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



 
                      ENERGY AND WATER DEVELOPMENT
                        APPROPRIATIONS FOR 1998

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

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                              FIRST SESSION
                                ________

              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT

                JOSEPH M. McDADE, Pennsylvania, Chairman

HAROLD ROGERS, Kentucky              VIC FAZIO, California
JOE KNOLLENBERG, Michigan            PETER J. VISCLOSKY, Indiana
RODNEY P. FRELINGHUYSEN, New Jersey  CHET EDWARDS, Texas
MIKE PARKER, Mississippi             ED PASTOR, Arizona
SONNY CALLAHAN, Alabama              
JAY DICKEY, Arkansas                 

 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.

 James D. Ogsbury, Bob Schmidt, Jeanne Wilson, and Donald M. McKinnon, 
                            Staff Assistants
                                ________

                                 PART 5
                                                                   Page
 Secretary of Energy..............................................    1
 Departmental Administration......................................  135
 Environment, Safety, and Health..................................  374
 Power Marketing Administrations..................................  395
 Energy Research, Renewable Energy, and Nuclear Energy............  487
 Nuclear Regulatory Commission....................................  977
 Federal Energy Regulatory Commission............................. 1163

                              

                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE

 40-795 O                   WASHINGTON : 1997

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                       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




          ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 1998

                              ----------                              

                                         Wednesday, March 19, 1997.

                          DEPARTMENT OF ENERGY

                               WITNESSES

HON. FEDERICO PENA, SECRETARY OF ENERGY
THOMAS P. GRUMBLY, UNDER SECRETARY

                           Opening Statement

    Mr. McDade [presiding]. The committee will come to order.
    We're very pleased to welcome the new Secretary here this 
morning. He has a distinguished career in public service in a 
variety of circumstances; second cabinet position, second tough 
one. This one's probably the toughest. Sometimes you look at 
this Department and you think there are people who just want it 
to self-destruct, and you have the unenviable task of putting 
it all together. And we have a lot of hope and confidence that 
you'll be able to succeed in doing that. We want to work with 
you together, jointly as a committee and as a department. The 
problems are serious, and it will take a lot of doing to get 
them in shape.
    So I would suggest that, if you wish, you file your 
statement with the record, your formal statement, and then 
proceed informally. Proceed as you like, Mr. Secretary, in an 
informal manner and then we'll get to the questions.

                         departmental overview

    Secretary Pena. Thank you very much, Mr. Chairman, for your 
very kind and very warm introduction. I very much appreciate 
that, and let me thank the members of the subcommittee also.
    Mr. Chairman, I would like to submit my more formal 
comments for the record and take just a few minutes to share 
some general thoughts and observations and priorities with you 
and with the members of the subcommittee.
    Having just been confirmed last week, I have hit the ground 
running. This is my third budget hearing in about six days----
    Mr. McDade. Third hearing in six days.
    Secretary Pena [continuing]. And I have one more tomorrow. 
I have asked, with your permission, Mr. Chairman, the Under 
Secretary, Tom Grumbly, to be here with me in the event that 
there are any very specific questions that need some answers. 
Otherwise, I'm happy to answer.
    Mr. McDade. We're delighted to have Tom here. He may get 
some specifics, so be prepared.
    Secretary Pena. Well, then let me excuse Mr. Grumbly. 
[Laughter.]
    Mr. Chairman, let me first begin by thanking you and the 
subcommittee for changing the date of this appearance. It was 
scheduled some time ago, and I appreciate the fact that it was 
rescheduled to accommodate my confirmation schedule, because I 
very much wanted to testify before this committee to discuss 
this very important budget for the reason that this 
subcommittee accounts for 90 percent of the Department's 
budget. Also, obviously, you play a pivotal role in the 
achievement of our programmatic objectives.
    Whatever achievements this Department has made over the 
last several years, or in our laboratories, for example, I 
believe are your achievements, because this committee has been 
very supportive. You have been partners in this enterprise, and 
I very much want to continue that collaborative and partnership 
relationship with you over the next several years.
    I have, Mr. Chairman, been briefed about some of the 
concerns the subcommittee has about things in the past. For 
example, management and staffing levels at the departmental 
administration level, as well as some of our program direction 
lines. Let me assure you that I take your concerns about that 
very seriously. I will work very closely with you on those 
matters, and we're beginning to already make some adjustments 
to address those concerns.
    We have a lot of work to do as you stated, Mr. Chairman, 
including implementation of many of the recommendations of the 
Galvin Commission report to reduce the costs of doing business 
in our labs, to continue our efforts to downsize staffing at 
the Department, to ensure that we get more output for each of 
our dollars that are spent. At the direction of the 
subcommittee, the Department, as of January of this year, has 
already reduced its overall Federal employee workforce by 
nearly 2,000--14 percent since May 1995.
    The administration workforce has been reduced by 534, which 
is a 29 percent reduction in that same period, and the 
contractor workforce has been reduced by 37,000, about 24 
percent, since October 1992. So progress has been made, but we 
realize that more has to happen.
    The work of this Department, Mr. Chairman and members, is 
important to the American people, whether it's our scientific 
work; our work to ensure the safety and reliability of our 
nuclear deterrent; our work to contain the proliferation of 
nuclear materials; it's work to diversify our energy resources; 
our work to clean up the legacy of the Cold War.
    One can always debate and one can always question the level 
of the effort, particularly in a very difficult budget context, 
but the work is necessary, and the work must be done because it 
will benefit the American people by giving us a more secure and 
a more prosperous and a safer world.

                              achievements

    In 1996 alone the Department was responsible for some very 
interesting achievements, which I think most Americans are 
unaware of. The Department, through its work, was able to 
sequence the genome of a microbe that has proven that there is 
a third branch of life. There may be some of us who didn't 
realize there were two branches of life. [Laughter.]
    But we now have a third branch of life, which is a major 
scientific discovery.
    Last year we announced--the Department announced--the 1 
trillion operations per second super-computer, which is faster 
than any other by at least a factor of 10. And that is already 
being put to work to help us with our Stockpile Stewardship and 
Management program.
    We supported the work of the 1996 Nobel Prize winner in 
chemistry for the discovery of a new form of carbon called the 
Bucky Ball, which looks like a soccer ball; but it, too, is a 
very important advancement in the area of understanding 
materials.
    These are just a few examples of the kind of revolutionary 
scientific achievements this Department has been able to 
accomplish working in partnership with the labs and the private 
sector.
    The Department has turned the corner of the Cold War to 
meet the new and the uncharted national security challenges of 
nuclear proliferation, and most recently, chemical and 
biological weapons.
    The Department has made progress in environmental clean-up. 
For example, we have completed 23 of the 46 original formerly-
utilized sites remedial action projects, known as FUSRAP, and 
our Fiscal Year 1998 request would accelerate the clean-up of 
the remaining sites, most of which are in urban areas. At our 
proposed funding level, we estimate completion of this program 
by 2002. The important point I want to make is that it's 14 
years earlier than originally scheduled, if we are able to have 
the money that we are requesting in the budget.
    The Department of Energy manages an extensive complex of 
unparalleled scientific and applied research user facilities. I 
continue to be very impressed with the complexity of DOE's 
activities, the enormously valuable scientific personnel, and 
the facilities that we manage. Your support has sustained the 
Department's ability to promote U.S. scientific excellence.

                               priorities

    Mr. Chairman, and members, let me share with you my four 
priorities. Number one: we will develop a realistic strategy 
for strengthening our Nation's energy security. We must address 
both energy production and consumption, and we need targets and 
timetables to measure our performance on behalf of the American 
people.
    Second, we need to ensure a safe and reliable nuclear 
weapons stockpile to reduce the global nuclear danger. Third, 
we need to clean up our former nuclear weapons sites and 
address the challenge of disposing of nuclear waste; and 
fourth, we need to leverage our science and technology to 
advance fundamental knowledge in our country's economic 
competitiveness with a stronger partnership with the private 
sector.

                             fy 1998 budget

    Let me make a few brief points about the budget, Mr. 
Chairman, then I'll be happy to answer your questions. Our 
budget request for energy and water is $18.1 billion. Of this, 
$15.5 billion supports our core budget request. In addition, 
$1.6 billion is to fund future construction, and $1 billion is 
for an environmental management privatization program.
    In Fiscal Year 1998, the Department includes $1.6 billion 
in up-front funding for total anticipated construction costs. 
This approach is similar to the way that other agencies--for 
example, the Department of Defense--budget for their 
construction projects. This approach makes the full cost of 
construction clearer for budgeting and planning for future 
years.

                             privatization

    We have also requested $1 billion in budget authority to 
expand the environmental management and privatization 
initiative, which we started last year. This will allow the 
Government to enter into contracts with the private sector to 
construct waste-processing facilities. Once a facility is 
operating to the Government's specifications, the Department 
will pay for waste-processing services as they are provided.
    We recognize that we can no longer afford to do things the 
old way, where the taxpayer assumed all the risk for these 
projects and the incentives to clean up quickly and efficiently 
are few. Privatization, if we do it correctly--and I want to 
emphasize that because I know there are questions about this 
new approach--but if we do it correctly, it will enable us to 
dramatically reduce our costs, minimize risk to the taxpayer, 
attract private capital for public purposes, and create 
incentives for contractors to manage these projects better.
    I fully recognize that this committee, the GAO report, and 
other Members of Congress have questions about this initiative. 
And, frankly, I have raised some of these questions myself in 
the briefings that I have received at DOE. So we must have 
accurate cost estimates; we must have accurate scopes of work. 
Our contracts must be airtight. We must have good contract 
managers. There should be no question that if a contractor does 
not deliver, the contractor does not get paid.
    We need to apply private sector principles very directly 
here. The bottom line is that we need more cost-effective ways 
to clean up these sites, and I believe this initiative has 
great promise to take us there. And I want to work very closely 
with you, Mr. Chairman, and the members of the subcommittee to 
ensure that we fulfill that.

                         construction projects

    I've had many briefings since I've been named to this 
position. I have observed the magnitude and the complexity of 
the construction projects that we undertake, and I am going to 
review the way in which the Department of Energy now manages 
the magnitude of the construction projects it has under its 
jurisdiction.
    There are few entities that have as many and as complex 
construction projects as DOE has. I want to make sure that we 
are fully synchronizing the way in which we manage these 
projects, get cost estimates, and, more importantly, meet our 
targets.

                               education

    Finally, in closing, Mr. Chairman, and members, let me 
raise an issue that I have always felt very strongly about and 
that is the question of education and, in particular, math and 
science education. I see very serious concerns about the levels 
of math and science literacy of our young people. I am very 
concerned that we are not producing the next generation of 
scientists and engineers that we need in our country to compete 
in the 21st century.
    If we look at the resources of this Department--the labs, 
the scientific and technological jewels that we have throughout 
the country--I believe we ought to find a way to make that more 
available to our kids in schools. Let us find ways to bring the 
wonders of our labs to children--why can't we use the Internet, 
for example, to expose children in elementary schools and high 
schools to our super-computer work, to designing super 
efficient automobiles, our work in chemistry? I think if we 
work very creatively we can find ways to excite a new 
generation of Americans in science and technology.
    And I want to work with you, Mr. Chairman, and members, to 
find a way to do that. I think there's a way that we can let 
elementary kids see a nuclear reactor in their classroom, 
rather than looking at a picture in a book. And there are all 
sorts of opportunities like that if we apply our creativity to 
it. This is something that I want to spend some time on, and, 
obviously, I think we can do it in a very cost-effective way, 
but in a way that will help our country in the long term.
    Mr. Chairman, thank you very much for your welcoming 
remarks. I will conclude my opening remarks at this point, and 
I'm happy to answer your questions.
    [The statement of Secretary Pena follows:]


[Pages 6 - 31--The official Committee record contains additional material here.]




                             galvin report

    Mr. McDade. Mr. Secretary, thank you for a fine statement. 
We probably will have a series of questions. We recognize this 
is not your budget. We recognize you haven't had a deep chance 
to look at it, but we have a number of questions that we want 
to go through with you. And if we're unable to get specific 
answers, we'll ask you to do it for the record.
    I want to give one caution if I may, please, about the 
record. Lots of times when a request is made to introduce some 
information into the record, it's kind of forgotten in the 
midst. I want to make sure that the Department answers, since 
we're going to go through this procedure, and, to the extent 
that we have to do record answers that we're going to look at 
them very strongly. And we hope you'll be very precise in your 
answers, or we'll just have to have you back up for another 
hearing, because we are determined to try to help you with 
probably the toughest job perhaps in the city of Washington.
    I was looking at some of the reports that are out about 
restructuring--the Galvin report, the GAO reports--and the 
words are not happy. The Galvin report says you're oversized; 
you're inefficient; you've got excess capacity; you've got 
management practices that are inefficient; political 
considerations enter into a lot of the decisions that are made, 
and so forth and so forth, and those are kind of, as you know, 
backed up when you begin to read GAO reports and you find out 
that the Department--not under your administration, but in 
previous administrations--has a number of contracts placed on 
high-risk watch by the GAO. They describe them as being easily 
subjected to waste, fraud, and abuse, et cetera.
    So there are a lot of things that we're going to have to 
deal with, all of them very difficult. Let me ask you, are you 
content, at least at this stage, that the Department is working 
toward meeting the objectives of the Galvin report?
    Secretary Pena. Mr. Chairman, I have been briefed about the 
Galvin report, and generally am aware of the steps the 
Department is taking to respond to the Galvin report. Let me 
say for the record that I think the Galvin report is a very 
valuable and important critique of the Department, and I 
support the overwhelming majority of those recommendations. And 
I have said already to my associates at the Department that we 
want to move aggressively to adopt the recommendations of the 
Galvin report.
    And I would like to, at some point, be able to come back to 
you, perhaps in six months, and give you a sense of how we're 
doing in responding to those recommendations.
    Mr. McDade. I know we're all glad to hear that, and we look 
forward to seeing some of those implementations. As a new 
groom, so to speak, you're the only hope to try to get those 
things implemented, so we want you to take aggressive action to 
do so. And we want to work with you to see, to the extent that 
we can, that the recommendations, insofar as they're useful and 
fitting--and a lot of them are, in my opinion--are carried out.
    Did you have an opportunity yet to meet with the directors 
of the various laboratories?

                         laboratory management

    Secretary Pena. Mr. Chairman, I have. It was, I must say, a 
very brief meeting, and it was more of simply a way for me to 
introduce myself to them. But let me, if I might, just share 
with you a couple of things that I said to them.
    Number one, I very much appreciate their concern about the 
so-called micro-management of their work, and I have said to 
them that I would rather that they be focused on product and 
not so much process and micro-management. And so I'm going to 
work to make sure that we have a supportive relationship with 
the labs so that they can spend their time and their energy on 
what they should be doing, and that is producing the scientific 
advancements that are important to the country, and that we 
ought to re-think the way in which we micro-manage 
unnecessarily. And I think that's one of the things that I want 
to work with them to correct.
    Mr. McDade. Have you met with the laboratory operations 
board yet? Have you had an opportunity to do that?
    Secretary Pena. I have not yet met with the laboratory 
operations board, Mr. Chairman. I will be doing that very soon.

                             privatization

    Mr. McDade. Okay, and we want to be apprised of any changes 
that you make in how the governance of the labs occur, whether 
or not you've got changes that are going to occur in the system 
that we can look forward to, and if you do that prior to 
markup--I don't know how soon you plan to meet with them--but a 
continuing dialogue back and forth is going to be very 
important to us, and we'll want to hear from you at your 
convenience after you do have such a meeting.
    There's a lot of concern about one of your silver bullets 
that a lot of people down in the Department seem to think is 
the answer to all the problems, and that's called 
``privatization.''
    Given the Galvin report and the others, do you think you 
can manage these contracts that are set up to try to be 
privatized? I know you probably haven't had much chance to even 
look at them yet, but they're highly complex. There are serious 
questions about who's on the hook in terms of liability should 
the contracts go awry, and that is against a background of all 
of these reports talking about inefficiencies, inabilities to 
do contracts, et cetera, et cetera, et cetera. Have you had a 
chance to examine the question of whether you're comfortable 
that the Department can do this? Have you had a chance to look 
at that yet?
    Secretary Pena. Mr. Chairman, obviously, in a general way, 
I've had discussions with the principal leaders in the 
Department who are working on the privatization effort. Let me 
share with you the questions that I have asked in these 
briefings.
    Number one, I am generally very optimistic and hopeful that 
the privatization program can work. In order for it to work, in 
my view at least, based on the briefings I've received, if one 
is going to have a competitive fixed-based contract, you've got 
to ascertain the value of that contract correctly from the 
beginning, and that is a very difficult and complex process so 
you need the right kind of----
    Mr. McDade. Probably no more difficult anywhere than what 
we're asked to do here.
    Secretary Pena. That is correct, and that is why we need to 
make sure we have the right kind of expertise in the Department 
to help us peg that number.
    Secondly, if we are to invite the private sector to invest 
their dollars up front for a period of four or five years in 
the construction of a particular facility, and if we are to say 
to you that the Department will not pay any money until a 
product is delivered, then we had better do that. And that 
means that the private sector contractor then assumes the 
liabilities and the risks during the up-front stages, and only 
until that product is produced would we make a payment.
    But, we must be very vigilant to ensure that in that four 
or five year construction period, while this is a private 
sector construction project, that the contractor is at least 
meeting the minimum specifications of the sponsor of the 
project to make sure that no corners are being cut.
    Thirdly, it has been said in explaining the privatization 
project that we want the up-front BA authority in the event 
that somewhere during this process, if the Government wants to 
cancel a project for its own convenience, we'll have the budget 
authority to do that. And I have asked the question why we even 
mention that.
    It seems to me, if we are going to engage in a $500 million 
project, we should not be thinking about canceling a project 
for the convenience of the Government. It is either a good 
project or it is not a good project. And we ought not be 
saying, well, halfway through we may re-think this and decide 
to cancel it. I don't think that's the appropriate approach.
    Mr. McDade. We appreciate that attitude, Mr. Secretary, 
very much, because we agree with you. We think you're on the 
right track in terms of trying to nail these things down.
    Secretary Pena. Absolutely.

                               gao report

    Mr. McDade. I don't know how you do it, though. I'm looking 
at a GAO report, and it says that cost estimates that the 
Department uses have a range of variance that can have a margin 
of error in them of as much as 40 percent. Now, when they 
translate that, this is what they mean; that a privatized 
approach could range from $5.8 billion to $13.4 billion, based 
upon the current method of cost estimating, and the non-
competitive approach from $8 billion to $18.6 billion.
    That's the inherent method in this range of estimates that 
past practices within the Department have proven out, and 
they've been authenticated. And when we get asked to start a 
project for $4 billion and it's going to lead to $40 billion, 
or $200 million and it's going to lead to $1.6 billion, and you 
look at this variation in there, I look at it, Mr. Secretary, 
and I say, ``My gosh, how can Secretary Pena manage that kind 
of a system?''
    What are you going to do to try to change that?
    Secretary Pena. One way to correct that, Mr. Chairman, is 
to say the following: if we have a fixed price contract, that 
is the amount, and that's all that will be paid to the 
contractor. If there is an incentive payment built in to that, 
we need to make sure that the incentive payment is reasonable 
and has been established in an appropriate fashion.
    Thirdly, we need to be very precise in understanding what 
the Government's payment will be once the product is delivered. 
Obviously, the company will want to recover its investment; the 
company will want an internal rate of return which is 
satisfactory to its investors and will be paid for the services 
over the long term.
    So we need to calculate what those costs will be over the 
next 10 years after the product is delivered to make sure that 
the 15-year costs of the Government are, in fact, less than the 
old M&O process we used to follow. And unless we can justify 
that and prove it to ourselves, we ought not to be doing these. 
So we've got to be very rigorous in how we evaluate all of 
those elements of the contract.
    Mr. McDade. There's the nub of one of your enormous 
problems. People all over the town say the Department can't do 
that, hasn't done it, and, in fact, is almost in chaos in 
trying to do it. So the people who you are going to rely upon 
who have been down there have established this track record, 
and how are you going to change that?

                           project management

    Secretary Pena. Well, Mr. Chairman, there's good news, and 
that is that there have been some projects the Department has 
been involved in which have been on time and on budget. And so 
I've asked to fully understand how we were able to be 
successful in certain projects. What were the elements that 
allowed us to be successful there? And what were the elements 
that allowed us not to be successful in other projects?
    So, they're all different. The important thing is to put 
into place the kinds of safeguards--and I'm just giving you 
minimal safeguards, I think--to make sure that the kind of 
question you ask can be answered positively in the future. So, 
we need to have the right kind of technical expertise in the 
Department. We need to have the correct oversight. We need to 
have people who are attentive to particular timetables and to 
make sure that whatever estimates we give you, and ourselves, 
about cost savings are genuine.
    Mr. McDade. We've had conversations about the importance of 
your project managers in every one of these projects, and we've 
tried to emphasize back and forth and have general agreement 
that as you begin to make those decisions down within the 
Department, they're absolutely critical. And you may have to 
have a sea change to get the kind of people as project managers 
that can do these contracts if you want us to appropriate and 
put at risk billions of tax dollars of the taxpayers of 
America.
    It's going to be a tough one. I'd like to hear what you 
plan to do about it, if you know at this juncture, Mr. Pena.
    Secretary Pena. Mr. Chairman, what I'd like to do, and 
obviously I haven't had the time to do it yet, is to answer 
that question more specifically over the next couple or two or 
three months before the committee makes final decisions and get 
back to the committee and give you my assessment of the caliber 
of technical expertise we have, where we might need to bring in 
additional expertise if, in fact, we do, and whether we need 
additional training.
    One other point that I raised, for example, was the need 
perhaps to bring in a major private sector company that, while 
maybe not having the same kind of construction experience DOE 
has, also has the problem of having to construct a number of 
facilities worldwide.
    How do they manage their projects with their private 
contractors and keep them on budget? And how do they work them 
into their schedule? And I think we need to use a private 
sector approach here since we have literally dozens of these 
projects of various sizes all over the country.
    And I still have not yet been briefed fully on how we 
manage the multitude of these construction projects throughout 
the Department. And I want to be able to answer that question 
for you in the next couple of months.

                          contract competition

    Mr. McDade. Okay, and we'll stay in touch on it as you go 
along because as we see it up on the committee, it's an 
enormous problem for you and it may be the linchpin on whether 
or not your administration as Secretary succeeds or fails. And 
so we want to work with you to make sure that as you go through 
that decision process, if you do need, for example, outside 
expertise, or whatever you need, we want to see that the 
mission is accomplished as best it can.
    Let me turn to competition, because that'sanother new 
direction for the Department, one that generally we all agree with. 
And, hopefully, we'll get competition and better products and reduced 
prices that competition normally generates into a system.
    When you went out for bid at Hanford, I'm told that you 
expected to get quite a number of responses; in fact, you've 
only gotten two. And I'm told--and I'd like you to comment on 
it--that the reason for that is the complexities of the 
project, and that complexity tends to repeat itself as you go 
through all of these privatization contracts. And you may get 
far fewer bids, it seems, based on what happened up at Hanford 
and as you go through the system.
    Would you tell us what your thoughts are on that, Mr. 
Secretary?
    Secretary Pena. Well, Mr. Chairman, I'm also concerned 
about that problem, and I'm aware of it. Let me set that 
particular project aside for a second and speak more generally 
about the problem. If, in fact, we are not going to have 
adequate responses to certain kinds of projects, and if there 
is a concern that we are truly not going to have competitive 
bids because we don't have enough people bidding, then I think 
we need to re-think whether any particular project should be 
subject to a competitive bidding process.
    Unless you do have a competitive bidding process and a 
number of companies bidding, then you may not, in fact, really 
have a competitive bid. And so I think we need to evaluate each 
of them very carefully, make judgments about that and address 
that question to make sure we don't have problems.

                            interim storage

    Mr. McDade. Okay, let me do one more question before I 
yield to my friend, Mr. Fazio, from California.
    As you know, both by law and by decision of the Circuit 
Court, the Department is supposed to be fulfilling an agreement 
that was made some years ago about interim waste. In fact, 
there's no plan that we're aware of to do that, to try to deal 
with this enormous national problem. Have you had a chance to 
look at that, and have you got any thoughts on what you're 
going to do about it?
    Secretary Pena. Yes, I have, Mr. Chairman. I spent a lot of 
time on this already. You are correct. In litigation that was 
brought some time ago, the court has not yet found the 
Department liable because it is not until January of next year 
that the Department must satisfy its contractual obligation to 
begin to take some of the waste.
    However, the Department, last December, notified the 
utilities in writing that we will not be able to take waste in 
January of 1998 and invited the parties to submit their 
thoughts about this. They have done that as of March 14, last 
week. I am in the process of arranging a meeting with the 
various parties, hopefully over the next two weeks, to begin to 
talk about options on how we deal with our contractual 
obligations, particularly in light of the court decision.
    Because, ultimately, come January 1998, a court will make a 
ruling about whether we are liable in some fashion, and that 
looming court decision is not going to go away. I'm going to 
talk to them; I'm having some internal discussions in the 
Department about what our options are, and, hopefully, we can 
create something that responds to their needs.
    Mr. McDade. Are you finding any options within the 
Department? Are you going to make any concrete recommendation 
to us in this budget as we go along? I mean, you're going to 
have a meeting soon; are we going to hear a recommendation from 
the Department within the time we do this markup period, we do 
this bill which, you know, is going to govern your next fiscal 
year?
    Secretary Pena. Mr. Chairman, it may be possible, and I 
don't want to pre-judge that because I haven't had that meeting 
yet. And I've had just one conversation with our attorneys 
about this; I need to have more conversations about that. But, 
it is possible we may have some statement of some kind about 
the litigation.
    Mr. McDade. Well, we applaud you for taking the initiative 
and getting everybody in and trying to figure out a solution. 
It's a very difficult problem that we need to solve, and thank 
you for your questions and answers.
    I yield at this time to my good friend from California, Mr. 
Fazio.
    Mr. Fazio. Thank you, Mr. Chairman, and I'd like to welcome 
you, Mr. Secretary, Mr. Grumbly.
    I'm sorry I couldn't have been here to hear your opening 
remarks, but we're having hearings on the California flooding 
in the Public Works Committee, and since I still have part of 
my district under water, I thought I'd better go there first.
    I want to congratulate you, Mr. Secretary, on the rapid 
ramp-up that you have had in your assumption of the role of 
Secretary of the Department. You really have absorbed a 
tremendous amount and have been in a position, I think, to 
really take hold and provide some leadership there. And I want 
to work with you to see you succeed in that regard.
    I have a number of questions. One is a bit of a pet of 
mine, but I'm pleased to see the Department's budget 
emphasizing renewable energy as part of your long-term 
strategy. If you would speak to your view of the importance of 
it, I know there are those who would like to reduce our 
contribution. If you could give us some feel for how that may 
impact on the industry directly and how it may also fit into 
our effort, I know, the one you want to lead to provide for 
energy independence.

                          energy independence

    Secretary Pena. That's exactly correct, Congressman, and 
thank you for that point. In my more formal statement for the 
record, I listed a minimum of nine sub-strategies which I think 
we must use to develop a more comprehensive strategy for what 
I'm calling ``energy independence'' or ``energy security''.
    But one of those is in the area of conservation, and one is 
in the area of alternative fuels, because if you look at the 
two fundamental forces at work here, we have a consumption 
number, which, if you project for the next 10 or 15 or 20 
years, is literally going off the charts.
    On the production side, we are going down slightly over the 
next 5, 10, 15 years, but we've got to do two things 
fundamentally: find a way to address the production side and 
get that up in some fashion, and find a way to either taper 
down or begin to bring down the consumption side. And part of 
that is alternative fuels, renewable energy, conservation.
    So it is a very important part of that, and let me be more 
specific. We know that transportation is accountable for 67 
percent of the fossil fuel consumed in our country, so we've 
got to deal with the question of transportation. And that is 
why we are very much involved in the partnership for the new 
generation of the next vehicle for the next century, and other 
technologies like that, to find a way to drive down our 
consumption in the area of transportation.
    So, I think my background in transportation will help us 
address that issue much more directly, but I agree with you 
that that's a very important part of the budget, and that's why 
we've emphasized it in the 1998 budget with some increases 
there.

                         stockpile stewardship

    Mr. Fazio. Mr. Secretary, on another subject quite 
different, we have a $4 billion commitment in this budget for 
the Stockpile Stewardship program. That's a sizeable amount, 
but there are also questions, I think, within this panel about 
whether or not it's the right approach. Could you give us from 
your perspective the level of confidence that you have in not 
only this budget that you present, but the approach that 
underlies it?
    Secretary Pena. Well, Congressman, as you know, the 
administration, the President, has embarked on the Stockpile 
Stewardship program, which is to ensure to the American people 
that our nuclear weapons are safe, secure, and reliable. And we 
have committed to do that without underground testing. Let me 
be more precise--critical testing. In order to give ourselves a 
scientific certainty that that nuclear stockpile is safe, 
secure, and reliable, we need to have the kinds of investment 
we are proposing in this budget.
    I have already met with General Haberger, who is the 
commander of the Strategic Command, about his view of his 
analysis of this process, and he feels confident about it. Just 
last month, then-Acting Secretary Curtis and the Secretary of 
Defense notified the President that their review of the first 
year was that our nuclear stockpile was, in fact, safe and 
secure, and we must assure the President of that--and the 
Congress--on an annual basis. So that will be my responsibility 
in the next year or so.
    But I believe the investments that we are proposing here 
for the 1998 budget in this area are necessary to meet that 
responsibility. It is a very serious responsibility. In fact, I 
have said publicly before, I cannot think of any more serious 
and onerous responsibility than assuring the President that our 
nuclear stockpile is safe, secure, and reliable. So I fully 
support it; I think it is a wise investment.
    And, of course, any time during this process if I or the 
Secretary of Defense, or the lab directors and others who are 
involved in this process, believe that we cannot provide that 
certainty to the President, then under the various provisions 
of the Comprehensive Test Ban Treaty, the President then has 
the option to take other steps such as resorting back to 
testing or other measures in the national interest. So we think 
this is a very important process and, thus far, I believe that 
it will work and give us the confidence to assure you and the 
President that our stockpile is safe, secure, and reliable.

            formerly utilized sites remedial action program

    Mr. Fazio. Let me ask about an entity called FUSRAP, and 
that means, for everybody's benefit including mine, Formerly 
Utilized Sites Remedial Action Program--FUSRAP--and after we 
wrap the fuse, I guess it goes off. [Laughter.] But the 
question is the $100 million increase in the funding for this. 
What will be the benefit that derives as a result of that kind 
of commitment? Are we doing enough? Isn't this a problem that 
can be managed over time? Is there a need to infuse more into 
FUSRAP?
    Secretary Pena. Yes, Congressman. Let me be more specific. 
This program has been relatively successful. We had 46 original 
sites; 23 have been completed. Obviously, citizens who are 
being affected and are concerned about the remaining sites are 
asking that we move and accelerate our clean-up. We believe 
with this $100 million request we can complete the program, 
clean up the rest of the sites by 2002, which is 14 years 
sooner than we had originally projected.
    So, because this is of enormous importance to people, 
particularly in the cities where these sites are located, we 
think this is a wise investment and over the long term will 
reduce the costs because the overhead that we may need for 
security or other measures, which will drag on for 10 or 15 
years, will be cut back by accelerating the clean-up at those 
sites. So I think it's a wise investment, and I believe we have 
a good project for getting that clean-up done by that 
timeframe.
    Mr. Fazio. Well, could you place in the record some 
additional information about what sites we'll be looking to 
that might not have been identified had we not taken action to 
provide additional funds this time?
    Secretary Pena. I'd be happy to.
    [The information follows:]

            Formerly Utilized Sites Remedial Action Program

    The Department is requesting a substantial increase in the 
funding for the FUSRAP program for reasons of economic 
efficiency and risk reduction. First, the request for increased 
funding in cleanup at FUSRAP sites reflects the President's 
commitment to reduce or eliminate risks in urban areas from 
sites being remediated under the Comprehensive Environmental, 
Compensation, and Liability Act. Further, it is consistent with 
the Department's consideration of risk to set priorities. While 
there are no urgent high risks at FUSRAP sites, the risks 
consist of residual radioactivity located in privately owned 
facilities and near community residences. This material is 
currently uncontrolled and has the potential of coming into 
contact with workers, the public and the environment. To 
achieve the goal of completing the program by Fiscal Year 2002, 
the program is accelerating the residential and commercial 
vicinity property cleanups which eliminates the most 
significant risk to the public and minimizes the further spread 
of contamination. The extra funding will also accelerate 
actions at the larger sites which are the principal potential 
source of off-site contamination to soil and ground water.
    The risks that are being addressed by this program vary 
widely depending on the site. Most of these sites were first 
contaminated by old nuclear weapons production operations 
during the 1940's and 1950s. The resulting contamination has 
been isolated from nearby populations only through relatively 
high cost maintenance operations that do not allow the land to 
be used by the communities.
    The current proposal to accelerate the FUSRAP program is 
extremely aggressive and is based on the ability of the 
Department of Energy to reach agreement with the regulators and 
stakeholders at sites on the level of cleanup.
    Due to the uncertainly of being able to obtain concurrence 
of our planning assumptions from our stakeholders, the 
acceleration of the FUSRAP program is proposed in the 
Administration's budget submittal for Fiscal year 1998 as an 
estimated one and may need to be modified depending on the 
remedy selected in consultation with regulators and 
stakeholders.
    Second, the total life-cycle cost of cleaning up the sites 
in the FUSRAP program can be reduced substantially by 
accelerating the cleanup process. The sites in the FUSRAP 
program are relatively small and can be cleaned up in a shorter 
period of time than many of the large sites, such as Hanford 
and the Savannah River Site where larger and more complex 
technical challenges remain. By investing in more rapid cleanup 
at the FUSRAP sites, the Department believes that it can 
complete cleanup at the FUSRAP sites by the year 2002--about 
ten years or more earlier than originally planned--depending on 
the results of interactions with regulators and stakeholders. 
Completing cleanup earlier would eliminate substantial fixed 
costs at these sites, such as security and site maintenance. 
The Department believes that this acceleration could result in 
a savings of up to $90 million, provided that regulators and 
stakeholders agree with our planning assumptions.

                        next generation internet

    Mr. Fazio. My last question before I sit back--and perhaps 
go for another round; we'll see what happens--is on the Next 
Generation Internet issue. We have five Federal agencies who 
are proposing to spend some $100 million on the next generation 
of the Internet. DOE is proposing $35 million.
    Could you tell us which of the labs are going to be putting 
an emphasis on this, and how much we can anticipate getting out 
of it? I think there are those in the Congress who think in 
terms of a private sector benefit here that might perhaps call 
into question this kind of Federal commitment of funding.
    Secretary Pena. Congressman, it is a reasonable question, 
but let us recall where we are today with the Internet and how 
we got here today, and there is a significant history about the 
Government's role in the creation of the Internet. So I believe 
that by coordinating very carefully with the other agencies 
this can be done, I think, in a very cost-effective fashion, 
but it will have enormous implications for our country, for the 
American people, obviously for the private sector, but all of 
us as citizens who will be part of this new system.
    So let me get back to you, Congressman, and give you a 
specific answer to the particular labs that are going to be 
involved, and the nature of the work and how we're going to 
integrate our work with the other departments in the work of 
the Next Generation of the Internet.
    [The information follows:]

                        Next Generation Internet

    Selection of specific sites to be involved in the Next 
Generation Internet initiative has not yet occurred. DOE labs 
that have strong network research capabilities and strong 
network applications capabilities are likely to be selected. 
Several DOE labs are world leaders in both of these areas, so 
we expect substantial participation by the DOE labs.
    The Department is working very closely with the other 
agencies involved in the initiative, including its planning and 
implementation. These agencies include those with specific FY 
1998 budget requests for the initiative--Department of Defense 
(Defense Advanced Research Projects Agency), Department of 
Commerce (National Institute of Standards and Technology and 
National Oceanic and Atmospheric Administration), Department of 
Energy, National Aeronautics and Space Administration and 
National Science Foundation--as well as agencies with important 
applications such as Health and Human Services (National 
Institutes of Health). A management structure has been set up 
within the National Science and Technology Council to lead the 
initiative, co-chaired by DOE and NSF. Specific agency 
responsibilities for the announced goals of the initiative have 
been determined, and an initial schedule for accomplishing 
these goals has been laid out. In areas where the Department 
shares responsibility with other agencies, we intend to use 
joint announcements and joint selection of participants in FY 
1998.

    Mr. Fazio. Thank you very much.
    Mr. McDade. The gentleman from Michigan.
    Mr. Knollenberg. Mr. Chairman, thank you, and welcome, 
Secretary Pena. It's only been a couple of days, or a few days, 
since you took on the appointment of then-Under Secretary 
Grumbly, but I've been told you're a fast study and so we 
expect, then, you to be up to snuff in a hurry. And we look 
forward to working with you----
    Secretary Pena. Thank you.

                             ten year plan

    Mr. Knollenberg [continuing]. On a variety of DOE 
activities. I want to talk about the environmental, EM, 10-year 
plan, and specifically, to go back just a couple of years ago. 
I know, Mr. Grumbly, we've had some conversations about it--and 
I think that the Department did a favor to all of us by 
producing the BEMR report in 1995, which scared the devil out 
of us in terms of some of the costs that were fabricated into 
the 75-year plan. Actually, the cost that was mentioned then 
was somewhere between $200 billion and $350 billion. That's the 
scary part.
    But I'm happy to say that there have been some changes in 
that because, frankly, those kinds of costs, I don't think 
they're sustainable; I don't think it's fair to the taxpayer. I 
think we can do a lot better, and I think the Department very 
definitely recognized that by coming up with a plan that would 
bring to closure some of these projects by prioritizing them in 
a fashion that you're well aware of, I'm sure, that would bring 
us to closure more quickly. And the 10-year plan does that very 
definitely.
    Last week we heard from Assistant Secretary Al Alm in 
regard to the progress that's being made. And I notice that 
because the Department has changed its vision about this thing, 
they've brought it forward now to the year 2006, that we can 
get as much as possible out of the way by that time. I applaud 
that vision because I think that gets us on track.
    But if you would, Mr. Secretary, for this panel, for this 
subcommittee, would you tell us what your thoughts are about 
the 10-year plan, and whether you think this vision is 
achievable, and specifically, what would you do to support it?
    Secretary Pena. Congressman, let me say I'm very excited 
about the commitment to 10-year workout plans. In fact, I have 
a little personal experience here because one of the more 
successful ones is in my home State of Colorado in Rocky Flats.
    Mr. Knollenberg. Yes.
    Secretary Pena. And I can say, as one who many years ago 
was tasked to look at the long-term utilization at Rocky Flats, 
which at that time we thought was going to take 20 or 30 years 
to finally get cleaned up--we are absolutely delighted to see 
that DOE has now worked out a 10-year program with the State 
and the contractor to finally bring closure to Rocky Flats, at 
least in a significant way, where all the community has bought 
into the goal; the contractor is performing; and the State is 
pleased with the objectives and the process.
    So, from that experience, I think that all communities 
would very much appreciate having the benefit of a 10-year 
plan, where we agree on the objective, and then by doing that, 
I think ultimately we can find a way to reduce the cost. In 
fact, that was the case in Rocky Flats, where the community 
finally said, ``Let us agree to this level of cleanup; we'll 
all agree, and then march on.'' So I'm very supportive of this.
    We will be providing the Congress a report on the full 10-
year plan, I think, in a month, so we'll have a sense of how 
we're going to lay this out for all of the sites--at least 
we're on it--so we'll hit that goal of 2006. So it's a high 
priority, and I support it.
    Mr. Knollenberg. Thank you. I appreciate hearing that.
    In the 1996 BEMR--this is a summary; this is not the BEMR, 
but it's a summary--there's a pie chart that appears on the 
first page, and I've enlarged that--at least I have a full 
color chart here which, just to remind you, if you don'thave it 
in front of you, it indicates that--and Rocky Flats, by the way, is a 
part of that; that's 8 percent of the total cost. But there are other 
sites, some $67 billion or 30 percent, a little less than a third. 
They're the sites other than Oak Ridge, other than Idaho, other than 
Savannah River, and Hanford. I want to get some information from you on 
that, if I could.
    Will all of these small sites--I'm not talking about the 
big ones, but all of them be completed by 2006?
    Secretary Pena. Congressman, until I see that report, I 
can't answer your question specifically, but, generally 
speaking, I believe that the smaller sites will be able to be 
cleaned up in a 10-year period. It's the very large sites where 
we're not yet clear how much we'll get done in 10 years.
    Mr. Knollenberg. There's one at Fernald, and, really, I 
appreciate the fact that you probably don't have your hands on 
everything. So I'm just saying to you that this is a report 
that came out on the AP, I think, this morning that suggests 
that the vitrification project at Fernald is expected to cost 
$56 million. The original estimate was $14.1 million. And, 
also, the most disturbing part about it is--and this is a GAO 
assessment--is that the Department said it will take another 13 
years and an additional $2.4 billion to complete the cleanup. I 
just think that we ought to look at that very closely because, 
of those 30 percent that fall into this pie chart, those are 
the ones we want to clean up in a hurry, if we can. I think 
that's the move that the Department would like to make, too.
    So I'm asking you to--maybe you're familiar with it. If you 
are, you can respond, but I would like some attention paid to 
the specifics there because it does have some of the--on both 
sides of the fence--Democrat and Republican Members of this 
Senate and House concerned about that. And if you don't have 
any information on it, I guess we'd just like to bring it up 
for the record, and if there is a way that you can focus some 
attention on that--because that is one of those we'd like to 
get out of the way by the year 2006.
    Which of the five major sites--you mentioned Rocky Flats, 
and I've been there and I know a little bit about that area--
which of the five major sites--Hanford, Savannah River, Oak 
Ridge, Idaho, and Rocky Flats--will have completed their 
cleanup by 2006? We know Rocky Flats is on target, but the 
other four?
    Secretary Pena. Mr. Chairman, I must say, I have not been 
briefed about all those top five sites. If you'd like, I could 
ask Mr. Grumbly. He perhaps can respond more specifically this 
morning.
    Mr. Knollenberg. Sure, certainly.
    Mr. Grumbly. Well, I think of the five sites that you 
indicated, Rocky Flats is the one that we are intending to 
finish by 2006. The other sites that you indicated have a lot 
of transuranic and high-level wastes that will have to be 
treated that will go beyond the 2006 timeframe. Obviously, a 
lot of our ability to succeed at those sites rests on our 
ability to do two things: one, vitrify at Savannah River the 
wastes in a timely and cost-effective way, and, two, get the 
Waste Isolation Pilot Project, so-called WIPP, open as quickly 
as possible. But those four sites that you cited will go beyond 
the 2006 number.

                             closure funds

    Mr. Knollenberg. I applaud the WIPP decisions, too, by the 
way. I think that's something we'd all like to see happen.
    On a matter of closure--and you're familiar, I believe, 
with the closure fund that was a part of the last budget. In 
that closure fund, it was really the 1997 Conference Report 
that contained language, it does what you want to attain, I 
believe: reduce the mortgage costs, of course, bring to 
closure, and, in short, save money.
    We included some $15 million in that closure fund which was 
to be used for accelerated purposes only--just by prioritizing, 
using the criteria of--and there are five or six points which 
are available to you, but the question I have is, if you look 
at the vision of the 10-year plan, it would seem to me--and 
this may not be a question; it may be more of a statement, but 
it seems to me like your reaction--that the criteria of this 
closure fund does exactly what you want to accomplish, and it's 
a mechanism, I think, that could use some additional money.
    I notice that the administration called for the same 
amount. It was $15 million; it's $15 million this year. Any 
comments about increasing that?
    Secretary Pena. Congressman, I understand that when this 
budget was put together, there was some conversation about 
possibly increasing it, and as with all other budgets, the 
decision was made that for this budget $15 million was the 
amount that the Department could recommend. But, I must tell 
you, I agree with the idea, the concept. I think it's a very 
good idea, and it might be the kind of incentive we need to 
present to communities, so that they'll agree to a 10-year 
closure plan.

                             yucca mountain

    Mr. Knollenberg. Well, I appreciate that.
    On the Yucca Mountain situation, which I know is something 
that's on everybody's minds, I share the concern of many of my 
colleagues that we lack a strategy for meeting the obligations 
of the government. Obviously, you're well aware, I'm sure, of 
the fact that in January of 1998 we have to do something in the 
lawsuit that is in place, and it seems to me that, well, that 
decision by January of 1998 was recently reaffirmed by the 
Federal courts, I believe. So we're in a situation where we 
have to deal with it.
    Your own budget recognizes the need for interim storage. 
Assuming that the spending of the $85 million from Fiscal Year 
1996, which is in the budget, that is held in reserve for 
interim storage, will begin in 1999. I guess what I'm asking 
for is, is that correct? Is that $85 million in there, and is 
that going to be used with respect to interim storage?
    Secretary Pena. Let me answer your question generally, 
Congressman, and perhaps I may turn to Tom to give you more 
specifics. We are doing general work on a non-site-specific 
interim storage process, so that we do not lose valuable time 
while we look toward the 1998 viability assessment, which must 
be made. And that will give us much more complete information 
about how to proceed. So that's what we have in the budget, to 
be able to continue some of that work, but it is not site-
specific, and it is very generalized work on interim storage.
    As I said earlier, I'll be meeting with the plaintiffs and 
other parties, I hope, in the next couple of weeks or so to 
talk about the litigation and to determine what options we have 
available to respond to the obligations we have in the lawsuit 
and in our contract.
    Mr. Knollenberg. What is the Department estimating would be 
the earliest possible date--earliest possible date--inwhich an 
interim storage facility would be constructed and ready for operation?
    Secretary Pena. Congressman, we don't have an answer to 
that question today, for the reason that we want to make sure 
that we, first of all, do not lose sight of the viability 
assessment to be made in 1998, and so if you look at that 
schedule--and I'm sure you have----
    Mr. Knollenberg. Would it be an answer that you could give 
us after the end of March, or does none of that data really 
reflect or telescope into this problem?
    Secretary Pena. I do not think we'll be able to generate 
any additional information to answer that question more 
specifically.
    Mr. Knollenberg. Just a question on the permanent 
repository: I know that in your Senate testimony I believe you 
said there were no show-stoppers--I think that was the term 
that you used----
    Secretary Pena. That's correct.
    Mr. Knollenberg [continuing]. And, apparently, there 
aren't, in your judgment. Have you changed your mind since that 
statement as to any obstruction that might get in the way here?
    Secretary Pena. No, I have not changed my mind, 
Congressman. Let me explain why I made that statement. No. 1, 
I, in the briefings I received from Dan Dreyfus, who, as you 
know, was in charge of this project, but, unfortunately, has 
moved on, he explained to me that the scientific work done thus 
far, the information received thus far on the four-and-a-half 
miles that have already been completed in the mountain, have 
indicated that there are no show-stoppers. Now, clearly, as he 
laid out the process which must follow after 1998, and et 
cetera, for completion, I mean, there are lots of very 
complicated issues that have to be resolved. But, in his 
words--and I, at least in the briefings I have received, I 
agree with him--there are no show-stoppers, and the information 
we're receiving thus far is positive.

                    TRANSPORTATION OF NUCLEAR WASTE

    Mr. Knollenberg. With your expertise at the Department of 
Transportation, do you see that coming into play, because 
transportation is a part of--whether it's interim or permanent, 
storage, it comes into play. Is that going to be something that 
you're going to call upon?
    Secretary Pena. Absolutely, Congressman. I've already had 
conversations with people at DOT about the work that they have 
done preliminarily with DOE about looking at priority routes, 
working with the States and communities, et cetera. So lots of 
work has already been undertaken in this regard. Final 
decisions have not been made yet, but we are on top of that 
because it is also a very sensitive and important issue.

                YUCCA MOUNTAIN SITE SUITABILITY DECISION

    Mr. Knollenberg. And just a very quick final question: is 
there any way, in your judgment, that we can see bringing the--
I'm talking now about the timeline for Yucca--bringing that 
decision into the timeframe of the year--by the year 2000 on 
this administration's watch, on this President's watch, rather 
than waiting until the year 2001. And I know that you may not 
be in a position to make a statement or a prognostication on 
that, but it would seem to me--administrations do change, and 
it seems like we've just pushed it off the edge of the year 
2000 into 2001. Is there any way to bring it back to 2000?
    Secretary Pena. Congressman, let me, first, before 
answering your question, say that I'm very much aware of the 
frustrations that people have about having invested $12 billion 
in a fund and not having seen the product. I believe the 
schedule will show that in 1998 we do the viability assessment. 
Then a suitability determination is made immediately 
thereafter, I think by 2000, as Tom has indicated to me. So the 
answer is, yes, there is an opportunity in this administration 
to make a decision about this.
    Mr. Knollenberg. Thank you, Mr. Secretary.
    Secretary Pena. Yes.
    Mr. Knollenberg. Mr. Chairman, thank you very much.
    Mr. McDade. The gentleman from Indiana.

                    POWER MARKETING ADMINISTRATIONS

    Mr. Visclosky. Mr. Secretary, congratulations. I look 
forward to working with you. Mr. Grumbly, thank you for being 
here.
    Mr. Secretary, the current administration proposed a sale 
of the Power Marketing Administrations in its first budget. Is 
the administration still interested in selling PMA assets?
    Secretary Pena. No.
    Mr. Visclosky. Why not?
    Secretary Pena. Well, to be very blunt, as I understand, 
the first idea was not well-received. [Laughter.]
    So it is now off the radar screen, if I can be very direct.

                     FEDERAL AND STATE TAX BENEFITS

    Mr. Visclosky. You'll do fine as Secretary. [Laughter.]
    Could you, if not here, for the record, provide an estimate 
of the benefits enjoyed attributable to the exemption from 
Federal income taxes that the administrations enjoy, the Power 
Marketing Administrations?
    Secretary Pena. I'd be happy to present that in writing to 
you, Congressman, yes.
    Mr. Visclosky. If you could, at the same time also, the 
benefit attributable to the exemption from State and local 
taxes, I would appreciate that very much.
    Secretary Pena. I would be happy to do that.
    [The information follows:]


                      Federal and State Income Tax

    As with all Federal agencies, the PMAs are not subject to 
Federal income taxes. As Federal instrumentalities, PMAs are 
constitutionally exempt from state and local taxes unless 
Congress enacts legislation to authorize payments-in-lieu-of-
taxes. Even if the PMAs were subject to Federal income taxes, 
they collect only enough revenue to cover expenses, and have no 
net income.
    State and local taxes vary from jurisdiction to 
jurisdiction and may include income taxes, real estate taxes, 
and business and professional taxes. Because the PMAs set rates 
so as to not have any net income, there is no benefit of income 
tax exemption. There would be some benefit from being exempt 
from real estate and business and professional taxes, but no 
estimate of the benefit can be developed on short notice. It 
should be noted that the Army Corps of Engineers and Bureau of 
Reclamation do make certain payments-in-lieu-of-taxes to local 
governments when authorized by Congress. The power customers 
would pay for power's allocation of such taxes.

                              FERC REVIEW

    Mr. Visclosky. Mr. Secretary, currently, the FERC has very 
little oversight responsibility with respect to the rates and 
operations of the PMAs. Would you have an opinion today what 
the effect would be of subjecting the Power Marketing 
Administrations to the same requirements as other FERC-related 
entities?
    Secretary Pena. Congressman, let me answer your question 
generally. The Department of Energy has put together a proposal 
to address the question of electric restructuring or 
deregulation, and in the context of that proposal we will be 
attending to the very unique circumstances of the Power 
Marketing Administrations, and there will be some treatment of 
the FERC. That is the proposal and we are now vetting that. We 
are now sharing that with other departments throughout the 
administration, and I'm hopeful that within a month or two we 
will have that process completed and be able to give you an 
answer to that question. But, in the meantime, let me see if I 
can give you a more specific answer to that, so that we 
understand whether or not significant changes in the FERC are 
going to be proposed. Right now they're very general 
discussions.
    [The information follows:]

                             FERC Oversight

    The FERC has limited oversight over PMA rates pursuant to 
Federal law and administrative decisions. The FERC also has a 
role in ensuring that PMAs provide open access over their 
transmission lines. Section 726 of the Energy Policy Act of 
1992 defined a ``transmitting utility'' to include a Federal 
power marketing agency which owns or operates electric power 
transmission facilities. Section 721 of the Energy Policy Act 
amends Section 211 of the Federal Power Act to allow FERC to 
require ``transmitting utilities'' to provide open access upon 
the request of an entity requiring wheeling services.
    BPA's power rates are subject to a number of unique rate 
setting requirements set forth in section 7 of the Pacific 
Northwest Electric Power Planning and Conservation Act. Those 
rate directives reflect many Congressional policy 
determinations, including ensuring BPA's rates are established 
to recover costs and repay the U.S. Treasury over a reasonable 
number of years; ensuring preference, residential exchange and 
Federal agency customers pay rates based on BPA's lowest cost 
resources; linking rates for the Direct Service Industries to 
those rates; specifying how certain costs, such as fish and 
wildlife costs, are to be allocated; providing for negotiation 
of rates for power sold outside the United States; and setting 
standards for sale of nonfirm power within the United States, 
but outside the Pacific Northwest region. Application of 
Federal Power Act standards to BPA could substantially change 
these substantive standards and diminish BPA's authority to 
recover potential stranded costs. In addition, these matters 
are currently determined first in a formal BPA hearing under 
section 7(I) of the Northwest Power Act, and then reviewed by 
FERC. Application of FERC's procedural standards could result 
in the formal hearing process being transferred to FERC, with a 
consequent diminution of local control and input, an increase 
in time and the cost of hearings to the parties, and 
inefficiencies in deciding issues. A FERC decision on BPA rates 
can be appealed directly to the Ninth Circuit Court of Appeals.
    Rates for the other four PMAs are subject to a three-step 
review process. Pursuant to Department of Energy Delegation 
Order No. 0204-108, Amendment No. 3, these PMAs' long-term, 
firm-power rates are first developed by the respective PMA 
administrator after a public process that requires the PMA to 
address the issues and concerns raised. This is Step 1. Then, 
the PMA rates are forwarded to the Deputy Secretary of Energy 
for review and approval on an interim basis. This is Step 2. 
Finally, if the Deputy Secretary concludes that the rates being 
proposed are acceptable, he places the rates into effect on an 
interim basis and forwards the rate package to FERC for final 
approval. FERC has been delegated the authority to confirm, 
approve, and place rates into effect on a final basis, or to 
remand or disapprove rates. FERC's review is limited to 
determining if the rates are the lowest possible to consumers 
consistent with sound business principles, whether the revenues 
generated are sufficient to recover costs, and the assumptions 
and projections that are subject to Commission review. A FERC 
decision can be appealed to Federal District Court.
    Affirming and strengthening the Federal Energy Regulatory 
Commission's authority to regulate electricity transmission 
that is in interstate commerce should be a key goal of federal 
electricity restructuring legislation. One issue that must be 
considered as Congress attempts to achieve this goal is the 
transmission access authority of FERC over non-jurisdictional 
transmitting utilities such as the PMAs. Related stranded costs 
issues should also be considered.
    The Department has strongly supported FERC's Order 888. 
Consistent with that support, DOE adopted a formal policy 
statement in cooperation with the PMAs in September 1995 
directing the PMAs to provide open access transmission in 
manner comparable to that required of jurisdictional utilities 
under Order 888.

                        ALASKA TERMINATION COSTS

    Mr. Visclosky. Mr. Secretary, last year the committee 
provided $5.5 million by transfer for transition and 
termination costs for the Alaska Power Marketing 
Administration. Do you know if this amount will be sufficient 
to complete all transition and termination activities?
    Secretary Pena. Congressman, I'm not sure. Let me get back 
to you in writing and assure you that that is all that is 
necessary to transfer the Alaska PMA.
    [The information follows:]

                Alaska Transition and Termination Costs

    At this point in time, it appears that the $5.5 million 
will be sufficient. We continue to work with the purchasers to 
limit all transition and termination costs to this amount. 
However, there may be real estate, environmental, or 
maintenance items that Alaska Power Administration is not 
currently aware of that could require additional funding in 
order to complete all transition and termination activities. 
One significant issue that has surfaced through the State of 
Alaska's inspection of the Snettisham Project is the corrosion 
of the armor around our 3-mile submarine transmission cable. 
The State has requested replacement of the cable at an 
estimated cost of $11.7 million. We are working with the cable 
manufacturer and experts in the Bonneville Power Administration 
to resolve the issue to the extent required for the State to 
secure the necessary bond financing for the purchase, while 
minimizing costs to the Federal taxpayer. Other items being 
negotiated with potential cost implications include land titles 
and rights-of-way at the Eklutna Project and generator repair 
and a potential land survey at the Snettisham Project.

               alaska power administration budget request

    Mr. Visclosky. If you could, additionally, it's my 
understanding, and I was not on the subcommittee myself last 
year, that the committee was informed that no additional funds 
would be needed for the Alaska Power Administration. 
Nevertheless, in this budget there was a $1 million request for 
1998, and I'm wondering, again----
    Secretary Pena. Again, Congressman, let me look at that and 
get back to you in writing to explain that $1 million figure. 
I'm assuming that's the last payment if it's only a million 
dollars.
    [The information follows:]

    Alaska Power Administration's FY 1998 budget request will 
provide $1.0 million to support 11 FTEs, supplemented by 
$1,327,000 in net billing authority, to continue administration 
and necessary operations and maintenance activities at its two 
hydroelectric projects during remaining Federal ownership. 
While the request is the minimum allowable under the current 
rounding rule (to the nearest million), it is of critical 
importance to Alaska Power Administration as it attempts to 
fulfill its mission of asset sales and agency termination. 
Preparation of both projects for transfer, including settlement 
of all outstanding land, dam safety, maintenance, and 
environment issues, and the subsequent agency termination 
activites will coninue using the non-reimbursable funds 
provided through an appropriation transfer in FY 1996 for 
Alaska Power Administration transition and termination.
    During deliberations last year on Alaska Power 
Administration's FY 1997 budget request for $4 million for 
ongoing operations and maintenance and the FY 1996 
appropriation transfer request of $5.5 million for transition/
termination, the Department of Energy assured the Congress 
that, barring some extraordinary or unforeseen circumstances, 
no further requests would be made for transition/termination. 
The Department was clear, however, that continued operations 
and maintenance funding would be required until final transfer 
of the projects.

                  sale of alaska power administration

    Mr. Visclosky. Okay. Mr. Secretary, the other question I 
would have is, if the sale is not consummated by the end of 
1997, what other anticipated costs or liabilities we might be 
looking at?
    Secretary Pena. I will have to answer that in writing also, 
Congressman. Again, I'm assuming we're proceeding with that. 
There is no question about it. The question is will we meet the 
date, and do it on a timely basis, and within the budget that 
we have? And let me get back to you more fully and specifically 
on that question.
    Mr. Grumbly. Yes, I think we anticipate meeting the date.
    Secretary Pena. Our anticipation is that we will meet the 
date. If we do not, we will advise you immediately.
    Mr. Visclosky. Okay, great.
    [The information follows:]

     Alaska Power Administration Termination Costs and Liabilities

    The Transaction Date for each project is identified in the 
detailed Transition Plans that were negotiated with the 
purchasers. The Transaction Date for the Eklutna Project is now 
set for November 28, 1997. It will be sold to its three current 
power customers. The Snettisham Project transfer is tentatively 
scheduled for December 31, 1997, and it will be sold to an 
agency of the State of Alaska. However, should the State 
experience delays in securing the necessary bond financing for 
the purchase of the Snettisham Project, its Transaction Date 
could be delayed to as late as August 20, 1998, the limit 
imposed by the terms of the Snettisham Purchase Agreement.
    The Alaska Power Administration Asset Sale and Termination 
Act requires that detailed Transition Plans for both projects 
be completed within six months of enactment of all authorizing 
legislation. The required Transition Plans were completed on 
May 28, 1996, for the Eklutna Project and on March 7, 1997, for 
the Snettisham Project. Alaska Power Administration and the 
purchasers are in the process of implementing the Transition 
Plans for both projects. Consistent with these Transition 
Plans, all indentified items must be completed by the 
Transaction Date, or, in the event of long lead-time items, 
must have started and a completion date agreed to. The most 
significant issues remaining to be addressed prior to the 
Transition Dates for both projects involve land title and 
rights-of-way, maintenance or ``punch list'' resolution and 
responsibility, and some minor environmental cleanup, including 
the following:
    Final preparations for Eklutna and Snettisham Transaction 
Dates, including agreements for required post-transaction 
activities.
    Close-out of the Eklutna generators rewind contract.
    Final transfer of all Eklutna assets by November 28, 1997, 
and all Snettisham assets by December 31, 1997 (tentative).
    Preparations for completion of the administrative 
termination of Alaska Power Administration activities in Alaska 
by January 31, 1997.
    Initial preparation of the legislatively-required final 
Report to Congress on implementation of the Alaska Power 
Administration Asset Sales and Termination Act, with a 
submission target date of September 30, 1998.

    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. McDade. The gentleman from Texas is recognized.

                            energy security

    Mr. Edwards. Thank you, Mr. Chairman. Mr. Secretary, 
welcome. Mr. Grumbly, good to have you here.
    Mr. Secretary, let me focus on two areas of questions. One 
is what you listed as a top priority of the Department, and 
that is energy security. And I know this subcommittee shares 
responsibilities dealing with energy supply and conservation 
with other committees, but, certainly, our situation, our 
energy dependence, affects all of our committees' 
deliberations.
    Do you know today what percent of our oil and gas we import 
compared to, say, during the era of oil embargo?
    Secretary Pena. Congressman, generally speaking, it's 
interesting, this Department was created 20 years ago this 
year. We're celebrating our 20th anniversary, particularly to 
deal with the oil crisis we had in the early seventies. And 
back then, depending on which date you pick, we were importing 
about 37 percent of our oil from overseas markets. Today our 
net imports are about 50 percent--and I'm using net imports as 
opposed to gross imports.
    Mr. Edwards. Right, right.

                              oil imports

    Secretary Pena. And our projection, the Energy Information 
Agency's projection, is that in 10 years that will grow 
probably to 60 percent. So we are moving in the wrong 
direction, clearly.
    Mr. Edwards. I assume a large percentage of those imports 
come from the Middle East?
    Secretary Pena. That's correct. Our projection there, 
again, is that within a very short period of time the Middle 
East exports will be close to, I think, 70 percent of world oil 
export market.

                              oil reserves

    Mr. Edwards. Is your Department doing anything in regard to 
what I understand are enormous reserve potentials in the 
Caspian Sea area? And while I'm interested in domestic 
conservation and domestic alternative sources of renewable 
energy, as well as non-renewable energy, you know, I'd also 
like to see us diversify, at least to the extent that we're 
dependent upon foreign sources of oil and gas, diversify 
sources outside of the Middle East. Are we doing anything--is 
your Department doing anything in that region of the world?
    Secretary Pena. Yes, we are, Congressman, and I agree with 
that. One of the nine strategies that I outlined in my more 
complete testimony talked about diversifying our imports, 
whether they're from the Caspian Sea region or South America or 
other parts of the world that are more stable. We think that 
that is part of our strategy for at least more energy security. 
It is still imported oil, but at least it will come from parts 
of the world that perhaps have a morestable political 
environment. So we are involved with the Caspian Sea, as with other 
parts of the world, too.
    Mr. Edwards. Okay, very good, and I'll follow up on that 
with your staff in the weeks ahead.
    Secretary Pena. Okay.

                            nonproliferation

    Mr. Edwards. Let me ask also about your role in the area of 
nonproliferation of weapons of mass destruction. On page 10 of 
your testimony, you talk about, ``The Department is currently 
working to secure nuclear materials at over 40 sites within the 
former Soviet Union,'' and ``With a total request of $668 
million, the Department will continue this emphasis and 
accelerate activities in critical areas such as export 
controls, nuclear materials protection, control and accounting 
* * *.''
    Can you summarize for me what the Department of Energy is 
doing in regard to proliferation of nuclear materials in other 
countries outside the United States, and how you work with 
other Federal agencies, and do we really have at the Federal 
level a coordinated effort between your agency and other 
agencies regarding proliferation issues?
    Secretary Pena. Congressman, let me take the last question 
first. The answer is, yes, I believe we are in close 
coordination with the State Department, and other departments, 
in our work in the materials accounting, management program we 
have both in Russia and in Kazakstan, and we're beginning to 
move into other areas.
    The investments we have made thus far are working. We are 
seeing more material accounting for the materials we're 
concerned about. I think we're making significant progress, and 
we want to continue to make the investments we propose in our 
budget, obviously, to get that job done. We are very concerned 
about the possibility of these materials falling into the hands 
of terrorists or rogue states. This is a very important 
priority of ours. And so in the areas of safety and security of 
those facilities and those materials, this is a continuing high 
priority of ours.

                           russian scientists

    Mr. Edwards. I understand. Thank you. I understand in your 
budget you include $30 million for the initiatives for 
proliferation prevention, which helps draw scientists, 
engineers, and technicians from the former Soviet Union 
nuclear, chemical, and biological weapons programs into 
commercial ventures. Do you have a sense yet--and, again, I 
know you've not been onboard very long, but any sense of how 
that program is working? I understand the economy in the former 
Soviet states is just so abysmal that it has to be incredibly 
attractive for some of these scientists to be drawn into rogue 
states or perhaps even get involved in the smuggling of nuclear 
materials.
    Secretary Pena. That's a concern, Congressman, and thus far 
my briefings indicate that the relationships, in particular, 
between the scientists of our labs and the scientists in Russia 
are very close, and they're working quite well. So, at the 
technical level, there is a tremendous amount of support, and 
we think we're making very great progress in those areas. So, 
thus far, I think this is a good investment. It is obviously a 
very high concern of ours, but I think we're moving in the 
right direction.
    Mr. Edwards. Okay, thank you, Mr. Secretary. Mr. Chairman, 
thank you.
    Mr. McDade. The gentleman from Arizona is recognized.
    Mr. Pastor. Thank you, Mr. Chairman.
    Good morning, Mr. Secretary. Congratulations on your 
appointment. I join the chairman in extending our cooperation 
in working with you to make sure that your objectives are 
fulfilled.
    Recently, we had the Assistant Secretary for Renewable 
Energy, and she explained to us how photovoltaic research is 
going to continue, and there's an increase in the budget. I 
congratulate you for it.

                          photovoltaics budget

    Two questions: one, there's a sense that most of the money 
is going into basic research, but now there seems to be a 
change in emphasis on marketing this technology. Do you have 
any sense of what's happening and where you're at on that?
    Secretary Pena. Congressman, obviously, our investment in 
photovoltaics and other alternative forms of energy continues 
to be a priority of the Department. We fundamentally believe 
that in terms of our national security we need a diversified 
energy base. And so that's why we support those programs.
    Secondly, let me say that one of my priorities is going to 
be to ensure that when we make those investments, in whatever 
arena, we actually get product. I think it is a very fair 
question for the members to ask, and others to ask, that after 
making multimillion dollars of investments over a period of 
years, what is the product? What are we seeing in terms of 
actual production and deployment of those technologies?
    So we will work, obviously, closely with the private sector 
to ensure that we're developing products that can be applied, 
that will be usable, and generate the kinds of savings in 
energy that we expect. It is part of the discussion I had 
earlier about developing a strategy of energy independence. 
Unless we can identify with at least some specificity what 
level of savings of energy we'll receive from certain 
investments, how else can we develop a strategy that can assure 
you that in 2020 or 2030 or 2015 we'll have a correction of the 
direction in which we're going today.
    So, yes, I think ensuring that we have more diverse use of 
these products is a very important part of our work.
    Mr. Pastor. And the research that the Department has 
undergone, in cooperation with the private sector, has brought 
us forward in terms of more power produced, but I would 
encourage you to continue the research because we need to get 
further ahead.
    As you well know, in the articles that have been written, 
other foreign countries are looking at this type of research 
and investing more money. Even though we have an increase in 
proportion to what is happening in other countries, it's not as 
great of an increase that maybe we should consider in 
photovoltaic and other forms of renewable fuels and that type 
of research.
    Secretary Pena. Congressman, I share your concern. The 
other trend that we're beginning to see is that a number of 
companies, particularly larger companies, which historically 
had invested in R&D are now cutting back on their R&D. As we 
see more deregulation of certain key industries in our country, 
companies are now much more focused on short-term gains over a 
one-or two-or three-year period, and they're now cutting back 
on their long-term research in a number of areas. We're very 
concerned about that. And so I think as a nation we need to 
decide whether or not there is an appropriate role for the 
Federal Government to play to ensure that we don't fall behind 
our associates in Japan and inEurope, who are, as you say, very 
focused on this long-term research and have made it a priority.

                             basic research

    Mr. Pastor. Well, that's why I was very happy to see in 
your formal statement, I think it's principle four, where you 
want to leverage science and technology to advance fundamental 
knowledge, because I agree with you that--well, I agree that 
the Federal Government has a role in basic research, and as we 
see companies downsizing, and in many cases downsizing in their 
research, we can't jeopardize our own national security in 
terms of basic research. And I was happy to read through your 
statement that we're continuing with neutron and DNA research, 
et cetera, because I think we have a role, in cooperation with 
the private sector, to ensure that we have that edge in 
science.

                       math and science education

    And I agree with you that we need to ensure that our 
students, our youth, are well-educated. So an initiative on 
math and science, you have my support. I know that this 
subcommittee cut back--was it last year, the 1997 appropriation 
on the Department of Energy's education funding or funding for 
educational programs, and I would hope that, with the 
chairman's encouragement, that we go back and invest in our 
youth in math and science, because it seems that we're lacking 
there in those areas. I think DOE, with its labs, could design 
and implement programs that could ensure that our young 
students are educated in math and science. And so I 
congratulate you for that, and I don't know if you have any 
further thoughts on that, but----
    Secretary Pena. Congressman, not more than what you have 
stated, but I can say this: I think many of us are concerned 
about what we are projecting in the next 10 or 15 or 20 years 
in terms of American scientists and engineers, and we look at 
the world around us, and we've all traveled around the world 
and we've seen what our competitors are doing in the area of 
education and the production of scientists and engineers. And 
so I think we've got this valuable asset in the labs and 
throughout the Department, and we ought to find a way to share 
that and expose these young kids to the excitement of what 
we're doing, and, hopefully, generate more interest and more 
talent. I think the labs are already doing some of that work, 
but I think there is more that we can do working with them and 
others.
    Mr. Pastor. Thank you, Mr. Chairman.
    Mr. McDade. The gentleman from Arkansas is recognized.
    Mr. Dickey. Congratulations on your appointment.
    Secretary Pena. Thank you.
    Mr. Dickey. I have a set of questions I'd like to submit 
for the record myself, and I understand the chairman is going 
to submit some on behalf of my colleague, Zach Wamp.
    Mr. Dickey. That's all I have.
    Do you want to thank me for not asking any more questions? 
[Laughter.]
    Secretary Pena. Thank you very much, Congressman.
    Mr. Dickey. You're welcome.
    Secretary Pena. I owe you. [Laughter.]

                        procurement regulations

    Mr. McDade. Mr. Secretary, let me go back to the question 
that you and I discussed a bit about the enormity of the task 
and how we get there. I am advised that the Department has its 
own unique procurement regulations--or they used to. Do you 
know if they still do have those unique procurement 
regulations?
    Secretary Pena. I have not had a chance, Mr. Chairman, to 
look into the procurement rules.

                       major systems acquisitions

    Mr. McDade. Let me suggest that you make it a high 
priority, and one of the reasons is--listen to these numbers: 
that under that system, which has kind of a dual-track system 
and exempts the Department from the Federal acquisition 
regulations, totally exempt, if you decide to be exempted, 
there were 80 major acquisition programs that were undertaken, 
of which only 15 were completed, most of them with huge cost 
overruns. Thirty-one were terminated after billions of dollars 
had been invested in them.
    And so the report that I have looked at and studied says 
that, because you engage in this kind of a procurement 
practice, these are the results unique to the Department and 
the Federal Government, and it would seem it cries out for 
change. So I recognize your statement that you haven't had a 
chance to look at it yet, but I urge you to do so.
    I also want to, in the same connection, since we talked 
about competitiveness and the need to inject competitiveness--
sometimes the Department says that and doesn't do it. There 
were 24 decisions on new management and operating contracts 
between July 1994 and August 1996, and 16 of the 24 were 
awarded noncompetitively.
    Take a look at that background for us----
    Secretary Pena. I'd be happy to.
    Mr. McDade [continuing]. And come back and tell us what's 
going on.
    Secretary Pena. I would like to provide that for the 
record.
    [The information follows:]

                        Procurement Regulations

    DOE does have its own unique procurement regulations, the 
DOE Acquisition Regulations at 48 CFR Chapter 9. They are 
authorized by, and in accord with, the Government-wide Federal 
Acquisition Regulation. Like every major Federal Agency, DOE 
requires its own unique procurement regulations to address 
agency specific statutes and needs. We have recently reduced 
the size of these regulations by approximately 50%.
    Your question may have been prompted by a November 1996 GAO 
report entitled, ``Department of Energy--Opportunity to Improve 
Management of Major System Acquisitions'' (GAO/RCED-97-17). In 
that report, GAO cited the statistics to which you refer. The 
GAO noted 4 reasons for cost overruns, schedule slippages, and 
terminations in DOE major systems: unclear or changing 
missions; incremental funding of projects; a flawed system of 
incentives both for DOE's employees and contractors, and a lack 
of sufficient personnel with the appropriate skills to 
effectively oversee contractor operations. From their report, 
it does not appear that GAO attributed these problems to the 
Department's procurement regulations.
    However, I share your serious concern about the issues 
raised by the GAO report on Major Systems Acquisitions. During 
the past month, I initiated a detailed review of these issues, 
led by John Angell, one of my senior policy advisors. I intend 
to place a high priority on improving DOE's management of Major 
Systems Acquisitions.

                        competitive procurements

    As background, from the creation of the Department of 
Energy until 1994, DOE policy favored noncompetitive extensions 
for the management and operation of its major sites and 
facilities. In September 1994, DOE abandoned this policy in 
favor of one that established competition as the norm, 
requiring a compelling justification for noncompetition.
    DOE, in abandoning its former unique competition policy, 
has adopted the standard regime applicable to every other 
Federal executive agency, under which competition is the norm, 
and a noncompetitive procurement must be justified in 
accordance with statutorily prescribed criteria of the 
Competition in Contracting Act of 1984. The DOE implementation 
of this policy is, however, more rigorous than any other 
Federal agency, since it requires Secretarial authorization of 
noncompetitive actions, and a more extensive analysis of the 
basis for noncompetition.
    It should be noted that prior to the 1994 contract reform 
initiative, the Department and its predecessor agencies had 
conducted only 21 competitions for the management and operation 
of major Department sites since the early 1950's. Since 1994, 
there have been 7 decisions to compete management and operating 
contracts, with an approximate value of $21 billion. Even in 
those instances where extension was justified and supported 
based upon the statutory exceptions contained in the 
Competition in Contracting Act, we believe that the possibility 
of competition increased the contractor's commitment to 
innovation and cost reduction.
    All DOE decisions to seek extensions were conditional 
decisions, and required the incorporation of contract reform 
concepts into the contract before the extension was finally 
granted. This changed the basis of negotiation. Rather than 
using the existing contract as the basis for negotiation, the 
Department developed administrative mechanisms to ensure that 
contract reform terms and conditions were the basis for 
negotiation. The practical effect of this strategy was an 
extension of the existing relationship, not an extension of the 
existing contract.
    In addition, during the past three years, the Department 
has achieved a substantial increase in competitively awarded 
work that traditionally had fallen within the purview of 
management and operating contractors. DOE also has accomplished 
several large-scale privatizations, thereby achieving greater 
competition in its contracting. (See the August 2, 1996 GAO 
report on the Hanford Tank Waste Privatization effort). The 
result is that DOE's shift in its competition policy has had 
the effect of subjecting noncompetitive decisions to a more 
disciplined analytical process rather than the routine, pro-
forma, decisions of the past.

                          global ecology study

    Mr. McDade. Let me ask you this, too: there's criticism 
that the labs are not focused enough, that they're kind of 
independent duchies that kind of do their own things sometimes, 
and there's no coordination between what they do. For example, 
we're told that the Lawrence Livermore Lab is off on a project 
to do or study, the long-term strategic mission of global 
ecology. It sounds good. We never appropriated any money for a 
study of global ecology. We don't know how they have the right 
under the stewardship of the Department to initiate such a 
program, and we would like you to look into it, Mr. Secretary, 
and tell us how they initiated it, where the money came from, 
what the source of it was, with a view toward getting down to 
the question of coordination and focus between the various 
laboratories, so they serve us all well. We'd appreciate an 
answer to that.
    [The information follows:]

                             Global Ecology

    The global ecology study referred to was initiated at 
Lawrence Livermore National Laboratory in FY 1995, principally 
in response to issues raised by the Galvin Task Force and the 
House Science Committee. The issues include the need for 
improved coordination and focus between programs and 
laboratories. This global ecology study initiative was aimed at 
enhancing the integration of energy, environment and economy 
related research and development. This was to be accomplished 
through development of a programmatic framework which could 
potentially lead to a model to be used across the Department.
    The initiative was coordinated with Secretary O'Leary's 
office. It involved the addition of one senior expert from 
industry to the Laboratory staff to guide the study, with 
industrial ecology as a starting point; conceptual framework 
development for this has been underway for some time. Secretary 
O'Leary specifically commended the efforts.
    Consistent with the spirit of enhancing coordination and 
focus among research and development activities, Lawrence 
Livermore, in their strategic planning documents, grouped their 
ongoing and planned energy, environment and economy work into 
one area called ``global ecology''. These activities 
represented 20-25% of the Laboratory's budget, as they have for 
many years.
    This global ecology framework was presented and discussed 
in both the FY 1994 and FY 1995 Lawrence Livermore 
Institutional Plans. These Institutional Plans were fully 
coordinated with the Department. The study was supported by the 
general funds provided for planning, coordinating and managing 
Laboratory activities. The specific report which appears to 
have raised the concerns expressed at the hearing contained a 
compilation of articles covering work sponsored principally by 
various Departmental programs, although some were sponsored by 
other federal agencies, i.e., NASA, ARPA, and Interior. These 
articles were organized in this manner to illustrate the 
conceptual framework of industrial ecology.

    Mr. McDade. I yield to the gentleman from California.
    Mr. Fazio. I'd be happy to yield to my friend from New 
Jersey, and then I'll jump in.
    Mr. Frelinghuysen. Mr. Chairman, he's yielded to me. Is 
that all right?
    Mr. McDade. The gentleman from New Jersey----
    Mr. Frelinghuysen. Well, thank you, Mr. Chairman.
    Mr. McDade [continuing]. Is recognized and welcomed.
    Mr. Frelinghuysen. Well, thank you. I'd like to thank the 
ranking member.
    And, Mr. Secretary, good morning. Sorry to be late. I just 
have a few questions.

                 Strategic Alignment Initiative savings

    Two years ago, Mr. Secretary, the administration presented 
a budget plan that would have reduced spending at the 
Department of Energy by $14 billion. I'm wondering what 
happened to that proposal, given the fact that your budget 
request appears to be increasing rather than decreasing.
    Secretary Pena. Congressman, let me say, without specific 
reference to that item of two years ago, where we're generally 
headed. As you know, I have been the Secretary for, I think, 
six days, and this budget had been prepared, but let me tell 
you what we're doing.
    If you look at the core budget and you take out the $1.6 
billion and the $1 billion that we have for either advanced 
construction or the privatization effort, the core budget is 
slightly above the core budget of last year. However, the 
Department had committed itself to reducing, No. 1, the 
workforce, and we are on target in doing that. I earlier this 
morning outlined the progress we have made in reducing both our 
contractor workforce and our DOE workforce and the employee 
level in the departmental administration section of the 
Department of Energy. And we will continue to meet those goals, 
and I think that was a five-year commitment that we made of a 
several billion dollar reduction, and those commitments we will 
meet, and we will still get to those targets.
    So I think we need to come to either an understanding or an 
agreement on how to treat the advanced funding and the 
privatization efforts, so that they are not counted in a sense 
toward the core budget, for the reason that they, over the long 
term of the budget, will reduce long-term costs of DOE if we 
take a more traditional contracting approach than we have taken 
in the past. So this is a reasonable area for dispute, or at 
least this agreement, and I'm happy to work with you and others 
to see how we can reach an understanding about how we compare 
apples and apples and one budget to the next.
    Mr. Frelinghuysen. So the long and the short of it is that 
the commitment to reduce spending is the same now as it was two 
years ago?
    Secretary Pena. That's correct.

                    Power Marketing Administrations

    Mr. Frelinghuysen. It is? All right.
    A few questions relative to the whole issue of Power 
Marketing Administrations, and I understand one of my 
colleagues has already explored this area. I just have some 
questions. This year the Power Marketing Administrations' 
budget request goes from $242 million in Fiscal Year 1997 to 
$252 million for Fiscal Year 1998. It seems to me that this 
increase sort of takes us in the wrong direction. Why do we 
need this increase?
    Secretary Pena. Congressman, I don't have a specific answer 
to that question this morning. Let me, with your indulgence, 
get back to you in writing to explain that particular budget 
item.
    Mr. McDade. Amplify it for the record, please, Mr. 
Secretary.
    Secretary Pena. I would be happy to.
    [The information follows:]

                       PMA FY 1998 Budget Request

    The PMA budget request, excluding the Bonneville Power 
Administration and the Colorado River Basins Power Marketing 
Fund, is $243.9 million in FY 1997 and $253.1 million in FY 
1998. This increase in new budget authority (BA) of $9.2 
million is due to reduced levels of prior year carryover funds 
in FY 1998. The use of prior year carryover funds is $68.8 
million in FY 1997 and $21.6 million in FY 1998, a difference 
of $47.2 million. On a program basis, including all sources of 
funds (new BA and prior year carryover funds) the PMA budget is 
being reduced by $37.9 million, from $312.7 million in FY 1997 
to $274.8 million in FY 1998. This 12 percent reduction in one 
year is due to cost cutting and responding to competitive rate 
pressures.
    Subsequent to forwarding the President's FY 1998 budget 
request to the Congress, the Administration proposed that the 
PMAs carry an additional $16 million in unobligated funds from 
FY 1997 into FY 1998, reducing FY 1998 new BA for the PMAs to 
$237.1 million--a reduction of $6.8 million from FY 1997 new 
BA.

    Mr. Frelinghuysen. Mr. Grumbly seems to be ready--at the 
ready there. [Laughter.]
    Secretary Pena. Well, with your permission, Mr. Chairman, 
if I could ask Mr. Grumbly to try to----
    Mr. Grumbly. I can volunteer one piece of it, and that is, 
given the power outages and the problems that we had last 
summer, the whole issue of the reliability of the western 
United States transmission grid was called into question. So we 
are investing more effort in the whole reliability area in the 
1998 budget than we have earlier. We want to be sure that, 
whatever we do in terms of dealing with things as simple as 
maintenance of the lines, that those are accounted for. So part 
of the increase is at least accounted for that way.

            power marketing administration employment levels

    Mr. Frelinghuysen. But, just speaking on my own behalf--and 
I'm sure other members of the committee feel it--we need to 
deal with the Power Marketing Administrations issue. I mean, 
there's a lot of criticism out there about the types of 
subsidies these represent, that to many people it's 
anachronistic to have these types of entities, no matter how 
well they function; they, to a certain degree, are being 
subsidized by Federal tax dollars and local tax dollars.
    Would you be good enough to provide me, Mr. Secretary, for 
the record, with the total number of Department of Energy 
employees that work on PMA issues, and what percentage of the 
Department's total energy-related workforce work for PMAs?
    Secretary Pena. I'd be happy to.
    [The information follows:]

           FTE LEVELS--POWER MARKETING ADMINISTRATIONS (PMAs)           
                           [Estimated FY 1997]                          
------------------------------------------------------------------------
                      PMA                         Federal     Contractor
------------------------------------------------------------------------
Alaska........................................           32            0
Bonneville....................................    \1\ 3,131          893
Southeastern..................................           41            2
Southwestern..................................          193           49
Western.......................................        1,329          265
                                               -------------------------
      PMA total...............................        4,726        1,209
------------------------------------------------------------------------
\1\ These are official FY 1998 FTE numbers from the FY 1998             
  Congressional Budget Submission. Current estimated FTE usage for FY   
  1997 is already under the estimated FY 1998 level of 2930.            
The Department of Energy has an estimated workforce in FY 1997 of       
  135,682 FTE (Federal FTE 18,163 and contract FTE of 117,519). The PMAs
  estimated work force of 5,935 (Federal FTE 4,726 and contract FTE of  
  1,209) represent 4.0 percent of DOE's estimated total employment.     

                        pma long-term contracts

    Mr. Frelinghuysen. In addition, could you make some general 
comments relative to the whole issue of long-term contracts? I 
understand that the DOE is in the process of negotiating some 
long-term contracts, in some cases 20 years, at some Power 
Marketing Administrations. Could you tell me why we are--if 
we're taking a look at this issue, why does it make sense to be 
moving ahead with these types of lengthy, multiple-year 
contracts?
    Secretary Pena. Congressman, let me try to respond 
generally, and then I'll turn to Mr. Grumbly to give you a more 
specific answer.
    I'm aware of the fact that the PMAs themselves are trying 
to execute longer-term contracts with some of their current 
contracting parties. Let me turn to Mr. Grumbly about the 
contractual relationship between DOE and the PMAs specifically.
    Mr. Grumbly. Well, the major one that I'm aware of in terms 
of the long-term commitment is the commitment that was made, I 
believe, in 1995 with the Bonneville Power Administration. 
That's something that, as a result of that long-term 
commitment, Deputy Secretary Curtis, as well as former 
Secretary O'Leary, have convened a task force to look at 
whether, as you indicated, those kind of long-term contracts 
are suitable for the future.
    Mr. Frelinghuysen. Well, I understand you're negotiating 
now a 20-year contract at the Southeastern Power 
Administration. Is that right?
    Mr. Grumbly. I'll have to get back to you on that.
    Mr. Frelinghuysen. Well, if you would be good enough to 
give us a view of where we are relative to some of these long-
term contracts.
    [The information follows:]

                          Long-Term Contracts

    When marketing Federal power resources, the primary focus 
is on assuring cost recovery of the Federal investment while 
operating and maintaining the power systems in a reliable, cost 
effective manner. Over the decades these facilities generate 
and transmit power, there are times when the generation cost is 
above the short- and intermediate-term market price, and there 
are times when it is below the market price. In addition, 
droughts and floods significantly impact power production, and 
differences in regional power supply options impact the 
marketability of the Federal resource. These variables provide 
a challenge to the power marketing administrations when 
marketing power from their hydropower-based systems.
    By marketing Federal power through long-term contracts, the 
likelihood of repayment of the Federal investment is increased 
because long-term contracts provide a reliable revenue source. 
For example, the recent long-term renewal of the Southeastern 
Power Administration (Southeastern) contracts was necessary in 
order to assure adequate revenues to repay costs associated 
with its program. If long-term contracts were not executed, the 
power Southeastern markets from Army Corps of Engineers 
generation facilities would have been sold on a short-term 
basis. This would be detrimental to the fiscal interests of the 
United States because current market prices for short-term 
electricity resources are, in many instances, lower than 
Southeastern's current rates and would not produce adequate 
revenues to meet the projects' repayment obligations.
    The recent renewal of power contracts by Southeastern will 
not preclude the Congress from adopting reforms to Southeastern 
in the context of legislation to restructure the electricity 
industry to increase competition or through the appropriations 
process. The legislative options of the Congress in this area 
are preserved because the contracts only provide for an 
allocation of a certain amount of power to each Southeastern 
customer, but do not fix a price for such power. Consequently, 
if Congress sees fit to direct Southeastern or a successor 
entity to modify the price charged for Southeastern power, the 
contracts will not be an impediment to this policy. 
Furthermore, all of these contracts include clauses that make 
them contingent on the availability of appropriations. In sum, 
the terms of these contacts give Congress very broad discretion 
to enact legislation to modify the current structure of 
Southeastern.

             national ignition facility-advisory committees

    Mr. Frelinghuysen. Relative to another issue, the National 
Ignition Facility, and a lot of money is being spent on this 
project, the Department has been sued in U.S. district court by 
the NRDC, the National Resource Defense Council, regarding the 
practices used to obtain advice on the National Ignition 
Facility. As you are aware, the suit charges that the advisory 
committee formed to provide advice on the facility was, and I 
quote, ``comprised mainly of members who had already expressed 
a favorable opinion on the facility or who had financial and 
other ties with the Lawrence Livermore National Laboratory.''
    The NRDC has also claimed that closed advisory committee 
meetings were held in violation of Federal requirements. Would 
you be willing to comment on that case?
    Secretary Pena. Congressman, I can't comment on it 
publicly, given the fact that litigation has just been filed. 
Obviously, our attorneys will be responding to the claims in 
that case.
    Let me generally say, however, that irrespective of the 
work done by that particular advisory committee, my 
understanding is the Department has been independently making 
judgments about the National Ignition Facility not related to 
the work of that committee. So that it stands--its need stands 
on the merits of the internal work done by DOE in respect to 
the need for the National Ignition Facility. So we'll have to 
determine how the court finally rules on whether that committee 
appropriately was operating under the Federal law, but I guess 
our bottom line is we don't think that is determinative of the 
decisions made by DOE in respect to the need for the National 
Ignition Facility.
    Mr. Frelinghuysen. Is this an issue with other Federal 
advisory committees?
    Secretary Pena. Apparently it is, Congressman. Let me ask 
Mr. Grumbly to amplify.
    Mr. Grumbly. Pardon me, I'm sorry, Mr. Secretary.
    Secretary Pena. Go ahead.
    Mr. Grumbly. The issue of the role of the National Research 
Council and the National Academy, and whether it's going to be 
subject to the Federal Advisory Committee Act, is one that's in 
play all over the Government at the moment, and I know the 
Academy has very strong views that if it's going to be 
subjected entirely to the requirements of the Federal Advisory 
Committee Act, it's going to make the very valuable purpose 
that it serves much more difficult. That's going to have to get 
played out government-wide and is an issue that I think that 
Dr. Alberts, the president of the Academy, is bringing before 
the Science Committee and other places right now.
    So it is a serious issue in terms of the kind of advice 
that the Government's going to be able to get, and under what 
circumstances, from the National Academy of Sciences.
    Mr. Frelinghuysen. Well, at the appropriate time, would you 
be good enough to share with the committee the Department's 
position relative to this and other situations.
    Secretary Pena. Yes, we'd be happy to, Congressman.
    [The information follows:]

                   National Academy of Science Report

    In the case of National Resource Defense Council v. DOE and 
NAS. (CV-97-308), the plaintiffs asserted that the Department's 
use of the Committee for the Review of the DOE Inertial 
Confinement Fusion (NAS Committee), for evaluation of the 
National Ignition Facility (NIF), is an advisory committee and 
the Department did not comply with requirements of the Federal 
Advisory Committee Act (FACA). The NAS Committee's first 
report, which was to provide a review of the scientific and 
technical readiness of the NIF project, was scheduled to be 
released on March 6, 1997.
    In a hearing held on March 5, 1997, Judge Friedman 
concluded that plaintiffs were likely to prevail on their claim 
that the NAS Committee is covered by FACA and issued an 
injunction prohibiting the Department from relying on, or 
otherwise utilizing, the report and prohibited the Department 
from any further funding of the NAS Committee. The judge also 
ruled that NAS could release the report on March 10, 1997. On 
April 3, 1997, DOE filed a brief in support of its motion for 
partial reconsideration of the injunction (filed with the court 
on March 19, 1997) with respect to the bar on DOE's use of, or 
reliance on, the report.
    The Department of Energy has used the National Academy of 
Sciences as a source of independent review for many years. The 
major issues for the long-term are whether or not the NAS must 
function under FACA, and when and how Federal agencies may rely 
on analysis by the NAS. While the Department does not require a 
NAS report to continue the NIF project, timely resolution of 
this issue is of great interest to the Department, since the 
Department would like to continue the use of NAS committee 
reports, to assist in future decision making and project 
management.

    Mr. Frelinghuysen. Thank you very much. Thank you, Mr. 
Chairman.

               national ignition facility-budget request

    Mr. McDade. Thank you. My friend from California.
    Mr. Fazio. Thank you, Mr. Chairman.
    On NIF, I'd really like to go to the heart of the issue. Is 
there a position that you feel strongly about, Mr. Secretary, 
in terms of the funding of NIF? We have an $876 million item 
here fully upfront funded. I know this is a large bone--not of 
contention, but in the throat of the committee.
    Secretary Pena. That's right.
    Mr. Fazio. And I'm wondering if perhaps you could argue for 
the record, but hopefully now, as to the importance of this 
facility, but also the whole issue of whether you think it 
needs to be fully funded upfront, and what benefits might 
accrue as a result.
    Secretary Pena. Well, Congressman, the National Ignition 
Facility is a key part of our stockpile stewardship program. If 
we are to, according to the scientists who are working on this 
and the lab directors who are working on this, be able to 
ascertain that our nuclear weapons stockpile is safe, secure, 
and reliable without testing, we need to be able to replicate 
at least some of the simulations which would result from real-
life testing. The NIF will give us the information on high 
temperatures and, to some extent, high pressures that will be 
able to supplement the knowledge that our scientists have from 
past testing that occurred prior to the no-yield test agreement 
the President agreed to.
    So, again, if we are to have the tools to be able to 
provide this information to you and to others accurately, the 
NIF is a very important part of that effort. So let me say that 
the presentation in the budget to try to find a way to get the 
funding for that facility, so that we will have a certainty 
that it will be built on time and on schedule, so that we can 
have it as part of our tools, is a very high priority, and 
that's why it was identified as such in the budget.
    Mr. Fazio. Well, if it's not in the wisdom of the Budget 
Committee or the full committee to allocate to this committee 
the kind of money that would be required--it's about a $2 
billion plus-up in our bill for what amounts to accounting 
purposes--what would be the amount that would be expendable in 
the first year, or I should say in the next fiscal year?
    Secretary Pena. Well, Congressman, obviously, we would then 
resort to the traditional way of funding these kinds of 
projects, and we would present to you a multi-year program 
funding request for that project, and we could have that 
available to you. For this fiscal year, it would be $198 
million.
    Mr. Fazio. And you'll provide us for the record the 
timeframe----
    Secretary Pena. Yes.
    Mr. Fazio [continuing]. And the spend-down?
    Secretary Pena. That's correct.
    [The information follows:]

                       National Ignition Facility

    I would like to insert a table for the record that reflects 
the annual obligation schedule for the National Ignition 
Facility. This represents the incremental annual funding that 
is required by the project. The information follows:

[Page 63--The official Committee record contains additional material here.]


    Mr. Fazio. And it's your position that the accounting issue 
is not going to interfere with our ability to build this 
project within the costs that are currently estimated? This is 
not an issue of whether or not we're going to spend more 
because we don't appropriate it all up front, is it?
    Secretary Pena. Well, we certainly hope not, but that's the 
issue. I mean, that is one of the matters that we're trying to 
present to the committee for full understanding and debate and 
discussion, and that is that there is a sense that, by having 
upfront certainty that this project is a priority, that both 
the Congress and the administration support it, gives all of us 
the kind of certainty we need to be able to manage this 
project, plan it as a private company would manage a major 
construction project like this, highly complicated, so that we 
have some certainty here. Otherwise, we are then subject to the 
vicissitudes of annual appropriations, and in that process we 
will have some adjustments to make, and that is what typically 
affects so many of the projects that are done throughout the 
Department and other departments.
    So we're hopeful that the committee will give us an 
opportunity to explain this more fully, give you a higher level 
of certainty that we can meet our targets by using this 
different approach.
    Mr. Fazio. I can just say Congress doesn't like to think of 
itself as wasteful in regarding annual appropriations. I mean, 
when we want to waste money, we'd much rather cancel something 
after it's well under construction, the supercollider being a 
good example of our unwillingness to stay the course, so to 
speak. [Laughter.]
    But, you know, I think we like to think of ourselves as 
keeping a tight fiscal rein here. The implication is that we 
are spending more money by providing a tight fiscal rein annual 
appropriation. But I'm not sure that we have any room to have 
anything more than an academic discussion of this issue, and it 
may not be this subcommittee's fault.

                           tritium production

    Can I ask a bit about tritium production? You've proposed a 
dual-track strategy for developing a replacement source of 
tritium, and I hope that that decision, the two options, would 
be made in fiscal year 1998. Can you tell us what goes into 
that decisionmaking process? Are we on schedule? Will we have 
available to the stockpile in the year 2005 the tritium we 
need? How does this perhaps interact with the Fast Flux Test 
Facility in Richland, where we have maintained an option that 
we might have precluded.
    Secretary Pena. Yes, Congressman. First of all, we must 
have the new tritium supply by 2005, because we know the 
Defense Department has advised us of that need. So the dual-
track process will get us there.
    We are on schedule and looking at both the accelerator and 
the reactor options. However, as Secretary O'Leary announced 
very recently, it was her judgment to keep the Fast Flux Test 
Facility in standby, not as a third option--and I want to 
clarify this because some questions have been asked about 
whether this is now a third option--but as a supplement to the 
dual-track process we are now embarked on. So sometime later 
this year, early next year, as respects the Fast Flux Test 
Facility, we'll make a judgment about what role, if any, it can 
play here, and then later on in 1998, make a judgment about the 
accelerator and the reactor options for the tritium----
    Mr. Fazio. So it's possible that the facility in Richland 
may ultimately be closed for this purpose? And this is a 
temporary standby decision, so that we have a backup if the 
other two options do not prove to be productive; is that 
correct?
    Secretary Pena. Well, that's one way of characterizing it, 
Congressman. As I understand the history of this, that facility 
was supposed to be shut down and was supposed to--the fuel in 
it was supposed to have been drained this year, but because the 
question was raised whether it might be able to provide an 
interim source in the short-term, we ought to do, as a good 
business practice, keep it open until we make a determination 
about whether it is needed or not. If a determination is made 
that we do not need it, then, presumably, we would continue on 
with the original plan to shut it down.

                       departmental restructuring

    Mr. Fazio. The last question, and it relates really to the 
restructuring of the Department. We've had a lot of debate in 
this committee and in this Congress, and in the last Congress, 
about the future of the Department. The impression is, I think, 
out there that things are going along as usual at the 
Department of Energy. Could you describe for the members of the 
committee, as you arrive, six days into your assignment, how 
different is the Department at this point than it was four 
years when this administration took office--in terms of the 
staffing, the priorities that are being set, the way in which 
administration is being handled at the top, the way in which we 
interact with our contractors, et cetera?
    Secretary Pena. Congressman, let me say that I am impressed 
with, frankly, the improvements that have been seen at the 
Department over the last four years. Let me be specific.
    The contractor workforce, as I understand it, was up to 
about 150,000 at one time. At the end of this fiscal year, I 
think we'll be below 100,000. That is a very significant 
reduction. The employee workforce at DOE itself has been 
subject to a specific goal of reduction over a period of years, 
and we are meeting that goal, and we will commit ourselves to 
meeting that goal.
    The Department put together a new strategic vision for how 
it should integrate the various diverse missions of the 
Department--making science and technology the fundamental core 
of the other missions of the Department. I thought that was a 
rather creative way of trying to synchronize everything from 
the defense mission of the Department to the environmental 
mission of the Department, to the energy strategy of the 
Department, and to the science and technology missions of the 
Department. So that was done, I think, very well.
    I think where we need to go in the future now is to take it 
to the next step, to ensure that we see the integration that we 
have projected, at least in the past vision statement of the 
Department, to make sure that it actually occurs. We need to 
move forward on the recommendations of the Galvin Report to see 
even more efficiencies in labs.
    In respect to the labs, in response to a question asked 
earlier, my own vision is that we ought to find a way to ensure 
that each of the labs has independent world-class status in 
what they do. They all ought to be able to justify to you and 
to me and to the country that they are world-class in what they 
do, and we ought to minimize, to the extent we can, 
duplication, unnecessary exploration of otherareas which aren't 
focused on their core mission, and we need to find a way to make the 
labs work as a unified system, so that they can work together. That is 
now beginning to happen, I must say to you. The briefings I've received 
indicate that we are now having greater collaboration in key projects 
and priorities of the Department.
    So a lot has been done. Clearly, as we discussed this 
morning, there is more room for improvement, more advancements. 
The President has asked me to come over here to DOE to apply 
some management practices here, to take it to the next step. 
I'm excited about that challenge. There are some very good 
people at DOE; they're excited about this challenge. And, with 
your help, and with the kind of dialog we've established today, 
I think we can do it. You have concerns; I have concerns; the 
President has concerns; but, fundamentally, this Department is 
providing very valuable service to our country. We need to 
simply make sure we do it better.
    Mr. Fazio. Thank you, Mr. Secretary. I appreciate those 
remarks.
    Mr. McDade. The gentleman from Michigan.

                             ten-year plan

    Mr. Knollenberg. Thank you, Mr. Chairman. I'll be very 
brief, Mr. Secretary, but I do want to go back--if you think 
I'm repeating something here, maybe I am, but I want to get a 
fix, if I can, on some of the--with the transitioning to the 
10-year plan and the fact that we've acknowledged, with 
information such as this, that certain things are doable and 
certain things may not be in 10 years.
    And I want to ask again--and you can't see this perhaps, 
and maybe it's something you should have in front of you. I do 
have a copy, by the way. What it does tell you is that, all the 
small sites, 30 percent is a representative figure there. 
Savannah River is about 22 percent; Hanford is 22 percent. 
That's a big block, 44 percent there. Now we know those two 
won't be closed by 2006, but my question--we know Rocky Flats 
will be. We're going to take that one, spend that one. Oak 
Ridge won't; Idaho won't. But what percent of those large 
sites, in your judgment, will be closed? And if you can't, 
maybe Mr. Grumbly can. I'll let you try.
    Secretary Pena. No, I understand the question, and you'd 
like us to document at least what percent, or what proportion 
of those projects will see some completion----
    Mr. Knollenberg. Right.
    Secretary Pena [continuing]. And closure by 2006.
    Mr. Knollenberg. Yes.
    Secretary Pena. And we can do that for you, Mr. 
Congressman. Let me ask Tom if he'd like to amplify that a 
little bit.
    Mr. Grumbly. First, let me say we'll try to get you the 
very specifics for this.
    [The information follows:]

                             Ten-Year Plan

    The Department is currently reviewing and analyzing draft 
Ten-Year Plans submitted by our Operations Offices on February 
28, 1997, for development of the draft EM National Ten Year 
Plan. Draft Ten-Year Plan documents, which are scheduled to be 
released to Congress and the public soon, will provide 
estimated dates for individual site cleanup.

    Mr. Grumbly. But, as I understand it at the moment, what we 
are going to try to do, first of all, with the exception of the 
sites that you're looking at, we are really going to try to 
finalize end-states at all of the other sites, working together 
with citizens and the State regulators.
    With respect to this, if you take a look at the amount of 
money that we projected over the next 10 years, assuming it 
gets appropriated, it's in the vicinity of $45 to $50 billion 
over that 10-year period of time. Our best estimate at this 
point is that, after that's finished, there will be about 
another $30 billion, primarily directed at these four or five 
big sites. So we're talking about probably eating about two-
thirds, from a dollar perspective, of the total elephant over 
the next ten years with about $30 billion still remaining for 
the rest.
    That is cutting the estimates in that first Baseline 
Environmental Management Report by roughly 50 percent, maybe 
even a little bit more, over where we thought we would be just 
two or three years ago. And to do that we are dramatically 
reducing the workforce, increasing productivity, and getting 
better with respect to our regulators at setting different 
kinds of end-states, so that we're not expecting to have to 
clean everything up to a greenfield state.
    I'm not going to tell you that there aren't going to be 
some struggles as we get to this over the next 10 years, but I 
think with respect to these sites, we're probably going to be 
two-thirds to 70 percent through at the end of that period of 
time.

                         technology development

    Mr. Knollenberg. Have you factored in new technologies as a 
part of that or is that difficult?
    Mr. Grumbly. Well, it is difficult with any degree of 
credibility to factor the amount of money that we would expect 
to see driving down the cleanup costs by new technologies. I 
mean, we've estimated that we ought to be able to reduce the 
cost by, oh, roughly, $10 billion with new technologies, 
justifying, I think, the investment that we've made.
    But we haven't seen yet the kind of fundamental 
transformational technology come on the scene that would change 
the slope of the curve to that kind of a reduction. Now what 
we're involved in at the moment, as you know, is a technology 
deployment initiative where, instead of continuing to spend 
large sums of money on technology development, we want to 
encourage the development or the application of the technology 
that we've already developed, to get it to be used at these 
sites, and I think that's something that we need to engage in 
quite strongly.
    The last thing I would say is, with respect to--of that $30 
billion, the largest sum of that will be for high-level 
treatment of waste. And I think there are going to be, as we go 
over the next 10 years, some terrific opportunities to drive 
down the cost of dealing with high-level waste. We need to get 
started. I mean, we've got this Defense Waste Processing 
Facility at Savannah River which is actually processing wastes. 
We're started into the Hanford cleanup, but I believe that we 
will have significant opportunities over the next 10 years to 
drive down even that remaining cost that I talked about--
technologies that will be safe, where we may not have to pump 
out all the stuff from those tanks.
    Mr. Knollenberg. Right.
    Mr. Grumbly. But I can't sit here today and tell you I have 
those technologies available.
    Mr. Knollenberg. We just would like to have some numbers--
--
    Mr. Grumbly. Sure.
    Mr. Knollenberg [continuing]. And I think we ought to work 
in that regard with respect to the smaller sites, the bigger 
sites, and where we can project being in 10 years, and I can 
submit the specifics of those questions for the record, but I 
would like to go on record as saying that we'd like to have 
that. I think it would help us all in many ways.
    Secretary Pena. Absolutely, absolutely.
    Mr. Knollenberg. If those goals are not meetable, 
whatpercentage of them in each of those categories would be?
    Mr. Grumbly. I might just say, just to end, in the draft of 
the 10-year plan that you all will see approximately a month 
from now, a lot of these questions will have to be addressed in 
that, and we will.
    [The information follows:]

                             Ten-Year Plan

    The Department is currently reviewing and analyzing draft 
Ten-Year Plans submitted by our Operations Offices on February 
28, 1997, for development of the draft EM National Ten Year 
Plan. Draft Ten-Year Plan documents, which are scheduled to be 
released to Congress and the public soon, will provide 
estimated dates for individual site cleanup.

    Mr. Knollenberg. Thank you. Thank you, Mr. Secretary.
    Mr. McDade. The gentleman from Indiana.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Secretary, as I had mentioned earlier, I am new to the 
subcommittee as well and have a couple of impressions. One is 
that the tempo has picked up at the Department, and you had, in 
relationship to Mr. Fazio's question, enumerated a number of 
the improvements that have been made.
    My benchmark, I guess, as far as some programs, and not 
just specifically with the Department of Energy, that, however, 
seem to go on and on and on, is that this country fought and 
won World War II in four years. I would be the first to admit 
that in my congressional district I have been trying for 23 
years to get one lake dredged. I have been trying for 21 years 
to get a harbor dredged. I've been trying to get a bridge built 
for five years, and I've been trying to get a Federal building 
built for eight years. The world has changed, and we kind of 
plod along.
    I guess my only comment is as you take over, that there is 
a sense of urgency in the Department, and recognizing the very 
complicated, very dangerous nature of many of the missions that 
you are on, that we do make all deliberate speed in 
understanding we have 10-year projects and 5-year projects. I 
would always hope that those aren't floors, that those are 
ceilings, and I would simply urge that to you.

                     renewable energy technologies

    As far as renewable resources, my sense from the budget is 
that the emphasis has changed as far as marketing--previously 
domestic, and now more international in its characteristics, 
and I'm wondering what your opinion would be as far as whether 
or not that really is a mission for the Department of Energy as 
far as marketing some of these new renewable energy 
technologies overseas, as opposed to, again, looking for our 
independence.
    Secretary Pena. Congressman, I think it is a byproduct of 
the work that we do, and let me be more specific. In certain 
areas of the Department, where new technologies are being 
developed, frankly, they are more appropriate, in the sense of 
being more timely, in other parts of the world, in less 
developed countries, which are now looking to avoid perhaps 
some of the mistakes we made 50, 60 years ago in wanting to use 
these new technologies. So in many areas the work the 
Department is doing in working with the private sector to 
develop new technologies will be in some cases sold overseas by 
those companies themselves.
    And, frankly, as you know, we live in a highly-competitive 
environment. Other governments around the world are far more 
supportive of their companies in a very direct way. I saw that 
in the area of transportation everywhere I traveled in helping 
their companies compete; we don't do that.
    But I think at least this relationship of helping develop 
those technologies to allow our companies to be world 
competitors is a sensible policy, and at appropriate times 
those technologies will also be usable in the United States. So 
I would characterize this as a byproduct of the work that we 
do.

                 contractor employees detailed in d.c.

    Mr. Visclosky. Mr. Secretary, just one other question: 
there was a recent Inspector General report that identified 
hundreds of M&O and laboratory contract employees working in 
Washington, D.C., for periods of six months or more. What steps 
has the Department taken to reduce those numbers?
    Secretary Pena. Let me have Mr. Grumbly address that 
specific IG report.
    Mr. Grumbly. You're right about the report; we are 
examining on a program-by-program basis at the moment exactly 
what the purposes are that these people are onboard for, and 
our objective is to minimize, and in many cases eliminate, the 
number of contractor employees that are working on our 
programs. I think this has been a case where there's been some 
creep, and this is a report that we're taking very seriously, 
and we will be dramatically reducing the number of contractor 
employees that are working at the DOE on a full-time basis.
    Mr. Visclosky. Thank you. Mr. Secretary, again, I didn't 
want to lecture you, and I have expressed a great deal of 
frustration with projects in my own district, but I do think 
that all deliberacy would be great.
    Secretary Pena. I agree.
    Mr. Visclosky. Right. Thank you very much. Thank you, Mr. 
Chairman.
    Mr. McDade. The gentleman from Texas.
    Mr. Edwards. Mr. Chairman, any additional questions I have, 
I'll submit for the record. Thank you.
    Mr. McDade. Mr. Secretary, as I indicated to you, we're 
going to give you a series of detailed questions for the 
record, and we want them done with great specificity. 
Otherwise, as I indicated, we'll have to have another hearing 
on it.
    I want to thank you, Mr. Secretary and Mr. Grumbly, for 
your testimony. You credited yourself well, as we expected you 
would, and we look forward to seeing you again.
    Secretary Pena. Thank you very much, Mr. Chairman.
    Mr. McDade. Thank you.
    [The questions and answers prepared for the record follow:]

[Pages 71 - 485--The official Committee record contains additional material here.]


                                          Thursday, March 13, 1997.

            ENERGY EFFICIENCY AND RENEWABLE ENERGY PROGRAMS

                               WITNESSES

DR. MARTHA KREBS, DIRECTOR, OFFICE OF ENERGY RESEARCH
CHRISTINE ERVIN, ASSISTANT SECRETARY, OFFICE OF ENERGY EFFICIENCY AND 
    RENEWABLE ENERGY
TERRY LASH, DIRECTOR, OFFICE OF NUCLEAR ENERGY, SCIENCE AND TECHNOLOGY
JOSEPH ROMM, DEPUTY TO MS. ERVIN
ALLAN HOFFMAN, ACTING DEPUTY ASSISTANT SECRETARY
JOHN FERRELL, OFFICE OF FUELS DEVELOPMENT

    Mr. McDade [presiding]. The committee will come to order.
    We're very pleased this morning to have Dr. Martha Krebs, 
head of the Office of Energy Research. We're pleased to have 
Christine Ervin, the Assistant Secretary for Energy Efficiency 
and Renewables, and, last but not least, Dr. Terry Lash, the 
Director of the Office of Nuclear Energy.
    An interesting panel, and we look forward to your 
testimony. May I suggest to you that you file your official 
statements with the record in the interest of time.
    We may have a vote, we're being told. It may not occur, but 
it may. If we do, I'm going to recess the committee because we 
want to hear you speak as a panel and hear you across the 
board. So if you would file your statements, formal statements, 
for the record and proceed informally as you wish--Dr. Krebs, 
if you would lead off, we would be grateful.

                            energy research

    Dr. Krebs. Mr. Chairman, thank you. Mr. Edwards, it's a 
pleasure to be here and speak to the subcommittee this morning. 
I will, indeed, submit my testimony for the record.
    This is the fourth time I've had the pleasure and the 
opportunity to present the budget of the Office of Energy 
Research to this subcommittee. I'm very proud of the programs 
that we carry out on behalf of the American people and I'm very 
proud of the people in Energy Research and in the institutions 
we support at universities and national laboratories.
    We have a special role in providing outstanding, unique 
scientific facilities. We continue to make progress on those. 
This year we've dedicated the Advance Photon Source at Argonne 
National Laboratory, the Environmental Molecular Science Lab at 
Pacific Northwest National Lab, the Main Injector at Fermilab, 
the B-Factory at Stanford, and the Relativistic Heavy Ion 
Collider at Brookhaven--all are on schedule and within their 
budget targets. The Combustion Research Facility at the Sandia 
Laboratory in California is also proceeding on pace.
    We've also made progress in science. The 1996 Nobel Prize 
for the discovery of Buckminsterfullerene at Rice University 
was made possible, along with investments by NSF and others, I 
should say, but certainly made possible by the investments of 
the Office of Energy Research in chemical dynamics and 
combustion science for both Dr. Curl and Dr. Smalley.
    We have had a number of other accomplishments that are 
changing the way we look at the absorption of radiation in the 
atmosphere, and that will have an impact on our climate models. 
The sequencing of the third form of life, called Archaea, was 
made possible by investments of the Biological and 
Environmental Research program, both recently and also in the 
past.

                         energy research budget

    Let me now turn to our budget for 1998. Our budget is 
$2.525 billion. That's $72 million above our 1997 request; 
$39.6 million of that is for outyear funding of construction 
projects in the 1998 budget. We think this increase, though 
modest, represents the Administration's recognition that the 
Office of Energy Research programs represent an investment in 
the Nation's science and technology future on a par with the 
National Science Foundation.

                         major budget elements

    Let me comment on some of the major elements of this 
request. We are requesting additional funds to continue design 
and R&D associated with the National Spallation Neutron Source 
located at the Oak Ridge National Laboratory. This facility, at 
a 1-megawatt beam of neutrons, would place us at the frontier 
of neutron science, which not only has scientific value, but 
also because of its impact on materials and biological 
structures, contributes to our energy and environmental 
missions.
    The other investment in neutron science is to begin a 
jointly-funded upgrade for the facility at Los Alamos National 
Laboratory that will put us at the frontier, or at least make 
us competitive at the same level as our European colleagues are 
in their facility.
    Another major investment is the Next-Generation Internet. 
This is a $100 million interagency initiative. DOE's piece of 
that initiative is a $35 million program--$25 million increase, 
$10 million redirection of other activities--in our 
Computational and Technology Research Program. This will 
establish a high-performance prototype network 100 to 1,000 
times in advance of current performance. We expect to work with 
industry and universities to do the R&D that will make this 
increase in performance possible. We are going to pick our 
colleagues at universities and labs jointly with the National 
Science Foundation and the other agency partners, and one of 
the bases for this choice will be on the relevance of 
applications to the agency missions.
    Within DOE, you might ask, Why us? In large measure, we--
and especially within the Office of Energy Research--have 
developed and operated the Energy Science Network, which is one 
of the premier agency research networks in this country. High-
energy physics has had a major role in the development of the 
Worldwide Web, initiated by an investigator at CERN in 
Switzerland and the Stanford Linear Accelerator Center was the 
first Worldwide Web node in the United States. We have many, 
many applications that will benefit from the increased 
performance of the network.
    Other important elements of the 1998 budget are our Science 
Facilities Utilization Program, which will keep our other user 
facilities at the cutting edge and at higher levels of 
availability. Within High-Energy Physics, we are proposing 
advanced funding for the Large Hadron Collider, a $6 billion 
machine to be built at CERN. The DOE's$450 million plus a 
contribution from NSF will enable over 500 of our high-energy 
physicists to perform science at this machine, and all of these funds 
will be available to researchers, industry, and our laboratories here 
in this country. We think it's a pretty good deal.
    We continue to proceed with restructuring our fusion 
program, and our genome program continues to be carried out in 
collaboration with the National Institutes of Health. We run 
about one-third of that program nationally, and we would 
propose to move our laboratories and our university performers 
into high-throughput sequencing as an element of this budget.
    A few days ago, actually early last week, I spoke to some 
faculty and students from Historically Black Colleges and 
Universities that are doing research for our Fossil Energy 
Program. I reflected on the following quote from Jerry Weisner, 
who was a former president of the Massachusetts Institute of 
Technology and one of the early science advisors in the post-
war period. He said, ``It's not what you think; it's what you 
haven't thought that's important.''
    My point to these folks was that it was DOE's and the 
Congress' role to determine the best investments for our 
missions, so that they and others in our labs and other 
universities could do what we hadn't thought of yet. I believe 
our 1998 budget will give them and other scientists and 
engineers, young and old, the right environment to do what we 
haven't thought about yet.
    Thank you.
    [The information follows:]

[Pages 490 - 525--The official Committee record contains additional material here.]


                           energy efficiency

    Mr. McDade. Thank you, Doctor Krebs, for a very interesting 
statement.
    Ms. Ervin, we'd love to hear from you. Welcome to the 
committee and proceed informally.
    Ms. Ervin. Thank you, Mr. Chairman, Mr. Fazio, Mr. Edwards, 
Mr. Knollenberg. I'm delighted to be here today to present the 
Administration's budget request for the Energy Efficiency and 
Renewable Energy Programs. Rather than go into the details of 
our budget request, I'd like to focus in the next few moments 
on the underlying rationale and sense of urgency we feel about 
these programs.
    The decisions that we make on our budget request of about 
$330 million will ultimately have a profound impact on the 
health of this Nation's environment and our people. It will 
also help determine whether or not we in the United States 
ultimately sell renewable energy systems in a global 
marketplace, which could hit several hundred billion dollars 
before the middle of the next century, according to Shell Oil, 
whether or not we purchase them from competitors. And it will 
influence whether our dependence on Persian Gulf oil grows or 
shrinks in the years ahead. That is why the President's 
Committee of Advisors on Science and Technology, just as 
recently as December, recommended to the President that we 
greatly increase work on renewable energy options and end-use 
efficiency and energy R&D in general.
    We are truly at a very critical time for these critical 
industries. Over the past 20 years, we have alternatively fed 
and starved research and development programs in renewable 
energy. In the late 1970s, our solar and renewable budget 
reached $1.5 billion. It plunged to $107 million by 1990, and 
Japan had assumed world leadership in a number of critical 
technologies that we developed. Today, thanks to bipartisan 
support extending back to the Bush administration, the U.S. has 
recaptured technical leadership and market share and brought 
prices down dramatically, but our competitors are redoubling 
their efforts at a time when both public and private investment 
is shrinking in the United States. They recognize that the 
inevitable result of an expanding global population, exploding 
economic growth, and an increasingly degraded environment, both 
locally and globally, is a huge and expanding market for 
cleaner energy resources, and they're making the investments 
needed to capture it.
    Developing nations alone will be adding 5 million megawatts 
of new generating capacity over the next 30 years. That 
corresponds to a market of about $5 to $10 trillion. By way of 
comparison, just think of this: the total world capacity now 
stands at only 3 million megawatts.
    The Japanese government, as an example, has increased their 
budget for solar energy by 15 percent per year since 1992, and 
in 1997 Japan is expected to spend in U.S. dollars $182 million 
for solar research for photovoltaics in particular, compared to 
$77 million that is requested in the 1998 budget. Germany and 
the Netherlands each spend about the same as the United States 
in funding fundamental improvements to wind energy systems. In 
addition, these countries have public policies that are 
designed to stimulate markets. I might mention also that both 
the Japanese and the Germans are moving aggressively to capture 
the lead in superconductivity, an enabling technology with 
broad applications for a number of economic sectors.
    As I said, this concerted and farsighted effort from our 
competitors is coming at a time when both private and public 
research and development money is declining in the United 
States. In the energy field, this decline is exacerbated by the 
uncertainty caused by utility restructuring.

                   energy efficiency accomplishments

    Now I should say we have retained leadership in these 
technologies so far. Last year the Department and its partners 
set an efficiency record of nearly 18 percent for thin film 
cells in photovoltaics. The entire PV manufacturing capacity of 
the U.S. is sold out for 1997. By the year 2000, we expect to 
produce electricity from solar cells at between 10 to 15 cents 
per kilowatt hour. U.S. federally-funded research and 
development has lowered prices in all the other key renewable 
technologies as well. Oil fuels now cost $1 a gallon. Wind-
generated electricity comes in at under 5 cents per kilowatt 
hour.
    But these investments are not just about economic returns 
and economic competitiveness. For the long term, they are key 
to protecting the health of our citizens and the quality of our 
environment. The production and use of energy generates 
virtually all of the Nation's air pollutants. Clean and 
efficient use of energy offers the prospect of eliminating most 
of that pollution.
    I should say that the American people, too, have an 
intuitive understanding of these issues. In a major poll 
conducted recently, 72 percent of the respondents believe that 
protecting the environment is very important. The majority 
believe that climate change is a serious threat, and 78 percent 
say that they support and are willing to pay more for renewable 
energy.
    I opened by saying that we're at a critical time for this 
industry. The juxtaposition of shrinking investments at home 
and aggressive support abroad, coupled with rapidly-emerging 
markets fueled by environmental need, makes the next few years 
particularly vital for us. If we fail to invest, we will 
squander the strong leads our previous bipartisan investments 
have given us.
    Mr. Chairman and members of the committee, I do appreciate 
the difficult constraints that this committee must operate 
under. We're all seeking ways to do more with less.We all feel 
the pressures to give the American people a balanced budget that 
assures a high quality of life. I do firmly believe that the 
investments we make in these programs are terrific investments for 
taxpayers. They have a high payoff in the form of a healthy economy, a 
clean environment, and good jobs.
    Thank you very much for this opportunity to explain why the 
administration believes so strongly in these programs.
    [The information follows:]

[Pages 528 - 541--The official Committee record contains additional material here.]


    Mr. McDade. Thank you.
    Ms. Ervin. I might mention that for the record, I have with 
me Dr. Joseph Romm, my principal deputy, who is here as a 
supporting witness; also, Allan Hoffman, who is the Acting 
Deputy Assistant Secretary for all of the utility programs; 
and, also, John Ferrell----
    Mr. McDade. Are you Mr. Hoffman? Welcome.
    Ms. Ervin [continuing]. And John Ferrell, who is the head 
of our Office of Fuels Development in the Transportation 
Program.
    We are all here to answer any questions you have.
    Mr. McDade. Thank you very much, and thank you for an 
interesting statement.
    Dr. Lash, clean-up hitter.

                             nuclear energy

    Dr. Lash. Well, thank you.
    Mr. McDade. We expect you to do a great job.
    Dr. Lash. Well, I am very heavy these days, so I guess it's 
an appropriate position. [Laughter.]
    Thank you very much for the opportunity to be here with you 
this morning, Members of the Committee. The Office of Nuclear 
Energy, Science and Technology represents the U.S. Government's 
core expertise in nuclear engineering, and our activities 
benefit our country in several ways, including, importantly, 
the Nations security interests, environmentally-responsible 
forms of generating electricity, and advancing various aspects 
of our country's economy and technological competitiveness.

                      international nuclear safety

    Our programs with regard to national security focus 
primarily on efforts to improve the safety of reactors that 
were designed in the former Soviet Union and still operate in 
several countries in Central and Eastern Europe, Russia, and 
Ukraine. We work with these countries in the short term to 
improve their safety, but, more importantly, we work with them 
in ways that will ensure that their capability to operate these 
reactors safely in the future will be maintained, and, in fact, 
will be enhanced.
    For instance, in the short term we train operators of 
Soviet-designed nuclear power plants in modern ways to operate 
such plants. More importantly for the long term, we train 
individuals in these countries who will conduct training 
programs to ensure that the operators are effective in their 
performance.
    We also provide equipment that is actually installed in 
these nuclear power plants, but, again, more importantly, we 
put a great deal of focus on transferring the technological 
capability from U.S. companies to entities in these countries, 
so that they can continue to manufacture advanced safety 
equipment and have it installed in their plants in the future, 
after our program and other bilateral programs come to an end.
    These efforts at nuclear safety are helping these countries 
avoid nuclear power plant disasters like the one that occurred 
almost 11 years ago in Ukraine at the Chornobyl nuclear power 
plant. We believe that a repeat of such a major accident would 
have grave effects on the political stability of that region, 
and could also lead to some serious environmental problems in 
Europe, as the Chornobyl accident did.
    Our program is seen as an important component of the 
country's overall effort to help countries, particularly like 
Ukraine, maintain their political and economic independence. 
This program on nuclear safety, I want to stress, will not go 
on indefinitely. We have prepared a document which has been 
submitted to staff that shows our basic mission should be 
complete by the year 2003.
    Beyond our nuclear safety activities, the Office of Nuclear 
Energy Science and Technology also serves an important role in 
implementing nonproliferation policies of the United States. 
For instance, our experts are used to lead the U.S. technical 
effort to monitor the Russian program to dilute 500 metric tons 
of highly-enriched uranium from dismantled Russian nuclear 
warheads into commercial grade uranium that can be used in 
nuclear power plants and not used in nuclear weapons ever 
again.
    Our proposed Fiscal Year 1998 programs will also reduce the 
need for reprocessing of spent fuel in the former Soviet Union 
and will work toward the minimization of the region's excess 
supply of plutonium.

                    nuclear energy security program

    In 1997, we are completing the program that we used to call 
Advanced Light Water Reactors. For Fiscal Year 1998, our budget 
request, therefore, reflects a major shift in the Department's 
nuclear energy research and development activities, which will 
now be directed primarily toward issues pertinent to the 
existing nuclear power plants. The Nation will remain dependent 
on these plants for a significant portion of our electricity 
supply for several decades to come.
    Today, 109 nuclear power plants provide about 22 percent of 
U.S. electricity needs and represent an investment by 
ratepayers of about $200 billion. As a group, these plants can 
provide the Nation with an efficient, reliable source of 
baseload electric power for many years. These plants also have 
the benefit that they do not emit pollutants associated with 
global climate change. If they were shut down early, the United 
States would have to build a substantial number of fossil fuel 
plants to replace them.
    Our new program in nuclear energy R&D is characterized by 
long-term research and by research that has higher technical 
risk than is typical for the private sector to undertake. In 
addition, we plan to take special care to use the facilities at 
the Department of Energy tomake sure that they're applied in an 
effective way to deal with the issue of the continued operation of 
existing nuclear power plants.
    We expect that over a period of years our research and 
development could lead to large reductions in the generation of 
spent nuclear fuel from nuclear power plants. This research 
would address important aging issues associated with the 
components of the nuclear power plants, to help ensure that 
they are operated safely and economically, and would support 
technological advances that would enable the plant operators to 
continue to ensure the plant's safety. Such technologies would 
allow existing nuclear power plants to continue to operate 
while generating nuclear waste and help delay the need to build 
replacement capacity. The longer these plants operate, the 
greater the chance the United States will be able to turn to 
advanced renewable or nuclear power technologies to replace 
them, thereby reducing the emissions associated with global 
climate change.

                                ISOTOPES

    Another important mission of the Office of Nuclear Energy, 
Science and Technology is to use the Department's unique 
facilities to supply important isotopes for medical research 
and industrial uses. As an example, the Department is 
developing a reliable domestic source of the isotope 
molybdenum-99 which is used for medical diagnosis. The current 
North American source of this isotope, an isotope which decays 
very rapidly and therefore cannot be stored for long periods of 
time, is a single aging reactor in Canada that is scheduled to 
shut down in the near future. The Department, therefore, is now 
redirecting existing facilities in New Mexico to produce this 
isotope, which, by the way, is used about 36,000 times every 
day in the United States. When Canadian, U.S., or other 
suppliers establish a new, reliable source of molybdenum-99 for 
the U.S. market, or when the Department is able to privatize 
its own facilities for this purpose, there would no longer be a 
continuing need for Federal funding for the molybdenum-99 
production.

                             SPACE MISSIONS

    Another aspect of our budget is to support the Nation's 
space program. In October 1997, NASA will launch the Cassini 
spacecraft on a mission to Saturn. Like previous planetary 
missions, Cassini will be powered by radioisotope 
thermoelectric generators built by my office. Beginning in 
Fiscal Year 1998, the Department will begin work on advanced 
power systems needed to support future explorations of the 
outer planets. In addition, our national security customers 
depend on the Department's special power systems to carry out 
missions critical to the Nation's security. The infrastructure 
needed to build the power sources required for these missions, 
both the NASA and the national security missions, exist only in 
the Department of Energy, and we need to take actions in Fiscal 
Year 1998 to assure that this infrastructure remains available 
to the country in the future.

                            uranium programs

    Finally, I would mention that we maintain 560,000 tons of 
depleted uranium hexafluoride at the gaseous diffusion plant 
sites in Ohio, Kentucky, and Tennessee. Currently, the depleted 
uranium is contained in approximately 47,000 cylinders which 
are stored in a safe condition. Our program is designed to keep 
these cylinders safe by assuring that they remain in good 
condition. We are also pursuing technologies that would be 
needed to minimize the cost of this material's future 
maintenance and disposition.
    In the coming Fiscal Year, we also propose to continue our 
research into advanced spent fuel conditioning technology, 
proceed with the deactivation of the Experimental Breeder 
Reactor-II in Idaho, and increase our support for research and 
education programs at U.S. universities and colleges.
    Thank you for the opportunity to make a short statement. 
I'd be happy to answer any questions.
    [The information follows:]

[Pages 546 - 572--The official Committee record contains additional material here.]


                   ISOTOPE USAGE IN MEDICAL DIAGNOSIS

    Mr. McDade. Dr. Lash, thank you for what was an expectedly 
fine presentation. We appreciate it very much.
    Let me, since you were the last to speak, start with you. 
You mentioned to the committee the importance of the isotope 
funding with respect to medical research, and I wonder if you'd 
flesh that out for us a bit. What kind of medical situations 
are you pointing at and what are the results of benefits to 
society?
    Dr. Lash. Well, my office produces over 100 different kinds 
of radioactive isotopes, many of these are used for medical 
purposes, either in research or actual diagnosis of patients. 
In terms of diagnosis----
    Mr. McDade. Put John Q. Citizen out there who wants to know 
why we should spend this money.
    Dr. Lash. Yes.
    Mr. McDade. What kind of medical diagnosis can the medical 
profession do to help that citizen?
    Dr. Lash. Yes, in the case of certain heart ailments, for 
instance, the traditional way of investigating the heart 
ailments was to insert a catheter in a vein, push it all the 
way up through the vein in the arm and to the heart. This was a 
painful and expensive process. Through the use of short-lived 
radioactive isotopes, you can now give the patient an 
injection; the isotope concentrates on the aspect of the heart 
that's being investigated, and the doctor can determine what 
further medical procedures are needed based on that--less cost 
and less problems.
    Mr. McDade. Where does it display, in x-rays or in MRIs, or 
how does it display when the isotope is injected in the vein? 
How does the doctor pinpoint the problem?
    Dr. Lash. It's because of the radioactive nature of the 
isotope which produces a radiation which is detected not 
through the kinds of means that you just mentioned, but, 
rather, special detectors that measure the radiation from the 
isotopes, and it depends on the type of isotope.
    Mr. McDade. And are you saying that, for example, a citizen 
that's facing maybe clogged arteries or something like that can 
use this process and the doctor can diagnosis more readily?
    Dr. Lash. Yes, they can often do it faster, cheaper, and 
with less pain to the patient.
    Mr. McDade. Put in the record, will you, the cost 
differential--I don't know how you quantify pain, so we'll just 
let that one go----
    Dr. Lash. All right.
    Mr. McDade [continuing]. But I want you to do a little bit 
of a more complete statement about the benefits to the 
taxpayers of the Nation from the program and from the 
investment that we're making on the medical front. We used the 
one example; I invite you to amplify that beyond heart 
problems, because I know there's a lot of uses of it.
    Dr. Lash. Yes.
    [The information follows:]

                            Isotope Program

    There are many cases where radioactive isotopes are used to 
diagnose illnesses. One example involves the diagnosis of 
renovascular hypertension. The use of the radioisotope 
technicium-99m saves an estimated cost per patient of $5,800-
$8,000 when compared to the alternative diagnostic techniques. 
Another example involves the use of Positron Emission 
Tomography scans to diagnose lung carcinoma, which cost about 
$2,500, and results in an estimated savings of $1,150-$2,270 
per patient. A third example involves the treatment of non-
Hodgkins lymphoma or acute myeleogenous leukemia. The use of 
radio-labeled monocilinal antibodies results in estimated cost 
savings of $50,000-$100,000 per patient. In most of these 
cases, before the development of radioisotope diagnoses, there 
was no accurate diagnostic technique. This makes it difficult 
to provide a cost/benefit analysis. Additionally, some of these 
therapies are in the early stages of human clinical trials.
    There are approximately 12 million nuclear medicine 
procedures performed annually in the United States. A 
conservative estimate of $1,000 per patient for each nuclear 
procedure, versus the use of a nonnuclear procedure, would 
result in an estimate of approximately $12 billion in cost 
savings to patients as a result of using radioactive isotopes 
in medical diagnostics. Successful radioisotope therapy is 
generally less expensive than conventional therapy, however, 
the most significant savings accrue because multiple and/or 
repeat treatments are unnecessary with successful radioisotope 
therapy.

                   scope of isotope usage in medicine

    Mr. McDade. How extensive is the use of the isotope therapy 
today or the treatment?
    Dr. Lash. Well, with the isotope that I mentioned, 
molybdenum-99, it's 36,000 times every day, 36,000 individual 
procedures in hospitals and doctors' offices throughout the 
country.
    Mr. McDade. It is now nationwide in its use?
    Dr. Lash. Yes. And, in fact, it's used in major 
metropolitan areas and rural areas as well.
    Mr. McDade. And no problems with respect to the medical 
community? They're comfortable with it and believe it to be 
effective?
    Dr. Lash. Yes, in fact, the use of radioactive isotopes for 
medical diagnosis is increasing, not decreasing. I would also 
say that recent research has been quite encouraging. We'll be 
able to move in the direction of using radioactive isotopes to 
actually treat cancer. We don't have the final answer yet, but 
some of the research has been extremely encouraging, and we're 
now in some test phases, that if they support what the research 
indicated, you will see a major growth in the use of 
radioactive isotopes to treat a variety of cancers.
    Mr. McDade. That's very interesting and hopeful. We hope 
you succeed.
    In this year of years, when the budget is under intense 
pressures, you have a new start in your budget to the extent of 
about $40 million for the Nuclear Energy Security Program. A 
lot of people are saying that that's a number that bears a 
strange resemblance to the Light Water Reactor that was killed 
last year, or effectively stopped, and that it's really a 
substitution. What do you say to that, Doctor?

                  funding for reactor program changes

    Dr. Lash. Well, let me say, first of all, that we're 
bringing the Advanced Light Water Reactor Program to a 
successful close, and it was not a program that was stopped in 
midstream where there was a waste of taxpayers' money. This 
program will result in positive benefits for the country and 
assure that there are advanced reactor designs available in the 
next century if utilities or others wish to order them.
    With regard to the similarity in number, quite frankly, it 
was not just by accident. In looking at the Congress' actions 
over the past few years, we saw that a level of about $40 
million a year seemed to be something that the Congress could 
support. Quite frankly, the nuclear industry has submitted to 
us a much more ambitious list of activities that they wish the 
U.S. Government to undertake. We did not choose to submit that 
number, which would be up to two times as much as what we 
submitted. I think this $40 million is, in the Federal system, 
a modest investment in a major supply of electricity for this 
country. There are 109 operating nuclear power plants that 
provide 22 percent of the electricity. It would be an 
enormously detrimental impact on this country if those plants 
cannot continue for many years in the future to provide that 
electrical supply.
    There is research that we propose to undertake that could 
assure that these plants are economically available and safe 
for much longer periods of time and that the Nuclear Regulatory 
Commission would allow these plants, through its licensing 
action, to operate. Now some of these things are speculative in 
terms of research and development, and they're longer-term. The 
industry is not willing or able right now to undertake all of 
that research. However, they support the programs that we've 
proposed. They're coordinated, for instance, with the planning 
of the Electric Power Research Institute, representing the 
utility industry and the nuclear industry. And they are putting 
money into complementary activities, so that we're assured that 
we're not doing something that would not be used by the 
industry if it's successful, but we are undertaking those 
things that are a bigger challenge for the industry to take on 
by itself. They're focused on the one-, two-, and the three-
years' kinds of success paths, and we're focused on the longer 
term.

                       reactor program direction

    Mr. McDade. Well, some of the people who are concerned 
about the program and what you intend to do would say that 
you're duplicating what the Nuclear Regulatory Commission does 
with respect to safety and security, et cetera. And it does 
seem to the casual observer that there's overlap there and 
possibly duplication of effort. Would you address yourself to 
that, please?
    Dr. Lash. Yes, certainly. I would not agree with that 
opinion. I think everyone understands, including the Nuclear 
Regulatory Commission, that the safety of nuclear power plants 
is, first and foremost, the responsibility of the operators of 
those plants. The Nuclear Regulatory Commission's 
responsibility is to oversee those operations as a double-check 
on what is being done, so that they can separately assure the 
public that the plants are operated safely, but they do not 
develop technologies in order to make the plants safer. They 
undertake some research, confirmatory research, to assure that 
they have up-to-date information to double-check the 
calculations and analyses of the operators of the plants.
    What the Department of Energy primarily does is work with 
those who are responsible for operating the plants to try to 
advance safety, not to double-check what the utilities do. And, 
by the way, some of our work is conducted jointly with the 
Nuclear Regulatory Commission. We have several memorandums of 
understanding with the Nuclear Regulatory Commission, one that 
we conducted the previous Fiscal Year----
    Mr. McDade. Give us an example of how----
    Dr. Lash [continuing]. And one that we propose in Fiscal 
Year 1998 to conduct is Pressure Vessel Annealing. Pressure 
Vessel Annealing is a technique for eliminating small cracks in 
pressure vessels caused by embrittlement due to radiation. 
There is not much experience in the world, and certainly not in 
this country, on these Pressure Vessel Annealing techniques.
    The Nuclear Regulatory Commission has signed a memorandum 
with us in support of this activity and actually has provided 
partial funding for this particular research and development.

                           reactor annealing

    Mr. McDade. It's the opinion of the committee that that 
procedure has already been done, that it's a finished effort, 
that you heat up the vessel and that causes the crack to be--
that it's known technology.
    Dr. Lash. Well, I, with great trepidation, voice a separate 
opinion.
    Mr. McDade. Let's hear about that.
    Dr. Lash. I do have a different opinion of that point, and 
so does the Nuclear Regulatory Commission.
    Mr. McDade. Let's hear your opinion, Doctor.
    Dr. Lash. Our opinion is that this is not an established 
technology, particularly for these very large pressure vessels 
that exist in U.S. commercial nuclear power plants. That is why 
the Nuclear Regulatory Commission has notonly signed a 
memorandum of understanding with us, and not only loaned staff to 
participate in the previous demonstration, and shown every willingness 
to participate in another demonstration, they have put some of their 
own research and development money into this, because they believe they 
need that information in order to analyze any proposal by a utility to 
conduct pressure vessel annealing in the future, and the utilities 
believe they need the information from these demonstrations in order to 
make a sound decision about whether to proceed with annealing, and if 
so, how.

                 funding for panel on nuclear research

    Mr. McDade. Okay, we'll be continuing to dialog. We're 
going to take a hard look at this account.
    You're aware that new starts are rare in this budget, and 
this is one of the larger ones. Your Department has proposed 
establishing an expert panel to study the Nation's long-term 
requirements for nuclear energy R&D. Tell us, please, what the 
cost of that proposal is. We don't have hard cost figures.
    Dr. Lash. I don't believe we have hard cost figures, 
either, but I think they're modest. We have just begun the 
discussion with the National Academy of Sciences' operating 
arm, the National Research Council, to discuss the scope of 
work and the nature in which they would assist us in looking at 
the long-term research and development needs of this country as 
it pertains to nuclear energy. I think I would be able to give 
you a fairly solid cost estimate within 30 days, maybe sooner, 
but we're dependent upon input from the National Academy of 
Sciences.
    Mr. McDade. Well, we will need that before we consider it 
in marking up, but 30 days should hit that timeline. So stick 
within the 30 days, and we will appreciate the additional 
information.
    Dr. Lash. Absolutely.
    [The information follows:]

          Independent Review, Nuclear Energy Security Program

    The Department's discussion with the National Academy of 
Sciences (NAS) to potentially conduct a review of the long-term 
issues associated with the role of Government R&D efforts in 
nuclear power are still underway. If such a study is performed 
by the Academy, the Department does not anticipate initiating 
it until early in FY 1998. A review of this nature would take 
several months because of the broad policy implications 
associated with the Federal role in nuclear research and 
development. When completed, information from the review would 
also be made available to the Committee. The cost of this 
review is still being negotiated but would be only a few 
hundred thousand dollars. We anticipate that this review would 
be funded mostly using funds appropriated for the Nuclear 
Energy Security Program depending on when it begins.
    In the interim, the Department is planning two activities 
to obtain independent input on the priorities and 
appropriateness of its proposed FY 1998 program. First, a panel 
of five independent consultants will review the scope and 
adequacy of the FY 1998 efforts that are proposed as part of 
the new Nuclear Energy Security program. These consultants 
began their efforts in mid-February and will complete their 
reviews by this spring. The cost of this review should be 
minimal since it only involves their consulting fees and 
associated travel while conducting the review. These funds will 
come from the Advanced Light Water Reactor program. The results 
of these consultant reviews will be provided to the Committee.
    Second, the Department intends to ask the Secretary of 
Energy's Advisory Board to consider whether a Federal role in 
nuclear energy R&D is needed and if so, provide guidance as to 
what priorities the Department should consider in proposing 
future programs. The Department anticipates that this review 
will be completed in time to inform our FY 1999 budget request.

    Mr. McDade. Where is the money coming from? What's the 
source of the funding for the expert panel?
    Dr. Lash. Well, that would come out of the approximately 
$40 million you just identified. It would be included in that.
    Mr. McDade. Okay. When are the recommendations going to be 
available? Do you know?
    Dr. Lash. Well, we are also negotiating with or discussing 
this with the National Academy. I don't, frankly, know yet how 
soon they can get started and when they might be able to 
provide an answer. We would like to have some input such that 
it would inform our Fiscal Year 1999 submission. So I hope that 
we can get it by next fall.
    Mr. McDade. We'll be looking forward to it, and we'll still 
be active by next fall, we expect.

                           program direction

    Then last year Congress provided $14.8 million for program 
direction, as you'll recall, and the 1998 budget reveals that 
the Department plans to spend $1.8 million more on salaries and 
expenses in this account. What was the source of the funding 
for this increase of $1.8 million?
    Dr. Lash. Well, I think the appropriation and expenditures 
are different. We had carryover money from the previous year, 
and we don't have--don't anticipate the same kind of carryover 
money for----
    Mr. McDade. What account was the carryover money in?
    Dr. Lash. It was in, I believe, program direction, but I'll 
have to----
    Mr. McDade. In program direction?
    Dr. Lash. Yes, I'll have to double-check that, but I 
believe that's true.
    Mr. McDade. Please do, and if you find an inconsistency, 
notify the staff and you can amplify it for the record.
    Dr. Lash. I will.
    [The information follows:]

                          NE Program Direction

    In the 30 months since the beginning of FY 1995, the Office 
of Nuclear Energy, Science and Technology's (NE) Headquarters 
staff has been reduced from 172 to 130 positions (a 25 percent 
reduction). Because of this large reduction in personnel, NE 
was able to carryover prior year staffing funds into FY 1996 
and FY 1997 to accommodate the $11.1 million reduction in its 
staffing accounts since FY 1995. The sources of the FY 1997 
carryover funds are:

AF-90 NE R&D Program Direction................................  $798,708
KK-05 Policy & Management\1\..................................   786,800
35-KK Policy & Management--Equipment\1\.......................   211,126
                    --------------------------------------------------------------
                    ____________________________________________________

    Total..................................................... 1,796,634

\1\ In FY 1997, the Policy & Management account was merged into Nuclear 
Energy R&D-Program Direction.
---------------------------------------------------------------------------

                    request for staff reduction data

    Mr. McDade. Also, for the record, answer this please: the 
Department has stated that it's on-track to cut administrative 
staff by 50 percent. Provide the starting point and the 
timetable for the record and furnish the committee with the 
information for the reduction, please.
    Dr. Lash. I'd be happy to do that.
    [The information follows:]

               NE's Reduction in Administrative Positions

    The Clinton Administration's 1993 National Performance 
Review contained a 5-Year goal of a 50 percent reduction in 
targeted administrative positions (personnel specialists, 
budget specialists, accountants and auditors, and acquisition 
specialist). In FY 1993, the Office of Nuclear Energy, Science 
and Technology (NE) had 11 budget specialists, 2 accountants 
and auditors, and 2 acquisition specialists, for a total of 15 
targeted positions. Currently, NE has only 7 budget 
specialists. This is a 53 percent reduction in targeted 
administrative positions.

    Mr. McDade. At this time, I yield to the gentleman from 
California.
    Mr. Fazio. Thank you, Mr. Chairman.
    I want to welcome all of you to the new Energy and Water 
Committee.

                                 fusion

    Martha, maybe I should start with you. I think that the 
fusion program has undergone a tremendous change in recent 
years. I know Mr. Freylinghuysen, who's not here at the moment, 
has been a real leader in attending to these issues, 
particularly because of the tradition at Tokamak and Princeton, 
but we now have basically two major fusion experiments in this 
country, DIII-D in San Diego at General Atomics and C-MOD at 
MIT. Could you tell us the importance of those programs as you 
see them, as we look to the future frontiers of fusion science? 
Talk to us about what kind of role they play, and particularly 
interrelate with that the university programs, because I think 
that's where the great strength of our future really lies, but 
indicate what's happened to those programs in recent years and 
what you see as their future. And if you could, put this in the 
context of what we're seeing in Europe and Japan, even Korea, 
where fusion continues to be at least a seemingly higher 
priority in budget proportionate terms.
    Dr. Krebs. Let me try to be brief and expand on some of 
these issues for the record, but, essentially, as you note, 
we've had three major Tokamak facilities in this country: TFTR 
at Princeton, the Doublet-IIID at San Diego, and C-MOD at MIT. 
In 1997, we will terminate the operation of TFTR. That will 
leave us with two Tokamak facilities, as Mr. Fazio said, and we 
will begin, within the 1998 budget we propose to begin the 
construction of the National Spherical Experiment at Princeton.
    But in the time when we are doing that construction and as 
we move forward to continue international collaboration, the 
facilities at General Atomics and at MIT will be crucial for 
maintaining the forward progress of fusion science in this 
country. Doublet-IIID has become a true user facility, drawing 
participants from our national labs as well as from 
universities who are participating in the program. The MIT 
program, of course, being located at a university, is a 
critical educator and trainer of the next generation of 
engineers and scientists who will be able to pursue the 
scientific agenda that we are currently developing.
    Indeed, as you noted, we expect our partners in the ITER 
project, particularly those in Japan and Europe, to maintain 
their interest in fusion as an energy option. Japan, in 
particular, has been emphatic in visits to me and to my 
superiors at the Department in their interest in having the 
United States be an active and effective partner, and I believe 
that in order to do that, the facilities at GA and MIT and 
others of smaller scale that we are proposing to invest in will 
be a critical path for us to follow in order to participate in 
any international facility.
    Again, as you know, Korea has identified fusion as an area 
that it would like to be participating in a domestic program, 
as well as internationally. So these two facilities, not only 
in terms of the specific elements associated with the Tokamak 
option, but because they are really user facilities focused on 
fusion science, become critical. And in 1998, one of the things 
we would propose to do is operate them at a more effective 
level, so that they can accommodate more users from across the 
country.
    Mr. Fazio. In other words, they'll be up and operating a 
larger percentage of the time?
    Dr. Krebs. Yes.
    Mr. Fazio. Could you give us some sense of how you're doing 
that and what the improvement in turn-on time is going to 
amount to?
    Dr. Krebs. I know that how we are doing it is that, as a 
result of the TFTR shutdown, we will be reallocating some of 
those funds to increase operation at DIII-D and at C-MOD. The 
exact numbers of weeks that are additional, it's somewhere in 
my head, but I'll have to provide it for the record.
    [The information follows:]

                     Fusion Energy Science Program

    Assuming funding at the President request level, the major 
tokamak facilities in the Fusion Energy Sciences Program, DIII-
D and Alcator C-MOD, will be able to run 18 and 12 weeks, 
respectively, in fiscal year 1998.

    Mr. Fazio. University participation amounts to what? How 
many people, professors, students, universities? Could you put 
that in the record?
    Dr. Krebs. I will.
    Mr. Fazio. Because it seems to me that for this committee 
to continue to support fusion research, we need to think of it 
in more than just two places on the map----
    Dr. Krebs. Absolutely.
    Mr. Fazio [continuing]. And more than an international 
collaboration. We want to know what is happening on the ground 
where aspiring physicists are in a position to do 
experimentation and to be participants in the new technology.
    Dr. Krebs. I can name some of the universities, whether 
it's Wisconsin, UCLA, Auburn, Texas--all of these schools have 
active fusion programs. The numbers I'll have to get for you.
    Mr. Fazio. Well, I think it would be useful for the record 
to have some portrait of the amount of university involvement 
in the fusion program.
    [The information follows:]

                     Fusion Energy Sciences Program

    There are presently 30 universities participating in the 
Fusion Energy Sciences Program, with about 90 faculty and more 
than 200 graduate students. Many of the university programs 
involve both on-site research at the university and 
participation as part of research teams at the major 
facilities. There are also substantial numbers of 
collaborations between universities in carrying out experiments 
on facilities located at the universities. The following list 
shows universities with Fusion Energy Sciences Programs during 
the past two years.

                       participating universities

Auburn University
California Inst. of Technology
California, Univ. of Berkeley
California, Univ. of Davis
California, Univ. of Irvine
California, Univ. of LA
California, Univ. of S. Barbara
California, Univ. of San Diego
Colorado School of Mines
Colorado, University of
Columbia University
Cornell University
Dartmouth College
Georgia Tech Research Corp
Hampton University
Illinois, University of
Johns Hopkins University
Lehigh University
Maryland, University of
Massachusetts Inst. of Technology
Missouri, University of
New Mexico, University
New York University
North Carolina Central Univ.
North Carolina State Univ.
Old Dominion University
Rensselaer Polytechnic Inst.
Rochester, University
Rollins College
Southeastern Louisiana Univ.
Texas, University of
Tuskegee University
Washington, University of
William and Mary, College of
Wisconsin, University of
Yale University

                       solar and renewable energy

    Mr. Fazio. Christine Ervin, I'd like to ask you, again, a 
similar area, where it seems that we're being out-invested by 
the Europeans and Japanese. What are the implications for 
American industry if we proportionately reduce our investment 
in the commercialization and the practical kind of research 
that leads up to that in renewable energy? We have some debates 
ongoing in this Congress about the photovoltaic manufacturing 
initiative, for example. What is the appropriate role of the 
government, and how does it contrast with the competition we 
are actually engaged with overseas?
    Ms. Ervin. Well, you're exactly right; we're very concerned 
about the effects on U.S. businesses of the overseas 
competition, and there are a number of areas where we see the 
foreign investments at startling high levels. Photovoltaics is 
one; superconductivity is another, but there are more.
    I think there are several ways to evaluate that question. 
One is, what kinds of investments have we made in the past in 
this country and what kinds of returns to our investment do we 
expect? We have invested, albeit erratically, in photovoltaics. 
We have invested over the last 15 years with a good measure of 
results. The price for PV has come down by a factor of ten in 
just the last 10 years alone. After losing our world expert 
leadership to the Japanese for a number of years, when the 
funding went down, we regained it just two to three years ago.
    I guess it would be a shame if we would repeat the VCR 
story for photovoltaics and for a number of these technologies, 
where we have had the creative genius in this country to refine 
and develop the technologies, only to give a very lucrative 
market away overseas. The Japanese market for PV, as I 
mentioned, is about $100 million now. Nearly $120 million of 
that, or thereabouts, is for a very aggressive marketization 
program over five years. It's $120 million each of five years, 
and then----
    Mr. Fazio. When you say, ``marketization,'' it sounds 
almost like a violation of the World Trade Agreement. Would you 
explain how they, in effect, subsidize their industry in a way 
that puts them in an advantageous position?
    Ms. Ervin. A portion of that is for the direct buydown of 
the cost of photovoltaic modules for residential deployment. 
That's a good portion of their budget. They're also supporting 
the cost for field tests. They're supporting funds for 
conducting feasibility studies. They have at least $2 million 
that's directly available for encouraging photovoltaic 
applications in other countries.
    Germany has a very different program, but a very stiff 
program as well. That one is about $100 million, give or take a 
few, and is fairly evenly split between the national government 
and very aggressive efforts at the regional and local level. In 
this case, a portion of their deployment program stems from the 
rate-based incentives that they offer. In other words, what 
happens is that it allows the public to install PV systems, and 
then they recover their investment through some surcharges on 
their electric utility bills.

                           market deployment

    Mr. Fazio. Well, we've seen some real improvements in the 
performance of renewables. Wind energy technology has seen its 
cost decline some 80 percent in the last 15 years. What has 
actually--first of all, what has DOE done to help bring that 
about, but, second, what is the real benefit to American 
manufacturing when you see those kinds of efficiencies? Are we 
still in position to take advantage of the ongoing sales of 
these breakthroughs or are we still back in that realm where we 
always did the cutting-edge work and never figured out how to 
manufacture the product and sell it and profit from it?
    Ms. Ervin. It really does get back to your earlier 
question, too, about the proper role of the Federal Government 
in R&D and deployment. I guess the best way to describe this is 
that we had a model of research in this country, maybe 10 years 
ago, that said that the Federal Government only did the early 
forms of research, and then we passed it over the fence and 
expected the market development. We've learned from our 
competitors that that does not workvery well--in their own 
markets, but certainly on the international market.
    The updated model of effective research and development, 
and one that has been widely adopted by scientists, I think, in 
the last four to five years is not a linear model, where 
there's a sharp division between public and private roles, but 
one that is very interactive. In other words, we get experience 
in deploying and testing technologies in the marketplace, and 
that feeds back into the research community. We do that, and 
that is the hallmark of many of our renewable energy programs, 
where we have a close partnership with the private sector, we 
develop business plans together, we carefully decide who does 
what, we carefully decide what appropriate level of cost-
sharing should govern the relationship, and then we put that 
business plan in practice. It has been an outstanding success 
that has produced the dramatic reductions in prices that we've 
seen for the renewable energy technologies. As a result, we 
create jobs in this country.
    Now the major point that I was making earlier, and now, is 
that we have made this investment; we've brought the prices 
down; they're on a downward track, a very predictable track. 
Dutch Shell Oil, for example, uses their strategic planning 
projections to estimate a very large market for these 
technologies in the future. What a shame it would be if we turn 
these investments, and the results of our investments, over to 
others. We shouldn't let it happen.

             renewable energy international budget request

    Mr. Fazio. Let me just, finally, ask you a question about 
the international activities in the budget. Currently, there's 
an increase from $750,000 to $7.0 million. I'm asking this in 
the blind. Is there relationship here to our interest in seeing 
a more effective export program, an international acceptance of 
American technology?
    Ms. Ervin. There is, clearly, a relationship. We believe in 
supporting basic research and development, supporting the 
demonstration and the deployment, and then helping condition 
the markets for their acceptance. This is particularly 
important in the international arena, and why this relatively 
modest increase in our international budget is so important.
    We are requesting----
    Mr. Fazio. That's a modest amount; it's not a modest 
increase, I might say.
    Ms. Ervin. No, that's right. We are asking for $7 million 
in 1998, up from a sharply reduced, I might add, $750,000 in 
1997. The prior year funding was about $4 million or so.
    Mr. Fazio. We do bounce around, don't we?
    Ms. Ervin. We do bounce around, and that creates a real 
hardship, not only, of course, for our planning, but for the 
fact that many of our programs, as I said, are industry-driven. 
They make investment decisions based on the partnerships that 
we have together.
    Let me go over very briefly the details of this modest 
budget for international work. Four-and-a-half million of that 
is needed to continue and resume the work of the Committee on 
Renewable Energy, Commerce, and Trade. You know that as CORECT. 
It's been in existence for a good 10 years. The Department of 
Energy is the lead agency responsible for that mechanism that 
brings together 14 different agencies to coordinate the work 
that we do in renewable energy technologies overseas. It has a 
wonderful track record. Based on, again, small amounts of 
funding, we've been able to help Latin America alone identify 
and help facilitate 15 projects in those countries that have 
already received $200 million in funding from other sources, 
and when completed, they will total up to about a billion 
dollars. The final amount of that international budget is for 
joint implementation, which is a pilot program, as you know, 
that's designed to encourage U.S. private sector participants 
in investing overseas to reduce greenhouse gas emissions--a 
small, but critical portion of our budget.
    Mr. Fazio. So you're dealing with the global warming issue, 
but the bottom line is it's accruing to the bottom line of 
American business?
    Ms. Ervin. That's right.
    Mr. Fazio. Mr. Chairman, thank you for this round.
    Mr. McDade. Yes. The gentleman from Michigan is recognized.

      basic research funding for solar and renewable technologies

    Mr. Knollenberg. Mr. Chairman, thank you very much.
    Welcome, panel.
    I have a couple of questions for Ms. Ervin, and then I want 
to, if I have time, turn to Dr. Lash on a question. I 
appreciate my colleague's comments about a couple of topics, 
and I want to get into one of two of those. I believe it is the 
proper role of the Federal Government to support some basic 
research programs. I get into a little bit of some awkward 
moments when we start to talk about the commercial viability, 
applied technology. So I want to refer to some of those kinds 
of points in my questions.
    I do commend DOE for the basic research programs, which 
just to name a couple that I'm highly supportive of: biomass 
research at Oak Ridge, for example, and you have the--you 
mentioned, I think, superconductivity, and of course that 
program, that research program, also is at Oak Ridge, I 
believe, isn't it? Those are two that fall into the basic 
research profile.
    I do have some skepticism about Federal funding for applied 
research and the technology transfer programs and some of the 
commercialization--if we can get a competitive product out 
there. I know that's part of the problem, because you cited the 
rest of the world as being leaders in that regard, and we seem 
to be dragging our feet in some ways when it comes to the 
renewables.
    But, with these things in mind, I'd like to discuss how the 
Department of Energy spins out its solar and renewable energy 
funds on basic research, as compared to some other expenses, 
and specifically, if you can, offer this information now; if 
you can't, if you can get it for me. I don't know how much of 
the Department's funding for the following programs is spent on 
basic research. I'll take those same six categories that are--I 
think they're enumerated in the budget: photovoltaics, biomass, 
wind energy systems, geothermal, hydrogen, and the high-
temperature superconductivity program. How much of the funding 
for each of these programs is used for technology transfer 
programs or for commercialization? Would you have any 
percentage figure off the top of your head?
    Ms. Ervin. We will provide the details for those programs 
in terms of what percentages fall into different areas of the 
research pipeline, but I do want to stress that the Department 
of Energy is not in the business of commercializing. We are in 
the business in these programs of doing basic research, of 
doing applied research----
    Mr. Knollenberg. Applied research?
    Ms. Ervin [continuing]. Applied research, and of 
demonstrating it in the field, in sometimes prototype 
applications, if a technology can----
    Mr. Knollenberg. Maybe this will be a simpler question; it 
may help you out. How much of the funding for each of these 
programs is used for costs other than basic research--such as 
administrative costs, cost to facilitate grant situations, that 
kind of thing? Can you give me that information?
    Ms. Ervin. I'll be happy to provide that for the record as 
well.
    Mr. Knollenberg. All right.
    [The information follows:]

                                    ADMINISTRATIVE COSTS WITHIN SOLAR BUDGET                                    
                                        [Fiscal year 1997, $ in millions]                                       
----------------------------------------------------------------------------------------------------------------
                                                                        Total        Funding for                
                              Program                                  funding    administrative\1\   Percent of
                                                                       enacted          costs           total   
----------------------------------------------------------------------------------------------------------------
PV.................................................................        $60.0            $6.0            10.0
Biomass............................................................         55.3             7.2            13.3
Wind...............................................................         29.0             2.9            10.0
Electric Energy systems............................................         31.7            0.96             3.0
Geothermal.........................................................         30.0             3.0            10.0
Hydrogen...........................................................         15.0            0.75             5.0
                                                                    --------------------------------------------
      Total........................................................        221.0            20.8             9.5
----------------------------------------------------------------------------------------------------------------
\1\ Administrative costs cited here are defined as including funds used to facilitate grants and projects, carry
  out crosscutting analysis, conduct workshops, develop and print publications, provide for computer support and
  other tools, and support services.                                                                            

    Mr. Knollenberg. And then a basic question is: how much of 
the approximately $270 million which was appropriated for the 
entire solar and renewable energy program was spent on basic 
research, just the basic research? And then you can calculate 
in some of those other numbers, if you don't have that 
available now.
    Ms. Ervin. Sure, I'll be happy to.
    [The information follows:]

               Solar and Renewable Energy--Basic Research

    Within the Solar and Renewable programs, approximately 15% 
of the research could be categorized as basic research.

    Mr. Knollenberg. Let's talk about the viability of solar 
and renewable energy sources, because I do believe we have to 
do something about that. I think we have to keep our 
competitive level up there, and you cited, as I say, some other 
world powers that are at least leading in that regard.
    Let me ask you about a couple of programs, one in 
particular that exists in Traverse City, Michigan, which is my 
home State. It's the Traverse City Light and Power. It's a 
city-owned utility. I have an article that I can leave for the 
record that came out last June of 1996, and it has to do with--
it's an experiment, I guess you could call it that, to put a 
wind turbine online up there to generate electricity. It was 
funded by 145 families and some 20 businesses, and they agreed, 
because it wasn't commercially-viable, to pay the extra out of 
their pocket. It was about $7.58 per month, and that's a 
program that was voluntary. They wanted to do it. They wanted a 
cleaner source of power.
    It appears to me that there may be some other programs like 
that around the country, and if there are, can you indicate 
what progress, what success, has been attained by them? This 
one is still in the question mark stage, but do you have others 
like that you can point your finger to?
    Ms. Ervin. We do, and thank you for bringing that 
particular one to my attention. You know, for years we have 
heard, as I mentioned in my earlier testimony, that public 
polls have indicated consistently that a very large majority of 
the American populace supports renewable energy and would be 
willing to pay a premium for them. But until the last couple of 
years, we haven't had hard, empirical data to demonstrate 
whether or not they would really put money on the table to do 
so. In the last couple of years, we have about 14 examples--is 
that right?--14 utility examples of cases where a utility has 
offered to their customers, ``Would you be willing to pay a 
certain premium''--it varies from case to case--``for having a 
certain portion of your energy come from a variety of 
sources?''
    In Detroit Edison, it was a centralized PV array. In this 
case, it was wind. And what we have found in all cases that I'm 
aware of, not only did they get a good response, but they've 
got a waiting list.
    Mr. Knollenberg. I understand there's some State money 
involved in some of these programs. I know in Michigan there 
is. There was a $50,000 grant that was used to fortify that 
experiment. That's a pretty good chunk of bread, too, you might 
add. Are they getting, in these other States that you talk of, 
some kind of subsidy?
    Ms. Ervin. In at least 12 to 13 of them, they are only 
customer-supported, and I think that's----
    Mr. Knollenberg. But there's no subsidy, no State grant----
    Ms. Ervin. That's right. I'll provide full details for you, 
but I think that is a powerful part of the story, and, frankly, 
it's one reason why we probably do not need a full $200 million 
in Federal support in this country to compete successfully with 
the Japanese, because we do have a growing wellspring of 
support across the country for consumers that would be willing 
to pay slightly more to actually deploy the technologies that 
we develop in our own homes.
    [The information follows:]

[Pages 587 - 592--The official Committee record contains additional material here.]


    Mr. Knollenberg. Do you have a feeling for a time when--
because it appears to me that we don't have--we have the 
technology for wind energy, but we still don't have a 
competitive product, even in these instances that we've been 
speaking about. There still has to be some sacrifice on the 
part of the participants--it comes out of their pocket--to make 
this thing work. Do you foresee a time when we'll close the gap 
and it will be competitive? Do you have any kind of thought in 
mind as to when that would be?
    Ms. Ervin. In many cases, renewable energy technologies are 
competitive today, if you are off the grid, for example, in 
this country. Globally, 2 billion people on this planet do not 
have access to electricity. Stand-alone, modular, renewable 
energy systems are often the least-cost form of providing that 
energy. Now in economies and situations where you have a 
highly-developed infrastructure--in this country, for example, 
with the transmission system, the renewable energy technologies 
are not always competitive. That is true now. But, based on the 
performance that we've seen, the steady decrease in price over 
the last 10 years, strategic planners such as Royal Dutch Shell 
fully anticipate these technologies to be competitive in the 
next 20 years, for example.
    Mr. Knollenberg. Twenty years?
    Ms. Ervin. Well, as I said, they're competitive now in many 
cases. As natural gas prices have gone down steadily, of 
course, the target for competition keeps moving, but these are 
all steadily moving into the competitive zone.
    Mr. Knollenberg. If you would be kind enough to supply us 
with some of those other examples of those locations within the 
country that have done this voluntary program that allows for 
participation on the part of the consumer, that would be, I 
think, helpful.
    [The information follows:]

[Pages 594 - 602--The official Committee record contains additional material here.]


    Mr. Knollenberg. We have seen, I think, some advances in--I 
happened to have visited a couple of locations back in the 
State where some improvements have been made that I think are a 
step forward, a huge step forward, but they are still not 
commercially-viable. When I posed that same question to them, 
they didn't know, either. They talked about 10, 15 years or so 
before it would be competitive with other sources of power. I 
think in the meantime we have to be very careful about how we 
spend money to sustain a product that, frankly, the consumer 
won't buy. I just think we have to have our focus and be 
concerned about that, rather than trying to subsidize another 
form of power that may not, in fact, be doing what the customer 
can get from just around the corner. But I do think we have to 
look sharply at improving, increasing the potential of other 
renewable sources of energy.

                 viability of nuclear power in the u.s.

    Let me turn now to Dr. Lash. Thank you, Ms. Ervin.
    This will be just one quick question, although it may have 
a long answer. When do you think that nuclear power will again 
be viable in this country? I know you mentioned we have 109, is 
it, licensed reactors. And here's the real brunt, the focus, on 
what I'd like to have in your answer: of these, it says that, 
in the report I just received, that 10 percent reach the end of 
their operating lifetime, and you might have commented on part 
of this, in the year 2010, 50 percent by 2020, and the 
remainder by 2030. And it looks to me like we need some kind of 
long-term strategy for nuclear power, those of us that believe 
in it and believe it should be a part of the source. So when do 
you think we'll--that's maybe a tough question, but when do you 
think we'll reach that point where it will be viable, if, in 
fact, ever.
    Dr. Lash. Well, I'm glad you asked that question, and I'll 
try not to take too long in responding to it, but it is true 
that the operating licenses for the existing nuclear power 
plants will be expiring at the time you indicated. However, I 
want to stress that those are not the operating lifetimes of 
the power plants. Those are the arbitrary times that were 
selected initially by the Nuclear Regulatory Commission to say 
they wanted to go through again a very thorough regulatory 
review of these plants to see whether they would still be safe 
to operate for a longer period of time.
    Mr. Knollenberg. But they may or may not renewed? They've 
got to pass muster?
    Dr. Lash. They have to pass muster again. Now the reason 
that we are suggesting to Congress, requesting of Congress for 
Fiscal Year 1998, for money to apply to nuclear technology R&D, 
is to address those very questions that will come up during 
that license renewal or regulatory review situation. We know 
there are some things, such as the embrittlement of the 
pressure vessels--as we talked about that. There will be other 
questions about updating the control rooms, the electronics. 
There will be questions about the aging impacts on existing 
electrical systems, and so on. There are many questions that 
will have to be answered in order for those licenses to be 
renewed from a technical perspective.
    There also will be questions about the economics. Many 
nuclear power plants today operate economically, cost-
competitively, at a lower cost than new generation. However, 
the total cost is often higher because of the large debt 
payments that have to be made by the utilities to cover the 
initial huge capital investments.
    We expect that through the deregulation process that's 
going on in the utility industry there will be some shakeout of 
the nuclear power industry. Some utilities may decide, as a 
result of changing economics, not to operate the power plants. 
However, we believe that many will decide that these are 
currently economical plants to operate and will do so.
    The biggest uncertainty is as to when there will be a new 
order for a nuclear power plant in this country, and I don't 
think there's a clear answer to that. I spent quite a bit of 
time in the past year meeting with the chief executive officers 
of major utilities across the country, and I alwaysask them 
that question. For most of these utility executives, they say they 
would like to order a nuclear power plant, but they're uncertain about 
the economics and they're uncertain, frankly, about the public 
willingness to have more nuclear power plants built. And so we're going 
through a period of substantial uncertainty here that will last, I 
think, 10 years.

                   viability of nuclear power in u.s.

    Mr. Knollenberg. So the answer is really uncertain?
    Dr. Lash. It's uncertain, and it's clear that in the short-
term, within the next 10 years, the major market for new 
nuclear power plants will be in other countries. We hear, of 
course, most often about China, where they are building more 
nuclear power plants today. They have made positive contacts 
with a variety of countries actually: France, Canada, Russia. 
They are interested in also working with the United States, but 
we have restrictions that make that tough.
    Mr. Knollenberg. I think you've answered it. I'm familiar 
with some of that activity around the world. But thank you very 
much, Dr. Lash. Thanks to the panel.
    And, Mr. Chairman, I yield back.
    Mr. McDade. The gentleman from Indiana is recognized.

                         renewable technologies

    Mr. Visclosky. Thank you, Mr. Chairman. Mr. Chairman, I 
mentioned earlier trying to measure pain, and I was suggesting 
him to think about losing to Southern Cal. That might be a good 
yard-mark. [Laughter.]
    Mr. McDade. That is severe pain. The only thing worse is 
Texas. [Laughter.]
    Mr. Visclosky. Mrs. Ervin, you had mentioned that there are 
2 billion people out there without electricity. If there is 
that type of market globally, why doesn't industry just go out 
and make money? Why do we have to spend money on these 
programs?
    Ms. Ervin. Well, there are a whole magnitude of various 
barriers to accessing that market, although we do see steady 
progress. One is that a number of these technologies, since 
they are emerging, are unfamiliar to many governments or 
localities. So a prime role of government is to help 
demonstrate their feasibility and their applicability in a 
particular setting.
    It's very important, for example, for Federal Governments 
to provide a quality assurance program, that these technologies 
are warrantied and that they can last for ``X'' number of 
years. In some cases, it's a matter of helping bundle the 
individual projects into a larger loan package that can then be 
funded by the World Bank and others. There are very large 
transaction costs associated with many, many small renewable 
projects, and, therefore, World Bank----
    Mr. Visclosky. I can understand the loan programs. I can 
understand our Government assisting businesses in selling the 
technology, but why don't they just go out and do it. If we can 
help them with the barriers, why should we be doing the 
research if there is this market out there and they have the 
technology?
    Ms. Ervin. Well, the research is very successful, but we 
still have a way to go in many cases. The whole renewable 
energy technology is not monolithic. You have technologies 
today that are competitive today in given markets. You have 
others that are emerging, yet refinements still need to be 
made. We have technologies that are successful in the 
demonstration stage, but need to be proven in the commercial 
stage. So there's a rapidly-changing, active, successful 
portfolio, but you cannot describe them as a monolithic thing. 
That's why our programs are so carefully designed, in 
partnership with the private sector, to accomplish very 
specific goals for individual programs.
    Mr. Visclosky. Are there American companies making money 
exporting wind technology today?
    Ms. Ervin. Yes, although we have a particular challenge in 
wind technology now.
    Mr. Visclosky. Could you provide for the record which 
companies and what level of dollars we're talking about?
    Ms. Ervin. I will do that.
    [The information follows:]

                        International Wind Sales

    According to information provided to the Department by the 
American Wind Energy Association, recent exports of wind 
turbines by American companies are as follows:
    Windfarm Project Sales ($ in millions)--Kenetech 
Windpower:-$54 Costa Rica and Netherlands; Zond 
Corporation:-$15 China and Ireland; Flo Wind Corporation:-$15 
India; Total:-$84.
    Small Wind Systems Sales ($ in millions)--Various 
manufacturers for many small and isolated installations: 
Atlantic Orient Corporation, Bergey Windpower Company, 
Southwest Wind Power, World Power Technologies, others; 
Total:-$7 million (approximately).
    The above listed export sales represent about 5 percent of 
the world market. Many international sales have been difficult 
and not profitable. As our industry successfully completes the 
development of new improved turbines for both the domestic and 
international markets, U.S. manufacturers will be competitive 
and profitable in expanding world markets.

    Ms. Ervin. Let me discuss just briefly the international 
situation for wind. Last year about 1,400 megawatts of wind 
power were installed around the world. That's almost double the 
previous year's record of about 700 megawatts. This is a very 
rapidly-growing market. In the United States we installed fewer 
than 50 megawatts because of, primarily, the uncertainty of 
utility restructuring. So our U.S. businesses are facing some 
very stiff competition overseas and difficulty in penetrating 
those markets.
    Mr. Visclosky. In the United States there's uncertainty 
about deregulation, but for the last 20 years in constant 1995 
dollars we spent about $800 million on the wind program. There 
was a prediction in 1984 that 20 percent of the total demand 
for electricity in the country in 1995 would be wind. Am I 
correct in understanding one-tenth of 1 percent is today?
    Ms. Ervin. We'll provide the specifics for the record.
    [The information follows:]

                     Wind Energy Contribution Today

    Currently, 1,790 MW of wind capacity are installed in this 
country, and almost all of that is in California. Wind energy 
in the United States generates a little over 3.1 billion 
kilowatt hours each year, and this represents about 0.1 percent 
of total electric sales as reported by the Energy Information 
Administration for 1995. Wind technology has improved 
significantly from the early California windfarms. Over 2500 MW 
was installed world-wide in the last two years. However, the 
advent of electric utility restructuring has substantially 
altered the electric power environment and has dampened market 
projections for wind energy significantly, compared to five 
years ago. We anticipate that our next-generation wind turbine 
efforts, which are targeted to reduce the cost of wind energy 
by an additional 20 percent, will result in a 25-fold increase 
of economically-viable wind resource, especially in the Midwest 
and Texas.

    Mr. Visclosky. Am I ball park correct? I'm asking 
percentage of the electricity market; is it about one-tenth of 
a percent?
    Ms. Ervin. Yes.
    Mr. Visclosky. The threat and uncertainty of deregulation 
hasn't existed for the last 20 years. There was a 
recommendation by the Yergin Task Force that we spend another 
$350 million on this program. Would you agree with that 
recommendation?
    Ms. Ervin. That's roughly consistent with what the 
President is recommending for Fiscal Year 1998, of course.
    Mr. Visclosky. That's what the President is recommending. I 
asked you what you thought about it.
    Ms. Ervin. Oh, well, I fully support the President. 
[Laughter.]
    Mr. Visclosky. Very good answer.
    Ms. Ervin. You know, one of the things that we need to 
remember, when we're looking at these technologies, is to be a 
little humble in the case of forecasts. It was just 15 years 
ago that a CEO for a major computer company in this country 
said that he foresaw nothing beyond a niche market for home 
computers, and look at how the world has changed.
    Now over the last 20 years for renewable energy, we have 
put, relative to many, many other investments, a pittance of 
investments into these technologies, and remember that they 
have been erratically funded--from very highs in the seventies 
to 70, 80 percent decreases. That has been a de-stabilizing 
factor in the progressive growth of these industries.
    Having said that, look at the remarkable progress that we 
have made. I referred to the Royal Dutch Shell Company a number 
of times. It's important because they are arguably the finest, 
most successful strategic planning unit in the world and a very 
profitable oil company. They have looked at the economics of 
these technologies. They have looked at the steady technology 
progress that largely the U.S. has brought about. They have 
looked at demand; they have looked at supply; they have looked 
at environmental constraints. And what is Royal Dutch Shell 
projecting? That renewable energy will provide 50 percent of 
total world energy needs by the year 2050--not new, but total. 
This is a major market that will happen. It is inevitable. It's 
not a matter of if; it's a matter of when. The question is: 
will we benefit from the investments that we've made in the 
past?
    Mr. Visclosky. Well, I hate to play the devil's advocate, 
but I think the price of oil has a lot to do with all of this, 
and that suddenly if those technologies become competitive, 
industry would find the R&D dollars to make sure that they 
participated in that 50 percent of sales.

              international nuclear safety program update

    Dr. Lash, if I could, could you tell me what the estimated 
cost and schedule for improving safety of Soviet-designed 
reactors is?
    Dr. Lash. The Fiscal Year 1998 request is $50 million. The 
total that we estimate for our program in our strategy document 
I believe is about $550 million, ending in the year 2003.
    Mr. Visclosky. What progress have we seen so far?
    Dr. Lash. We believe we've made a great deal of progress 
across the whole range of activities that we've engaged in, 
from actually installing equipment that has demonstrably 
improved the safety of operating plants to encouraging and 
getting accomplished the establishment of procedures and 
equipment manufactured in those countries that will have 
enduring benefit. For instance, one of the early successes was 
the qualification of a Ukrainian company to manufacture fire 
doors for nuclear power plants that were qualified by an 
international institute for testing in Sweden. Although we were 
initially the major customer in terms of our program purchasing 
those fire doors for installation in nuclear power plants, they 
are now successfully marketing those fire doors to other 
nuclear power plants in the former Soviet Union. There is now 
also a manufacturing capability of a similar nature being 
developed and almost completed in Russia. So that they will now 
have--and fires, I would stress, is one of the major risks 
associated with these Soviet-designed nuclear power plants. So 
that was a very major success.
    In other areas such as in regulations and laws, we've also 
made great progress in working with the regulators, improving 
the level of safety; teaching them how to do modern, 
probablistic risk assessments, a technology or a procedure that 
they did not have in their country before because they 
believed, until the Chornobyl accident, that a major 
catastrophic accident was impossible. So it's been an effort of 
working with their research institutes, the universities, and 
the regulatory agencies, to train them in this methodology, 
which is then used to evaluate the safety of plants, to 
determine whether they continue to operate, and if so, what 
modifications should be made to improve the safety of the 
plants.
    I'd be happy, for the record, to submit our status report 
which goes through country by country and reactor type all the 
major accomplishments over the past few years in this program.
    Mr. Visclosky. I'd appreciate that.
    [The information follows:]

[Pages 608 - 609--The official Committee record contains additional material here.]


       source of funding for international nuclear safety program

    Mr. Visclosky. What other agencies are cooperating in the 
United States on this program? What other agencies are spending 
money on this?
    Dr. Lash. The principal agencies, other than the Department 
of Energy, that are involved are the Nuclear Regulatory 
Commission, the Agency for International Development, and then 
other parts of the State Department. But the funding for much 
of this activity with regard to the Nuclear Regulatory 
Commission, and certain elements of the Department's program, 
in the past came from the Agency for International Development.
    For instance, the bulk of the funds that we are using in 
conjunction with shutting down the Chornobyl nuclear power 
plant comes from the Agency for International Development, and 
that's separate from the appropriation request that we've been 
making in recent years, and make again for Fiscal Year 1998 for 
this program.
    Mr. Visclosky. For the record, could you provide the dollar 
amounts for this Fiscal Year and the coming Fiscal Year for 
these agencies, please? Would you compare that?
    Dr. Lash. Absolutely. We'd be happy to do that.
    [The information follows:]

                      International Nuclear Safety

    For the completion of Soviet-Designed Reactor Safety 
activities, the following funding has been provided or has been 
requested:
    Agency for International Development (AID) provided the 
Nuclear Regulatory Commission (NRC) $900,000 in FY 1996. In 
total, AID plans to provide NRC $3,218,000 in FY 1997. NRC has 
requested $4,800,000 from AID in FY 1998.
    AID provided $21,400,000 for Department of Energy (DOE) 
activities in Ukraine and $630,000 for DOE activities in 
Armenia in FY 1996. AID plans to provide, but has not yet 
transferred to DOE, $30,000,000 for Ukraine and $6,000,000 for 
Armenia in FY 1997. AID has requested $6,000,000 in FY 1998 for 
DOE activities in Armenia.
    DOE received direct appropriations of $30,000,000 in FY 
1996 and $45,000,000 in FY 1997. DOE has requested $50,000,000 
in FY 1998.

    Mr. Visclosky. A final question I would have is: could you 
talk to me about the funding that has been provided by our 
international partners as far as the Soviet reactor problems?
    Mr. Lash. Yes, I'd like to do that for the record because I 
don't have the precise numbers in mind, but there is a large 
effort by various European countries, through bilateral 
programs. We work very closely with them to assure that there 
isn't duplication. Sometimes we work on the same projects 
together; sometimes we work on complementary projects. We keep 
track of that very, very carefully through the G-7 and the G-
24. In addition to the bilateral programs, there are efforts by 
the International Atomic Energy Agency, the Nuclear Energy 
Agency in Paris, and the European Bank for Reconstruction and 
Development, which has an account called the nuclear safety 
account. I'd be happy to provide you for the record the best 
information we have on the economic aspects of those different 
countries and organizations.
    Mr. Visclosky. I'd appreciate that very much. Thank you 
very much.
    [The information follows:]

[Pages 611 - 612--The official Committee record contains additional material here.]


    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. McDade. Thank you, Mr. Visclosky.
    Before I yield down the table, I want to express the 
committee's thanks to you for the great improvement in your 
budget justifications which enable us to get a better detail on 
what you're trying to do before we are forced to make 
decisions. We appreciate it.
    Ms. Ervin. Thank you.
    Mr. McDade. I'm pleased at this time to yield to the 
gentleman from Arkansas, Mr. Dickey.
    Mr. Dickey. Thank you, Mr. Chairman.
    I know when it gets down to the end of the table, things 
like this have already been said, Mrs. Ervin, but 
congratulations on your appointment. Has anybody else been as 
thoughtful as I am? [Laughter.]
    Ms. Ervin. Not yet.
    Mr. Dickey. Okay. I think it's wonderful; your enthusiasm 
is certainly contagious.
    You talked about photovoltaics, wind energy, solar, 
thermal, geothermal, and such. The State of Arkansas is not a 
rich State. Many people would be hard-pressed to take advantage 
of these alternative energy sources, and as I listened to the 
people from California, my colleagues from California and 
Texas, they don't seem to care about us, either, about this 
sort of thing. [Laughter.]
    Please tell the panel what your office----
    Mr. Fazio. That's where we all came from. [Laughter.]
    Mr. Dickey. This is my time. [Laughter.]

                   weatherization assistance program

    Please tell the panel, Ms. Ervin, what your office in the 
Department of Energy does for less advantaged families or 
families with low incomes in States such as Arkansas.
    Ms. Ervin. Thank you. Most of the programs that we have 
that are particularly targeted to low-income individuals are in 
the other part of my budget, the efficiency side of the budget 
which falls under the Interior subcommittee, but there are 
several very important programs there. The major one, of 
course, is for low-income weatherization. It's about $150 
million in the 1998 budget, and that is used to help pay for 
retrofits in low-income households, retrofits that I might say, 
more than pay for themselves. Their benefit-cost ratio is about 
1.6 to 1. That is also down from levels of several years ago of 
about $220 million, unfortunately.
    Mr. Dickey. How does a retrofit work?
    Ms. Ervin. Generally, what happens, the program is often 
run by the community action program agencies in various 
communities and States. They have weatherizing teams that go 
out to households and they do an audit.
    Mr. Dickey. Okay.
    Ms. Ervin. They basically see where they can make the most 
cost-effective improvements, whether it be caulking, weather-
stripping, and so forth, and they make them. It's a very good 
tool for providing jobs in the local communities as well, and 
addresses a fundamental need in that low-income people 
generally pay three to four times, as a percent of their 
income, three to four times for their energy bills what you and 
I do. So it's important.
    Two other areas that are growing in importance that you may 
be interested in--we have a very strong partnership with 
Habitat for Humanity, which is a wonderful, wonderful volunteer 
organization that you know of, that is either the largest or 
the second-largest residential building institution in the 
United States today. And as a result of our partnership, they 
now include a core of energy-efficiency technologies in their 
plans. I had the privilege of working on an all-women crew 
about a month or so ago in Texas, in Houston, Texas, and that 
was my first experience actually helping build one of those 
Habitat houses, and it was a real joy.
    The final program that we have is working with HUD, Housing 
and Urban Development, to retrofit about a third of their 
housing units. Two years ago, we had about $5 million requested 
in our budget to help address a third of their housing units. 
We did not get that appropriation. We are turning our efforts 
mainly toward training the facility managers and helping get 
private companies to do as much of the retrofits as possible, 
but that's another low-income program we care about a lot.
    Mr. Dickey. Good. One of my constituents and a next-door 
neighbor in Pine Bluff, Arkansas is a fine gentleman by the 
name of Roy Hunter. He gave me a report on using municipal 
solid waste for conversion to ethanol. Do you have any 
information you could tell us that I could tell him, so I could 
go home, about this technology? And would you please look at 
this report and his recommendations and then give me your 
response for the record?
    Ms. Ervin. I would be happy to do that.
    [The information follows:]

              Municipal Solid Waste Conversion to Ethanol

    The cellulosic component of municipal solid waste (MSW), 
including waste materials such as paper, yard wastes, and wood 
pallets, is one of the options for the production of ethanol. 
The technology to convert cellulosic materials has been 
demonstrated at the pilot plant scale at the Department of 
Energy's National Renewable Energy Laboratory in Golden, 
Colorado. A number of feedstocks are being tested at the pilot 
plant. The results are expected to be applicable to MSW 
conversion.
    The use of MSW is complicated by the fact that it is a 
mixed feedstock. About 65 percent of the wastes is cellulosic 
in nature. This mix requires a cost-effective method to 
separate the non-cellulosic materials, as well as methods to 
remove toxics that may be present. The Department of Energy is 
working with Masada Resources, Incorporated, of Birmingham, 
Alabama, to assess and improve the technical and economic 
feasibility of MSW conversion. Numerous discussions with the 
Swedish government have also taken place concerning a possible 
collaborative activity using cellulosic feedstocks.

    Mr. Dickey. Do you have any reaction?
    Ms. Ervin. Just very briefly, we are not directly doing any 
work on converting municipal solid waste to ethanol, but we do 
have a very successful production unit at the National 
Renewable Energy Laboratory that is capable of producing--what, 
a million gallons a day; is that right?--from any number of 
diverse feedstocks.
    Mr. Hoffman. Yes.
    Ms. Ervin. So municipal solid waste has been characterized 
and has been analyzed with a view toward processing ethanol. We 
simply have not formed a venture with parties to actually use a 
unit for that purpose. But I'd be happy to provide more 
information and respond to that report.
    Mr. Dickey. Thank you, Ms. Ervin.
    Mr. Chairman, thank you. Mr. Freylinghuysen, thank you.

                                 grants

    Mr. McDade. Ms. Ervin, before I yield to my friend from 
Texas, let me ask you a couple of questions. Some of our 
critics say--I mean your critics say--that you also made grants 
to the high-income side, like MacDonalds, WalMart, and even 
casino developers. Are you familiar with those grants offhand?
    Ms. Ervin. No, I am not.
    Mr. McDade. I'll tell you what you do, take a look at them 
and see if the information is accurate, and if it is, provide a 
justification for the record.
    [The information follows:]

                Energy Efficiency Grants to Corporations

    On occasion, the Department does provide funds to larger 
companies which provides an opportunity for a broad segment of 
the public to view renewable technologies in use. In addition, 
they are sufficiently large to offer a market capable of 
sustaining or incubating these technologies in their own right. 
The resources spent by DOE are highly leveraged and offer a 
unique opportunity to shape markets and educate the public.

    Mr. McDade. There's also a complaint that the Department is 
assisting a photovoltaic manufacturer in Russia. Is that 
accurate, do you know?
    Ms. Ervin. We have, under the Gore-Chernymerden work of the 
last several years, worked on a number of renewable and 
efficiency projects in Russia. One of them is to support a firm 
in Michigan, ECD, that has joined with a Russian firm called 
Sovlux, I believe, to create a thin film manufacturing 
facility. And I'll be happy to provide more information for the 
record for you.
    [The information follows:]

                     Photovoltaics Plant in Russia

    The Sovlux manufacturing plant in Russia is highly cost-
shared. Only $75,000 of the total federal funding has been 
provided by the Department of Energy's Photovoltaic Program, 
the rest has been provided by the Department of Defense. 
Through an effort coordinated by the National Renewable Energy 
Laboratory (NREL), a Russian State organization known as KVANT, 
has been funded for a total of $927,000 from June 1995 to date 
to start up production of photovoltaic modules in a two 
megawatt amorphous silicon photovoltaic manufacturing plant at 
Sovlux in Moscow, Russia. Sovlux is a joint venture of KVANT 
and Energy Conversion Devices (ECD) of Troy, Michigan. Of the 
$927K in federal funds, only $75,000 were from the Department's 
Photovoltaic Program, with the remainder of funds from DOE's 
Newly Independent States/Industrial Partnering Program (NIS/
IPP) conducted by the United States Industry Coalition (USIC). 
The NIS/IPP funds are from DOD appropriations aimed at the 
conversion of Russian high-technology resources from military 
to civilian applications.
    The U.S. will benefit from the project through the 50% 
ownership of Sovlus by EDC.

    Mr. McDade. Is it similar to what U.S. companies are doing? 
The complaint is not just the grant, but also that it's 
subsidizing an industry offshore that will compete with a 
company that is producing products in the United States. Take a 
look at it, please, and furnish information to the committee, 
will you? Thank you.
    [The information follows:]

                     Photovoltaics Plant in Russia

    The Sovlux production equipment was manufactured in the 
U.S. by Energy Conversion Devices (ECD) of Troy, Michigan for 
$8,700,000. The Russian government paid for this equipment in 
hard currency before it was shipped to Moscow. Additional 
funding for the startup has been provided by the Ministry of 
Atomic Energy of the Russian Federation (MINIATOM), now a 
partner with KVANT in the Sovlux venture.
    The Sovlux project actually is a joint venture expansion of 
a U.S. company into the Russian market. The Department believes 
this effort has many benefits that will accrue to the U.S. 
including the fact that the Russian-made products will boost a 
U.S. domestic company (ECD) through their 50% ownership of 
Sovlux. Further scale-up of production capacity would also be 
done through purchases of additional equipment manufactured by 
ECD, resulting in U.S. jobs. Furthermore, this project will 
provide for a more secure situation as Russian military 
personnel, resources, and scientists transition to peacetime 
activities and build a more stable economic environment.

    Mr. McDade. I'm pleased to yield at this time to my friend 
from Texas.
    Mr. Edwards. Thank you, Mr. Chairman.
    Mr. Dickey, for the record, let me just say what Texas does 
for Arkansas is send you our best football players year after 
year. [Laughter.]
    Mr. Dickey. Yes, but you beat us all the time. [Laughter.]

      responsibility for monitoring soviet nuclear-grade materials

    Mr. Edwards. Dr. Lash, let me ask you, in your 
responsibilities working with the states of the former Soviet 
Union on the issue of nuclear safety, do you also have 
responsibility for monitoring the question of inventory control 
of nuclear-grade materials in the former Soviet Union?
    Dr. Lash. No, my office does not have that responsibility, 
although we work very closely with the office that is involved 
in that. Some of our work on nuclear safety concerns the same 
institutes with which the Office of Nuclear Nonproliferation 
works with them to greatly improve the physical and material 
security of these materials.
    Mr. Edwards. That's the office of?
    Dr. Lash. Nuclear Nonproliferation.
    Mr. Edwards. What agency is that?
    Dr. Lash. Within the Department of Energy.
    Mr. Edwards. So it is within the Department of Energy that 
you do that?
    Dr. Lash. Yes, yes. I'd be happy, if you have a specific 
request for information, to obtain it and transmit it to you.
    Mr. Edwards. Okay, very good. I would like to follow up on 
that.
    [The information follows:]

   Department of Energy Activities With Respect to Nuclear Material 
      Inventory and Tracking Within Former Soviet Union Countries

    Nuclear material control and accounting (MC&A) is 
fundamentally a national responsibility. The Department of 
Energy has several programs designed to improve the capability 
of Russia, the New Independent States (NIS), and the Baltic 
states which possess nuclear materials to meet this 
responsibility.
    The Russia/NIS Nuclear Materials Security Task Force within 
the Energy Department's Office of Arms Control and 
Nonproliferation is providing assistance to the states of the 
former Soviet Union to accurately track and account for nuclear 
material inventories including:
    Improving facility-level nuclear material control and 
accounting systems by providing the following: Modern nuclear 
material measuring equipment to determine the exact amount and 
types of all facility nuclear material; computers and 
specialized accounting software to provide near-real time 
tracking of the movements of the material; access control 
systems to limit access to nuclear material; tamper indicating 
devices which detect any unauthorized access to nuclear 
material.
    Work is progressing at more than 44 facilities which use or 
store weapon-usable nuclear material across Russia, the NIS and 
the Baltics to complete nuclear material protection, control 
and accounting (MPC&A) upgrades. By the end of 1997, the 
Department of Energy plans to have completed MPC&A upgrades at 
over 20 of the smaller nuclear facilities in Russia, the NIS 
and Baltics.
    The Department of Energy is working with Russia's lead 
physical protection institute, Eleron, to upgrade physical 
protection and material accounting for weapon-usable nuclear 
material during transportation between Minatom facilities.
    The Department of Energy is cooperating with Gosatomnadzor 
(GAN), the Federal Nuclear and Radiation Safety Authority of 
Russia; Atominform, the Russian Institute of Management 
Economics and Information; and Euratom, European Atomic Energy 
Community, to develop a Russian Federal Material Control and 
Accounting Information System for tracking all civilian nuclear 
material and transactions on a national level. The first step, 
joint development of a pilot nuclear material control and 
accounting system at several independent civilian sites, is 
currently underway.
    The Department of Energy also provides technical assistance 
to help these countries meet their obligations to the 
International Atomic Energy Agency (IAEA). All of the states of 
the former Soviet Union except Russia are non-nuclear-weapon 
states parties to the Treaty on the Non-Proliferation of 
Nuclear Weapons (NPT). As such, they are required to submit 
safeguards report to the IAEA containing official nuclear 
material accounting information including physical inventory 
listings of nuclear materials and nuclear material balance 
reports. The IAEA conducts periodic inspections to confirm the 
accuracy of these reports. The Department of Energy's program 
of assistance in this area is directed by the International 
Safeguards Division in the Office of Arms Control and 
Nonproliferation.

                          benefits of research

    Mr. Edwards. Dr. Krebs, let me ask you this: it seems to 
me, coming from someone who is not a scientist, but someone who 
has an intuitive faith in the importance of research in our 
country that goes back to, I guess, 20 years--I used to work 
for the chairman of the Science and Technology Committee--but 
it seems to me that there are two problems we face in order to 
try to continue support for research programs in the Department 
of Energy. One is to educate the public and Members of Congress 
as to the direct benefits of research, and I believe in basic 
research and even research for the sake of learning about our 
world, but, nevertheless, to maintain public support for DOE 
energy research projects and other projects, it seems to me 
we've got to do a better job of educating the public, including 
Members of Congress.
    If I were to ask you today, if I said I wanted to go out on 
the floor of the House--in fact, right now--to educate my 
colleagues about the benefits of DOE research dollars in the 
past, is there a publication that's in lay terms that farmers 
and lawyers and business people could understand what the 
benefits have been of DOE research in the past?
    Dr. Krebs. I think each of our programs has tried to put 
out documents which convey the practical benefits and the 
historically-practical benefits of the work they do. I think 
that the Department of Energy's basic research programs share 
with many other basic research programs supported by the 
Federal Government, with perhaps the exception of the National 
Institutes of Health, the problem of conveying benefits in 
common language, plain language, not common but plain language, 
the result of their work. It is a challenge, a continuing 
challenge for anyone who sits in this job, and I have worked 
with my colleagues in the agency, with my colleagues in our 
national laboratories, to do more effective outreach on these 
issues.
    So I have a variety of materials. The best material, I 
would say, is probably from our human genome and our global 
climate research programs, which have built in from the very 
beginning a commitment to invest in educational materials that 
range from K-through-12 to general public outreach.
    Mr. Edwards. I'd like to see those materials----
    Dr. Krebs. We'll be happy----
    Mr. Edwards [continuing]. But the bottom-line answer is 
there's not one publication that I could take on the floor----
    Dr. Krebs. There's not one publication.
    Mr. Edwards [continuing]. Right now, as we're voting, and 
say, Members, this is what DOE does in research and these have 
been the practical benefits of those tax dollars?
    Dr. Krebs. Not one; there are several, but we'll get you 
copies of what they are.
    [The information follows:]

                      Energy Research Publications

    Due to size and number of Energy Research Publications 
available to the Committee, we will provide the requested 
publications under separate cover.

    Mr. Edwards. It seems to me--and this isn't the only 
reason, but I think one of the reasons there's been a lot of 
discussion about abolishing the Department of Energy is people 
don't understand the benefits of what you do. As leaders in an 
agency that's been proposed for abolishment, I would think it 
would be very helpful to come up with that kind of publication, 
so that those of us that are not scientists, but are strong 
supporters of research, and the role of government in that 
research, can be of help to you.
    Dr. Krebs. Let me say I believe that we have broadly, as an 
agency, made an effort to convey the benefits of our research, 
and, in particular, over the last two to four years there are 
very strong--there are a number of publications where we do 
convey how the interaction between basic research efforts that 
we have carried out and that have been handed on to either the 
Fossil or the Energy Efficiency and Renewables Program have had 
very strong payoffs to the American public. We can get you that 
document as well.
    Mr. Edwards. I'd like to see that. I'm not blaming you. We, 
as Members, have to take responsibility for educating 
ourselves, too, but I would be willing to bet money, including 
your budget----
    Dr. Krebs. Don't do that. [Laughter.]
    [The information follows:]

[Pages 619 - 659--The official Committee record contains additional material here.]


    Mr. Edwards. If I walked out on the floor right now, there 
would not be 20 Members of the House who could tell us five----
    Dr. Krebs. I agree with that.
    Mr. Edwards [continuing]. Practical benefits from the 
billions of dollars we've spent in energy research, and you 
can't expect the public and Members of Congress to continue to 
support what I believe are important programs unless we better 
educate them. And while I would, in an ideal world, wish you'd 
spend all your resources doing research, I think in our real 
world, and as the chairman and others try to support your 
funding, we need tools to help educate people about what you 
do.
    Dr. Krebs. Right.
    Mr. Edwards. Is that the 10-minute--okay, I won't ask for 
another question to be answered. I'd just say the second point 
I think you need to focus on, in terms of supporting funding 
for energy research, is to educate or define the difference 
between corporate welfare and what is responsible, necessary, 
justified government research.
    Mr. McDade. We have a vote on the floor, as you know. We're 
going to recess for 10 minutes.
    [Recess.]
    Mr. Frelinghuysen [presiding]. We'd like to get the hearing 
going, please.
    Welcome to all.
    I'll be asking a few questions, if that's all right, and 
congratulations, where appropriate.
    I have some questions relating to the fusion energy science 
portion of the budget.
    Dr. Krebs, how are you?
    Dr. Krebs. Fine, sir.

                                 fusion

    Mr. Frelinghuysen. The fusion sciences program has 
experienced, as you know, major budget reductions over the past 
two years, and, accordingly, developed a plan which you've 
referred to at some length in your formal remarks, a plan for 
restructuring the program goals. Can you briefly describe the 
progress of that restructuring, since you're dealing with--I 
think we've had over the last couple of years a 45-percent 
reduction?
    Dr. Krebs. Over the last few years. The intent of the plan 
is to revise the program from having technology goals in a 
determined timeframe to develop the underlying science for a 
fusion energy option. Within that, we are broadening our 
investigation of alternative concepts of magnetic fusion. An 
example of that in the 1998 budget is our intent to initiate 
the construction of the Spherical TORUS Experiment at 
Princeton.
    Another element of the revised structure is to make 
investments in fundamental plasma science, and in 1997 we will 
have a joint solicitation go out with the National Science 
Foundation to initiate those programs.
    Another example of focusing on the fundamental issues will 
be some increases, but small, in the theory program. With 
respect--it continues to be an element of the restructured 
program to participate in international collaborations, and as 
a consequence, we propose to meet our revised commitments to 
the ITER design activity in Fiscal Year 1998. We will also 
operate, as I spoke in answer to a question from Mr. Fazio, the 
tokamak facilities at General Atomics and at MIT, because they 
have become workhorse user facilities for the domestic program 
in the near-term. So it's some of the activities that we've 
been carrying out.
    Mr. Frelinghuysen. Of course this is my view, but I think 
it's the view of many people: the Princeton plasma physics lab 
is the premiere center. Coming from New Jersey, you'd better 
believe I not only believe it, but I like to let others know 
that. It's the only single-purpose laboratory in the field 
funded by the Department.
    As you're aware in the Fiscal Year 1998 budget, the lab 
will have to lay off about 200 of its current 500 employees. I 
was just wondering if you could discuss briefly what plans you 
have for maintaining the lab so that the fusion program there 
continues to be a real focus of work and benefit to the Nation.
    Dr. Krebs. Well, there's no question that I believe one of 
the comments and elements of advice that we've gotten from the 
various committees and subcommittees that have been developing 
our view of the future of the fusion program is the importance 
of the Princeton laboratory, both from a human and a physical 
infrastructure perspective. The investment in the Spherical 
TORUS Experiment is a crucial one, and its development as a 
user facility for other users around the country is a crucial 
one for maintaining the capability at Princeton, as well as 
some of the efforts and investments we expect to make in other 
small-scale facilities and their theory capability. This is 
very much something that is on the mind of all of us at all 
levels in the program and in the community, which is 
maintaining capability and participation and contribution from 
Princeton to our program.
    Mr. Frelinghuysen. Well, I feel very strongly about the 
whole notion----
    Dr. Krebs. Right.
    Mr. Frelinghuysen [continuing]. Of our maintaining a very 
high domestic operation, and I certainly salute the efforts at 
MIT, out in California and other places, where we have our 
participants and brain power.
    Dr. Krebs. Okay, let me make one more comment just for 
information here or completeness. One of the things we are 
doing with Princeton--with the people at Princeton--is weare 
trying to have them participate more as users at the other facilities. 
So we are supporting them to participate at other facilities more 
strongly than they have in the past.

                                  nstx

    Mr. Frelinghuysen. This is the Appropriations Committee. So 
let me ask you some questions relative to your budget request 
for Fiscal Year 1998. You're requesting $11.3 million for the 
National Spherical TORUS Experiment?
    Dr. Krebs. In 1998.
    Mr. Frelinghuysen. In 1998?
    Dr. Krebs. Yes.
    Mr. Frelinghuysen. What's the total cost?
    Dr. Krebs. I believe the total cost, as represented in the 
budget request, was $18.5 million. We have indicated in 
discussions with staff that that is under review, and the 
review committee met a few weeks ago, and we have transmitted 
in answer to questions that the revised total estimated cost 
for the Spherical TORUS Experiment is $21.1 million. That's the 
total estimated cost.
    Mr. Frelinghuysen. Do you anticipate the price of the 
experiment to increase if other elements are added, as moving 
the neutral beam from the existing Tokamak?
    Dr. Krebs. We are--any facility that one commits to may 
subsequently be upgraded. Any of those upgrades come, of 
course, at a price. I think that at this time what we are 
expecting to do is to--this issue of putting some of the TFTR 
neutron beams on the NSTX has arisen in recent discussions. We 
will review that. I don't expect to see a change in the request 
for the NSTX in this budget cycle. We need to review that and 
consider it within the 1999 budget; it could be considered--you 
know, any kind of upgrades associated with neutron beams might 
be proposed as a separate project.
    Mr. Frelinghuysen. You'll keep us posted on that?
    Dr. Krebs. You bet.

                                  iter

    Mr. Frelinghuysen. Relative to ITER, do the recently-
reported results of scientists studying the predicted turbulent 
losses of energy from ITER, the ITER design, mean that there 
are some problems or flaws in that work?
    Dr. Krebs. We don't think so. Let me tell you how we are 
proposing to review the ITER design. We've asked our Fusion 
Energy Science Advisory Committee to review the report. There 
are, I believe, some 11 subcommittees that are reviewing 
different pieces of that report. The gentlemen, the two 
scientists, who have developed the theory, which is quite a 
significant scientific advance, although it's not perfect, both 
of these gentlemen are on the review teams. They are an 
integral part of the U.S. fusion community, and we believe that 
we'll have the opportunity within this review process and 
others to determine whether or not their theory is a better 
predictor of ITER performance than others. Because right now 
the community, in grappling with the scientific debate, has 
basically determined that they'd rather depend right now on 
other theories for predicting ITER performance.
    Mr. Frelinghuysen. Fiscal Year 1998 is the final year of 
funding under the Engineering Design Activities Agreement for 
ITER.
    Dr. Krebs. Yes.
    Mr. Frelinghuysen. What happens if the ITER project is not 
ready to proceed? Will the overall fusion budget be adjusted 
accordingly or is the Department planning on keeping a $225 
million budget for the next five years?
    Dr. Krebs. We are currently in discussions with our 
partners in the ITER agreement. There are indications that some 
of our partners may come forward with proposed sites. There are 
also indications that there may be an interim period before we 
proceed to full construction, but that even within that interim 
period, we are talking about opportunities for R&D that would 
be associated with ITER. There is strong indication that we 
wish--that the U.S. participate in that kind of an 
international activity. Of course, if over the coming year 
things change dramatically in terms of ITER's prospects, then 
we would have to reconsider what the structure of our program 
would be and what the investment level would be. I don't think 
I can give you any--I don't think there's a bottom line that I 
can give you at this particular point in time.
    Mr. Frelinghuysen. I want to just get your reaction to the 
funding for fusion. I get on the committee; I find a couple of 
years ago each and every year people are attacking fusion for, 
let's say, some say, a lack of productivity, and I find myself, 
obviously, throwing myself into the breach because I'm excited 
by the notion of fusion. I'm excited by the men and women I 
meet who spend their lives working in this regard. Have we 
reached a point where we are doing some damage? And you need to 
be forthright here. Are we at the bare minimum now?
    Dr. Krebs. I believe so. Let me tell you, you know yourself 
from just dealing with the consequences at the Princeton 
laboratory the kind of loss, particularly human loss, in 
capability that has occurred at that institution. I do believe 
that the request that we've asked for in 1998 is a barebones 
request for maintaining the capability if we wish to take 
seriously the kind of contribution that fusion power might make 
to this country and the world in probably the middle or 
sometime later in the next century.
    I certainly believe that fusion power provides an option 
for an energy source that I am not ready yet to say to this 
committee, or anyone else, that we should give up. We have 
developed a human and physical capability in this country to 
pursue the underlying science. I believe that the $225 million 
investment represents a level below which we're going to--we 
simply should not go, that we'll lose--you know, that we'll 
simply have to reinvent much of what has been done in these 
last 25 years if we go very much below what we've got here.
    Mr. Frelinghuysen. I think there's been a substantial 
investment. I think some good science has been produced, and I 
worry, too, that there has been already a loss of 
institutional----
    Dr. Krebs. Yes, already.
    Mr. Frelinghuysen [continuing]. Memory. I continue to be 
excited about this part of your budget, and more excited when I 
see some of the competition that other Members of Congress 
advocate on behalf of it. Let me say, though, the ranking 
member is not here, but I appreciate the life line that the 
ranking member has thrown me on occasion relative to fusion, 
because I do think it has real potential and we need to talk 
about it a lot; we need to explain it a lot, and we need to get 
out in the field to advocate for it.
    But I thank you for your work, and I do have some 
additional questions at some point in time I'd like to ask and 
put into the record.
    Mr. McDade [presiding]. Without objection, so ordered.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. McDade. The gentleman from Arizona.
    Mr. Pastor. Thank you, Mr. Chairman.

                                 quarks

    First, let me apologize to the committee and the members of 
the panel. I was a little bit late because I was involved in 
another hearing. Sorry I didn't catch your testimony, but I've 
had an opportunity to go through it and read some of your 
comments.
    One of the areas that I think government has a role is 
involving itself and promoting basic research. I was on the 
committee, the subcommittee, when we did the supercollider and 
then we also shut it down. But, like my colleague Mr. Dickey, 
my neighbor on occasion asks me, ``What happened to the Quark; 
have we found it or are we still looking for it, and if we 
have, who's found it, and are we taking advantage of finding 
it?'' [Laughter.]
    Dr. Krebs. Yes, sir, we've found it. The Fermi National 
Accelerator Laboratory outside of Chicago announced the 
discovery of the Quark in 1995, and we have been continuing to 
try to pin down more precisely the mass of the Quark. And, 
basically, the Fermilab is the only place of sufficient energy 
that can really explore the property--actually produce Quarks. 
Part of what we want to do, of course, in the High-Energy 
Physics program is to begin our participation in an 
international collaboration to build a facility now in 
Switzerland, the Large Hadron Collider, which will be of 
sufficient energy to allow us to both explore further the 
properties of the Top Quark--it's actually the Top Quark, one 
of six that was just discovered--and we believe that our 
request, our proposal to contribute $450 million for this 
collaboration over 10 years is a good deal in the framework of 
what is a $6 billion facility.

                           science leadership

    Mr. Pastor. I guess the underlying issue with me in asking 
the question about the Quark was more to the attitude I think 
that we're seeing become more pervasive in Congress, and that 
is our unwillingness to support basic research and not commit 
more monies in that effort. When we saw the supercollider go 
down, obviously, then in Switzerland there was an interest, and 
something similar or better will be built there, and then we 
have to become part of a team. Rather than leading, we may be 
following.
    But what other areas of research are we now falling behind 
or not getting involved in that? In the long run, we may be at 
the short end of the stick, rather than being at the front end 
of the parade, as we were several years back.
    Dr. Krebs. Well, one of the elements that we are proposing 
to sustain in the 1998 budget is in the area of neutron 
science. The Department of Energy has had--Neutrons are a tool 
for understanding what the structure of materials are. By 
understanding that structure, we may learn better how to 
fabricate them and to process them. We may learn more about 
biological structures, biological materials. The Department of 
Energy basically was where neutron-scattering started. We won a 
Nobel Prize in 1994 for the discovery and development of 
neutron-scattering. For the last 20 years, we have been behind 
the Europeans in the capability and quality of our neutron 
sources. We are proposing to continue and to accelerate the 
design and R&D associated with a 1-megawatt source. That would 
put us way out at the frontier of this kind of science. If we 
don't bite the bullet and move forward with that, then we will 
stay behind, and in areas that are crucially important to 
energy applications, but also generally economic areas where 
industry is interested.
    Mr. Pastor. When my colleague, Congressman Edwards, talked 
about--is there a book that shows or gives us the missions? I 
think that one of the basic missions that you probably don't 
promote enough to the public is the basic research that we need 
to do in nuclear physics and nuclear chemistry and those areas, 
because we still need to continue our efforts in basic research 
or else we will fall behind and find ourselves, again, lacking 
the knowledge and information, and having to worry about other 
countries allowing us to participate in particular projects. 
And I think that was the point I wanted to make, and I'm glad 
to find out there were six Quarks rather than the one we were 
looking for.
    The other issue is, I saw where we're asking for additional 
money for solar research, but it's equivalent to what we did in 
1995. That's disappointing because I know that that is a 
renewable source, that we have invested some time and money 
into it, and I know that the technology has gone a long way in 
converting energy to power. If you look back at the 
photovoltaic cell 10 years ago and what's available today, 
you'll see a marked difference, and we are going to get to the 
point where more and more it will be affordable, not only in 
Arizona, but in Arkansas, as we continue to devote resources to 
its development. But I think that if we don't continue the 
effort, we're going to find ourselves again losing our edge to 
other countries who have seen the advantage of this renewable 
source and are investing a lot more money than we are as a 
country.
    Would you like to expound on that, Mrs. Ervin, on solar 
energy and where we're at and what our competition is, and what 
they're doing to overcome our lead, if we still have the lead?
    Ms. Ervin. Congressman, I wholeheartedly agree with what 
you've just said. In fact, the very questions that you raised 
about basic research apply to this area of research as well.
    We're talking about underinvesting in energy research 
altogether. This is what the prestigious Yergin Committee said 
last year; this is what the President's Advisory Committee on 
Science and Technology has said. We are underinvesting in these 
technologies that play a pivotal role not only in our economy, 
but in environmental quality. Very few people realize that the 
production and use of energy causes more environmental damage--
that air emissions and other kinds of damages--than any other 
economic activity. So the investments that we make in these 
technologies have a tangible, monetary, palpable effect on the 
health of individuals and the health of our economies.
    In the case of solar energy, it was one of many that took a 
very deep cut in Fiscal Year 1996. As you may recall, there 
were proposals to actually eliminate a number of these 
programs. We maintained the loss at about a 30 percent 
reduction, but we have been striving to recover them ever 
since. The 1998 budget request, then, is about comparable, 
then, to what we had in 1995. I think that is also a barebones 
budget to protect this technology that is important not only 
for providing energy, but, as some have described it, this is a 
transforming technology that is critically important to a 
number of industries, including telecommunications. It is not 
only the electricity that is important in transmission lines, 
but in the watch and in the telecommunications, in computers. 
So this is a vitally important industry that has major 
underpinnings to many otherindustries in this country.
    Mr. Pastor. Is Japan becoming a competitor here? And how 
much money are they investing in the whole solar energy 
technology?
    Ms. Ervin. Yes. We spoke earlier about the very aggressive 
investment that the Japanese, in particular, are making, about 
$100 million overall compared to the U.S. investment proposed 
in this budget of $77 million. Their research budget per se is 
about equivalent to ours for that size of nation, and then 
their deployment efforts are about $120 million. The German 
budget is also larger than ours. The Swiss are also putting a 
lot of money into photovoltaics, and I heard just the other day 
that the Labor Government in Britain is interested in matching 
what the Japanese are doing in photovoltaics. This is a very 
bullish, aggressive market that we're seeing emerge here, and 
our companies deserve a good piece of the action.
    Mr. Pastor. My last question, Mr. Chairman, deals with 
hydrogen and the work we may be doing with using hydrogen as an 
energy source. I know that what little I've read about the 
water bond and generating power from the breakage of that--
whereabouts are we, and is it something that you're going to 
continue to invest money in?
    Ms. Ervin. Oh, absolutely. Our hydrogen budget is at about 
$15 million in the 1998 budget, and this is a very high 
priority for us because it also has such a great potential to 
transform energy as we know it. This is your ultimate zero-
emissions energy source, and it has wide applications not only 
in the transportation sector, but in buildings.
    Many of you may have heard about Chrysler's announcement 
about a week ago. It had a lot of press about their development 
of the proton-exchange membrane fuel cell that is currently 
used in gasoline, the current gasoline infrastructure. They're 
planning to build a car that will use this PEM fuel cell. 
Actually, that particular technology was developed by the 
Department of Energy with Arthur D. Little, and the other car 
companies are using various other forms of fuel cells as well. 
Hydrogen will be a transforming technology, and we strongly 
support that.
    Now I have a very strong expert in hydrogen with me, Joe 
Romm. Would you like to add anything to this or supply it for 
the record?
    Mr. Romm. Yes, why don't we?
    Mr. Pastor. As he comes up with his water bottle. 
[Laughter.]
    Mr. Romm. Yes.
    Mr. Pastor. If you could submit it for the record, I would 
appreciate it.
    Ms. Ervin. Okay.
    [The information follows:]

              Hydrogen Research and Technology--Production

    The production of hydrogen from renewable energy sources 
continues as an active area of research, although no clear cost 
competitive process has yet emerged. The Department supports 
longer-term research in photoelectrochemistry and photobiology 
where solar energy is used to directly split water. We also 
have active collaborations between the University of Hawaii, 
University of Miami, Oak Ridge National Laboratory and National 
Renewable Energy Laboratory to develop the materials, processes 
and equipment for direct conversion of solar energy to split 
water into oxygen and hydrogen. During the past year, we had a 
significant accomplishment in our Photoelectrochemistry project 
at the University of Hawaii. The researchers demonstrated over 
2000 hours of operation with a triple junction Solarex 
semiconductor coated with catalysts developed at the university 
to split water into oxygen and hydrogen with an overall 
efficiency of 7.8 percent. This project is one example of the 
collaborative efforts conducted within the Department. The 
Department's Office of Energy Research funded basic work to 
develop the protective coatings used to prevent corrosion of 
the materials, and the photovoltaic programs supported the 
development of the triple junction Solarex cell, while the 
hydrogen program has been supporting the efforts to apply these 
technologies to produce hydrogen. We hope to test a process 
development unit within two years which will provide data to 
validate the production cost of hydrogen.
    Our photobiology efforts are also providing significant 
results. In February of this year, a collaborative project was 
initiated between the University of Florence, University of 
Hawaii, and the Department to build a state-of-the-art 100 
square meter bioreactor for the production of hydrogen using 
the blue green algae Spirulina. This bioreactor will 
demonstrate a two-step process to produce hydrogen from water 
and will lead to a process development unit to produce hydrogen 
from water at a cost of $8-9 per million BTUs by the year 2002.

    Mr. Pastor. I thank the panel, and I thank you, Mr. 
Chairman, for allowing me to make the questions.
    Mr. McDade. The Chair recognizes the gentleman from 
Mississippi.
    Mr. Parker. I thank the chairman. I appreciate your 
forbearance. I've been in budget meetings this morning. While I 
was gone, I missed your interaction with Congressman Jay Dickey 
when he was asking you about what type of programs that you do 
for the poor. I think you said some very nice things about 
weatherization and you thought it was a very good program.
    Is there any waste in your budget at all?
    Ms. Ervin. Any waste?
    Mr. Parker. Yes.
    Ms. Ervin. There are always targets of opportunity to find 
more efficient ways of doing things, no doubt about it, but I 
would say overall that we have a well-designed budget and we 
practice a lot of discipline in designing our programs.
    We also have taken some aggressive efforts to reduce the 
overhead and administrative costs associated with our budget. 
In fact, by the year 2000, we will have reduced our 
administrative costs by 50 percent.
    Mr. Parker. Why, if you like weatherization so much, did 
you, in the Interior bill last year, did the Department of 
Energy oppose my amendment which would have increased it and 
taken a little bit of money, very little, away from some of the 
corporate, what I consider, a lot of it, corporate welfare? Why 
did you oppose that, when I consider it to be basically the 
only thing you did that actually touches the public from the 
standpoint of an actual onsite taxpayer--it's really the only 
service that you provide where people actually receive 
something for it in their home?
    Ms. Ervin. Well, first of all----
    Mr. Parker. Why did you oppose it?
    Ms. Ervin. I would strongly take exception to the assertion 
that this is the only technology that touches the lives of 
Americans. I can point to--and, in fact, we took a very 
vigorous look at this just last year with the General 
Accounting Office--I can point to five technologies that were 
developed in the building sector alone, let alone industry and 
transportation, that have saved American consumers $27 billion 
in the last 15 years. And if you look at the overall amount 
that we've invested in our efficiency programs, it's been $7 
billion since 1970. That's not a bad return on the investment, 
and that touches real lives.
    We believe strongly in the low-income weatherization 
program. We were very disappointed to see that the President's 
budget for low-income weatherization was cut 50 percent in 
1996. Since then, we have been striving to restore the funding 
for that program. The 602(b)s in the Interior Subcommittee have 
been very, very low. They have not accommodated our increases, 
even though the President's budget, as submitted to those 
committees, would have covered the increases requested. So we--
--
    Mr. Parker. But that's because--you know, the 602(b) is the 
total number. It's because of the priorities that you placed in 
the committee. See, I'm not real good when it comes to 
discussing physics. You know, I'm not quite up to par on a lot 
of that. I'm real good on addition and subtraction. So that's 
what I want to talk about, and I will tell you, Ms. Ervin, I'm 
going to talk about addition and subtraction to you and to 
anybody else who comes before this committee and any other 
committee I sit on that wants to talk about numbers. And I have 
some problems. I've just got some basic questions, and I've got 
five or six hours of questions, and I'm going to try to 
condense them down, because I'm going to ask these questions 
over and over again in different ways until I finally kind of 
get to the bottom of some of the problems I think we have.
    Do you do your own budget in the Department of Energy?
    Ms. Ervin. What do you mean: do I do my own budget?
    Mr. Parker. Does the Department of Energy do it in-house, 
do the budget in-house?
    Ms. Ervin. We prepare our budget in-house.
    Mr. Parker. You do not contract anything out?
    Ms. Ervin. We have some contractual services. I don't know 
if we do for our budget per se. I don't think so, but I'd be 
happy to look into that and provide that for the record.
    [The information follows:]

              DOE Use of Contractors To Prepare the Budget

    The Office of Energy Efficiency and Renewable Energy (EERE) 
does not use contractors in the formulation and development of 
its narrative justification. However, EERE does employ the use 
of contractor administrative assistance in such aspects as 
inputting revised text from the various EERE programs. In 
addition, contractors assist EERE in editing the narrative 
justification to ensure that the content and style of each 
programs narrative is consistent. Finally, once EERE's 
management decides on the final presentation of the budget, 
EERE uses contractor technical expertise to produce graphs, 
tables, charts, and time-line data.

    Mr. Parker. Would it surprise you that you do?
    Ms. Ervin. We do use support service contracts for any 
number of activities, as do other Federal agencies. No, it 
wouldn't necessarily surprise me. We generally use support 
service contractors when there's a good reason for doing so--if 
it saves time or if it saves money.
    Mr. Parker. How do you, when you look at these grants and 
things that you do out there--and you've got them divided over 
the spectrum, different industries--now I'm going to tell you 
my personal view because I'm cynical, and I can't help it. But 
I've got this idea that I think the way that sometimes 
bureaucrats--and this is not a personal thing; I mean, I think 
this is a bureaucratic thing--what they do is that they fund 
these things in so many different places, try to get into as 
many congressional districts as possible, so that they can get 
as much support as possible, and I'm cynical that way, okay, 
but I'll tell you it happens. You know, it's kind of like the 
ditch out in Texas. I mean, we built a little of that ditch 
every place just to get more people involved. I mean, that's 
just me.
    Explain to me how this thing works as far as--let's say you 
take a company out there and they make, like General Motors, 
and I think it made like $6.8 billion in profits last year, 
which was a pretty good year, you know. We had a contract with 
them for $85 million. How does that work? How do you go through 
that process a little bit?
    Ms. Ervin. Let me preface this by saying----
    Mr. Parker. And let me--I want you to add one other thing 
in this whole debate.
    Ms. Ervin. Okay.
    Mr. Parker. Because we have all these laboratories all over 
this country, and they always say that we're not funding them 
well and we're not doing what we should be doing, from the 
standpoint of giving them what they think they should have, but 
then we kind of bypass them, I think, a lot of times. I'm 
trying to see exactly how that works.
    Ms. Ervin. My colleague, Martha Krebs, may want to join on 
this after I make a couple of comments. Just a short preface, 
you and I may have something in common, and that is we are both 
cynics. I used to head up the budget process in the State of 
Missouri for a number of years, and you do get accustomed to 
everyone having a good rationale and justification for their 
own particular program. So I'm a long-time budget cynic, and 
I've applied that to these programs as well. We may want to 
discuss that further at some point.
    In terms of the distribution of the funds across the 
country and in as many other districts as possible, let me tell 
you that for the efficiency renewable energy programs these are 
inherently--inherently--going to touch many, many different 
parts of the country because we're talking about end-use 
technologies in all of our industrial and manufacturing 
facilities, in all of our homes, commercial office spaces, 
hospitals, schools, transportation, cars, and trucks. Because 
of the very nature of the work that we do, then, we are going 
to have broad distribution, if we're going to be doing our job 
responsibly.
    Let me get to your question about how we make a decision in 
doing business with GM, and I assume that you're referring to 
the administration's work on the Partnership for New Generation 
Vehicles. That is the goal to triple the fuel economy of the 
average automobile by the year 2004, or to develop a prototype 
to do that, with no sacrifice in affordability or comfort and 
safety, and so forth. It turns out that the Department of 
Energy, and, in particular, my office, has the lead technology 
role in that partnership.
    Two points: first of all, that partnership is not just with 
GM or the Big Three per se. It's with the whole supplier chain. 
It's with the automobile industry that, broadly defined, 
employs one out of seven Americans in this country.
    Mr. Parker. But why do you go to GM and say, ``I want to 
cut this deal with you guys?''
    Ms. Ervin. Well, as part of the partnership, then, what we 
have done is to say--and this gets to some of the arguments we 
hear about the program in general--will the private sector have 
a private economic incentive to develop this radically more 
fuel-efficient car on their own. No, they won't. The price of 
gasoline in this country is relatively cheap.
    Mr. Parker. Well, why couldn't you go to a laboratory, and 
if they need to bring in an expert, you contact them and bring 
the expert in?
    Ms. Ervin. One of the great attributes of the Partnership 
for a New Generation Vehicle is that we exploit the resources 
of all of our laboratories and bring that talent and expertise 
to bear on this effort. So, as Martha can perhaps describe, we 
not only use all of our laboratories----
    Mr. Parker. So we're doing this for the benefit of GM?
    Ms. Ervin [continuing]. We use universities and small 
entrepreneurs in partnership with the automobile industry.
    Mr. Parker. We're doing this for the benefit of GM, for the 
automobile industry, right, in the long-term?
    Ms. Ervin. We are doing this for the benefit of Americans.
    Mr. Parker. Okay, but, I mean, if it's for the benefit of--
if it's good for people, it's good for business; you know, it's 
good for GM.
    Ms. Ervin. We are importing record levels of oil in 
thiscountry today, and when we do that, we're exporting about $60 
billion out of the country to pay for foreign oil.
    Mr. Parker. See, I'm trying to figure out why we work it so 
we give $85 million to a company that makes $6.8 billion in 
profits. I'm trying to figure that out. And that is not the 
only example. I can show you on the Fortune 500 where you've 
got $1,383,000,000 going to these different companies that are 
sizeable companies. They make a lot of money. I'm trying to 
figure out how all of this works together.
    Ms. Ervin. Let me ask, if this is permissible, Joe Romm, my 
principal deputy, to add a few comments. I will say, before he 
says that, I'm not--the whole Partnership for a New Generation 
Vehicle budget in my program, total, is perhaps about $100 
million. So $85 million for one company is simply out of the 
question.
    Joe, would you like to add a few comments?
    Mr. Parker. Well, now, you know, you mentioned that that 
was part of it. They get a total of $85.2 million, General 
Motors. That's what they get in their total grants and 
contracts with you. Ford Motor Company gets $23.5 million, 
which I guess GM is doing better than Ford. Well, you know, 
it's interesting, but a company like Westinghouse got $502.9 
million.
    But, anyway, there's some basic questions that I have on 
how all of this fits together, because it's hard for me to 
believe that somewhere along the way, with all of these 
millions and millions--billions--of dollars, that there's not 
something that we could change.
    I've got one--and you're going to have to come back with 
this answer----
    Ms. Ervin. Okay.
    Mr. Parker [continuing]. But I've got one question. Is it 
easier, if you are an 8(a) company, an 8(a) firm, a minority 
business or small business, is it easier to get a contract with 
you all than it is if you're a big company? Do you have that--
do you know that off the top of your head? Is the process 
shorter in order to be approved on it?
    Dr. Krebs. It can be.
    Mr. Parker. It can be? I think it can be, too.
    Now my question is, Do you know how many--now it's our 
understanding that if you're an 8(a) company, you can turn 
around and you can subcontract to a big company, or whatever, 
up to 49 percent of the value of the grant; is that right? I 
think it's right, but maybe you want to get back; I keep seeing 
nodding behind you that I'm correct. So maybe you need to be 
looking the other way. [Laughter.]
    Ms. Ervin. It appears that we do, but we'll provide that 
for the record.
    [The information follows:]
              Authority for ``8a'' Firms for DOE Contracts
    Authority for contracts for small businesses (8a firms) working 
with the Department of Energy is provided for within section 3021, 
Disadvantaged Businesses Enterprises, under the Energy Policy Act of 
1992. As stated in the law, to the extent practicable, the head of each 
agency shall provide that the obligation of not less than 10 percent of 
the total combined amounts obligated for contracts and subcontracts by 
each agency under this Act and amendments made by this Act pursuant to 
competitive procedures within the meaning of either the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 251 et 
seq.), or chapter 137 of title 10, United States Code, shall be 
expended either with (1) small business concerns controlled by socially 
economically disadvantaged individuals or women; (2) historically black 
colleges and universities; or (3) colleges and universities having a 
student body in which 20 percent of the students are Hispanic Americans 
or Native Americans.
    An 8(a) small business can subcontract up to 49 percent of the 
value of the contract to a large business or other non-8(a) firm.

    Mr. Parker. I'm interested in how that whole process works. 
There's several reasons why I'm interested in it, because I 
think a lot of games can be played in this whole--it's nothing 
personal. I don't want anybody to feel that I'm getting 
personal at all, but I think in a bureaucracy it just happens 
that way. I think in a bureaucracy it just gets--it takes a--a 
bureaucracy is a self-perpetuating entity, and it takes a life 
of its own. Occasionally, it has to be brought down, but it 
will start back again. I mean, it's like a fungus; it just will 
grow. [Laughter.]
    I've got one question, and, I mean, this is not, you know--
I noticed, when I was reading through stuff, and it really--I 
thought it was an interesting thing, but I noticed that out in 
the West, out West, that the budget includes $2.6 million to 
study avian mortality over three years, and I guess this was 
done because you've got windmills, these wind things out West, 
and birds hit them and it kills them. Now I think it's--if a 
bird hits a big fan, it's going to kill him, you know, isn't 
it? [Laughter.]
    Now that's the conclusion I come down on this thing. Now 
what I find fascinating about it is this $2.6 million figure. 
But let's say that you've got a bunch of these birds and you 
need to look at it, you've got an organization called the 
American Wind Energy Association.
    Ms. Ervin. Right.
    Mr. Parker. Are you familiar with that?
    Ms. Ervin. Yes.
    Mr. Parker. All right. Now is it logical that you would 
take a group that lobbies to have these fans out there 
performing a study to see how much damage their fans do to 
birds? I mean, is that logical?
    Ms. Ervin. It's absolutely logical. There are two reasons 
for doing it. One is that if there's a perception that wind 
machines do damage to raptors, we want to know if that's true 
or not. Second of all----
    Mr. Parker. Well, I've got an answer. I can answer part of 
it, and it's not going to cost you anything. It does.
    Ms. Ervin. Second of all--okay--
    Mr. Parker. If a bird flies into it, it's going to kill it. 
[Laughter.]
    Ms. Ervin. Second of all, if there are damages to birds, 
then how do you redesign the wind turbine to avoid that? That's 
what the research is all about.
    Mr. Parker. You're telling me that we as a government are 
going to design the wind turbine to keep birds from going in it 
and being chewed up?
    Ms. Ervin. There are actually a number of very practical 
findings that we have found as a result of this research that 
will minimize any bird loss, and I'd like, if this is 
permissible, Allan Hoffman to make a few comments in that 
regard.
    Mr. Parker. I want to hear it. He's the bird man. 
[Laughter.]
    Mr. Hoffman. The fact of the matter is that birds get 
killed when they roost on the towers that support the wind 
machines, and their vision is so acute that they see their prey 
and don't see the rotating blades which are moving very fast, 
and so they take off after prey and fly through the blades 
without even realizing the blades are there. So the real 
problem is, how do you keep the birds from roosting on that 
wind support structure before they ever go off after their 
prey? And we're learning that there are certain sounds, there 
are certain colors, and there are certain kinds of support 
structures that don't allow birds to roost.
    For example, if you look at some of the older wind 
machines, they're on flat structures. The birds like to roost 
on those horizontal struts. If you put in a cylindrical support 
tower, they don't do it, and you can really reduce the number 
of birds that are killed.
    Part of the problem also is the kind of birds you're 
killing in California are golden eagles, and if you kill one 
eagle in this country, it's a serious problem. We're trying to 
reduce that mortality rate, so there won't be an environmental 
or any other opposition to wind, which is a very important 
energy resource for this country. We can open up the wind 
resource in this country with the advanced wind turbines we're 
developing and basically supply all the electricity in the 
United States, if you tapped all the potential that was there.
    Mr. Parker. But you're telling me it's going to cost you 
$2.6 million to study----
    Mr. Hoffman. We have a whole series of groups that are 
involved in this study. We have put together a group involving 
all the various interests in the wind situation, not only the 
American Wind Energy Association--obviously, it represents the 
manufacturers, but environmental groups and other groups that 
have an interest in wind, to make sure that whatever results 
come out of the study will be credible to people all across the 
spectrum.
    Mr. Parker. Mr. Chairman, I could go a long time, but I'm 
going to close, and that's all I've got to say about birds 
right now. But I want to say just one thing: I think it would 
surprise this committee--and I'm sure it would surprise our 
panelists--to know that I know of a case a few years ago, and 
this was not an uncommon occurrence, where you would have a 
contracting group out there who would be contacted by the 
committee to submit the questions to beasked to the panel, and 
the same contracting committee would be submitting the questions that 
they created by the Department of Energy to respond to the questions 
that they originally wrote. Now I must tell you I think that type of 
thing is a little irresponsible. I think there are many programs--and I 
support research. One thing I would like for you to answer is, when you 
talk about research, I would like for you to submit to this committee 
what is the difference in money spent in Japan, in Germany, as far as 
we're concerned, of applied research versus basic research, because 
that tells the tale, I think, when you look at those numbers, but I'd 
like for you to supply those numbers to this committee.
    [The information follows:]

                Foreign Competition in Renewable Energy

    The Department of Energy does not have access to the 
breakdown of basic and applied research and development funding 
of Japan or Germany. This is generally proprietary information 
and has not been supplied to the Department.

    Mr. Parker. And I have a list of questions, but I think 
when I hear about members of both the Executive branch and the 
Legislative branch of our government stand up and talk about 
how we are reinventing government and we're downsizing--well, 
that's true to some degree, but it gives the wrong impression 
to the American people. The American people think we're doing 
much more than what we're actually doing. We're doing very, 
very little. And we're not doing anything with what's going to 
happen in the future because the resources are going to be less 
and less.
    So I'm interested in seeing the answers to these questions, 
and I'm interested also in pursuing some of these things from 
the corporate side because I'm not sure that we can't save that 
money because I think it's being spent unwisely.
    I appreciate your indulgence. Thank you, Mr. Chairman.
    Mr. McDade. We appreciate your questions, may I say to the 
gentleman from Mississippi.
    We are grateful for the appearance of the panel and for 
their responses. We, you will not be surprised to hear, have a 
host of other questions for you which we want you to answer in 
specificity and detail for the record. They will be submitted 
to you.
    And, with that, the committee stands adjourned until 
Wednesday next at 10:10 a.m.
    [The questions and answers prepared for the record follow:]

[Pages 675 - 1284--The official Committee record contains additional material here.]




                           W I T N E S S E S

                              ----------                              
                                                                   Page
Ervin, Christine.................................................   487
Ferrell, John....................................................   487
Grumbly, T.P.....................................................     1
Hoffman, Allan...................................................   487
Krebs, Dr. Martha................................................   487
Lash, Terry......................................................   487
Pena, Hon. Federico..............................................     1
Romm, Joseph.....................................................   487



                               I N D E X

                              ----------                              

                          Department of Energy

                                                                   Page
Accelerated Strategic Computing Initiative (ASCI)................   119
Advisory Committee List..........................................   240
Alaska Power Administration......................................    48
    Budget Request..............................................48, 432
    Expenditures.................................................   434
    Sale Completion..............................................   436
    Sale of,.....................................................49, 87
    Transition and Termination Costs.............................   433
Arthur D. Little Report..........................................   898
Authority for Contracts with 8(a) Firms..........................   671
Baseline Environmental Management Report (BEMR)..................    78
Basic Research Budget Request....................................    53
Biography--Christine Ervin.......................................   541
Biography--Martha Krebs..........................................   525
Biography--Secretary Federico Pena...............................    28
Biography--Terry Lash............................................   572
Biography--Thomas Grumbly........................................    30
Board of Contract Appeals--Why is it Needed?.....................   366
Board of Contract Appeals--Case Load Analysis....................   360
Bonneville Power Administration:
    Borrowing Authority..........................................   472
    Employment Attrition.........................................   478
    Employment...................................................   475
    Extending Borrowing Authority................................   473
    Fish Facilities..............................................   481
    Regional Review..............................................   484
    Revenue Financing............................................   474
    Severance Payments Costs...................................476, 477
    Treasury Payments............................................   479
    Brookhaven--Radiochemistry Laboratory........................   728
Brookhaven--Tritium Leak.........................................   389
Carryover Funds--Biological and Environmental Research Program...   104
Carryover Funds--Construction Program Accounts...................   107
Carryover Funds--Office of Civilian Radioactive Waste Management.   108
Certification Methods at EPA.....................................   129
Civil Service Retirement and Health Benefits.....................   395
Clean Up--Statutory Drivers......................................   123
Climate Challenge................................................   960
Climate Change Action Plan.......................................   899
Closure Funds....................................................    43
Commercial Reactor Safety Program................................   778
Committee on Renewable Energy Commerce and Trade (CORECT)........   949
Competition for Funding Between Clean Up and Research Programs...   130
Computational and Technology Research............................   736
Congressional Affairs--Distribution of FTEs by Mission Area......   348
Contract Competition.............................................    36
Contractor Employee Protection--Status of the Office of,.........   372
Contractor Employee Protection--Cases............................   371
Contractor Employees Detailed--in Washington, D.C................    69
Contractor Employment Table......................................   221
Corporate Information Program....................................   202
Corporation for Solar Technology and Renewable Resources Power 
  Sales..........................................................   901
Departmental Administration--Reallocation of Prior Year Balances.   138
Departmental Aviation--Aircraft Charter Costs....................   230
Departmental Aviation--Number of Planes Leased or Owned..........   226
Departmental Restructuring.......................................    65
Departmental Sponsored Conferences...............................   243
Economic Development.............................................   278
Electric and Magnetic Field (EMF)..............................926, 957
Electric Energy Systems and Storage..............................   924
Electric Utility Deregulation....................................   109
Electricity Restructuring........................................   112
Electrometallurgical Processing..................................   813
Electrometallurgical Processing--Alternatives....................   816
Electrometallurgical Processing of Spent Fuel....................   800
Employee Departures--By Category.................................   270
Employee Departures--Department wide.............................   269
Energy Development Programs Outside the United States............   346
Energy Education--Goals to Enhance the Role of Teaching..........   678
Energy Efficiency..............................................526, 615
Energy Efficiency--Use of Contractors to Prepare Budget..........   668
Energy Independence of the United States.........................    38
Energy Information Administration--Support for,..................   902
Energy Research................................................487, 617
    Proposal Management..........................................   686
    Publications.................................................   618
    Research for Industries......................................   677
    Research Related to Solar and Renewable Energy...............   698
    Taxes on Programs............................................   693
Energy Security for the United States............................    50
Environment, Safety and Health--Technical Support Role...........    85
Environmental Management--Mortgage Reduction.....................   127
Environmental Management--Staffing Level.........................    83
Epidemiologic Studies--Description of,...........................   375
Epidemiologic Studies--List of,..................................   377
Ethanol--Conversion of Municipal Solid Waster to,................   614
Ethanol--Gridley Rice Straw Project..............................   955
Experimental Program to Stimulate Competitive Research (EPSCoR)..   970
External Regulation..............................................   391
Fast Flux Test Facility..........................................   796
Field Management--FTEs and Funding Information...................   367
Flexible Workplace Proposal......................................   210
Foreign Travel Expenditure--Department wide......................   345
Formerly Utilized Sites Remedial Action Program (FUSRAP).........    40
Full Time Equivalent and Staffing Levels.........................   216
Functional Cost Pilot Program Data...............................   149
Fusion Energy..............................100, 115, 579, 729, 749, 772
    Advanced Test Reactor Fusion Irradiations....................   789
    Charge for Usage of Departmental Computer Resources..........   733
    Decision on Further Participation in ITER....................   734
    Funding by Institution.......................................   973
    Funding Comparison for ITER..................................   976
    ITER.......................................................113, 662
    National Spherical TORUS Experiment..........................   661
    Program Direction Funding....................................   732
    Restructuring of,............................................   660
Galvin Report..............................................32, 688, 774
GAO Report.......................................................    34
GAO Report on Fernald............................................    81
General Science and Research--Large Hadron Collider..............   739
General Science and Research--Relativistic Heavy Ion Collider....   743
General Science and Research--$15 Million Offset Explanation.....   746
Geothermal................................................915, 919, 921
Geothermal Heat Pumps..........................................917, 920
Geothermal Program--Lake County Geysers Project..................   921
Global Ecology Study.............................................    55
Government Performance and Results Act (GPRA)....................    71
High Energy Physics..............................................   776
High Flux Beam Reactor...........................................   675
High Flux Isotope Reactor........................................   134
Hispanic Serving Institutions--Funding.........................286, 288
Historically Black Colleges and Universities--Funding..........284, 288
Hydrogen Program...............................................914, 956
Hydrogen Research and Technology--Production.....................   667
Inspector General--Employees Located at Field Sites..............   370
Internal Reprogrammings and Use of Prior Use Deobligations.......   167
International Nuclear Safety..............................542, 797, 809
    Allocation of Funding to Development of Standards............   961
    Countries to Receive Funding.................................   802
    Cuban VVER-1000 Reactors.....................................   962
    Improving Safety of Soviet Designed Reactors.................   607
    Source of Funding for,.......................................   610
    Spent Fuel Reprocessing......................................   803
    Upgrades.....................................................   799
Isotope Program--Molybdenum-99...................................   817
Isotope Support..................................................   787
Isotopes--Usage in Medical Diagnosis.............................   573
Laboratory Employees Working in Washington, D.C..................   679
Laboratory Management............................................    33
Large Hadron Collider............................................   102
Legislation Required by Budget Request...........................   281
Litigation Costs--Anticipated....................................   282
Math and Science Education.......................................    53
Medical Isotopes.................................................   573
Multiprogram Energy Laboratories--Facilities Support.............   692
National Ignition Facility.......................................59, 61
National Renewable Energy Laboratory (NREL)......................   922
National Spallation Neutron Source...............................   131
Natural and Accelerated Bioremediation Research Program..........   690
New Reactor Designs..............................................   780
Next Generation Internet...................................41, 118, 747
Nonproliferation--Declassification Program.......................   128
Nonproliferation Efforts.........................................    51
Nonproliferation--Responsibility for Monitoring Soviet Nuclear 
  Grade Materials................................................   616
Nonproliferation--Russian Scientists.............................    51
Nuclear Energy.................................................542, 782
    Allocation of Prior Year Balances Reduction..................   786
    Full Time Equivalents........................................   821
    Program Direction..........................................577, 781
    Reduction in Administrative Positions........................   578
    Research Grants..............................................   965
Nuclear Energy Security Program......................543, 808, 819, 822
    Implications of Electricity Restructuring....................   806
    Justification................................................   777
    Necessity for,...............................................   804
    Proposal for Expert Panel....................................   779
    Total Costs..................................................   807
Nuclear Energy--Viability of Nuclear Power in the United States..   603
Nuclear Reactor--Annealing.......................................   576
Nuclear Reactor Program..........................................   574
Office of the Secretary--Staffing Level..........................   135
Oil Imports.....................................................50, 347
Oil Reserves.....................................................    50
Outyear Funding..................................................   169
Panel on Nuclear Research--Funding for,..........................   576
Partnership for a New Generation Vehicle.........................   669
Payments in Lieu of Taxes........................................   147
Photovoltaic Manufacturing Technology (PVMatT)...................   905
Photovoltaics...................................................52, 946
    Manufacturing in Russia......................................   833
    Plant in Russia..............................................   615
Policy Analysis and Systems Studies and Environmental Policy 
  Studies........................................................   295
Polling--Use of,.................................................   904
Power Marketing Administrations..................................57, 94
    Alternative Financing........................................   401
    Calibration of Meters........................................    95
    Composite Rates..............................................   408
    Construction Project Debt Repayment..........................   420
    Cost Recovery................................................    96
    Cumulative Investment........................................   411
    Customer Financing...........................................   430
    Debt to Treasury Repayment...................................   410
    Elimination of Subsidies.....................................    88
    Employment Levels............................................    58
    Federal and State Income Tax................................46, 427
    FERC Oversight..........................................47, 91, 428
    GAO Reviews..................................................   417
    Impacts of FERC Orders 888 and 889...........................   398
    Long Term Contracts...........................................58,89
    Net Generation...............................................   413
    Operating Facilities and Capacities..........................   412
    Renewable Energy Promotion...................................   423
    Revolving Funds..............................................   407
    Sale of,................................................46, 97, 426
    Staffing Levels..............................................   422
    State and Local Taxes........................................    90
    Streamlining of,.............................................   404
    Tariff Filing................................................   400
    Uncosted Balances............................................   414
Privatization....................................................    33
Privatization Team...............................................   294
Procurement Regulations--Competitive Procurements................    55
Procurement Regulations--Major Systems Acquisitions..............    54
Project Management...............................................    35
Public Affairs--Distribution of FTEs Within and Outside 
  Washington, DC.................................................   359
Public Affairs--Disbribution of FTEs Outside Washington, DC......   350
Quality Management--Cost of Office and Staffing Level............   213
Quality Management--Funding Support from other Program Offices...   215
Quality Management--Number of Detailed Employees.................   214
Quarks...........................................................   664
Radiation Effects Research Foundation (RERF).....................   374
Radioisotope Program--Cassini Mission............................   790
Radioisotope Program--List of Existing Responsibilities..........   791
Reactor Annealing................................................   963
Renewable Energy:
    Development of,..............................................   113
    Foreign Competition In,......................................   673
    Renewable Energy Production Incentive (REPI).................   906
    Renewable Energy Production Incentive (REPI).................   959
    Renewable Energy Technologies--Environmental Impacts.........   969
    Renewable Energy Technologies................................    69
    Renewable Technologies--Why Is the Government Involved?......   604
Resource Assessment..............................................   951
Resource Assessment Program......................................   897
Role of Plants Versus Laboratories...............................   133
Russian Scientists...............................................    51
Schedule ``C'' Employees.........................................   264
Science Research Leadership......................................   664
Small Business Innovative Research...............................   697
Solar and Renewable Energy:
    Administrative Costs.........................................   584
    Basic and Applied Research Funding...........................   966
    Budget Request...............................................   824
    Commercialization Versus Basic Research......................   581
    Congressional Authority for Various Programs.................   894
    Corporate Partners...........................................   934
    Dollars Managed Per Headquarters FTE.........................   827
    Electricity Restructuring....................................   830
    Funding for Administrative Activities........................   867
    Funding for Basic Research of,...............................   583
    Funding for Trade Associations...............................   871
    Funding/Cost Share/Production Information....................   881
    Grants.......................................................   933
    International Budget Request.................................   582
    Leadership in Field..........................................   825
    Market Deployment............................................   582
    OMB Funding Recommendations..................................   892
    Program Direction............................................   927
    Reorganization and Space Reallocation........................   838
    Royal Dutch Shell Oil Company Comments.......................   831
    SBIR and STTR Activities.....................................   842
    Support Service Contracts....................................   937
    Unobligated and Uncosted Balances............................   869
    Use of Prior Year Balances.................................828, 835
Solar International Program....................................912, 952
Solar Two........................................................   900
Solar Validation Programs........................................   948
Southeastern Power Administration:
    Cumberland System............................................   440
    Funding Repairs and Maintenance..............................   443
    Industrial Customers.........................................   442
    Major Litigation.............................................   445
    Reimbursement Authority......................................   439
    Russell Project..............................................   438
    Water Conditions.............................................   444
Southwestern Power Administration:
    Closure of Oklahoma Office...................................   447
    Major Litigation.............................................   451
    Purchase Power and Wheeling..................................   449
    Reimbursable Authority.......................................   448
    Truman Project...............................................   446
    Water Conditions.............................................   450
Statement-Oral--Christine Ervin..................................   526
Statement-Oral--Martha Krebs.....................................   487
Statement-Oral--Secretary Federico Pena..........................     1
Statement-Oral--Terry Lash.......................................   542
Statement-Written--Christine Ervin...............................   528
Statement-Written--Martha Krebs..................................   490
Statement-Written--Secretary Federico Pena.......................     6
Statement-Written--Terry Lash....................................   546
Stockpile Stewardship............................................    38
Strategic Alignment Initiative Savings...........................    56
Strategic Plan for the Restructured U.S. Fusion Energy Sciences 
  Program........................................................   754
Subsidies in Electric Utilities Green Pricing Programs...........   587
Subsidy for Energy Employees Transit (SEET) Program..............   209
Success Stories: The Energy Mission in the Marketplace...........   619
Superconducting Super Collider...................................   745
Support Service Contractors--Use by Office of Environmental 
  Safety and Health..............................................   388
Support Service Contracts........................................   273
Technical Assistance Program.....................................   393
Technology Development...........................................    67
Ten Year Plan................................................41, 66, 82
Termination Costs................................................   793
Training Activities--Department wide.............................   267
Transportation of Nuclear Waste..................................    45
Tritium Production...............................................    64
Uncosted Balances--Annual Report on,.............................   139
University and Science Education--Budget.........................   727
University Reactor and Support...................................   783
University Science and Reactor Support...........................   811
Uranium Enrichment Facilities....................................    77
Uranium Enrichment--Vulnerability Study..........................   387
Water Resources Development Act..................................    93
Weatherization Assistance Program................................   613
Western Area Power Administration:
    Alternative Financing........................................   468
    Boulder Canyon Project.......................................   466
    Colorado River Basins Power Marketing Fund...................   469
    Debt Repayment...............................................   458
    Deficit......................................................   457
    Falcon and Amistad Project...................................   459
    Helicopters..................................................   455
    Major Litigation.............................................   470
    Meter Calibration............................................   471
    Operation and Maintenance Program............................   467
    Performance Measures.........................................   465
    Purchase Power and Wheeling..................................   463
    Purchase Power Contracts.....................................   464
    Shasta Temperature Control Device............................   452
    Unobligated Balance..........................................   453
    Utah Account.................................................   461
    Water Supply Outlook.........................................   460
Wind Energy...............................................672, 908, 953
Wind Energy--Contribution to Total Installed Capacity in the 
  United States..................................................   606
Wind Energy--Energy Output Forecasts.............................   903
Wind Energy--International Sales.................................   605
Wind Energy--Kotzebue, Alaska Project............................   911
Workforce Restructuring..........................................   116
Working Capital Fund--Services Provided and Costs................   174
Working Capital Fund--Explanation of Business Lines..............   197
Yucca Mountain...................................................    44
Yucca Mouintain--Interim Storage.................................36, 99
Yucca Mountain--Site Suitability Decision........................    45

                     Nuclear Regulatory Commission

Budget Request...................................................  1028
Commission Restructuring.........................................  1017
Cuban Reactors...................................................  1011
Electricity Industry Restructuring...............................  1020
External Regulation..............................................  1016
Government Performance and Results Act...........................  1022
High Level Waste Repository......................................  1013
Molybdenum-99....................................................  1018
Office of Investigations.........................................  1010
Potassium Iodide.................................................  1012
Questions for the Record.........................................  1007
Reactor Research Program.........................................  1007
Regulatory Reforms...............................................  1019
Statement for the Record--Chairman Shirley Ann Jackson...........   977
Statement for the Record--Hubert T. Bell, Inspector General......  1001
Thermal Annealing................................................  1007
Uncosted and Unobligated Balances................................  1016
Watch List.......................................................  1015

                  Federal Energy Regulatory Commission

Budget for Renewable Resources...................................  1179
Budget Request...................................................  1187
Buyout Authority.................................................  1173
Carryover Balances...............................................  1183
Fee Structure....................................................  1179
Natural Gas Program Staffing.....................................  1172
Order Nos. 888 and 889...........................................  1174
Proprietary and Non-Proprietary Receipts.........................  1183
PURPA Reform.....................................................  1171
Questions for the Record.........................................  1171
Renewable Energy Sources.........................................  1178
Standard Cost Issues.............................................  1176
Statement for the Record--Elizabeth A. Moler, Chair..............  1163
Stranded Cost Estimates..........................................  1175