 
should not be. These are a group of talented professionals who 
need to know that their judgment is paramount when it comes to 
land management decisions.
    Now policy, obviously, the policy of any administration has 
to come into play in this regard. I mean, that is why you have 
elections. That is why you have administrations. That is why 
you have Congress. So we are obviously involved in policy 
issues of where the Forest Service ought to be going from a 
conceptual point of view.
    Mr. Regula. Well, that's my concern, to get you involved in 
the big policy decisions, because I know CEQ is getting 
involved, the Council on Environmental Quality, and there's a 
growing interest in the overall management because it 
transcends selling trees for fiber. It gets into recreation. It 
gets into habitat, the things that you've outlined, and I think 
there are important policy questions about the future of the 
Forest Service.
    Secretary Glickman. Right, and I need to be, in the same 
way that I am involved institutionally in determining, let us 
say, what a farm program implementation is going to look like 
or how we do meat and poultry inspection, or all the other 
issues--I also have to be involved in working with the Chief, 
recognizing he is the chief professional, however.
    Mr. Regula. I understand.
    Secretary Glickman. And I do not want to second-guess his 
professional judgment, but working with him is an appropriate 
role for me to be personally involved, along with Under 
Secretary Lyons, who is my chief policy officer for this area 
within the Department.
    And I do think it is fair to say in the past Secretaries 
have not been terribly personally involved in Forest Service 
decisions. When I said I was going to get more involved, some 
people said, ``You have got a tiger by the tail and you are 
going to choke yourself on this thing.'' But the fact is that 
that is not true. This is an extremely important matter. This 
is a legacy that we will leave our children and grandchildren 
far beyond almost anything else we do in the Department of 
Agriculture, and so we need to preserve that legacy, and I 
think that this is the important part of it.

                           budget initiatives

    If I might, I might just make a few specific comments. 
Obviously, we are operating within constrained budgets, and the 
Nation does face an increasing number of environmental problems 
on public as well as private lands, especially endangered 
species, water quality, and forest health problems. But even 
with these problems and even with constrained budgets, I 
thinkwe are trying to make some important investments.
    For instance, we are proposing the Forest Ecosystem 
Restoration and Maintenance Fund, which provides funding for 
watershed restoration and other forest health work that needs 
to occur. The Chief will talk to you more about the details, 
but we need to work together with you to move the forest health 
debate forward in a constructive manner.
    The salvage rider, as I said, was so controversial that it 
actually turned the words ``forest health'' into dirty words 
for the public. They also became politically-charged words, 
both for the timber industry, as well as for the environmental 
community. Working together, I think that we can come to a 
reasonable meeting of the minds on those forest health needs 
issues and how to deal with them over the long term.
    Another way to care for the land and improve forest health 
is to look at the way we manage fire. I think we may all agree 
that the fire funding system we have in place is inadequate, 
particularly as we reduce hazardous fuels, as we prevent fires 
from occurring before they actually go into a suppression 
situation.
    After reviewing it extensively within the Government and 
our cooperators, our budget proposes to change the fire-funding 
mechanism to accomplish two main goals. First, we have to have 
the money to fight fires when they occur. Our budget provides 
$211 million with a $5.8 billion proposed governmentwide 
emergency contingency fund to tap into once we run out of 
appropriated dollars. Of course, the contingency fund would 
deal with a lot of issues beyond fires.
    Second, the Forest Service needs to reduce hazardous fuels 
through prescribed burns and other means to minimize the risk 
of large, intense fires. Our budget proposes between $30 and 
$50 million for these types of activities, which is a 25 to 100 
percent increase over the 1997 budget.

                            forest planning

    Another way we are investing in land is through our 
regional forest planning management and research efforts. 
Experience has taught at the Forest Service that it needs to 
manage resources on a broader scale. This is a very different 
approach to managing land than what people are used to at the 
local, State, and national level, and so it involves a lot of 
controversy. In fact, the Forest Service is struggling with it 
to some degree because they have had to alter their management 
style and their interaction with people. But investment in this 
type of research and planning, such as the President's 
Northwest Forest Plan, the Tongass Land Management Plan, the 
Columbia River Basin effort, will ensure that we have a 
sustainable flow of resources in the years to come. I would 
strongly encourage the committee to support us in these efforts 
on regional forest planning management and research efforts.

                       state and private forestry

    Serving people is the other important component of the 
Forest Service's overall mission, and I continue to be amazed 
at the number of services we provide. Tens of thousands of our 
Nation's nonindustrial forest owners rely on our State and 
private forestry programs for technical advice, financial 
incentives, and education for managing their land. This 
assistance is extremely critical when you think of the amount 
of forest land they own in this country, about 60 percent of 
the total, and the contributions these lands make toward 
improving our environment while providing timber and other 
services to our Nation.
    In fact, if you compare the amount of money we invest in 
conserving crop and grazing land, which is about $3 billion, to 
the amount devoted to State and private forestry programs, less 
than $200 million, I believe that you can see that funding 
those programs to the maximum extent possible is important to 
help the continued productivity of these critical forest lands.

                             other programs

    The Forest Service provides more recreation opportunity for 
Americans than any other agency in the Nation. Millions of 
Americans visit the forest system to hunt, camp, hike, fish, 
sightsee, climb, ski, canoe, among other activities. These 
recreationists also bring large sums of money with them, which 
helps many rural economies. Recreation is an economic engine 
which makes investing in it important.
    In addition to recreation, many other Americans go to work 
on the national forest system to operate timber sales, graze 
cattle, and mine. As you know, these activities are also 
important economic engines. The total volume for projected 
timber offer for Fiscal Year 1998 is 3.8 billion board feet 
with a projected harvest level of 3.9 billion board feet.

                        collaborative management

    In closing, I believe the Forest Service budget reflects 
the multiple objectives and goals that the agency seeks to 
achieve. As I said, we have a new Chief who I believe will be 
an outstanding leader. He understands the need to build up the 
public's trust in land management efforts by constructively 
including the public in the discourse and management of our 
lands. He is a bridge-builder, and that is one of the reasons 
why Jim and I asked him to come over to the Forest Service from 
the Bureau of Land Management. He will also add a lot of budget 
details to the issues I raised briefly in my remarks to you 
today, and he also is not a polarizer. By saying that, I am not 
saying that anybody else is. I am saying that the debate on 
these land management issues has got to become less polarized, 
and every issue does not have to become World War III. Every 
timber sale does not have to become World War III. We can try 
to see in a collaborative sense whether we can resolve some of 
these issues before they reach that kind of level, and besides, 
when they reach that kind of level, I end up getting involved 
in individual timber sales, which is what I certainly want to 
avoid in the future if I can.
    So, again, I thank you very much for asking me to be here, 
and Jim Lyons and I would be glad to answer any questions. The 
Chief follows us, but if there is anything specific that he 
needs to answer, he will be able to come up here.
    [The prepared statement of Secretary Glickman follows:]

[Pages 10 - 14--The official Committee record contains additional material here.]


                         under secretary lyons

    Mr. Regula. Mr. Lyons, do you have any comments you'd like 
to make?
    Mr. Lyons. No, Mr. Chairman, I think the Secretary has said 
well what it is we're trying to achieve, and the discussions we 
have had over the past few years I think give a good sense of 
where I hope we are going to head, trying to emphasize the 
multiple-use management activities we have and make prudent 
investments with the limited resources that you are able to 
provide us. So we will look forward to working with you in the 
future.

                                 agenda

    Mr. Regula. For the committee members, the Secretary would 
like to be out in less than an hour, and I know there are eight 
other subcommittees of Appropriations meeting. So I think I 
have only a couple of questions, and then I'll defer to those 
of you that are here to get a five-minute chance to question 
the Secretary, in the event you have to leave. And then what I 
would hope to do is follow up with Mr. Dombeck at about 11:15, 
and perhaps we can get this finished by 12:30 or so.

                       administration commitment

    Mr. Secretary, the President has committed to many 
initiatives that are expensive: Headwaters, $250 million; New 
World Mine, $65 million; Tongass, $140 million on the sale 
cancellation; Everglades, $135 million; the Northwest Forest 
Plan, $408 million; some buyouts in the Northwest, $200 
million; KV reforestation, $443 million; wildfire management, 
$515 million, and then I understand that he may make a 
commitment on Lake Tahoe which is about a billion. This is a 
lot of money, and I wonder if you've been a party to these 
decisions, and if there's been any thought as to how we're 
going to pay for them.
    Secretary Glickman. Well, obviously, I have been a party to 
some of the decisions. For example, you talk about the fire-
related decisions, how we fund fire and fire management. This 
is a matter of very high priority. Secretary Babbitt, I, people 
in the Forest Service and BLM, people in the White House, we 
have talked about that initiative, and that is a demand that 
just has to be met. There is just no question about that. We 
also need to deal with fire before it occurs through some of 
the things I mentioned in my testimony.
    Some of these Presidential issues are being met and will 
continue to be met. The President's Northwest Forest Plan is a 
high priority of the administration. We are on track on that. 
That involves collaborative efforts between State and local 
communities and the Federal Government. It has been an 
extremely important program, and it is one that we continue to 
work on very strongly.
    I agree with you that within limited budgets one has to 
make some priority choices here. All the things you mentioned 
are very important, and ultimately working with Congress and 
the President, we will decide which ones are most deserving of 
the highest priority. But, you know, by and large, all of them 
that you mentioned are high priorities of the President, and 
most of them have actually been working. Some of these are in 
the budget, like the Pacific Northwest--the Northwest Forest 
Plan. Others require offsets like Headwaters and the New World 
Mine, which has been in the news lately. Given the PAYGO 
requirements of our budget, those decisions are a lot more 
difficult than they used to be.
    Mr. Regula. Well, Mr. Secretary, I hope prospectively that 
you will be engaged in this process because these are tough 
decisions and our whole subcommittee's got tough priority 
judgments on the agencies we fund.
    Mr. Skeen, I know you have a hearing, and I see we have a 
vote on.

                            personal regards

    Mr. Skeen. Thank you, Mr. Chairman.
    I wanted to come here today to pay my respects to the 
Secretary because we have multi-faceted responsibilities that 
bridge all kinds of subcommittees, and so on, and coming up 
with some of the answers that we need to come up with takes an 
attitude of cooperation that he certainly has shown us. He was 
my next-door neighbor when I first came up to this place. So, 
Dan, you've been a good leader.
    Mr. Yates. He's overcome bad influence. [Laughter.]
    Mr. Skeen. I beg your pardon?
    Mr. Yates. He's overcome bad influence. [Laughter.]
    Mr. Skeen. I know that. I'm down here checking on my turf. 
[Laughter.]
    But it's not the Secretary that I'm really worried about; 
it's Steve Dewhurst because he's a fixture in our committee 
over there; we don't want to lose him. [Laughter.]
    But I just want to congratulate you on it, and we have a 
good working relationship between these subcommittees, and I 
appreciate your interest in bridging all of this and 
congratulate you on it.
    And he did overcome it, by the way. [Laughter.]
    He rose to much greater levels.
    So thank you, Mr. Chairman.
    Mr. Regula. Mr. Dicks, you are next in line here. Do you 
have another committee commitment----
    Mr. Dicks. Yes.
    Mr. Regula [continuing]. And do you want to try to get done 
before we vote?
    Mr. Dicks. Yes, if the chairman would yield, I would be 
delighted----
    Mr. Regula. Yes.
    Mr. Dicks [continuing]. Mr. Yates, if that's all right with 
you----
    Mr. Yates. Oh, please do. I can hardly wait to get at the 
Secretary, but I'll yield. [Laughter.]
    Mr. Dicks. Well, Congressman Glickman and I came to--
Secretary Glickman and I came to Congress in the same class; 
we've been very good friends ever since, and we're all thrilled 
that he's down at the Department of Agriculture. And Jim Lyons, 
of course, came from the staff up here on the House side, the 
Agriculture Committee. So we want to welcome them both here.

                      pacific northwest situation

    I would just say that I think--I want to say thank you to 
the administration for the good work that's been done in the 
Pacific Northwest. I agree that the timber salvage rider turned 
out to be a mistake in that sufficiency language was used, and 
I think it caused a lot of heartburn in the Northwest, and it's 
expired now, and I think in the future we should really try to 
stay with the existing laws that are on the books and do these 
timber sales accordingly.
    But we do appreciate the tremendous support for the 
communities that have been hard-hit, and are still being hard-
hit. Just a few months ago, the Ranier Mill in Port Angeles, 
Washington, announced that it was shutting down. One of the 
reasons they argued was that they were having a hard time 
getting enough wood for their mill. I think actually economics 
were a much more important part of their decision, but it 
caused tremendous problems, and, yet, just a couple of days ago 
we were able to announce a reserve grant under the Department 
of Labor to help all the workers with retraining, et cetera. 
And that is part of the President's--there was $12 million in 
the President's Forest Plan in the Northwest to deal with that. 
So that still is a major concern, and we're still going through 
the repercussions.
    The downsizing, I'll give you an example. I think I've 
explained this to you both: the Olympic National Forest in my 
district used to do about 225 million board feet in timber 
sales. We're now lucky if we get 10 million board feet. It's 
like a 98 percent reduction. My constituents have a hard time 
understanding why it can't be just a little bit more than that, 
and we don't have matrix areas. We're hoping that now that the 
State's HCP is done that we can look at adaptive management. 
This is one of the things I would really emphasize. There's 
been a lot of science out there that says we just have to put 
circles around these areas and make them reserves, and that you 
can't do adaptive management.
    On the east side of our State we seeing that adaptive 
management is very essential in terms of prescribed burns and 
clearing out the understorage in order to really make the 
forests more healthy. We also believe on the west side that, 
through thinning, pruning, and some adaptive management, you 
could actually create larger trees faster, and we've got a 
whole series of companies out there that by thinning created 
huge trees in a much more rapid time than if you just leave the 
forest all to itself. So I'm hoping that we can at least look 
at the potential of doing more thinning and pruning, and then 
looking at some of the new science, I would call it, in these 
adaptive management areas.

                              timber sales

    If there's one area, besides getting up to the 1 billion 
board feet that was committed to under the President's plan in 
green sales, it's the failure to really look at new approaches, 
and I hope that we can do that. I mean, I hope we can do the 
experimentation. Let's look and see what science is the best, 
and I would urge that on the Forest Service. This is a major, 
still a major concern out there.
    I am told that this year we are going to get to the 1 
billion board feet that's been committed to under the 
President's plan, and I hope that will be something that we all 
can agree on. In the past there's been, well, they added some 
sales that weren't--salvage and this and that, or firewood, or 
whatever, and we hope this is going to be green sales and that 
it's going to be what the President committed to.
    Jim, maybe you want to take this, but, first of all, we're 
very thrilled to have Secretary Glickman here, and we know that 
he will work with us. You helped us on a whole series of 
problems with the Forest Service, but maybe, Jim, do you want 
to comment?
    Mr. Lyons. Well, Norm, I would say that we, first of all, 
are committed to meeting that goal this year, and we will be 
there. I would also indicate that we are going to continue to 
support the research work at the University of Washington to 
look at the new approaches to try to improve productivity, 
address forest health concerns, and hopefully also increase the 
value of the products that come off those forests. And 
particularly on the Olympic Peninsula, I think there is a 
tremendous opportunity to use the adaptive management area----
    Mr. Dicks. Yes, and of course----
    Mr. Lyons [continuing]. To try those methods out.
    Mr. Dicks. And the Olympic experimental forest has been 
held up, in essence, while the State was doing its habitat 
conservation plan, which now has been signed. So it looks to us 
now that maybe we can get them involved, so you can have the 
State lands and the Federal lands, and do the adaptive 
management.
    Mr. Regula. We've got to vote. We have about eight minutes, 
seven.
    [Recess.]
    Mr. Nethercutt [presiding]. The hearing will come to order.

                             new world mine

    Mr. Secretary, I also want to welcome you here on behalf of 
the fifth congressional district of Washington. I'm on the 
Agriculture Subcommittee of Appropriations as well, and you've 
been a gentleman to work with there. We're glad to see you here 
too because of the joint relationship between the two 
committees and the Forest Service.
    I want to bring to your attention an issue that I'm sure 
you're familiar with relating to CRP----
    Secretary Glickman. I've heard of that. [Laughter.]
    Mr. Nethercutt [continuing]. Especially as it relates to 
the Federal Government's acquisition adjacent to Yellowstone. 
The Administration proposes using the reduction in the 
enrollment acres for CRP to pay for the withdrawal of this 
particular property from mining.
    Let me, before I have you answer, tell you that this is 
causing great distress among the farm community, certainly out 
West where we are struggling to maintain CRP acres. The program 
is a tremendous environmental benefit. As you know, we're 
facing PM 10 and possibly PM 2.5 air quality regulations. We 
have a great wind erosion problem in eastern Washington. It 
seems wrong-headed to me that we're trading off the CRP acres 
in connection with taking this mining land out of production.
    I guess my question to you, sir, is I think this is a 
dangerous precedent. Do you see it as a dangerous precedent? 
Are you concerned about it? Are you supportive of it?
    Secretary Glickman. Well, let me just say that this was a 
very tough decision by the administration. Let me make a couple 
of comments. Number one is that we have a lot of important 
programs in the Department of Agriculture, but there is no 
question in my mind that the CRP is, if not the most important 
program that we are doing now, it is close to it. It will take 
a period of years to sign up all the people into this program, 
and with the changes that are taking place, we are making it a 
more environmental program in terms of the kind of land that 
goes into it, so that we do not get good productive farmland 
into it. It remains, I think, the greatest contribution to the 
legacy of fertile productive farmland that we have in any 
program in government. So I want to make that clear.
    I have been out trying to provide the leadership through 
the countryside to let people know that this is important. And, 
by the way, the signups, which are right now, indicate a great 
deal of interest, probably more than we anticipated in the 
program. So that is my position; that is the position of the 
Department; that is the position of the administration.

                            budget tradeoff

    The issue involving the Crown Butte New World Mine is also 
a high priority of the administration. To a large extent this 
involves trying to prevent degradation associated with the gold 
mine from occurring in and around Yellowstone. This has also 
been a high priority. And given the budget situations in the 
government and the PAYGO requirements in the budget, that when 
you provide dollars for a function like, let us say, the 
purchase of a mine, you must find the dollars elsewhere. As the 
administration looked around, the judgment was made that you 
could defer a portion of CRP signups from Fiscal Year 1998 into 
the following year, Fiscal Year 1999 and the year 2000, under 
the theory that we would probably have great difficulty signing 
up 19 million acres in Fiscal Year 1998, because we have 
about--how many acres do we have coming out?
    Mr. Lyons. Twenty.
    Secretary Glickman. Twenty million acres, 22 million acres 
coming out on September 30, and we believe that the acreage 
could be deferred into the following year or years without 
disturbing the total amount of acres that would ultimately be 
coming into the CRP.
    Now through this period of March, we will be in a better 
position to determine what the level of interest really is. We 
know that it's going to take more than one year to get up to 
the 35 million or so acres that are going to go in this thing. 
It is going to take two, three, or four years to do that kind 
of thing. Can I tell you it was an easy decision in the 
administration? It was not, but----
    Mr. Nethercutt. Can you tell us that it is a good decision?
    Secretary Glickman. I would tell you that it is a matter of 
trying to accomplish a priority which is to prevent this mine 
from operating, and to do it in a way that would minimize any 
negative or deleterious effect on the CRP. Therefore, we 
reduced our projected total CRP signup goals for next year by 2 
million acres and deferred the enrollment of these acres to the 
following year. If we did not have the PAYGO requirements, 
probably we would not be going down this road, to be honest 
with you. It ultimately is a congressional decision. We will 
have to work with you on it because, you know, this is not 
something that can be done without Congress taking action.
    Mr. Yates. Which mine are we talking about?
    Secretary Glickman. The New World Mine, the Crowne Butte--
--
    Mr. Yates. Is this one next to Yellowstone?
    Secretary Glickman. Yes, that is the one that is next to 
the Park. And so, you know, we have had a lot of concern 
expressed from the Hill on this--not so much on the issue of 
making sure that the mine doesn't operate. That is one that I 
think there is general agreement on. The question is, How do 
you come up with the resources to pay for it and do it in the 
natural resources general area of the budget?
    So that is about the best I can tell you right now.
    Mr. Nethercutt. Well, my sense is that there's great 
concern about attacking essentially the integrity of a program 
that has long been isolated in its application. In other words, 
what else won't we dip into that should be inviolate?
    Secretary Glickman. No, I understand that, and I have to 
tell you from my perspective what I have told people for the 
last six months, that this program, the Conservation Reserve 
Program, is the farm bill of the future in a sense, especially 
after the 1996 farm law by which we went down the road to 
deregulate row crop agriculture. And so the CRP and related 
conservation programs in the 1996 farm bill are really the 
heart of farm policy right now. When you combine that with an 
aggressive trade posture, that is kind of the heart of where 
farm policy is.
    So I want to make it clear that this should not be 
interpreted as a lack of support for the CRP. I think it is 
more a matter of honoring the President's commitment on the 
mine issue and finding dollars to pay for it someplace in a 
PAYGO environment. In looking for offsets, we considered a 
program which looked like it was going to take more than one 
year or two years even to get signups in. We felt that this 
could be done without harming the integrity of the program.
    Mr. Nethercutt. Well, I hope that's the case. I think we're 
going to have a good debate on it, not only in the Ag 
Committee, but in this committee. We will try to figure out 
whether that's very smart policy or not, and my inclination, 
for what it's worth, is it is not, but there may be some other 
places that can be used to pay for that commitment that the 
President made.

              interior columbia basin ecosystem management

    Let me turn, if I may, to the Interior Columbia Basin 
Ecosystem Management Project. I don't know how engaged you've 
been in this, Mr. Secretary. The Forest Service has been 
involved along with BLM and a lot of Interior agencies. I have 
concerns about the implementation of the project. It affects 
one-quarter of the national forest land in our country. I don't 
know if you're aware, but the former co-manager of the Columbia 
Basin Project, Steve Mealey, who's now the Idaho Fish and Game 
Director, recently sent a letter to the governor of Idaho in 
which he recommended that the governor ``not support a 
preferred alternative or release of a draft EIS until the major 
concerns with the project can be resolved.''
    Are you also aware that five Forest Service superintendents 
prepared feasibility studies earlythis year of what the cost 
would be of implementing the two most likely alternatives? I looked at 
these feasibility studies, and they're very interesting. I don't know 
if the subcommittee is as deeply involved in this as I am, but it 
affects us from an appropriations standpoint. The superintendent of the 
Colville National Forest in my own district estimated that in order to 
complete all of the analysis work mandated by the EIS, he would need to 
hire an additional 43 staff people, for a total first-year budget 
increase of $4.7 million, about a 50 percent increase in funding. 
Without this funding increase, the timber sale program on the Colville 
would drop 60 million board feet to zero in the first year of 
implementation. In the second year, under alternative four, they would 
have a target of 4.4 million board feet, and under alternative six they 
would still be at zero.
    I know you've spoken this morning in your testimony about a 
sustainable flow out of the forest, and certainly I support 
that. In the third year, it's the same thing. The 
superintendent summarizes that the program impacts, even with 
additional staff and budget, are extreme and will result in 
unacceptable impacts to local communities and users. Now I 
acknowledge to you that he's retiring, but, on the other hand, 
he's made this judgment.
    The superintendents of other national forests that are 
affected by the study have concerns about the requirements that 
they'll have to implement that will be difficult, and they're 
worried about declining budgets and implementation and reduced 
staffing. The Deschutes National Forest found that 
implementation would require an additional $789,000 per year 
for one alternative and over a million per year in additional 
funds to implement alternative six. And I want to be fair to 
you because I know this is a multi-agency subject and multi-
agencies in the Department of Interior are involved in it.
    My question really is this: it seems to me that there has 
not been adequate thought to implementation of this ecosystem 
study. And it seems also to me that the Forest Service, is 
going to be spending its time on more studies and 
implementation rather than forest management for the next few 
years. And that bothers me from the standpoint of your 
commitment, your expression of support for a sustainable flow 
of timber.
    To the extent that you've gotten involved in this one 
directly and looked at the study implications, I'd be 
interested to know whether you agree that this is an awful lot 
of study rather than management, and that there is going to be 
not an unacceptable level of sustainable flow, given your 
commitment to sustainable flow.
    Secretary Glickman. Well, let me just say that--I'm going 
to ask Jim Lyons to respond. This is one of those issues where 
I wish I had more knowledge.
    Mr. Nethercutt. I understand.
    Secretary Glickman. I was in Boise and I was briefed by a 
lot of the folks involved with this. I think underlying it all 
is the idea that you have a much better, more comprehensive, 
and realistic way of dealing with planning on a broad scale 
than if you have a bunch of separate forest plans. And so not 
only does it make more regional sense, but also it will save 
money, compared with having to have a forest plan for each 
forest that is out there. And I think that is one of the ideas 
behind this thing.
    I would also tell you that I am aware of the concerns about 
the counties and I know that we have met in the last week with 
them to try to ensure that we get their concerns clarified, 
whether they are procedural or whether they are substantive, 
and to make sure that they have the appropriate input into this 
process.
    But I would ask Jim to comment on the larger question that 
you talk about which is, in doing this, will it somehow disturb 
some of the more fundamental functions of the Forest Service 
and whether we have the resources to even get it done.

                       planning information needs

    Mr. Lyons. Mr. Nethercutt, I think what's important to 
recognize is that one of the goals that we have, in addition to 
the goal that the Secretary highlighted--attempting to do 
planning in a much more efficient way and in that way reduce 
costs--is to also develop a plan that will provide us a 
database to do a much more efficient job in implementing that 
plan over time.
    One of the things that we face that I know has been a cause 
for concern for this subcommittee and for the authorizing 
committee is continuing concern over legal challenges to 
management actions. And I think, as is evidenced by the 
Northwest Forest Plan where we have had no successful legal 
challenges, we feel that developing that kind of database 
through a collaborative process, working with other agencies in 
USDA, as well as the Departments of the Interior and Commerce, 
allows us to do a better job of integrating management. 
Ultimately, we will make more efficient use of funds, and, 
hopefully, reduce the litigation risk that is associated with 
the challenges that are inevitable.
    The laws provide the public with an opportunity to have 
some say in how their public lands are used. That is the way it 
should be. I think we as professionals have to ensure that we 
are making the best professional judgments we can, and to the 
best of our ability. I think this integrated approach allows us 
a better chance of ensuring that the best scientific 
information is being applied in a way----

                          funding requirements

    Secretary Glickman. But I think his question is also 
related to, do we have the resources to do it, can it be done 
in an intelligent, balanced way? I mean, I understand----
    Mr. Lyons. And I agree.
    Secretary Glickman. I do not mean to be the interlocutor in 
this effort, but----
    Mr. Nethercutt. Thank you. That is my question and it was 
not answered. Is there money to implement whatever you're 
trying to do in connection with these alternatives for 1998?
    Mr. Lyons. Well, let me say, first of all, we must find out 
what it is we are going to implement. If no plan or alternative 
has been decided, frankly, I am shocked to hear that forest 
supervisors are making judgments about implementation costs.
    Mr. Nethercutt. They've been asked to.
    Mr. Lyons. Well----
    Mr. Nethercutt. They've been asked to. That's their job.
    Mr. Lyons. But there is a range of alternatives that we are 
looking at and so it is hard to make those judgments.
    Mr. Nethercutt. They looked at several alternatives and 
costed them all out. So----
    Mr. Lyons. But I think what is lost in this dialog is that 
there are savings that will be associated by the closer working 
relationship between agencies. I think one of thethings that is 
lost in this process is that we cannot do business the way we normally 
did business.
    For example, in the Colville National Forest, as would have 
been the case from the former Forest Supervisor's perspective, 
we cannot simply go out and lay timber sales out by ourselves, 
prepare the documentation, make the investments in sales, then 
turn those over to Fish and Wildlife and, in essence, say, 
``What do you think?'' and have them come back and say, ``No, 
that's inadequate. Go back and do the analysis again.''
    The difference is we are working together much more closely 
and I think it really has helped us. In fact, I hate to bring 
up the salvage rider, but maybe the only silver lining in that 
effort, in terms of what we learned in the process, was that we 
found that the working relationships between the agencies 
actually streamlined the process and saved us money.
    In fact, the interagency review of that whole salvage 
program indicated--and this is actually described in a report 
that was generated--that the involvement of Fish and Wildlife 
and the National Marine and Fishery Service in sale planning 
added to, rather than duplicated, the efforts of BLM and the 
Forest Service. This indicates that whether or not the process 
functions well depends on the commitment of all the agencies 
involved. That is where the savings will be.
    And I would share with you, and this is no slight of the 
former Forest Supervisor, who is actually someone I knew for a 
long period of time, but we are trying to change mindset and 
focus, so that we work in a much more collaborative way. And I 
think estimates of the savings that come of that are not 
factored into our own people's thinking right now because it is 
a new way of doing business.
    Mr. Nethercutt. Is there money in the 1998 budget to 
implement the study?
    Mr. Lyons. Well, we will only have the draft out in April, 
so we will probably not have the final in place until the fall. 
So really, it is in part reflected in here, in terms of our 
normal operating procedures, but we do not know if we are going 
to need additional resources until we get that final 
alternative selected.
    Mr. Nethercutt. So I take it your answer is no. There is no 
money?
    Mr. Lyons. We do not know what we are going to need. Yes, 
the answer is no.
    Mr. Nethercutt. Thank you.
    Mr. Regula. Mr. Yates.

                              timber theft

    Mr. Yates. Thank you. It's a pleasure to see you again, Mr. 
Secretary. I want to congratulate you upon your administration 
of the Department of Agriculture. I haven't seen any criticisms 
levied against you.
    Secretary Glickman. You have not been looking the same 
places that I read everyday. [Laughter.]
    Mr. Yates. Well, perhaps that is true. But, at any rate, I 
think you're doing a superb job.
    Mr. Regula. Being former Members gives them unique 
qualities.
    Mr. Yates. Oh, yes.
    Mr. Taylor. And you haven't gotten through the whole thing 
yet. [Laughter.]
    Mr. Yates. And he was well-trained. He was well-trained. 
[Laughter.]
    I want to ask a few questions. Some years ago, we were 
importuned by, I think it was a district attorney out in the 
Northwest, who had a great number of fraud cases that arose 
from improper payments for trees because of use of the scaling 
process rather than tree measurement. And so, in line with that 
district attorney's recommendation, our committee urged you to 
go to the tree measurement, rather than the scaling process. 
You didn't want to do it then and, apparently, now that we've 
changed administrations and the committee, you don't want to do 
it now because you think it costs too much.
    Are you avoiding fraud? Do you know whether you're avoiding 
fraud? Do you still have the same number of cases out there? 
Tree measurement obviously will avoid the fraud. And the 
scaling process is subject to it because, as I understand, what 
happens is you let the contractor pick the person who does the 
measuring. And it seems to me that you're letting the fox into 
the chicken coop.
    Secretary Glickman. My knowledge of tree-scaling is pretty 
limited.
    Mr. Yates. ``Timber theft'' is the phrase.
    Secretary Glickman. But the Chief may want to comment on 
this as well.
    Mr. Yates. Which Chief?
    Secretary Glickman. The new Chief of the Forest Service.
    Mr. Yates. Oh, OK.
    Mr. Regula. He'll be on at 11:15.
    Mr. Yates. OK.
    Mr. Lyons. Mr. Yates, I think timber theft remains a 
concern for the agency and it is one that we are focused on. In 
regard to scaling versus tree measurement, frankly, I am not 
sure why we have not moved more quickly to address some of the 
issues that you have raised, so as to ensure that we reduce 
concerns related to timber theft associated with the different 
approaches to measuring the value of trees.
    I think, to some degree, the changes have been inhibited by 
the rapid changes that are occurring in the Timber Sale Program 
overall. Our product mix is changing; the kinds of trees we 
sell are changing.
    Mr. Yates. Incidentally, what are you selling?
    Mr. Lyons. Well, we are selling more material that is not 
sawtimber, green sawtimber, but it is material that we sell as 
biomass. So as a result, tree measurement would not apply, 
individual tree measurement would not apply, and we would use a 
different method to do so.
    I might yield to Mike Dombeck, who maybe can give you more 
details on his thinking on where we are headed, since this is 
an issue that we have actually discussed in the last few 
months.
    Secretary Glickman. Before Mike speaks, I just might want 
to say that I have talked with our Inspector General about 
this. He has been very involved, along with the U.S. Attorney, 
in the whole issue of timber theft.
    You might be aware of this, but in Fiscal Year 1996 there 
were 120 felony and serious misdemeanor-level timber theft 
cases investigated nationwide. Fifty of these cases have been 
closed with 24 convictions thus far, recovering of fines and 
restitutions, and I believe there were jail sentences in some 
cases.
    In March of last year our Inspector General issued an audit 
of our Timber Theft Program which you should have, and----
    Mr. Yates. I'm not aware of it.
    Secretary Glickman. And the law enforcement people 
investigating timber thefts have implemented those 
recommendations. I do not know if the issue you raised was part 
of those recommendations or not.
    But, again, it kind of relates to the relationship between 
our Inspector General, who is USDA-wide, and then the Forest 
Service which has its own law enforcement people, and the 
relationship between those two basic functions. But it is clear 
that this is a high priority for us. And perhaps the new Chief 
may want to comment on some of these things as well.
    Mr. Yates. Is my impression correct that most of your 
payment is done through the scaling process rather than tree 
measurement?

                         tree measurement sales

    Mr. Dombeck. What I can add to this, Congressman Yates, is 
that, first of all, preventing timber theft is a top priority 
and a real serious concern of mine and of the agency and that 
over time, as you mentioned, the agency has been moving toward 
tree measurement versus scaling.
    But the other point that I think is significant is one that 
Jim raised--the fact that we are selling fewer and fewer 
sawlogs and more of the loads that are leaving, are biomass in 
the form of chips or other material like that, and it is 
actually much lower-value material.
    Mr. Yates. Can you have fraud in connection with the sale 
of bio-chips?
    Mr. Dombeck. Well, I guess--I am assuming you can probably 
have fraud almost anyplace. But from the standpoint of 
accountability, and that is where we are headed, it is 
something that we have to just be increasingly vigilant about.
    Mr. Yates. Well, I would think so. It's my understanding 
that originally when we pressed this issue, the Forest Service 
created a timber theft task force. Your predecessor disbanded 
that timber theft task force. Why, I don't know. Were they not 
doing anything? Or what was the purpose for disbanding it?
    Mr. Lyons. Mr. Yates, part of, I think, Jack's rationale 
for disbanding the task force was the belief that a great deal 
of the work that they had done had been accomplished and now is 
the time to move the investigative capability that they had 
built up into the field--into the law enforcement organization 
that you helped create, the stovepipe structure that we have. 
So really the goal is to get people out there who can do the 
work that can lead to the kind of investigations and 
convictions, hopefully, that the Secretary has highlighted. 
That was the ultimate goal.
    Now, there has been a lot of controversy about that from 
some of the members of the timber sale task force who had 
raised concerns about whether or not their work was completed. 
But rather than having one group in Portland working on these 
issues--Portland and northern California--we thought it was 
extremely important to have this capability in other places. 
And we have actually done training now based on the work that 
this task force had generated. Now others within the law 
enforcement organization are developing the skills to actually 
identify and work on timber theft.
    Mr. Yates. How do you know whether you're being subjected 
to timber theft now? Do you have a police force supervising 
this at all?
    Mr. Lyons. Well, it is one of the law enforcement 
functions.
    Mr. Yates. It is? Well, do you have police at each of your 
timber-weighing installations to supervise it? Or how do you do 
it?
    Mr. Dombeck. Well, we have a full-time law enforcement 
professional who is an expert in this area and manages the 
process. Now, I personally cannot tell you if we have a law 
enforcement officer at every scale or checkpoint. But the fact 
is, our staff is set up to focus on the priority areas, to 
focus what resources we have at the areas where we assume the 
major problems exist.
    Mr. Yates. Well--yes, Dan?

                        inspector general's role

    Secretary Glickman. No, go ahead--I just might say that one 
of the issues that came to my attention actually before Mike 
came onboard relates, again, to the role of our Inspector 
General at USDA. He is our chief law enforcement officer and is 
involved with food stamp fraud and all those kinds of things. 
And our IG has come to us on several occasions saying that 
there needs to be much more coordination between the law 
enforcement functions of the Forest Service and what the IG 
does. That would help the Forest Service law enforcement 
function more effectively.
    There have also been some proposals that the IG should take 
over that function totally. We have not decided yet; these are 
longer-term issues. But I think it is all being done to figure 
out how to make Forest Service law enforcement operate more 
effectively.
    Mr. Yates. I have two pedestrian questions left, Mr. 
Chairman.
    Mr. Regula. Okay. I'm trying to guard his time and I have 
two more members.
    Mr. Yates. Well, I'll ask my questions after the two 
members, then.
    Mr. Regula. Okay. Mr. Taylor?

                            personal regards

    Secretary Glickman. May I just say that I understand that 
Mr. Yates is leaving the Congress and he was a great mentor of 
mine for many years.
    Mr. Yates. Well, that's very kind of you.
    Secretary Glickman. And----
    Mr. Yates. And I'm sure the Congress will get along. 
[Laughter.]
    Mr. Regula. Mr. Taylor?

                   response to forest health problems

    Mr. Taylor. Mr. Glickman, Mr. Lyons, so much to cover and 
so little time. I recall President Lincoln, when he had sorry 
generals in command of the army for so long and the little 
Napoleon was in, he finally sent him a letter and said 
``General, if you're not going to use the army, may I borrow 
it?'' And I feel that way about the area of the Forest Service. 
We have tried patiently to work with--this committee tried to 
work with and do a variety of things to bring about sensible 
management of the forests and forest health, and we have been 
thwarted.
    I have drafted legislation that would remove the Forest 
Service from the Department of Agriculture, and set up a 
commission that would abolish the regional foresters. The Chief 
Forester would head the commission through a limited staff in 
Washington, then direct forest management through the supervisors in 
the district.
    I thought, I'll introduce this bill and see if there is any 
interest. I can't begin to tell you the number of people that 
want to endorse that bill now and sign it, and want to make a 
definite move this time with it. And it's because they don't 
think--it's not just this administration; we're talking about 
the issues here. You talk about sustainable flow of timber, but 
your Department has not shown that it has a clue about the 
deterioration of our infrastructure, which is absolutely 
essential for any sort of management. You haven't included it 
in any study, including the Pacific study. By your own 
admission, you don't have a concept of the deterioration in 
forest health or we wouldn't be dawdling as we've done in this 
talking about more studies and how we can split hairs on this 
situation. I don't think you have a concept about the area of 
overcrowding and the implication that it's having on forest 
health or the spread of disease or insects or fire.
    I don't see that you have any concern about the billions of 
dollars of taxpayers' money that's literally being wasted 
because of dying and deteriorating forests--and not just the 
national taxpayer, but school districts out there in the 
counties we've talked about that depend on these dollars 
because they have had part of their land base eroded when the 
Forest Service took over their lands, which were to be managed 
under the Department of Agriculture in a scientific way. The 
lands were to be harvested. Not set aside in a wilderness, 
which you have set 80 percent of the national forest aside 
already, and getting ready, in pandering to the Sierra Club 
that wants zero cutting in the forest, to take it down to zero 
percent.
    Mr. Yates. And some Members of Congress, may I say?
    Mr. Taylor. And some Members of Congress, misguided though 
they may be, they're doing it openly and honestly, and I 
appreciate it. But your Department was charged to follow the 
mandates of Congress, and two years ago we passed a salvage 
amendment. Mr. Lyons says he hates to bring up the salvage 
rider. It's the first time this administration has started--a 
moment ago when he started this conversation--it's the first 
time this administration has stopped pandering to the 
politically-correct set and did something for forest health and 
we were making some headway in that area.
    The President said in a letter which I have, that he would 
support that legislation after we agreed that it could stop 
December 31. You, Mr. Secretary, sent a letter and said you 
would do the same thing. And yet the record shows that 
throughout that period of salvage we stopped it, time and 
again, and we set sales aside time and again.
    And, in fact, Mr. Lyons--and I assume, Mr. Secretary, 
yourself--and the administration, terminated it before the 
legislation terminated it, terminated it in early December, 
rather than letting it run to its end until December 31, which 
I think is falsifying statements to this committee, where you 
said you would be cooperative, and in fact went directly 
against the will of Congress.
    Now, that's what has gotten us all so frustrated about 
what's happening out there. I don't know whether there is this 
breach--and I know, Secretary Glickman, you are not a forester. 
You're not out in that area. You have other areas of 
agriculture that you have to be aware of. But I can tell you, 
two minutes out in the field talking with staff that would be 
willing to talk with anonymity would clearly tell you what's 
happening. You could talk with forest scientists.
    In fact, Mr. Secretary, a year ago I asked a group of 
eleven distinguished silviculturists from around the country to 
come together and put together a study on forest health. They 
come from our leading universities in the area of silviculture. 
They have completed it. They will report to a joint committee 
on April 9. They have said they are not there to say, ``You 
ought to cut this tree, you ought not to do this, you ought to 
do that.'' They're trying to assess what the forest health 
really is.
    And it's hard to remind Mr. Yates, a good friend and a man 
I greatly respect, of the fact that the loss of species we've 
had in this country, and the ones that are the most threatened 
now are not threatened because of over-management, over-
harvest, or over-cutting. They're threatened because of the 
mismanagement and the lack of management because we did not 
control disease, insects, and fires. We lose tens of millions 
of acres of forests from these factors, but very little in 
other areas.
    Thank you, Mr. Chairman.
    Mr. Yates. Will the gentleman yield for a question? I 
wanted to ask the Secretary, with the gentleman's permission, 
as I understand the salvage rider to which the gentleman 
referred, part of the criticism of it is the fact that too many 
greens were being cut in connection with it.
    Mr. Taylor. While we were arguing over whether or not two 
green trees might have been cut, we lost tens of millions of 
trees to fire alone, not counting insects and disease. So if 
you're really concerned about the health of individual trees or 
as a group, the salvage rider was saving far more than it was 
accused of ever cutting.
    Thank you, Mr. Chairman.
    Mr. Regula. Mr. Wamp?
    Secretary Glickman. Could I respond, if possible?
    Mr. Regula. Yes, sure.

                    administration of salvage rider

    Secretary Glickman. First of all, I know that Mr. Taylor 
has got more knowledge in this area than most Members of 
Congress and certainly more than I do. So I accept that. I do 
want to make it clear for the record that there were a lot of 
board feet sold under the salvage rider. And, yes, a lot of 
those sales were controversial and there were a lot of 
philosophical differences on some of them. Perhaps judgment was 
exercised, and I am not saying in 100 percent of the cases it 
was necessarily the best judgement. But I think the record 
should reflect that in the report we sent to you there was a 
total of 4.6 billion board feet offered, advertised under the 
salvage rider and of that, 3.825 billion board feet was sold. 
The volume of salvage harvested was 2.773 billion board feet. 
The report you have got indicates more information about it.
    So there were sales approved. And as you know, Mr. Taylor, 
many of those sales were stopped and slowed down by lawsuits 
and by other factors beyond our control.
    Now, the second thing I would say to you is that one of the 
reasons I am here, Mr. Regula asked me to come today. I believe 
I am the first Secretary of Agriculture in maybe two 
generations----
    Mr. Yates. That's true.
    Secretary Glickman [continuing]. To ever come down here. I 
am usually before Mr. Nethercutt's subcommittee. I am here 
because I believe that the Forest Service is a critical part of the 
Department of Agriculture. It is the largest component in terms of 
personnel. It has 35 percent of our people. We are the largest land 
management agency in government. And it is important that I be here to 
try to work through these problems.
    Third, I do believe that a lot of these things are 
questions of public policy. The Congress seventy years ago may 
have passed something and intended something, but during the 
intervening period of time the Congress is the one that has 
designated most of the wilderness in this country. It has to. I 
cannot do that on my own. I voted for a lot of that when I was 
in the Congress myself. It may have been a good idea or a bad 
idea, but that is a public policy determination. There is a lot 
of public policy debate on what ought to be the functions and 
roles of our Forest Service. That is why we have the fights. 
People have strong differences on both sides of the issue.
    And so I would like to see this issue become a little less 
polarized. I want to make sure that people know that we have a 
new Chief, that these issues, professional issues, decisions 
are being made professionally according to good, scientific 
information. And, yes, I have a role in implementing policy 
because that is part of administration. You have a role of 
appropriating based on policy, but I think that we have to go 
forward from here and try to manage this great institution as 
well as we possibly can.
    Mr. Yates. Good statement.
    Mr. Regula. One reason I invited you was to get you engaged 
with the Forest Service and I think we've achieved that 
mission. [Laughter.]
    Mr. Regula. Mr. Wamp?

                         county officer closure

    Mr. Wamp. Very briefly, Mr. Secretary, as a new member of 
the Appropriations Committee, I want to thank you for coming 
today and tell you that I look forward to working with you in 
the coming months and years.
    Just one parochial concern that I would raise, that I would 
ask you to be sensitive to. Both at the authorizing committee, 
Mr. Nethercutt's committee--particularly, Congressman Bryant 
from Tennessee will be approaching you about this, and has been 
approaching you about the closing of the FSA offices. The State 
of Tennessee is a strong farm State, and while a lot of that 
farming takes place in other congressional districts across the 
State other than mine, I'm the only Tennessean on this 
particular committee and would like to point out that we have a 
disproportionate number of closings in our State based on our 
farms, based on our revenues, our activities in the entire 
agriculture industry.
    Particularly, there appears to be an effort to close 
certain offices in certain districts in certain counties. As a 
matter of fact, the first 23 offices out of 95 that closed in 
the State of Tennessee, 17 of those office closings happened to 
take place, 17 out of 23, in the three districts of the new 
House Republican freshmen of the class of 1994. Now, that might 
just been a happenstance. I won't make any allegations. I'll 
just say, let's try to make this as fair as possible. There is 
science behind the closings. Particularly, the plan right now 
that closes two-thirds of the offices in the State of Tennessee 
is very disproportionate to other farm States. I can assure you 
of that. I assume it's disproportionate to all the farm States, 
based on the numbers, and would remind you that the vice-
president happens to be from our home State. [Laughter.]
    And I would ask you to please consider looking at Tennessee 
in a favorable light when you close these FSA offices because 
some of the offices are requiring farmers to drive sixty miles 
one way to go to the new office. And there's supposed to be a 
25-mile rule, I think, imposed in the closing of these offices.
    But, I'll tell you, in my district it is a real burden for 
small, family farmers to travel that far to get good 
information. So please try to go slow, methodical, and keep 
Tennessee in mind as you approach the closing of these offices 
in your realignment.
    Secretary Glickman. Mr. Wamp, first of all, let me tell you 
I have talked with Congressman Bryant personally about this. I 
am going to hand you a letter I sent to Bob Smith, chairman of 
the House Agriculture Committee, yesterday. The letter in part 
reads as follows: ``I have not approved any plan to close 
additional offices beyond those closures and consolidations 
already approved in the adjusted Department's 1994 plan''--
which are well known out there.
    You are talking about hypothetical and speculative plans 
that have been developed in connection with future budget 
decisions. And I want to make it clear that, given the pressure 
on the discretionary functions of the budget, it is likely we 
are going to have to close considerable additional offices in 
the future, but that is going to be based on collaboration with 
the Congress and based upon what the needs are to serve our 
farmers and ranchers out there.
    Yes, there has been some hypothetical discussion about 
office closings. But I have said, no, none will be closed right 
now. We are going to have to work with you to see what the 
budget numbers are, and I think that has satisfied Congressman 
Bryant and others, at least for the time being. But I will say 
we are going to have to work together because, given the 
budgets that we have, there is no way we can keep the present 
number of offices open, unless we get some additional dollars 
for them.
    Mr. Wamp. I understand though, too, Mr. Secretary, that 
there will be further hearings before the Agriculture 
Committee----
    Secretary Glickman. That's correct.
    Mr. Wamp [continuing]. On these office closings and at that 
time we'll be able to flesh out exactly what the constraints 
are and what your intentions are.
    And if I've got a minute, I like to yield to Mr. Taylor.

           general accounting office report on timber salvage

    Mr. Taylor. Mr. Chairman, I just wanted to read this one 
statement in the material that the Secretary has talked about. 
``For example, on July 2, 1996 the Secretary of Agriculture 
placed more restrictions on the criterion to classify sales as 
salvage sales under the rider, which resulted in the delay of 
224 sales containing 724 million board feet that the Forest 
Service had planned to offer for sale.'' Now, that doesn't 
sound like the letter he sent me that he would work to maximize 
to meet the goal.
    ``In addition, on December 13 the Department of Agriculture 
Under Secretary, and so forth, told the Forest Service not to 
advertise any salvage sales after December 13 and that resulted 
in the loss of 27 additional sales and almost 30 million board 
feet,'' which is direct in violation of the law as I see it and 
breaking your word to cooperate by stopping it two, three weeks early.
    Secretary Glickman. If I just may make a couple of points--
on the first issue, I issued that directive to make sure that 
the sales were emergency sales, which is what the law intended, 
and not a use of salvage sales as a way to get green sales out. 
And, as I said, we offered 4.6 billion board feet under the 
salvage rider. We sold 3.8 billion board feet under the salvage 
rider. So, in my judgment, we honored the commitment we made to 
Congress.
    Mr. Regula. And we have a couple questions for the record 
on that, Mr. Taylor.
    Mr. Yates. I just want to say, Mr. Chairman----
    Mr. Regula. Mr. Yates?

                             urban forestry

    Mr. Yates. I don't want to hold the Secretary unduly. 
First, I failed to thank you for the gracious statement you 
made about our relationship while you were a Member of 
Congress. I appreciate that very much. And you were an 
outstanding Member of the Congress, in my opinion, just as you 
are an outstanding Secretary in the President's Cabinet. I 
think you're outstanding in all your activities.
    I want to follow up on Mr. Wamp. The Midwestern and the 
Northeastern States have nearly half America's population and 
over half of the nation's urban resources. There is such a 
thing as urban forestry. And Mr. Taylor and I are delighted 
that there is such a thing as urban forestry because it's a 
question of trees flourishing in our cities and trying to live 
in spite of the smog that we create.
    And the question I have in that respect is, Why are you 
trying to move $1.4 million in urban forestry funding away from 
the Northeast and Midwest? I indicated I had a pedestrian 
question, Mr. Chairman, but it's very important to the people 
of Chicago.
    Mr. Lyons. Mr. Yates, first of all, I want to say I 
appreciated your leadership in the whole urban forestry arena 
it has been significant and I think helped us establish the 
leadership that we have. We are going to do our best not to 
move money out of the Chicago environment because, not only has 
it been important from the standpoint of the citizens of 
Chicago, but it serves as a laboratory for a lot of the urban 
work that we have done. Chicago ideas have expanded to other 
regions of the country. So we are looking for ways to avoid 
having to do that. Of course, that is contingent on the 
continued support of this subcommittee, but we have been 
pleased and are thankful for the support that we have received 
thus far.
    Mr. Regula. You have one other question----
    Mr. Lyons. I just want to mention to you quickly--I know an 
issue that you have been concerned about and that is the 
Director of the North Central Station. And I want you to know 
that we approved the advertisment for that position today, to 
fill that position.
    Mr. Yates. Good for you. I appreciate that.

                            holocaust museum

    I have one other question. You and I have spoken about the 
possibility of space in the Forest Service area of the 
Department of Agriculture building for the Holocaust Museum, 
which is becoming very crowded. I got a letter back, I think 
from Jim Lyons----
    Secretary Glickman. Probably Mike Dombeck.
    Mr. Yates. Oh, maybe, yes. Sorry. From Mike Dombeck saying 
no way. Even though he offered to talk to me about it, there is 
no way they can move any of his Forest Service people. And I 
wondered why they can't move some out of there and into other 
parts of the Forest Service area in order to, I think, make 
available 13,000 square feet.
    Secretary Glickman. Well, first, let me say that we, Mike 
and I, have met with the----
    Mr. Yates. Mr. Lerman.
    Secretary Glickman [continuing]. Mr. Lerman. And the fact 
of the matter is that I am convinced that Mike does not have 
any space. In fact, because of downsizing they are moving 
people from other offices in and around the Washington area 
into that building----
    Mr. Yates. Oh, I see.
    Secretary Glickman. However, what we have said, is that as 
that reorganization continues on, it may be that actually we 
need more space around that building, not less. And the 
Holocaust Museum may need more space, and so we have suggested 
that we meet with GSA to see if there is some way to look at 
where we could find additional space in and around the area.
    Mr. Regula. I think the Ronald Reagan Building has some 
extra space. [Laughter.]
    Secretary Glickman. Well, it is not very far away, either. 
That is that new big building--the Federal Triangle building.
    But I would have to say that they are extremely crowded. I 
am convinced that Mr. Dombeck is correct.
    Mr. Yates. Thank you. All right, I'll convey that 
information.

                      management of appropriations

    Mr. Regula. Mr. Secretary, I know you need to go. A couple 
quick things: we've been a little bit unhappy with 
reprogramming. The Department has been a little bit inclined to 
ignore us, and I hope that that policy will change. For 
example, they purchased Mount Jumbo as an emergency purchase 
after a reprogramming had been turned down by the committee and 
I think it's very important that any readjustment of numbers 
should be done with the reprogramming. So I want to urge that 
policy on you.
    Secondly, there's been some concern, and I know you are 
aware of this, about the Department not being fiscally well-
managed. And I know that you're making an effort to change that 
policy and we want to help you in any way possible. We think 
it's important that every agency of government be well managed, 
and that's one of the missions of this subcommittee, is to 
ensure that that happens.
    And, thirdly, I hope that we can keep communicating. I very 
much appreciate your coming this morning. I think the Forest 
Service is a very vital part of the Department of Agriculture. 
I think it's going to grow in importance to the American people 
because it's one of the great recreation resources of this 
Nation, as well as a fiber resource. And it also has an 
enormous impact on water supply; the quality of water has an 
impact on the soil conservation because the forests are one of 
the great retention systems in our country in terms of water. 
And with respect to wildlife; we have the bison problem and 
you're involved in that.

                       yellowstone bison problem

    Secretary Glickman. I am actually going to Yellowstone on 
Sunday, because, you know, our Department is involved in 
protecting the health and safety of livestock, as well as the 
Forest Service being a neighbor of the Park there. So I want to 
get a bird's-eye view of what is going on.
    Mr. Regula. Well, if there's something we can do to be 
helpful, when you get back, let us know because it is a serious problem 
in Montana. It's a problem for the ranchers. It's a disease problem and 
how to address it--and then I think in Yellowstone you'll probably see 
firsthand that there's a diminution of the grazing capability because, 
in part, of oversupply of animals. Historic forces aren't at work, 
hunting, and so on.
    So I look forward to working closely with you in the future 
in managing a valuable, valuable resource. We thank you for 
coming.

                     importance of forestry issues

    Secretary Glickman. Thank you for inviting me and, again, 
it is my goal--recognizing the conflicts involved, which Mr. 
Taylor and others talked about here--it is my goal as Secretary 
to give the same level of attention to Forest Service issues as 
I give to other issues. And I am not telling you that it has 
not been done in the past, but it will be done in the future.
    Mr. Regula. And we thank you for that.
    Mr. Yates. Good job, Dan. Good job today.
    Mr. Taylor. Would you want to be a member of the 
commission, the independent commission that may be formed----
[Laughter.]
    Secretary Glickman. I will tell you what, Mr. Taylor, I do 
not know if I have enough brain power to be on that commission. 
[Laughter.]
    Mr. Regula. Again, thank you for coming.
    [The following questions and answers were submitted for the 
record:]


[Pages 35 - 70--The official Committee record contains additional material here.]


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


                     U.S. Department of Agriculture

                          U.S. Forest Service


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


                                          Thursday, March 20, 1997.

                     U.S. DEPARTMENT OF AGRICULTURE

                          U.S. FOREST SERVICE

                               WITNESSES

MIKE DOMBECK, CHIEF, FOREST SERVICE
DAVE UNGER, ASSOCIATE CHIEF
JANICE McDOUGLE, ACTING DEPUTY CHIEF, NATIONAL FOREST SYSTEM
BARBARA WEBER, ACTING DEPUTY CHIEF, RESEARCH
JOAN COMANOR, DEPUTY CHIEF, STATE AND PRIVATE FORESTRY
CLYDE THOMPSON, ACTING DEPUTY CHIEF, ADMINISTRATION
RON STEWART, ACTING DEPUTY CHIEF, PROGRAMS AND LEGISLATION
STEVEN SATTERFIELD, DIRECTOR, PROGRAM DEVELOPMENT AND BUDGET STAFF


[Pages 74 - 75--The official Committee record contains additional material here.]


    Mr. Regula [presiding]. Thank you for coming, and we've had 
an interesting discussion this far. The statement of each of 
you will be made a part of the record, and, Mr. Dombeck, if 
you'll summarize, we'll just move ahead.

                            Opening Remarks

    Mr. Dombeck. Well, thank you, Mr. Chairman, Mr. Yates, and 
committee members. This is my first time appearing before this 
subcommittee in this job, and I just want to thank you and the 
members for the very cordial relationship that we had in my 
previous life as Acting Director of the Bureau of Land 
Management. I guess, as you said earlier, my friends probably 
thought I did not have a big enough challenge, so they thought 
they would give me a bigger challenge with the Forest Service.
    But what I want to say is--and I think Mr. Taylor made the 
point--that we are an organization full of the best natural 
resource managers in the world from the standpoint of 
silviculturists to hydrologists, to engineers, to biologists, 
to interpreters and wildland firefighters. I think I am very, 
very proud--in fact, humble--to be Chief of the organization of 
so many people that know so much more than I do about their 
various specialties. We as a nation I think need to be proud of 
that.
    But I also recognize the ongoing debate that we have over 
natural resource management in this country and the future of 
the National Forests and Grasslands, and in fact all public 
lands. I think the fact is that the debate is healthy, and as 
our society gets more complex, the way to move forward will be to 
embrace people and to educate more. In fact, I have got to say that, of 
all of the people that I have talked to in the, say, about three months 
or so since I came into the job, what I continually hear is three 
themes: working with people, knowledge, and of course the land. That is 
what it is all about.
    And one of the themes that you will hear from me time and 
time again is ``collaborative stewardship'' and the need to 
work with people. The fact is that we are not here to be the 
dictators of what will happen on the land. We are here to be 
the facilitators, the educators, the coordinators, the 
professional experts, the individuals that come to the table 
with the expertise to help not only this committee, but the 
American people, the Congress, and the administration make 
decisions on how we will move forward with public land 
management.
    And I have got to say I know there is a debate out there. I 
would hope that we can spend as much time as we can talking 
about the positives and our capability to move the ball 
forward, knowing that a lot of that debate is going to be there 
just because of the polarization that we have in society.
    And I just want to mention some of the successes that we 
have had in forest management in this country. In Forest 
Service Research, on the Wayne National Forest, we are working 
with Meed Paper Corporation to better understand how mixed 
forest communities in southern Ohio have responded to 
prescribed burning. This knowledge is not only benefitting the 
Meed Paper Corporation to make better business decisions, it is 
also benefitting the Forest Service to make better land 
management decisions.
    In North Carolina, in fact, Mr. Taylor, I have been to the 
Cradle of Forestry in America. I am very proud that that 
project is being completed because I think part of what we need 
to do in forestry and all land management is education, and 
building a support base so we can move forward in a 
collaborative, cooperative manner. It is, I think, one of the 
key challenges that I have; I recognize that challenge and want 
to work with you to do that.
    I was very proud of the fact that the Forest Service was 
maybe the only agency to ever get an Olympic Gold Medal for the 
cooperation of the Cherokee National Forest and the Olympic 
Whitewater Forest, and I hope that I am in this job long enough 
to enjoy it--since I like to get out as much as I can and see 
that.
    Of course, in northern Illinois we have the Midewin 
National Tallgrass Prairie, the newest unit in the National 
Forest System that I think is highly valued there. Much work 
going on in Illinois concerning rehabilitation of wetlands and 
working with the Natural Resource Conservation Service and 
American Land Conservancy. I think in every State there are 
amazing things going on that I certainly am proud of.
    And I want to close by saying that this year the 
President's budget is focused on three things: to restore and 
protect ecosystems; to provide multiple benefits within the 
capabilities of ecosystems; and to ensure the organizational 
effectiveness of the agency by continuing to move forward, to 
streamline, and to become more efficient.
    I would be happy to answer any questions. I have the 
experts with me, realizing that I am not the ultimate expert. 
Dave Unger is the Associate Chief of the Forest Service. Steve 
Satterfield knows all the numbers, and the Deputy Chiefs for 
State and Private Forestry, Research, and the other National 
Forest System are also in the room to assist, to provide you 
with the best information that we can here this year.
    [The prepared statement of Mike Dombeck follows:]


[Pages 78 - 82--The official Committee record contains additional material here.]


                             forest health

    Mr. Regula. Well, I have a number of questions for the 
record. I might ask, in general, what is the overall status of 
forest health, and what do you prospectively contemplate doing 
to ensure that it's even better in the future?
    Mr. Dombeck. I spent last week traveling in northern 
California and Oregon looking at specific forest health issues 
with our field managers. What I have got to say is we have a 
tremendous job on our hands. But our ability to move forward is 
not hampered by lack of technical knowledge.
    I also want to say that we need to continue to invest in 
science and technology because that is the foundation as we 
move forward. We are really sort of in a social debate. The 
people on the Deschutes National Forest and the resource 
managers there indicated that they can move forward as long as 
the forests look like forests when they are done. And I notice 
that every gas station in town, and every place, has sort of 
got the scenery in the background. I think in any part of the 
country those qualities are appreciated. I grew up around the 
National Forests in northern Wisconsin and worked in the woods 
as a guide. The people that I grew up with, friends and 
relatives, made a living in that country. And it seems like, 
Mr. Yates, I know somebody from every suburb of your 
metropolitan area that came on vacation there, but----
    Mr. Yates. I want to know whether you were successful in 
guiding them to muskie fishing. [Laughter.]
    Mr. Dombeck. As a matter of fact, yes.
    Mr. Yates. You were?
    Mr. Dombeck. Yes.
    Mr. Yates. You've got muskies?
    Mr. Dombeck. Yes. And the next time I come----
    Mr. Yates. I went up there looking for muskies and I never 
found them. I don't think you've got any up there. [Laughter.]
    Mr. Dombeck. I will bring pictures the next time I come to 
your office.
    At any rate, I do not want to underestimate the challenges 
that we have from the standpoint of forest health. We recognize 
that we have got to make investments in land and investments in 
watershed. We have got to be as aggressive as we can from the 
standpoint of using every possible tool--from timber sales to 
thinnings, to prescribed fire, to every technology that we 
have. We have stands that might have had 100 stems per acre 
under natural conditions that in many cases now, because of 
wildfire suppression over several decades, might have 2,000 to 
3,000 stems per acre. The encroachment of fir in Ponderosa pine 
stands not only have lower economic value, but the fact is that 
fir are competing with the larger trees for water, for 
nutrients, and the dense crowding allows for bug infestations. As a 
forester and a silviculturist, I think Congressman Taylor knows all of 
the details. Of course, when a fire gets in there, when we have an 
incredibly dry year, it is no different from the disastrous effects of 
a hurricane, an earthquake. It is a tremendous challenge we have, and 
it is real, and we need to get on with it.

                               recreation

    Mr. Regula. Since recreation is such a big part of the 
Forest Service--the last number I heard was triple the visitor 
days of the Park Service--do you feel that you're adequately 
financed to meet security, safety needs of the forest visitor?
    Mr. Dombeck. Well, managing recreation is, in a sense, a 
tremendous opportunity, but it is also a tremendous challenge 
because recreation visits are skyrocketing in the National 
Forest System. As you said, we have more visitors than the 
National Park System.
    The thing about having grown up near a National Forest that 
I think is unique is not only are National Forests in many 
cases a destination vacation location for more people, we are 
also the place where local people come to hunt and fish and 
play and recreate. We do not have to worry about no-trespassing 
signs.
    But from the other standpoint, recreation is like any 
activity on the forest: it needs to be managed to prevent 
damage to resources. People demand services. Our recreation 
program, being able to bolster that in a balanced way, is going 
to be a challenge both, I think, for the committee as well as 
for those of us in the Forest Service.

                           fee implementation

    Mr. Regula. Are you implementing the fees wherever it's 
appropriate?
    Mr. Dombeck. Yes, we have implemented the demonstration fee 
project in, I think, 15 locations. We have another 47 ready to 
go online before the end of the fiscal year. We look forward to 
the success of that program.
    Mr. Regula. Mr. Yates.
    Mr. Yates. I'll pass. I want to hear other questions first.
    Mr. Regula. All right, Mr. Nethercutt.
    Mr. Nethercutt. Thank you, Mr. Chairman.
    Welcome, Mr. Dombeck. I appreciated your coming to my 
office yesterday. We had a nice discussion. I wish you well in 
your new assignment, and it has been a pleasure to have you 
here previously as the Director of BLM. Again, I look forward 
to working with you.

                       east side ecosystem study

    You were in the room when I was talking with Secretary 
Glickman about the East Side Ecosystem study and my concern 
about implementation. My sense is, hearing Mr. Lyons' 
testimony, that there is no money that is requested for 
implementation. That causes me some concern. I look at the 
delays attendant to this study and I do recognize it will 
probably be another year before we get a final EIS. Then we 
would be looking at more time for implementation.
    Based on the East Side Ecosystem validation reviews by the 
various forests, it appears to me that we're not going to have 
any real harvest coming out of the forest in any great volume. 
In other words, less than there has been in the past. I would 
appreciate having your comment on the implementation. I am not 
trying to argue with the study itself here, but I'm trying to 
get some really clear sense of whether you all are thinking 
about the implementation phase. It is nice to study and get a 
lot of science, but if it's going to take two years to 
implement an alternative, and who knows where the money's going 
to come from, we're going to have some very serious problems on 
the ground for people who make their living on the forest. 
Could you comment for the record, please?
    Mr. Dombeck. Yes. First of all, let me say that in my job I 
am fully committed to multiple use. I think we need to 
recognize the importance of silviculture, watershed management, 
wildlife management, recreation management, as we move forward. 
What we have is sort of building on some of the previous dialog 
on this issue. We have an interaction of social values we are 
dealing with. The interests of more and more local people are 
involved in everything that we do.
    I was a little kid at the very, very tail-end of sort of 
the lumberjack era in northern Wisconsin. At that time the 
demographics of those communities were far, far different than 
they are today. In fact, I have got to tell you that I lived on 
a lake that had muskies in it, and grew up on that lake in a 
house with a picture window that faced the road.
    Mr. Yates. It wasn't Lake Minakwa, was it?
    Mr. Dombeck. No, it was not, no. [Laughter.]
    It was one of the many moose lakes.
    But the fact is, about 1965 to 1970 the values began to 
change: the picture windows now face the lake. We have experts 
and people in various communities--from the Bend, Oregons to 
the Aspens to the Tellurides, to those kinds of communities 
that are very diverse. Somehow, as we get through this debate, 
we have got to be as inclusive as possible to build the support 
we need to move forward because I am one that believes that 
natural resource management is good stuff. It is about healthy 
forests and hunting and fishing. I am perplexed by the level of 
debate associated with the way I spend my time and my staff 
spends time. We need to move forward as quickly as we can. It 
needs to be based on science.
    I see us in a transition now: rather than individual, 
isolated timber sales that we would offer, society is now 
demanding that we look at things in the bigger picture. People 
are now wondering about the spatial and temporal effects of 
what we do as we see shots of the globe from 30 years ago. I 
think the amount of litigation that we have been faced with, 
and so on, is all attendant to this now.
    To your specific question--``Are we going to sell more 
timber or less?''--I have not looked in detail at all the 
preferred alternatives. What I can say is, I think that will 
largely be dictated by social as well as the technical things. 
The course that I intend to steer in this agency while I am 
here is that what we do has got to be based on science, using 
the best techniques, and what I am paid to do is work within 
and implement the laws that we have.
    Mr. Nethercutt. Well, let me just follow up and just say to 
you: I hear what you're saying and I understand that, but 
implementation is a very important part of the process, 
judgments about how the forests are used for the multiple uses 
that you've identified, and I support those multiple uses, but 
if there's no money to implement the science, then you're going 
to have a problem.
    Mr. Dombeck. That would be a problem.
    Mr. Nethercutt. And if you spend all your time on science 
and no money on management and implementation, or try to find 
some money somewhere else, you're going to have problems.

                                 roads

    The President's budget is knocking $12 million out of the 
Forest Service road program. Now how are you going to get into 
the forests to manage them, to reduce fuel loads, to thin 
overstocked areas, to do your prescribed burning? The purchaser 
credit road program is eliminated. This is a very important 
program for small timber companies trying to implement the 
programs that you all are scientifically studying and coming to 
some judgments about.
    I'm very concerned about the reality of life in terms of 
doing that which you want to do. It sounds very nice, but there 
seems to be no planning. I've asked every single agency that's 
affected by this East Side study, ``What have you got in the 
way of implementation money?''
    They have responded, ``What? Implementation? Well, we'll 
have to figure that one out.''
    I think we're headed down the road, with no pun intended, 
to some very serious problems, and I just say that to you 
advisedly with the hope that we can work with you. I look for 
the answer to the question that given your goals and desires to 
implement a multi-use concept, Why are you cutting back roads 
and the timber purchaser road credit program? This doesn't 
square, in my judgment. Now maybe there's some justification 
for it.
    Mr. Dombeck. Well, I certainly will be the first to say 
that we have got some tremendous challenges in front of us as 
we move forward. From the standpoint of your concerns about the 
roads, I am hopeful that--is it purchaser election?----
    Mr. Satterfield. Yes, sir.
    Mr. Dombeck [continuing]. That we will have the capability 
to lessen the impacts on the small operators. We will be 
working with you closely, and the committee here closely, as we 
move forward. We have got to do the high-priority things. We 
have got to manage forests in such a way that we manage them 
before they start to unravel. We have got to increase the time 
horizon available to us to look at issues, so we can go in 
there and deal with them. Because the thing that is perplexing 
to me is the fact that I do not know how much money we spend on 
wildland firefighting in this Nation. It is a lot, nearly a 
billion dollars. Just think, if we could invest portions of 
that into fixing things and managing----
    Mr. Taylor. Timber salvage----
    Mr. Dombeck [continuing]. The appropriate things, rather 
than making that investment when we hit the emergency room.
    Mr. Nethercutt. You and I have talked about the EPA and 
Department of Ecology constraints in the State of Washington 
relative to burning and particulate matter in the air. We're 
going from PM 10 down to PM 2.5, but, yet, you want to have 
prescribed burns. Again, it seems that one hand doesn't know 
what the other hand is doing. I won't make that judgment, but 
all evidence sure seems to look that way. There's a lot of 
science going on and experimentation going on, and I realize 
the need for some of that, but I think there has to be a 
practical application of that science at some point, and sooner 
rather than later.
    Thank you, sir.
    Mr. Regula. Mr. Dicks.

                     timber commitment in northwest

    Mr. Dicks. Well, I want to welcome our new Chief, Mike 
Dombeck, and I appreciate very much the opportunities that I've 
had to talk to you about your program. I think you were here 
when I asked a question of the Secretary and Mr. Lyons about 
meeting the 1 billion board foot commitment, that that 
obviously still is a crucial element, I think to the 
credibility of our effort. As I understand it, the 
administration is committed to that. Is that correct?
    Mr. Dombeck. That is correct. I have asked my staff. I am 
now two-and-a-half months into the job and they tell me, the 
Secretary, and Under Secretary and staff that we are going to 
do it.
    Mr. Dicks. Good. Now, obviously, we had some difficulties 
last year, and we've substituted some sales for 318 sales. How 
is that effort going? As I understand it, a number of these 
sales now--in other words, I know in the swap, the companies 
are now going to go out and look at the substitute timber. How 
is that effort going?
    Mr. Dombeck. Well, let me just ask Steve if he has the 
specific numbers on the sales, and if we do not have that, I 
can get that to you for the record.
    Mr. Dicks. I'm not--I'm just kind of generally speaking 
now, the effort.
    Mr. Satterfield. It is going well, it is my understanding. 
We are making additional dollars available to the Regions to 
carry out the replacement.
    Mr. Dicks. And I understand that we've identified more than 
enough substitute volume so that we don't have to reduce the 
timber plan in order to accomplish this, so we can do both; is 
that correct or is that the intention?
    Mr. Satterfield. Yes, sir.
    Mr. Dombeck. What I see here is that we are working on 
providing about 177 million board feet of replacement, and 
that, I think, is going well.

                       monitoring and assessment

    Mr. Dicks. Yes. I think the only other area of concern--and 
I want to say that the help for the communities, the watershed 
analysis, the watershed restoration work, and I certainly am 
pleased to see your firm effort to create this new fund for 
watershed restoration--all those things have helped 
tremendously the communities that have really been affected in 
Washington, Oregon, and northern California. That piece has 
been very good, and doing the restoration of these ecosystems 
solves something. I also think a positive aspect of this are 
the large number of private companies, and now the State of 
Washington, who are doing multi-species habitat conservation 
plans. I think that, along with option nine, is going to give 
us a real good program in the Northwest where we're going to be 
able to not only do timber harvesting on State and private 
lands, as well as on Federal lands, but we're going to have a 
good conservation program over the longer term. I think we can 
really keep these ecosystems functioning out there, and I think 
that's a high priority.
    But one area I'm worried about--Jack Ward Thomas and Norm 
Johnson, and a number of other people, talked to us several 
years ago about this, and I just want to make this point. They 
said, you know, you can do all this work, but if you don't do 
monitoring and assessment--you know, we just go out there and do all 
these various things and nobody goes out and really says, ``Now did it 
make any difference? Did watershed analysis and watershed restoration 
really lead to something?'' And I would hope that, as the leader of the 
Forest Service, that one thing you will really insist on is making sure 
that on some periodic basis--and I think under the law you have to do 
it anyway--you really do assess whether all this money and all this 
effort has really helped us.
    Give me your view on that.
    Mr. Dombeck. Well, there are two key points that I want to 
make along those lines. The first one is that, in my experience 
as a resource manager for many years, if you look at what's 
needed for a program and know what kind of condition the 
resource is in, the further in advance or the earlier you know 
that, the better. It is like keeping tabs on your blood 
pressure and cholesterol.
    Mr. Dicks. Right.
    Mr. Dombeck. You identify things that need to be done which 
become your management program. Then, you implement the 
program, and lastly, you need to know if it works.
    It has always been easiest for resource managers in any 
area to get dollars for projects, and it is always easier to 
defer the monitoring or the initial inventory----
    Mr. Regula. It's not as glamorous.
    Mr. Dombeck. It is not as glamorous. It seems like in many 
cases we wait to treat the patient. That has been a problem. It 
is something from the standpoint of presenting a program. We 
are hopeful that the efforts coming out of the Columbia Basin 
study, the President's Forest Plan--where we are taking a look 
at a broader scale over time and space based upon the best 
science available--will get us there.
    Now the other plan I want to mention--conceptually, that is 
where I'm going to push us--is: Keep on pushing the research to 
make sure that we are using the best professional expertise 
available. We have got to prove to ourselves, as well as to the 
people we are accountable to, that the money is being utilized 
most efficiently.

                       STATE FORESTERS' CONCERNS

    I have spent a reasonable amount of time with some of the 
State Foresters since I have been in this job. One of the 
things that they were saying is that they want us to invest 
more in monitoring technologies. They want us to work more with 
the State and Private Forestry program because this has 
implications well beyond the National Forest System. It has 
implications for private landowners, these technologies that 
are applied across the board.
    And as you mentioned with the habitat conservation plan, I 
think there is a lot more to the forests of the United States 
than 191 million acres of National Forests. We need to be part 
of that as well.
    Mr. Dicks. Mr. Chairman, please, just give me one last 
question here.
    Mr. Regula. Yes.

                     ADMINISTRATION'S ROADS POLICY

    Mr. Dicks. Let me just say one thing. I think one of the 
areas of attack recently has been on the question of roads, and 
the administration has changed its policy on roads. But I'd 
like to read into the record just a paragraph from a Forest 
Service background paper, for the edification of everyone, and 
then have you comment.

    Roads in the national forests serve many purposes. Each 
year they allow 76 million Americans to visit the 191-million-
acre national forest system and allow them access to over 
121,000 miles of hiking trails, 96 wild and scenic rivers, 120 
national scenic byways, 397 designated wilderness areas, and 
over 18,000 recreational facilities, including campgrounds, 
boat ramps, and picnic areas. Roads provide access for 
recreation, for wildlife and fisheries projects, for fire 
protection, for monitoring water quality, for many other 
aspects of ecosystem management and for timber harvesting. In 
short, roads are a necessary tool for environmental management 
in the national forests.

    And what I worry about, Chief, is that there's been this--
every year we have this assault on roads, and last year a one-
vote majority on the floor of the House. Now give me your 
assessment. I mean, don't we need to be able to maintain this 
system and keep these roads in place, to do the multi-purpose 
benefit of having these things? And as the chairman always 
says, both chairmen, you know, the Forest Service provides a 
lot of recreational opportunities for American people. I just 
worry that this assault on the roads program is really 
unwarranted and misunderstood.
    Mr. Dombeck. From the data that you read, I think the 
numbers are very telling. The fact is that we do a lot of roads 
work, and roads are expensive. In this year's program, we have 
budgeted for about 2,300 miles of road work, and of that, about 
300 miles are new roads. About 2,000 miles of that is for 
maintenance to bring roads up to par with what they should be 
from the standpoint of sedimentation problems, roads 
maintenance, all of these kinds of things.
    I just read this morning--and I cannot remember the exact 
figure--about the number of bridges we have in bad shape that 
we need to fix. It is a problem. I have been here in this town 
about 10 years now, and every year I have heard the roads 
debate. What I hope that we evolve to is to look at this as 
part of a transportation system that provides a variety of 
things. We have tended to tie roads to timber in people's 
minds.
    Mr. Dicks. And the point is that they're used for a lot of 
other things.
    If you want to know what your number was, by the way, I 
have it here in this statement. It says, ``At the beginning of 
Fiscal Year 1996, the Forest Service reported a maintenance 
backlog for roads and bridges totaling $440 million.''
    And I would say one thing that I've learned about the road 
thing is, if you don't maintain these roads and make sure that 
they're secure, then you get the big rainstorms and you have 
the blowout, and the blowout takes dirt, trees, and everything 
right into your rivers. What we found out in our State is where 
we have done the watershed restoration work and fixed the roads 
and repaired them, that doesn't occur. And that has a major 
positive impact on our salmon and steelhead.
    Thank you, Mr. Chairman.

                           SILVICULTURE MYTH

    Mr. Taylor. What is your title, sir? What is your title?
    Mr. Dombeck. Chief of the Forest Service.
    Mr. Taylor. I'd like to talk to you about the 
qualifications, and so forth, of that, but I won't take up the 
time at the moment.
    What I would like to do is remind you that the Marines have 
a saying: ``Lead, follow, or get out of the way.'' Now let me 
tell you what we're coming around to. You say that society 
demands all of this; the public demands all this. What I've 
found in the seven years that I've been in Congress and talking 
to many people in public, there's a very vocal group of people 
who--the three or four same folks show up at every 
demonstration, and that sort of thing. They raise hundreds of 
millions of dollars lying to people here in Washington, which 
is--you know, I can understand their wanting to do that--and 
planting myths, but that is not what is modern silviculture.
    We have dozens of quality universities from Yale all the 
way through our country that teach modern silviculture, that 
fly right in the face of what these organizations are 
preaching, and, frankly, what the U.S. Department of 
Agriculture is doing to our forests today. And, yet, we ignore 
that wealth of information, and we listen to this very small 
minority.

                           SALVAGE SALES MYTH

    Now let's talk about some of the myths. We talked about 
green trees being cut. I mean, I heard that in the salvage 
situation. GAO finished its report, and here's what it said:

    We reviewed 14 salvage sales for which the Forest Service 
had received complaints from environmental organizations that 
the sales contained excessive volumes of green timber, live and 
healthy trees, and, thus, did not comply with the definition of 
salvage sale under the salvage rider. Our analysis of the 
contract files for all 14 salvage sales showed that they 
contained sufficient documentation to support the Forest 
Service conclusions that these sales met the salvage rider's 
definition of salvage sale and the Forest Service guidelines 
for implementing the rider. However, six of the sales were set 
aside anyway because of action by the Secretary.

    A myth, clearly proved a myth, and yet we erred with the 
other side.
    We go in this area that my good friend was talking about a 
moment ago, let the buyers do the scaling. Now he had picked 
this up or heard it, and perhaps with downed timber--with dead 
timber, they sold it in such a way, its value not being able to 
be scaled, in a lump sum. But you know, I'm sure, and certainly 
the Department knows, that the United States Government, 
through its Forest Service, puts each sale on the market. You 
use your Department to scale those salvage sales, to find 
comparable sales. You even set a floor on the bidding, and then 
you make them available to the public, and only the 
Government's in total control; the buyer has to follow what's 
out there. If he does not believe that you are adequate in your 
scaling methods, then he has the option of not buying the 
timber, but he can't come back and get you to change those 
scaling methods.

                               ROADS MYTH

    The third point is the myth of roads, and it was just 
brought out very well, I think, with the gentleman from 
Oregon----
    Mr. Dicks. Washington.
    Mr. Taylor [continuing]. Or Washington, excuse me.
    Mr. Dicks. We used to be part of the Oregon territory. 
[Laughter.]
    Mr. Taylor. I know.
    The situation with roads about being corporate welfare, 
it's kind of like this: suppose that television camera is being 
put up for bid, and all of us here in the audience get to bid 
on it. Well, there's going to be two prices. First of all, do I 
have to go over and get it? That gentleman's a lot bigger than 
me, and I've got to calculate my hospital cost for bringing it 
back. [Laughter.]
    Or, are you going to bring it to me and give it to me? Now 
if I've got to go get it, I will figure one price, and I will 
put that in my cost of getting it. If you bring it to me, I can 
give you a greater bid because you're covering that cost. Now 
in a road situation, when you're selling timber, you say you 
want the buyer to build that road to your specification, and so 
he concludes what that cost is, and then he takes that off his 
bid, and he bids the amount. If you build the road and then put 
the timber up for sale, he would give a higher bid because that 
part of the cost would be covered.
    So to say that you are supplementing in corporate welfare 
that bid, is ludicrous. If you want to cover it, the taxpayer 
wants to cover the cost of the access for the timber, they'll 
get higher bids in that direction.
    I would say that your Department, though, given what we've 
just been talking about, has an ethical duty to put forth the 
case for modern silviculture, and also to fight these truly 
ludicrous myths. I mean, they're like Elvis being seen down at 
the drive-in among reasonable people, among scientists, or 
anyone that has any knowledge in the area, but they show up on 
the front page of papers, and they wind up being public policy.

                            SILVICULTURISTS

    Now I would also ask, sir, there is a perception in your 
leadership that you may be forcing out those with silviculture 
knowledge and bringing in ``other-ologists'' who will pander to 
the politically-correct set.
    Mr. Yates. That's a myth. [Laughter.]
    Mr. Taylor. I'm not saying that it is true because I do not 
know. I am getting sufficient enough reports that I am 
concerned, and I'd like to talk with you about it later when we 
have the opportunity. I would also like for you to speak at 
some point on fees that you're requesting, what you're 
requesting. We talked about the accessibility of the Forest 
Service, and yet there seems to be this great desire for fees 
at the moment.
    And I'd like to see what your goal is for salvage harvest 
and overall harvest for the forest. You do not need the salvage 
rider to be able to do what is right for forest health in 
cutting forest timber. But the Service never did it before, did 
not meet its deadline this time, or its goals this time. In 
fact, not through your area, but through others, it was 
circumvented several different times. I'd like to know what the 
thought is because it's essential for forest health.
    I assume the chairman wants to cut the time because we have 
votes.
    Mr. Regula. Well, we have the two votes tonight, and Mr. 
Yates has a question; then I think we can wrap up.
    Mr. Taylor. All right, I'll yield.
    Mr. Regula. But I think you ought to probably have some 
additional conversations with Mr. Dombeck.
    Mr. Taylor. Well those things I mentioned I'd like to have 
answered.
    Mr. Regula. Well, you can submit them. The record is going 
to remain open for questions.
    Mr. Dombeck. And I would be happy to drop by and visit at 
your convenience.
    Mr. Taylor. And these can come in writing for the record; 
I'd be glad to talk with you about them.
    Mr. Regula. Mr. Yates.

                    SCALING VERSUS TREE MEASUREMENT

    Mr. Yates. I had the impression that under the scaling 
method, the Forest Service permits the purchaser of the timber 
to select the weigher of the timber. Now is that a correct 
impression?
    Mr. Dombeck. Let me----
    Mr. Taylor. Never in any forest Government sale that I've 
ever seen, Mr. Yates, in our area, but I would like that now.
    Mr. Yates. I'm trying to find out----
    Mr. Dombeck. Let me ask Dave, here, to respond.
    Mr. Unger. Let me just say a word about this. We are 
moving, at the direction of Congress, to greater use of tree 
measurement sales. I do not have the figures with me, but we 
understand the concern of this committee and the Congress in 
that regard.
    Mr. Yates. What's the answer to our question----
    Mr. Taylor. Yes----
    Mr. Yates [continuing]. As to whether or not you have the 
private contractors select the----
    Mr. Taylor. In the Pisgah or Nantahala district, have you 
ever had a sale where the buyer has been able to go in and 
scale it?
    Mr. Unger. No, in the East we have used tree measurement 
sales----
    Mr. Yates. No, no; I'm talking about the buyer selecting an 
independent person to do the scaling.
    Mr. Taylor. Or the buyer--in our region--the buyer's agent 
doing it.
    Mr. Unger. The problem out here, I think, is that we have 
in some parts of the country, in the East, traditionally used 
tree measurement sales as our standard process. In the West 
they----
    Mr. Dicks. But you do the measurement--the Forest Service?
    Mr. Unger. That is right.
    Mr. Taylor. Absolutely.
    Mr. Unger. And that's the process that----
    Mr. Yates. Well, that's fine. You're talking about tree 
measurements there, but I'm talking about the scaling method.
    Mr. Dicks. That's the same thing.
    Mr. Unger. No, no. In the West and in other parts of the 
country, there have been scaling processes where independent 
associations, although they have been funded with timber 
industry funding, have measured the logs after they have been 
cut. There has not been this initial tree measurement of the 
kind that you are familiar with.
    Mr. Taylor. But you have them assessing, and that's where--
--
    Mr. Yates. Could you expand on that answer please? We have 
to go vote.
    Mr. Unger. We are moving toward what Congressman Taylor is 
speaking for, what you believe is appropriate, and away from 
the scaling system.
    Mr. Yates. Well, I'm glad to find myself in agreement with 
Congressman Taylor on something. [Laughter.]
    Mr. Regula. On that happy note----
    Mr. Taylor. You will feel much better for it. [Laughter.]
    Mr. Regula [continuing]. We will have many questions for 
the record, and you don't have a great history of getting 
responses back quickly, and we hope that that will change under 
your leadership.
    Mr. Dombeck. We will work on that.
    Mr. Regula. Right. And we may want to have an oversight 
hearing on prior problems and costs because that's a major 
problem along with the Department of Interior.
    Mr. Dicks. Mr. Chairman?
    Mr. Regula. We have a lot of questions for the record.

                       ADAPTIVE MANAGEMENT AREAS

    Mr. Dicks. Just one quick thing. Please help us on these 
adaptive management areas. In the Northwest--and this is a 
point I forgot to make--this has been one area where we have 
fallen down.
    I think we're doing well on the green sales and on taking 
care of the communities' watershed analyses, restoration, and 
all of those things, but I think it's the adaptive management 
areas where we need to look, and use some of this new science 
and see if it works or not, which we were promised that would 
be done. And some of us think that there are ways to, with 
thinning and pruning, to actually help improve the condition of 
the forest on the west side. And we just hope that you will 
help us get that done.
    Mr. Regula. And I'm pleased that you're focusing on 
management. I think you have a big challenge there, and I know 
you've brought in some people for that express purpose, and 
that's one of the missions of our subcommittee, to get a good 
management handle on all of the functions that we're 
responsible for.
    Mr. Dombeck. Well, thank you, Mr. Chairman.
    Mr. Regula. Thank you for coming. The committee is 
adjourned.
    [The following questions and answers were submitted for the 
record:]


[Pages 94 - 414--The official Committee record contains additional material here.]


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


                          Department of Energy

                          Secretary of Energy


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


                                           Tuesday, March 18, 1997.

                          DEPARTMENT OF ENERGY

                               WITNESSES

FEDERICO F. PENA, SECRETARY OF ENERGY
ROBERT S. KRIPOWICZ, PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF 
    FOSSIL ENERGY
JOSEPH J. ROMM, PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF ENERGY 
    EFICIENCY AND RENEWABLE ENERGY


[Pages 418 - 421--The official Committee record contains additional material here.]


    Mr. Regula [presiding]. Okay, we'll get the committee to 
order and get started on the hearing.
    We're happy to welcome you, Mr. Secretary. Your comments 
and statements, and those of your colleagues, will be put in 
the record, and we'll welcome a summary of what you might want 
to talk about in terms of the Department of Energy.
    Secretary Pena. Thank you very much, Mr. Chairman. Let me 
say what a privilege it is to be here, and I would like to ask 
that my more formal statement be entered into the record.
    Mr. Regula. Yes, it will be a part of the record.
    Secretary Pena. And I do have a brief opening statement, 
Mr. Chairman.
    Mr. Regula. Fine.
    Secretary Pena. I'm going to do that, Mr. Chairman and 
members of the subcommittee, because, as you know, I have been 
Secretary of Energy all of, I think, five days. So I wanted to 
at least present some general views, and I've asked Bob 
Kripowicz, to my left, who is the Principal Deputy Assistant 
Secretary for Fossil Energy, and Dr. Joe Romm, to my right, 
Principal Deputy Assistant Secretary for Energy Efficiency and 
Renewable Energy, to be here in the event that there are any 
technical questions the committee members might ask that----
    Mr. Regula. You used to be on the other end, where we 
burned it. [Laughter.]
    Now you've got to furnish it.

                            Opening Remarks

    Secretary Pena. That's correct.
    Mr. Chairman, this subcommittee, as you know, has been a 
critical partner in the delivery of the missions of the 
Department of Energy. The subcommittee is directly concerned 
with a portion of the Department's missions, but is a key 
partner in the objective that we put at the very top, and that 
is enhancement of our national energy security, the development 
and deployment of clean, affordable energy supplies.
    Every day Americans depend on the benefits of energy, but 
usually are not fully cognizant of the role that it plays in 
our quality of life--until we have a disruption, and we have 
had those--in the last 23 years, three major oil disruptions 
causing both domestic and international difficulties. We 
predict that in the next 15 years U.S. net oil imports will 
grow to 60 percent of domestic consumption. We predict that 
Persian Gulf oil-producing nations will increase their oil 
exports to surpass their peak of 67 percent of global oil 
exports in the embargo year of 1974. I believe this is 
unacceptable.
    The budget we're presenting to you today advances national 
energy objectives in two very broad ways: No. 1, emphasizing 
energy supply solutions to increase domestic energy production, 
expanded use of natural gas, diversification of oil supply 
options, development of alternative transportation fuels, 
maintenance of the Strategic Petroleum Reserve to ensure 
economic stability in the event that we have an oil supply 
disruption. And, secondly, our budget emphasizes energy use 
solutions to promoting increased efficiency of energy used in 
all segments of our economy, enhanced competitiveness of the 
electric utility industry, and other sectors of the energy 
industry.
    For our energy efficiency programs, we're requesting $707 
million, a substantial increase, 24 percent from 1997. Some, 
I'm sure, will ask why the large increase. Mr. Chairman, we 
believe that this is a smart investment. Improved efficiency is 
not only achievable, but it is essential if we are to avoid 
serious risk in the future. Moreover, it is a proven way to 
reduce the demand for energy while enhancing our standard of 
living and our environmental quality.
    For example, the Energy Information Agency's 97 Annual 
Energy Outlook forecast that in the year 2015 the average home 
will be 4 percent larger and will rely more on electricity-
based technologies. We also know, based on my past experience 
at Transportation, that annual per capita highway and air 
travel are expected to grow 12 and 76 percent higher, 
respectively.
    Despite that growth, the Energy Information Agency forecast 
that energy use per capita will remain essentially static, 
which is remarkable, and the reason for that is that we also 
anticipate that improvements in energy efficiency will provide 
higher levels of service without significant increases in 
energy use per capita. So this notion of energy efficiency is 
key if we're to simply stay even, to stay where we are today.
    Our budget request is part of that energy efficiency 
strategy; for example, to design and deliver cars of the 
future, to improve efficiency in energy-intensive industries, 
to develop energy-efficient buildings and communities of the 
21st century, and to increase the use of proven efficiency 
levels by consumers in both the Federal, the State, and local 
governments, as well as low-income households. I'm very pleased 
to bring the committee's attention, if you haven't seen it, 
today's announcement by Ford Motor Company, announcing that as 
part of its relationship in the Partnership for New Generation 
Vehicles, they have announced a new prototype where by the end 
of the year they'll have 10 to 12 of these new ones processed 
which will produce or operate 70 miles per gallon--lightweight 
in stature. And the Ford announcement makes note of the fact 
that it was because of its relationship with the Federal 
Government and the PNGV program that it was able to announce 
they are significantly ahead of where they otherwise would have 
been without the Federal Government's partnership. So it's a 
very concrete example of how the PNGV program is working.
    Mr. Yates. Where is Ford on the electric car?
    Secretary Pena. Ford--actually, Chrysler probably is a 
little more advanced on electric, and Chrysler recently 
announced, I think a few months ago, a new fuel cell that it 
will be using for its cars. So each of the three companies are 
using different strategies as part of its relationship with us, 
so we can test different approaches, and it so happens that 
Ford wanted to take this approach.
    In terms of fossil energy research, we're requesting $346 
million. That is a slight reduction from 1997, about 5 percent, 
because many of the gas and coal fuel power system projects are 
entering their final stages of development, and so we thought 
at this point we could make that adjustment.
    With regard to the Strategic Petroleum Reserve, the 
Department does not propose to sell any oil from the reserve to 
finance this operation this year. We are making a 
recommendation to return about $153 million to Treasury in 
Fiscal Year 1998 under the Clean Coal Technology Program, 
because those are programs or projects that are now being 
cancelled or restructured. However, I do want to emphasize, Mr. 
Chairman and members of the subcommittee, that the Clean Coal 
Technology Program we think is a very good example of the kind 
of partnership that this committee helped craft years ago.
    An example of one very successful component of the Clean 
Coal Technology Program is the new low NOx burners which are 
now being used at 25 percent of the utilities throughout the 
country. We expect that sales have already reached $750 
million, will approach $4 billion by the year 2000, and the 
companies are now beginning to pay back some of the investments 
that were made years ago under the Clean Coal Technology 
Program. They're modest payments, about $400,000, but it is the 
first time that we're going to see those repayments. So I think 
it's an excellent example of how we can work in partnership 
with the private sector to produce new clean technologies.
    Mr. Chairman and members, let me end my testimony with 
those very brief opening remarks by simply saying that I'm very 
pleased to be here. I look forward to working with you and the 
Members to address these very important issues, even in the 
context of difficult budget scenarios, and I'd be happy to 
respond to your questions.
    [The prepared statement of Secretary Pena follows:]


[Pages 425 - 435--The official Committee record contains additional material here.]


                             fossil energy

    Mr. Regula. Well, I'm pleased that you're putting emphasis 
on energy independence and recognizing the tremendous growth in 
demand there will be in still maintaining levels of consumption 
which, of course, reflects a lot of the research that we've 
been funding over the past several years in natural gas and 
clean coal technology, and so on. Obviously, the majority of 
electric power generation will be coal-fired. Do you think that 
the utility industry has moved aggressively enough in adopting 
some of the new technology to lower emissions and make their 
boilers more efficient?
    Secretary Pena. Mr. Chairman, it is my sense that they 
have, and the data that I referred to earlier, the fact that 25 
percent are now using, for example, the low NOx technology, and 
that is increasing, and we expect that within a very short 
period of time even more will be using it. That is one example 
of how that Clean Coal Technology Program, by developing new 
technology, was able to apply the products of that research in 
a very direct and measurable way, and that new technology, 
obviously, and those low NOx burners are far cleaner than the 
old traditional technologies we saw in the past.
    Mr. Regula. Has your Department had any input into the 
decision by EPA to propose new clean air standards?
    Secretary Pena. Mr. Chairman, the traditional process when 
EPA issues proposed standards, as they have done, is for all of 
the departments of the government to interact in some fashion. 
So we're just in the stages now of devising our responses and 
our input into those proposed EPA regulations, but we will, 
obviously, share our thoughts about that.
    Mr. Regula. Well, it's interesting, in our markup in the 
1997 bill the DOE had a rather scathing press release about our 
assault on the environment, because we recommended cuts in the 
energy conservation programs. Would not your proposed cuts to 
the fossil energy research program be also an assault on the 
environment?
    Secretary Pena. Well, Mr. Chairman, I don't know about that 
scathing report of last year. [Laughter.]
    Mr. Regula. We shouldn't have told you. [Laughter.]
    Secretary Pena. I see you have a copy of it in front of 
you, and I don't really need to see it.
    Mr. Regula. I'm going to let you take a look. [Laughter.]
    Secretary Pena. Thank you. Mr. Chairman and members, let me 
say this, we all share the goal of trying to eliminate the 
deficit. We all understand that we have to cut some programs 
and do it in a responsible fashion. What we have tried to do in 
the clean coal technology area, for example, is to look at 
those projects which were either at their end--we had about 40 
of them; 20 have been completed already--so we're down to the 
last 20--and make adjustments there. Obviously, when these 
decisions are made, they're worked out with the corresponding 
companies and others who are partners in those particular 
projects with the understanding that we will complete them. So 
even when we make adjustments, as we have in this proposed 
budget, we are not abandoning those projects, and we have that 
understanding with the project sponsors.

              partnership for a new generation of vehicles

    Mr. Regula. The Partnership of a New Generation of Vehicles 
received $100 million in 1996, 105 in 1997--that is millions. 
Are you comfortable that this program is being efficient and 
productive in reaching the goals?
    Secretary Pena. Yes, I am, Mr. Chairman, and let me tell 
you why. Fortunately, in my previous position as Secretary of 
Transportation I was also involved in the PNGV program from 
Transportation's perspective, and I worked with Mary Goode at 
Commerce. As you know, the Department of Commerce is the lead 
on this project, but the Department of Energy is the lead 
technological part of the government's partnership with the Big 
Three.
    I gave you one example today of a new announcement. There 
had been a number of milestones that have been met under the 
PNGV program, which we are very proud of. And so we think this 
partnership is very important. Let me also add that when I was 
in Europe last year meeting with my counterparts, they were 
very concerned that the United States was forming this 
partnership with our own auto companies to develop this new car 
of the next century. Now they are trying to replicate the 
relationship we have with our automakers because they're 
concerned that we may be making some advances here which may 
cause some competitive problems for their manufacturers.
    Mr. Regula. How about Japan, because they're the major 
player in the import market?
    Secretary Pena. Because they?
    Mr. Regula. In Japan, are they developing natural gas 
vehicles?
    Secretary Pena. Well, the Japanese, as you know, Mr. 
Chairman, have made very significant advances in very fuel-
efficient automobiles. We are trying to leap-frog into a new 
type of car, one that is three times more fuel efficient than 
the world currently has today. That means looking at a totally 
different car in terms of its lightweight materials, in terms 
of whether or not we will use combustion technology, turn to 
fuel cells, different alternative fuels. We were very pleased 
that when Chrysler made its announcement about two months ago, 
the fuel cell technology it is proposing can use either 
gasoline or otherforms of fuel to supply the fuel cells. So 
we're trying to leap-frog into a new type of revolutionary car for the 
next century.

                          natural gas vehicles

    Mr. Regula. Does the PNGV program coordinate--or how does 
it coordinate with the NGV program?
    Secretary Pena. Let me turn to one of my associates here 
and ask. Perhaps they might be able to respond to that.
    Mr. Romm. Well, the Natural Gas Vehicle Program is more 
focused on specifically developing a longer-range natural gas 
vehicle and developing the infrastructure for that. It is, I 
think, more of a near-term program. The PNGV is a 10-year 
program to develop a triple efficiency car that could run on 
any of a number of fuels, which would include natural gas. But 
it's not, I don't believe, coordinated in that sense.
    Mr. Regula. Is there a growing usage of natural gas 
vehicles for the delivery systems in the cities, because they 
do have problems with meeting their air emission standards?
    Secretary Pena. Yes, there are, Mr. Chairman. One of the 
programs that we have in the Department of Energy is the Clean 
Cities Program. I'm proud of the fact that my former city of 
Denver is a member. Let me describe how that program works.
    We do provide some funding to the States to help in a 
number of ways: one, to help communities develop a strategy for 
the use of, for example, of CNG vehicles. It may also involve 
helping develop the infrastructure, the refueling stations, for 
example; encouraging cities and others to convert their fleets 
into natural gas fleets. When I was at Transportation, we 
encouraged the transit agencies to begin to use their buses and 
convert their buses into CNG buses. So there has been a 
significant amount of progress throughout the country, both at 
the State level and at the city level, in encouraging States to 
convert their fleets, the city fleets, but also finally 
beginning to encourage consumers by having fueling stations 
that are more convenient to be able to use those for natural 
gas-powered vehicles.
    Mr. Regula. I have other questions, but Mr. Yates?
    Mr. Yates. Thank you.
    Let me follow up on that. Are any of the car manufacturers 
putting out vehicles that use natural gas as a fuel?
    Secretary Pena. Yes, there are--for example, you can make 
adjustments. I have a car that has a CNG tank in the back, in 
the trunk.
    Mr. Yates. Your car is adjusted?
    Secretary Pena. It's adjusted.
    Mr. Yates. I wondered whether they have engines in their 
cars that will burn natural gas.
    Secretary Pena. Congressman, let me ask Mr. Romm to answer 
that question specifically.
    Mr. Yates. Okay.
    Secretary Pena. I think there is one manufacturer----
    Mr. Romm. Yes, Ford. Ford has about a dozen models that use 
natural gas directly.
    Mr. Yates. A dozen models? When you say, ``a dozen 
models,'' how many vehicles are we talking about?
    Mr. Romm. It's just a few thousand.
    Mr. Yates. A few thousand. Does that mean that is the sole 
fuel that the vehicles can use?
    Mr. Romm. I believe that's correct. We can get the exact 
answer for the record.
    [The information follows:]

                          Natural Gas Vehicles

    In the 1997 model year, two of the three U.S. light duty 
vehicle original equipment manufacturers are offering 
compressed natural gas vehicles for sale. Ford Motor Company 
has taken the lead in development of compressed natural gas 
(CNG) vehicles. The seven CNG models offered by Ford include 
bi-fuel Contour compact sedans, dedicated Crown Victoria full 
size sedans, dedicated F-250 pickups, and four versions of 
dedicated E-series vans. Ford projects total model year 1997 
sales of these vehicles will be approximately 2,800. On 
Wednesday, March 19, 1997, the California Air Resources Board 
recognized selected Ford F-250 trucks and vans as being the 
first trucks ever to achieve the Super Ultra-Low Emissions 
Vehicle (SULEV) certification--the cleanest non-electric trucks 
ever manufactured. For model year 1998, Ford plans to continue 
offering these seven models and add seven models of bi-fuel 
compressed natural gas/gasoline F-series pickups and E-series 
vans.
    General Motors Corporation, in partnership with IMPCO 
Technologies, is also selling bi-fuel compressed natural gas/
gasoline C/K 2500 trucks that are full-size pickups. Although 
final model year sales figures are not available, projections 
are that 1,000 of these pickups will be sold this year. General 
Motors plans to continue offering this vehicle in model year 
1998.
    In addition to the alternative fuel vehicles described 
above, Chrysler Corporation and General Motors offer electric 
vehicles, and Ford offers flexible-fuel ethanol and methanol 
Taurus mid-size sedans. For model year 1998, Chrysler will add 
flexible-fuel ethanol minivans to its offering and Ford will 
add an electric compact pickup and seven models of bi-fuel 
liquefied petroleum gas (LPG) F-Series pickups and E-Series 
vans.

    Mr. Yates. Where are they selling these vehicles? Where is 
natural gas available?
    Secretary Pena. Congressman, why don't we give you more 
specific answers--let me answer the question generally. There 
are a number of communities that have established CNG refueling 
stations. In Denver, for example, we had one in northwest 
Denver in a neighborhood. We had one by the old airport. We 
have one now by the new airport, and we worked closely with a 
number of companies, oil companies, to set those up, and also 
with our own fleets. The city had its own CNG fleets, and also 
for consumers who were interested in buying either a CNG 
vehicle or, what typically happens, a vehicle that can either 
be converted--so you have a switch and you can use CNG, and if 
you run out of the fuel, you can switch over to gasoline.
    So more and more communities are beginning to do this. 
Obviously, we haven't made the in-roads that we would like to 
see, but I think we're moving in the right direction.
    Mr. Yates. Well, how do you fuel your vehicle with natural 
gas? Where do you get it?
    Secretary Pena. A tank in the----
    Mr. Yates. Yes, that burns natural gas.
    Secretary Pena. I don't know where to refuel it. I've just 
been at DOE for five days. [Laughter.]
    Mr. Yates. Okay.
    Secretary Pena. I'm still trying to find my office. 
[Laughter.]

                     naval petroleum reserves sale

    Mr. Yates. Okay. I want to turn for the moment to the sale 
of the Naval Petroleum Reserves, and I notice that in your 
statement you say, ``The Department is on track for completion 
of the Elk Hills sale as set forth by statute. Sufficient 
safeguards have been put into place to ensure that Elk Hills 
will not be sold unless the government receives maximum value 
for the field.'' What does that mean?
    Secretary Pena. Congressman, the process that we are using, 
which I think is specified in the legislation, is to have five 
independent evaluations done. We would take the average of 
those five, or eliminate the top and the bottom, and take the 
average of three other evaluations, and then take the higher of 
those evaluations for the field.
    We also have another company, which I believe has already 
been hired, to give us an independent evaluation of the 
reserves remaining in the field.
    Mr. Yates. Who is undertaking the five evaluations?
    Secretary Pena. These are independents that I think we're 
in the process of hiring.
    Mr. Yates. But you just, as I understood you, said you have 
a sixth that is making an independent evaluation. How does it 
differ from the other five?
    Secretary Pena. Congressman, I'll have to get you the 
details on that. That is my general understanding of the 
process we're using here. But at some point, when all that data 
is collected, the Secretary of Energy must make a determination 
about whether the bids for the field are in excess of the value 
of the field that we established based on these assessments.
    Mr. Yates. Have you received--I'm sorry.
    Secretary Pena. If we believe that they are not of 
sufficient amount to make this a beneficial sale for the United 
States Government, for the American people, then we will not 
proceed.
    Mr. Yates. Do you have to have congressional approval for 
the sale?
    Secretary Pena. Let me ask Mr. Kripowicz to answer that 
question.
    Mr. Yates. Okay. We welcome, Mr. Kripowicz.
    Mr. Kripowicz. Mr. Yates, the proposed sale, if it's of 
sufficient value, will come to Congress by January 18, and 
there's a 31-day ``lie-before.'' The Congress does not have to 
approve it, but Congress has 31 days to act if they want to 
disapprove the sale. There's not an active approval that's 
required by Congress.
    Mr. Yates. Do you have any bids on that yet for the 
purchase?
    Mr. Kripowicz. No, sir.
    Mr. Yates. No bids as yet? Do you have any idea as to what 
your minimum bid will be?
    Secretary Pena. No, Congressman, we do not. We're not at 
that stage yet.
    Mr. Yates. Well, if I remember correctly, the fields are 
making something like $100 million a year for the government.
    [Mr. Yates confers with staff.]
    Three hundred million, is it $300 million? Well, then, 
you're going to have to have a pretty substantial bid then, 
aren't you?
    Secretary Pena. Congressman, these are the kind of 
questions that we're going to have all the experts address. 
Obviously, when all that data is presented to me, I will have 
to exercise some judgment about whether this is a good deal for 
the United States.
    Mr. Yates. Good luck. Thank you, Mr. Chairman.
    Mr. Regula. Just a follow-up question: I don't believe 
you've asked for enough money in your budget to operate the 
field in Fiscal Year 1998 in the event it's not sold and to 
keep it in first class condition. Do you have a concern about 
that?
    Secretary Pena. Mr. Chairman, we do. It was my 
understanding that we had enough to operate it for 1998, with 
the assumption that in February of 1998 the report would be 
done. If we do not have enough, obviously, we will notify the 
chairman about that and the members of the subcommittee.
    Mr. Regula. Yes, because you may not get the sale 
consummated in Fiscal Year 1998, and, therefore, I think it 
would be vitally important to keep this field in first class 
condition, so that it will bring top dollar when it's sold.
    Secretary Pena. Absolutely, Mr. Chairman.
    Mr. Regula. I'm not sure that you've requested enough money 
to do that.
    Secretary Pena. Why don't we do this: let me go back and 
evaluate that question.
    Mr. Regula. Okay.
    Secretary Pena. And, obviously, we will have early warning 
signals throughout this process.
    Mr. Regula. All right.
    Secretary Pena. So somewhere along the line if we sense 
this is not going to work, we will keep very close 
communication with you.
    Mr. Yates. Mr. Chairman?
    Mr. Regula. Yes?
    Mr. Yates. One further question, suppose you don't get a 
bid you consider adequate. Does the basic legislation require 
you to sell it anyway?
    Secretary Pena. No, no. This is a judgment made by the 
Secretary of Energy, and if the Secretary determines that the 
bids are not adequate and this is not a prudent sale for the 
American people, then the Secretary is not required to proceed 
with the sale.
    Mr. Yates. Well, then it's more important than ever that 
the chairman's question be answered in the affirmative, that 
you'd better take good care of the field.
    Secretary Pena. Absolutely.
    Mr. Yates. Otherwise, you may not get the bid that you 
think is adequate.
    Secretary Pena. Absolutely.
    Mr. Yates. Thanks, Mr. Chairman.
    Mr. Regula. Mr. Wamp.
    Mr. Wamp. Thank you, Mr. Chairman.
    I want to congratulate you, Mr. Secretary, for an 
overwhelming confirmation, and in light of the fact that you 
have only been on the job officially for a few days, I will 
submit some detailed questions for the record and ask if you or 
your staff can respond to those in a timely manner. I actually 
intend to submit some more questions tomorrow morning when you 
appear before the Energy and Water Subcommittee.
    I think that it is fortuitous that you join Energy at this 
time, having come from Transportation. We're here today to 
focus on some obvious linkages between the two. I think you're 
positioned well to come to the Department of the Energy, and I 
also want to challenge you that you have a burden on you in a 
certain sense to help restore some confidence in the position 
of Secretary of Energy in the coming months. I think that the 
way you conduct yourself and the efficiency that you seek as 
the Secretary of Energy will bode well for the Department, and 
our ability in a bipartisan way to build support for the 
Department of Energy here in the Congress, which at times in 
the last two years has been difficult to achieve.
    I've tried to build bipartisan support around four major 
principles. One is the national security mission of the 
Department of Energy through the Nuclear Weapons Stockpile 
Stewardship and Management Program, and also now in 
counterproliferation activities, national security being a real 
vital part of the Department of Energy's mission; also, long-
term investment in science and energy research, which is 
upstairs at the Energy and Water Subcommittee level; energy 
efficiency and renewable energy, which is here at this 
subcommittee, and it's extremely important and I think one of 
the four key missions of the Department of Energy; and then the 
responsibility that we have in this country to address the 
environmental legacy that won the Cold War, that now exists 
across the DOE complex. And all four of those priorities I 
think are bipartisan priorities and four principles through 
which we can build some support for your efforts as you seek to 
improve the Department of Energy yourself.
    I also want to challenge you, just in opening before I ask 
a specific question, to rise to a challenge that, having served 
on the Transportation Committee myself for the last two years 
and the Science Committee, and having been a student for about 
six years of our national laboratory systems and our long-term 
commitment to science and energy research, and looking at what 
drove science policy here for 50 years in this country--really 
the nuclear legacy drove science policy in many ways--that we 
have not in the post-Cold War era, as a nation, asked the 
question and addressed the question: where do we go from here 
and what is the mission of our national laboratory system in 
the post-Cold War era? We haven't done that, and I would ask 
you to every week, as you go about your responsibilities over 
the next few years, to keep that at the forefront of your 
thoughts, because I think we can't really establish certain 
priorities until we address exactly where do we go from here. 
Is it to keep people alive to be 100 years old? Is it to create 
materials in an environmentally-responsible way, so we have 
zero emissions? I don't know, and actually we won the Cold War. 
We built up the nuclear legacy and scared everybody else to 
death, and they crumbled, sometimes under their own set of 
problems, but we won the Cold War. Now where do we go with 
long-term science and energy research policy in this country? I 
think it's a legitimate question; I've heard it for two years 
asked too many times; I think it's time for Congress and the 
administration to come together behind that. I would challenge 
you to address the big long-term questions, not just to serve 
your time out as Secretary of Energy.
    On this issue of transportation and next generation 
vehicles, we actually make in my home district with applied 
technology in the south end of my district, in Chattanooga, 
through a company called Advanced Vehicle Systems, we make 
electric buses. We actually have backed-up orders on making and 
exporting those electric buses all across the country. The 
basic research was born in many ways at the Oak Ridge National 
Laboratory in the north end of my district. So I've actually 
watched the basic research go to applied and know that there's 
a legitimate role for both and the support for both.

                            hybrid vehicles

    Mr. Regula. Would you yield?
    Mr. Wamp. Yes, sir.
    Mr. Regula. Your electric buses, are these plug-in charges 
or do they have a diesel engine that runs them?
    Mr. Wamp. No, sir, they are plug-in charges, but now there 
are problems associated with that, and that takes me to what I 
wanted to ask, and that is about, frankly, it's going to take a 
hybrid approach. I mean, you're going to have to have all 
different sources coming together. Some of the battery problems 
we need to address are because of the environmental problems 
that batteries create as we're looking at these hybrid 
vehicles. But not only do we make a battery to power this bus, 
but the chassis frame for the bus--everything--They come up 
here once a year, and I'll take you on a ride down through the 
Mall here, and show you how well they work. We make the short 
ones, the long ones, and export them. It's a great business, 
and it's a growing business.
    But I think there's some foundations in this country that 
now say that maybe our best export market potential is in a 
small vehicle, which I think you referenced a minute ago, with 
impeccable gas mileage, incredible gas mileage, and, actually, 
we could export those little vehicles to developing nations. 
That may be the No. 1 market opportunity that we have for next 
generation vehicles. It's going to be a long time before 
domestically we change people's thinking to the traditional 
gas-powered cars. Build another road, you know--urban sprawl. 
The whole notion that we've been involved in as a nation since 
the turn of the century.
    But what do you think about an export market potential for 
small vehicles that can compete with motor scooters 
indeveloping nations and countries, frankly, that can't afford a 
$15,000 car, but they might afford a $4,500 car that's made on a small 
chassis with a hybrid system. Some of it may be natural gas; some of it 
may be a turbine; some of it may be battery; it might be a combination 
of all those.
    Secretary Pena. Congressman, you've raised an excellent 
point, and let me say that in my travels in the past to places 
like Vietnam to Thailand and many Southeast Asian countries, 
we're beginning to sense--and in a particular place like 
China--that they are very concerned as they become much more 
developed about how they can incorporate clean technology, so 
that they can perhaps avoid the mistakes that we have made 
because of the natural course of our country's development.
    So I agree with you; I think there is a tremendous market 
opportunity there for that kind of a car in some of those 
countries. So one of the byproducts of the PNGV partnerships is 
for our automakers to become the world dominators of this new 
market of the next century. And, presumably, with many of our 
companies now opening up factories in other countries around 
the world, they'll have the capacity then to have those 
production lines also in those countries. So I think there is 
great potential there. I agree with your evaluation.
    Mr. Wamp. Do you think it's feasible that smaller 
companies, other than the big automakers in this country, can 
actually compete? Is there any way that, through grants or some 
kind of startup infrastructure development, that other 
companies might have a remote chance of being competitive in 
this new production capability?
    Secretary Pena. Well, it depends. I think there are parts 
of this where smaller companies can play a role. Last year, for 
example, we rolled out another bus made of the material that 
the old Stealth bomber was made of. We called it the Stealth 
bus. This is a bus you can actually see, however, when it 
drives past your home. [Laughter.]
    But it was a third lighter, and there were a number of 
smaller companies that built certain parts of that Stealth bus 
with a large company in California. So I think that, by being 
creative with our major partners, and perhaps encouraging the 
use of small companies to develop parts of these new systems, I 
think we can help small companies be a part of this new 
technology.
    Mr. Wamp. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman.
    Mr. Regula. Mr. Skaggs.
    Mr. Skaggs. Thank you, Mr. Chairman.
    I want to make a special welcome to you, Secretary Pena, 
and say, congratulations on your confirmation, and all success 
to you.
    Secretary Pena. Thank you.
    Mr. Skaggs. We're proud of you at home.
    I wanted to get into an area that really isn't within our 
subcommittee's jurisdiction as far as DOE is concerned, but 
certainly is of concern to you, having to do with a hearing we 
had this morning with USGS and their seismic monitoring 
program, which is an important ingredient in our treaty 
compliance work. Again, this isn't a DOE function directly, but 
since you're here and it's close proximity to the conversation 
I had this morning with Mr. Eaton from USGS, they're facing a 
problem with the crunch on their budget and not being able to 
maintain this global seismic monitoring system as well as I 
think our national security agencies would want to see happen. 
To date, anyway, they haven't, I gather, tried very much to get 
anybody at Defense or Intelligence to chip into these costs. It 
does affect your Department ultimately since it has nuclear 
weapons consequences down the road. I just wanted to bring it 
to your attention. I don't expect you to have a response, but 
it may be something that within the consultations within the 
administration you might be able to help USGS out, because 
ultimately it will be helping you all out. They're much more 
strapped for funding than some of the people that count on the 
work that they can do in that area.

                        naval oil shale reserves

    Along the same lines of just wanting to get onto your 
already full plate--and maybe you can comment on this, if 
you're able to--the status of moving the oil shale lands out 
West into, presumably, Interior/BLM management, where we stand 
on that and what you see as the timeline. It's of interest, as 
I'm sure you're aware, to folks at home that want to get into 
the oil and gas leasing of those properties or use them for 
grazing, or whatever.
    Secretary Pena. Congressman Skaggs, my understanding is 
that we owe the Congress a report, about not only that field in 
Colorado, but others around the country. I believe that will be 
available in a couple of months so that we can give you a sense 
of what options are available.
    One of those options is to transfer the responsibility to 
DOI, Department of Interior, and have Interior, through its 
normal leasing provisions, help lease some of those properties, 
but that's not a decision that's been made yet. So we're 
exploring all those options, and in that report we'll be able 
to respond to you directly about not only the Colorado field, 
but I think some of the other fields in the country.

                role of federal research and development

    Mr. Skaggs. Thank you. You are the lucky beneficiary, I 
think, of a budget proposal that I know was put together before 
you came onboard, but I'm glad to see the plus-up proposed in 
energy conservation. I'm sure you'll defend that with vigor.
    Implicit in that, I'm sure you are aware, is the ongoing 
debate around here between those that see a legitimate Federal 
Government role in development of applied technology and those 
that sort of say, hey, if it's ready for the market, private 
industry will take care of this; if it's not, it's nothing that 
the government ought to be involved with.
    And I just wanted to give you a chance, if you'd like to 
take it, to give us your sense philosophically of why you see a 
legitimate Federal role in this applied R&D area, particularly 
as it pertains to energy conservation and alternative energy 
sources. Why don't we just leave it to the market and get 
government out of this business?
    Secretary Pena. Congressman Skaggs, you've asked, I think, 
a very important question, and let me give you my philosophy 
about this, my answer is based not just on my philosophy, but I 
think also on my experience.
    There are a certain number of facts that are very clear to 
us. No. 1, many private sector companies which traditionally 
had invested large amounts of their dollars on research and 
development are now cutting back. We have seen that, 
particularly in the area of industries which are de-regulated, 
highly competitive, and where they are very focused on, 
obviously, short-term profit margins. And so we have seen some 
of these companies begin to cut back on theirR&D investments. 
We as a nation then have to ask the question: will we lose our long-
term competitive edge if the Federal Government does not play a part in 
R&D?
    Secondly, we have seen through experience where we have 
successfully engaged in some of these partnership applied 
technology ventures, taken them to a point, and then abandoned 
them because of difficult budget scenarios, only to find that 
world competitors picked up our initial work, finalized them, 
developed those products, and then we ended up buying them 
back.
    I can give you a couple of examples, if you'd like, in the 
area of transportation, for example.
    Mr. Skaggs. Sure.
    Secretary Pena. Years ago, we as a nation decided to try to 
develop a magnetic levitation train, a train for the next 
century. We started to invest in that technology. I think even 
in Pueblo, at the test track facility, they started to do some 
work there. We had budget problems years ago; we abandoned 
that. The Japanese took our information, our research, 
perfected, developed a magnetic lev train, and now Germany has 
one that is going to be built with the goal of becoming the 
world exporter of mag-lev technology, and someday I would not 
be surprised if we end up buying that technology back.
    I would suggest, as difficult as these decisions are, 
particularly at a time when we're cutting our budget, that we 
be mindful of our past experience, that we look to the future 
and understand that these kinds of applied technology 
investments are good for the long term; they are good for our 
country; they are good for our companies; they're good for 
American workers, and I believe they're sound investments.
    So I would encourage us to, as much as possible, continue 
these partnerships, continue to invest, recognize the change in 
the private sector, and that we are in a fiercely competitive 
environment where our competitors worldwide are now investing 
more in R&D sometimes, compared to GNP, than we are. I think 
that is a very disturbing possibility if we allow that to 
happen and we continue to fall behind in the next century.
    Mr. Skaggs. Thank you, Mr. Chairman.
    Mr. Regula. I might add to that comment that I think the 
low-emission boiler is something that perhaps should have that 
kind of attention. I don't know that your budget is quite 
adequate to move in the direction in that particular instance 
that was suggested by Mr. Skaggs.
    Mr. Miller?

                         clean coal technology

    Mr. Miller. I'm new on this committee, too. So I sympathize 
with your five days on the job.
    But Mr. Skaggs was talking about industrial policy, and I 
have concerns about that, the Federal Government picking 
winners and losers. I mean, I'm not--high-definition TV is 
something the Japanese poured all kinds of money in it, and 
they picked wrong. So, I mean, it's not an easy, clear-cut 
question.
    Let me ask--start with a clean coal technology question and 
get an understanding of that. This is--I don't know, you may 
have to turn to your colleagues on either side of you who may 
know more answers to that, but that was a program that was 
forward-funded a lot of money years ago--I don't know how many 
years ago--and there's just----
    Mr. Kripowicz. I think 1986.
    Mr. Miller. 1986?
    Secretary Pena. Two point four----
    Mr. Miller. Is that unusual to do it that way, to have such 
a huge forward-funding? I mean, we don't----
    Secretary Pena. It generally is unusual to do it that way, 
Congressman. You'll notice that in our 1998 budget in other 
areas we are now suggesting that we revisit that concept of 
forward-funding. I'd be happy to tell you why.
    Mr. Miller. Well, I would agree with you; I mean, I have 
concerns about forward-funding too many things, and especially 
from 1986.
    How much money is left in that program to spend? I see 
where you were rescinding $286 million this year. If we closed 
down the whole operation, I mean aside from those that have got 
commitments, you know, contracts under construction, what would 
be left there?
    Secretary Pena. Let me give you a summary while Mr. 
Kripowicz gives you the details. We had about 40 projects. 
Twenty of them have been completed. There are 20 others that 
are now at various stages. The money is committed to a number 
of those 20 projects, and the rescission proposal is based on 
the fact that some projects were either completed early or had 
been readjusted, and the money wasn't necessary. So we returned 
it to the Treasury. But we want to complete those projects even 
though we've made those adjustments.
    Mr. Miller. These are new projects that are being committed 
to?
    Secretary Pena. I don't think so, Congressman. These are 
the 20 that are remaining.
    Mr. Miller. That are remaining?
    Secretary Pena. Let me have Mr. Kripowicz give you the 
details on it.
    Mr. Kripowicz. Yes, sir, there are no new projects 
contemplated in the Clean Coal Program. The remaining funds are 
to cover those 20 that are either in operation and construction 
or in design right now.
    Mr. Miller. How much is being spent right now on those 20?
    Mr. Kripowicz. The total amount that will remain in the 
account after the proposed rescission, if Congress acts on it, 
is about $2.3 billion, over half of which has already been 
spent.
    Mr. Miller. But it's still over a billion dollars sitting 
out there?
    Mr. Kripowicz. To complete these projects, yes, sir.
    Mr. Miller. And we're contractually obligated on those 
projects?
    Mr. Kripowicz. Yes, sir.
    Mr. Miller. Will there be a rescission next year or the 
year after? Are we making only--is this all that we can have 
to----
    Mr. Kripowicz. At this particular time, the $153 million is 
based on projects that we know definitely are not going 
forward. If any of the existing projects fail for one reason or 
another, we would then offer the remaining funds from those 
projects to return to the Treasury.
    Mr. Miller. So you're saying there's no more money 
available, even if we wanted--unless we stopped the project in 
the middle of it; is that right?
    Mr. Kripowicz. That's correct, sir.
    Mr. Regula. Mr. Miller, if you'll yield----
    Mr. Miller. Yes.
    Mr. Regula. Since I was involved in putting clean coal 
together, the reason for the large advanced funding is because 
these are matching funds, which at the time was somewhat of a 
new approach, and it's big dollars. In order to get confidence 
on the part of industry to participate, we had to forward-fund; 
otherwise, we would not have gotten any bids. It's worked out. 
We anticipated a 50/50 match; we're getting 66 private and 34 
Federal. So I think that attests to the efficacy of the 
program.
    You have, I'm not sure it's your district, Tampa Electric, 
but the Polk plant is a classic example of a very effective 
project that has resulted from this program, and the technology 
being demonstrated will be used by many other companies. So 
there is rationale for the large advanced funding, and without 
it, I don't think the program would have worked as well as it 
has.
    Mr. Miller. But 10 years seems like a long time.
    Mr. Regula. Well, I understand that, but it has taken a lot 
of time because they are big projects.

                             china project

    Mr. Miller. What about the China project, the $50 million?
    Secretary Pena. Congressman, that is a proposal that is, 
apparently, the marker in the 1998 budget, but as I understand 
the suggestion, it would not actually be effective until the 
1999 budget. So it's more a marker than anything else.
    Mr. Miller. What do you mean ``a marker?''
    Secretary Pena. In the sense that we wouldn't spend that 
money in 1998 and don't intend to. It will be in the 1999----
    Mr. Miller. But we're committing to it and forward-
funding--why are we doing it?
    Secretary Pena. As I understand that project----
    Mr. Miller. I don't mean to put you on the spot.
    Secretary Pena. That's fine. I'll try and explain it. The 
understanding here is that in discussions with the Chinese 
Government, given the enormous potential that economy has in 
the area of coal, this was one way in which we could begin to 
introduce U.S. companies to be competitive in bidding for some 
of those projects. The market in China is enormous, I think all 
of you know. There are a number of U.S. companies and other 
companies around the world who want to get into that market, 
and this was one way in which to facilitate that.
    Mr. Miller. There's no reason--it's just to get into the 
market? It's not--I mean----
    Secretary Pena. Well, there are obviously other benefits.
    Mr. Miller. Why do we need to do that in here? I'm just----
    Secretary Pena. Again, I'm doing this based on the 
information I've been provided, that the kind of technology 
being used there was going to need some kind of financial 
assistance. It wouldn't come directly from the Department of 
Energy. I believe the concept here is that the funds would be 
provided to one of the financial institutions that are involved 
in these projects worldwide, and then that would help 
facilitate the project in China.
    Congressman, I know you're aware of the fact that this----
    Mr. Miller. I read about China in the paper a lot right 
now, but it's not a lot of coal. [Laughter.]
    Secretary Pena. The point I was going to make was that a 
number of our competitors around the world have similar kinds 
of financial techniques to help their companies enter into new 
emerging markets, and China is probably one of the----
    Mr. Miller. Is this an authorized program? Or does it need 
to be authorized?
    Secretary Pena. It is authorized.
    Mr. Miller. So it was authorized like last year or 
something or----
    Secretary Pena. Let me have Mr. Kripowicz answer that.
    Mr. Kripowicz. It was authorized in the Energy Policy Act, 
and I believe that was 1992. The international program was 
authorized----
    Mr. Miller. Oh, the program, but as far as the $50 million 
program with China, you all just developed that one now. Okay.

                     coal research and development

    Let me ask one more question, if I can get a little 
clarification on the fossil energy, the R&D on coal, R&D. 
That's different from the clean coal. How much do we spend on 
coal R&D? The total program is $346 million. How much of it 
goes for coal R&D?
    Secretary Pena. Approximately $100 million.
    Mr. Miller. Do we need to do that all the time? I mean, is 
that a necessary program? Is that----
    Secretary Pena. Well, obviously, we are trying to find ways 
in all of the energy areas, whether it's coal or natural gas or 
ethanol or methanol or electric or solar or wind, whatever, to 
try to find a way to advance all of these energies. If we are 
developing, in my view at least, an energy-independent 
strategy, we must rely on a diversity of energy sources, and I 
think it would be a mistake to be relying on only one. So to 
the extent that we can continue to make coal, for example, a 
viable energy source, given the fact that we are the world's 
largest holder of coal reserves perhaps, then we ought to find 
a way to continue to make it a viable energy option. One of the 
ways to do that is to make sure that we have clean emissions, 
that we attend to the environmental issues, and of course the 
cost issues. So we think these investments are helpful to 
advance that particular option among a number of options that I 
think are important.
    Mr. Miller. How much have we invested in coal R&D?
    Is my time running out here?
    Mr. Regula. Yes.
    Mr. Miller. Okay, we'll pursue it some other time. Thanks.
    Mr. Regula. If you continue pursuing this, it will get 
shorter and shorter. [Laughter.]
    Do you have any further questions?
    Mr. Miller. No, sir. [Laughter.]
    Mr. Regula. Mr. Dicks?

                        fast flux test facility

    Mr. Dicks. Mr. Secretary, welcome to the committee, and I 
congratulate you on your confirmation and also on the 
outstanding job you did as Secretary of Transportation. 
Obviously, as you know, the Department of Energy plays an 
enormous role in the State of Washington, particularly over in 
the Hanford area. Obviously, the cleanup program and the work 
of the contractor there are all very important to the people of 
our State. On both sides of the State people pay a great deal 
of attention to it.
    I would like to ask you a question on a related subject, 
Mr. Chairman, and then I will get to a question that's 
beforethe jurisdiction of our subcommittee. And that is on the recent 
decision to keep the Fast Flux Test Facility in a warm standby 
condition as a potential tritium producer. Our delegation was on a 
bipartisan basis very supportive of this, as has been our new governor, 
Gary Loch, and we see this as a potential way to save literally 
billions of dollars, potentially. If we get to a Start III agreement 
and the requirement for tritium goes down, you might, just with the 
FFTF, be able to meet that requirement. We can't get into those details 
here, obviously; that's classified information.
    And so it is my hope that you will seriously look at this 
option, which is a very safe reactor that sits out there at 
Hanford, has really never been used, and could be used for this 
purpose. We're hoping that there will be a reprogramming 
requested, so that we can move the money in there to keep it in 
warm standby, as you consider all your alternatives in the 
tritium area. I know this is--I don't know if you've had a 
chance to focus on this subject, but I just wanted you to know 
that we're very interested in pursuing it.
    And a lot of people say, well, you know, we've got to be 
worried about cleanup money. My view is the best way to ensure 
that there's enough cleanup money in the future for cleaning up 
the site at Hanford is if we could save, some people estimate, 
up to $12 billion that it would cost to build a new facility. 
So if we've got an existing one that can do the job, for the 
taxpayers' sake, I think we ought to seriously examine it. It's 
not that far off in terms of being able to meet the 
requirement.
    The other question I wanted to ask you about--and I'd be 
willing, if you have anything to say about that----
    Secretary Pena. Very briefly, Congressman, obviously, 
Secretary O'Leary chose to keep that option available to 
support--and I want to be clear about this; it is not a third 
option to the dual-track option she identified last year--
    Mr. Dicks. Right.
    Secretary Pena [continuing]. But to support the dual-track 
option for production of tritium.
    Sometime later this year, early next year, I'll be making a 
final decision about how best to proceed with all those 
approaches, but we do know that we will need a new supply of 
tritium by about 2005. Tritium, as you know, deteriorates at 
about 5.5 percent per year.
    Mr. Dicks. Right.
    Secretary Pena. So we need to replace it and have our five-
year reserve. So the Fast Flux Test Facility is clearly an 
option that we want to evaluate very carefully.
    Mr. Dicks. Good. Well, I appreciate, and I really do 
believe, if you have a chance to come out and take a look at 
it, I think you'll be impressed with it. And there's also 
another facility out there, the Fuels Material Examination 
Facility, that also has some other potential possibilities in 
the disposition of plutonium that we may want to look at as 
well.

              Partnership for a New Generation of Vehicles

    Now on the question of a Partnership for a New Generation 
of Vehicles, your testimony reflects a priority in developing 
an R&D strategy in order to protect our country from another 
unplanned crisis. The committee, obviously, has an interest in 
two important areas of energy R&D namely, fossil energy and 
energy efficiency. As a former Secretary of Transportation, can 
you give me an assessment of our transportation research needs 
as they relate to energy in this country, and is the 
Partnership for a New Generation Vehicle on schedule? We're 
very interested in that because there's been some good work 
done at Battelle with the other companies. By the way, there 
was actually an article today in USA Today talking about a 
future car, in which it says, ``Ford Motor said it plans to 
have prototypes of an ultralight, high-mileage car ready to be 
tested this fall. Ford said that a mid-size family sedan will 
weigh only 2,000 pounds, will get nearly 70 miles per gallon 
with diesel fuel, and will produce limited amounts of 
pollution. The vehicle is part of the Partnership for a New 
Generation of Vehicles, a joint venture by the Federal 
Government and the Big Three automakers to develop 
environmentally-fuel-efficient vehicles.''
    Can you tell us a little bit----
    Secretary Pena. Congressman, you're absolutely right. That 
is another very good example of the success of the PNGV 
program, and some of the products that are being delivered are 
actually being delivered ahead of schedule. I think that's a 
good example of one. But the program is very important, and we 
want to complete it.
    Let me answer your other question, which I think has very 
significant implications, and that's transportation. It is my 
view that if we are to develop an energy-independent strategy, 
we have to address two fundamental forces. One is what I call 
the consumption line----
    Mr. Dicks. Right.
    Secretary Pena [continuing]. And that is consumption of 
energy, in particular, the area of transportation, where 67 
percent of oil is consumed in transportation, is going way up, 
and we project it to go way up. Domestic production, 
particularly of oil, is flat, if not declining. We can't 
continue those two trends and allow them to remain unabated.
    As respects the consumption figure or trend, if we want to 
make a significant reduction there, we have got to deal with 
transportation.
    Mr. Dicks. Right.
    Secretary Pena. If we do not address transportation, we 
will fail. Perhaps the most viable strategy is in the area of a 
new generation of vehicles, which will be three times more fuel 
efficient than today's cars, which will be a new generation of 
cars, hopefully running on fuel cells, alternative energy 
sources, et cetera. So this has great promise, not only from an 
environmental perspective, but I would say from a domestic 
security perspective, to help us bring some sanity to these two 
lines, where we are becoming less energy-independent. In fact, 
we are moving in the wrong direction. I testified in my opening 
statement that our prediction is that within a decade we will 
probably be 60 percent reliant on foreign oil, and our 
projections even beyond that are worse, and we simply can't 
allow that to continue to be the case. So this investment in 
transportation I think is key to helping us to deal with these 
energy-independent strategies.
    Mr. Dicks. Good. Thank you, Mr. Chairman.
    Mr. Regula. Mr. Nethercutt.
    Mr. Nethercutt. Thank you, Mr. Chairman.
    Mr. Secretary, welcome. Congratulations on your 
confirmation. I know you have a great challenge ahead of you, 
and we wish you well.

                           Fuel Cell Program

    The molten carbonate cell program has been funded by the 
Department of Energy for the last 16 years. I noticed in your 
testimony there was reference to the partnership with industry 
in that regard. My information is that that technology, the 
fuel cell technology, is close to commercialization--in fact, 
maybe within the next two or three years.
    I can see some great benefit economically and 
environmentally for this technology. I know that we have--I 
have some vested interest in it because a consortium, a group 
in my district, a public-private partnership arrangement, is 
working to develop fuel cells. Can you describe for the 
committee whether the Department fully supports the 
continuation of this research? I understand there was some 
decrease in fuel cell funding, and I'm wondering if that 
represents some kind of a stepping-back from your commitment 
prior to this time?
    Secretary Pena. No, it does not, Congressman. We had to 
make some very difficult decisions in this budget and some 
adjustments, and that was one. The impact of that adjustment in 
the molten carbonate fuel cell program is delay for pushout of 
the ultimate product by, I think, one or two years. But we want 
to complete that technology; we think it's very important, and 
we think we will have additional money in the next budget cycle 
to make sure we get that job done. So it is still a priority; 
we do not want to abandon that project. We think it's very 
important. And a lot of progress has been made, as you would 
say. As I understand it, that will be able to be fueled by 
natural gas, which will be terrific. A fuel cell that will be 
able to give us that kind of technology would be a wonderful 
breakthrough.
    Mr. Nethercutt. And private industry, private utilities, 
and private entrepreneurs are involved in this----
    Secretary Pena. That's right.
    Mr. Nethercutt [continuing]. And I think it's a job-
creator. It's got great potential. There was going to be 
release of some funds to SIRTI in my district. Is there some 
change or some holdup in connection with distributing funds?
    Secretary Pena. Congressman, I'm not aware of that. Let me 
look to my associates. We'd be happy to get back to you in 
writing.
    Mr. Nethercutt. That would be great.
    [The information follows:]

  Contractor Funds in congressman Nethercutt's Congressional District

    The Department encourages the award of cooperative 
agreements through peer reviewed competitive solicitations. 
This was also required by the passage of the Hydrogen Future 
Act of 1996. The Department was aware of a joint effort on 
phosphoric acid fuel cells between International Fuel Cells 
(IFC) Corporation, Spokane Intercollegiate Research and 
Technology Institute (SIRTI), and Washington Water Power. In 
order to expedite the ability of the Department to proceed with 
a review of a formal proposal, Spokane Intercollegiate Research 
and Technology Institute (SIRTI) and International Fuel Cells 
(IFC) Corporation were informed of a Program Research and 
Development Announcement to which they could have responded 
concerning the development of advanced high temperature 
phosphoric acid fuel cells fueled by hydrogen. The final date 
for submission of proposals was March 14, 1997, and the funding 
awards will be announced after the review process is completed.
    In addition, the Hydrogen Program has established a mission 
to work with fuel cell manufacturers to develop hydrogen-based 
electricity storage and generation systems to enhance the 
introduction and penetration of distributed renewable-based 
utility systems. As part of that activity the Hydrogen Program 
is proceeding with plans to issue a solicitation for a Hydrogen 
Fuel Cell Project. According to the original plan, that 
solicitation was scheduled to be released after the completion 
of a design study of a hydrogen fuel cell by the International 
Fuel Cell Corporation which is anticipated to be concluded in 
May. It is expected that IFC and SIRTI will respond to that 
solicitation. There has been to delay in the Department's plans 
to move this process forward.

    Mr. Nethercutt. I also want to follow up, too, on Mr. 
Dicks' question with regard to the Fast Flux Test Facility. 
That has great potential medically, too.
    Mr. Dicks. Right. I forgot that----
    Mr. Nethercutt. I appreciate your being willing to consider 
continuation of it and as to how it fits into the Department's 
requirements, but it does have great medical benefit for 
cancer----
    Mr. Dicks. Medical isotopes.
    Mr. Nethercutt. So that's a second reason, it seems to me, 
that it ought to receive high consideration from your 
Department. I'll hope you'll do that.
    Secretary Pena. I'm aware of that, Congressman, and your 
new governor has been very effective also, in addition to the 
congressional delegation, in bringing the medical isotope 
byproduct to my attention.
    Mr. Nethercutt. Great. Thank you very much, and good luck 
to you.
    Secretary Pena. Thank you.
    Mr. Regula. Mr. Skeen.

                      Waste Isolation Pilot Plant

    Mr. Skeen. Thank you, Mr. Chairman, and, Mr. Secretary, 
it's a pleasure to have you before this group. I have a very 
noncontroversial topic I want to talk to you about, but I just 
want to say to you that you have had a distinguished career, 
and I hope we can resolve some of these problems we've got 
before us.
    As you know, the Waste Isolation Pilot Plant is located 
near Carlsbad in my district, and the State began receiving 
transuranic waste in November of this year. However, it's come 
to my attention that there are some serious timeline problems 
within DOE and the EPA. I understand the complexity with 
obtaining certification from EPA, but I have some difficulty 
understanding why the DOE is not making a concerted effort at 
all levels to ensure the compliance process is moving to meet 
the timeframe, as established by the Federal law which I 
drafted. Now is the time to protect our children and 
grandchildren's future by putting that waste where it belongs 
in WIPP. You've been the mayor of Denver, Colorado, and I know 
you want the transuranic waste stored at Rocky Flats, in 
particular, and all other sites in general, shifted to WIPP for 
permanent and safe storage as soon as possible.
    Second, I understand DOE received a letter from EPA in 
December requesting further documentation they claim is 
necessary for application completeness and technical 
sufficiency, and has DOE replied yet? Right now we're looking 
at an EPA decision to open next year, and they are essentially 
blaming DOE for the delay. Yet, the law states that a one-year 
decision period began upon DOE submittal, which was last 
October. And what is DOE doing to facilitate EPA obeying the 
law and meeting its October deadline for decisions?
    I also understand there is some indecision within DOE on 
its timeline for readiness and completion for WIPP's opening. 
What is the current DOE timeline, and if it's not targeted for 
November of 1997, why not? I have some more questions 
concerning adequate funding I will submit for the record, and I 
would deeply appreciate your reply to these, as well as any 
further in-depth replies to my previous questions.
    Again, I hate throwing this all on you at one time, but 
this thing has been festering long enough, and it's about time 
we moved this waste we have above ground and get it in this 
facility, because it's ready to go and has been for some time.
    Secretary Pena. Congressman, I agree with you. Let me tell 
you what we're doing. Let me tell you my position.
    No. 1, this is a very high priority. I've already had one 
conversation with Administrator Carol Browner at EPA about the 
importance of this facility to the country. I've met with the 
current mayor and the past mayor of Carlsbad in my office to 
talk about their very strong support, obviously, and they want 
to make sure we open that facility on time.
    Let me explain the process. There may be a little 
misunderstanding.
    Mr. Skeen. I'd appreciate it.
    Secretary Pena. I do not believe that there is a fight 
between DOE and EPA or that anybody is not obeying the law. 
What traditionally happens is that the Department will submit 
its documentation to EPA, and because the application is quite 
voluminous, EPA will ask questions; and that is what is going 
on. So this is normal.
    Now what I want to make sure is that your concern is met, 
and that we don't have elongated conversations about documents 
that have not been provided. So----
    Mr. Skeen. That's correct. We've gone through this exercise 
with EPA and some of the others.
    Secretary Pena. I think the fact, Congressman, that there 
is a likelihood of litigation on this project requires all of 
us to make sure that the documentation and the record are 
complete. The last thing we want to do is to be challenged for 
an incomplete record. So I will do everything I can to make 
sure that the DOE personnel are responding to EPA, working with 
EPA according to the law, so that that one-year timeframe can 
begin to be triggered.
    And, by the way, the legislation simply says that EPA, if 
it wants, may take up to a year from the time the record is 
officially complete. So it need not take a full year, if the 
record is complete.
    Also, there have been contemporaneous evaluations by EPA of 
this record while it has been developed. So it's not as if EPA 
is starting for the first time----
    Mr. Skeen. That's right.
    Secretary Pena [continuing]. Looking at the record. Having 
said all that, as you know, at least the target date was 
November of this year.
    Mr. Skeen. Yes, sir.
    Secretary Pena. Four things have to happen: EPA has to do 
its work. The State of New Mexico has to issue a RCRA 
certificate.
    Mr. Skeen. We understand that, and we're working on that.
    Secretary Pena. That's right, and we're very pleased with 
that progress. The Department of Energy has to make two other 
findings, which we will make according to the law. So we're 
going to work very, very hard to try to meet that goal and 
cooperate with EPA, answer all the questions, and finally get 
that site open. It's important to the country. It's a great 
success, I think, for the people of Carlsbad, the great work 
they've done there, and, as you've said, it is important to 
many sites around the country who want to move their 
transuranic waste and finally have it disposed in Carlsbad.
    Mr. Skeen. Well, you have to understand the feeling I have 
and the intensity of it, because I've been with this project 
for some 20-odd years, and we've had delay, delay, delay by the 
administrators, and particularly by some of those on the inside 
who are supposed to be oversight observers of the process. It's 
a good process. It's a good unit. We need to get on with this 
because it's been ludicrous. We're letting this stuff pile up, 
as you know, in Idaho, Colorado, the panhandle of Texas, in 55-
gallon drums that are corroding, and they're setting over 
aquifers and water, and we've had some litigation already in 
the Idaho area. So I hate to be this intense about something, 
but the hair stands on the back of my head when I keep thinking 
of all the fiddle-faddle and folderols we've gone through, 
particularly with some of the agencies.
    I appreciate your response because, with the record you've 
had at Transportation and being an airplane jockey, I've always 
appreciated what you did with aviation and the rest of your 
responsibilities. You've done a great job. The previous 
Secretary also had an interest in this thing, and we've moved 
it along, and we'd like to get it done. It's gone on for far 
too long.
    Thank you very much for your responses, and I have some 
questions I'll submit to you in writing.
    Mr. Skeen. Thank you, Mr. Chairman.
    Mr. Regula. I think what we'll do is go around in the same 
order for anyone that has an additional question you'd like to 
ask, before we let the Secretary go. Mr. Wamp?
    Mr. Yates. Mr. Chairman, I thought I preceded--Mr. Wamp?
    Mr. Regula. I'm sorry. I'm sorry. [Laughter.]

                         Air quality standards

    Mr. Yates. Not that I'm not interested in the questions, 
but I just have a few of my own.
    My city, Chicago, is concerned with the new EPA regulations 
for air quality. I think every city in the country is. And I 
have an idea that most of the pollutants in the air are caused 
by transportation. At least, if my memory's correct, at least a 
third of the pollutants are caused by various factors in the 
transportation industry. Is my memory correct on that?
    Secretary Pena. In some of them they are. For carbon 
monoxide, it's largely transportation; particulates, a lot of 
transportation. So, yes.
    Mr. Yates. How close are we--this supplements our previous 
discussion--how close are we to cutting back those pollutants 
in the field of transportation in the large cities or the whole 
country, for that matter?
    Secretary Pena. Well, Congressman, in many areas we have 
made remarkable progress. Let me give you an example of Denver 
again.
    Mr. Yates. Okay.
    Secretary Pena. It was not but a few years ago where Denver 
violated the carbon monoxide standards 31 days out of the year, 
and last year I believe it had zero days. And a lot of cities 
have made significant progress----
    Mr. Yates. How did that happen in Denver?
    Secretary Pena. Through the use of everything from 
alternative-fuel vehicles to inspection and maintenance 
programs, a number of strategies that were used. Obviously, the 
newer cars that are being purchased now are more efficient, are 
less emitting in terms of CO and other emitters.
    The point I want to make is that a number of cities have 
made great progress in achieving the old targets that EPA had 
established for carbon monoxide or for particulates, for PM-10, 
and so it is very understandable that cities like Chicago and 
others are now asking questions about these new standards, 
because in some cases cities that perhaps were previously in 
compliance may be found to be in noncompliance. For that 
reason, all of us in the administration have been working on 
this issue with EPA, as we typically do, to make sure that we 
continue to make advances in cleaning the air, but to do it, I 
think, in partnership with the communities who I think very 
much want to clean up the air also, and I know the mayors 
personally throughout the country are taking great strides in 
cleaning their air.

                      Alternative fueled vehicles

    Mr. Yates. How far away are the alternative-fueled vehicles 
themselves from conversion? You talked about the use of natural 
gas.
    Secretary Pena. Yes.
    Mr. Yates. If I remember correctly, Denver was emphasizing 
ethanol as one of the alternative fuels. But you talk about the 
PNGV, but that's in the distant future, isn't it?
    Secretary Pena. We're looking at 2002 and 2003, but, as the 
announcement today by Ford, they're thinking that the midpoint 
of the next decade they will have these in almost full 
production.
    Mr. Yates. There's no way of having EPA wait for that happy 
day, is there, before it puts its regulations into effect?
    Secretary Pena. Congressman, I think you're asking a 
difficult question. [Laughter.]
    Mr. Yates. Thank you, Mr. Chairman.
    Mr. Regula. In the case of Denver, was there any standard 
requiring delivery vehicles to use natural gas, for example? 
Some of the cities are pushing very hard to get fleet vehicles 
on natural gas as a beginning.
    Secretary Pena. There were some voluntary efforts, as I 
recall, with a number of the companies that had large fleets--
--
    Mr. Regula. Right.
    Secretary Pena [continuing]. And, in addition to the 
Federal agencies and State agencies and city agencies to try to 
use CNG fleets of one kind or another----
    Mr. Regula. Did you have fueling stations in Denver?
    Secretary Pena. Yes. We had two or three around the city. 
So if one wanted to have a CNG vehicle, if one wanted to have a 
CNG fleet, there were stations that were there.
    Mr. Regula. Mr. Wamp?
    Mr. Wamp. Thank you, Mr. Chairman.
    It's always good to go after Mr. Yates because he brought 
on a whole new area here that we can talk about. Thank you, Mr. 
Yates, for bringing up the issue of new air quality standards 
proposed by Ms. Browner. [Laughter.]
    Let me just say, representing Chattanooga, Tennessee, which 
went from almost the dirtiest air quality city in America to 
one of the cleanest air quality cities in America, we did that 
with a great partnership between industry and government, but 
our private sector manufacturers went beyond the minimum 
standards, and they did it in a way where they took ownership 
in the whole process, and it worked because--it worked not 
through brute force from the Federal Government, but through 
partnership and through ownership, and I think that the new 
standards are big time overreach. I'm concerned what it does to 
our coal-fired power plants in this country because, as you 
well know, for a variety of reasons, we stopped construction of 
nuclear power plants. There are no permits that I know of now 
in process. There are 110 reactors, I think, online. I'm the 
chairman of the TVA caucus in our seven-State region, and we 
have now five reactors online, but that's it. At one time they 
were going after 17. It's now five; that's the end of it; no 
more nuclear plants, okay?
    If Ms. Browner succeeds and we shut down the coal-fired 
plants, we're going to have to have a lot of dams in this 
country to generate enough power for the people that live here. 
And so, I mean, I don't want to oversimplify it, but it's a 
big-time problem. I think it's an overreach, and I think we 
ought to all speak with a united voice that we hold off on that 
for a while and see how things go, as maybe Mr. Yates 
suggested.
    Secondly, on the tritium production, there are going to be 
parochial pulls for you, sir, from all over the country. So I'd 
just ask you to keep your powder dry. [Laughter.]
    We've got a $4.5 billion asset in the TVA system 
that'snever been used, a power plant that was built and is sitting 
there with two reactors, never been used, totally capable of doing the 
whole deal, triple play, if that's what you determine. So there's 
inventory and assets all across the country, but I will say don't 
contaminate a green field site if it's not necessary. There are assets 
within the system that we can use where we don't have to contaminate a 
green field site.
    And then, thirdly--and this gets into tomorrow morning's 
hearing some, but I think everybody's kind of ventured out of 
the jurisdiction of the Interior Committee in their comments--I 
think it is, as we learned for six years, all that I could 
learn in six years, it's absurd to think that we're going to 
make real progress toward cleaning up the nuclear legacy until 
we establish some reasonable di minimis level of contamination. 
We can't take all these sites back to their original condition. 
It's not economically feasible. It's not practical, and some of 
these buildings, some of these assets, can be put back into 
productive brown field use unless we establish some reasonable 
di minimis level.
    Over the last two years, I've met with literally every one 
of your Assistant Secretaries--Secretary O'Leary's Assistant 
Secretaries, some of which you will undoubtedly keep--about 
this particular issue, because I think we have to do that. The 
reindustrialization effort, as Secretary Alm has promoted, 
really I think has been received well on the Hill over here 
from the Republican Congress because, for the first time, it 
actually sets budgets and targets and says, let's get on with 
it and let's get some buildings cleaned up. But how far are we 
going to take them, and how many of them can be put back into 
productive use? That's another big issue that you face and big 
challenge. I look forward to working with you the whole way. 
We've got to have science drive a di minimis level, not 
mythology, not fear, but science.
    Mr. Regula. Mr. Miller.

                        official time monitoring

    Mr. Miller. Was there a question? [Laughter.]
    I'm new at this. I'm trying to learn a lot of these 
programs because this was targeted by many Republicans for 
elimination, the Department of Energy; it was the sugar daddy 
of corporate welfare located there, and so I'll have a lot of 
questions as we go through this to find out how much corporate 
welfare really exists in this program.
    But, anyway, let me switch to the question, next question 
that I have, which is unrelated to the corporate welfare area. 
Well, I guess in a way it is related. Official time--and since 
you're starting, it's a good time to raise the question, and 
maybe there ought to be a policy on it--official time is the 
paid time off for union activities. And I don't know at the 
Department of Transportation if you had a policy to keep track 
of it, but there has been a dramatic increase in the 
utilization of official paid time off for union activities in 
those departments or agencies for which there has been--the 
Social Security Administration has increased like 300 or 400 
percent in the past three or four years. I know you're new in 
this Department, but I don't know if you even kept track of it 
in the Department of Transportation, but if not--I mean, have 
you kept track of the official time or do you----
    Secretary Pena. Congressman, I don't think it was as much 
of an issue in DOT because we didn't have the extent of union 
involvement that we have in DOE with the contractors and the 
contractor workforce, et cetera.
    Mr. Miller. Is there a way to keep track of it or would you 
check into that?
    Secretary Pena. I'd be happy to.
    Mr. Miller. Monitoring official time--because, as I say, I 
know in other areas there's been a dramatic amount of it in 
some other agencies of the government----
    Secretary Pena. Let me go back to my team and ask that, 
Congressman.
    Mr. Miller. Okay.
    Secretary Pena. In my briefings, I did not have a chance to 
get briefed on that.
    Mr. Miller. Okay, thank you.
    [The information follows:]

                   Time Keeping for Union Activities

    All DOE employees are required to report to an assigned 
time keeper on a weekly basis to record all types of leave, 
including annual leave, sick leave, and administrative leave. 
Within the administrative leave category are recording codes 
for mandatory attendance at work-related meetings, snow 
emergencies, and Union-related activities.
    Union representatives are granted official time to perform 
representational duties, such as negotiations with management 
officials, attendance at formal discussions with agency 
officials regarding personnel policy and practices, and the 
preparation and presentation of grievances.
    Matters for which official time is not granted are those 
dealing with the internal business of a labor organization, 
such as solicitation of membership, elections, and dues 
collection.

    Mr. Regula. Mr. Dicks.
    Mr. Dicks. Was Mr. Miller ahead of me? He passed?
    Mr. Regula. He just finished.
    Mr. Dicks. Oh, excuse me. I'm sorry. [Laughter.]

                       energy efficient buildings

    Let me ask you about the Energy Efficiency Program as it 
relates to buildings and businesses. Are you satisfied with the 
role the Federal Government is directing in trying to do energy 
efficiencies in our own buildings and encouraging companies to 
get out there and do energy efficiency work with various 
businesses around the country, in terms of the amount of energy 
they use for lighting and heating and things of that nature? 
I've been told that that's another way we could save a lot of 
energy.
    Secretary Pena. That also is another key program in this 
area, Congressman, and let me first talk about the government 
effort. Secretary O'Leary, and the President, frankly, had 
directed us to begin to make modifications in the various 
buildings, and I want to continue to remind my associates on 
the Cabinet and throughout the government of the importance of 
this. A lot has been done, for example, in the Department of 
Energy's building. Others have done the same. I know at 
Transportation we took some measures, too. We can obviously do 
more.
    As respects the private sector, Secretary O'Leary had 
reached a number of voluntary arrangements with a number of 
companies in this area. I think that's one thing we can 
continue to encourage the companies to do. There is lots of new 
technology available now which will pay back in terms of 
investment. So that is also a very important part of the 
strategy, and I want to focus on that, as I will with other 
areas, too.
    Mr. Dicks. Good. I have no further questions. It's good to 
see our former colleague, Mr. Kripowicz, here today, and we're 
glad he's down there working with you.
    Mr. Regula. Mr. Moran.

                   weatherization assistance program

    Mr. Moran. Thanks, Mr. Chairman, and congratulations and 
welcome, Mr. Secretary. It's nice to see you.
    About a month ago, I went to a trailer off Route 1, and 
there was an old lady living in that trailer and she was paying 
over $120 a month for heating oil. Now a weatherization 
assistance program, a local company that gets funding to do 
this came in and they caulked the gaping holes. So it turns out 
she was paying more than twice what she should be paying, just 
because of all these holes in the trailer that she was living 
in, and, yet, we were funding her heating oil assistance and 
had been doing so for years. So they caulked up the problems, 
put some insulation underneath, and now her heating oil bill 
goes down, and since we were subsidizing those bills, we saved 
far more money than it ever cost to weatherize it.
    But I'm wondering, do we generally weatherize these 
trailers? Because I know we give a substantial amount of fuel 
assistance to people who are living in trailers, and it takes 
years to catch up and actually weatherize the thing for a 
fraction of the cost that we pay out in subsidizing the heating 
cost.
    You have an increase, I guess, in your budget, but it might 
be useful to address that. It seems a little----
    Mr. Regula. Will you yield?
    Mr. Moran. Yes, sure.
    Mr. Regula. I'd like to piggyback on your question, when 
you're answering this, and say: should LIHEAP and 
weatherization be combined, because LIHEAP does some of it; we 
do some of it, and you're suggesting they ought to be 
coordinated since they're totally related. So if you'd enlarge 
on that.
    Mr. Moran. That's the better question: why don't we 
coordinate LIHEAP because we'd save a lot of money with 
weatherization?
    Secretary Pena. They're both excellent questions. Let me 
try to answer them.
    No. 1, yes, the program, the Weatherization Program does 
also include homes, mobile homes, and trailers. We think that 
the Weatherization Program is a very good program.
    And let me answer the second question by making this point: 
Let me encourage all of us to look at this differently. Unlike 
the LIHEAP program, which is more directly a ``poverty'' 
program, a direct payment to help someone take care of a bill, 
this, in my view, is more an energy program for this reason: 
when that woman, I believe you said lost all that energy, 
someone paid for it, and that affected our energy elsewhere in 
the community. And so to the extent that we have lost and 
wasted energy throughout the country in building the homes and 
mobile homes, that has an impact on our energy cost as a 
nation. All of the rest of us as consumers end up paying for 
that in one way or another. So I would suggest we look at this 
as an energy strategy. Again to the question I raised earlier 
about how we bring the consumption line down if we are to get 
to a question of energy-independence--so, in that sense, it is 
different from the focus and the philosophy of the LIHEAP 
program, which is more directly, I think, a low-income family 
program. This, I think, is an energy-saving program, and we 
ought to look at it as such.
    It just so happens that we lose most of our benefits in 
homes that are older, in mobile homes, that have cracks, et 
cetera, open doors, broken windows, which are owned by people 
on fixed incomes, senior citizens, for example. I've been to 
their homes in Denver, and we've seen that, where people seal 
off part of their home because they can't heat the entire home. 
They never step into a bedroom, and they only have the kitchen 
sealed up to conserve heat.
    So I think this is an energy program, and, obviously, there 
has to be coordination with LIHEAP, and there is a connection, 
but I think it has a different focus.
    Mr. Moran. Yes, it just seems, Mr. Chairman, that it 
doesn't make sense to be paying out LIHEAP money when, if we've 
brought in weatherization, we could be saving a substantial 
amount of money, Federal money, that goes to direct assistance 
for the people to meet their bills. Their bills would be half 
what they are now in some cases.

                       energy efficient buildings

    Let me ask another question. You've got a 31-percent 
increase in your Energy Conservation Program for buildings. To 
what extent do you get the States to modify their building 
codes, so that they are consistently energy-efficient with what 
you are trying to do in your Energy Conservation Program? I 
don't see why the States and localities don't have building 
codes that are maximally energy-efficient and consistent with 
what the Department of Energy is recommending.
    Secretary Pena. Congressman, my understanding is that we do 
work with the States in providing guidance, explanations as to 
the benefits of these kinds of programs, et cetera, butthe 
States, then, take final action, but I do believe we have coordination 
with the States, and perhaps let me have Dr. Romm amplify a little more 
about the specifics of that relationship.
    Mr. Romm. Yes, we definitely work with the States to help 
them develop building codes and to be as energy-efficient as 
possible.
    Mr. Moran. Well, it seems like $302 million for energy 
conservation, most of it going to buildings, again, I just hope 
we're not putting in subsidies where we could solve the problem 
more directly by having State, and ultimately national, 
building codes that reflected the most energy-efficient 
consciousness that you could inform them on. It seems like that 
should be the first step before we--go ahead.
    Secretary Pena. We agree.
    Mr. Moran. I'll ask a question and then I'll turn it back 
to the chairman. But to what extent do we try to put in 
renewable energy sources in Federal buildings? Are we trying to 
do that now?
    Secretary Pena. Yes, we are, Congressman. I know, for 
example, last year Secretary O'Leary and I dedicated a solar 
panel that was used in a park between the FAA building and the 
DOE building. That's a relatively modest example of how we can 
work together on these kinds of programs. But, yes, the answer 
is we do work with other departments, encourage them to look to 
increased efficiencies, et cetera. Obviously, we can do more, 
and this is a high priority because if you look at the Federal 
Government, we are perhaps one of the biggest sectoral 
consumers of energy in the country.
    Mr. Moran. Well, we sure are. Let me give you an example. 
You're familiar with that enormous southwest Federal Center 
that we just built without an occupant, initially at least. 
Shouldn't we be using buildings like that as models to set a 
standard for renewable energy? I don't see where they're using 
sunlight to heat or anything like that. It's just another big 
concrete building, probably responding more to the contractors 
that were available and interested in doing the work than in 
maximizing energy efficiency that we're capable of 
accomplishing.
    Secretary Pena. Congressman, it's a good question. Let me--
I don't know if Dr. Romm wants to amplify what the relationship 
is with new construction.
    Mr. Moran. Well, what's the relationship with GSA when they 
go about building a new building?
    Mr. Romm. Well, we do have a number--through the Federal 
Energy Management Program, we do have a number of showcase 
buildings that make use of renewables. I do not believe that 
we--we do not have renewable energy technologies in every new 
Federal building, but we do demonstrate and integrate 
renewables into a number of new Federal buildings.
    Mr. Moran. Well, it's nice to have showcases, but I think 
it would be even more impressive to actually put it in a major 
Federal building as a matter of course, and we're building a 
lot of them here in the Washington area. I don't see any real 
forward progress in terms of renewable energy sources being 
used within the construction of these new buildings. We've got 
a whole bunch of them, and, you know, they're really already 
outdated in terms of maximizing their energy use.
    Secretary Pena. Congressman, let me do this: we'll have a 
conversation with GSA about how we can have a more constructive 
relationship as respects future construction. I think this is a 
very good point that you raise.
    Mr. Moran. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman.
    Mr. Regula. Just to follow up on that, you've asked for a 
57 percent increase in your Federal Energy Management Program, 
which goes to this issue, and it would seem to me that the 
agencies ought to do that. Maybe you ought to jawbone them 
about using energy efficiency in their construction, but should 
not OMB put the pressure on? I don't know that it's the role of 
DOE to be out there as a watchdog.
    Secretary Pena. Mr. Chairman, I think it's both. I think we 
try to encourage, but the departments themselves also use part 
of their budget. So it's going to have to be, I think, a 
combination for a while.
    Mr. Moran. Could I just piggyback on that for just a 
moment?
    Mr. Regula. Yes.
    Mr. Moran. If you'd yield for a moment, Mr. Chairman?
    Mr. Regula. Surely, I'll yield.
    Mr. Moran. Great opportunity, the Pentagon, we're going to 
rehab the whole Pentagon, one of the biggest office buildings 
ever, and we're going to do it in stages where we move people 
out temporarily and then move them back in. Could we see if we 
could try some of our 20th century know-how before----
    Secretary Pena. The 21st century comes? [Laughter.]
    Mr. Moran [continuing]. Yes, before the 21st century is 
upon us at the Pentagon? And I think that would be a wonderful 
place to show what can be done and should be done.
    Secretary Pena. Let me, with your permission, invite Dr. 
Romm to address that. I think he's aware of some issues.
    Mr. Romm. Yes, I mean, in the specific case of the 
Pentagon, we launched last year a specific program called 
Greening of the Pentagon, in which we brought together some of 
the top design architects, renewable energy and energy-
efficiency experts, to do a charette, to go through and look at 
all the opportunities for energy efficiency and renewable 
energy just because, as he said, there's going to be a major 
retrofit of the building. So I think that you will see the 
Pentagon become much more energy-efficient over the next 
several years and many state-of-the-art technologies 
introduced.
    Mr. Moran. Well, I'm glad I threw you that soft ball. 
That's great. [Laughter.]
    Excuse me, Mr. Chairman. Thank you.
    Mr. Regula. Mr. Dicks?

                       electricity restructuring

    Mr. Dicks. One question I forgot to ask when I had the 
time, and I just want to make just one comment, and that is, 
those of us who come from the Pacific Northwest remain very 
committed to the Bonneville Power Administration, and I know 
you hear all kinds of talk about privatization and everything 
else.
    In our region, on a bipartisan basis, Democrats and 
Republicans are in favor of the government continuing to own 
and operate the Bonneville system. We have some very serious 
problems out there with salmon and the Endangered Species Act, 
but I'm very confident that we can work with you and with 
Bonneville, who we feel has played a very constructive role in 
our regional economy. We have some ofthe lowest-priced energy 
in the country.
    But the point I wanted to get to is that we're concerned 
about--and I want to be careful--on deregulation. And I would 
make this observation: in my district we have a number of 
hydro-projects in the Northwest, all of which have fish and 
natural resource problems. And the phenomena we're seeing with 
deregulation is that, as the relicensing comes up and they have 
to go before FERC, all the Federal agencies come in and want to 
add tremendous additional cost to these projects, and some of 
which I would support in terms of salmon and everything else. 
But, as you well know, on the other hand, we're going toward 
energy deregulation, which forces us to be much more 
competitive. And the concern I have is that you're going to see 
a lot of people just turning in these licenses on hydroelectric 
projects in the Pacific Northwest and in the West in general, 
because of this conflict we have with the agency saying, Do all 
these things and not worry about the cost, and, yet, while 
we're going to de-reg them with these more efficient gas-
turbine engines--there's people around who want to provide very 
low-cost energy, and I think this is going to be an emerging 
problem. I just want to know if you've had a chance to even 
consider that, and maybe tell us a little bit how you feel 
about de-reg.
    Secretary Pena. Congressman Dicks, I have been involved in 
these discussions. No. 1, the administration is in the process 
of circulating a proposed restructuring bill that DOE has been 
working on for some time, and we will work with the various 
departments in the government to come to closure on that as 
quickly as we possibly can.
    In that discussion, we are fully aware of the unique status 
not only of Bonneville, but of some of the power marketing 
administrations, some of the rural cooperatives which have 
relationships with the Department of Agriculture in terms of 
Bonneville, et cetera. And so it might be--and we have not 
reached a final decision here, but let me throw out some 
options--it may be that we may want to in this restructuring 
effort specially treat entities like Bonneville and the power 
marketing authorities----
    Mr. Dicks. Right.
    Secretary Pena [continuing]. Separate from a de-regulated 
environment. That is at least an option, but no decision has 
been made about that yet, and we are still vetting our proposal 
throughout the administration.
    But the points you've raised I think are very good ones. 
We're aware of the challenges that Bonneville has, and we're 
also aware of the cost-cutting measures that Bonneville has 
taken very recently to stay competitive----
    Mr. Dicks. Right.
    Secretary Pena [continuing]. To their credit, and, 
obviously, we have to be mindful that we don't impose 
unnecessary requirements to make their situation even more 
challenging in a more competitive environment.
    Mr. Dicks. And I'm not just talking about the dams that 
Bonneville operates. There are all kinds of small--as you well 
know--hydroelectric projects, and after 60 or 70 years they 
come up for relicensing. I'll give you one example. In my 
district I have Lake Cushman, and, as you well know, you can 
get gas turbine electricity at about 15 mils in firm, five-year 
contracts in our area. The cost of this power today probably is 
at 11 mils, very inexpensive, and the utilities said, well, 
we'll go up to 24 mils, and do mitigation and other things that 
the agencies wanted. FERC came in at about 47 mils, or 
thereabouts. The agency proposal was 134 mils, which would make 
it completely uncompetitive. So just to give you an example of 
this--you know, I just think there's a lot of people in these 
agencies who don't realize that we're in a more competitive de-
regulated environment. And what I worry about, if that occurs 
as all of these relicensings come up, the utilities are going 
to have to just turn in their license, and there's a big policy 
question here about who is responsible for this problem, and is 
there a taking? And you're going to have a lot of litigation.
    So I'm just saying, in your new job, there are about 2,000 
of these dams in the West that are going to have to be 
relicensed, and I think this is a very serious problem, and one 
that I think some in the Administration would like to avoid. I 
don't think you're going to be able to avoid it, because you're 
going to have a number of these. The Administration is going to 
have to have a policy as it relates to it. There are very major 
environmental questions about it.
    So I just wanted to inform you of that today and I look 
forward to working with you to see if we can't figure out some 
way to deal with it.
    Thank you, Mr. Chairman.
    Mr. Regula. We have a couple more questions. Will you have 
a role, will DOE have a role on the deregulation of 
electricity, which of course is a very hot topic now?
    Secretary Pena. Yes, Mr. Chairman, DOE is the lead agency 
here, and we have already developed proposed legislation for 
electric restructuring or de-regulation, and now we're 
circulating that throughout the administration to get comments 
from the other departments, but we are the lead agency here in 
dealing with this question. We hope to complete our work as 
quickly as possible. We know that perhaps there may be some 
hearings in the House fairly soon on this matter. And so we 
want to be players in this conversation in the Congress.
    Mr. Regula. And you're working with the Commerce Committee; 
specifically, Mr. Schafer, I think, has a bill in?
    Secretary Pena. Mr. Schafer had a bill last year. I don't 
think he's held hearings yet this year, but I think he's 
proposing to have hearings, I think, next month. He's 
introduced legislation.
    Mr. Regula. Yes.
    Mr. Dicks. Mr. Delay has a bill. There's, I think, several.
    Mr. Regula. Several. Undoubtedly, it's not going to happen 
this year, but it's a topic that's on everybody's radar screen.

                      strategic petroleum reserve

    If we don't get an increase in this committee on our 
allocation, we're going to have to again sell SPR oil. Now I 
know you did not include it in your budget request. Would you, 
for the record, say why this is a good or a bad idea, to sell 
SPR oil? And I think I know what the answer might be, but I'd 
like to have it in the record.
    Secretary Pena. Well, Mr. Chairman, it's my view that we 
should not sell any more of the oil out of the Strategic 
Petroleum Reserve. The reason for that is that we now have a 
67-day supply. We are required, or at least our goal was to 
have, a 90-day----
    Mr. Regula. It was at one time 90, was it not?
    Secretary Pena. Ninety days, that's correct. And, secondly, 
given that I am committed to shape an energy-independence 
strategy, the role of the Strategic Petroleum Reserve will be 
very important in making that strategy. So our goal and our 
intention is not to have any more sales out of the Strategic 
Oil Reserve. I know that three sales occurred in the last two 
fiscal years. There were so many circumstances about that, but 
I think as a matter of policy we should try to avoid that in 
the future.
    Mr. Regula. I'm sure you're aware of this GAO report on 
energy security, but the essence of it is that we're going to 
be vulnerable for many years to come, and probably the greatest 
challenge your Department faces is how to get the U.S. in a 
position to at least reduce our vulnerability to oil shock or 
oil disruption.
    Secretary Pena. Absolutely, Mr. Chairman, and the strategic 
petroleum reserve is one part of a multi-pronged strategy to 
get us more security and more independence.

                          appliance standards

    Mr. Regula. Just one other comment, and you and I have 
talked about it. It's in the area of appliance standards. These 
standards ought to be perhaps set on a wholistic approach to 
the industry. In other words you give them a challenge to meet 
a certain reduction in energy usage in appliances, and let the 
various manufacturers, since most of them manufacture a range 
of appliances, divide how to achieve a goal across their 
appliance portfolio, just as we do with the auto industry, and 
also to work closely with EPA to make sure that the standards 
are consistent in the sense of, if you build a refrigerator 
box, that you're dealing with the CFCs at the same time you 
deal with the efficiency standards.
    I understand you're going to review that refrigerator 
standard; is that correct?
    Secretary Pena. Mr. Chairman, that's correct, the 
refrigerator rulemaking, and it is a rulemaking. So I have to 
be careful, though, what I say here. It's still being reviewed, 
and I'm hopeful that we will address that as soon as possible. 
It is now under my watch. So I will attempt to address the 
various points of view that a number of the parties had about 
the various proposals that are circulating.
    Mr. Regula. Well, thank you, Mr. Secretary. If you do this 
well in five days, you'll be dynamic next year. [Laughter.]
    Mr. Moran. Mr. Chairman?
    Mr. Regula. Yes?
    Mr. Moran. Can I ask one final question?
    Mr. Regula. Yes.

                   indian tribes and renewable energy

    Mr. Moran. There was a Senator from Nevada who tried to 
develop a solar energy zone for an Indian tribe. Indians have a 
particular problem in that, as you know, their location is 
somewhat remote and their insulation is abysmal, but if we 
could work with the Indian tribes in teaming them up with some 
companies that wanted to get into renewable energy, it seems 
like that would be a terrific opportunity, but there's nothing 
in the budget. Would you look into that? It ties into what this 
committee is doing in having the responsibility for Indians as 
well.
    Secretary Pena. I'd be happy to, Congressman Moran. I was 
not aware of that particular issue.
    Mr. Moran. Yes, I think that's kind of an exciting thing to 
explore. So thank you, and excuse me for interrupting. Thank 
you, Mr. Chairman.
    Mr. Regula. That's perfectly all right.
    Also, Mr. Secretary, one of the members, Congresswoman 
Northrup, has some questions. I'm going to put them in the 
record on her behalf. She's not a member of this subcommittee, 
but I think these are germane to the topic that we are 
addressing.
    Mr. Regula. So I have a number of questions that will be 
for the record as well as these from Congresswoman Northrup.
    Mr. Regula. If not--any other comments, questions?
    [No response.]
    If not, the committee is adjourned.
    [The following questions and answers were submitted for the 
record:]


[Pages 468 - 518--The official Committee record contains additional material here.]


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


                          Department of Energy

                        Office of Fossil Energy


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


                                          Wednesday, April 9, 1997.

                          DEPARTMENT OF ENERGY

                        OFFICE OF FOSSIL ENERGY

                               WITNESSES

PATRICIA FRY GODLEY, ASSISTANT SECRETARY, OFFICE OF FOSSIL ENERGY
ROBERT S. KRIPOWICZ, PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF 
    FOSSIL ENERGY


[Pages 522 - 524--The official Committee record contains additional material here.]


    Mr. Regula [presiding] We'll call the committee to order 
and we've got a lot of time constraints, so we're going to move 
this morning.
    We're happy to welcome you, Ms. Godley, and we're going to 
put your statement in the record, and also you, Bob. It's nice 
to be on the other side of the table, huh? [Laughter.]
    Your statement will be made part of the record and we'd 
appreciate it if you'd summarize.
    Ms. Godley. Thank you, Mr. Chairman. In fact, I'd like to 
limit my opening remarks to just a few brief comments that will 
emphasize not only the importance of the budget that we are 
presenting to you, but also the importance of energy, and 
particularly fossil energy in a larger context. Most of us 
don't think about the fact that we rely on energy for every 
single thing that we do from the moment we get up in the 
morning and pour that glass of refrigerated orange juice; pop 
the toast in the toaster; and adjust our heat or 
airconditioning; hop in the car and drive to work, turn on our 
computers; get on an airplane to go to those important 
meetings; cash our paychecks that result from the manufacture, 
sale, and export of the products of our work and our 
industries, products we could not have made or consumed or 
exported without energy; enjoy the protection of our armed 
forces whose weapons, communications systems, global mobility 
would not be possible without energy.
    In fact, Americans spend more than a half a trillion 
dollars each year on energy. Just over $200 billion of that is 
for electricity, another $200 billion for oil. Energy is not 
just another commodity. It is imperative to our economy, our 
quality of life, and our national security.
    Mr. Chairman, another fact that you know well is that 
fossil fuels supply 85 percent of the energy Americans consume. 
Fossil fuels are the reason why we have the strongest economy 
in the world. They are why we enjoy a standard of living that 
is the envy of the world. And it is important to recognize that 
even as energy consumption grows in this country, perhaps by as 
much as 20 percent over the next 15 years, the contribution of 
fossil fuels will grow. Even with the significant progress in 
the efficiency with which we use energy and the increase in 
affordability of renewable energy resources that Assistant 
Secretary Ervin will be discussing, our Energy Information 
Administration forecasts that coal, oil and natural gas will be 
supplying 88 percent of the energy this Nation will require by 
the year 2015.
    But the increase in the use of fossil fuels brings with it 
two very significant challenges. First, the increased use of 
fossil fuels results in increased environmental impact and 
pollution resulting from the combustion of those fuels. We're 
not alone in this regard. World energy use is projected to 
increase by 33 percent by the year 2010 and most of that growth 
will be supplied by fossil fuels.
    China, just as one example, will double its coal use over 
the next ten years, much of it fueling its huge increase in 
demand for electricity which will require the addition of 
between 30 and 50 new 330megawatt power plants a year over this 
period, providing a huge new potential market for U.S. 
technologies and an opportunity to create thousands of new U.S. 
jobs.
    China's cities, just as an example, now suffer the emission 
of two times the legal limits of sulphur dioxide that we 
require in this country and ten times our legal limits of 
smogcausing nitrogen oxide. These pollutants are why in many of 
China's cities, as in other cities in the East, residents 
literally see and taste the air that they breathe. China's 
greenhouse gas emissions will triple by early next century with 
global as well as local impact.
    The second challenge from increased fossil fuel use in this 
country comes from our heavy reliance on imported oil and 
petroleum products which supply about 98 percent of the fuel 
consumed in our transportation sector. That reliance requires 
us to import nearly 50 percent of our oil supplies today, which 
at $50 billion a year creates the largest component of our 
trade deficit and a projected 60 percent ofimports by 2015. And 
by 2015 it is projected that more than 50 percent of the oil we import 
will come from the Persian Gulf.
    Mr. Chairman, the budget that we are presenting to you 
provides Americans with the tools to effectively address both 
the environmental and the energy security challenges of fossil 
fuel use. The funds that we are requesting for research and 
development will develop technologies that will produce more 
domestic oil and gas at lower costs and cut our oil imports by 
up to a million barrels per day by the year 2010 and increase 
our natural gas production in the United States by 3.7 trillion 
cubic feet per year--technologies that, when developed, will 
allow us to use our vast domestic coal resources, and we have 
more proven reserves of coal in this country than the rest of 
the world has proven reserves of oil, in ways that are ten 
times cleaner than today's standards, virtually eliminating the 
common pollutants associated with coal in electric power 
generation. We have concepts that can cut the release of carbon 
dioxide in half from power generation, buying us decades of 
time to develop permanent solutions to global climate concerns.
    With advanced technology we can continue to rely on 
America's true energy strengths--coal, oil and natural gas--
without compromising our commitment to a cleaner environment, 
our commitment to a stronger economy, and our commitment to a 
more secure energy future.
    In short, our program focuses on cutting edge R&D concepts, 
concepts that are well beyond the technological timetables of 
corporate research and development, but they are not overnight 
wonders. Their success depends on sustained commitment to R&D 
by the government at a time when private sector R&D is being 
severely curtailed.
    With that, I think I'll conclude my comments this morning 
and welcome your questions and those of the other members.
    [The prepared statement of Patricia Godley follows:]


[Pages 527 - 544--The official Committee record contains additional material here.]


    Mr. Regula. Thank you very much. We'll go right to the 
member questions. I have a couple, then we'll go with the other 
members.

                     clean coal technology program

    You mentioned, of course, the importance of coal in our 
energy picture, and yet the budget proposes rescinding $153 
million and shifting that, and then I notice a supplemental 
proposes to rescind an additional $10 million. How can you 
absorb all of this and still keep the Clean Coal Program on 
track, recognizing the importance of this both in terms of 
clean air, as well as in being able to use a fuel that's in an 
abundance in this country?
    Ms. Godley. Sure, and you know that we have a continued 
commitment to the Clean Coal Technology Program. As from the 
beginning of the program we have always contemplated that not 
all of the demonstration projects would go to completion, and 
in fact what we've found is a number of our partners in these 
projects have withdrawn the projects.
    The rescissions that we're proposing for the 1998 budget, 
as well as the rescission for 1997, is going to bring us to the 
edge of the funding commitments that we have. It will severely 
constrain our ability to meet cost growth in these projects, 
but, nevertheless, we believe we can meet the base project 
requirements with those rescissions.
    And I might end by saying that we still have several 
projects that are still in the design phase and they may have a 
possibility of not going either. So while we don't know that, 
we're not making the judgments now. I think this is at the 
margin what we can do with rescissions.
    Mr. Regula. Well, as you know, we've rescinded over $323 
million. Has this resulted in projects being terminated?
    Ms. Godley. No, sir.

                      strategic petroleum reserves

    Mr. Regula. SPR--again, it's a matter of energy security--
do you think we should sell more oil out of SPR to fund 
operations in the Fiscal Year 1998 budget?
    Ms. Godley. No, sir. I don't believe that to be true. I 
think that we need to continue to fund--to get the request for 
funding that we've made for continued operations for SPR and 
not sell anymore oil in Fiscal Year 1998. That's an important 
oil security and energy security device for us, our insurance 
policy against interruptions in oil imports, and I believe we 
need to maintain it at its current level.
    Mr. Regula. Well, I notice the Administration is proposing 
to sell a billion dollars worth of SPR oil in 2002 and this is 
a little gamesmanship on getting a balanced budget. I fail to 
see the difference between selling 200 million a year for five 
years or selling a billion dollars of SPR oil in 2002, which 
would create a huge glut on the market, an overhang. I don't 
know if you had a voice in preparing this, quote, ``balanced 
budget,'' but isn't that a bit of gamesmanship?
    Ms. Godley. I think, from the beginning, what the 
Department has said with respect to that proposed sale has been 
that it is a budget holding device, a number in the budget, and 
that we're hopeful that between now and the year 2002 that the 
economy will be such that we won't be required to sell that oil 
in order to meet a balanced budget. It is a placeholder, 
however, between now and then is how we're viewing it.
    Mr. Regula. It may be a leap of faith.
    Ms. Godley. Excuse me?

                            epa regulations

    Mr. Regula. It may be a leap of faith instead of a 
placeholder. As you know, EPA has proposed stringent new 
standards for regulating ozone and particulate matter. I've 
learned more about this issue. One thing that's clear--there's 
a dearth of science and there's not even an air monitoring 
system with the ability to track the levels of particulate that 
EPA has proposed regulating.
    In fact, as I understand, they've asked for $27 million to 
do more research. It's kind of like having a hanging and then 
you get the jury sequestered after you've hung the defendant. 
We get the science after the fact. What, if anything, has your 
agency done with respect to research on these pollutants and 
should more be done by your agency with respect to improving 
the science in this question of clean air and particulates and 
ozone?
    Ms. Godley. My understanding of where the rulemaking is at 
this moment is, if or when issued, that the states would have a 
year and a half basically to develop their state implementation 
plans. I would imagine that those plans would require some 
amount of monitoring done at the state levels that would 
determine both the source and the amount of particulates that 
need to be addressed in those states.
    We don't have currently any programs at DOE that would 
assist in that monitoring effort, but we have in the past 
teamed up with EPRI and with members of industry to monitor air 
toxics, pollutants emitted from power plants, in advance of a 
previous EPA rulemaking. We have some experience in that, but 
we don't have any ongoing research in the area of monitoring 
for particulates.
    With respect to compliance with the standards, we, of 
course, have had significant successes in reducing 
SO2 and NOX reductions from power 
generation. We have currently a number of programs that would 
reduce NOX emissions even further. So we have those 
in-house and there are some other efforts, other programs we 
could undertake with sufficient funding.
    Mr. Regula. Do you think there's adequate coordination 
between your agency and EPA?
    Ms. Godley. We have a close working relationship with EPA. 
To my knowledge, we have had higher level consultation with EPA 
on this rulemaking, but we have not in the Office of Fossil 
Energy been involved in any.
    Mr. Regula. Who would get the $27 million for research that 
they're proposing to expand?
    Ms. Godley. I don't know, sir.
    Mr. Regula. Mr. Yates?
    Mr. Yates. Yes, Mr. Chairman. I suggest, for your thrust 
about not knowing where they're going, the third chapter of 
``Alice in Wonderland.'' Do you remember the quatrain? `` `I'll 
be judge, I'll be jury,' said cunning old Fury. `I'll give them 
a trial and I'll put them to death.' ''
    Mr. Regula. There you go. Always glad I have a great 
historian and a scholar in our midst. [Laughter.]

                         clean coal technology

    Mr. Yates. I'm as disturbed, I think, as the chairman is 
because Illinois is a coal-producing State and we do have 
sulfur coal. I was particularly struck by the statement where 
you said that you are committed to clean coal technology, and 
the elimination of particulates and the other pollutants. Yet 
you say your budget is adequate, even with this massive 
reduction this year. How can that be reconciled?
    Ms. Godley. Are you speaking about the rescission in the 
Clean Coal----
    Mr. Yates. That's only $10 million, but there's also the 
failure to make available--what is it?--$120 million that was 
originally called for?
    Ms. Godley. Right. And then the rescission in the Clean 
Coal Program. Again, of the 40 projects in the Clean Coal 
Technology Program, a number of those projects have already 
dropped out through the decision of the project sponsors.
    Again, the money that we proposed to rescind in 1998 is 
within the amount of money that we have as a result of some of 
those projects being terminated. Again, where we are somewhat 
at risk is we may not be able to fund any cost growth or 
additional cost growth in those projects if any should come in 
as a result of those----
    Mr. Yates. What will you do if that happens?
    Ms. Godley. Well, as you'll recall, in the Clean Coal 
Technology legislation, the Federal Government was authorized 
to fund up to 25 percent of the base project in cost overrun--
authorized, but not required to. And that's been an 
understanding of the program from the beginning. So if the 
Federal Government, if we did not have the funds available to 
meet the cost growth requirements, those requirements would 
have to be met by the project sponsors.
    Mr. Yates. Well, will you be on track? When do you 
anticipate that your statement will reach fruition? When are we 
going to say to the producers of coal in Illinois we have this 
available to make your coal clean? What's your timing on that?
    Ms. Godley. Our advanced research in the area of clean coal 
technology, in addition to the Clean Coal Technology Program, 
is projecting that we can--especially if we combine some of our 
combustion technologies with, for example, fuel cells--can 
reach efficiency levels in excess of 60 percent while reducing 
SOX and NOX and those sorts of pollutants 
by less than one-tenth of the currently applicable new source 
performance standards and lower the cost of electricity----
    Mr. Yates. When will you achieve this?
    Ms. Godley. That high of standards is in the 2010-2015 time 
range under current program projections.
    Mr. Yates. I want to yield.
    Mr. Regula. I wish you could see the Tampa Electric 
Greenfield plant. They're getting close to accomplishing the 
goals that we're talking about.
    Mr. Yates. What does their research do at the Tampa 
Electric plant?
    Ms. Godley. The Tampa plant is a demonstration of 
integrated gasification, combined cycle power generation 
technology. And those efficiencies in that plant are expected 
to be up at the 45-48 percent efficiencies. As you know, about 
35-37 percent----
    Mr. Yates. Well, I have the impression that there's a 
relationship between the progress of your research programs and 
the amount of money that's available.
    Ms. Godley. Absolutely.
    Mr. Yates. Okay. And if the amount of money is reduced, 
doesn't that have an effect on your research? Now, as I 
understand what you're saying is the amount of money that you 
have set aside for programs that have dropped out will permit 
you to absorb whatever reduction the committee recommends.
    Ms. Godley. Yes, sir.
    Mr. Yates. Well, let's take the contrary. Suppose the 
committee makes more funds available to you. Will that speed up 
your program?
    Ms. Godley. Yes, sir, it would. I will add the caveat that 
under the Energy Information Administration's projections of 
when new baseload power plants, either coal-fired or natural 
gas-fired power plants, will be required in this country, that 
those power plants will not be required until after the year 
2005 in any large number. So that our technology window is 
aimed at that new market or new requirements for baseload power 
plants.
    Mr. Yates. Well, suppose the committee were to recommend 
more money than the budget calls for. Would that help you?
    Ms. Godley. It would accelerate the completion of the 
research and development and, in some cases, demonstration that 
we're working on, yes, sir.
    Mr. Yates. And how much money do you think you would need 
for that?
    Ms. Godley. I can't give you a number off the top of my 
head. Again, I don't believe we need additional money in the 
Clean Coal Technology Program because we think we can fully 
fund the projects in those programs even with the rescissions 
we're requesting.
    Other areas, we might take it on a project-by-project 
basis. For example, in the Low Emission Boiler Systems Program, 
if we had an additional $15-20 million in that program, we 
could keep it on its current time track which is to be 
completed in the year 2000. Our request is lower than that 
requirement and extends the program to the year 2002.
    So on a program-by-program basis we do have numbers that 
would keep us on a 2000 year time track instead of a 2002 time 
track. That's the same thing in the Advanced Gas Turbines 
Program, the LEBS program, and the fuel cells program.
    Mr. Yates. Would you amplify your answer for the record----
    Ms. Godley. Yes, sir.
    Mr. Yates [continuing]. Where the funds could be used and 
how beneficial the additional funds would be?
    Ms. Godley. Yes, sir. I will.
    [The information follows:]


[Pages 550 - 551--The official Committee record contains additional material here.]


    Mr. Regula. Mr. Nethercutt?
    Mr. Nethercutt. Thank you, Mr. Chairman. Welcome to you 
both.
    Madam Secretary, I took particular interest, as the other 
members of the subcommittee did, in your comments about clean 
coal and coal technology. As you know, the President made the 
declaration under the Antiquities Act to name a national 
monument in Utah. The declaration really frustrates the 
development of low-sulphur, low-ash coal deposits, perhaps some 
of the richest in the world. My information is that the 
development would have covered about forty surface acres of 
land out of about 1.8 million acres.
    First of all, do you support that decision?
    Ms. Godley. Yes, sir, I do support it.
    Mr. Nethercutt. Even though it can clearly be perceived as 
contrary to your argument that we need to look at clean coal as 
an alternative to other fossil fuels that we're currently 
using?
    Also, I assume you consider in your answer the fact that we 
have low-sulphur, low-ash deposits in--where?--Indonesia. We 
are effectively shipping our energy development--at least for 
low-sulphur, low-ash coal--overseas. I guess I'll ask you how 
you can reconcile that, and the second question is, were you 
consulted with regard to that decision? And if so, what was 
your decision?
    Ms. Godley. With respect to your first question, I think 
that the good news about coal in this country is that we have 
an abundance of it. Again, we have more proven reserves of coal 
in the United States than the rest of the world has proven 
reserves of oil. Again, coal provides in our country, again, 
the good fortune of being a huge export for us, helping with 
our balance of payments, our export payments in this country. 
So coal is a good resource.
    With respect to the decision in Utah, I personally did not 
have involvement with that. It would fall into the area of the 
Office of Policy in our Department. I believe there were 
interagency discussions with respect to that decision as well.
    I don't know how to balance the interests of--and I know 
the Administration did balance the interests in their 
judgment--of the value of that as a monument versus the other 
potential uses of that land. So I think, again, to answer your 
question, that we have significant reserves of coal in this 
country. We are fortunate to be able to export those and 
continue and not have it affect our energy security in this 
country and to the benefit of the economy as a whole.
    Mr. Nethercutt. Wouldn't you agree that the richness of the 
deposits in Utah are not available in other parts of the United 
States for easy development?
    Ms. Godley. I'm not that familiar with coal as a resource 
state-to-state, but I know it is a rich resource in Utah.

                               fuel cells

    Mr. Nethercutt. Well, for what it's worth, I think that was 
a shortsighted decision, clearly unbalanced, notwithstanding my 
commitment and everybody else's commitment at this table to a 
clean environment and to wilderness areas, and so on. But to 
make the unilateral decision as the President did I think was 
very shortsighted and will likely have consequences to your 
department and your commitment to clean fuel development in the 
future.
    I also heard you talk about, or testify about, fuel cells. 
You've requested a decrease of money in the Fuel Cell Program 
in your agency, yet they're apparently going to retain all 
three contractors involved in that Fuel Cell Program. Will this 
reduction not put the Fuel Cell Program and the relationship 
with the contractors behind schedule?
    Ms. Godley. As with the Advanced Gas Turbines Program and 
with the LEBS program, the request in the area of fuel cells 
will stretch out that program so that its completion date will 
be extended I believe it is two years. Again, that really is an 
effort to meet the bipartisan commitment to a balanced budget 
and it takes some budget reductions where we thought we could 
without severely injuring any programs. We are committed to 
fuel cells as a unique, new energy resource for this country 
and believe that that commitment of funds will continue the 
development of fuel cells.
    Mr. Nethercutt. I understand. I have some parochial 
interest because there is a fuel cell program project out in 
the east side of the State of Washington involving a public-
private relationship, and I think you, we, your agency has to 
be concerned about the contractors who are the participants in 
those programs losing confidence in the integrity of the 
program if it's stretched out and if the deadlines and the 
commitments that have been previously made are not met.
    One final question, if I may.
    Mr. Regula. Sure, no problem.

               bureau of mines health and safety research

    Mr. Nethercutt. The health and safety research functions of 
the Bureau of Mines, former Bureau of Mines, have now been 
transferred to the Department of Health and Human Services 
under NIOSH. In the testimony that appeared last year there 
were statements that the work of NIOSH was consistent with the 
functions of your office, but that the Bureau of Mines health 
and safety research functions had some synergy with NIOSH. Do 
you feel that that transfer was appropriate now, looking back 
from the last Congress?
    Ms. Godley. It's hard for me to judge that. There's so many 
different factors involved in it. I do know that the portions 
of the Bureau of Mines that were transferred into the Office of 
Fossil Energy have synergy with our office. The research, for 
example, in Albany is material to related research that we can 
use and fit in to the strategic plan for fossil energy, 
including our full work.
    We are able to integrate the folks who are already at the 
Bruceton site in Pennsylvania with our work in the Federal 
Energy Technology Center. Those pieces work for us and I, 
frankly, am not familiar enough with the other programs really 
to provide an opinion on the others.
    Mr. Nethercutt. Thank you. Thank you both.
    Mr. Regula. Mr. Miller?
    Mr. Miller. Thank you for being here today. And this is my 
first year on the committee, so I look forward to learning a 
lot more as we go through these hearings.
    Yesterday, I had the pleasure of testifying before a 
committee of Congress. It's always fun to be on the other side 
of the table. I was testifying, basically, on the elimination 
of the LIHEAP Program, a low-income energy program, feeling 
that the need for that program is passed. Now, maybe there was 
a need back in the late seventies and early eighties, but today 
this should be a state responsibility. The Federal Government 
should step aside on that one.

                           corporate welfare

    One of the arguments for the program, they said, well, we 
should go after corporate welfare, not just welfare for the 
poor. Well, I agree. The Energy Department is a lot of times 
targeted as one of the leaders of corporate welfare. And your 
department is identified in that area.
    Let me discuss and explain what corporate welfare means to 
me. I'm a big believer in basic research. I sit on the 
Corporation Committee for NIH. I'm a strong proponent of NIH 
basic biomedical research. When you get into applied research 
and applied research monies that flow to huge, multi-billion 
dollar corporations, why would that not be considered corporate 
welfare and how do you define corporate welfare and how do you 
defend some of these programs?
    Ms. Godley. That's a very fair question and it's one that 
we've asked ourselves in reducing the Office of Fossil Energy's 
R&D budget by 21 percent in the last two years. So we've taken 
the scalpel to the programs that we have, but not really for 
reasons of corporate welfare. The definition that I hear most 
frequently of corporate welfare is the use of Federal funds to 
benefit corporations in a manner that doesn't have broad public 
benefit. And the work in our programs does not fit within that 
definition of corporate welfare.
    In the area, for example, of oil and gas exploration and 
production technologies that we're developing, 95 percent of 
our partners in those programs are small companies, not major 
oil companies. Ninety-five percent are small companies.
    Mr. Miller. What's the definition of small?
    Ms. Godley. Small companies?
    Mr. Miller. Approximately.
    Ms. Godley. Less than $50 million in revenues a year, I 
would think, something in that area. But, to focus on another 
piece of that, that program is mostly directed towards 
independent oil and gas producers in this country. Those oil 
and gas producers produce 40 percent of the oil, 70 percent of 
the gas, and yet they have--90 percent of the independents have 
fewer than 20 employees in their companies. So these companies 
don't have R&D programs where they're developing technologies 
to develop our domestic oil and gas resource base.
    All of our programs in the oil and gas area also require--
have a technology transfer requirement. So when we partner with 
a 50 percent cost-share with our oil and gas producers, for 
example, if that technology is successful and it's successfully 
applied to their programs, they have a requirement to then 
transfer that technology to other producers. It doesn't just 
benefit that one company.
    Finally, I think that--this is on the oil and gas side--
that when you look at, for example, our industry laboratory 
partnership program where we put producers together with our 
national laboratories, we're turning unique Federal 
capabilities or expertises that were developed--for example, in 
our weapons laboratories, underground weapons testing generated 
incredibly advanced seismic and computational technologies that 
we can now turn to use in finding oil and gas supplies. And 
that computational technology, I think, is a unique Federal 
capability that wouldn't be available to the public of truly 
turning swords into plowshares in that example.
    And I can give you other examples, but, again, each of the 
programs that we have, even on the power generation side where 
there are large corporations involved, each of those projects 
have a broader public benefit that is transferred into the 
public. It doesn't just rest with those companies.

                     basic versus applied research

    Mr. Miller. How do you differentiate basic versus applied 
research? And then when you get to the applied research issue, 
the CBO made a comment that Federal agencies typically lack 
market feedback for determining when a new technology is too 
expensive or esoteric for commercial purposes. When you get 
into applied, how do you know that you're not just throwing 
money away?
    Ms. Godley. Exactly. And that is another good question. The 
primary reason we know that is virtually all of our programs 
are cost-shared with industry, up to 60 percent in some cases. 
The Clean Coal Technology Program, for example, one-third of 
that program is Federal dollars. Two-thirds of that 7 billion 
ten-year program----
    Mr. Miller. The light program is only 25 percent. Do you 
have a minimum percentage? Should you?
    Ms. Godley. We don't have a minimum percentage--well, let 
me just rephrase it another way. The percentage that we require 
differs according to where on the technology development chain 
that project is. So, for example, in areas that are higher 
risk, more basic than applied, we require less cost-sharing on 
that end of the scale than we do, for example, closer to the 
market. You know, pre-commercial R&D, close to the 
demonstration phase, could be 50-60 percent cost-sharing. So 
the closer you get to the market, the much heavier the cost-
sharing for industry.

        funding to historically black colleges and universities

    Mr. Miller. One more question. I know this is over in NIH 
and other areas, but under the Advanced Research and Technology 
Development Program there's a preference for historically black 
colleges and universities. Is that a quota? I mean, basic 
research should be basic research. But do you have a quota 
operational?
    Ms. Godley. We don't have a requirement----
    Mr. Miller. How does that work, historically favored--I 
mean, do you automatically give a certain amount of grants to 
them or is there a guarantee? Or how does that----
    Ms. Godley. It's not a guarantee. We issue--we try to 
identify universities that have expertise in the area in which 
we're doing work, and where there is a match between the work 
that is ongoing, typically in the basic end of the research 
cycle, we'll match up our commitments to the historically black 
colleges and universities according to expertise. It's not just 
an automatic commitment.
    Mr. Miller. So they get favored grants?
    Ms. Godley. They're identified as a performer of R&D that 
we want to provide money to support that institution if--
provided that the work that they have, the expertise that they 
have, is supporting the programs that we have ongoing.
    Mr. Miller. Thank you, Mr. Chairman.
    Mr. Regula. Thank you. Just to advise the committee 
members, what I hope we can do is complete this hearing by 
about five after 11:00 or so, and then do energy conservation 
and wind up this morning and save us all some time. So we'll 
move from one right into the other. Mr. Moran?
    Mr. Moran. Fine, Mr. Chairman. Thank you. I have three 
areas of inquiry. The first is a quickie.

                      strategic petroleum reserve

    You justify the Strategic Petroleum Reserve on the basis of 
national security and foreign policy. Has the request been made 
to put this under the Defense 602(b) allocation, even within 
the Defense budget?
    It seems to me that the chairman has had that concern in 
prior years and I don't know--I wouldn't be surprised if Mr. 
Yates hasn't wondered about that as well. And it sure would 
help us, and I think it would be a more appropriate allocation 
to put the SPR under Defense. What do you think?
    Ms. Godley. I think that whatever methodology is used to 
fund this program, that's what we need to do. The point from my 
perspective, or our perspective, is that the program should be 
funded. We should continue to support the Strategic Petroleum 
Reserve. How that gets funded, I don't really have anything--I 
don't know how to value that judgment.
    Mr. Regula. Will you yield?
    Mr. Moran. I'd be happy to yield.
    Mr. Regula. I've been trying for two years to get that to 
happen because $200 million a year out of Defense is just a 
blip, and out of our budget it is significant. So I welcome 
your help in trying to move that over to Defense. It's really a 
national security issue, and I agree with your line of 
questioning.
    Mr. Moran. Absolutely. They could include that just in a 
little bit of rounding. [Laughter.]
    Ms. Godley. In that case, I think it's a great idea. 
[Laughter.]
    Mr. Moran. That would be a win-win. So we ought to talk to 
Jack Murtha about that, and Mr. Young.

         interagency panel for environmental and energy policy

    Okay, now, the second one: Mr. Chairman, I'm going to 
suggest that we set aside whatever money is required, and I 
doubt that it's going to be much money, but I ought to atleast 
have some language that the Executive Branch put together an 
interagency panel to develop an organic environmental and energy act. 
We are nickel and diming this thing. Here we come out with regulations 
on ozone--I've had this discussion with Ms. Godley and our subsequent 
witness previously, but, you know, we come up with ozone regulations 
that are going to be much more difficult than most states are going to 
be able to, and certainly willing to, comply with. Yet greenhouse gas 
emissions are far more important than that, really on a relative scale. 
We've got the Department of Transportation doing some of the most 
important energy stuff. We've got Interior, we've got Energy, we've got 
DOT, and we've even got--we ought to get foreign policy perspective.
    When you consider the fact, if we could get some of these 
other countries, China being first and foremost, using some of 
our advanced technology, that would reduce greenhouse gas 
emissions and the threat of global warming far more than all of 
the cumulative actions we take individually and collectively as 
citizens of the United States. And yet we're not pushing this 
adequately with China. And we ought to. It ought to be a 
foremost objective of our foreign policy.
    But while we had a comprehensive energy policy about a 
decade ago, I don't know that there is such an organic, 
comprehensive policy now. It ought to at least be updated, if 
not reinvented, and I think there's a lot of merit to having an 
interagency panel to come up with one organic environment/
energy policy for the executive and legislative branches to 
implement. And so, I'm going to ask that we have the executive 
branch sit down and see if we can't do something like that.
    Mr. Regula. Well, would you yield?
    Mr. Moran. Yes.
    Mr. Regula. Would you contemplate putting energy and 
environment in one agency, or something like that?
    Mr. Moran. I think there's some merit to that, but I'm not 
going that far. If there's going to be that kind of a 
recommendation, it would be more helpful that it come from the 
Administration. I think EPA does good work. I think DOE does 
good work, and, of course, I have about 30,000 employees that 
are employed by both of those agencies, Mr. Chairman.
    Mr. Regula. So they must do good work. [Laughter.]
    Mr. Moran. Yes, they must. But that's not my ultimate 
objective, to find ways of downsizing. My ultimate objective is 
to maximize our efficiency and integrate our policy, and I 
don't think our energy and environmental policy is sufficiently 
integrated. And we have a golden opportunity, where the former 
Secretary of Transportation is now the Secretary of Energy and 
understands both perspectives. So I would hope that this 
subcommittee might consider some language that would get that 
ball rolling.

                        greenhouse gas emissions

    And let me just ask you the third area, specifically on 
ozone vis-a-vis greenhouse gas emissions, your perspective, 
where we have some really tough ozone regulations coming out. A 
lot of us are going to be trying to get our States to comply; 
we're going to be running interference for the Administration 
on this. But knowing that a far more serious problem is 
greenhouse gas emissions and the global warming it's causing, 
and most people have no idea of the difference. Would you give 
us some comment on that, Ms. Godley?
    Ms. Godley. On--I'm sorry?
    Mr. Moran. Well, on our fossil fuel; greenhouse gas is 
primarily a fossil fuel issue.
    Ms. Godley. Right.
    Mr. Moran. In fact, I'm becoming more and more inclined 
towards nuclear power the more we look at this issue. But 
you've got a problem with greenhouse gas, and I think your 
ability to implement that policy is undercut by ozone 
regulations which are going to be extremely stringent and not 
necessarily targeted where we need the special effort.
    Ms. Godley. And I think that the answer in the short and 
midterm to all of those issues is going to be the development 
of technologies that will allow us to minimize the 
environmental impact of energy use--production and use--whether 
it's fossil fuels or other energy resources.
    And that is in fact why--and I think that the 
Administration has come up with what I believe is a balanced 
investment in both the energy efficiency--in cutting down the 
energy that we require in this country--as well as to increased 
domestic production, and minimizing the environmental impact, 
for example, of the use of fossil fuels. I think that's an 
appropriately-balanced portfolio.
    I think that we require additional technology development 
to meet these more stringent requirements over time in a way 
that's affordable to this country and to other countries. And 
in my view it's going to be the technology advances, advanced 
technology, that will allow us to get there.
    Mr. Moran. Thank you, and thank you, Mr. Chairman.
    Mr. Regula. I advise the members that I think we have 
enough time for another round of questions, so we'll go ahead, 
and if you have additional questions, you'll have an 
opportunity as well to have those submitted for the record.

                     fossil energy research funding

    I notice the Administration is supporting huge funding 
increases for energy conservation research, while fossil energy 
research funding is declining. It seems to me that, long term, 
that's the reverse of the way it ought to be. The real key is 
to do the fossil research to be more efficient in the use of 
our resources and perhaps make the resources less polluting. 
Conservation is nice for one year--a band-aid approach--but it 
doesn't address the long-term national security problem.
    How do you comment on that?
    Ms. Godley. Well, again, I think that, like all 
investments, it's a matter of judging where you want to put 
your resources and where the ultimate biggest bang-for-the-buck 
is going to come. I think that when we look at the projections 
for the increase in energy use in this country of 20 to 21 
percent between now and the year 2015, half of the equation of 
energy security is reducing our requirements for energy. And 
the other half, of course, is making sure we have enough 
available to meet the resulting requirements. So, I think the 
Administration's judgment on where to put money to achieve 
energy security, whether it's through reducing our energy use, 
or investing in our existing fossil fuel technologies to reduce 
the environmental impact of those, or investing in long-term 
energy resources and the renewable energy resources; again, 
it's a judgment on just how to divvy up the amount of money we 
have for that. So, I agree with the judgment that the 
Administration has made in that regard.
    Mr. Regula. Well, I would expect that, but it doesn't 
necessarily mean that we do. [Laughter.]
    At least we did get your take on it.
    I notice that the oil research program is the big winner in 
the fossil energy budget; other items are decreasing. Why would 
oil research get an increase in your budget and others are 
less?
    Ms. Godley. I think when you--again, we tried to present 
our budget in a slightly different way this year to show where 
we're emphasizing technologies or work that contributes to 
reducing the environmental impact of our fuels, as well as 
investments that are intended to increase energy or oil 
security in this country.
    So, I think that any increase in the area of the oil budget 
is targeted towards decreasing the cost, for example, in areas 
of environmental compliance, so that we can bring down the cost 
of producing domestic oil and help our producers compete in the 
world marketplace so that we don't shut in those--what is it? 
How many thousand wells a year?
    Mr. Kripowicz. Fifteen thousand.
    Ms. Godley. Fifteen thousand wells a year now that we're 
shutting in and abandoning prematurely.
    Mr. Regula. And you're doing research for enhanced 
production?
    Ms. Godley. Correct, absolutely. In fact, our oil budget is 
primarily directed towards enhancing domestic exploration, 
lowering costs, and enhancing production.
    Just as an aside, I think that as you know, historically, 
we have differentiated between the coal R&D new budget 
authority requests versus the expenditures that we make each 
year on clean coal technology programs. And if you add in what 
we expect to expend in 1998 in the clean coal program to our 
new budget authority request for coal, coal still comprises 58 
percent of the monies we are projecting to expend on R&D in 
1998, so it's still a hefty portion of our budget.

                        advanced turbine systems

    Mr. Regula. What's the status of the advanced turbine 
systems program?
    Ms. Godley. The status is it's currently in phase III. We 
have, as you know, projected in our 1998 budget, consistent 
with the program plans from the beginning, to down-select from 
two contractors to one in the phase IV actual component in 
integrated system construction, but at a reduced funding level, 
which, as we talked about earlier, would extend the program 
completion from the year 2000 to the year 2002.
    We're currently in discussions with the contractors to 
perhaps modify phase III so that we would basically extend 
phase III, which is components development, and eliminate phase 
IV, which is closer to the market types of work, and keep the 
two contractors in the program.
    Mr. Regula. When would that get you to the marketplace?
    Ms. Godley. I believe it's still 2002.
    Mr. Regula. So you have a stretch-out?
    Ms. Godley. Right, but we maintain the work in two 
different technologies, having two different contractors.

                           sale of elk hills

    Mr. Regula. What are you doing to make sure the American 
taxpayers get the best possible return from the sale of Elk 
Hills?
    Ms. Godley. Well, Congress helped us along in that regard 
in a number of respects. As you know, we had some very specific 
milestones that we had to walk through in the sale of Elk 
Hills, including, I think, the biggest safeguard, which is the 
statute that requires us to determine a minimum price below 
which we will not sell Elk Hills. And that minimum price is to 
be determined based on the estimate of the value of Elk Hills 
under continued Government ownership by five independent 
experts in petroleum properties evaluation.
    So, DOE, or the Administration, in fact, is not free just 
to set any minimum price. It will be set by five market 
experts, and then the bids that we get on the property have to 
exceed that minimum price or the property won't be sold.
    Mr. Regula. If you don't sell it, do you have the adequate 
funds to continue operations?
    Ms. Godley. We have requested funding that, I believe, 
provides for the sale in February and then a three-month 
transition period after that. I think if we do not sell Elk 
Hills, we'll have to address funding requirements at that time.
    Mr. Regula. So it would require a supplemental?
    Ms. Godley. Yes, sir.
    Mr. Regula. Mr. Yates?
    Mr. Yates. Mr. Chairman, thank you.

                       low emission boiler system

    My home state of Illinois has committed to spend more than 
$2 million in support of the Low Emission Boiler System Prairie 
Energy project. Private industry, including the Chicago 
company, Sargent & Lundy, is going to invest millions of 
dollars in research, development, and demonstration programs. 
Federal support is critical to go along with the efforts that 
are being made by both the State and private companies.
    Does DOE have plans for this project? And what type of 
support can you give this project?
    Ms. Godley. Sir, I'm not sure I'm familiar with the project 
that you're talking about. Is it the D.B. Riley?
    Mr. Kripowicz. That's the one they're talking about.
    Ms. Godley. I'm sorry; now I'm with you. That is, of 
course, one of the three contractors--I believe the project 
that you're talking about--in our LEBS program. And again, 
under our Fiscal Year 1998 budget request, we would implement 
that program as it was originally designed to down-select from 
three to one contractors in Fiscal Year 1998. This is what the 
program originally contemplated.
    The way we make that down-select judgment is based on where 
these folks are in the development of their technologies, the 
performance of the technology, and, of course, on a qualitative 
basis, which one do we think is the one that should proceed 
with the Federal funding. So we're continuing with the program 
as it was designed, and the project that you're talking about 
will be part of that consideration on the down-select judgment.
    Mr. Yates. How much money is in the budget for that?
    Ms. Godley. $5.4 million, and, again, that is not the 
amount of money that was requested by any of the project 
participants.
    Mr. Yates. How much did they request?
    Ms. Godley. I believe we would need an additional $20 
million to fund fully that program in 1998 as originally 
contemplated. Our funding request now would stretch that 
program completion out to 2000 or 2002, but it would still be 
completed.
    Mr. Yates. Well, would failure to provide the funds 
requested mean that the State and the private contractors would 
have to put up more money?
    Ms. Godley. No, sir. Again, I think that the consequence 
would be stretching it out----
    Mr. Yates. Stretching it out.
    Ms. Godley [continuing]. Not requiring additional funding.
    Mr. Yates. Well, that's not good. Suppose you made 
available $10 million instead of the $5 million; would that 
help speed it up?
    Ms. Godley. Yes, sir.
    Mr. Yates. And they really need $20 million. Okay; thank 
you.

                         clean coal technology

    Now you've got a clean coal technology demonstration 
proposed for China. Would you, in the record, indicate just how 
you propose to go ahead with this?
    Ms. Godley. Yes, sir.
    [The information follows:]

                 Clean Coal Technology Project in China

    An advanced appropriation of $50 million is requested to 
initiate support of an international clean coal technology 
program. The funds appropriated would become available at the 
start of fiscal year 1999. The project will apply U.S. 
integrated, coal gasification combined cycle technology in the 
People's Republic of China to introduce advanced, high 
efficiency, clean coal technology in the production of much 
needed electricity. China's rapidly expanding economy depends 
on coal to supply about three-quarters of its total energy 
needs. The IGCC technology that would be utilized for this 
initiative must be adapted for the Chinese environment. 
Adaptations would be made to achieve lower capital costs, 
performance with Chinese coals, and lower operating costs. 
Modifications would also be made to the technology to allow for 
less stringent performance standards than those imposed for the 
American market. This would strengthen the competitiveness of 
U.S. power equipment manufacturers in the largest global market 
for power generator equipment.

    Mr. Yates. Okay.

                           sale of elk hills

    You spoke about the sale of the Naval Petroleum Reserve, 
and that there will be five experts who will evaluate its 
value. Have those experts been selected yet?
    Ms. Godley. Yes, sir, they have.
    Mr. Yates. Are they doing any work on it?
    Ms. Godley. Yes, sir; they were selected in February, 
contracted, I believe, by the middle of March or so, and 
they've begun their work.
    Mr. Yates. When are they expected to complete it?
    Ms. Godley. In the fall, probably in the middle to the 
latter part of September.
    Mr. Yates. The latter part of September--what happens after 
they complete their work? Does their report go to the 
President?
    Ms. Godley. Under the statutory requirements of the 1996 
Defense Authorization Act, each of the five experts estimate of 
the value of Elk Hills under continued Government ownership 
comes to the Secretary of Energy. And the Secretary of Energy 
is required to take the average of the five, or the average of 
the three if we could kick out the high and the low, and of 
those two averages the higher shall be the minimum price for 
Elk Hills.
    Now the Secretary does have the authority to actually set a 
higher minimum price; the Secretary may not set a minimum price 
lower than the higher of those two averages.
    Mr. Yates. Do you have any minimum price that has been 
established for that sale?
    Ms. Godley. No, sir.
    Mr. Yates. You don't at this time?
    Thank you, Mr. Chairman.
    Mr. Regula. Mr. Miller.

               research funding to minority institutions

    Mr. Miller. I have a couple of things to clarify, like in 
the advanced research and technology development area, which is 
$30 million. Does that money go to universities?
    Ms. Godley. Universities and national laboratories.
    Mr. Miller. Now there's ``Minority Institutions'' of $1 
million set-aside; do you have a set-aside besides minority? A 
set-aside is not a peer-reviewed type of research, is it? I 
mean, there's a limited group that can bid on it. Is that 
right?
    Ms. Godley. Let me introduce Bob Kripowicz, who is our 
Principal Deputy. He can, I think, provide a more complete 
answer to that question?
    Mr. Kripowicz. Although a specific amount of money is set 
aside, all of the proposals are still peer-reviewed so that you 
only choose the best proposals out of the total package.
    Mr. Miller. Of only that limited number that can apply?
    Mr. Kripowicz. Yes, that's correct.
    Mr. Miller. Are there any other set-asides besides that one 
that you know of off-hand?
    Mr. Kripowicz. We have set-asides by technology, but not 
specifically by other different SBIR programs----
    Mr. Miller. Oh, yes; what is that?
    Mr. Kripowicz [continuing]. Which covers the whole 
Department, which is not run by Fossil Energy; it's run by our 
Energy Research organization----
    Mr. Miller. I have a problem with that, too.
    Mr. Kripowicz [continuing]. And that is a percentage set 
aside by law.
    Mr. Miller. Again, not based necessarily on----
    Mr. Kripowicz. It is based on----
    Mr. Moran. Competitive--it's only limited to those that can 
qualify under that classification, right?
    Mr. Kripowicz. But again, those are also peer-reviewed.

                     technology transfer with china

    Mr. Miller. As for the China issue, one of the potentials 
is the export market. China is very wise as far as the 
technology transfer issue. How do you protect technology 
transfer as we do these joint ventures and such? What 
protections do we have there?
    Ms. Godley. The protection of the technology would be one 
of the provisions of the transaction as we would contemplate 
it. How that would be protected would be subject to our broader 
relationships across the Government with China.
    Mr. Miller. Would that have been a problem in the past, 
that you are aware of?
    Ms. Godley. Not in this area; I don't really know.
    Mr. Miller. We were talking briefly before about the issue 
of basic versus applied research, and I'm just trying to get a 
better understanding. As I say, I go through that in the bio-
medical research debate, also. How do you differentiate between 
the two?
    Ms. Godley. I think basic research and applied research is 
in the eye of the beholder in many cases. And as I understand 
it, although my background is not technology, the timeframe for 
the development of technologies, historically, has been 20-plus 
years from an idea to the time of market entry, and that 
depending on your area of research now, that timeframe has been 
substantially reduced by more efficient research techniques; 
for example, high speed computational capabilities that we 
didn't have before in the area of technology development.
    So, I think that my understanding is, that a general view 
is, that the timeframe that it requires to develop a technology 
is perhaps less than it used to be so that the timeframe 
between basic, applied, and market-entry research is perhaps 
compressed. Now exactly where applied research falls in that 
continuum, I think, can differ depending on your definition.
    One thing that I use in my head is that if the work 
actually produces a product--a piece of hardware, something 
that you can see and touch and look at--that to me is applied. 
Whether it can be used to accomplish its purpose is part of the 
research that's undertaken. Basic, in my mind, for what it's 
worth, tends to be more in the idea laboratory-level kind of 
work.
    But in any event, applied research is not market-ready 
research. You're not working on something that's ready for the 
market, that's commercializable. It's still high-risk; it still 
requires research and work to make it, hopefully, acceptable.
    Mr. Miller. And the philosophy--again, this goes back to 
biomedical research--is that you start the basic research, as 
at NIH or such, and then at some stage the Government steps 
aside and lets the pharmaceutical companies take over, follow-
up, pursue it, and get it to market. Do you have a policy along 
those lines as to when you kind of step back and let the market 
drive it, let the private sector drive it, rather than continue 
to fund it? Or do you keep funding it all the way to market?
    Ms. Godley. There is no hard and fast rule. Again, our 
general rule is the closer it gets to market, the greater 
degree of cost-sharing is required.
    Mr. Miller. Right.
    Ms. Godley. But specifically how much will depend on the 
technology, depend, for example, on the broader public benefits 
that might be available to that particular technology, so 
there's no hard and fast rule.
    One thing that I would throw in to this mix, though, that I 
think that we often overlook in trying to draw those kinds of 
formulas or create those kinds of formulas, is that the 
companies, the United States companies, are having to meet 
stiff competition internationally, particularly in the area of 
power generation or energy resource-related technologies. And 
we're not really playing on an even playing field; our 
companies are not.
    And I'll take as an example, Japan, which has just 
announced that it has plans to double its R&D investment; the 
Government will double its R&D investment in their energy area 
by the year 2000. It has nearly tripled the funding of advanced 
coal combustion technology over the last five years, and it 
currently spends three times what the United States Government 
does on fuel cells alone, just on that one technology.
    So, when we're looking ahead--again, as our world gets 
smaller and global trade becomes significant, and, really, we 
may be facing national security issues on the economic front 
now that we haven't faced before--assisting our companies in 
very basic and relatively small investments in technology 
development, where there's a broader public benefit, can also 
put them at least on a more even playing field internationally.
    Mr. Miller. Thank you.
    Mr. Regula. Mr. Moran?
    Mr. Moran. Thank you, Mr. Chairman.
    Two areas of inquiry--you can drink the water while I talk 
if you want to; I'll filibuster for another few seconds. 
[Laughter.]
    This is a good segue, when we talk about Japan. I want to 
talk about Asia, particularly.
    You said in your testimony that we are going to meet our 
energy demands with these fossil fuels, that that's a foregone 
conclusion. But that also means that it's a foregone conclusion 
that global warming is inevitably going to drown entire 
populations of people. There are the Seashells Islands; there 
are a whole number of islands that they're organizing a caucus 
for in the United Nations, and it is a fairly apocalyptic 
prediction, and I'm afraid an accurate one, that they are going 
to lose their land.
    Now that doesn't bother you, Joe?
    Mr. Skeen. Nothing bothers me. [Laughter.]
    Mr. Moran. Nothing bothers you. [Laughter.]
    Mr. Regula. New Mexico is high enough that they won't be 
bothered.
    Mr. Moran. That's right; that's high enough. You don't have 
the problem.
    But that's got to be a real concern. And yet, even if we 
were able to mobilize our population to do all the right things 
in terms of energy conservation and efficiency of fossil fuels, 
it's a drop in the bucket given the carbon emissions that other 
countries are going to be producing.
    Now what I want to know is, to what extent are 
youcoordinating your policy and their priorities with the Department of 
State and the Department of Commerce, who really have the ability to 
influence other countries, particularly in terms of getting them to 
purchase some of our technology which would produce tremendous gains in 
terms of reducing the global warming effect?
    Ms. Godley. I cannot tell you that there is an absolutely 
developed and coordinated strategic plan to get there. I can 
tell you that the Department of Energy, including folks in the 
Office of Fossil Energy, participate daily, almost, in 
interagency work to look at greenhouse gas emissions and 
technologies that are available or could be made available to 
address those emissions, in what timeframe, and that we're 
including that cost information as well as effective technology 
information in the models that are being done in support of the 
Administration's efforts in that regard.
    So, we are very heavily involved at the technological 
level, as well as in the Deputy's meetings on the policy level.
    Mr. Moran. Well, I'm glad to hear that, and I don't doubt 
that that's the case, but I'm not sure the White House is 
giving adequate priority or focus on this. And if they don't, 
everything we do, with all the political downside it takes to 
try to get our constituents to do the right thing, all it is is 
a bunch of feel-good measures because the reality is that we're 
not really going to gain any ground unless we can get some 
international policy implemented. We have the ability, and I 
don't think we're using much leverage to try to get those 
policy changes effected in other countries.
    China is the best example because they're going to eclipse 
so many other economies in Asia, and despite the fact that 
we're doing some stuff on clean coal technology, the reality is 
that their emissions are just going to dwarf--it's going to 
mean that all of our collective efforts are a drop in the 
bucket. They are going to undo all of our good efforts.
    The second thing; let me ask you since--I know you do 
fossil fuels--but it's intricately related to our policy on 
nuclear power, because nuclear power is really the only 
realistic alternative to dependence upon fossil fuels.
    Is it true that other countries, like France and Germany, 
are using our technology to recycle uranium and plutonium so 
that they don't have to go through all of the political and 
economic problems we're going through in terms of finding 
places to dump spent fuel rods and so on, that they have an 
alternative way of doing that, which is really American 
technology in large part that we are not implementing, but that 
they are purchasing and implementing with the security of their 
constituencies?
    Ms. Godley. Certainly that's true, and certainly countries 
like France, of course, are heavily dependent on nuclear 
energy, and that remains an option for this country as well. I 
think, though, that you've put your finger on it, that the 
political opposition, the people of our country opposition to 
the use of nuclear fuel, or the increased use of it, is very 
strong.
    I think we have in this country the issues that we read 
about in the press almost every day, with respect to the 
disposal of spent fuel, that are serious issues and that are 
difficult ones. And I think that, again, that is a policy 
judgment, a political judgment, a response to the citizens of 
this country that that's not a choice that's a viable one to 
pursue at this time.
    Mr. Moran. I don't want to put words in your mouth, but if 
I could just follow up on a quick one, Mr. Chairman.
    Would you say that it is more a matter of educating the 
American public than it is a matter of the real threat to the 
American public from the use of nuclear power?
    Ms. Godley. That's a hard question.
    Mr. Regula. You can answer that.
    Mr. Moran. That's why I asked. [Laughter.]
    Ms. Godley. And, you know, I can certainly supplement for 
the record.
    Mr. Yates. That's no quickie; that's a longie.
    Ms. Godley. I think the answer to that is not a simple one, 
and it involves a number of issues that pertain to national 
security and the use of--that can't be addressed in a short 
answer.
    Mr. Moran. So you've ducked the question. Okay.
    Well, thank you, Mr. Chairman.
    Mr. Regula. It's not unusual. [Laughter.]
    Mr. Moran. No, I appreciate your concerns; I don't mean to 
be critical of the witness.

                        electricity deregulation

    Mr. Regula. One last one. We're talking a lot about 
deregulating electricity. Do you think this will have an impact 
on the investment in conservation technology, fossil research, 
et cetera, because of the competitive forces that will be 
unleashed by deregulation?
    Ms. Godley. I think there's no doubt about that. In fact, 
an anecdote that I like to tell is that I'm the chairman of the 
International Energy Agency's working party on fossil fuels, 
and one of the warnings that the representative to that 
committee from the United Kingdom gave to us was, ``Boy, one of 
the biggest mistakes we made was not addressing the fact that 
as competition increased in electric power generation, that our 
utilities and related industries stopped investing in research 
almost altogether in the U.K. in that area by requirements.''
    In fact, we see now that the energy industries are 
investing about 30 percent less currently than they did as 
recently as three and four years ago in energy research and 
development. We're expecting that trend to continue, and that's 
on top of the fact that the Department of Energy has reduced 
its investment in energy research by 75 percent since the late 
seventies.
    So, I think Dan Yergin, who, as you know, reviewed for 
Secretary O'Leary the energy research programs in the 
Department of Energy, questioned whether we are facing anR&D 
crisis in this country with respect to energy research.
    Mr. Regula. Joe, I didn't want to overlook you, but I 
understood you didn't have any questions, and if you do----
    Mr. Skeen. No, but I'd like to make a comment.
    Mr. Regula. Okay.
    Mr. Skeen. And I want to apologize to my friend, Mr. Moran, 
over there, for interrupting him. I didn't mean to do that.
    Mr. Moran. Oh, no; you can interrupt me anytime, Joe.
    Mr. Skeen. Anytime it's global warming--well, okay, thank 
you. I would. [Laughter.]
    Any time global warming presents a threat of flooding, 
we'll take it in New Mexico. Any excess water is welcome. 
[Laughter.]
    I want to compliment the Department and you, in your role, 
and for the technology that I think helped us develop further 
the domestic supply of fossil fuels, particularly in the oil 
and gas reserves, and the new mapping technology for 
subterranean deposits. That's been an outstanding event, and my 
favorite.

                     waste isolation pilot project

    Let's go to nuclear energy. We have a repository called the 
Waste Isolation Pilot Project, and if we can get all the damn 
fools in the departments around here--if you'll excuse the 
expression--and get off of this diamond and start putting this 
stuff underground. It's sitting on asphalt pads in Idaho, the 
panhandle of Texas, Colorado, and other places, rotting in an 
open stand. And when we get it underground, the quicker the 
better.
    This constant delay of the opening date for the Waste 
Isolation Pilot Project is really causing my ear to itch. It's 
been 20 years since we developed this thing. We have a 
repository. The Europeans have been operating with repositories 
of this kind with no threat, no danger to the population. We 
have a community that's willing to accept it. You've got 
another community that's not willing to accept it--high level 
deposits and so on--but let's get on with this business and 
open WIPP.
    We're a great technological Nation, but we've got so many 
dog-gone people, self-appointed saviors, running around scaring 
the heck out of people. I think probably the basic objective of 
that is their own personal coffers, from revenue from people 
who donate to some of these causes. But let's get on with the 
business of being the technologists that we really are, and 
taking care of the problems that we are all so cognitive of.
    I want to thank you for the work that your Department has 
done and done very well.
    Ms. Godley. Thank you.
    Mr. Regula. Thank you very much for coming, and all the 
members, I'm sure, will have some questions for the record. 
We'll appreciate some prompt responses.
    Ms. Godley. You bet.
    Mr. Regula. Thank you.
    Ms. Godley. Mr. Chairman, if I could take one more second, 
and this really may respond to Mr. Miller's questions as well.
    Mr. Regula. Sure.
    Ms. Godley. We have been asked, appropriately so, what have 
we gotten for the investment of taxpayer dollars in the Office 
of Fossil Energy programs? And we have developed a concise 
summary of some of our major successes, and I would like to 
make that available to you as well as to other members of the 
committee.
    Mr. Regula. Okay, send one to each of the committee 
members----
    Ms. Godley. Will do.
    Mr. Regula [continuing]. And to Senator Grams also--
[laughter]--because he is reported in Roll Call as saying the 
Department of Energy should be abolished.
    Mr. Skeen. Who?
    Mr. Regula. Rod Grams from the Senate.
    Thank you very much for coming.
    Ms. Godley. Thank you, sir.
    Mr. Regula. This will complete this hearing, and we'll 
start the new one.
    [The following questions and answers were submitted to be 
included in the record:]


[Pages 569 - 648--The official Committee record contains additional material here.]


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


                          Department of Energy

            Office of Energy Efficiency and Renewable Energy


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


                                          Wednesday, April 9, 1997.

                          DEPARTMENT OF ENERGY

            OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

                               WITNESSES

CHRISTINE A. ERVIN, ASSISTANT SECRETARY, OFFICE OF ENERGY EFFICIENCY 
    AND RENEWABLE ENERGY
JOSEPH J. ROMM, PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF ENERGY 
    EFFICIENCY AND RENEWABLE ENERGY
THOMAS GROSS, DEPUTY ASSISTANT SECRETARY, OFFICE OF TRANSPORTATION 
    TECHNOLOGIES
JOHN ARCHIBALD, DEPUTY DIRECTOR, FEDERAL ENERGY MANAGEMENT PROGRAM


[Pages 652 - 653--The official Committee record contains additional material here.]


    Mr. Regula. Ms. Ervin, thank you for coming. I understand 
you're getting a promotion and this will be your last hearing 
here.
    Ms. Ervin. That's right, sir.
    Mr. Regula. And we'll assume that you're going over to the 
White House to get them straightened out and share some of the 
worthwhile things that we've accomplished in conservation.
    Ms. Ervin. That's right.
    Mr. Regula. Your statement will be made a part of the 
record. You can comment as you choose, and then we'll go to 
questions; and we want to move as expeditiously as possible. 
Thank you, and go ahead.
    Ms. Ervin. Chairman Regula, and members of the 
subcommittee, I am very pleased to join you today to present 
and discuss the Energy Efficiency budget of the Department of 
Energy.
    Overall, our request of about $688 million will help the 
United States reduce our dependency on imported oil through new 
transportation technologies and the promotion of alternative 
fuels. It will help small and large businesses retain jobs and 
remain competitive through greater resource efficiency and ways 
to avoid environmental compliance costs.
    We'll save consumers billions of dollars in the energy that 
they use in their homes and their offices. We'll encourage the 
use of natural gas, cut the Federal Government's energy bill by 
$1 billion a year by about the year 2004 and support----
    Mr. Yates. And what year will this occur?
    Ms. Ervin. A billion dollars a year more by the year 2004--
and support State and community programs, including the 
weatherization of 78,000 homes in Fiscal Year 1998.
    Now I know some of you may be saying to yourselves, ``Here 
she comes again asking for another budget increase.'' And, 
indeed, our request for 1998 is an increase of about $138 
million. And in a time when we are jointly moving together to 
balance the budget, you might well ask how we can afford such 
an increase.
    What I'd like to do in the next few minutes is to give you 
four reasons why I think we cannot afford not to make this 
investment in the efficiency programs. First, this subcommittee 
presides over what amounts to the largest voluntary pollution 
prevention program in the entire Federal Government, the Energy 
Efficiency programs of this Department.
    A cursory review of the statistics makes it abundantly 
clear that energy causes more pollution than any other economic 
activity. It is by far the dominant source of many of the 
criteria pollutants, of particulates and of greenhouse gas 
emissions. That is why you might call our programs, actually, 
the Fossil Energy Efficiency programs, because many of our 
programs are designed to help use fossil fuel more efficiently.
    Now we have essentially two approaches at our disposal in 
dealing with this pollution. One emphasizes regulatory controls 
on businesses and industries and on consumers, and the other 
favors strategies based on the efficient use of raw materials 
and energy through voluntary methods of R&D. Now, in fact, we 
need a combination of the two. But the investments that you 
make in these programs, I think, will go a long way into 
determining what the balance is between mandatory and voluntary 
approaches.
    A second reason for making this investment is that they are 
particularly timely given the state of deregulation in the 
utility industry that we just spoke about and the state of 
energy research and development funding overall. While the 
Administration does support, as you know, the long-term goal of 
deregulation, we are concerned about the chilling effect it's 
having on utility-supported research and demand-side management 
programs in the near term. And as you know, this is already 
exacerbating the precipitous decline in R&D spending in this 
country.
    Within the last decade we've seen R&D investment by the 
private sector drop by more than a third, and Federal 
investments are not making up the difference; in fact, quite 
the opposite; they've reduced, as my colleague, Assistant 
Secretary Godley stated, about 75 percent over the last 15 
years.
    Now many, many specialists have commented and expressed 
alarm about these trends. We heard about the Yergin Commission 
a few minutes ago. The President's Council of Advisors on 
Science and Technology, just in last December, called for 
substantial increases; not stable funding, but substantial 
increases of energy R&D spending.
    At a congressional breakfast last month, Kurt Yeager, the 
president and CEO of the Electric Power Research Institute, 
urged that we not, quote, ``let short-term expediency sacrifice 
the engine of prosperity,'' referring to the role that research 
and development plays in boosting productivity.
    And, finally, I saw recently a Wall Street Journal poll of 
1,500 economists across the country revealed that the single 
most cost-effective way to boost economic productivity in this 
country is through Government spending on education and 
research and development. Nothing else came close for getting 
the bang for the buck.
    A third reason for this investment: our international 
competitors are increasing Government support of research and 
development, even as we reduce ours. Overall, Japan does spend 
twice as much as the United States as a percent of GDP on 
research and development. Germany, the Netherlands, and 
Scandinavian countries also are outspending the United States 
on a per capita basis.
    The fourth reason why I'm asking for your support for this 
budget is that simply, we are delivering strong results on 
returns on investments to American taxpayers. These programs 
are winning a disproportionate share of the prestigious R&D 100 
awards for our technology breakthroughs. Our technologies have 
captured the very top honors from Popular Science and 
Discoveries and Inventions of the Year for the two years 
running.
    In terms of saving consumers money, using methods 
documented by the General Accounting Office, we have 
documented, for just five of our building technologies, that we 
have saved consumers $27 billion through the year 1996. Now 
keep in mind that the total R&D budget for our conservation 
programs since their inception in 1978 have totalled just $7 
billion.
    Perhaps the greatest measure of success I think comes 
though from our partners and our customers. I certainly won't 
take time to review those now, but I am proud of the fact that 
we have earned a reputation for being one of the most customer-
driven organizations in the Federal Government. It shows in the 
kind of feedback that we get from consumers who receive tips on 
how to save money from our toll-free hotline, to leaders of 
industrial consortia who credit ourpartnerships for 
dramatically reducing the costs of environmental compliance, helping 
protect American jobs.
    I said four, but let me add a fifth very quickly. One of my 
top priorities in the last several years has been to 
aggressively cut administrative costs in the office, and to 
help infuse our programs with private sector funding wherever 
possible. We have a strong track record. In terms of the 
financing, we have put in place at least five major initiatives 
that will help overcome market barriers to the financing of 
clean and efficient energy technologies. These range from 
partnerships with the insurance industry, to venture capital 
firms, to energy service companies, bankers, and lenders. That 
has required thousands of hours of effort from very many 
talented staff at the Department of Energy, and all for the 
benefit of American taxpayers.
    Mr. Chairman, as you just noted, this is my last 
Appropriation hearing in my current capacity as Assistant 
Secretary. In May, I will be moving on to the White House to 
help the President's Council for Sustainable Development pursue 
work on climate change and on smart growth policies. As such, I 
will continue to be a strong advocate for clean energy 
technologies that I think will be, should be, the cornerstone 
of the next generation of environmental policy in this country.
    So in closing, let me say that over the last several years, 
I have greatly appreciated the opportunity to work with you. 
While we have not always agreed on the levels of funding for 
these programs, I have always respected your professionalism, 
your courtesy, and your heroic efforts to balance programs 
given the budget allocations.
    I sincerely hope that this year's budget allocation for the 
subcommittee allows you to avoid solomon-like decisions. If you 
are able to do so, you have got a great opportunity to make one 
of the best investments in the Federal Government. Thank you 
very much.
    With me to help answer any questions you might have is Dr. 
Joe Romm, my Principal Deputy and leader on our budget. At the 
table is Tom Gross, who heads up transportation programs. I 
have several other of my management team behind me.
    [The prepared statement of Christine Ervin follows:]


[Pages 657 - 666--The official Committee record contains additional material here.]


    Mr. Regula. Thank you. I think it's unlikely that we'll 
have any more for 1998 than we have had in 1997, from reading 
the tea leaves. You mention that they are a management team. I 
would hope that one of your missions will be to take a critical 
look at every phase of what you do and see if through 
management you can get greater effectiveness and efficiencies.

                    industries of the future program

    For instance, the Industries of the Future program, you 
focus on several key industrial areas. I support that approach. 
I wonder why we can't take the same approach on the building 
and transportation areas where we actually focus the dollars. I 
think it's so easy in Government to get sort of spread out all 
over the landscape and not do anything as well as it should be. 
Also I think we should avoid funding anything that's beyond the 
development stage. The marketplace has to drive implementation 
of research, the product of research. The Government role is to 
develop the technology, but let the marketplace take over from 
that point on. I would hope that would be the thrust of 
whatever role you have in the sustainable future as well as 
those who continue in your department down there.
    Ms. Ervin. I am glad you posed this question and statement. 
The Industries of the Future program is in fact similar to what 
we have in place for the transportation programs under the 
Partnership for a New Generation Vehicle. It is quite a change 
from previous years where we had so many, hundreds of different 
R&D projects. These are very carefully tailored to technology 
roadmaps that are developed in partnership with key industries. 
So we have the Industries of the Future for that sector. We 
have Partnership for a New Generation Vehicle for the 
transportation sector. I am pleased to say that we have just 
launched a similar effort in the building sector just six 
months ago. We call it Buildings for the 21st Century. It is 
going to go a long way in doing the same kind of streamlining 
that you have found successful in these other programs.
    Mr. Regula. What happens is that when you have a wide 
variety, each gets constituents. Then it becomes virtually 
impossible to consolidate.
    Ms. Ervin. I am very well aware of that.
    Mr. Regula. I am sure you are. So this is a case of an 
ounce of prevention.
    Mr. Yates?
    Mr. Yates. Sorry to lose you here. You have done a very 
good job.
    Ms. Ervin. Thank you, Mr. Yates.

                           electric vehicles

    Mr. Yates. We appreciate everything you have done.
    How close are we to getting electric automobiles?
    Ms. Ervin. Tom?
    Mr. Gross. Well, one way to look at it is----
    Mr. Yates. Well, I keep seeing these articles coming out in 
the newspapers. General Motors comes out with one.
    Mr. Gross. One can conclude that we're so close that we're 
there. In terms of the introduction of certain vehicles, 
particularly in California and Arizona in the U.S., there is 
the ED-1 from General Motors. Later this year, we expect the S-
10 pick-up truck, electric version to be available, both other 
major U.S. auto producers, as well as Toyota and Honda have 
announced that they will be introducing electric vehicles into 
that market as well. So we'll have a variety of models issued.
    In terms of building that market successfully over the next 
few years, can we reduce the costs associated with those 
vehicles. Of course as you know, we're working on battery 
technology to do just that.
    Mr. Yates. I wonder how close you are to having a liveable 
battery?
    Mr. Gross. Well, the nickel metal hydride battery, which is 
one of the results of the research that we have supported, will 
be the type of technology that's introduced in some of the 
vehicles that are coming out. We expect within the next couple 
years to move to the advanced batteries, which we would help 
support increasing them.
    Mr. Yates. What about the fuel cell?
    Mr. Gross. The fuel cell is a little bit longer in terms of 
introducing for consumer use. However, there have been a couple 
of very exciting recent announcements. Chrysler a couple of 
months ago at the Detroit Auto Show announced the internally 
funded program that's picking up on the fuel processor 
technology that the Department of Energy started supporting 
about five years ago. Chrysler became interested a couple years 
ago and is now going to build a concept vehicle using that 
technology, but also indicating that there is going to have to 
be significant enabling technology, component development work, 
cost reduction work still needed in order to actually come up 
with prototype vehicles and to turn that into direction.
    They are saying it's shaved 10 years off of the 
introduction time to maybe from 2020 to 2010. So we have still 
got a lot of work to do.
    Mr. Yates. I take it--I don't hear much talk about a solar 
cell. Is there one?
    Mr. Gross. There are vehicles in the program that use solar 
technology, but that's a bit further out with respect to the 
requirements for conversion efficiency of those cells.
    Mr. Yates. What is your guess as to when the big three are 
going to come out with that technology?
    Mr. Gross. Solar vehicles?
    Mr. Yates. No, no. I mean electric vehicles.
    Mr. Gross. Well, the process has started in the niche 
markets. So they are coming out right now.
    Mr. Yates. Thirty five thousand dollars?
    Mr. Gross. For the average consumer, I think we're still 
looking at five to six years down the road, at least.
    Mr. Yates. Is the industrial sector using them?
    Mr. Gross. We have in alternative fuels, including electric 
vehicles, increasing interest as well for example in buses in 
fleet units at airports, in part of our Clean Cities Program, 
for example. We are focusing on shuttle buses at airports, vans 
as a more earlier more cost effective way to introduce electric 
vehicles, as well as other alterative fuels such as natural 
gas.

                          energy star program

    Mr. Yates. Can you elaborate? Let's turn to another 
program. DOE's Energy Star program, volume purchases of high 
efficiency appliances. DOE and the Housing Authority are 
cooperating in this respect. How is it going?
    Ms. Ervin. It is going very well, although we have a lot 
more work to do. The Energy Star program has two different 
components. One is to promote consumer awareness of energy 
efficient appliances in retail stores across the country. So 
about a year ago, after doing some detailed site research in 
the Washington, D.C. area, we entered into a partnership with 
Circuit City and Montgomery Ward to begin with. We are now 
using the Energy Star labeling program in 750 stores across the 
country. We expect to expand to about 1,400 by the end of the 
year. That's a very important accomplishment and one that our 
newly created advisory board for the appliance standards 
program whole-heartedly endorses as a supplement to the 
program.
    In terms of the partnership with the housing authorities, 
in March of this year, public housing authorities in several 
areas are going to receive about 70,000 high efficiency 
refrigerators for public housing apartments. In the New York 
Power Authority alone, we are looking at 20,000 refrigerators 
and over the life of those products, that will cut the housing 
utility bills by about $30 million. So it's a very significant 
effort.
    It is good for the manufacturers too, because when we are 
able to use those volume purchases, it allows them to have 
confidence in continuing to produce a product like that and to 
reduce the cost.
    Mr. Regula. Mr. Moran?
    Mr. Moran. Thank you, Mr. Chairman. I am delighted, Ms. 
Ervin, that you are going to be put in charge of sustainable 
development for the White House. I can't even talk about that?
    Ms. Ervin. Well, I haven't been promoted that high.
    Mr. Moran. Okay. You're going to be playing a major role.
    Ms. Ervin. I'm going to help contribute, absolutely.

                integrated environmental & energy policy

    Mr. Moran. Now I want to get your response on the record to 
the idea of putting together, particularly from your vantage 
point an organic energy efficiency/environmental protection/
sustainable development policy, an integrated policy that would 
then be carried out through on an integrated legislative 
package. Is that possible? Do you think it's a good idea?
    Ms. Ervin. It is an appealing, creative, innovative idea.
    Mr. Moran. It doesn't stand a chance.
    Ms. Ervin. I think it is a goal that we should strive for. 
I think we should also not let it serve as an obstacle to some 
important incremental steps in that direction. When we spoke 
recently about an organic law, we talked about some work that I 
did at the Conservation Foundation a number of years ago, where 
that organization really did some ground-breaking work in 
creating some model legislation like that.
    I think it is very important. I think it is very difficult 
to do. But that doesn't mean that we shouldn't strive for it. 
Now in the interim, the Administration is actively working to 
better integrate our energy and environmental policies. As you 
mentioned, with Secretary Pena, joining us from the Department 
of Transportation, we have an opportunity to link our programs 
and policies even more closely with that agency. A couple of 
examples with theEnvironmental Protection Agency, our Energy 
Star partnership is one. But our collaboration on utility restructuring 
was another. Our collaborative work on diesel research that Tom is 
responsible for is another area. The discussions that we are having on 
the proposed rules for particulates, those are another.
    From what I have heard and seen, we have never seen such a 
time of this kind of collaboration between agencies. I hope 
that will continue.

                              fossil fuels

    Mr. Moran. The cost of over-dependence upon fossil fuels is 
not a national problem, it's an international problem. Given 
your expected new responsibility, are you going to be able to 
work with Commerce and State Department to deal with the fossil 
fuel emissions of other countries, particularly using our more 
advanced technology to address the problem so that all the good 
things we do are no more than a drop in the bucket toward the 
goal?
    Ms. Ervin. Well, I certainly do hope to be involved in 
those kinds of discussions. But I do want to point out that the 
Department of Energy in our programs is also actively working 
in those areas. Denise Swink, my Deputy Assistant Secretary for 
the industrial programs, was just in China a week or so ago. 
She told me when she came back that we have some Chinese teams 
visiting in the country in early May. She also informed me that 
the Chinese policy is giving equal weight to energy efficiency 
and new supply. That is of profound importance to us all.

                      federal fleet gas emissions

    Mr. Moran. That's true. It is. It is wonderful. The last 
thing, when we were trying to deal with what I considered to be 
a stupid, inefficient, illogical policy on emissions 
inspections that the EPA issued, where you have to buy up these 
public buildings and force your constituents to spend all day 
Saturday bouncing back and forth from the emissions station to 
the auto body shop and so on, I was told that the largest fleet 
of vehicles, and this is particularly the case in Northern 
Virginia, it may be in other places, is the Federal fleet. They 
didn't even have to comply with this kind of stuff in terms of 
emissions.
    Now that may not be true. Maybe that's just a bizarre 
rumor. But it may be a case of do as I say, not as I do. Can 
you assure me that the Federal fleet has to be at least as 
conscientious as our private citizens in terms of emissions?
    Ms. Ervin. It is my understanding that we are not required 
per se to meet those standards. But in practice, we do.
    Mr. Moran. I was told you are not required and that in 
practice you don't. But I would like to see some----
    Ms. Ervin. I would be happy to follow up.
    [The information follows:]

             Emission Standards for Federal Fleet Vehicles

    Every Federal vehicle procured, whether conventionally or 
alternatively fueled, is certified to the Environmental 
Protection Agency's emissions standards applicable to the 
vehicle at the time of its production. Although Federal fleet 
vehicles are not required to submit to non-Federal vehicle 
emissions testing programs in the localities where they are 
operated, the Department has had hundreds of emissions tests 
performed on Federal fleet vehicles, both conventionally and 
alternatively fueled, as part of the Alternative Motor Fuels 
Act emissions testing program. Data from these tests is 
available at the Department's Alternative Fuels Data Center, 
operated by the National Renewable Energy Laboratory in Golden, 
Colorado. The relatively short length of time vehicles remain 
in Federal fleets, and the exceptionally high level of service 
these vehicles receive, helps ensure that Federal vehicles 
remain in compliance with Federal emission standards. In the 
event that a vehicle is found not to be in compliance, the 
vehicle is taken out of service immediately and sent to a 
manufacturer approved repair facility to correct the problem.

    Mr. Moran. That would really be helpful. But it sure is 
tough to tell people to go through all this silly rigmarole 
when the Federal Government doesn't even do it itself. So that 
would be helpful if you would check into that.
    Thank you, Mr. Chairman.
    Mr. Regula. I might tell the committee members, it's 
contemplated there will be a vote about 12:15, and that will be 
the only vote for the day. So that will be our target or a 
little earlier.
    Mr. Skaggs and Mr. Dicks, I appreciate your getting here. 
You can each have 10 minutes because you missed the first 
round. So, Mr. Skaggs, it's yours.
    Mr. Skaggs. Thank you, Mr. Chairman. I want to thank you 
for your service at the Department, and look forward to 
continuing to follow your career in a new venue.
    These are moments in life when you are entitled to sort of 
do your valedictory or your whatever. Not so much what you may 
be proudest of, but what did you get done in the last three 
years that makes the most difference and what didn't get done 
that we ought to pay the most attention to?
    Ms. Ervin. Several things are of particular----
    Mr. Skaggs. No, you can only do one each.
    Ms. Ervin. Oh, no. I would want to highlight two, okay, two 
accomplishments, give me that. One really is the general policy 
direction that we have made considerable headway in boosting 
the understanding and the public awareness thatenergy is right 
in the bullseye of environmental policy. For many many years, the 
public has not made the connection between energy and environment. 
Ironic in that energy is the largest source of pollution. But we have 
made great strides I think in improving that link. That's important not 
simply for the awareness of course, but for the opportunity that it 
presents us to use efficiency in renewable energy technologies to 
reduce pollution, improve public health, and minimize environmental 
compliance costs. That's the opportunity for us all.
    Second of all, one of the things that I am most proud of is 
the various financing efforts that we have put underway. I have 
been a long-time believer that there is obviously a critical 
role that the Federal Government must play in research and 
development, in making those contributions and in providing 
leadership. This role cannot be sacrificed. We are on dangerous 
ground here today.
    But I also believe that in the long run, to be truly 
successful, we need to make sure that the private market has 
incentives to invest in these technologies. There are a host of 
obstacles to the private market doing that today, because 
energy prices are so relatively cheap.
    We strive to overcome those barriers through these various 
financing partnerships with the insurance industry, the energy 
service companies and so forth. So in the long run, that will 
generate much more activity in the efficiency renewable 
programs than previously. I am quite proud of that.
    In terms of unfinished business, we could just do a lot 
more in all of the areas. Also, the Buildings Program, our 
Buildings for the 21st Century initiative is just starting, and 
has a lot ahead of it, but I think it will make a profound 
difference in probably the sector that has the most effect on 
our daily lives. We spend most of our lives in homes and 
offices. Many of them are inadequate and could be a lot better. 
So I am excited about that.
    Mr. Skaggs. The chairman gives us a heads up about the 
unlikelihood of substantial increases in funding within your 
jurisdiction. I am just wondering if you would advise us to cut 
off the legs of several horses or put one horse out of its 
misery.
    Mr. Moran. You don't want to elaborate on that or she knows 
what you are referring to.
    Mr. Skaggs. I think so.
    Ms. Ervin. I have not given up hope that in the wisdom of 
the allocation committee, your subcommittee will receive a 
boost of funds to prevent choices between legs and horses.

             federal investment in technology r&d programs

    Mr. Skaggs. You mentioned the important market-leading 
function of some of these technology R&D programs. Is the 
investment that we're making with the new vehicle effort one of 
those? What would happen if we weren't doing that? What would 
the private sector be doing on its own without Federal money?
    Ms. Ervin. Well, in the transportation sector, we have the 
situation of record levels of oil imports with a very high 
price tag associated with that, $50 or $60 billion a year now 
being exported out of this country to pay for imported oil. 
That is associated with some considerable security risks as 
well. Those numbers are getting even more depressing as we look 
at the projections. So clearly, the work that we are doing 
together in the Partnership for a New Generation Vehicle and 
the alternative fuels is fundamental to stabilizing and turning 
that around.
    We know that the private sector is not doing that on its 
own. It is only through a partnership between the public and 
private sector that we can even hope to reduce our reliance on 
imported fuel.
    Mr. Skaggs. In other words, the big three would not be 
pushing this technology without your investment?
    Ms. Ervin. That is what they tell us. I believe that is 
absolutely true, based on considerable part of the price of 
gasoline. It does not provide an economic incentive for long-
term risky investments like this.
    Tom Gross was just reminding me that in Ford's roll-out 
last month of the P2000 vehicle which refers to the weight of 
the vehicle, 2,000 pounds using light-weight materials. Ford 
has directly and consistently said this would not have happened 
without the partnership with the Federal Government. It's just 
one more example of the kinds of technologies, in this case 
hybrid technologies coupled with light-weight next generation 
materials.

                             market forces

    Mr. Skaggs. Just one final question. Your testimony and 
answers reference market forces. Clearly if we were able to 
really have the market account for a lot of the externalities 
that are involved, particularly in the energy and 
transportation sectors, we would have a much different set of 
market forces. Is anything being done either within the 
Department or through grants that you may be making to really 
perfect our market mechanisms so that command strategies, 
regulatory strategies can be replaced really by better-informed 
market decisions?
    Ms. Ervin. So many of our programs are targeted to exactly 
that, providing better information, making it more accessible 
to people, demonstrating to consumers and businesses and 
industries that an advanced technology works, validating its 
performance.
    Mr. Skaggs. Forgive me for interrupting, but I'm taking the 
conceptual leap of really costing out externalities and forcing 
those costs into the price of things.
    Ms. Ervin. We are doing some work in terms of costing the 
externalities, also work on the life cycle analysis of our 
energy use, which is very important. Sometimes we only look at 
the energy that's being used at the end use of the site, when 
in fact we should be considering the whole life cycle effects 
of energy, from its very production to manufacture, to 
transportation and eventual disposal. So those are appropriate 
roles that we are undertaking now.
    Mr. Skaggs. Thank you.
    Ms. Ervin. If you are asking are we proposing a gasoline 
price increase, I would say no.
    Mr. Regula. Mr. Dicks?
    Mr. Dicks. Madam Secretary, we want to welcome you here 
today. I want to complement you on the job that you have done. 
We look forward to working with you on sustainable development.
    From our part of the world out in the northwest, Battelle 
Northwest has been at the lead with the Boeing Company, in 
fact, in making application of the Partnership for a New 
Generation of Vehicles. I think you have got some very 
interesting technology and some ideas out there about materials 
and the manufacture of materials, a lot of things learned in 
the airplane business that hopefully can be relevant here as 
well. So I just want to mention that.

                   federal energy management program

    You and I had a conversation the other day about another 
program, the Federal Energy Management Program. I have been one 
of thosewho feels that as was suggested, the Federal Government 
should be leading. That we need to work with each of the departments in 
trying to do more in terms of conservation within their buildings, 
structures, facilities, operations. In our discussion, you mentioned 
the fact that sometimes it's hard to get people to understand why we 
have to have this $31 million of funding as seed money in your 
department in order to get these other agencies to do this work.
    I mean I thought it might be appropriate for you to give us 
an example of how this thing works so that the committee might 
better understand why you believe that having this seed money 
here is essential to getting the work done and involving the 
private sector in actually doing the energy conservation work, 
and a whole industry is sprung up that does this work and 
invests their own money to do it.
    Ms. Ervin. We are asking for $31.1 million in the Fiscal 
Year 1998 budget for the Federal Energy Management Program, 
which as you know is designated as the lead program in the 
Federal Government to implement the EPACT requirements for the 
Federal Government.
    We not only have a leadership role, we have an opportunity 
to reduce the national deficit through these Federal Energy 
Management programs. It is not a trivial exercise to locate 
energy waste in buildings and to find ways to reduce it. Thirty 
million is a very modest amount of money, in fact, to do that.
    Yes, I will give you an example of what I have come to 
appreciate in this job. We are making a radical change in the 
way that we do business with the Federal Energy Management 
Program. In the old days, all the Federal agencies would rely 
on in-house expertise to identify potentials for energy 
savings. Sometimes energy efficiency is not at the top of the 
list of building managers responsibilities. So that's one of 
the obstacles. Plus, having the expertise. Plus having the 
funds to actually pay for the improvements is a problem.
    About 10 years ago, we started seeing the emergence of what 
we call energy service performance contracts. Those are tools 
that private companies use to come in, do auditing or survey of 
buildings, and to pay up front for the cost of the 
improvements. Sometimes they can even go further and provide 
for operation and maintenance of those energy saving and 
equipment technologies. So that's a real boon. But in the last 
10 years, we have seen a total of 40 contracts put in place, 40 
alone. That is because these were new contract measures in a 
very difficult procurement system for the Federal Government. 
It took a lot of expertise to know how to design them, how to 
negotiate them. The average time is one to three years to put a 
energy savings performance contract in place.
    What I am very pleased about, and this is one of the 
finance initiatives that I was discussing, is that after about 
two years of effort, we now have a master energy savings 
performance contract in place. We will shortly in the next 
couple of weeks, we will be announcing one that is 15 times 
greater than what we have achieved in the last 10 years. That's 
for the western region alone. Agencies will be able to buy 
projects directly off of a central procurement tool in three to 
five months rather than one to three years.
    In total, the new energy savings performance contract 
mechanism is going to be generating $5 billion of private 
sector financing for improvements in the Federal system by the 
year 2005. That will be in place. So I am very pleased. It's a 
radical change in the way that we do business.
    Mr. Dicks. And how much will that lead to in terms of 
savings, energy savings for the agencies themselves? This 
actually pays for itself, as I understand.
    Ms. Ervin. Oh absolutely. We are estimating that with these 
kind of mechanisms in place, we'll be able to pare another 
billion dollars off the energy bill every year by the year 
2004.
    We spend a total of about $4 billion a year in our Federal 
sector energy bill. So we will be reducing that by another 
billion we hope, beginning in the year----
    Mr. Dicks. Four billion on an annual basis?
    Ms. Ervin. On an annual basis.
    Mr. Dicks. And so by doing these, with these companies 
doing this, we can get that down to $3 billion?
    Ms. Ervin. That's right. Now after all of these long words, 
let me hasten to say though that we still need expertise in 
agencies and funding levels to keep strong vibrant efficiency 
programs in place. These energy savings performance contracts 
can not be a wholesale substitute for funds that we need in 
other agencies. That is a struggle for several of them. If you 
look at the Department of Defense, the General Services 
Administration, and the Department of Energy, we used to have 
$300 million in place for these energy programs. That has been 
reduced to $30 million. This is quite a considerable challenge. 
We need to support the remaining programs.
    Mr. Dicks. You and I talked about the fact that they cut 
some of this money out of the defense budget. Did we find out 
whether it is in the defense budget or is it in the military 
construction budget?
    Ms. Ervin. This is John Archibald, who is the acting 
director for the Federal Energy Management Program.
    Mr. Archibald. There used to be funding in a centralized 
Department of Defense program. That money has now been 
identified in the agency programs. However, it's no longer 
fenced as energy retrofit funding only. So there is no 
practical mechanism to constrain it to be expended just for 
energy retrofits. In fact, the Department of Defense energy 
manager tried to get an accounting of that last year and was 
unable to get an accurate account of how much was actually 
expended for energy retrofit projects.
    Mr. Dicks. So before, they had $300 million, and then that 
was taken out of the budget?
    Mr. Archibald. It was taken out of the Department of 
Defense centralized budget.
    Mr. Dicks. Who is it, the energy manager at the Department 
of Defense?
    Mr. Archibald. The gentleman that has the central 
responsibility is Mr. Millard Carr. He reports to I can't 
remember the Assistant Secretary's name right now.
    Mr. Dicks. Well if you would get me that, I would 
appreciate it, and we'll take a look at that.
    Ms. Ervin. Of course.
    [The information follows:]

[Page 676 --The official Committee record contains additional material here.]


    Mr. Dicks. But getting back to this. The point is, that $31 
million that you get in this bill is kind of the catalytic 
fund, right? In order to get these other agencies up and 
running and able to do the best job they can on the energy 
savings side. Isn't that correct?
    Ms. Ervin. It's a perfect case of you have got to spend a 
little to make a little. In this case, we'll be saving a lot of 
money with this small investment in the Federal Energy 
Management Program.
    Mr. Dicks. So you strongly support the increase in the 
budget, I understand?
    Ms. Ervin. Absolutely.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Regula. Thank you. Mr. Skaggs, do you have any 
additional questions you want to ask? You have got a little 
time here.
    Mr. Skaggs. I have got to run. Thank you, Mr. Chairman.

                     buildings for the 21st century

    Mr. Regula. Okay. Just a couple. I have gotten some 
communications from the building industry, home building, 
expressing concern about this proposal for ``Buildings for the 
21st Century.'' Have they been in touch with your department to 
articulate their concerns?
    Ms. Ervin. The National Home Builders Research Center has 
been a participant in the last two workshops that we have had 
for Buildings for the 21st. I have not had an extended 
conversation with NHB proper, and would be happy to do so. They 
have not expressed those concerns to me.

                       weatherization assistance

    Mr. Regula. That's interesting. Weatherization Assistance 
has a large proposed increase. How much funding is devoted to 
weatherization in the low income home energy assistance program 
funds through HHS? It seems like there are two different 
programs going here.
    Ms. Ervin. They are two.
    Mr. Regula. Why don't we consolidate it? That's not 
efficient.
    Ms. Ervin. They are two separate and distinct programs. I 
don't know what the Administration's request for LIHEAP is in 
Fiscal Year 1998. But it's generally been in the billions.
    Mr. Regula. Tell me why there's two different missions 
here, or are there?
    Ms. Ervin. LIHEAP is a welfare assistance program.
    Mr. Regula. All right. I understand that.
    Ms. Ervin. That provides emergency and fuel assistance to 
low income households. So for example, if there is a cold snap 
and low income residents are without power, they are given 
emergency fuel.
    Mr. Regula. Okay. So at HHS, it's more than just the 
weatherization of the building, it's the money for paying the 
bills.
    Ms. Ervin. Only up to 15 percent of the LIHEAP money, I 
believe, is allowed for weatherization. The vast majority of 
the money is used to provide money to households to pay for 
their energy bills.
    Now the weatherization program is an energy program to 
obviously retrofit and weatherize low income homes.
    Mr. Regula. I understand that, but staff advises me that 
that 15 percent is probably more money than you have in your 
whole program for weatherization. So you get two different 
programs. I don't quite understand why we don't do it with one 
agency.
    Ms. Ervin. The weatherization program relies on generally 
community action programs across the country.
    Mr. Regula. Yes, CACs, right.
    Ms. Ervin. That kind of infrastructure. So you will find 
that the LIHEAP program works very closely with that same 
infrastructure. They piggyback.
    Mr. Regula. Right.
    Ms. Ervin. Off of each other. And the total amount of 
funding, if LIHEAP were to use up to the full 15 percent, does 
start approximating what we have in weatherization. But that 
does not negate or in any way undermine the need for the low 
income weatherization program in the Department of Energy. This 
program is weatherizing 78,000 homes.
    Mr. Regula. I understand, but why can't the LIHEAP people 
do the 78,000 homes and reduce the administrative overhead?
    Ms. Ervin. I have asked that question with the various 
weatherization leaders and providers. They advise me that the 
expertise, the technical assistance and expertise that we have 
in the Department of Energy by virtue of our mission does not 
exist at HHS.
    Mr. Regula. Well then we should take it out of LIHEAP and 
put it in your agency.
    Ms. Ervin. Does that mean our funding allocation goes up?
    Mr. Regula. I beg your pardon?
    Ms. Ervin. I won't touch that one.
    Mr. Regula. Let you do the expertise and let them handle 
the money. In other words, you are in a sense a research agency 
to develop better technologies. Would it not make sense as a 
management technique, to let your agency develop the 
techniques, new insulating materials, and so on, share that 
with LIHEAP, but let the LIHEAP program be used to put these 
technologies on the ground.
    Ms. Ervin. Once again, we do work closely with the same 
provider network. But I think there are probably more synergies 
and efficiencies with this energy weatherization program being 
in our buildings program than vice versa.
    Remember, a number of the technologies that we develop in 
our core buildings program find their way into the 
weatherization program and occasionally some of the advances 
that we find on the ground in the weatherization program help 
inform our buildings program.
    Mr. Regula. So you get into school buildings?
    Ms. Ervin. We do.
    Mr. Regula. Hospitals, which LIHEAP would not. Is that 
correct?
    Ms. Ervin. In other programs, yes. Not in the low income 
weatherization. That is targeted only to residences.Not just 
low income, but is especially targeted to elderly, sick and disabled 
within the low income population.
    Mr. Regula. How is the consolidated State grant program 
working? Does this differ from the weatherization program?
    Ms. Ervin. The State energy program is wholly distinct from 
the weatherization program. Often in the vast majority of 
cases, different agencies run their programs for one thing. The 
HHS affiliated program and cap agencies are largely responsible 
for weatherization. The State energy offices are responsible 
for the other programs.
    I might mention that one of the important challenges for 
the State energy offices in the next couple of years will be to 
help States and communities include efficiency and renewable 
technologies in the State implementation plans for Clean Air 
Act requirements. This is a new and expanding role that they 
have not had in the past. They are also planning a stronger 
role as we undergo utility restructuring.

                      natural gas vehicle research

    Mr. Regula. Last year Congress directed the department to 
work with industry to develop a five-year plan for conducting 
research for natural gas vehicles. What is the status of the 
plan? Has industry been involved in the planning process?
    Mr. Gross. Mr. Chairman, there was a meeting, a conference 
that was hosted in January at the West Virginia University to 
assemble a number of interested parties in natural gas vehicles 
to put together the plan, a draft and plan. That draft has been 
completed. It is about to go into internal review within the 
Administration. I would hope that within a month or so it will 
be ready to go forward from the Administration to Congress.
    Mr. Regula. We added $2.3 million to the Fiscal Year 1997 
budget request for natural gas vehicle research. One million 
for systems optimization, $300,000 for engine optimization, and 
$1 million for NOX emissions research. Are you using 
these funds? And in what way?
    Mr. Gross. We are indeed using those funds. It's consistent 
with the plan that was just mentioned. We have both in the 
automotive part of the program as well as the vehicles part of 
the program, natural gas related activities consistent with the 
directions of the Congress.
    Mr. Regula. Does the Fiscal Year 1998 budget assume or what 
does it assume with respect to continuing the research started 
by the $2.3 million? Are you requesting money to keep this 
going?
    Mr. Gross. In part we'll be able to continue what is being 
started. The amounts are in the budget for Fiscal Year 1998, 
are a bit less than what the plan has indicated, what the 
natural gas industry is interested in, so we'll either have to 
slow up a portion of it or make some selections going back to 
either cut the legs off a couple horses or kill one.
    Mr. Regula. Now if you could give us a little more detail 
for the record, but let me ask you, what do you see as the 
future in natural gas vehicles? We do have a great deal of 
natural gas available. It's obviously non-polluting, pretty 
much. How do you see this emerging over the next 10 years? Will 
we be buying automobiles and driving to Ohio with a natural gas 
vehicle?
    Mr. Gross. Well we have got a number of components of the 
program which if successful, would have that result. In the 
technology arena, we do have work such as a continuing effort 
to increase the range of natural gas vehicles by adsorbent 
technology, for example.
    A major focus at this point in time is looking at where the 
use of natural gas is most cost effective, medium trucks, 
delivery trucks for example, fleets.
    Mr. Regula. And they go into where the problem exists.
    Mr. Gross. Within the Clean Cities program, we are focusing 
our efforts on natural gas vehicles on those kinds of fleets 
where there is a standard route each day, they go back to the 
same place every night. The owners look much more closely at 
the life cycle costs associated with different fuels. Natural 
gas is more attractive in those uses.
    So we believe that that's an excellent opportunity. Then 
you will see in the 1998 budget, the increased emphasis on the 
Clean Cities Corridors Program, so we can connect for some 
selected corridors, these nodes where we've got the fleets 
operating and the refueling stations can be supported properly 
together. We are working on one in the northeast with a high 
priority as well as in California, Nevada, and the I-25 
corridor in Colorado. So I don't know that we're going to be 
able to get to Ohio as first order. But if those are 
successful, then----
    Mr. Regula. You know, I was in British Columbia, it's been 
five years ago. I was in a small town. Here they had a fueling 
station. I think all the taxis, obviously they have done 
something with tax incentives or whatever to get people in 
British Columbia to use NGVs. I don't know why they are so far 
ahead of us, but it would appear that way to me just having 
been in a few small towns where I found fueling facilities.
    Do you know anything what stimulated it up there?
    Mr. Gross. The relative economics is different. As has been 
discussed, the signals that our consumers particularly like 
vehicles. The alternative fuels are still at a significant 
disadvantage.
    Mr. Regula. Does Canada or British Columbia give the 
consumer a tax incentive to go to a vehicle because they have 
an abundant supply of natural gas?
    Mr. Gross. The combination of the costs of gasoline being 
higher. I don't know the details on any incentives, we can 
provide that for the record, that are available in Canada for 
the alternative fuels. But we would be happy to provide that.
    [The information follows:]

            Canadian Incentives for Natural Gas Vehicle Use

    Canada, through March 31, 1997, offered ``market 
development incentive payments'' for the purchase of (C$1,000), 
or conversion to (C$500), a natural gas vehicle (NGV), and the 
purchase of a home compressor (C$500). The Canadian government 
also offered funding up to 25 percent of the capital cost of a 
natural gas vehicle refueling station, not to exceed C$50,000. 
It is not yet clear what impact these incentives had on the 
sale of NGVs in Canada.
    Legislation passed in 1995 requires the Canadian government 
to steadily increase its purchase of alternative fuel vehicles 
(AFVs) beginning in the fiscal year starting on April 1, 1997. 
In 1997, the percentage of new vehicles purchased must be 
composed of 50 percent AFVs, with this percentage rising to 60 
percent in 1998 and 75 percent in 1999 and all subsequent 
years.
    Natural gas as a transportation fuel is exempt from 
Canadian federal excise taxes. A number of the Canadian 
provinces, including British Columbia, Alberta, Saskatchewan, 
Ontario and Quebec, also exempt natural gas from provincial 
excise taxes.

    Mr. Regula. Do you follow up on your programs like 
weatherization to see if they are cost effective? Do you have 
some type of evaluation of these various conservation programs?
    Ms. Ervin. We have rigorous evaluation methods in place. 
For weatherization, there's a great example. The Oak Ridge 
Laboratory has just completed an exhaustive study of the 
weatherization program, has verified its savings, and in fact 
has documented that we have doubled the amount of energy 
savings per house over the last five to six years. On average, 
five years ago, the weatherization crew would reduce energy 
consumption by about 16 percent. Now it's up to 33 percent. 
That is well documented.
    Overall for other programs, we have invested a tremendous 
amount of effort into developing what we call a quality metrics 
system for verifying our numbers and our market assumptions for 
the technologies, for the dollar value associated with it, the 
emission reductions associated with it. In the last year and a 
half, we actually hired Arthur D. Little to do an extensive 
peer review of those metrics that we use. So we have invested a 
lot of time and effort in that, and believe that our estimates 
are very credible.

                        arthur d. little review

    Mr. Regula. A story in the Houston Chronicle was just 
pointed out to me. You probably saw this article challenging 
the efficacy of the Department's estimated savings. ``In most 
cases, especially in the early years, Little's analysis found 
that the energy savings would be lower than predicted by the 
Energy Department.'' Do you have any comment on that?
    Ms. Ervin. We have a number of comments on that. I am going 
to let Joe Romm here elaborate. But let me preface it by saying 
that I thought the criticisms of the process were quite ironic 
and unfair given that we did not need to work with a consultant 
to do a rigorous peer review of our programs. The intention of 
it was to give us good healthy criticism so that we can make 
adjustments where need be.
    Mr. Regula. It appears that they did that.
    Ms. Ervin. In many cases, our estimates were too low and 
they were adjusted upwards. But Joe?
    Mr. Romm. Yes. This is one of those things that comes up at 
every hearing because of one outside guy who I'm sure sends you 
a lot of paper. He sends us a lot of paper. We asked Arthur D. 
Little to review our numbers. We were very careful when we sent 
up numbers, to use the most conservative numbers because we 
knew that we were in the midst of figuring out what was the 
most accurate estimates of our energy and environmental 
benefits. This outside person got a hold of this document and 
spent a lot of time mischaracterizing it to the press, to be 
very blunt, as DOE's numbers are wrong, rather than DOE is 
engaged in a process to develop the best numbers possible.
    I will say that the vice president of Arthur D. Little 
submitted to us a letter saying that DOE should be praised for 
undergoing the process to develop the most credible numbers 
possible. The point is, we have been trying to provide you the 
best estimates possible. There has never been an effort to 
mislead. This has all been very public and above board.
    Mr. Regula. Did that letter get in a press story?
    Mr. Romm. The letter from----
    Mr. Regula. Praising you.
    Mr. Romm. One of our trade papers ran a story in which they 
presented this case without even bothering to talk to us. I had 
a long talk with the editor. After half an hour, he said gee, 
you really do have a story. I am going to give you 600 words to 
present your side. In that 600 word response, we did in fact.
    Mr. Regula. I can have some sympathy for that kind of a 
problem.
    Ms. Ervin. As is often the case, words of apology or words 
of praise for Federal Government do not often occur.
    Mr. Regula. Page 59, I know. I always say to my staff we 
can't gather up the papers once they are out there, even though 
the story may have not been totally accurate. We'll have 
questions for the record. Thank you for coming. Best wishes in 
your new assignment.
    Ms. Ervin. Oh, thank you very much.
    [The following questions and answers were submitted for the 
record:]


[Pages 683 - 772--The official Committee record contains additional material here.]


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


                          Department of Energy

                     Office of Hearings and Appeals


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



[Pages 775 - 781--The official Committee record contains additional material here.]


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


                          Department of Energy

                   Energy Information Administration


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



[Pages 785 - 804--The official Committee record contains additional material here.]



                           W I T N E S S E S

                              ----------                              
                                                                   Page
Archibald, John..................................................   651
Comanor, Joan....................................................    73
Dombeck, Mike....................................................    73
Ervin, C.A.......................................................   651
Glickman, Hon. Dan...............................................     3
Godley, P.F......................................................   521
Gross, Thomas....................................................   651
Kripowicz, R.S................................................ 417, 521
Lyons, J.R.......................................................     3
McDougle, Janice.................................................    73
Pena, F.F........................................................   417
Romm, J.J..................................................... 417, 651
Satterfield, Steven..............................................    73
Stewart, Ron.....................................................    73
Thompson, Clyde..................................................    73
Unger, Dave......................................................    73
Weber, Barbara...................................................    73


                               I N D E X

                              ----------                              

                        Secretary of Agriculture

                                                                   Page
1995 Recission bill timber salvage provision.....................    45
Administration commitment........................................    15
Administration of salvage rider..................................    29
Administration's national forestry policy........................    36
Agenda...........................................................    15
Biography, Secretary of Agriculture..............................     4
Budget initiatives...............................................     7
Budget tradeoff..................................................    19
Collaborative management.........................................     9
County office closures...........................................    30
Fiscal accountability............................................    40
Forest health situation..........................................    59
Forest planning..................................................     8
Funding requirements.............................................    22
General Accounting Office report on timber salvage...............    31
Global climate change............................................    64
Headwaters redwood grove.........................................    48
Holocaust museum.................................................    32
Ignoring Congressional direction.................................    41
Importance of forestry issues....................................    34
Inspector General's role.........................................    26
Interior Columbia basin ecosystem management.....................    20
KV Reforestation fund viability and Wildlife suppression costs...    60
Lake Tahoe Presidential summit...................................    61
Management of appropriations.....................................    33
Methyl bromide...................................................    69
New World mine...................................................    18
Official time....................................................    68
Opening remarks, Secretary of Agriculture........................     5
Other programs...................................................     9
Pacific Northwest situation......................................    17
Personal regards.................................................16, 27
Planning information needs.......................................    22
Political fund raising...........................................    69
Political intervention in forestry...............................    38
Politics altering large planning efforts.........................    43
Power line.......................................................    63
President's Pacific Northwest forest plan........................    55
Response to forest health problems...............................    27
Secretary's policy role..........................................     7
Secretary's statement............................................    10
Sugar program....................................................    68
State and Private Forestry.......................................     8
Timber:
    Sales........................................................    17
    Sales contract liability.....................................    53
    Theft........................................................    24
Tongass long term timber sale buyout.............................    51
Tree measurement sales...........................................    25
Under Secretary Lyons............................................    15
Urban forestry...................................................    32
Yellowstone Area/New World mine..................................    49
Yellowstone Bison problems.......................................    33
Adaptive management areas.......................................93, 403
Administration's roads policy (see also Roads, Forest roads).....    89
Agency morale....................................................   103
American heritage rivers.........................................   304
Biographical Information, Michael P. Dombek......................    74
Commitment to communities........................................   104
Condition of forests.............................................   215
Decreasing budget, prioritize needs (see also Proposed budget)...   107
Discrimination...................................................   287
Downsizing and rightsizing operations and work force.............   111
East side ecosystem study........................................    84
Economic action programs.........................................   230
Evanston research work unit and Lincoln Park.....................   297
Fee implementation...............................................    84
Fire (see also Wildfire management)............................229, 311
    Management...................................................   302
    Policy.......................................................   214
Forest ecosystem restoration and maintenance fund................   290
Forest health....................................................83, 94
Forest roads (see also Roads, Administration's roads policy).....   409
Government Performance and Results Act (GPRA)....................   208
Grazing (see also Range).........................................   355
Interior Columbia basin ecosystem management project.............   271
KV Reforestation trust fund shortfall loaned for past wildfires..   133
Lake Tahoe situation.............................................   145
Land management planning, inventory and monitoring...............   159
Managing for species protection..................................   408
Minerals and geology division....................................   274
Monitoring and assessment........................................    87
Mt. Graham.......................................................   394
Mt. St. Helens' minerals.........................................   409
Northwest forest plan (see also President's Northwest . . ., 
  Timber)........................................................   400
Opening remarks, Chief of the Forest Service.....................    76
Presidential initiatives/Headwaters..............................   116
President's Northwest forest plan (see also Northwest . . ., 
  Timber)........................................................   123
Proposed budget reductions and shortfall (see also Decreasing . . 
  .).............................................................   108
Public confidence................................................   102
Purchaser road credit system.....................................   289
Range (see also Grazing).........................................   311
Recreation.......................................................    84
Recreation fee demonstration.....................................   154
Reforestation....................................................   181
Roads (see also Forest roads)....................................    86
    And construction.............................................   183
    Myth.........................................................    91
Salvage sales....................................................   307
    Myth.........................................................    90
Scaling versus tree measurement..................................    92
Sierra Nevada ecosystem project and California Spotted Owl EIS...   129
Silviculture myth................................................    90
Silviculturists..................................................    91
Special use fees and permits.....................................   292
Statement of Chief of the Forest Service.........................    78
State and Private Forestry.....................................230, 303
State Foresters' concerns........................................    88
Timber:
    And Forestry.................................................   170
    Commitment in Northwest......................................    87
    Receipts.....................................................   393
    Sales......................................................305, 312
    Theft........................................................   180
Tongass..........................................................   214
    Land management plan.........................................   291
    National Forest Ketchikan timber sale cancellation...........   121
Unser cited for alleged wilderness violation.....................   237
Urban forestry............................................229, 286, 299
Watershed restoration/watershed analysis.........................   405
Wayne National Forest:
    Construction.................................................   218
    Fee demonstration............................................   223
    Forest Plan..................................................   221
    Land Acquisition.............................................   216
    Research...................................................223, 226
    Supervisor's office..........................................   217
    Timber.......................................................   225
    VER..........................................................   223
Wildfire management (see also Fire)..............................   137

                          Secretary of Energy

Air Quality Standards............................................   455
Alternative Fueled Vehicles......................................   456
Appliance Standards..............................................   466
China Project....................................................   448
Clean Coal Technology............................................   446
Coal Research and Development....................................   449
Electricity Restructuring........................................   463
Energy Efficient Buildings.....................................459, 461
Fast Flux Test Facility..........................................   449
Fossil Energy....................................................   436
Fuel Cell Program................................................   452
Hybrid Vehicles..................................................   443
Indian Tribes and Renewable Energy...............................   466
Natural Gas Vehicles.............................................   437
Naval Oil Shale Reserves.........................................   444
Naval Petroleum Reserves Sale....................................   439
Official Time Monitoring.........................................   458
Opening Remarks..................................................   422
Partnership for a New Generation of Vehicles...................437, 450
Role of Federal Research and Development.........................   445
Strategic Petroleum Reserve......................................   465
Time Keeping for Union Activities................................   459
Waste Isolation Pilot Plant......................................   453
Weatherization Assistance Program................................   460
Additional Committee Questions:
    Assault on the Environment...................................   470
    Clean Coal Technology........................................   472
    Department of Energy Government Performance and Results Act 
      (GPRA).....................................................   493
    EPA Emissions Regulations....................................   487
    Federal Energy Management Program............................   485
    Low Emissions Boilers........................................   481
    National Energy Strategy.....................................   469
    Overview of the Budget Request...............................   468
    Partnership for a New Generation of Vehicles.................   474
    Sale of Elk Hills............................................   485
    Strategic Petroleum Reserve..................................   489
    U.S. Vulnerability to Oil Shocks.............................   490
    Weatherization Assistance Program............................   482
Questions from Congressman Ralph Regula:
    Alternative Energy...........................................   506
    Clean Air Act................................................   503
    Electric Utility Deregulation................................   507
    Eliminating the Department of Energy.........................   504
    General......................................................   499
    Strategic Petroleum Reserve..................................   503
Questions from Congressman Joe Skeen:
    Waste Isolation Pilot Plan...................................   509
Questions from Congressman Zach Wamp.............................   511
Questions from Congresswoman Anne M. Northup:
    Efficiency Standards.........................................   517

                             Fossil Energy

Advanced Turbine Systems.........................................   559
Basic Versus Applied Research....................................   555
Bureau of Mines Health and Safety Research.......................   553
Clean Coal Technology..........................................547, 561
Clean Coal Technology Program....................................   545
Corporate Welfare................................................   554
Electricity Deregulation.........................................   566
Environmental Protection Agency Regulations......................   546
Fossil Energy Research Funding...................................   558
Fuel Cells.......................................................   552
Funding to Historically Black Colleges and Universities..........   555
Greenhouse Gas Emissions.........................................   557
Interagency Panel for Environmental and Energy Policy............   556
Low Emission Boiler System.......................................   560
Research Funding to Minority Institutions........................   562
Sale of Elk Hills..............................................560, 561
Strategic Petroleum Reserves...................................545, 556
Technology Transfer with China...................................   563
Waste Isolation Pilot Project....................................   567
Additional Committee Questions:
    Advanced Research and Environmental Technology...............   585
    Advanced Turbine Systems.....................................   590
    Advanced Research and Technology Development.................   585
    Clean Coal Technology/Overview of Budget Request.............   569
    Coal Research................................................   580
    Commercialization............................................   613
    Concluding the Clean Coal Program............................   577
    Cooperative Research and Development.........................   599
    Foreign Storage..............................................   614
    Fossil Energy Research and Development.......................   579
    Fuel Cells...................................................   594
    High Performance Power Systems...............................   583
    International Program Support................................   587
    Life Extension...............................................   615
    Life Extension Program Projects..............................   616
    Low Emission Boiler Systems..................................   581
    Materials Research...........................................   601
    Natural Gas Research--Climate Change Action Plan/Coal Mine 
      Methane....................................................   589
    Naval Petroleum Reserve No. 3 in Wyoming and Oil Shale 
      Reserves...................................................   605
    Naval Petroleum and Oil Shale Reserves.......................   604
    Need for the Strategic Petroleum Reserve.....................   611
    Office of Fossil Energy Government Performance and Results 
      Act (GPRA).................................................   619
    Oil Technology...............................................   598
    Petroleum Account............................................   612
    Project Level Information....................................   572
    Strategic Petroleum Reserve Rescission.......................   611
     Technology Development......................................   592
Questions Submitted by Congressman Ralph Regula:
    Clean Air Act Requirements...................................   627
    Clean Coal Technology........................................   632
    Cost Share...................................................   627
    General/Miscellaneous--Abolition of DOE......................   624
    Green Scissors Report........................................   629
    International Outlook........................................   628
Low Emission Boiler System (LEBS)................................   636
Naval Petroleum Reserves.........................................   633
    Strategic Petroleum Reserve..................................   631
    Utility Deregulation.........................................   626
Questions Submitted by Congressman Joe Skeen.....................   637
Questions Submitted by Congressman Zach Wamp.....................   641
Questions Submitted by Congressman Sidney R. Yates...............   643
Questions Submitted by Congressman David E. Skaggs...............   646
Questions from Congressman Moran:
    Clean Coal Technology Program................................   647
    International Environmental Issues...........................   648

                          Energy Conservation

Arthur D. Little Review..........................................   681
Building for the 21st Century....................................   677
Electric Vehicles................................................   667
Energy Star Program..............................................   669
Federal Energy Management Program................................   673
Federal Fleet Gas Emissions......................................   670
Federal Investment in Technology Research and Development 
  Programs.......................................................   672
Fossil Fuels.....................................................   670
Industrial of the Future Program.................................   667
Integrated Environmental and Energy Policy.......................   669
Market Forces....................................................   673
Natural Gas Vehicle Research.....................................   679
Weatherization Assistance........................................   677
Additional Committee Questions:
    Affordable Low Income Housing................................   707
    Best Practices...............................................   710
    Buildings (Lighting and Appliance Research)..................   704
    Ceramics.....................................................   704
    Clean Cities.................................................   695
    Climate Wise.................................................   733
    Codes and Standards..........................................   716
    Electric Vehicles............................................   685
    Federal Energy Management Program............................   720
    Fuel Cells...................................................   698
    Heavy Vehicles Systems.......................................   700
    Highly Reflective Surface Demonstrations.....................   713
    Hybrid Vehicles..............................................   696
    Industrial Assessment Centers................................   729
    Industries of the Future.....................................   726
    Industry Research Programs (Advanced Gas Turbines)...........   722
    Motor Challenge..............................................   730
    National Laboratory Funding..................................   736
    National Industrial Competitiveness Through Energy, 
      Environmental, and Economics (NICE3).......................   732
    Natural Gas Vehicles.........................................   702
    Overview of the Budget Request...............................   683
    Partnership for a New Generation of Vehicles.................   686
    Policy and Management........................................   734
    Space Conditioning Research..................................   712
    Transportation/Alternatively Fueled Vehicles.................   684
    Weatherization and State Grants..............................   718
    Windows and Glazing Research.................................   714
    Office of Energy Efficiency and Renewable Energy Government 
      Performance and Results Act (GPRA).........................   740
Questions Submitted by Congressman Regula:
    Battery Technologies.........................................   750
    Buildings....................................................   744
    Electric Vehicles Market Launch..............................   751
    Federal Acquisition of Alternative Fuel Vehicles.............   749
    General......................................................   744
    Transportation (Natural Gas Vehicles)........................   745
Questions Submitted by Congressman Skeen.........................   754
Questions Submitted by Congressman Zach Wamp.....................   757
Questions Submitted by Congressman Yates.........................   759
    Student Vehicle Competitions.................................   761
Questions Submitted by Congressman Skaggs........................   763
Questions Submitted by Congressman Moran:
    Automobiles..................................................   769
    Building America Program.....................................   764
    Energy Efficiency in U.S. Versus Other Countries.............   766
    Federal Energy Efficiency Program............................   767

                     Office of Hearings and Appeals

Additional Committee Questions:
    Case Work....................................................   775
    Reimbursable Work............................................   776
    Staffing.....................................................   777
    Sunset Plan..................................................   777
    Office of Hearings and Appeals Government Performance and 
      Results Act (GPRA).........................................   778

                 Energy Information and Administration

Additional Committee Questions:
    Energy Conversation..........................................   790
    Budget Reduction.............................................   791
    Reorganization...............................................   793
    Staffing.....................................................   795
    Administrative Overhead......................................   796
    Energy Information Administration Government Performance and 
      Results Act (GPRA).........................................   798