    [House Hearing, 106 Congress]
    [From the U.S. Government Publishing Office]

          DEPARTMENT OF ENERGY'S PROPOSED BUDGET FOR FISCAL YEAR 2000

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

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON ENERGY AND POWER

                                     of the

                             COMMITTEE ON COMMERCE
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED SIXTH CONGRESS

                                 FIRST SESSION

                                   __________

                               FEBRUARY 24, 1999

                                   __________

                               Serial No. 106-54

                                   __________

                Printed for the use of the Committee on Commerce

                          U.S. GOVERNMENT PRINTING OFFICE
    55-148 CC                     WASHINGTON : 1999

                             COMMITTEE ON COMMERCE

                         TOM BLILEY, Virginia, Chairman

    W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
    MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
    MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
    JOE BARTON, Texas                    RALPH M. HALL, Texas
    FRED UPTON, Michigan                 RICK BOUCHER, Virginia
    CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
    PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
      Vice Chairman                      SHERROD BROWN, Ohio
    JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
    CHRISTOPHER COX, California          PETER DEUTSCH, Florida
    NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
    STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
    RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
    BRIAN P. BILBRAY, California         BART STUPAK, Michigan
    ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
    GREG GANSKE, Iowa                    THOMAS C. SAWYER, Ohio
    CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
    TOM A. COBURN, Oklahoma              GENE GREEN, Texas
    RICK LAZIO, New York                 KAREN McCARTHY, Missouri
    BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
    JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
    JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
                                         BILL LUTHER, Minnesota
                                         LOIS CAPPS, California

                       James E. Derderian, Chief of Staff

                       James D. Barnette, General Counsel

          Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                     ______

                        Subcommittee on Energy and Power

                          JOE BARTON, Texas, Chairman

    MICHAEL BILIRAKIS, Florida           RALPH M. HALL, Texas
    CLIFF STEARNS, Florida               KAREN McCARTHY, Missouri
      Vice Chairman                      THOMAS C. SAWYER, Ohio
    STEVE LARGENT, Oklahoma              EDWARD J. MARKEY, Massachusetts
    RICHARD BURR, North Carolina         RICK BOUCHER, Virginia
    ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
    CHARLIE NORWOOD, Georgia             SHERROD BROWN, Ohio
    TOM A. COBURN, Oklahoma              BART GORDON, Tennessee
    JAMES E. ROGAN, California           BOBBY L. RUSH, Illinois
    JOHN SHIMKUS, Illinois               ALBERT R. WYNN, Maryland
    HEATHER WILSON, New Mexico           TED STRICKLAND, Ohio
    JOHN B. SHADEGG, Arizona             PETER DEUTSCH, Florida
    CHARLES W. ``CHIP'' PICKERING,       RON KLINK, Pennsylvania
    Mississippi                          JOHN D. DINGELL, Michigan,
    VITO FOSSELLA, New York                (Ex Officio)
    ED BRYANT, Tennessee
    ROBERT L. EHRLICH, Jr., Maryland
    TOM BLILEY, Virginia,
      (Ex Officio)

                                      (ii)

                                C O N T E N T S

                                   __________
                                                                       Page

    Testimony of:
        Moniz, Ernest, Under Secretary of Energy; accompanied by
          Michael Telson, Chief Financial Officer, Department of
          Energy.....................................................    11
    Material submitted for the record by:
        Department of Energy, responses for the record...............    57

                                     (iii)

          DEPARTMENT OF ENERGY'S PROPOSED BUDGET FOR FISCAL YEAR 2000

                                  ----------

                          WEDNESDAY, FEBRUARY 24, 1999

                      House of Representatives,
                                 Committee on Commerce,
                              Subcommittee on Energy and Power,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10 a.m., in
    room 2123, Rayburn House Office Building, Hon. Joe Barton
    (chairman) presiding.
        Members present: Representatives Barton, Stearns, Largent,
    Whitfield, Norwood, Rogan, Shimkus, Wilson, Pickering, Bryant,
    Ehrlich, Bliley (ex officio), Hall, McCarthy, Wynn, Strickland,
    and Klink.
        Staff present: Kevin Cook, science advisor; Donn Salvosa,
    legislative clerk; Sue Sheridan, minority counsel, and Rick
    Kessler, minority professional staff.
        Mr. Barton. The subcommittee will come to order.
        The Chair notes the presence of a quorum. We're going to go
    ahead and begin, and hopefully, we will have Mr. Hall or one of
    our minority members appear before our opening statements are
    concluded.
        Today's hearing is on the Department of Energy's proposed
    budget for fiscal year 2000. This morning, we're going to
    examine the Department of Energy's budget request. The
    Department of Energy has a wide-ranging set of missions, from
    cleaning-up contaminated sites here in the United States, to
    ensuring the reliability of our nuclear arsenal, to conducting
    the research and development to bring our energy systems into
    the 21st century.
        We have a number of energy issues that are important to the
    subcommittee. We need to see if the Department's proposed
    budget reflects the interests and priorities of the Congress
    and this particular subcommittee.
        It's probably too much to expect that we're on identical
    courses, but it's reasonable to expect that we're on parallel
    tracks moving in the same directions. If our paths diverge
    significantly based on this hearing, then we'll have to take
    the appropriate steps in conjunction with the Department.
        At the top of the subcommittee's priority list is nuclear
    waste. Spent fuel continues to accumulate at reactor sites
    around the country. Potential liability of the Federal
    Government continues to grow because of the Department's
    failure to take acceptance of that waste, and the Department
    still says that the earliest it can expect to open a permanent
    repository is the year 2010. That is simply unacceptable.
        Just 2 weeks ago, we held a hearing on H.R. 45, legislation
    that

    would accelerate acceptance of spent fuel by establishing an
    in-

    terim storage facility. H.R. 45 would protect consumers by
    halting

    the diversion of ratepayer fees into other Federal programs,
    and it

    would strengthen the permanent repository funding by ensuring a
    funding stream that matches project requirements.

        To this date, the Department does not support H.R. 45, and
    the President has indicated that he will veto this legislation.
    The administration apparently takes this position because it
    believes that an interim storage will somehow jeopardize the
    Department's efforts on a permanent repository.
        The Chair does not share the Clinton administration's view
    on that particular issue. I think it's time that we shed some
    light on the status of the permanent repository. Several of our
    witnesses 2 weeks ago expressed a lack of confidence whether
    the Department could really meet its promised 2010 date for
    opening the repository. It turns out that that lack of
    confidence appears to have been well placed.
        It is the Chair's understanding that the Department's basic
    repository program faces serious funding shortfalls. At
    historical funding levels, and with the existing caps in place
    on the fees collected from the ratepayers, the Department of
    Energy will not have sufficient funds to open the repository in
    the year 2010. Meeting the 2010 schedule will require some real
    budget sleight of hand and some very rosy assumptions regarding
    future appropriations.
        The DOE assumes that they will be able to tap into 100
    percent of the fees collected from the rate payers, when in
    recent years they have been to access only approximately 15
    percent of those fees. The Department also assumes a 150
    increase in Defense contribution to the repository. I think
    this last assumption is not well-founded.
        Based on the above information, it looks like the only
    thing that will be open in 2010 is, unfortunately, the wallet
    of the Federal taxpayer, since the Department will be paying
    out billions of dollars of damages since they haven't taken
    control of the repository.
        I intend to explore this problem in more detail in the
    question and answer period, but I am troubled to learn that the
    repository program does not rest on a firm financial
    foundation. I am hoping to hear from Secretary Richardson in
    the near future, both on the funding problem, and to learn
    whether he has a constructive alternative to offer in lieu of
    H.R. 45.
        I am also concerned about the approach to energy security,
    as reflected in the Department's budget request. In terms of
    real prices, oil is cheaper now than it was just before the oil
    crisis in the mid-1970's, and by some calculations, may be as
    cheap as the 1950's and early 1960's. The impact of these low
    prices may be of only academic interest to those here inside
    the Beltway; but to Mr. Hall and myself, who come from an oil-
    producing State, we know very well what impact these low prices
    have on the people in the oil-producing regions of the country.
        Our reliance on cheap imported oil continues to grow, and
    we run the risk of losing some of our essential domestic
    capability to locate and develop new oil and gas resources. I
    am pleased that we are no longer selling off oil from the
    strategic petroleum reserve, and will be interested in what
    other measures the Department is taking to improve our energy
    security. I note that our lead witness did bring a handout on
    that problem, and I'll certainly take a serious look at that
    booklet.
        The Department's budget request is in many ways a
    reflection of its ability to manage and oversee its programs.
    As Chairman of the Subcommittee on Oversight and Investigations
    in the last Congress, I reviewed several DOE programs in
    detail. I held hearings to review privatization contracting at
    Pit 9 and at Hanford. The delayed cleanup of spent nuclear fuel
    is stored dangerously close to the Columbia River at the
    Hannaford site. The Office of Environmental Management's
    failure to employ innovative environmental technologies which
    could have saved taxpayers $20 billion in clean-up costs.
        We also looked at problems with performance-based incentive
    contracting and the Department's questionable funding of molten
    metal technology.
        At each of these hearings, the subcommittee identified poor
    management by the Department that resulted in additional cost
    to the taxpayers. This year, as we review the DOE budget, we're
    going to be checking to see if the Department is making
    progress in those areas.
        The committee has a number of other interests, from climate
    change, to nuclear energy, to environmental cleanup, and I am
    sure that other members will go into those subjects in some
    detail as they question our witnesses. We are anxious to learn
    more about the Department's activities. We welcome Dr. Moniz,
    who has appeared before my Oversight and Investigation
    Subcommittee on numerous occasions, and look forward to your
    testimony.
        Not seeing Mr. Hall here yet, does Mr. Norwood request an
    opening statement? Okay. The Chair would recognize Mr. Norwood
    for a brief opening statement.
        Mr. Norwood. Thank you very much, Mr. Chairman, for holding
    this hearing on the Department of Energy's budget proposal for
    fiscal year 2000.
        As you know, Mr. Chairman, my district is contiguous to the
    Savannah River site, the most impressive field site in the DOE
    complex, and roughly 8,000 of my constituents currently work at
    that site, which has been a vital part of our community since
    World War II. I spent my first few years here in Congress
    fighting layoffs that were inevitable as the results of the end
    of the cold war; and now I want to make sure that the site is
    not only properly equipped to clean up after 40 years of
    defense buildup, but also is prepared for any new missions it
    may be qualified to handle.
        On that note, I commend DOE for its wise selection of SRS
    for the majority of the plutonium distribution mission that was
    recently awarded. While I am pleased to see that DOE's
    environmental management budget for fiscal year 2000 looks
    good, and that the site should not anticipate any major
    layoffs, I will have some questions for Dr. Moniz regarding the
    Department's recent selection of a commercial reactor at the
    Tennessee Valley Authority to meet our country's future tritium
    supply.
        My other concerns today, Mr. Chairman, will revolve around
    the ongoing saga of the Clinton administration's unwillingness
    to accept its responsibility to deal with our country's spent
    fuel problem, and a DOE budgetary proposal to eliminate funding
    for transmission and power purchases for the power-marketing
    administrations.
        As you may know, the Southeastern Power Administration is
    located in my district, and provides power to many of my
    constituents. Eliminating appropriations for transmission and
    power purchases will thoroughly disrupt the power supply for
    many non-profit electric distributors. As a matter of fact,
    does DOE realize that its budget proposal could disrupt the
    power supply of preference customers in Secretary Richardson's
    home State of New Mexico who are served by its P.M.A.? I hope
    he's not planning on running for Senate any time soon. But, I
    guess he could always run for Senator Moynihan's seat.
        I do appreciate you making the effort to be with us today,
    gentlemen, and I look forward to talking with you about these
    and many other issues.
        Thank you very much, Mr. Chairman.
        Mr. Barton. I thank the gentleman from Georgia. Does the
    gentlelady from New Mexico wish to make a brief opening
    statement? Does the gentleman from Kentucky wish to make a
    brief opening statement? And I missed the gentleman from
    Tennessee, but we'll let the gentleman from Kentucky go, and
    then we'll get back to Mr. Bryant.
        Mr. Whitfield. Thank you very much, Mr. Bryant. Mr.
    Chairman, I want to thank you for hosting our annual hearing on
    the fiscal year 2000 Department of Energy budget proposal. All
    of us look forward to hearing from Dr. Moniz about the
    Department's plans to help secure our Nation's energy future.
        I have the privilege of representing the workers at the
    Paducah Gaseous Diffusion Plant, 1 of only 2 uranium enrichment
    plants in the country. With the privatization of the U.S.
    Enrichment Corporation, the former government corporation which
    operated the Paducah and Portsmouth plants, the future of those
    workers is quite uncertain.
        The Ohio and Kentucky delegations have been meeting
    regularly with DOE staff to ensure full implementation of the
    provisions of Public Law 105-204, legislation I introduced with
    Senator McConnell, to ensure that all amounts accrued on USEC's
    books for the disposition of depleted uranium hexafluoride,
    will be used to treat and recycle that by-product by
    constructing two plants for that purpose--one at Paducah, and
    one at Portsmouth.
        The plan and proposed legislation to implement the law's
    provisions to dispose of this uranium were supposed to be set
    forth in the fiscal year 2000 budget. While I understand that
    DOE will soon put out an Expression of Interest and Request for
    Proposal, I am concerned about the amount of time it has taken
    the Department to move ahead with full implementation of the
    provisions of Public Law 105-204.
        Even under the best-case scenario, it's clear that these
    plants will not be up and running in time to mitigate the job
    losses we already know are forthcoming, especially with the
    continued importation of enriched uranium from Russia.
        And, of course, Secretary Richardson was in Paducah just a
    few months ago, and made the announcement that they would
    proceed with those plants, and that it would be a part of the
    fiscal year 2000 budget--which it is my understanding it is
    not.
        But we hope to hear more from Dr. Moniz about this issue,
    and I hope that you will be able to give us your assurance of
    DOE's commitment to move forward with the full implementation
    of Public Law 105-204.
        With that, I yield back the balance.
        Mr. Barton. I thank the gentleman. We now recognize the
    gentleman from Tennessee for a brief opening statement.
        Mr. Bryant. I thank the Chair, and welcome our
    distinguished panel. In the interest of time, I will simply
    submit any statement that I might have for the record.
        Mr. Barton. Thank you. Does the gentleman from California
    wish to make a brief opening statement?
        Mr. Rogan. Mr. Chairman, thank you. Very briefly, I want to
    thank you for calling this hearing, and just touch on one quick
    point.
        My one concern in the President's budget is the DOE's lack
    of activity on nuclear waste disposal. The budget itself
    provides $370 million for the Yucca Mountain Nuclear Waste
    Repository project, but makes this funding contingent upon
    postponing depositing materials there until the year 2010. As
    recent court cases have held, the Department of Energy is
    responsible for not accepting this waste by the beginning of
    the year, per Federal law. Therefore, funds must be allocated
    to accelerate acceptance, to avoid liability. It doesn't appear
    that any such provision has been made in President Clinton's
    budget.
        As there is a good deal of nuclear waste which must be
    handled in California, it is key that a repository effort be
    accelerate for public safety. It may be worthwhile to request
    an update at some point on the Department of Energy's progress
    on the Yucca Mountain site. Further, I believe the DOE must
    make an effort to describe its long-term plans to make this
    repository functional.
        With that, Mr. Chairman, I thank you again. I yield back
    the balance of my time.
        Mr. Barton. I thank the gentleman. The gentleman from
    Maryland is recognized for a brief opening statement. Okay. The
    gentleman from Oklahoma, Mr. Largent.
        Mr. Largent. Thank you, Mr. Chairman. I just want to say
    that I'm pleased as I come this morning and see the Department
    of Energy and Secretary Richardson's statement on America's
    oil, our strategic resource. We need to make sure that the
    plight of the domestic oil and gas producers in this country is
    addressed. It's an immediate concern--just last year, the
    industry itself lost 30,000 jobs; in the 10 years, the number's
    approaching a half a million jobs.
        We are losing our ability to produce oil in this country,
    and it is a real--it's not just a colloquial interest for
    Oklahoma, which I represent--it's a national security issue
    that we have to address. And so, I look forward to working with
    the Secretary of the Department of Energy, with this committee,
    in addressing the real concerns that we have--particularly
    coming from an oil-patch State--of losing our ability and
    capacity to produce oil in this country.
        Thank you.
        Mr. Barton. We thank the gentleman. The Chair concurs with
    that concern.
        [Additional statements submitted for the record follow:]
    Prepared Statement of Hon. Cliff Stearns, a Representative in Congress
                           from the State of Florida
        Thank you, Mr. Chairman. I appreciate this opportunity to hear more
    about the specifics of the Department of Energy's Fiscal Year 2000
    budget.
        I understand that the primary mission of the Office of Civilian
    Radioactive Waste Management is to develop a permanent geologic
    repository for the disposal of spent reactor fuel and high-level
    nuclear waste. DOE requested $370 million in new budget authority for
    FY 2000, a modest increase over FY 1999 of $12 million. Still, this may
    not be enough money to adequately fund the project at the Yucca
    Mountain site. Because the payments of utility ratepayers into the
    Nuclear Waste Fund are expected to soon be over $649 million, I would
    like to know if, in this budget, these fees will be diverted to other
    federal programs.
        In Florida, we have five nuclear units which provide about 19
    percent of the state's electricity generation. The benefits of this
    fuel source are clear: the use of nuclear energy has reduced Florida's
    carbon dioxide emissions by 96.7 million metric tons since 1973.
        However, these benefits have not come without a price. Since 1983,
    consumers of nuclear-generated electricity have contributed over $649
    million to the federal Nuclear Waste Fund. This fund was to finance
    nuclear waste management beginning in January 1998. However, the
    Department of Energy's failure to meet the January 1998 deadline to
    begin storing used nuclear fuel clearly violates the federal agency's
    contract with electric utilities operating Florida's nuclear power
    plants.
        I am concerned that this budget revealed little effort on DOE's
    part to meet this obligation. I look forward to hearing more about DOE
    efforts to address this issue. Thank you.
                                     ______

     Prepared Statement of Hon. John Shimkus, a Representative in Congress
                           from the State of Illinois
        Mr. Chairman, as always, I am delighted to be here this morning.
    Thank you for holding this important hearing. I believe it is important
    for the Congress and the Administration to sit face to face, at the
    very least, once a year to discuss how we are spending the taxpayers
    dollars. Though we do not always see eye to eye I do appreciate the
    good efforts of the Department and its dedicated public servants.
        I will have questions regarding our energy security, particularly
    about the small oil producers in my district. I am also very concerned
    about the growing liabilities to the department regarding commercial
    nuclear waste. I believe the Department has lost two court cases
    recently and I am curious as to how they plan to pay for these
    liabilities. I imagine these liabilities will be paid out of the
    Department's budget. Last, but by no means the least, I am also going
    to be looking for an update on the Department's progress regarding
    Public Law 105-388, which extended several programs under the Energy
    Policy and Conservation Act. This reauthorization had language which I
    drafted in conjunction with Chairman Barton last year to enhance and
    promote the alternative fuels program established under EPACT. I am
    looking forward to this hearing today and I know Dr. Moniz will do his
    very best to answer our questions. Good Morning, Dr. Moniz. I yield
    back, Mr. Chairman.
                                     ______

     Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce
        Thank you, Mr. Chairman. This is an important hearing, as it
    provides our Members with an opportunity to review in detail the
    Department of Energy's budget request for Fiscal Year 2000, and it
    provides the Department with an opportunity to explain and justify to
    us the roughly $18 billion dollars that it has requested for the coming
    fiscal year. Many of the difficult issues before us in the 106th
    Congress deal with energy programs. This budget hearing will help us
    determine whether the priorities of the Department are consistent with
    the priorities of the Congress.
        My priorities on energy issues are clear and simple. First, we must
    move forward with legislation to open up the electric utility industry
    to retail competition. Everyone now acknowledges the benefits that
    consumers will realize from opening our electricity markets to
    competition--the question is not whether electricity restructuring is a
    good idea, but how much of a role the Federal government should play
    and how quickly we should proceed with restructuring.
        A number of States are already pursuing restructuring, with varying
    degrees of success. These are commendable efforts, but not all States
    are moving forward to deregulate their electricity markets with the
    same enthusiasm. It is becoming obvious that the States cannot do this
    alone. The States cannot address the interstate commerce issues that
    arise in restructuring, nor can they address the host of Federal
    statutes that define the present Federal role in electricity. To assure
    a level playing field, and most importantly, to assure a fair deal for
    all consumers, Federal action is required.
        I have tasked Chairman Barton to develop legislation that will
    permit consumers to choose their electric supplier, that will promote
    competition among electric suppliers, and will remove existing barriers
    to interstate commerce in retail electricity markets. I trust that we
    will have the full cooperation of the Department of Energy in our
    efforts.
        My other priority is solving the problem of spent fuel and high-
    level nuclear waste. The Department recently released a Viability
    Assessment that shows us that the technical problems are solvable. The
    challenges we must now confront are not the technical ones--Congress
    and the Administration must now come to terms with the financial,
    legal, and political aspects of this problem.
        Under the current DOE plan, the permanent repository will not be
    able to begin accepting spent fuel until, at the earliest, the year
    2010. That date is, quite simply, over a decade too late. That is not
    the deal we made with the American people back in 1982, when Congress
    and the President promised that the Federal government would begin
    accepting spent fuel starting on January 31, 1998. That date has come
    and gone, and we are still here debating this issue. The courts have
    already spoken on this question, and have held that DOE has an
    unavoidable, binding obligation to take this spent fuel. If DOE
    persists in adhering to a schedule that won't allow the repository to
    open until 2010, it is just compounding the potential financial
    liability facing the Federal government.
        All of us here today, both from the Congress and from the
    Administration, have a responsibility to the American people to solve
    this problem. We must ensure that the permanent repository is on firm
    financial footing and that it is proceeding towards the earliest
    possible completion date. In addition, we must explore alternatives
    that would allow DOE to take possession of spent fuel at an earlier
    date, placing it in interim storage until the permanent repository
    opens.
        This Subcommittee has already held a hearing on legislation which
    would accomplish these goals. We want Secretary Richardson to testify
    on this question, and then we plan to mark up this legislation and take
    it to the floor of the House. Dr. Moniz, I hope you and your staff are
    ready to roll up your sleeves and work with us in a constructive manner
    to solve this problem. We need to show the American people that this
    government keeps its promises.
        I look forward to hearing the Department's testimony, and I thank
    Chairman Barton for holding this hearing.
                                     ______

    Prepared Statement of Hon. Ralph M. Hall, a Representative in Congress
                            from the State of Texas
        Thank you, Chairman Barton, for calling this hearing and giving us
    the opportunity to hear from the Department of Energy and to review
    their budget request for Fiscal Year 2000. I want to also extend a
    welcome to our witness, Under-Secretary Moniz, along with his staff.
        We have several pressing issues facing this Committee in the next
    year, and we are hopeful that we will gain the cooperation of both the
    Department, and the Administration in working toward the resolution of
    these issues. First in my mind, the question looms as to whether and
    for how long the Administration will continue to oppose all reasonable
    efforts at reaching a consensus on an appropriate opening date for
    storage of spent nuclear waste at Yucca Mountain. While the
    Administration indulges in last minute attempts to discourage action
    towards the goal of opening this waste site, judgements grow both in
    size and in numbers, and the taxpayers and the rate payers get hit with
    the bill.
        Of course, being from an energy producing state, I remain concerned
    about the continued plight of the independent oil and gas producers.
    This entire industry has felt the devastating impact of low priced
    foreign imports coupled with the reversal of our former trade policy
    with Iraq. While the Administration sees fit to permit the purchases of
    oil from this terrorist country, in the name of humanitarian
    assistance, it would seem appropriate that the Administration take both
    an humanitarian, and a national security interest in doing more to
    provide assurances to our own domestic, independent producers.
        These folks are facing ``no turning back'' decisions about capping
    wells. Once this happens, not only will multigenerational small and
    family owned businesses be destroyed, but we as a nation will be
    throwing ourselves at the mercy of foreign powers who will then decide
    how much our consumers should pay for a monopolized commodity. As a
    matter of logic, and as a matter of patriotism, the Administration must
    place our national security above foreign humanitarian ventures in
    Iraq.
        Finally, I want to say that I am hopeful that we will be hearing
    from the administration in the near future on their legislative
    recommendations for an electricity restructuring bill.
        Again, I want to thank you Mr. Chairman, for calling this hearing
    today, and I yield back the balance of my time.
                                     ______

      Prepared Statement of Hon. Frank Pallone, Jr., a Representative in
                     Congress from the State of New Jersey
        Thank you Mr. Chairman. I welcome Dr. Moniz back before our
    subcommittee today.
        I want to highlight some areas of the budget that are of interest
    to me. For instance, I'm pleased to see the Department of Energy's
    (DOE) FY2000 request of nearly $1.2 billion (which represents a 28%
    increase) to research, develop and deploy energy efficient and
    renewable energy technologies. This amount includes $399 million for
    DOE solar and other renewables programs (a 19% increase over last
    year). An additional $47 million has been made available for renewables
    through DOE's science program, as well. These are the programs of the
    future and it makes sense to invest in them today.
        I also see that the Department's FY2000 request includes $32
    million for the Federal Energy Management Program (FEMP), which is
    important because the Federal Government is the nation's largest single
    energy user. The FEMP program helps identify, finance, and implement
    energy efficiency and renewable energy projects in federal facilities,
    resulting in conservation of energy resources and billions of dollars
    in savings each year.
        Along these lines, I also support the DOE overall budget request of
    $1.1 billion for the climate change technology initiative for all DOE
    climate-related research & development activities.
        In the same vein, I'm glad that the administration is again
    requesting funding for its fusion energy program. In addition to the
    importance of fusion energy that we've discussed in previous years,
    particularly in light of current events, successful development of
    fusion will address the ever-present threat of international conflict
    over energy resources and could play an important role in reducing or
    altering atmospheric CO2 emission levels that contribute to
    global climate change. The Princeton Plasma Physics Laboratory (in my
    state of New Jersey) contributes to new and innovative approaches to
    fusion energy. For these reasons, I believe that funding for fusion
    energy sciences should be increased from last year's enacted level of
    $223 million to $260 million in FY2000. Ten million of this $260
    million should be directed toward the Tokamak program at Princeton
    University for Decontaminating and Decommissioning (D&D) the Tokamak
    Fusion Test Reactor (TFTR). The President's Council of Advisors on
    Science and Technology has recommended that the fusion energy sciences
    be funded at $270 million.
        I also wish to address the administration's request for the nuclear
    waste disposal program. Last week, a DOE representative testified for
    the first time that there is not enough money in the nuclear waste fund
    to pay for both interim and permanent nuclear waste storage facilities.
    DOE has not planned to build nor provide money for an interim facility,
    nor is it planning for such an eventuality in the near future. Thus,
    DOE has requested $370 million in new budget authority for FY2000, but
    this may still not be sufficient to fund permanent and interim storage
    and the related studies. And yet, ratepayers are expected to pay over
    $630 million into the nuclear waste fund in FY2000. In addition, the
    Administration is requesting the release of an additional $39 million
    that has been held in reserve until authorized for use by Congress.
    This amount was intended for interim storage, when DOE was considering
    this concept back in the 1980s, but this sum is now being requested to
    help pay for the ongoing scientific investigative work at Yucca to
    further determine the site's suitability for permanent storage. If H.R.
    45 were enacted into law, it appears funding for interim storage would
    be severely lacking and that the permanent site could face even greater
    delays due to funding problems. Moreover, I continue to be concerned
    that this administration--like previous administrations and some here
    in Congress--has become addicted to ratepayer money as a source of
    deficit reduction.
        Another issue that is going to require increasing U.S. attention is
    the management and cleanup of spent fuel and radioactive waste in
    Russia. I recently spoke on this topic at an international conference.
    It is not enough to support counter-proliferation activities alone. We
    must also assist Russia in properly dismantling, storing, disposing,
    and cleaning up from the legacy of its nuclear arsenal buildup. To this
    end, I am pleased to see that the budget request for nonproliferation
    and national security activities includes $30 million for the new
    nuclear cities initiative. This program will help employ Russian
    scientists in civilian research endeavors, hopefully to begin to
    address the drastic environmental and health problems facing Russia as
    a result of its nuclear buildup. I hope that DOE will continue to
    devote substantial resources to these activities as time goes on,
    because the consequences of inaction will be global. In addition,
    better coordination and management activities needs to occur at the
    highest levels of our administration. I am pleased that the Consortium
    for Risk Evaluation with Stakeholder Participation (CRESP) led by the
    Environmental and Occupational Health Sciences Institute in New Jersey
    is working to clean up several nuclear sites in the U.S. in cooperation
    with the DOE. Perhaps their efforts could be expanded to provide
    international assistance in the future.
        In closing, I look forward to working with you to ensure that we
    see concrete progress in all of these program areas. Thank you, Mr.
    Chairman.
                                     ______

    Prepared Statement of Hon. Ted Strickland, a Representative in Congress
                             from the State of Ohio
        Thank you Mr. Chairman. And, I would like to thank the Under
    Secretary for coming to the Hill today to address a range of budget
    concerns and answer questions held by many of us on the Energy and
    Power Subcommittee. Specifically, Mr. Under Secretary, I have a number
    of questions regarding the ongoing work at the Portsmouth, Ohio Gaseous
    Diffusion Plant and very serious concerns about the Department's
    progress in developing its depleted uranium hexafluoride program. As
    you know, the United States Enrichment Corporation or USEC, Inc.
    operates the two gaseous diffusion plants in the nation--one of which
    is in my district. These plants were initially built by the federal
    government to process uranium for national defense purposes during the
    Cold War. Now, they process uranium for purchase by the commercial
    nuclear power industry.
        As you also know, Mr. Under Secretary, last July, the Congress
    passed and the President signed into law P.L. 105-204. The successful
    passage of this legislation was possible through a terrific bipartisan
    and bicameral effort and I would like to thank my colleague from
    Kentucky, Mr. Whitfield, for his active support of that legislation.
    Furthermore, I would like to express my appreciation for the guidance
    provided by the leadership of the Commerce Committee, Chairman Bliley
    and Mr. Dingell and of course, the advice of their dedicated staff.
        Briefly, P.L. 105-204 secured almost $400 million from USEC, which
    sits in an account at the Department of Treasury, for the development
    of a program to convert and stabilize more than 9000 canisters of
    depleted uranium hexafluoride generated and stored at both the
    Portsmouth, Ohio and Paducah, Kentucky sites. I regret to say that I
    have serious reservations about the commitment of the Department's
    Nuclear Energy Office to meet the statutory requirements under P.L.
    105-204. Requirements, which I might add, share a remarkable amount of
    bipartisan support from both the states of Ohio and Kentucky.
        I also have reservations about the role of USEC as the Executive
    Agent under the Russian-Highly Enriched Uranium Agreement. This past
    July USEC was sold in an initial public offering. As a private
    industry, USEC, Inc. serves as the Executive Agent for the Russian-HEU
    Agreement with the responsibility for purchasing specific quantities of
    Russian uranium. USEC's role as the Executive Agent for the Russian-HEU
    Agreement directly conflicts with the corporation's responsibility to
    meet requirements outlined in the Energy Policy Act of 1992 and the
    USEC Privatization Act of 1996. One such condition was the continued
    operation of the gaseous diffusion plants in Portsmouth and Paducah.
    During the process of privatizing USEC, I repeatedly reminded officials
    in the Administration, including the Department of Energy, that the
    corporation's function as Executive Agent for the HEU Agreement would
    result in decisions that may adversely affect the continued operation
    of the gaseous diffusion plants and therefore violate the statutory
    terms and conditions established by Congress. Furthermore, I was
    seriously troubled that either the workers and communities in southern
    Ohio would suffer tremendously or potentially an incredibly important
    foreign policy objective would not be met. Neither option was or is
    acceptable to me.
        In an effort to address the issues raised during privatization of
    USEC, DOE entered into two Memoranda of Agreement with USEC to provide
    $66 million for the liabilities arising out of the disposal of depleted
    uranium generated by USEC prior to privatization and the maintenance of
    depleted uranium tails transferred to DOE from USEC through fiscal year
    2004. A primary objective of the Agreements is to mitigate job losses
    by offering displaced workers with retraining and a hiring preference
    for the maintenance and disposition of the depleted uranium
    hexafluoride canisters located at Portsmouth and Paducah.
        I worked closely with officials in the Administration, including
    the Department of Energy, to ensure that the dedicated workforce and
    families long committed to supporting our nuclear industry would not
    now find themselves left out in the cold at the declared end of the
    Cold War. I cannot overstate how important this $66 million is to
    southern Ohio and western Kentucky. My district simply has not enjoyed
    the economic recovery that the rest of the state of Ohio and much of
    the nation enjoys. For this reason, I urge you to empower the
    appropriate DOE officials to move forward on a plan for spending this
    $66 million in as expeditious a manner as humanly possible.
        Finally, but not of least importance, I must make you aware of an
    annual funding battle I undertake with a number of my colleagues from
    both sides of the aisle. I am confident you are well aware of the good
    work done by the Worker and Community Transition Office. This office
    exists to to minimize layoffs and assist communities affected by the
    Department's shift from weapons production to other missions. The
    Department continues to work toward closure of numerous sites
    throughout the complex which will ultimately lead to the dislocation of
    workers.
        The Portsmouth and Paducah sites are undergoing a tough transition
    to a privately managed operation. This process, too, will result in a
    significant reduction in the workforces at the gaseous diffusion
    plants. In fact, USEC, Inc. recently issued a press release announcing
    its second round of reduction in force which will involve approximately
    250 employees at the Portsmouth and Paducah sites. This comes shortly
    after the completion of round one in November 1998 which resulted in
    259 layoffs shared by the two sites. The Worker and Community
    Transition Office must have adequate funding to continue to help
    workers affected in Ohio, Kentucky and throughout the DOE complex.
        I must add that these significant layoffs at the gaseous diffusion
    plants become particularly alarming when we acknowledge that USEC, Inc.
    is limited to annual layoffs at the sites because of an Agreement it
    has with the Department of Treasury. Under the Treasury Agreement USEC,
    Inc.. must keep its annual workforce reductions for each of the next
    two years to 250 people between the two gaseous diffusion plants.
    However, in July 2000, that Treasury Agreement expires and USEC, Inc.
    will no longer be limited in its workforce reductions. I have heard
    projected numbers of future layoffs and for this reason, the Worker and
    Community Transition Office absolutely must be ensured adequate funding
    to provide the necessary resources to minimize the potential economic
    impacts of privatization and restructuring.
        I have taken enough time to provide some background for the
    questions I have prepared to ask today. I appreciate your time and
    cooperation and I look forward to hearing your answers to my inquiries.
    Thank you.

        Mr. Barton. Dr. Moniz, we will welcome you to the
    subcommittee. Before we let you begin, the Chair announces that
    all members not present have the requisite number of days to
    put a written statement in the record if they so wish, unless
    there's an objection. Hearing none, so ordered.
        We'll put your statement in its entirety; we're going to
    recognize you for such time as you may consume, and at the
    conclusion of your statement, unless Mr. Telson wishes to also
    make a brief statement, then we'll begin to ask questions.
        Welcome, Dr. Moniz.

         STATEMENT OF ERNEST MONIZ, UNDER SECRETARY OF ENERGY;
        ACCOMPANIED BY MICHAEL TELSON, CHIEF FINANCIAL OFFICER,
                          DEPARTMENT OF ENERGY

        Mr. Moniz. Thank you, Mr. Chairman and members of the
    subcommittee, for the opportunity to appear before you today to
    discuss the fiscal year 2000 budget request for the Department
    of Energy.
        I will just note, given your earlier reference, Mr.
    Chairman, that I will be leaving this evening for your home
    State--for a pleasant day, I'm sure, tomorrow.
        In fiscal year 2000, the Department requests $17.8 billion
    dollars for all of its science energy research, energy
    security, environmental quality, and defense activities. This
    is slightly less than the amount appropriated last year.
        Let me provide a very brief overview of the Department's
    four principal mission areas: In science, our main goal is to
    ensure that the Nation's preeminent scientific infrastructure
    successfully meets the missions and goals the Nation has set
    for the Department of Energy. In turn, the Nation's scientific
    community depends on DOE, and on our laboratory system, to
    maintain U.S. leadership in an extensive range of research
    disciplines. In particular, the Department has a unique
    responsibility for designing, building and operating an
    extensive set of facilities for over 15,000 scientists and
    engineers across the Nation. For example, this year's budget
    supports critical initiatives in material science--for example,
    construction of its palatia neutron source--and in high-end
    computing for science and engineering the scientific simulation
    initiative.
        These are examples of key enabling technologies for
    science, and for our country's economy in the future. Our
    request for science funding for fiscal year 2000 is $2.8
    billion, an increase of 5.1 percent.
        In national security, the Department plays a critical role,
    by ensuring the safety, security, and liability of our nuclear
    arsenal, and by reducing the dangers of the spread and use of
    weapons of mass destruction. The Department is maintaining the
    nuclear stockpile safely and reliably, without testing, thereby
    supporting a comprehensive test ban while sustaining the
    nuclear deterrent.
        The Department also plays a central role in securing
    nuclear materials and know-how in the former Soviet Union, in
    support of America's non-proliferation goals.
        The technological strength of the Department's laboratories
    is being used to protect America from the threat of weapons of
    mass destruction. The Department's $6.3 billion request--$6.2
    billion request, excuse me--for national security programs, is
    an increase of 4.1 percent over the fiscal year 1999
    appropriation.
        In environmental quality, the Department's task is to
    continue to make progress in cleaning up the environmental
    legacy of the cold war, while minimizing the risks to human
    health and safety. Our goal is to finish the clean-up job at
    most of our sites by the year 2006, while systematically
    addressing the persistent challenges at our largest clean-up
    sites in accordance with various regulatory agreements. DOE's
    strong science and technology base, and our capacity to conduct
    inter-disciplinary, leading-edge R&D, will help up accomplish
    our clean-up goals. Furthermore, we will continue to work
    toward resolving the scientific and technical issues
    surrounding the important problem of disposal of spent nuclear
    fuel, both civilian and military.
        The Department is requesting $5.9 billion for the Office of
    Environmental Management--roughly $100 million more than the
    current year. We are also requesting $409 million for the
    Office of Civilian Radioactive Waste Management, which is
    needed to complete the work identified in the viability
    assessment, as necessary to be able to make a suitability
    determination about Yucca Mountain in 2001.
        In energy resources, the Department of Energy is the lead
    agency in the administration's commitment to abundant,
    affordable, secure and clean energy, and to electricity
    restructuring. Energy is, as you know, the life-blood of our
    economy. The Department is advancing a broad R&D portfolio to
    improve the efficiency of, and reduce the emission from, fossil
    fuel use; to advance the development of economical renewable
    technologies; and to provide nuclear energy options that are
    passively safe, proliferation-resistant, and waste-minimizing.
        At the same time, energy use is at the core of some of our
    most pressing environmental challenges--smog and particulate
    emissions, acid rain, global warming. Once again, DOE's policy
    initiatives and energy R&D portfolio, which focuses attention
    on increasing energy efficiency, will simultaneously help us
    sustain a strong economy and improve environmental quality. The
    Department will work with Congress to advance electricity
    sector restructuring, which will bring lasting benefits to all
    Americans, to the economy, and to the environment.
        The Department's request for programs comprising the Energy
    Resources Business Line is $2.3 billion--an increase of roughly
    2 percent.
        In the little time I have remaining, I'd like to just
    highlight some of our initiatives in the energy resources area.
    First, the Secretary has led a wide range of initiatives to
    enhance America's energy security. These follow four basic
    strategies, and are summarized in the briefing material that we
    provided you this morning.
        One, is to enhance America's energy security, including
    actions such as Federal royalty oil for the petroleum reserve--
    commercial storage in the petroleum reserve.
        The second strategy is to preserve domestic oil and gas
    production capacity, suspension of reduction requirements for
    stripper oils on Federal lands, royalty relief on Federal
    lands, Petroleum Technology Transfer Council crisis assistance
    to independents.
        A third involves trying to help lower costs of production,
    access to problem-solving technologies for independents,
    advanced technologies for improved recovery from endangered
    reservoirs, energy-efficient technologies for oil production,
    administrative and accounting relief on Federal lands.
        And finally, fourth strategy of improving government
    methods for making decisions. That is, improve coordination
    with other Federal agencies, and dialog with industry, States
    and Congress.
        I have brought with me, again, today, a short summary of
    these strategies.
        Turning to electricity restructuring--very briefly--this,
    of course, is not a budget initiative--as you know, we strongly
    support restructuring, to ensure that U.S. consumers receive
    the benefits of economically efficient energy production, and
    that the production and transmission sectors are encouraged to
    maximize their efficiency.
        The administration supports the progress that is being made
    toward promoting retail competition in the utility industry.
    Our analysis indicates that competition will benefit consumers
    in the economy, to the tune of roughly $20 million per year,
    and that it will also be good for the environment.
    Approximately 20 States have enacted legislation, or
    promulgated regulations, that either have led or will lead to
    the implementation of retail competition programs.
        The Department believes it is important to act sooner
    rather than later to complement what is going on at the State
    level, and stands ready to work with Congress to get the job
    done.
        As Under Secretary, one of my main responsibilities is to
    ensure that all the R&D activity supported by DOE, or performed
    by our laboratories, serve the missions and goals set out for
    the Department. To do this, we are organizing, over the past
    year, all of our R&D activities at DOE into a comprehensive
    portfolio, and assessing whether the portfolio is well-balanced
    to meet the Department's mission needs. We are in the last
    stages of developing the DOE R&D portfolio. I hope to share it
    with you within weeks.
        This will be the first time the Department publishes a
    document that will provide in one place a clear description of
    our entire research portfolio, organized around their support
    for the Department's strategic goals. The document will
    describe our current R&D activities and accomplishments, it
    will be a basis for assessing how balanced the portfolio is for
    long-term pursuit of our strategic goals, and it will be a tool
    for helping to plan for future investments through road-
    mapping.
        In the energy resources R&D portfolio, there are many
    examples in our fiscal year 2000 budget request that point to
    the future. I'll just name a few--they include Vision 21
    Powerplex, carbon sequestration R&D, the partnership for a new
    generation of vehicles, the nuclear energy research
    initiative--and one I'll comment on just briefly--the
    scientific simulation initiative, where we will develop a new
    program to develop large-scale, high-end computing simulation
    capabilities of chemical reactions, fluid dynamics, and heat
    transfer, associating with combustion, in order to facilitate
    the rapid design of improved combustion devices.
        Improved efficiency of such devices may provide savings of
    up to $26 billion in fuel costs, and approximately 2.7 gigaton
    reduction in carbon emissions for internal combustion engines
    alone. Just an example of the kind of return we anticipate as
    being possible from our basic science investments.
        The budget we have submitted attempts to balance many
    competing demands--from the scientific and national security
    communities, from industry, and from communities that surround
    and host our facilities--within current budgetary constraints.
    We believe this budget--along with some of the essential policy
    initiatives I have outlined--achieves this balance, and we ask
    for your support.
        Thank you again for the opportunity to testify this
    morning, Mr. Chairman, and I would like to introduce Dr. Mike
    Telson, the Department's Chief Financial Officer. Also, we are
    accompanied by several key program staff and would be please to
    answer any questions subcommittee has regarding our 2000
    budget.
        [The prepared statement of Ernest Moniz follows:]
      Prepared Statement of Hon. Ernest Moniz, Under Secretary of Energy,
                              Department of Energy
        Thank you, Mr. Chairman, and Members of the Subcommittee, for the
    opportunity to appear before you today to discuss the FY 2000 budget
    request for the Department of Energy.
        In FY 2000, the Department requests $17.8 billion dollars for all
    of its science, energy research, energy security, and defense
    activities. This is slightly less than the amount requested last year.
    This request supports the Departments activities in four business
    lines:

     National Security: $6.228 billion
     Energy Resources: $2.318 billion
     Environmental Quality: $6.452 billion
     Science: $2.844 billion
        This budget request, and the programs it supports, reflect the
    Administration's agenda to meet the challenges of the 21st century. The
    research and development capabilities of the Department of Energy place
    it at the forefront of many of the technological advances that will
    define the next millennium. ``Science, Security, and Energy: Powering
    the 21st Century'' is more than just the theme of our budget request
    this year; it defines the unique contributions that DOE has been
    making, and will continue to make, towards improving the lives and the
    security of all Americans. Attached to this testimony are concise
    summaries of the budget requests for each of our programs.
                                 doe's missions
        In National Security, DOE plays a critical role by ensuring the
    safety, security, and reliability of our nuclear arsenal, and through
    our efforts, to reduce the dangers of the spread and use of weapons of
    mass destruction (WMD). The Department is maintaining the nuclear
    stockpile safely and reliably without testing, thereby supporting the
    Comprehensive Test Ban while sustaining the nuclear deterrent. The
    Department also plays a central role in securing nuclear material and
    knowhow in the Former Soviet Union, in support of America's non-
    proliferation goals. The technological strength of the Department's
    laboratories is being used to protect America from the threat of
    weapons of mass destruction.
        In Energy Resources, DOE is the lead agency in the Clinton
    Administration's commitment to abundant, affordable, secure, and clean
    energy, and to electricity restructuring. Energy is the lifeblood of
    our economy. The Department is advancing a broad research and
    development (R&D) portfolio to improve the efficiency of, and reduce
    the emissions from, fossil fuel use; to advance the development of
    economical renewable technologies; and to provide nuclear energy
    options that are passively safe, proliferation resistant, and minimize
    waste.
        At the same time, energy use is at the core of some of our most
    pressing environmental challenges: smog and particulate emissions, acid
    rain, and global warming. Once again, DOE's policy initiatives and
    energy R&D portfolio--which focuses attention on increasing energy
    efficiency--will help us to sustain a strong economy with ample and
    clean energy resources. The Department will work with Congress to
    advance electricity sector restructuring, which will bring lasting
    benefits to all Americans, to the economy, and to the environment.
        In Environmental Quality, the Department's task is clear. We will
    continue to make progress in cleaning up the environmental legacy of
    the cold war nuclear weapons program, and we will do so while
    minimizing the risks to human health and safety. Our goal is to finish
    the cleanup job at most of our sites by the year 2006, while
    systematically addressing the persistent challenges at our largest
    cleanup sites, in accordance with various regulatory agreements. The
    scientific and technical issues involved in meeting this challenge are
    among the most complex of any environmental cleanup job anywhere in the
    world. DOE's strong science and technology base, and our capacity to
    conduct interdisciplinary, leading edge R&D, will help us to accomplish
    our cleanup goals. Furthermore, we will continue to work towards
    resolving the scientific and technical issues surrounding the disposal
    of spent nuclear fuel.
        In Science, our main goal is to ensure that the nation's preeminent
    scientific infrastructure successfully meets the missions and goals
    that the nation has set for the Department of Energy. At its heart, DOE
    is a science agency. Each of DOE's mission areas relies on cutting edge
    science and technology to achieve its objectives. And the nation's
    scientific community depends on DOE and the DOE laboratory system to
    maintain U.S. leadership in an extensive range of research disciplines.
    In particular, the Department has a unique responsibility for
    designing, building, and operating an extensive set of user facilities
    for basic and applied research, serving over 15,000 scientists and
    engineers across the nation.
        As Under Secretary, one of my main responsibilities is to ensure
    that all the research and development activities supported by DOE, or
    performed by DOE's laboratories, serve the missions and goals set out
    for the Department. To do this we are organizing all R&D activities at
    DOE into a comprehensive portfolio, and assessing whether this R&D
    portfolio is designed optimally to meet the Department's mission needs.
    We are in the last stages of developing the DOE R&D Portfolio. This
    portfolio will describe and analyze, for each of the four business
    lines, how the overall goals of the Department are supported by the
    specific R&D activities carried out in each program, and will
    facilitate discussions with the Department's stakeholders.
                               national security
        The Department's $6.228 billion request for National Security
    programs is an increase of $244 million over the FY 1999 appropriation.
    The FY 2000 request for Weapons Activities is $4.531 billion; this
    includes $2.286 billion for the Stockpile Stewardship program and
    $2.071 billion for the Stockpile Management program. The Stockpile
    Stewardship program is a science-based program designed to ensure the
    safety, security, and reliability of the nuclear deterrent without
    underground nuclear testing. Critical to the success of this effort is
    the Accelerated Strategic Computing Initiative (ASCI), which is
    developing state-of-the-art supercomputers and associated applications.
        Another important component of this program is the National
    Ignition Facility (NIF), a 192-laser beam facility under construction
    at Lawrence Livermore National Laboratory, that will advance not only
    our understanding of the physics of nuclear weapons, but will also
    advance mankind's knowledge in fusion and basic science. The Stockpile
    Management program request includes $170 million for the tritium
    program, which will be used to develop the irradiation services option
    chosen by Secretary Richardson, and to complete design work on the
    accelerator option in order to preserve it as a ``back-up'' capability.
        The $767 million dollar budget for Nonproliferation and National
    Security is an increase from $697 in FY 1999. This does not include
    separate requests for Intelligence ($36.1 million) and
    Counterintelligence ($31.2 million--$18.6 in new budget authority). We
    are asking for $221 million for Nonproliferation Research and
    Development to develop technologies for detecting nuclear explosions,
    detecting the production of different forms of WMD, countering chemical
    and biological weapons that could be released in our cities, and aiding
    federal, state, and local law enforcement agencies.
        Our request also includes $30 million for the Initiative for
    Proliferation Prevention and $30 million for the Nuclear Cities
    Initiative. These programs are designed to ensure that Russia's most
    experienced scientists and technicians can be gainfully employed at a
    time when they are highly sought after by rogue nations and terrorist
    organizations.
        The Fissile Materials Disposition program includes a request for
    $200 million to provide storage for U.S. weapons usable uranium and
    plutonium, while providing a technical basis for similar actions by the
    Russians. The Department recently announced that Savannah River is the
    preferred site for the Pit Disassembly and Conversion Facility (FY 2000
    request of $28.8 million) and the Mixed Oxide Fuel (MOX) Fabrication
    facility ($12.4 million).
        The Worker and Community Transition program request is $30 million.
    This will allow the Department to facilitate earlier site closures and
    to promote the reindustrialization of excess facilities. The result
    should be long term savings approaching $1 billion. The program also
    makes it possible to move to more efficient contracting mechanisms
    while utilizing the skills of the existing work force. In the case of
    Oak Ridge, for example, we were able to avoid immediate severance
    liabilities of up to $45 million.
                                energy resources
        The three key elements of DOE's Energy Resources mission are energy
    security, clean energy, and electricity industry restructuring. The
    Department of Energy continues to play a major role in helping to
    ensure the Nation's energy security and responding to both U.S. and
    world energy demand and the environmental consequences associated with
    energy production and utilization. And just as end of the Cold War left
    us with significant new national security challenges, the current
    international energy and economic situation bring with them new energy
    challenges.
        While it may be of benefit to U.S. consumers, the international oil
    market has created significant problems for producers. Low prices and
    abundant near-term supply will exacerbate the decline in higher cost
    domestic production while making investments in new energy supply and
    increased efficiency less attractive. This has the potential to
    increase U.S. dependence on imported oil and increase our vulnerability
    to future price increases and supply shortages. The Department and the
    Administration are moving to address these challenges on several
    fronts.
        First, in December, the Secretary appointed an internal Emergency
    Oil Task Force to develop a balanced oil action plan to enhance
    America's energy security, preserve domestic oil production capacity,
    lower the cost of production and to explore other actions government
    can take.
        To enhance America's energy security, we have developed a plan for
    using 28 million barrels of Federal Royalty Oil to fill the Strategic
    Petroleum Reserve (SPR) from off-shore oil production in the Gulf of
    Mexico. We also offered unutilized SPR capacity for long term
    commercial storage with storage fees to be paid in oil to increase the
    inventory. These steps reduce the vulnerability of the U.S. economy at
    tremendous cost savings to the taxpayer.
        To help lower the costs of production, we just committed $18
    million for a technology-driven, industry cost-shared program to
    improve oil recovery from endangered domestic reservoirs. We also
    kicked off a program to assist small independents--those with less than
    50 employees--that have specific production problems, ranging from
    reservoir characterization to environmental compliance. We are working
    with other agencies and the Administration to suspend production for
    stripper oil wells on federal lands. These steps prevent premature
    abandonment of important well capacity, maintain domestic production
    and preserve oil and gas and small business infrastructure.
        To lower the cost of production, we are announcing plans to expand
    the use of energy-efficient technologies to lower the cost of oil
    production. We are inaugurating a pilot program for on-line oil and gas
    permitting for state agencies. We are aggressively pursuing improved
    recovery from high-potential reservoirs, and we have requested a 3.2%
    increase in oil technology research and development for FY 2000--a
    modest reversal of the historic pattern of annual reductions, but a
    reversal nonetheless.
        In another action to preserve our domestic production, the
    Department is exploring possibilities for targeted tax relief. Such
    relief would have to be cost-effective and would require budget
    offsets. Any tax relief proposal would require the concurrence of the
    rest of the Administration, and the passage of legislation by the
    Congress.
        Second, the Department has moved very aggressively to reshape the
    way in which we make technology investment decisions to maximize our
    national return on those investments. Throughout the Department, and
    especially within the civilian research and development sector, we have
    initiated technology ``road-mapping.'' The process involves cooperative
    discussions between the Department and industry sectors to determine
    technology needs and the types of research and development activities
    needed to address them. These roadmapping efforts serve two purposes.
    They act as a catalyst for the industry to develop an effective R&D
    roadmap, and they help us to identify those investments which are most
    appropriate for the government to make. When appropriate, we are
    requiring significant cost-sharing with industry to ensure marketplace
    of the research agenda and a concomitant predisposition to deployment
    of the new technologies.
        We have also requested increases in funding to develop and deploy
    new, energy efficient technologies that would not otherwise receive
    adequate private-sector backing in the face of historically low energy
    prices. These investments make good economic sense, and good
    environmental sense. The FY 2000 budget includes a 20 percent increase,
    or $209 million, to fund energy efficiency and renewable energy
    programs.
        Third, we strongly support legislation to restructure the
    electricity industry to ensure that U.S. consumers receive the benefits
    of most economically efficient energy production and that production
    and transmission sectors are encouraged to maximize their efficiency.
        The Clinton Administration supports the progress that is being made
    towards promoting retail competition in the electric utility industry.
    Our analysis indicates that competition will benefit consumers and the
    economy to the tune of $20 billion per year, and that also it will be
    good for the environment. The Department of Energy will soon be
    forwarding an updated version of the Administration's Comprehensive
    Electricity Competition Plan to Congress. This revised legislation will
    retain the basic framework of encouraging retail electric competition,
    but providing the states and unregulated municipal and cooperative
    utilities the flexibility they need to ``opt out'' if they determine
    that competition would not be beneficial to their consumers. Under the
    leadership of Secretary Richardson, the Department has been engaged in
    an effort to fine-tune the legislation the Administration sent to
    Capitol Hill last year to: (1) make the bill more consumer friendly,
    and.; (2) address issues which were not contained in the original
    proposal (e.g., the role of federal utilities in a competitive
    environment).
        Approximately 20 states have enacted legislation or promulgated
    regulations that either have led or will lead to the implementation of
    retail competition programs. Almost every other state has the matter
    under active consideration. While the states are playing a primary role
    in the move towards competition, Federal action is necessary to remove
    the statutory impediments that currently exist and also to ensure that
    interstate electricity markets are sufficiently competitive and
    reliable. The Department believes that it is important to act sooner
    rather than later to complement what is going on at the state level,
    and stands ready to work with Congress to get the job done.
    Energy Efficiency and Renewable Energy
        The Department's Energy Efficiency and Renewable Energy Program has
    five principal objectives: (1) to reduce U.S. reliance on imported oil
    through improving efficiency and increasing the use of domestic
    renewable energy resources, (2) to maintain U.S. technological
    expertise and competitive advantage in global energy technology
    markets, (3) to minimize and reduce pollution attributable to energy
    consumption, (4) to develop and deploy technologies capable of reducing
    greenhouse gas emissions, and (5) to align the strategy for development
    of efficiency and renewable energy technologies with the new demands of
    a deregulated electricity market.
        The FY 2000 funding request for the Department's Energy Efficiency
    and Renewable Energy programs includes an increase of $209 million for
    a total of $1.2 billion. Key results supported by the FY 2000 budget
    request include:

     Power. Improve the performance, reduce the cost, and perform
            highly leveraged field verifications of technologies that
            generate electricity from renewable energy resources in a
            highly competitive, restructured utility environment. Power
            Technology programs are expected to replace up to 1.2 Quads of
            domestic primary energy by clean renewable resources, save
            consumers $1.4 billion, and reduce annual U.S. carbon emissions
            by nearly 24 million metric tons of carbon equivalent by 2010.
            This is roughly equivalent to all the energy used for a year in
            homes in Texas, our nation's second largest state.
     Industry. Develop and facilitate the deployment of energy
            efficient technologies in partnership with the most energy
            intensive industries. Investments are expected to save up to
            1.5 Quads, $6 billion, and 29 million metric tons carbon
            equivalent (MMTCE) annually by 2010. This is roughly equivalent
            to all the industrial energy used for a year in Pennsylvania,
            the fifth largest state in the nation.
     Transportation. The Partnership for a New Generation of
            Vehicles (PNGV) will support development of technologies needed
            for an 80 mpg family automobile, and more efficient small and
            heavy trucks. DOE Transportation programs are expected to save
            up to one million barrels per day of oil, $9.9 billion, and
            reduce carbon 25 MMTCE annually by 2010. This is roughly
            equivalent to the oil-based fuels used in a year for
            transportation in Florida, the third largest state in the
            nation.
     Buildings. Work with industry, states, and other key partners
            to develop and implement energy efficient buildings and
            building technologies and programs leading to savings of up to
            2.3 Quads, $16 billion, and 36 MMCTE annually by 2010. This is
            roughly equivalent to all residential and commercial building
            energy use in Texas in a year. In addition, the program will
            weatherize nearly 77,000 low income homes.
     FEMP. Accelerate efforts to deliver federal energy savings
            through $5 billion worth of Energy Savings Performance
            Contracts (ESPCs) with the private sector under the Federal
            Energy Management Program (FEMP). Also accelerate utility
            financing and procurement of energy efficiency products to
            achieve a 30 percent reduction in federal energy efficiency.
            FEMP programs are expected to save up to 0.1 Quads, $400
            million, and 1.2 MMCTE annually by 2010.
    Fossil Energy
        The FY 2000 Fossil Energy R&D request is $364 million, which
    includes the use of $11 million in prior year balances for a total
    operating budget of $375 million, a decrease of 2.4%. One of the key
    components of the Fossil Energy R&D request is the development of the
    ``Vision 21 Powerplex''--the power plant of the future. This includes
    modular technologies that could be integrated into a non-polluting
    energy producing facility, such as membranes for the low-cost
    separation of oxygen and other gases. The high efficiency of Vision 21
    Plants (60 percent for coal and 75 percent for gas) could, by 2030,
    reduce greenhouse gas emissions globally by 370 million tons of carbo
    per year. Sequestration R&D could lead to low cost options for reducing
    U.S. emissions by an additional 250 million tons of carbon during the
    same time frame. The economic benefits of Vision 21 Plants, through
    savings in electricity costs to consumers, could reach $5-15 billion
    annually by 2030. In addition, lower cost emission control technologies
    could save $5 billion annually by 2010.
        Within the Clean Coal Technology Program, the Department is
    requesting the net deferral of $246 million in funding until FY 2001
    and beyond. This is due to changes in project plans for pending
    projects that do not need to be funded at previously expected levels at
    this time. During FY 2000, the Department expects to complete
    demonstration of the third integrated gasification combined cycle
    project at Pinion Pine and to continue operations at the Polk project.
    Activities at these two Clean Coal Technology projects will provide the
    engineering foundation for a new generation of powerplants with
    efficiencies in the 60 % range.
        We have also proposed $164 million to operate America's energy
    security insurance policy--the Strategic Petroleum Reserve--without
    selling oil, including $5 million to ensure adequate resources to
    operate the Reserve at its maximum draw down rate during an emergency.
    We recently announced programs to use royalty oil and facility leasing
    to increase the amount of oil stored in the Reserve. In addition, we
    are completing upgrades of Reserve facilities, and by the end of FY
    2000, the Strategic Petroleum Reserve will have completed a
    comprehensive systems refurbishment to assure physical system
    capability through the year 2025.
        Key results supported by the FY 2000 budget request include:

     Coal R&D. Start construction of a clean, advanced coal fire
            power system--part of the final phase of the Low Emissions
            Boiler Program (LEBS) to be completed in 2001. The system will
            use newly developed high temperature filtration processes for
            superior environmental performance and provide the foundation
            for a new generation of highly efficient, supercritical steam
            power plants. Complete subscale testing of a high temperature
            air furnace technology for use in highly efficient, indirectly-
            fired combustion power systems and in Vision 21 Power Plexes.
            Complete initial laboratory tests of novel gaseous separation
            (O2, H, CO2) technologies to provide low cost options for
            Vision 21 Power Plexes. Identify candidates for low-cost gas
            purification technologies to support zero emissions goal of
            Vision 21 Power Plexes.
     Natural Gas and Oil R&D. Continue the scale-up development of
            ceramic membranes for gas-to-liquids processing; continue
            implementing the President's Committee of Advisors on Science
            and Technology (PCAST) recommendation for a methane hydrates
            recovery program; and continue development of advanced
            diagnostics and imaging technologies for highly fractured and
            bypassed gas reservoirs and endangered domestic oil reserves.
            Continue support for National Laboratory partnerships with
            industry and the Petroleum Technology Transfer Council.
            Initiate Preferred Petroleum Upstream Management Practices
            (PUMP). Continue a restructured advanced gas turbine program
            for the 2001 introduction of ``quantum leap'' turbines,
            continue scale-up tests of a solid oxide fuel cell, and
            continue cost-reduction R&D for molten carbonate fuel cell
            technologies.
     Naval Petroleum and Oil Shale Reserves. Continue to operate
            NPR3 and to finalize equity determination activities on NPR1.
     Strategic Petroleum Reserve. Maintain a highly reliable level
            of operational readiness. Complete oil skimming and
            decommissioning at Weeks Island. Initiate the long term
            monitoring of Weeks Island to assure mine stability. Test major
            SPR systems in the post-Life Extension program era at all
            sites. The addition of $5 million to the SPR Petroleum Account
            will assure the capability to sustain drawdown operations.
     Clean Coal Technology. Continue prior cost-shared commitments
            to 20 projects projected to be active in FY 2000.
    Nuclear Energy
        The FY 2000 request for Nuclear Energy programs is $269.3 million,
    a $6 million increase from FY 1999. The Department's request includes
    $25 million for the ``Nuclear Energy Research Initiative.'' NERI
    supports peer-reviewed research and development in advanced
    technologies that can address some of the barriers to the long-term use
    of nuclear power in the United States. NERI will explore advanced
    technologies associated with areas such as proliferation-resistant
    reactor and fuel technologies, small and high efficiency reactor
    systems, and methods for greatly enhancing safety and minimizing
    wastes. The Nuclear Energy request also includes $30 million for the
    Fast Flux Test Facility at the Department's Hanford Reservation. The
    Department is currently evaluating future missions for the reactor and
    will make a decision this spring on the future of the reactor. Funding
    at the request level would be adequate to fund minimum surveillance and
    maintenance to keep it in a safe and environmentally-compliant
    condition.
        The Department is also evaluating the potential application of
    electrometal-
    lurgical treatment technology to some of our spent fuel challenges. Any
    decision to use this technology will be based, in part, on the results
    of an ongoing National Research Council review, as well as on the
    completion of an Environmental Impact Statement. The FY 2000 budget
    provides limited funding for this technology pending completion of this
    evaluation.
        The Nuclear Energy budget also supports the Department's
    radioisotope power system production capability. These power systems
    are used by NASA and other government agencies for deep space probes
    and other remote power applications. The Department has adopted a
    strategy wherein the our budget is used only to maintain physical and
    institutional capability to manufacture these systems, while the cost
    of production will be charged to its federal agency ``customers.'' DOE
    is the only source of these power science and technology systems, and
    the nation's ability to explore deep space depends on the availability
    of these systems.
        The Nuclear Energy budget also supports production and distribution
    of isotopes for medicine and research where no commercially available
    alternatives exist. The FY 2000 budget request proposes to launch the
    Advanced Nuclear Medicine Initiative, to apply our unique expertise and
    capabilities in isotopes to advance nuclear medicine technology. This
    initiative sponsors peer-reviewed research that would include using the
    Department's large inventory of alpha-emitting isotopes to fight a wide
    spectrum of illnesses.
        The Office of Nuclear Energy has primary responsibility within the
    Department for implementation of Public Law 105-204, which requires the
    Department to prepare a plan to begin construction of two depleted
    uranium hexafluoride conversion plants at Portsmouth, Ohio and Paducah,
    Kentucky by January 31, 2004. Depleted uranium hexafluoride is a
    residual product created from the operation of uranium enrichment
    plants formerly operated by the Department and now operated by the
    privatized U.S. Enrichment Corporation. The Department expects to
    publish a formal solicitation for expressions of interest (EOI) in
    construction of these plants within the next week. The Office of
    Nuclear Energy is currently working to complete the statutorily
    required plan to support plant construction. The Department expects to
    transmit the final plan to the Congress this spring once responses are
    received from the EOI.
        Key results supported by the FY 2000 budget request include:

     Solve critical technology issues with existing nuclear plants.
     Conduct investigator-initiated, peer-reviewed innovative
            nuclear energy research and development.
     Optimize the capability of existing nuclear power plants to
            contribute to the reduction in U.S. CO2 emissions.
     Develop and produce vital medical, research, and industrial
            isotopes and their related applications.
     Maintain the capability to produce safe nuclear power systems
            and related technologies for future space exploration.
     Support research and education programs at U.S. universities
            through grants, fellowships, and scholarships.
     Manage Nuclear Energy facilities and DOE research reactors in
            a safe, economical, and environmentally sound manner.
     Develop advanced technologies to treat DOE spent fuel.
     Implement a long-term management strategy for the Department's
            depleted uranium hexafluoride inventory.
     Maintain and/or deactivate the Department's surplus non-
            weapons nuclear reactor sites.
                             environmental quality
    Environmental Management
        The Department is requesting $5.9 billion for the Office of
    Environmental Management, including privatization, or roughly $100
    million more than the current year. Of this amount, all but $571
    million is funded under ``Atomic Energy Defense Activities'' as part of
    the Nation's defense budget. The civilian portion of the budget request
    includes environmental management activities at the Department's
    civilian research and production facilities as well as funding for the
    Department's statutory obligations for environmental restoration work
    at the West Valley facility in New York, uranium mill tailings sites,
    and uranium enrichment facilities.
        The FY 2000 request reflects our effort to maintain a stable
    program that provides sufficient resources to meet our multiple demands
    of risk reduction, compliance and mortgage reduction. Because of the
    complexity of the cleanup and waste treatment operations, reliable and
    sustained funding is essential for performing the extraordinarily
    complex planning required for these long-lead time projects. The
    commitments based on this budget will be accelerated cleanup and
    closure, deployment of new technologies, and progress in resolving the
    nuclear waste backlog. We have set very ambitious goals for closing
    several sites by the year 2006, including a number of major non-defense
    projects including the Weldon Spring Site in Missouri, the Battelle
    Columbus Laboratory and the Mound Plant in Ohio, and the Energy
    Technology Engineering Center in California.
        By working towards our goal for cleanup, we not only reduce the
    hazards presently facing our workforce and the public, but also reduce
    the long-term financial burden on the taxpayer. For every year that a
    site remains open because cleanup has not been completed, we are paying
    a ``mortgage'' of necessary overhead for activities such as site
    security, facility operations, personnel, safety and other costs. By
    completing cleanup sooner, particularly at sites where we have no other
    continuing missions, we can substantially reduce these overhead costs.
    The FY 2000 budget request is now fully structured to emphasize site
    closure and project completion.
        We have made substantial progress towards this vision. We are
    completing site cleanups. In FY 1998, we finished cleanup of an entire
    class of nuclear waste sites--uranium mill tailings sites. Except for
    remaining ground water contamination, we completed cleanup of 22 large
    uranium mill tailings sites as well as 5,300 ``vicinity properties,''
    including elementary schools and homes. This project included
    remediation of over 40 million cubic yards of contaminated soil and
    material, a volume that would cover a football field with a mound of
    dirt four miles high. Also in FY 1998, we completed the primary
    vitrification campaign of the high-level wastes at the West Valley
    Demonstration Project in New York, ahead of schedule, and have begun
    the vitrification of high-level waste tank heels which will continue
    through FY 2001.
        I previously discussed the Department's responsibility for
    construction of conversion plants for depleted uranium hexafluoride
    resulting from the operation of uranium enrichment plants at Paducah,
    Kentucky and Portsmouth, Ohio. Decontamination and decommissioning of
    the uranium enrichment plants themselves, including a third plant
    located at Oak Ridge, Tennessee are funded out of the Uranium
    Enrichment Decontamination and Decommissioning Fund established by the
    Energy Policy Act of 1992. This fund also is used to reimburse private-
    sector companies operating uranium and thorium processing sites for
    specified costs of environmental cleanup within statutorily defined
    limitations. The Departments FY 2000 request for these activities is
    $240.2 million--a $20 million increase over the current year. The
    increase is entirely within the uranium enrichment portion of the fund.
        Within the Defense Environmental Management account, we are
    continuing work on the clean up of the Department's nuclear weapons
    complex. We continue to have a goal of cleaning up several major sites,
    including Fernald, Rocky Flats, and Mound, by the end of FY 2006, and
    to reduce the life-cycle cost of completing clean up activities at our
    other environmental management sites. We are also continuing with
    privatization projects at Carlsbad, Hanford, Idaho, and Oak Ridge. The
    Department will be submitting shortly its annual report to the Congress
    on the status of these privatization projects.
        The Office of Environmental Management has been playing a lead role
    in the Department-wide effort to use roadmapping techniques to improve
    the way we develop and manage science and technology programs. EM has
    constructed science and technology roadmaps at three levels: overall EM
    investments in science and technology have been mapped in the EM R&D
    Program Plan that was released in November 1998; five problem area
    roadmaps have been built at the Focus Area level; and a number of
    project level roadmaps have been developed, e.g., Hanford Vadose Zone
    and Salt Treatment Alternatives at the Savannah River Site.
        EM is applying systems engineering principles to develop these
    roadmaps on an integrated, complex wide basis. This complex-wide
    integration effort, championed by five Field Office Managers and the EM
    Assistant Secretary, was a winner of the 1998 Government Technology
    Leadership Award, sponsored by Government Executive magazine. Complex-
    wide integration activities, combined with science and technology
    roadmapping efforts, will strengthen the scientific and technical
    underpinnings of the EM program and ultimately reduce the cost of the
    cleanup effort.
    Office of Civilian Radioactive Waste Management
        In December 1998, the Department completed, and submitted to the
    President, the Congress, and the public the Viability Assessment of a
    repository at Yucca

    Mountain. This assessment assembled, for the first time, information
    about all major elements of the site and proposed repository design.
    Based on the results of the Viability Assessment, the Department
    believes the scientific and technical work at Yucca Mountain should
    proceed to support a decision by the Secretary of Energy in 2001 on
    whether to recommend the site to the President for development as a
    geological repository. The assessment also included a preliminary
    baseline design, cost and schedule for completion of the proposed
    repository. For FY 2000, the Department is requesting $409 million, an
    increase of $51 million over the current fiscal year to fund the
    additional cost of these efforts. This includes $39 million of the $85
    million reserved in the fiscal year 1996 Defense Nuclear Waste
    Appropriation. These funds will support continuation of technical
    evaluation of the site and refinement of engineering and design for the
    repository.
        Under the current schedule, the Department would also complete and
    issue the Final Environmental Impact Statement for the repository in
    the year 2000. If the site is suitable, the formal recommendation of
    the site to the President would be made in 2001 and submission of the
    license application to the Nuclear regulatory Commission would occur in
    2002.
                                    science
        As I said earlier, the Department of Energy is, at its heart, a
    science and technology agency. Science and technology are not merely
    parts of this Department, they are the foundation on which all the
    Department's work is based. Our request for science funding for FY 2000
    is $2.8 billion, an increase of $138 million. Included in this amount
    is $70 million for the Department's role in the President's Information
    Technology for the 21st Century initiative. This investment will enable
    us to develop and deploy new, far faster computers for advanced
    simulation. We call it the ``Scientific Simulation Initiative,'' or
    ``SSI.'' Our goal is to develop a multi-tera scale national computing
    infrastructure for solving complex scientific and engineering problems
    of national importance. We expect that this initiative, over the next
    five years, will elevate simulation to a discovery tool alongside
    experimentation and theory.
        These new simulation capabilities will be powerful tools to do
    things like design new, clean combustion devices, develop new
    pharmaceuticals, explore new materials, and improve our weather and
    climate research, reaffirming America's leading role in these fields.
        We will continue investing in other science programs that will have
    far reaching benefits to all of the country's and the Department's
    research agenda. For example, we are continuing development of the
    Spallation Neutron Source (SNS) at the Oak Ridge National Laboratory.
    This state of the art neutron scattering facility will lead to the
    development of stronger and lighter materials, more efficient motors,
    and increase our understanding of the structure of matter. The SNS is
    essential for restoring American leadership in neutron scattering, a
    core capability for materials science.
        It is important to emphasize here the contributions that the
    Science program makes not only to the advancement of basic sciences in
    this country and the continuation of U.S. scientific leadership, but
    also the direct impact the science program has on the other three
    missions of the Department of Energy. Energy Resources, Environmental
    Quality, and National Security are all the beneficiaries of the steady
    stream of discoveries and expertise from the DOE laboratory system, and
    from the universities and industries who perform work funded by DOE.
                          departmental administration
        The offices funded under the Departmental Administration
    appropriations account provide headquarters with guidance and support
    of all operating elements of the Department including such as areas as
    human resources, administration, accounting, budgeting, legal services,
    information management systems, congressional liaison and public
    affairs. Management of program activities is funded by program
    direction funding within each program budget. The Department is
    requesting $247.5 million dollars for Departmental Administration, a
    $2.9 million decrease.
                                   management
        Working with Congress, we have reduced our Federal employee
    workforce by 25 percent in less than four years. We've also reduced our
    contractor employment by 31 percent since its peak in 1992. But this
    streamlining has left gaps in important skill areas. To resolve this,
    in December, Secretary Richardson announced a targeted effort to bring
    specialized skills into the Department as part of his ``Workforce 21''
    initiative. One of the first steps taken was the development of an R&D
    Technical Managers Initiative, which now includes a detailed action
    plan for improving R&D technical management, to ensure the Department
    has the essential expertise to carry out our missions in the future.
        We are also taking a comprehensive look at the structure of the
    Department, looking for ways to improve efficiency, strengthen
    management, ensure accountability, and improve reporting requirements.
    For example, we have restructured the Research and Development Council,
    which I chair, to integrate our research activities across the
    Department. We have also reinvigorated the Laboratory Operations Board
    to ensure that our government-owned, contractor-operated laboratories
    are being managed effectively and are fully accountable to the
    Department.
                                   conclusion
        The Department's FY 2000 budget request of $17.8 billion will, if
    funded, allow the Department to serve the American people effectively,
    in pursuit of its core missions:

     Advancing the frontiers of science and technology;
     Ensuring the security, diversity and affordability of
            America's energy resources;
     Promoting national security, and keeping our nuclear weapons
            stockpile safe, secure, and reliable; and
     Cleaning up the environmental legacy of the Cold War.
        The budget we have submitted attempts to balance many competing
    demands from the scientific community, from industry, and from
    communities that surround and host our facilities, within current
    budgetary constraints. We believe that this budget, along with some of
    the essential policy initiatives I have outlined, achieves this
    balance, and we ask for your support.
        Thank you again for the opportunity to testify this morning. I
    would be pleased to answer any questions the Subcommittee has regarding
    the FY 2000 budget.

                            U.S. Department of Energy
                Office of Nonproliferation and National Security
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Research and Development.........       $210.0       $221.0       $+11.0
    Arms Control.....................        256.9        296.0        +39.1
    International Nuclear Safety.....         30.0         34.0         +4.0
    HEU Transparency Implementation..         13.6         15.8         +2.2
    Nuclear Safeguards...............         55.2         59.1         +3.9
    Security Investigations*.........         30.0         30.0          0.0
    Emergency Management.............         21.0         21.0          0.0
    Program Direction................         80.4         90.4        +10.0
    ------------------------------------------------------------------------
    Subtotal.........................       $697.1       $767.3       +$70.2
    Use of Prior Year Balances.......         -6.2           --         +6.2
    Offset to user organizations.....        -20.0        -20.0          0.0
    ------------------------------------------------------------------------
    TOTAL, Nonproliferation..........       $670.9       $747.3       $+76.4
    ------------------------------------------------------------------------
    *Program Offices are providing funding for Security Investigations to be
      used for all contractor personnel in the field. For FY 1999, $20
      million appropriated, plus $15 million per Congressional Notification
      letter; and for FY 2000, a request of $20 million.

                    Key Results Supported by FY 2000 Budget
     Increases nuclear safety and threat reduction assistance to
            Russia and maintains cooperation with the Newly Independent
            States (NIS) and Baltics to secure and prevent the spread of
            Special Nuclear and other Weapons of Mass Destruction materials
            and expertise.
     Continues development of technology upgrades for Comprehensive
            Test Ban Treaty monitoring and verification.
     Accelerates research and development of technologies for
            domestic response to chemical and biological weapons threats.
     Sustains Nuclear Safeguards and Security and Emergency
            Management Programs, and supports Critical Infrastructure
            Program.
     Protects against inadvertent release of Restricted Data and
            Formerly Restricted Data (P.L. 105-261), and continues the
            declassification process while protecting our national
            security.

                            U.S. Department of Energy
                 Office of Nuclear Energy, Science and Technology
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Nuclear Energy Research &
     Development
      Advanced Radioisotope Power            $37.0        $37.0         $0.0
     Systems.........................
      Test Reactor Area & Landlord             6.8          9.0         +2.2
     Functions.......................
      University Reactor Fuel                 11.0         11.3         +0.3
     Assistance and Support..........
      Nuclear Energy Plant                      --          5.0         +5.0
     Optimization (NEPO).............
      Nuclear Energy Research                 19.0         25.0         +6.0
     Initiative (NERI)...............
    ------------------------------------------------------------------------
      Total, Nuclear Energy R&D......         73.8         87.3        +13.5
    Fast Flux Test Facility..........         30.0         30.0          0.0
    Termination Costs................         85.0         65.0        -20.0
    Uranium Programs.................         35.4         41.0         +5.6
    Isotope Production & Distribution         21.5         21.0         -0.5
    Program Direction................         21.2         25.0         +3.8
      Subtotal, Nuclear Energy.......        266.9        269.3         +2.4
    ------------------------------------------------------------------------
      Use of Prior Year Balances.....         -3.5          0.0         +3.5
    TOTAL, Nuclear Energy............       $263.4       $269.3        $+5.9
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Solve critical technology issues associated with existing
            nuclear plants.
     Conduct investigator-initiated, peer-reviewed innovative
            nuclear energy research and development.
     Optimize the capability of nuclear power plants to contribute
            to the reduction in U.S. CO2 emissions.
     Develop and produce vital medical, research, and industrial
            isotopes and their related applications.
     Maintain capability to produce safe nuclear power systems and
            related technologies for future space exploration.
     Support research and education programs at U.S. universities
            through grants, fellowships, and scholarships.
     Manage Nuclear Energy facilities and DOE research reactors in
            a safe, economic, and environmentally sound manner.
     Develop advanced technologies to treat DOE spent fuel.
     Implement long-term management strategy for the Department's
            depleted uranium hexafluoride inventory.
     Maintain and/or deactivate the Department's surplus nonweapons
            nuclear reactor sites.

                            U.S. Department of Energy
                           Office of Defense Programs
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Stockpile Stewardship
      Core Stockpile Stewardship.....     $1,012.0     $1,153.9      $+141.9
      ASCI/Stockpile Computing.......        483.8        542.5        +58.8
      Inertial Confinement Fusion....        503.4        465.7        -37.7
      Technology Partnerships........         43.0         22.2        -20.8
      Education......................         19.0         29.8        +10.8
      Infrastructure Construction....         64.7         72.1         +7.4
    ------------------------------------------------------------------------
        Subtotal, Stockpile                2,125.9      2,286.2       +160.3
     Stewardship.....................
    Stockpile Management
      Core Stockpile Management......      1,639.4      1,552.0        -87.4
      Enhanced Surveillance..........         81.5         85.3         +3.8
      Advanced Manufacturing.........         79.5         85.0         +5.5
      Radiological/Nuclear Accident           76.2         77.6         +1.4
     Response........................
      Tritium Source.................        167.0        170.0         +3.0
      Materials......................         27.9         28.4         +0.5
    ------------------------------------------------------------------------
        Subtotal, Stockpile                2,071.5      1,998.3        -73.2
     Management......................
    Program Direction................        249.6        246.5         -3.1
    Subtotal, Weapons Activities.....      4,447.0      4,531.0        +84.0
    Use of Prior Year Balances.......        -47.0          0.0        +47.0
    ------------------------------------------------------------------------
    TOTAL, Weapons Activities........     $4,400.0     $4,531.0      $+131.0
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Maintain confidence in the safety and reliability of the
            nuclear weapons stockpile without nuclear testing
     Initiate manufacture of W88 pits for enduring stockpile
     Maintain National Ignition Facility schedule
     Demonstrate three-dimensional analysis of specific behavior of
            a nuclear weapon primary
     Execute two subcritical experiments
     Dismantle approximately 375 weapons
     Begin implementation of the Secretarial decision to produce
            tritium in a TVA reactor including the start of construction of
            the tritium extraction facility and maintaining an accelerator
            as a backup

                            U.S. Department of Energy
                    Office of Worker and Community Transition
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Work Force Restructuring.........         $9.4         $9.4         $0.0
    Community Transition Assistance..         16.6         17.1         +0.5
    Program Direction................          3.9          3.5         -0.4
    ------------------------------------------------------------------------
      Subtotal, Worker & Community           $29.9        $30.0         $0.1
     Transition......................
    Use of Prior Year Balances.......         -1.7          0.0         +1.7
    ------------------------------------------------------------------------
    TOTAL, Worker and Community              $28.2        $30.0        $+1.8
     Transition......................
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Manage the Department's efforts to restructure its contractor
            work force during FY 2000.
     Provide enhanced separation benefits to workers separated from
            former defense nuclear program activities.
     With community assistance, create 1,700 new jobs through
            expansion of existing businesses or new business starts within
            communities affected by the Department of Energy's work force
            restructuring.
     Support renegotiation or renewal of 25 collective bargaining
            agreements throughout the Department of Energy complex and
            assist field organizations in labor/management relations and
            negotiations.
     Stimulate efforts to dispose of unnecessary assets and reuse
            existing facilities.

                            U.S. Department of Energy
                 Office of Energy Efficiency & Renewable Energy
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Power Technologies (formerly            $272.3       $325.2       $+52.9
     Utilities)......................
    Industry Technologies............        165.9        171.0         +5.1
    Transportation Technologies......        243.8        305.5        +61.7
    Building Technologies, States &          262.2        335.9        +73.7
     Communities.....................
    Federal Programs.................         23.8         31.9         +8.1
    Program Management...............         59.7         66.9         +7.2
    ------------------------------------------------------------------------
      Subtotal, Energy Efficiency &       $1,027.7     $1,236.4      $+208.7
     Renewable Energy................
    Use of prior year balances.......        -64.0         -0.8        +63.2
    ------------------------------------------------------------------------
    Total, Energy Efficiency &              $963.7     $1,235.6       $271.9
     Renewable Energy................
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Power--(formerly Utilities) Improve the performance, reduce
            the cost, and perform highly-leveraged field verifications of
            technologies that generate electricity from renewable energy
            resources in a highly-competitive, restructured utility
            environment. Power Technology programs are expected to replace
            up to 1.2 Quads of domestic primary energy by clean renewable
            resources, save consumers $1.4 billion, and reduce annual U.S.
            carbon emissions by nearly 24 million metric tons by 2010,
            roughly equivalent to all the energy used for a year in homes
            in Texas, our nation's second largest state.
     Industry: Develop and facilitate the deployment of energy
            efficient technologies in partnership with the most energy
            intensive industries. Investments are expected to save up to
            1.5 Quads, $6 billion, and 29 million metric tons carbon
            equivalent (MMTCE) annually by 2010, roughly equivalent to all
            the industrial energy used for a year in Pennsylvania, the
            fifth largest state in the nation.
     Transportation: The Partnership for a New Generation of
            Vehicles (PNGV) will support development of technologies needed
            for an 80 mpg family automobile, and more efficient small
            trucks and heavy trucks. DOE Transportation programs are
            expected to save up to 1 million barrels/day of oil, $9.9
            billion, and reduce carbon 25 MMTCE annually by 2010, roughly
            equivalent to the oil based fuels used for a year for
            transportation in Florida, the third largest state in the
            nation.
     Buildings: Work with industry, states, and other key partners
            to develop and implement energy efficient buildings and
            building technologies and programs leading to savings of up to
            2.3 Quads, $16 billion, and 36 MMTCE annually by 2010. This is
            roughly equivalent to all residential and commercial building
            energy use in Texas in a year. In addition, the program will
            weatherize nearly 77,000 low income homes.
     FEMP: Accelerate efforts to deliver federal energy savings
            through $5 billion worth of Energy Savings Performance
            Contracts (ESPCs) with the private sector. Also accelerate
            utility financing and procurement of energy efficiency products
            to achieve 30 percent reduction in federal energy efficiency.
            FEMP programs are expected to save up to 0.1 Quads, $400
            million, and 1.2 MMTCE annually by 2010.

                            U.S. Department of Energy
                             Office of Fossil Energy
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Fossil Energy Research and
     Development
      Coal...........................       $123.1       $122.4        $-0.7
      Petroleum......................         48.6         50.2         +1.6
      Gas............................        115.2        105.3         -9.9
      Management & Other.............         97.1         97.1          0.0
    ------------------------------------------------------------------------
    Subtotal, Fossil Energy R&D......        384.0        375.0         -9.0
    Naval Petroleum & Oil Shale               20.7         21.2         +0.5
     Reserves........................
    Elk Hills School Lands Fund......         36.0         36.0          0.0
    Strategic Petroleum Reserve......        160.1        164.0         +3.9
    ------------------------------------------------------------------------
    Subtotal, Fossil Energy..........       $600.8       $596.2        -$4.6
    Use of prior year balances &              -7.9        -33.2        -25.3
     other...........................
    Clean Coal Technology Program....        -40.0       -246.0       -206.0
    ------------------------------------------------------------------------
    TOTAL, Fossil Energy.............       $552.9       $317.0      $-235.9
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Coal R&D--Start construction of clean, advanced coal fire
            power system-part of the final phase of the Low Emissions
            Boiler Program (LEBS) to be completed in 2001. The system will
            use newly developed high temperature filtration processes for
            superior environmental performance and provide the foundation
            for a new generation of highly efficient supercritical steam
            power plants. Complete subscale testing of high temperature air
            furnace technology for use in highly efficient indirectly-fired
            combustion power systems and in Vision 21 Power Plexes.
            Complete initial lab tests of novel gaseous separation (O2, H,
            CO2) technologies to provide low cost options for Vision 21
            Power Plexes. Identify candidates for low-cost gas purification
            technologies to support zero emissions goal of Vision 21 Power
            Plexes.
     Natural Gas and Oil R&D--Continue scale-up development of
            ceramic membrane for gas-to-liquids processing; continue
            implementing President's Committee of Advisors on Science and
            Technology (PCAST) recommendation for methane hydrates recovery
            program and continue development of advanced diagnostics and
            imaging technologies for highly fractured and bypassed gas
            reservoirs and endangered domestic oil reservoirs. Continue
            support for National Lab partnerships with industry and for
            Petroleum Technology Transfer Council. Initiate Preferred
            Petroleum Upstream Management Practices (PUMP).
     Continue restructured advanced gas turbine program for 2001
            introduction of ``quantum leap'' turbine, continue scale-up
            tests of solid oxide fuel cell, and continue cost-reduction R&D
            for molten carbonate fuel cell technologies.
     Naval Petroleum and Oil Shale Reserves--Continue to operate
            NPR3 and to finalize equity determination activities on NPR1.
     Strategic Petroleum Reserve--Maintain a highly reliable level
            of operational readiness. Complete Weeks Island oil skimming
            and decommissioning. Initiate long term monitoring of Weeks
            Island to assure mine stability. Test major SPR systems in the
            post-Life Extension program era at all sites. The addition of
            $5 million to the SPR Petroleum Account assures the capability
            to sustain drawdown operations until sales receipts are
            available.
     Clean Coal Technology--Continue prior cost-shared commitment
            to 20 projects projected to be active in FY 2000.

                            U.S. Department of Energy
                       Office of Environmental Management
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999*
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Site Closure.....................     $1,290.2     $1,265.6       $-24.6
    Site/Project Completion..........      1,141.1      1,081.8        -59.3
    Post 2006 Completion.............      2,403.9      2,532.5       +128.6
    Science and Technology...........        243.2        230.5        -12.7
    UE D&D Fund......................        220.2        240.2        +20.0
    Privatization....................        228.4        253.0        +24.6
    Program Direction................        337.1        349.4        +12.3
    ------------------------------------------------------------------------
      Subtotal, Environmental              5,864.1      5,953.0        +88.9
     Management......................
    Uncosted Offset..................        -32.1        -25.0         +7.1
    ------------------------------------------------------------------------
    TOTAL, Environmental Management..     $5,832.0     $5,928.0       $+96.0
    ------------------------------------------------------------------------
    *Includes FY 1999 Emergency Supplemental funding of $13.8 million to
      correct year 2000 computer problems.

                    Key Results Supported by FY 2000 Budget
     Accelerate clean up at as many sites as possible by 2006,
            reducing risks to workers, public health, and the environment.
     Pursue accelerated closure of three major sites: Rocky Flats,
            Fernald, and Mound.
     Provides for the first full year of operation of the Waste
            Isolation Pilot Plant (WIPP) by receiving waste from multiple
            sites across the country for permanent disposal. Transuranic
            waste will be received from New Mexico, Idaho, Colorado, South
            Carolina, Washington, Ohio, and Illinois.
     Continue EM's contracting strategy of privatizing clean up
            activities at multiple sites.
     Support aggressive efforts to deploy new, efficient
            technologies to accelerate clean up schedules, and produce
            significant cost savings.
     Vitrify between 100 and 105 canisters of high-level waste at
            the Savannah River Site, South Carolina and in West Valley, New
            York

                            U.S. Department of Energy
                    Office of Environment, Safety and Health
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Technical Assistance.............        $50.4        $50.8        $+0.4
    Health Studies...................         78.5         86.5         +8.0
    Oversight........................         25.0         25.5         +0.5
    ------------------------------------------------------------------------
    Subtotal, Environment, Safety and       $153.9       $162.8        $+8.9
     Health..........................
    Use of Prior Year Balances.......         -5.1         -8.7         -3.6
    ------------------------------------------------------------------------
    Total, Environment, Safety and          $148.8       $154.1        +$5.3
     Health..........................
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Technical Assistance: Technical experts in fields of nuclear
            safety engineering, occupational safety, radiation protection
            and other environment, safety and health disciplines work with
            DOE line programs to solve critical problems and develop
            programs to prevent injuries, illnesses, environmental
            contamination, and to comply with all environmental laws and
            regulations
     Health Studies: Continue research on the effects of radiation
            on humans; epidemiological studies on occupational diseases;
            and studies to determine potential health effects to workers
            and community residents exposed to hazardous materials from DOE
            operations. This year includes funding for the Department of
            Health and Human Services to conduct health studies previously
            funded by the Office of Environmental Management.
     Oversight: Perform independent oversight to appraise the
            effectiveness of environment, safety, health, safeguards, and
            security programs, and follow-up with corrective actions.
            Administer enforcement programs to assure DOE contractors
            adhere to safety rules.

                            U.S. Department of Energy
                                Office of Science
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Basic Energy Sciences............       $799.5       $888.1       $+88.6
    Biological and Environmental             436.7        411.2        -25.5
     Research........................
      Less One Time Projects.........        -46.8          0.0        +46.8
      Total BER Base.................        389.9        411.2        +21.3
    Fusion Energy Sciences...........        222.6        222.6          0.0
    Computational and Technology             157.5        198.9        +41.4
     Research........................
    High Energy Physics..............        695.5        697.1         +5.5
    Nuclear Physics..................        334.6        342.9         +4.5
    Multiprogram Energy Labs & Other.         72.1         74.6         +2.5
      Subtotal.......................      2,718.5      2,835.4       +117.2
    General Reduction/Use of Prior           -13.0          0.0        +13.0
     Year Balances...................
    Superconducting Super Collider            -7.6          0.0         +7.6
     (SSC) Balances..................
    ------------------------------------------------------------------------
    TOTAL, Science...................     $2,697.9     $2,835.4      $+137.8
    Technical Information Management.         $8.6         $9.1        $+0.8
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Begin the ``Scientific Simulation Initiative,'' a critical
            element in the President's Information Technology for the 21st
            Century program, in partnership with NSF and other agencies
            (NASA, DOD, NOAA, NIH); an integrated initiative in computer
            simulation and modeling that builds upon, and is integrated
            with Accelerated Strategic Computing Initiative (ASCI)
            capabilities.
     Increase Climate Change Technology Initiative research in
            carbon management science, in relation to DOE's technology
            programs which are directed at the themes of science for
            efficient technologies, fundamental science underpinning
            advances in all low/no-carbon energy sources and sequestration
            science.
     Continue construction of the Spallation Neutron Source at Oak
            Ridge National Laboratory to regain our position of
            international leadership in neutron sources used for physical,
            chemical, materials, biological, and medical research. This
            $1.3 billion facility involves DOE leadership of an
            interlaboratory effort (ORNL, LBNL, LANL, BNL, and ANL).
     Maintain scientific user facilities by providing operating
            time and user support for over 15,000 scientists in
            universities, federal agencies, and industry.
     Continued participation in the President's Next Generation
            Internet initiative, the Partnership for New Generation of
            Vehicles, DOE 2000, genome and global climate change.
     $32 million for carbon management science, including using
            microbial genomics to find ways to sequester carbon for
            potential greeenhouse gas reduction.

                            U.S. Department of Energy
                     Office of Fissile Materials Disposition
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Future Storage...................         $0.9         $4.3        $+3.4
    Disposition......................         86.0         95.0         +9.0
    Facility Design..................         48.0         62.9        +14.9
    U.S./Russian Activities..........         24.9         24.9          0.0
    Core Technologies................          2.7          2.3         -0.4
    NEPA Compliance..................          1.9          3.3         +1.4
    Program Direction................          4.6          7.3         +2.7
    Use of Prior Year Balances.......         -1.5          0.0         +1.5
    TOTAL, Fissile Materials                $167.5       $200.0       $-32.5
     Disposition.....................
    ------------------------------------------------------------------------
    Russian Plutonium Disposition....        200.0          0.0       -200.0
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
     Complete Title I and initiate Title II designs of Pit
            Disassembly and Conversion Facility and Mixed Oxide (MOX) Fuel
            Fabrication Facility
     Initiate Title I design of an Immobilization and Processing
            Facility
     Begin implementation of U.S./Russian accord for plutonium
            disposition in Russia
     Continue Phase II testing of integrated prototype for pit
            disassembly and conversion
     Upgrade surplus pit storage facilities at Pantex
     Continue disposition of surplus highly enriched uranium (HEU)
     Issue a draft environmental impact statement on disposition of
            U\233\

                            U.S. Department of Energy
                 Office of Civilian Radioactive Waste Management
                      FY 2000 Congressional Budget Request
                              [Dollars in Millions]
    ------------------------------------------------------------------------
                                         FY 1999
                 Program                Comparable    FY 2000       Change
                                         Approp.      Request
    ------------------------------------------------------------------------
    Yucca Mountain Site                     $282.4       $331.7       $+49.3
     Characterization................
    Waste Acceptance, Storage and              1.9          5.7         +3.8
     Transportation..................
    Accelerator Transmutation of               4.0           --          4.0
     Waste...........................
    Management Functions.............         69.7         71.6         +1.9
    ------------------------------------------------------------------------
      Subtotal.......................        358.0        409.0        +51.0
    Less the Use of Previously                -0.5        -39.0        -38.5
     Appropriated Funds..............
    ------------------------------------------------------------------------
    TOTAL, Civilian Radioactive Waste       $357.5       $370.0        $12.5
     Management......................
    ------------------------------------------------------------------------

                    Key Results Supported by FY 2000 Budget
        The FY 2000 budget requests $370 million in new budget authority
    and assumes that $39 million of the $85 million reserved in the FY 1996
    Energy & Water Development Appropriations Act (P. L. 104-46) will be
    made available by Congress. The total program funding request of $409
    million in FY 2000 supports activities necessary to be completed in
    time to determine the suitability of the Yucca Mountain site as a
    repository, develop the documentation needed for a Secretarial decision
    on the Site Recommendation to the President in FY 2001, and conduct
    other activities associated with the federal government's waste
    acceptance obligations.
    Yucca Mountain Site Characterization Project in FY 2000 will:
     Select the natural system reference models to support a
            decision on whether to recommend the Site to the President and
            the License Application.
     Select the reference repository and waste package designs to
            support a decision whether to recommend the Site to the
            President and the License Application.
     Complete and issue the final Environmental Impact Statement.
     Continue the evaluation of this site for compliance with 10
            CFR Part 960, the Department of Energy's repository siting
            guidelines.
     Initiate development of the documentation to support a
            Secretarial decision on Site Recommendation.
    Waste Acceptance, Storage, and Transportation activities will focus on:
     Development of processes for the legal and physical transfer
            of commercial spent nuclear fuel to the federal government.
     Pre-licensing discussions with the Nuclear Regulatory
            Commission for a non-site-specific interim storage facility.
     Updating a Request for Proposal scheduled for issuance in FY
            2001 for acquisition of waste acceptance and transportation
            services.
     Institutional issues of concern to Program stakeholders
            regarding transportation.
    Regulatory Compliance, Program Control, and Management functions
            include:
     Nuclear quality assurance, NEPA compliance, and compliance
            with external regulatory requirements.
     System engineering and integration, program planning,
            independent technical oversight of critical program elements,
            validation of repository design concepts and operating
            strategies, and licensing records management.
     Federal salaries, training, computer applications and
            information technology.

        Mr. Barton. Thank you, Dr. Moniz.
        We've been joined by the distinguished chairman of the full
    committee, the Honorable Tom Bliley. Does he wish to ask
    questions first? Mr. Chairman, I've given you the honor, if you
    wish to be the first questioner.
        Mr. Bliley. Oh, I'll pass.
        Mr. Barton. Okay.
        The Chair will then recognize Mr. Norwood--Mr. Norwood's on
    a tight time schedule and asked if he could go before some of
    the other subcommittee members.
        Mr. Norwood, for 5 minutes, questions only.
        Mr. Norwood. Thank you very much, Mr. Chairman, and I do
    appreciate it--the tight schedule is difficult today, and I do
    have some questions--however, those I have about Tritium and
    Yucca Mountain, et cetera, I'd like to submit for the record,
    and concentrate my efforts just a few minutes on the power
    marketing administration. In particular, my interest is the
    southeastern power marketing administration, which happens to
    be the best one, I think--I believe I'm right in saying that
    out there--at least we tend to generate more than we spend,
    that's always a good sign.
        Mr. Barton. It's the best one in the Southeast----
        Mr. Norwood. There's no question you can say that, Mr.
    Chairman, you're right very often.
        Has the gentleman--in either or both--has the
    administration made an actual policy decision to terminate
    wholesale power contracts with existing preference customers
    by, in your budget, having eliminated funding for purchase
    power and wheeling? Has there been a decision made, a policy
    decision?
        Mr. Moniz. The budget reflects, clearly, a policy that the
    PMAs would not need to participate in purchasing power or
    wheeling services for PMA customers, because the customers can
    obtain the services themselves, working directly with
    suppliers. However, since announcing that policy, we have
    learned that a number of PMA customers believe in an abrupt
    adoption of this policy----
        Mr. Norwood. Would you pull that mike just a little closer
    to you, please?
        Mr. Moniz. Yes. Since that time, we have learned that a
    number of PMA customers believe that an abrupt adoption of this
    past will create undue hardships. So we stand ready to work
    with Congress and PMA customers to develop a workable plan to
    go forward. The Department is open to new ideas that provide a
    permanent solution for financing this activity.
        If I may, Mr. Norwood, let me ask our CFO, Mike Telson, to
    amplify on this statement.
        Mr. Norwood. Thank you. Well, did you say to me you've
    changed your mind and you're going to change the budget--is
    that what you said? And then we'll talk about it again under
    more sensible circumstances.
        Mr. Telson. Mr. Norwood, we're willing to work with you to
    address any problems that are raised, but if I might take just
    about a minute to describe what the problem is. Over a number
    of years, we've been working with our customers to bring down
    what we call purchase power, using alternate financing
    techniques--that is, wherever possible where the customers can
    pay where we get our power from, we would arrange for that to
    happen, and so get it off our budget book.
        The problem that we have is that the purchase power/
    wheeling expenditures that we have to seek--we have about $50
    million or so that are left right now from a peak of much
    higher a number of years ago--that money has to be sought as a
    discretionary appropriation, even though that money comes back
    to us immediately in the form of a reimbursement from our
    customers.
        However, that money goes to the Treasury, it doesn't come
    to us.
        Mr. Norwood. In other words, they sell electricity and we
    put it back into the Treasury.
        Mr. Telson. Correct.
        Mr. Norwood. I understand.
        Mr. Telson. But we have to take $50 million, roughly, from
    a very, very tight pot, which you have----
        Mr. Norwood. I understand.
        Mr. Telson. [continuing] even a worse problem than we do,
    having to find money within a discretionary pot. So, we have an
    asymmetry which creates a problem for the Department, creates a
    problem for the whole budget. Obviously, just the bottom line
    is that if we don't appropriate the money, it's clear that we
    can't get the receipts from the purchase power. Right?
        Mr. Norwood. Right.
        Mr. Telson. Obviously. Yet prior OMB and CBO baselines
    would have you believe that that was possible. See, that's the
    situation we encountered when we were preparing this budget. So
    what we've done is we've taken the lead to work with OMB to
    prepare a proposal that would rectify the situation by
    basically taking these receipts out of the base sum, because
    we're not going to seek an appropriation for that.
        Mr. Norwood. You know, we all appreciate the problem that
    you generate the money, it goes to the Federal treasury, and
    you don't get it back appropriately--I've fussed about that for
    a long time. In fact, all of us who pay taxes into the Federal
    treasury have the same problem--we can't seem to get any of it
    back. But I understand and appreciate where you're coming from,
    but there are nuances here that will lower the amount that's
    going into the Federal treasury if you continue down this line,
    wherever the money's spent, and that's not good, either.
        Mr. Telson. Right.
        Mr. Norwood. Let me just ask quickly--because we're running
    out of time--did you check on the law when you made the
    decision, because it is my understanding that there is some
    question as to whether the Department of Energy would be able
    to comply with the Flood Control Act it this amount of
    appropriations were to stick.
        Mr. Barton. This will have to be the last question----
        Mr. Telson. Yes. Sir, we will work with you to address
    these issues, because, clearly, it is not in our intent to
    create problems for you.
        Mr. Norwood. I didn't think it is, and this isn't hard. All
    we've got to do is put it back like it was and then--so that we
    can generate more income for the Federal Treasury.
        Mr. Telson. Right. Maybe, perhaps if the CBO could also
    adjust their baseline. Maybe this is something to also be
    looked at.
        Mr. Norwood. Mr. Chairman, the rest of them I'll put in
    writing.
        Mr. Barton. Okay, I thank the gentlemen from Georgia. We've
    commented that I think Bear Bryant had a hat made out of the
    same cloth that your coat is----
        Mr. Norwood. Actually, he did, yes.
        Mr. Barton. The Chair would recognize the gentlelady from
    Missouri for 5 minutes for questions.
        Ms. McCarthy. Thank you, Mr. Chairman.
        Dr. Moniz, I appreciate your remarks with regard to energy
    efficiency, renewable energy, and--if I might read from your
    testimony--``to maintain U.S. technological expertise and
    competitive advantage in global energy technology markets to
    develop and deploy technologies capable of reducing greenhouse
    gas emissions.''
        I cannot find, when I look at the budget, where those
    numbers are--these are lofty and wonderful words--I happen to
    believe in them--I happen to think that addressing technology
    is a win-win for this country. I'd rather see us develop it and
    export it, than buy it under some foreign country's name as we
    did with electronic technology in the past in other instances.
        But I see the words, I don't see the numbers, and I want to
    know what you're talking about when you talk about ``develop
    and deploy technologies capable of reducing greenhouse gas
    emissions.''
        Could you give me a little more information on that,
    please?
        Mr. Moniz. Certainly. Thank you for the question.
        The portfolio, which will be addressing greenhouse gas
    emissions, first of all, is very broad, and I will walk through
    a few of those examples. I do want to also emphasize that
    without exception, the technologies that we are working on to
    develop greenhouse gas emission reduction, are simultaneously
    addressing multiple goals in terms of energy security, clean
    environment at local levels as well as global levels, et
    cetera. So these are multipurpose technologies--in particular,
    of course, efficiency is a technology which serves essentially
    all of our energy and economic goals.
        Ms. McCarthy. I'm particularly interested in those
    technologies that we can export to developing countries--they
    are an incredibly important component if we are going to
    address greenhouse gas emissions, we certainly can as a nation,
    but we need everyone addressing it. And one of the keys to that
    is to make technologies that are affordable and usable in these
    developing countries so they can participate in the goals we
    all seek.
        Mr. Moniz. Yes. There is a very good synergy here, in the
    sense that, as one develops, for example, renewable
    technologies, they of course are very environmentally
    friendly--they are also a technology, because they are often
    very modular, they depend upon resources which are available in
    rural areas and in many foreign countries. As we develop those
    technologies, they will be very important as we evolve to
    distributed power in this country, as we serve our own rural
    areas, and provide the basis for what we believe will be an
    exceptional export market as we serve other countries, for the
    same reasons.
        Ms. McCarthy. Are you working with private industry on
    this--because there are, you know, entrepreneurs all over
    America trying to accomplish this--this sort of next Silicon
    Valley approach to the future.
        Mr. Moniz. Yes. The--our energy programs, our energy
    resource and technology programs--of course, some of the work,
    particularly the basic--the more basic work--is done to a large
    extent in our laboratories in some universities. But certainly
    as we go into the development phase, the applied research
    phase, a very large fraction of our work is done in cost-shared
    partnerships with the private sector.
        Ms. McCarthy. Is there enough money in the budget for this
    effort? I think it's a critical one.
        Mr. Moniz. Well, the--we have to work, of course, within
    the overall constraints. We certainly have program pressure
    that could use more funding. On the other hand, we do have a
    fairly robust increase in the efficiency and renewable areas,
    for example--the order of a 20 percent increase in those areas.
        Ms. McCarthy. Can you get a little more detail to me and
    anyone else interested on the committee? I know a number of us
    that, along with the Chairman, went to Kyoto to participate in
    the protocol effort there, and came away convinced that this
    could be an economic opportunity for this Nation.
        I'd like to know a little bit more--and more detail--just
    what's going on, so that I can be of assistance in that regard.
    I don't want to take up the committee's time this morning, but
    I would like to have more information made available to me
    about these two important points that you make.
        Mr. Moniz. We would be delighted, of course, to provide you
    much more detailed briefings at your pleasure. Let me just note
    that, again, the principal Departmental response in the context
    of Kyoto, is to develop this robust and broad energy R&D
    portfolio, developing the new technologies that will provide
    power, whether it's through higher efficiency in fossil, or
    through developing renewables, or whether it's developing new
    modular small nuclear power plants, which may find use
    elsewhere and of course, have no emissions.
        The market for addressing the anticipated very, very large
    growth in energy use worldwide is enormous. We are talking
    trillions of dollars, and we believe that these technologies
    will also give our industries a strong competitive edge.
        Ms. McCarthy. I just remain concerned that when I couldn't
    find electronic components made in America, that I don't want
    to see this happen with our opportunity here, and that's why I
    keep raising these issues.
        Mr. Moniz. And we agree fully.
        Ms. McCarthy. These lofty words and these big numbers are
    great, but I really want to know how we're doing against our
    competitors out there in the world who are obviously, I think,
    a little ahead of us on the curve, and--Mr. Chairman, I know
    I've gone over my time, but--I know you are concerned about
    this issue, as well.
        Mr. Moniz. Mr. Chairman, if I may add one comment--or am I
    out of order?
        Mr. Barton. No, we'll give you--we've got the hearing room
    until 12, so----
        Mr. Moniz. I would just note that we are very acutely aware
    of the concern that you expressed. The good news is that in
    many areas--for example, even in nuclear power, where we have
    not, ourselves, had a new plant ordered for many years--we have
    modern designs from American companies which are leading the
    world. In advanced turbines, we are out there in front. For the
    photovoltaics--we have a huge export market right now for the
    photovoltaics.
        We could provide a lot more detailed information on this--
    --
        Mr. Barton. I thank the gentlelady from Missouri. We'd
    recognize the gentleman from Oklahoma, Mr. Largent--he asked to
    go out of order--and then we'll proceed in regular order after
    that.
        Mr. Largent, for 5 minutes.
        Mr. Largent. Thank you, Mr. Chairman.
        Dr. Moniz, how many employees are there at the Department
    of Energy? Currently?
        Mr. Moniz. The Federal workforce is--I believe it's around
    15,000. Then there are about 100,000 when you include the
    contractors who work in our laboratories and production
    facilities.
        Mr. Largent. Is that number going up or going down?
        Mr. Moniz. That's gone down very substantially. Both the
    Federal and the contractor workforces, in this decade, have
    gone down in the order of a quarter to a third, depends if it's
    Federal or contractor.
        Mr. Largent. Next question, I want to ask you about this
    Emergency Oil Task Force? It's been commissioned by the
    Secretary in December to develop a balanced oil action plan--
    when is that commission to report?
        Mr. Moniz. Well, in some sense, Mr. Largent, they are
    reporting continuously through developing the kinds of
    initiatives that we've outlined here. This task force was
    assembled to keep working with the industry and providing many
    of the ideas you've seen here.
        Mr. Largent. Okay, then let me ask you this question. The
    first idea that you mentioned in your report talks about
    taking--or putting 28 million barrels of oil into the strategic
    petroleum reserve, and using the oil--finding that oil from the
    offshore production. Why would you choose to use offshore
    production as opposed to domestic production from independent
    producers?
        Mr. Moniz. With your permission, may I ask one of the
    experts to address that question?
        Mr. Largent. Sure. You bet. I guess my point, while your
    expert comes to the table, is that 80 percent of the production
    that occurs domestically is done so through the work and
    efforts of independent producers. So why wouldn't we want to be
    helping the 80 percent as opposed to the 20 percent which is
    your majors--and your majors are principally responsible for
    the offshore productions--not independents--so I'm saying, in
    this time of crisis, why are we not looking to help the
    independent producers who are doing 80 percent of the work, as
    opposed to the majors, who are doing 20 percent of the domestic
    production?
        Mr. Barton. We need the expert's name and title at the
    Department.
        Mr. Shages. I'm John Shages. I'm the Director of Finance
    and Policy for the Strategic Petroleum Reserves Office.
        Mr. Barton. Okay.
        Mr. Shages. The answer, Congressman, is that logistically,
    the oil coming in from offshore is the only oil that can be
    brought directly to the strategic petroleum reserves. All the
    pipelines of the country lead inland from the coast; they do
    not lead from the inland back to the coast. All the strategic
    petroleum reserve sites are on the coast. We will try to make
    this program available to all the producers in the Outer
    Continental Shelf--there are about 140 leases out there and a
    number of them are with independent companies.
        Mr. Largent. Isn't it true that those pipelines used to
    flow the other way, though? In other words, when we were
    actually exporting oil, those pipelines flowed the other way,
    and now because we're importing over 50 percent, maybe over 55
    percent of the oil today, those pipelines have reversed as a
    result, is that not true?
        Mr. Shages. Some oil did use to flow to the coast, and it
    no longer does.
        Mr. Largent. Okay. All right, thank you for that, I
    appreciate it. Let's see, the other thing I want to say about
    this is that there is an invitation that will be forthcoming
    from the Oklahoma delegation to try to--an invitation to the
    Secretary to come to Oklahoma, where we could put on a highly
    publicized forum on this issue. I believe it's not only an
    interest to oil-patch States like Oklahoma and Texas, but it
    really does present national security issues that I think we
    need to highlight and underscore at this time.
        One other question I had about that is--and this is, I know
    this is a loaded grenade that I'm kind of throwing in here--and
    I have mixed emotions about it as well, but--what is the
    Department of Energy's thought--or the administration's
    thought--on an oil import fee? Because I don't see it mentioned
    anywhere in here, and yet I've heard it brought up in
    conversations.
        Mr. Moniz. Mr. Largent, well, first of all, I may just note
    that I think the Secretary would very much welcome the
    invitation to Oklahoma. With regard to the oil import fee, I'm
    afraid I'm not aware of any such discussion at the moment.
    Mike? Do you----
        Mr. Telson. No, I'm not, either. You may want to ask the
    Secretary, but we don't know.
        Mr. Largent. Okay. Let me--if I have just a little bit more
    time--I want a real quick question. Why do we not consider
    reprocessing spent nuclear fuel in this country, when
    everywhere else in the world, it's done? We'd reduce the amount
    of waste by 90 percent, it is environmentally friendly, it's
    the right thing to do. Why do we not do that in this country?
        Mr. Moniz. The policy, of course, goes back about 20 years
    to our non-proliferation concerns, in particular the
    reprocessing that is being pursued in other countries right now
    separates out plutonium, which is then--if acquired in the
    wrong hands--rather directly usable in a nuclear weapon, so we
    continue to try to maintain a strong non-proliferation regime.
        Mr. Largent. Mr. Chairman, let me just say in closing--ten
    seconds--that I am--I want to commend the Department of Energy
    and the administration for putting out a plan on electricity
    restructuring. It's a very important issue for our country, and
    I look forward to working with you on coming to a consensus
    bill in the near future.
        Thank you, Mr. Chairman.
        Mr. Moniz. Thank you.
        Mr. Barton. Thank you, Congressman Largent. We'd recognize
    Congressman Wynn for 5 minutes.
        Mr. Wynn. Thank you, Mr. Chairman.
        I noted in your testimony that you said that the problem
    would be working with Congress to advance electricity
    restructuring. My colleague just mentioned he was looking
    forward to working with you on that role. I'd like you to
    comment, if you would, about consumer protection issues with
    respect to restructuring, and specifically on the Department's
    position with respect to reliability issues that may be raised
    in the course of restructuring.
        Mr. Moniz. First, there will be a number of consumer issues
    addressed in the plan which is still undergoing final tuning.
    For example, a very important issue of serving rural customers
    is one very important example--as well as other issues
    involving PMAs.
        With regard to reliability, there are discussions, of
    course, as to how regulation of transmission would be handled.
    Second, we are--of course, reliability--a near-term issue of
    reliability is Y2K, where we are working with NERC to try to
    assure----
        Mr. Wynn. Could you repeat that please--I didn't----
        Mr. Moniz. A near-term reliability issue is our work with
    NERC--the North American Electric Reliability Council--to make
    sure the Y2K problem does not bite us later on this year. And
    finally, we are increasing our research program in reliability
    technologies for the good of the future.
        Mr. Wynn. There is a lot of sentiment--and I don't want to
    actually get in the debate today--but there's a lot of
    sentiment that individual States are well-positioned to address
    most of the restructuring concerns, but that they may not be as
    well-positioned to discuss or to address the reliability
    issues. What's the Department's position on this? Is there a
    Federal role in reliability--addressing reliability concerns?
        Mr. Moniz. Yes, we believe there is. We believe there are a
    number of considerations that go beyond the State
    considerations, involving, for example, regional issues. In
    that context, we are--we will be discussing a role for FERC in
    addressing reliability rules, basically. So that is under final
    development, but we are proposing, certainly, a role for FERC.
        Mr. Wynn. When do you believe that you will be in a
    position to discuss these with Members of Congress?
        Mr. Moniz. I believe the administration bill is in process.
    We believe it's very close. I would anticipate, certainly, in
    March.
        Mr. Wynn. By March----
        Mr. Barton. Would the gentleman yield on that point?
        Mr. Wynn. Certainly, Mr. Chairman.
        Mr. Barton. Just to inform the Under Secretary--and you can
    inform the Secretary--we're going to be holding hearings on
    comprehensive restructuring probably mid-March.
        Mr. Moniz. Mid-March, thank you.
        Mr. Wynn. Just a question regarding--you said there was
    perhaps an issue relative to rural customers--would similar
    issues be raised with respect to urban or low-income customers
    as well?
        Mr. Moniz. I'm not sure. Do you know [speaking to staff]? I
    will be honest, I am currently unaware of such discussion, but
    it's a very important point. I will----
        Mr. Wynn. What we've been hearing is that there may be some
    price discrimination with respect to customers in urban areas
    or low-income customers. Obviously, restructuring represents an
    opportunity for tremendous consumer savings, but those savings
    are basically for wholesale customers or larger customers and
    don't actually trickle down to the residential--both low-income
    and middle-income customers--that would be problematic, and I
    would really appreciate the guidance of the administration and
    your Department on how we address these issues.
        Mr. Moniz. Yes. One thing I might just add--of course, it
    is not specifically targeted at urban customers, but--the 1998
    bill proposed a public benefits fund, which includes State
    grants, which of course, could be used in targeting particular
    populations.
        Mr. Wynn. Thank you very much. Thank you, Mr. Chairman.
        Mr. Barton. Thank you, Congressman Wynn. The Chair would
    recognize--I think Mr. Whitfield was here before Ms. Wilson--so
    we would recognize Mr. Whitfield, 5 minutes, questions only.
        Mr. Whitfield. Mr. Chairman, thank you very much. During my
    opening statement, I mentioned the fact that Secretary
    Richardson, back in October, came to Kentucky, and amidst a lot
    of publicity, talked about how he was going to have submitted
    in the Department of Energy's budget for the year 2000 funds
    and a legislative plan to build two conversion plants--one at
    Portsmouth, Ohio and one at Paducah--to help deal with this
    depleted uranium hexafluoride problem. And yet, I notice in the
    2000 budget for the Department, there's not anything in there
    about this plan. I was wondering if you could address that, Mr.
    Moniz.
        Mr. Moniz. Yes, I certainly would be happy to. I'm
    certainly aware of your and Mr. Strickland's strong interest in
    this issue. Let me say first of all that we regret that the
    plan is not on the table at the moment, but let me outline what
    we believe is a schedule that will allow all of us to work
    together on this important issue.
        First, you referred earlier to the Expression of Interest
    that we will be sending out to begin the process, and
    particularly looking at getting industrial input in--in terms
    of the conversion plants and possible demonstration plants.
    That EOI will be completed this week and in the Commerce
    Business Daily next week. In March, we will issue a preliminary
    DUF6 plan, and also complete and issue the final programmatic
    EIS.
        With the input from the EOI, then we will move to a final
    plan. We are targeting that for May--to issue a final DUF-6
    plan--and then to issue a draft RFP for the conversion contract
    and hold a bidders' conference and go through that entire
    process. We would hope to issue a final RFP in July,
    potentially receive conversion plant proposals in September,
    move to award early in 2000, and potentially--and I stress, of
    course, these are all subject to change after we receive the
    EOI input--but we would like to target, if at all possible,
    completed design for full-scale facilities very early in 2002.
        So that is the path that we have laid out, and it will be
    kicked off with the EOI and the draft preliminary plan very,
    very shortly.
        Mr. Whitfield. Well, that's very good news. I hope that you
    all will be able to maintain that timetable on that aspect of
    it.
        On this Worker and Community Transition Program, there's
    been some discussion recently about the elimination of the
    Office of Worker and Community Transition Program--that
    obviously is a very important program because, as a result of
    the privatization, there already has been job loss in Kentucky
    and in Ohio, and we think it's quite important that we keep
    this worker and community transition program in existence. I
    had heard recently that the administration might propose the
    elimination of the Office of Worker and Community Transition.
    Is that accurate, or is that just a rumor?
        Mr. Moniz. I am certainly not aware of that--as you know,
    we've proposed a $30 million budget this----
        Mr. Whitfield. Right. And I guess that's down from about
    $45 million. So you all have no intention of proposing the
    elimination of the program?
        Mr. Moniz. That is certainly my understanding. We feel that
    the program clearly accomplishes very important goals with
    regard to the communities that have served us and that we
    serve. It has, in fact, generated, we estimate, about 16,000
    jobs over the complex. We expect to equal that in the years
    ahead.
        Mr. Whitfield. Okay. Well, I see my time has run out, but I
    have more questions.
        Mr. Barton. No, the Chair is going to let every member here
    ask 5 minutes, and then the Chair has a number of questions. If
    the gentleman from Kentucky wishes to stay, we'll, once
    everybody has at least 5 minutes, we're going to have kind of
    an open-ended question session that you can participate in.
        The Chair would recognize the gentleman from Ohio, Mr.
    Strickland, for 5 minutes.
        Mr. Strickland. Thank you, Mr. Chairman, and I would like
    unanimous consent to submit an opening statement and a list of
    questions that I probably will not have the chance to ask
    today. With your permission, I would----
        Mr. Barton. Without objection--we had already given that
    blanket consent, but we will certainly give you special
    unanimous consent.
        Mr. Strickland. Thank you, Mr. Chairman--and I want to
    follow up with my colleague, Mr. Whitfield's comments. Thank
    you, Mr. Under Secretary, for being here to answer our
    questions.
        I noted that in the President's proposed budget there's $5
    million allocated, and we are concerned--I think Mr. Whitfield
    and I both are concerned--that only $5 million has been
    allocated to implement Public Law 105-204, and I'm just
    wondering if you could give us some explanation as to why what
    appears to be a fairly meager sum has been included in the
    President's request.
        Mr. Moniz. Well, we believe of course, first of all, we
    want to husband the resources, that total $400 million roughly,
    carefully. We believe in the process that I just laid out in
    response to the last question on the timetable. These $5
    million will be appropriated for beginning the work on the
    conversion plans, going through NEPA processes, getting design
    work going.
        As I said, we are hopeful--again, contingent on the kind of
    input we receive from industry--but we believe we can aim for a
    2002 design completion.
        Mr. Strickland. So the amount of money, in your judgment,
    does not reflect any lack of commitment or intent to follow
    through with the intent of the law?
        Mr. Moniz. Quite the contrary, Mr. Strickland--this is a
    strong commitment, and we will absolutely do our best to feed
    input and hold to the kind of schedule that we discussed.
        Mr. Strickland. I would like to ask a question, if I could,
    about the Russian HEU deal--both, once again, Mr. Whitfield and
    I have had very similar concerns in regard to these issues.
        I understand that the Omnibus Budget Act of 1998 included
    $325 million to purchase natural uranium stockpiles from Russia
    in an attempt to encourage Russia to resume shipments of
    enriched uranium and to rescue this HEU deal that is of concern
    to us. Could you explain to me precisely what the
    administration is going to buy with the $325 million? Will this
    material be stockpiled? If so, could you tell us where, and
    where the resources to pay for the storage will come from? I
    don't know if you have those bits of information right now, but
    that's an issue that is of great concern to me.
        Mr. Moniz. I can certainly respond to that.
        First of all, as you correctly point out, the HEU agreement
    with Russia, which of course is a centerpiece of our non-
    proliferation objectives, is currently not functioning
    optimally. The key is, in fact, to resolve to so-called natural
    uranium component--and there currently are or soon will be,
    approximately 11,000 tons of natural uranium sitting at USEC.
        The $325 million to which you referred was appropriated to
    purchase the 1997 and 1998 uranium--namely, these 11,000 tons
    at the then market price--however, contingent upon there being
    a contract between Russia and western companies to market all
    future natural uranium consistent, of course, with the ceiling
    set in the original legislation.
        So, if this all goes forward, then presumably, we would
    purchase the 11,000 tons. As indicated in the protocol that the
    Secretary signed with Mr. Adamov in Vienna, we would--in the
    interests of stabilizing everything--store that uranium for
    approximately 10 years; details to be worked out, but
    presumably, somewhere with USEC.
        Mr. Whitfield. Mr. Chairman, could I ask one quick follow-
    up?
        Mr. Barton. Yes, you may. You would ask it anyway, so we'll
    just give you permission. No--you're very welcome to.
        Mr. Whitfield. I'm wondering, in your judgment, is it
    likely that there will be a requirement for additional
    expenditures in the future to keep the Russian HEU deal alive?
        Mr. Moniz. No.
        Mr. Whitfield. Thank you. Thank you, Mr. Chairman.
        Mr. Barton. The Chair would recognize the gentlelady from
    New Mexico, Congresswoman Wilson, for 5 minutes.
        Mrs. Wilson. Thank you, Mr. Chairman. I have a number of
    questions which I'll submit in writing, but there are several
    things that I thought you might answer here today.
        Starting out with the issue of non-proliferation and
    following on my colleagues' questions, what percentage of the
    Russian residual stockpile will remain after the expenditure of
    the $525 million appropriated last year?
        Mr. Moniz. First, let me indicate that the $525 million are
    in two pieces--the $325 million just referred to in terms of
    uranium, and $200 million to start our program of plutonium
    disposition.
        I cannot give you precise numbers in terms of the remaining
    stockpile, but let's just say that in the uranium case, perhaps
    comparable amounts might be remaining, and in the plutonium
    case, somewhat larger amount than the first traunch of 50 tons.
        Mrs. Wilson. Do we have any plan for further purchases to
    complete the purchase of that stockpile? And if not, what is
    the--what are our intentions with respect to controlling
    proliferation of that material?
        Mr. Moniz. It's a very good and very difficult question.
    Our work with Russia--and, in fact, our own internal work--
    involves, clearly, a steady stream of disposing of the
    material--and I might add that--for example, the HEU--the 500
    tons over 20 years is about all the system can bear.
        With regard to the remaining material, we are working, of
    course, with very strong materials protection control programs,
    so we are trying to make sure that the material is secure. With
    regard to the plutonium, in addition, we will be moving
    materials into a new storage facility that the Department of
    Defense is working to construct with Russia at Mayak.
        So basically, it is physical control, accounting, and a
    steady program of disposition.
        Mrs. Wilson. In your budget, you have $30 million for a
    nuclear cities initiative, and $30 million for initiatives for
    proliferation prevention. Can you please describe to me exactly
    what we're purchasing in those cases, or what the programs are?
        Mr. Moniz. Yes. Both programs--they're somewhat different--
    but both programs involve a variation on the theme of engaging
    Russian scientists and engineers in Russia, as opposed to
    having them engaged elsewhere. They involve, in the IPP--
    Initiative for Proliferation Prevention--case, they involve
    research programs--some of which may lead to commercialization
    in which American national laboratory individuals oversee the
    programs, guarantee accountability in terms of the work done,
    and in terms of it not being employed for weapons work--in
    contrast to a recent New York Times article.
        In the nuclear cities initiative, the first initiative is
    focused on a wide variety of Russians institutes, including
    those in major cities. The nuclear cities initiative addresses
    the 10 so-called closed cities, or secret cities, which are
    typically in not very convenient places in terms of
    infrastructure and transportation. We are working there in the
    cities to develop unclassified work. Frankly, it's an issue of
    working with them to help right-size their complex, which, for
    our own security reasons, we want to see come down in scale
    over the next years.
        Mrs. Wilson. Has the Department of Energy or the
    administration considered any alternatives other than direct
    subsidy of those cities in keeping those people in place? In
    particular, have you worked or considered changing immigration
    laws to get those scientists, or key scientists and engineers
    out of Russia?
        Mr. Moniz. Over the last years, since the end of the cold
    war, of course, there have been a number of Russian scientists
    and engineers who have come to this country and worked with us.
    There is, however, not an organized plan to bring the
    scientists from the nuclear cities to the United States--there
    are other issues in terms of impacting our own workforce which
    could be addressed. What we are doing--we do not view this as
    simply aid--we are working with them to develop specific
    projects which can also help them develop something of an
    economy. This is a challenge, but as an example, I will note--
    and I regret I can't say what the details are at the moment,
    but probably within a few weeks, for example, you will see,
    under the nuclear cities umbrella, an expansion of software
    work going on at one of the closed cities, involving American
    industry. So that's the kind of program that we like to see
    develop.
        Mrs. Wilson. Thank you, Mr. Chairman.
        Mr. Barton. Thank you, Congresswoman Wilson. The Chair
    would recognize the gentleman from Pennsylvania, Mr. Klink, for
    5 minutes.
        Mr. Klink. Mr. Chairman, I thank you. I apologize for my
    late arrival, but your old subcommittee is also meeting, and as
    you know, I'm the ranking member up there--we're holding a
    simultaneous hearing, and Dr. Moniz, let me welcome you, thank
    you for being here. It's good to see you again--I saw you
    briefly in the hall, but we were running to our committee.
        I really appreciate the Department's mission to foster a
    secure and reliable energy system that is environmentally and
    economically sustainable. But I am disturbed that there is a
    year-by-year cut in the fossil fuels program. I'd like an
    explanation about that--specifically, Dr. Moniz, I want to ask
    about fossil fuel research and development. The fiscal year
    2000 budget request for this is $364 million--that's down $20
    million, or about 5.4 percent from fiscal year 1999. I notice
    in your testimony that you make up for the decrease; that
    you're continuing to develop Vision 21 Powerplex program, which
    you call the roadmap to the future, and the power plant of the
    future--where modular technologies will be integrated into non-
    polluting energy-producing facilities such as membranes for the
    low-cost separation of oxygen and other gases.
        You say you expect Vision 21 power plants to be highly
    efficient. In your testimony, you also say that by the year
    2030, these plants could reduce greenhouse gas emissions
    globally by 370 million tons of carbon a year--that's pretty
    good.
        Now, you may know that, currently, I don't support the
    Kyoto protocol because it doesn't require the same emission
    standard reductions between developed and developing countries.
    We have to get the developing countries to participate
    meaningfully. But I'm very proud of the work that we've done in
    Pittsburgh by the Federal; Energy Technology Center--the FETC
    Center--where they manage the entire coal and natural gas
    program for the Department's Office of Fossil Energy. I know
    you're very familiar with what they to there. FETC is working
    with private industry, with universities, and with national
    laboratories, to develop advanced energy and environmental
    technologies. I believe that they deserve an increase in
    funding for fossil fuel research and development--or at least
    the same level as last year, instead of a steady decrease. You
    seem to be correlating Vision 21 with global warming--I'm not
    sure that that's true, but that's part of my question.
        Today, a fossil fuel, coal, is the primary source of fuel
    for electric generation. Realistically, you know that we cannot
    meet the Kyoto emissions reduction requirements by 2008. It
    would have a tremendous effect on the transportation industry,
    the manufacturing industry, building, power-generation sectors
    of our economy. Don't you think it would be most beneficial to
    increase, or at least maintain, the funding level for fossil
    fuel research and development rather than cutting it?
        Coal is the backbone of our economy currently. We have to
    have a bridge to get from where we are to where we want to be
    by 2030 or 2050. The good people at FETC, I think, should be
    given more funds so they can expand their partnership with
    industry, with universities and laboratories, to further
    develop an advanced energy and environmental technology. I
    believe this funding cut is to the detriment of FETC's
    partnerships, and I believe the Department is making a mistake
    in cutting fossil fuel funding. I would like to hear the
    rationale you have for cutting fossil fuel research in your
    budget, and I will thank you and let you respond.
        Mr. Moniz. Thank you for the questions. Let me make several
    comments, if I may. First of all, I will note that I am pleased
    that I will be visiting FETC on March 15 and 16, and I'm
    looking forward to that very much.
        Let me first respond to the question about the association
    of the Vision 21 with greenhouse gas emission reduction. It is
    indeed, I think, a very important contribution to greenhouse
    gas emission reduction by improving efficiency enormously, but
    I do want to stress that, again, the objectives are multiple--
    increasing efficiency in our fossil energy use addresses our
    economic strength, our energy security, our environmental
    issues--be they urban smog particulates or acid rain, or global
    warming issues. So, it's certainly a multi-pronged approach.
    With regard to the budget--I would just note two things. First
    of all, I want to go back and maybe stress--of course, we
    recognize that 85 percent of our energy use in this country is
    fossil. And when we talk about efficiency programs, be they in
    the fossil energy program or in the conservation appropriation,
    they are both basically fossil programs. So in some sense, once
    you add a major part of the efficiency program with the fossil
    program, to understand our total investment in fossil energy
    R&D.
        Second, the small decrease in the funding, I should also
    note, that part of that is the end of some major programs. For
    example, in the fossil energy case, the low emission boiler
    program is coming to an end--so that is ramped off.
        In the natural gas arena, for example, there's a major
    program in the efficiency program that involves small
    turbines--gas fire turbines--that program is going into
    commercialization, and we're coming out of it.
        So we believe the program, while not, frankly, as robust as
    we would like, does, in fact, maintain the core activities
    quite well.
        Mr. Barton. The gentleman's time has expired. Do you have
    one more question, Congressman Klink?
        Mr. Klink. No, I will have some follow-up in writing, and
    if the Under Secretary would be so kind as to respond, I
    would----
        Mr. Barton. The Chair would recognize the gentleman from
    Mississippi, Mr. Pickering, for 5 minutes.
        Mr. Pickering. Thank you, Mr. Chairman. Dr. Moniz, the
    first question is concerning the nuclear waste issue. My
    understanding is the DOE program staff estimate the nuclear
    waste program will need approximately $11.6 billion in funding
    between fiscal year 2000 and fiscal year 2010, in order to
    maintain the schedule and open the repository in the year 2010.
        Now, to stay on this schedule, program staff estimates the
    DOE needs $739 million in fiscal year 2000. Yet, you only ask
    for $370 million. So my question is, how can you say you're on
    track for the repository in 2010 when you only ask for half the
    funds needed to get the job done?
        Mr. Moniz. The request of just over $400 million, we
    believe, is the request to keep us on track for the repository
    in 2010. The request, in particular in the year 2000--in fact,
    we increased it above $370 million because of the results of
    the viability assessment that identified some issues that
    needed increased funding in order to keep us on track for the
    suitability determination in 2001. So, according to our
    profile, to reach the $10-plus billion requirements through
    2010, we believe we are on track with that budget request.
        Mr. Pickering. Let me make sure that I understand. Does DOE
    staff project that you need 739, or is that incorrect, for this
    year? Or--excuse me, for 2000, fiscal year 2000.
        Mr. Moniz. No--perhaps the CFO would like to address that
    question----
        Mr. Telson. The staff request is $409 million for this
    year--$370 plus $39 million of supplementary funds, they were
    requesting. 739, I believe, includes other work that does not
    pertain to our program, per se.
        Mr. Barton. Would the gentleman from Mississippi yield?
        Mr. Pickering. Gladly, Mr. Chairman.
        Mr. Barton. This is a point that I'm going to get into in
    my questions--but to facilitate the gentleman's questions from
    Mississippi--if you take $400 million times 11--that's $4.4
    billion--that's not $10 to $11 billion. So you must have a
    funding profile that in the future goes up much more rapidly
    than the $370 to $400 million. Is that correct?
        Mr. Moniz. Yes. In the years, for example, 2006, 2007--our
    profile is up at $1.3 billion--per year.
        Mr. Barton. I yield back----
        Mr. Pickering. Thank you, Mr. Chairman. My other questions
    concern the strategic petroleum reserve. I want to commend the
    Department for looking at flexible ways to address some of
    those issues, but I also want to kind of combine these
    questions to the efforts that Mr. Largent--the issue Mr.
    Largent raised--is there a way that we can also help our
    domestic producers, our independent producers--and you
    mentioned in your budget, also, ways that you will try to help
    them through tax relief and through research and development.
        My first question on strategic petroleum reserve--the
    current capacity is approximately 700 million--is that correct?
    700 million----
        Mr. Moniz. 680 million.
        Mr. Pickering. And that is after the decommission of the
    site. And you currently have how much oil in the strategic
    petroleum reserve?
        Mr. Moniz. 561. 561.
        Mr. Pickering. And you say that you will put 28 million
    barrels of offshore production in your budget, and so that
    leaves approximately 100 million barrels of capacity. Do you
    believe that the commercial storage potential will fill the
    rest?
        Mr. Moniz. I think it's--we'll have to wait to see what the
    industrial response is. But again, if I may ask our expert on
    this what he thinks--if you'll permit. John, do you want to----
        Mr. Shages. We're of course hopeful, but the amount of
    capacity that we're offering is the capacity of the Big Hill
    site, which is 70 million barrels of capacity, and so the
    commercialization effort wouldn't fill more than that.
        Mr. Pickering. Now, would you charge a fee or lease
    arrangement for them to store in your facility?
        Mr. Shages. Yes, that's the whole idea of the program--that
    we would charge a fee to be paid in-kind so that we would be
    adding oil to the strategic petroleum reserve inventory.
        Mr. Pickering. Would it produce a revenue flow to the
    Department of Energy that could be used for help in other
    domestic production?
        Mr. Shages. We would not accept money in payment--we would
    be accepting----
        Mr. Pickering. It would be in-kind----
        Mr. Shages. In-kind.
        Mr. Pickering. Okay. So, in essence, you would provide--not
    free storage--but, in essence, you would give the incentive to
    have the storage for our nation's stability and security of
    supply, and in return we would have an additional capacity in
    storage in this strategic petroleum reserve.
        Mr. Moniz. Yes, and it would increase in capacity.
        Mr. Pickering. As you know, back in the 1992 Energy Act,
    there was a--several issues raised, and subsequently--on the
    possible lease of oil versus the purchase of oil. Now, if I
    remember correctly, a lease arrangement cost about a quarter--
    25 percent--of a purchase of oil over a 15 year period of time.
    Is that correct?
        Mr. Telson. Are you referring, sir, to the leasing of oil
    from producers, or----
        Mr. Pickering. From producers. Now, in the past, it was
    always done under the assumption it would be from a foreign
    producer, but I think in today's environment, we may want to
    look at domestic producers or domestic supply. A foreign lease
    has, as you know, many complications. The question is, can you
    do more--either through a lease of the commercial storage--if,
    for example, we drew down more of the strategic petroleum
    reserve, currently, around 500 million barrels? If you sold it
    at $10 a barrel, that's approximately $5 billion. Could you use
    the $5 billion to then have targeted tax relief, assistance to
    the domestic industry to maintain our infrastructure, and feel
    it would be the commercial storage lease at a lower cost to the
    government? Do you understand my question?
        Mr. Telson. Yes, sir, I think you are suggesting, if we
    sold some oil, what would happen to the proceeds from that?
        Mr. Pickering. That is correct, and could you produce
    revenue----
        Mr. Barton. This will have to be the last question of this
    question period.
        Mr. Pickering. Sure. But the question is, you are saying
    that you need offsets to be able to help the domestic industry
    through tax relief or through other efforts. If you were to
    sell the oil but at the same time replace the commercial
    storage or lease, so that we don't jeopardize our security of
    supply, but it is a more cost-effective way, and it could
    provide the offsets to assist our domestic industry--as the
    Department considered or contemplated that type of approach?
        Mr. Telson. Mr. Pickering, we will be glad to sit with you
    and discuss these ideas. They are pretty complicated ideas, as
    you know, just laying them out. But maybe there is something
    there that we should look into.
        Mr. Pickering. Is it possible, if you sold it, you could
    use the receipts for these other purposes?
        Mr. Telson. Not without a congressional authorization. But
    we will be glad to talk about it.
        Mr. Pickering. Thank you.
        Mr. Moniz. I would just add that, of course, selling oil
    right now is one of the things we are trying to not to because
    of the market.
        Mr. Pickering. Right. I realize that, but in business, you
    know, bad money after bad money is not a good principle. If you
    can do it at 25 percent of the cost, and at the same time use
    the money for productive purposes that will give a good
    investment, then you have to look at those options.
        Mr. Moniz. Yes. It is a tradeoff. Again, we would be happy
    to certainly work with you.
        Mr. Pickering. Thank you.
        Mr. Barton. The gentleman from Mississippi used to work for
    the Majority Leader, Mr. Lott, and he stretched that one last
    question to about 5 minutes' worth of questions.
        We are going to recognize the gentlelady from Missouri. She
    claims she has one followup question before the chairman
    starts.
        Ms. McCarthy. Thank you very much.
        Dr. Moniz, I want, first of all, to thank the Secretary for
    visiting the Allied Signal plant in my district and for his
    very wise decision with regard to their future. We are all very
    pleased.
        I wanted to talk about the overall Federal management
    technologies Allied Signal budget because in fiscal years 1998
    and 1999 we, the Congress, increased the funding earmarked for
    them. In 1998, we increased the appropriation from the
    requested amount by about $20 million, and in fiscal year 1999
    the Congress add-on amounted to $12 million.
        Can you tell me how much of this was actually sent to
    Allied Signal, and if all was not given to the plant, where the
    remainder was sent? And Mr. Telson?
        Mr. Telson. I am sorry, Ms. McCarthy, could you repeat the
    question? I heard the elements, but I didn't put it together.
        Ms. McCarthy. Yes. The Congress put more money into the
    Federal manufacturing and technologies Allied Signal plants in
    the past 2 fiscal years. I don't need to go over the numbers.
        Mr. Telson. Yes, of course.
        Ms. McCarthy. But that add-on, I wonder how much of it
    actually reached those facilities across America, including my
    own----
        Mr. Telson. Congresswoman, we will be glad to get you the
    specific answer, the number. We have run into the phenomenon
    over the past several years that there are additions to lines,
    and then below the line there are general reductions required
    by the committees. What often happens is that the general
    reductions, when they are distributed across, in many cases end
    up eating up a lot of those increases. So we will get you a
    description of that.
        Ms. McCarthy. That would be very helpful, because that
    would, then, address the rumor that about $20 million was sent
    to the laboratories, and we could put that rumor to rest.
        Mr. Telson. We would be glad to get that information for
    you.
        Ms. McCarthy. I thank you very much, Mr. Chairman, for your
    gracious offer.
        Mr. Barton. The Chair is going to recognize himself for an
    open-ended question period, since everybody has had an
    opportunity to answer first round. If the members here--well,
    Mr. Fossella has not had a chance. Does Mr. Fossella wish to be
    recognized for 5 minutes?
        Mr. Fossella. No, thank you.
        Mr. Barton. Okay. Now all members that are present, if they
    wish to participate either in the line of questioning that the
    Chair is going or another one, feel free to interrupt, because
    we know that they have schedules.
        Mr. Secretary, I want to refer you to a draft funding
    profile that we just handed out. It was given to us last week
    at the staff level on the minority and majority side in
    preparation for this hearing. The title--it is a draft, and it
    is ``Cashflow Funding Profile for H.R. 45,'' which is the high-
    level nuclear waste interim storage bill that is pending before
    this subcommittee. Do you have a copy of that? Have you ever
    seen that before? I don't have knowledge that you have seen it,
    but I don't want to----
        Mr. Moniz. I saw it last night.
        Mr. Barton. You did? Okay, so you have at least had some
    familiarity with it.
        I want to go back to some of the questions that Mr.
    Pickering was asking, because it is the majority staff view--
    and I believe the minority staff would concur with this--that
    an analysis of this admittedly entitled ``draft'' profile
    indicates that the annual appropriations required for Yucca
    Mountain are going to be significantly higher than the
    historical appropriation levels. If you assume a historical
    funding profile of $350 million, we don't believe that the
    permanent repository is going to open in 2010.
        Now if you look on this chart, at the top, you have got a
    category called Yucca Mountain, and it has a funding profile
    this year of $308 million, and it goes to the current budget
    year that you were testifying before today, $359 million. If
    you go on out, it does get up in 2005 and 2006 to $925 million,
    and then $1.02 billion in 2006; 2007, it is over a billion
    dollars. So that the aggregate total from fiscal year 1999 to
    2010 is $6.5 billion.
        The interim storage proposal, the next line below that, its
    aggregate number is $4.553 billion. The program management
    number is a little over half a billion. The total program
    number is $11.613 billion--$11.6 billion, and that is an
    average of over a billion dollars.
        Now the appropriation request that we have before us
    doesn't appear to match that. Could you elaborate on that or
    explain to me how I have misread this document?
        Mr. Moniz. Yes, sir. First of all, I don't think you have
    misread it, from what I can understand. But, of course, this is
    a draft cashflow chart for building the repository and doing
    interim storage----
        Mr. Barton. Right.
        Mr. Moniz. [continuing] whereas our appropriation is that
    matched to doing the repository. So in that profile, then the
    $409 million in 2000 is what our profile says. So, without
    interim storage, the profile is roughly $400 million, up or
    down a bit, through 2002, and 2002 is when the licensing within
    our construction starts, and then the profile jumps
    dramatically after 2002.
        The chart that we have here includes interim storage, and
    then, of course, it ramps up much more----
        Mr. Barton. I understand that.
        Mr. Moniz. Yes.
        Mr. Barton. But it doesn't appear to me that, based on your
    testimony today, that you are on track, based on this, to have
    the funding levels that you need to get the repository open.
        Mr. Moniz. Mr. Chairman, I would say we are on track.
    Without interim storage, we are on track, but it does raise the
    issue that, as you noted correctly, that 5 years down the road
    we would need to be at an appropriate level, substantially
    higher than the historical funding.
        Mr. Barton. Okay, well, let me ask this question: Based on
    this--again, this is a draft analysis; you didn't submit this
    in your testimony, so I understand that it is not official
    departmental policy. But in this analysis, you get out to 2006,
    2007, et al., and you are well over $1 billion a year.
        Mr. Moniz. Yes.
        Mr. Barton. Now where is that money going to come from?
        Mr. Moniz. May I just add that is the case with or without
    interim storage. It is higher with interim storage, but it is
    $1.3 billion I think in the case without interim storage.
        What I would say is the integrated cost to year 2000--to
    2010, excuse me--which in the Yucca Mountain repository only
    program is $10.1 billion, can be accommodated in the waste
    fund. The issue is getting access to it, getting the annual
    appropriation to be in this $1-plus billion annual range. But
    the waste fund is growing currently in terms of receipts plus
    interest at roughly a billion a year.
        Mr. Barton. Well, then, my understanding is these funding
    requests do not take money from the waste fund. Is that correct
    or incorrect?
        Mr. Moniz. I think that would be a policy issue to address
    at that time. Mike, do you want to?
        Mr. Telson. It does. It would have to, presumably. But that
    is the issue we have to address in the years forward.
        So, again, we would argue the waste fund has the resources,
    but it will require an administration/congressional
    understanding that one has access to a billion----
        Mr. Barton. My staff analysis is that there has been about
    $15 billion put into the waste fund. We have got about $8
    billion currently in the fund. Is that the Department's
    assessment of the fund also?
        Mr. Moniz. It is $7 point something, is our current
    assessment. What is the number? Our analysis is $7.3.
        Mr. Barton. $7.3 billion?
        Mr. Moniz. Yes, and growing at about $1 billion a year.
        Mr. Barton. Okay. Now let's go back to Mr. Telson. Is it
    the Department's position to take some of the funding for the
    repository from the waste fund, which you don't show that you
    are going to do that? But at some point in time do you think
    you will? ``You'' being the Department, not you personally.
        Mr. Telson. No, no. We do in 2000. Our request does take
    money from the waste fund in 2000, part of it, and in the
    outyears it is 370, I think--I am sorry, 307, is that correct?
    A hundred and fifty in 2000 from the waste fund itself, but in
    the future we will have to tap into it higher than we are now,
    and that is just the consequence of the fact that we have been
    undertapping it over the last 15 years, and now we will have to
    go the other way, when we start the construction. That was the
    purpose, presumably, for developing the balances.
        Mr. Barton. We are going, in the very near future, to mark
    up H.R. 45 in this subcommittee. Is the Department going to
    offer an alternative to H.R. 45? Is the Department going to
    offer amendments to H.R. 45? Or is the Department going to just
    oppose H.R. 45? Or do you know?
        Mr. Moniz. Well, the administration, as you know, continues
    to oppose H.R. 45, and certainly the bill in its current form
    the President presumably would veto. The Secretary, as he said
    in his confirmation, is looking forward to discussions with
    Congress on this subject.
        Mr. Barton. Okay. Would you inform the Secretary that the
    Chair and the ranking minority and the full committee chairman
    and the ranking member of the full committee are going to
    invite the Secretary for a discussion on that in the very near
    future?
        Mr. Moniz. Yes.
        Mr. Barton. Because we are planning to move the bill, at
    least in the subcommittee, and I can't give you a time table,
    but very quickly. If there is a way--if there is a specific
    concern that can be alleviated by a particular amendment or a
    change in phraseology, or whatever, we would certainly wish to
    discuss that with either the Secretary himself or whoever he
    designates to be his spokesperson.
        Mr. Moniz. If I may add, Mr. Chairman, the Secretary
    certainly has stated that he hopes to avoid or help avoid a
    legislative showdown on this.
        Mr. Barton. We understand. We share his willingness to
    avoid a showdown, if that is the term he wants us to use.
        Mr. Moniz. On the other hand, I think the administration
    does remain strongly committed to the idea that any kind of
    early--certainly any kind of a commitment to the kind of
    interim storage proposal being proposed would undercut our
    development of the repository.
        Mr. Barton. I have a pending vote on the floor. At some
    point in time, I am going to actually have to suspend. What is
    your time schedule? Are you willing to wait? I think Mr.
    Whitfield is going to come back; Ms. McCarthy probably is going
    to come back. Are you willing to--I think even if we take time
    for a little vote, we can wrap this up by 12:30.
        Mr. Moniz. Oh, that would be fine, Mr. Chairman.
        Mr. Barton. Okay. Then we are going to recess the hearing
    until five until 12. I should be back here at five until 12,
    and we will continue the questions.
        Mr. Moniz. Very good.
        [Brief recess.]
        Mr. Barton. We certainly appreciate Under Secretary Moniz
    being very agreeable to staying. Hopefully, we can wrap this up
    in the next 30 minutes or so, if we don't have any other votes.
        Before the recess, Mr. Under Secretary, we were looking at
    this draft flowchart, a funding profile which would be required
    under H.R. 45. Now I want to read from the written testimony
    that Mr. Lake Barrett presented to our subcommittee on H.R. 45
    2 weeks ago.
        I quote, ``H.R. 45 would undermine our ability to open the
    repository as scheduled in 2010 by shifting budget priorities
    and work effort to an interim storage facility.''
        He went on to state that, again, ``Based on historical
    appropriations patterns, the proposed bill's funding provisions
    do not provide sufficient funding resources to support the
    simultaneous construction and operation and an interim storage
    facility and the repository program.''
        Now we will accept the fact that H.R. 45 requires higher
    funding levels than have been historically appropriated. That
    is a valid criticism. But if you look at this funding profile,
    it appears to me that the Department's funding profile, whether
    you have an interim program or not, does the same thing. It
    just does it later. Do you all agree with that?
        Mr. Moniz. I think that is likely to be true.
        Mr. Barton. Likely to be true? Is that as close as I am
    going to get you to giving me a straight answer?
        Mr. Moniz. No, I will----
        Mr. Barton. It is true. I mean, the plain fact, Doctor, is
    that it is true. Again, I am not here to get into an argument
    with you over the high-level waste bill.
        Mr. Moniz. Right.
        Mr. Barton. I mean, the Clinton administration, Secretary
    Richardson can support it, oppose it. I understand that
    President Clinton has given Senator Bryan a letter that he
    still intends to veto it. That is fine.
        We are going to try to do a bipartisan bill that can
    sustain, that can overturn a veto. We are not idiots up here. I
    mean, you know, we understand the President does what he has
    the right under the Constitution. To trump him, we have got to
    have more than a two-thirds vote. I am working to get that in
    the House, and I know certain Senators are in the Senate.
        But it would be nice to at least agree on what the funding
    profile is, whether you support an interim storage facility or
    not. Now I think we are going to get you the votes, so that
    next year, if you are still the Under Secretary and you come
    before this subcommittee, and I am still the chairman, we are
    going to talk about funding interim storage, because it is
    going to be a law of the land. But I may be wrong; we may not.
    But let's at least talk from the same page in terms of funding
    requirements.
        Even though it is a draft, and it is not official policy,
    it does appear reasonable that this is the funding amounts that
    are going to be required. Do you agree with that?
        Mr. Moniz. May I, Mr. Chairman, explain what I meant by the
    ``likely'' statement?
        Mr. Barton. Yes, you may. You don't have to ask permission
    to explain yourself. This is an open hearing.
        Mr. Moniz. I was trying to be precise within my limited
    understanding of budgetary issues. What I meant was the
    following, and perhaps Mr. Telson can clarify:
        Each year there is coming in now an annual funding stream
    of $650-or-so million.
        Mr. Barton. Right.
        Mr. Moniz. In the future, I believe there will be an
    additional funding stream coming from the defense side to catch
    up.
        Mr. Barton. We are less sanguine about that actually
    happening, but we understand that is your proposal. We are a
    little skeptical of that, but we----
        Mr. Moniz. And this is all part of where the ``likely'' was
    coming.
        Mr. Barton. Right.
        Mr. Moniz. If that is the case, and that is raised up to
    the billion dollar scale, my understanding is--and, again, I
    would ask Mr. Telson to clarify--is that there are a variety of
    thresholds in terms of the difficulty of funding these peak
    years.
        Mr. Barton. We would share that assessment.
        Mr. Moniz. Appropriations is an issue. There is an issue of
    going up to the annual income stream. With the defense issue,
    it was a major issue.
        Mr. Barton. Right.
        Mr. Moniz. And then there was an issue of, beyond that cap,
    having to access the existing fund. So all I was suggesting was
    that where the annual income stream is relative to the peak
    funding year is a qualitative year. That is all I meant by
    ``likely.''
        Mr. Barton. The subcommittee's assessment is that you are
    going to need more dollars sooner than you are requesting. And
    I think that Congressman Hall is not here; he is somewhat under
    the weather. He is voting on the floor, but he has trouble
    speaking. I think I am speaking for the majority and the
    minority, and so don't be surprised if, based on this hearing,
    we send a letter to the appropriators asking for more money for
    this program than the Department is. I don't think that is a
    bombshell to this group, but just be aware of that.
        Mr. Telson?
        Mr. Telson. If I may just modify it, Mr. Barton, we will
    need increases in future years higher than what we have now.
    But in fiscal year 2000, we are confident that the $409 million
    will do the job that we need to do to get the position----
        Mr. Barton. Okay, now you used a phrase that I should know,
    but I don't. What is $409 million?
        Mr. Telson. $409 million is the amount of money we are
    asking.
        Mr. Barton. Oh, the amount of money.
        Mr. Telson. Yes.
        Mr. Barton. Okay. Well, Mr. Whitfield, I have another line
    of questioning on something else, but you have been very
    patient. Do you want to ask some of your questions?
        Mr. Whitfield. Thank you, Mr. Chairman. I just have a
    couple.
        Mr. Barton. Sure.
        Mr. Whitfield. I appreciate that.
        Mr. Barton. Mr. Shimkus, we are in kind of an open question
    period here.
        Mr. Whitfield. Dr. Moniz, I wanted to say, again, that I do
    appreciate your laying out this timetable on these conversion
    plans. Actually, it is the first time we have heard about any
    timetables.
        But now I want to ask you--you indicated that you hoped to
    have design completed by the year 2002, I believe. I was
    curious, why is it necessary for the Department to do the
    design, and why wouldn't you just contract that out with some
    outside firm to do design, in hopes of speeding up the process?
        Mr. Moniz. The real question is when one can be prepared to
    startup construction on the full-scale facilities. That is what
    we hope to be able to target for this early 2002.
        Mr. Whitfield. Okay.
        Mr. Moniz. The design is complete and moving toward
    construction.
        Mr. Whitfield. Now that I have advocated your letting this
    out to private contractors, I want to criticize you for letting
    out something to private contractors. You know, one of the
    linchpins of the privatization was that we do everything to
    mitigate job loss in a well-trained workforce that the USEC
    plans. I notice DOE has entered into an agreement with Bechtel-
    Jacobs to be the agent for the Department in future
    construction projects at these plants. Of course, they are
    going to be subcontracting that out, but why would you not be
    able to utilize more of these USEC employees, many of them who
    do have the skills necessary to do this kind of work? Why would
    you not make more of an effort to do that?
        Mr. Moniz. My understanding is that the discussion as to
    how that work will be handled remains to be fully resolved.
    Certainly, the Department very clearly supports efforts to
    minimize impact on the incumbent workforce, and we will working
    with the contractors in this direction.
        Mike, do you want to add anything to that?
        Mr. Telson. Just that this contract was awarded on April 1,
    1998, and, basically, it was part of our effort to be more
    efficient in how we handle our environmental management work at
    all of our plants throughout the whole system. So it is one of
    the features of another program that we are trying to do.
        Mr. Whitfield. Well, I could proceed on this, Mr. Chairman,
    but I look forward to working with you all, because it is a
    real priority, not only for the Ohio delegation, but the
    Kentucky delegation, to get these conversion plants completed
    as soon as we can, because we have a real need for them.
        Thank you for your time today.
        Mr. Barton. Dr. Moniz, I want to switch gears on you a
    little bit. I am going to hold a hearing, I hope, within the
    next 2 to 3 weeks on the status of the domestic oil and gas
    industry with specific focus on the small, independent oil and
    gas operators. One of the themes of that is going to be to get
    the State Department and the Department of Energy to explain
    the policy with respect to Iraq. But just to get the ball
    rolling, can you explain to me what the current policy is with
    respect to oil sales allowed under the U.N. Protocols by Iraq?
        Mr. Moniz. My understanding, Mr. Chairman, is that there is
    a sales sort of price ceiling, that is, an income ceiling of
    roughly $5 billion a year.
        Mr. Barton. That is my understanding, too.
        Mr. Moniz. $5.2 billion a year.
        Mr. Barton. Let's assume the number is $5 billion, because
    that is good enough for this first round in this hearing. When
    that number was derived, do you know what the per-barrel price
    of oil was, the world markets?
        Mr. Moniz. I would have to guess, but, given the timing, I
    would guess it was somewhere in the $17, $18.
        Mr. Barton. Yes, it was over $17; it was between $17 and
    $20 a barrel.
        Now that being the case, what is the world price of oil per
    barrel today?
        Mr. Moniz. Well, as we know, let's call it in round numbers
    $10.
        Mr. Barton. Approximately, for even rounder numbers, let's
    say it is about half.
        Mr. Moniz. Right.
        Mr. Barton. Make it easy. If that is the case, doesn't it
    make sense to lower the cap? Because if you don't, it doesn't
    take a lot of mathematical genius to realize the Iraqis are
    going to produce twice as much oil, and if they do, that is
    going to further exacerbate the oversupply problem.
        I am told--again, I am not the Under Secretary of Energy,
    and I don't have all the resources that you and the Secretary
    have--but I am told that one of the principal reasons that we
    are continuing to have these low, low oil prices is because the
    Iraqis are pushing the upper limits, and maybe even exceeding
    the limits, of what they can produce. They have the capacity to
    produce even more oil than they are, and so it is killing, I
    mean literally, the independent oil and gas community in the
    United States, the small guys that do these 15-or 10-barrel-
    per-day wells.
        So why shouldn't we, cooperatively, on a bipartisan basis,
    take another look at this Iraqi cap, which was based on a price
    much higher than the world oil markets are today?
        Mr. Moniz. I am afraid, Mr. Chairman, I don't know the
    exact numbers in terms of the Iraqi--the volume of sales and
    how that impacts the market. Obviously, additional sales don't
    help the market.
        And I am afraid that the issue of the cap, I will certainly
    carry your message back, but in the end that is the State
    Department and other people----
        Mr. Barton. Well, we are going to talk to our friends at
    the State Department, too.
        Mr. Moniz. Yes.
        Mr. Barton. And we are going to do a hearing focused almost
    entirely on this.
        Mr. Moniz. Yes.
        Mr. Barton. You weren't briefed that you were going to have
    to talk about this, so I don't expect you to know all the
    details. I am just asking kind of general theory right now.
        Mr. Moniz. Right. I would add, I believe currently the
    Iraqi--with current oil prices, let's say $10 a barrel, I
    believe the Iraqi capacity to produce tops out at, in financial
    terms, $3 billion or so, I think is all they are capable of
    producing.
        Mr. Barton. We are told that, again, on the old price they
    could produce between 1 and 2 million barrels a day, and they
    are currently producing around 3 million barrels a day and they
    could go up to 4 to 4.5 million barrels a day. Now I haven't
    confirmed that.
        Mr. Moniz. We would have to look into that and get back to
    you. Again, my understanding is that I think they really cannot
    produce today more than around 2.5 billion barrels a day.
        [The following was received for the record:]

        At the time of the hearing, the Energy Information
    Administration (EIA), an independent agency within the
    Department that collects and analyzes energy data, was
    estimating current Iraqi crude oil production at about 2.5
    million barrels per day. With inflation-adjusted prices near
    all-time lows at that point, the EIA was estimat-

    ing that under the current phase of the United Nations' Oil-
    for-Food program, Iraq

    would generate about $3 billion in the 180-day phase that ends
    at the end of May.

    This is far less than the maximum of $5.256 billion allowed
    under the program. Because Iraq was so far under the maximum
    allowed, the EIA was assuming that Iraq was producing at full
    capacity. The EIA was also not expecting Iraqi oil revenues to
    reach the revenue cap through at least 2000.
        Since the hearing, however, oil prices have increased
    significantly. Largely as a result of an agreement among
    countries belonging to the Organization of Petroleum Exporting
    Countries to cut oil production, oil prices have risen about $5
    per barrel since the hearing. The EIA's forecast also estimates
    that Iraqi oil production will increase from current levels of
    about 2.5 million barrels per day to 2.7-2.8 million barrels
    per day by sometime in 2000. Consequently, the FIA's most
    recent short-term forecast now estimates that Iraqi oil
    revenues may exceed the current maximum allotted revenues
    ($5.256 billion) in the 180-day phase that begins in November
    1999 and ends in May 2000.

        Mr. Barton. Of course, if you are a stripper well producer
    in east Texas, in Congressman Hall's district, and you have got
    a well that is producing 8 barrels a day, the price, because of
    delivery charges, that they are offering is $6 to $7 a barrel.
    It doesn't help you a lot that the Iraqis may only have another
    half-a-million-barrels-a-day capacity. You are going out of
    business. And once you plug all those wells--and, as you well
    know, your own testimony, at least this little booklet shows we
    get about 20 percent of our oil from these small producers.
    Once they are gone, they are gone. Once you plug one of those
    wells, you don't reopen it next year, when the price goes back
    to $15, $16 a barrel.
        Mr. Shimkus, I think you might have had a question or two
    on this line?
        Mr. Shimkus. I do. Thank you, Mr. Chairman.
        I got a chance to visit DOE in my last term, and so I see
    some familiar faces, and I appreciate that relationship that
    that visit developed.
        Energy security is a big issue in your office. So I, too,
    have concern over the low prices in oil. It is a big local
    constituent concern, because still in southern Illinois we have
    marginal wells, maybe 2 gallons a day, that--2 barrels, excuse
    me. Marginal, marginal wells.
        They are being plugged up, too. From the debate of energy
    security, which those of you who followed just by first two
    terms, and being a former Army officer, is a big concern of
    mine. So I, too, encourage the chairman to, and look forward to
    the hearing on these low oil prices because it will have an
    impact, as we continue to close up the marginal wells in our
    country. I think that needs to be discussed.
        Is there dumping; i.e., the dumping--lower prices--of oil
    or refined gas on our markets? Do you know of any instances of
    that?
        Mr. Moniz. I personally do not know, Mr. Chairman, but if I
    may ask one of the experts here, they can respond. We have no
    knowledge of that.
        Mr. Barton. I used to know a little bit about the oil and
    gas business, but under the classic definition of dumping, they
    have got to sell in our market below their cost of production
    in their market, and the Saudis could make money at $5 a
    barrel. So, under classic definition, there is not dumping.
    There is obviously a surplus of oil on the market, but I don't
    believe anybody is bringing any kind of an antidumping case,
    because literally they can produce it and ship it to us and
    make money at very low prices.
        Mr. Shimkus. Do we import refined gasoline?
        Mr. Moniz. Yes.
        Mr. Shimkus. I mean, I have been told that in the district.
    So, as we do that, even if we import oil, our refineries are
    closing down, or are threatened to close down, because if we
    are importing the gasoline, we are no longer even refining the
    oil. Again, that is another national security issue.
        Mr. Barton. That will be another hearing.
        Mr. Shimkus. Another hearing, good. I like hearings.
        So that is going to be a concern that I want to focus on.
    Again, I guess for that purpose, as we said in the Army, it is
    a warning order that this is of great concern to my district
    and the issue of national security.
        Mr. Chairman, I have two other areas that I want to move
    into real quick.
        Mr. Barton. You are our last questioner, Congressman
    Shimkus. So, as soon as you are through, I am going to release
    the witness.
        Mr. Shimkus. Okay. Following up on energy security, the
    biodiesel legislation that passed and was signed into law, I
    would like to know--of course, the Department has to promulgate
    the rule. What is the status on the rule for biodiesel?
        Mr. Moniz. The Department plans to issue an interim rule
    that will take effect in the March-April timeframe.
        Mr. Shimkus. Be careful when you use dates. I mean, we are
    rabid on dates on this committee. So March-April?
        Mr. Moniz. March-April. Can I spell it April?
        Mr. Barton. Of this year, 1999?
        Mr. Shimkus. Thank you, Mr. Chairman.
        Mr. Moniz. Of course, then there will be a comment period
    on that rule.
        Mr. Shimkus. Now that biodiesel is an approved fuel under
    EPACT, is it safe to assume that DOE will now begin collecting
    data on biodiesel fuel use?
        Mr. Moniz. I actually thought we had, but perhaps I am
    mistaken. No? I am sorry----
        Mr. Shimkus. Well, the issue is you do it for all the other
    fuels, and I think it would be helpful if you looked into doing
    it for the biodiesel.
        Mr. Moniz. Okay. I think this year we are planning to
    invest roughly $50 million in biofuels development in general,
    and certainly it is a direction that we want to emphasize. So
    we take your suggestion.
        Mr. Shimkus. And the last thing that I want to address--and
    I was on the floor because part of the committee process was
    the 911 emergency bill. So I apologize for not being here
    earlier.
        I want to address the interim storage site and, actually,
    the lawsuits filed by the utility companies, and the judgments
    ruled by the courts. Where is the budget amount of payment for
    these liabilities, and where are they as a line item?
        Mr. Moniz. Actually, probably the CFO wants to address
    that.
        Mr. Shimkus. He probably doesn't want to, but----
        Mr. Moniz. I would just note that internal estimates are of
    potential damages in the half billion to billion range. We
    understand there are higher estimates by others. How any
    judgments would be covered is an issue that we are discussing
    with the Department of Justice.
        Mike, do you want to add to that?
        Mr. Barton. That is a question that the Chair was going to
    ask in writing. So we look forward to hearing your answer to
    this.
        Mr. Telson. I think you would be better off with it in
    writing, but payments with a judgment fund are made under a
    permanent appropriation, but they do come out of the judgment
    fund. They are made out of the permanent appropriation.
        Mr. Barton. We have a judgment fund?
        Mr. Telson. The United States has a judgment fund to pay
    for defaults and----
        Mr. Barton. Well, is the Department preparing a submission
    of liability to submit to the judgment fund?
        Mr. Telson. Mr. Chairman, I would like to have our General
    Counsel--they have been handling this whole issue. So I would
    like to have them be able to comment on that.
        Mr. Barton. Well, this was a subject at our hearing on H.R.
    45, and at that time the senior Department of Energy official
    was very ambivalent about where the money was coming from.
    There was some discussion about it coming from the waste
    depository, the waste fund itself----
        Mr. Telson. No, it has not been determined. That is why
    we----
        Mr. Barton. Former Chairman Dingell had a number of
    questions on this also. So we are going to seriously look
    forward to hearing--we want to get that lined out, where that
    money is going to come from.
        Mr. Moniz. We will respond in writing, Mr. Chairman.
        [The following was received for the record:]

        The Department has not included any line item in the budget
    for these liabilities. Although the Court of Federal Claims has
    ruled in favor of three utilities, the court has not yet
    decided what damages should be awarded to these utilities. It
    has not yet been determined whether the damage awards should be
    paid from the Nuclear Waste Fund or from the Judgment Fund. The
    Office of Legal Counsel at the Justice Department is currently
    analyzing that question.

        Mr. Moniz. Again, I would just add that there certainly are
    discussions going on with the Department of Justice in terms of
    how would approach this issue.
        Mr. Barton. Right. We understand.
        Mr. Shimkus. A better solution would be to get onboard and
    move the interim storage site, and not incur these liabilities.
        I yield back my time.
        Mr. Barton. I thank the gentleman.
        We are going to have a number of written questions. I have
    got 10 pages of written questions that I am not going to
    belabor.
        I want to thank you, Mr. Under Secretary here, for being
    gracious and willing to stay while we had to go vote.
        Please, again, encourage Secretary Richardson to accept the
    invitation to meet with myself and Mr. Hall, Mr. Bliley, and
    Mr. Dingell on H.R. 45, because we want to at least give the
    Secretary the opportunity to have a dialog, if he so wishes,
    before we begin our open markup process.
        This hearing is adjourned.
        [Whereupon, at 12:20 p.m., the subcommittee was adjourned.]
        [Questions, in addition to those below, were sent to the
    Department of Energy, responses were not received at time of
    publication.]
        [Additional material submitted for the record follows:]
           Department of Energy Responses to Questions for the Record
                         questions from chairman barton
    Nuclear Waste Disposal
        Question 1: The Department's proposal for Yucca Mountain requires
    annual appropriations that are significantly higher than historical
    appropriation levels. Assuming historical funding levels of $350
    million, when will the permanent repository be ready to begin accepting
    spent fuel?
        Answer 1: The funding levels in the President's fiscal year 2000
    budget request are sufficient to support a site suitability
    determination in 2001 and, if the site is determined to be suitable,
    submittal of a license application in 2002. It is difficult to
    determine the extent to which the opening of a permanent repository
    would be deferred, based on a flat funding profile. As the Department
    has stated before the subcommittee, the constraints imposed by the
    Federal budget process have the potential to limit the availability of
    funding for the nuclear waste program in the outyears, particularly
    during repository construction. The Department has not fully analyzed
    the impacts of outyear funding at historical levels, but as a rough
    measure of the outyear impacts of such a funding profile, the
    Department estimates that approximately $10 billion is required from FY
    2000 through 2010 to develop the waste management system described in
    the Viability Assessment report and the Total System Life Cycle Cost
    analysis. The Department desires to work with Congress to address this
    issue. In exploring any funding alternatives, the Department is
    committed to meeting two important objectives: not imposing undue
    burdens on either utility ratepayers or taxpayers, and ensuring that
    the revenues raised by the nuclear waste fee remain available to
    complete the job.
        Question 2: In order to make the 2010 schedule for the permanent
    repository, what specific changes have been assumed from the historical
    appropriation trends, existing fee caps, and the budget rules? What is
    DOE's basis for making such assumptions?
        Answer 2: Both the Department and the Congress have been aware for
    some time that the overall constraints of the federal budget process
    limit the availability of funding for the nuclear waste program in the
    out years. The recently released ``Viability Assessment of a Repository
    at Yucca Mountain'' provides the Department's current estimate of costs
    to construct and operate a repository. Funding at historical
    appropriation levels will not be adequate to pay Program costs during
    repository construction. Future budget requests for the Program have
    yet to be established and will be determined through the annual
    Executive and Congressional budget process. The Department would like
    to work with the Congress to ensure that the repository program is
    adequately funded. Two important objectives need to be considered: (1)
    the Federal Government does not impose an undue burden on either
    ratepayers or the taxpayers, and (2) the revenues raised by the nuclear
    waste fee remain available to complete the job of the safe management
    and disposal of nuclear waste.
        Question 3: The DOE budget submission does not take into account
    the potential fiscal impacts of damage claims against DOE for its
    failure to accept spent fuel. Has the Department, in coordination with
    the Department of Justice, determined how these claims will be paid?
        Answer 3: The Department of Justice, Office of Legal Counsel, is
    investigating how claims emanating from DOE's delay in accepting spent
    fuel should be paid, but has not yet issued an opinion identifying the
    proper method and source for paying such claims.
        Question 4: It appears that DOE is proposing in the budget to use
    $39 million of the $85 million in Defense Nuclear Waste Disposal funds
    previously set aside by Congress for the purpose of interim storage.
    Does this request indicate the Department is pursuing some version of
    interim storage, or is the Department proposing to use those funds for
    a purpose other than that which Congress intended?
        Answer 4: The Administration opposes pursuing any options that
    would jeopardize the existing geologic disposal policy by forcing
    resources to be redirected to interim storage development, rather than
    completion, by 2001, of the site characterization work needed to make a
    decision on the suitability of the Yucca Mountain site. The Viability
    Assessment, which was submitted to the Congress and to the President in
    December 1998, revealed no technical showstoppers. But, it did identify
    additional scientific and technical work that is needed before a
    decision can be made whether to recommend Yucca Mountain as a site for
    a repository. The $39 million of prior year budget authority will be
    used to reduce the uncertainties in our understanding of Yucca
    Mountain. Specifically, we will continue to study the presence and
    movement of water through the repository block, the effect of water on
    the waste package, and the effect of heat from the waste packages on
    the hydrologic and geologic behavior of the site.
        Question 5: What is the present balance in the Nuclear Waste Fund?
        Answer 5: The present balance in the Nuclear Waste Fund as of
    February 28, 1999, is $7.7 billion. The data is derived from a report
    entitled ``Nuclear Waste Fund Summary of Cash Balances,'' prepared by
    the Department's Office of Chief Financial Officer on a monthly basis.
        Question 6: Does the Department plan to use the balance accumulated
    in the Nuclear Waste Fund for the permanent repository program?
        Answer 6: The Nuclear Waste Policy Act established the Nuclear
    Waste Fund in order to ``ensure that the costs of carrying out
    activities relating to the disposal of such waste and spent fuel will
    be borne by the persons responsible for generating such waste and spent
    fuel'' [Sec. 111(b)(4)]. As required in section 302(d), Nuclear Waste
    Fund revenues can be used ``only for purposes of radioactive waste
    disposal activities.'' Both the Department and the Congress have been
    aware for some time that the overall constraints of the Federal budget
    process limit the availability of funding for the nuclear waste program
    in the out years. The Department would like to work with the Congress
    to ensure that the repository program is adequately funded. It is
    important that funding alternatives not impose undue burdens on either
    utility ratepayers or the taxpayers, and that revenues raised by the
    nuclear waste fee remain available to complete the Department's waste
    management activities.
    Energy Security
        Question 7: I am pleased that the Department has established an
    Emergency Oil Task Force and is taking steps to assist our domestic oil
    industry. What specific actions is DOE taking to assist small
    independent operators, and how much funding is dedicated to this
    purpose in FY2000?
        Answer 7: Specific actions taken to assist small independent
    operators and the corresponding funding in FY2000 include:
        Assistance to Independents: focus on technology production problems
    identified by small operators by conducting cost-shared research with
    independents on marginal wells at risk of abandonment ($0.5 million).
        Reservoir Class Demonstration Program Revisit: designed to
    encourage producers to use new techniques for prolonging the production
    life of mature oil fields, now under pressure for premature abandonment
    due to low oil prices. The program will revisit the nearly completed
    three reservoir classes to address new technology applications in
    different regions of the country ($6.6 million).
        Preferred Petroleum Upstream Management Program (PUMP): start an
    on-line permitting project to enable States and independents reduce
    permitting costs and speed response time and to conduct limited
    technology transfer of best reservoir management practices for
    production and environmental compliance ($0.5 million).
        Streamline State/Tribal/Federal Regulations: enhance cooperative
    efforts with states, tribes and Federal agencies to streamline
    environmental regulations and regulatory processes without compromising
    environmental protection. Generate independent quality scientific data
    to help implement national policy in streamlining and improving
    existing regulations and laws ($1.6 million).
        Technology Outreach: support regional workshops through the
    Petroleum Technology Transfer Council (PTTC), provide complete packages
    of applicable results from Reservoir Class Demonstration and other
    projects, assist operators in extending reservoir life, improve
    efficiency and coverage in electronic and hard-copy dissemination of
    publications and software, and expand schedule of exhibits at
    professional meetings ($2.9 million).
        Approximately one-third of the FY2000 Oil Technology budget applies
    directly to small independent operators, with the remainder also
    applicable to other segments of the petroleum industry, including
    exploration, production and oil services.
    Strategic Petroleum Reserve
        Question 8: I understand that DOE has decided to add 28 million
    barrels of oil into the Strategic Petroleum Reserve. Are there plans to
    store additional quantities of ``Federal Royalty Oil'' in the Reserve?
        Answer 8: To date, the Administration has only decided to transfer
    28 million barrels of royalty oil to the Department of Energy. We are
    conducting an interagency study on the appropriate size of the
    Strategic Petroleum Reserve that we anticipate completing this summer.
    If we reach the conclusion that the Reserve inventory should be greater
    than 590 million barrels we would then address the issue of how to best
    obtain the oil.
    Energy Security
        Question 9: The budget request includes $50 million for research
    and development on oil production technologies. Please explain in more
    detail what activities will be conducted with these funds?
        Answer 9: The Oil Technology Program conducts a broad range of
    research and field demonstration activities designed to enhance the
    efficiency and environmental quality of domestic oil operations. These
    R&D activities are conducted in partnership with universities, State
    and local governments, industry and other organizations. Private sector
    participation is emphasized through industry cost-sharing with
    individual companies and consortia to ensure relevance and to
    facilitate the transfer of technology to the private sector while
    leveraging Federal R&D investment.
        These activities are carried out under three major areas:
    exploration and production, reservoir life extension and management,
    and effective environmental management. Following is a more detailed
    description of activities in each area:
        Exploration and production research consists of exploration and
    advanced drilling, completion, and stimulation systems, advanced
    diagnostics and imaging systems, the Multi National Lab/Industry
    Partnership, reservoir efficiency processes, and planning and analysis
    efforts.

     Exploration work aims to stimulate activity in currently
            underdrilled areas and in untested formations within older
            producing areas
     Advanced drilling, completion, and stimulation work focuses on
            developing tools and techniques to drill, complete and
            stimulate oil wells that can achieve and maintain higher
            production rates.
     Advanced diagnostics and imaging systems work focuses on the
            development of technologies and methodologies that improve
            success rates and cost efficiencies for the development of
            existing fields and the discovery of new fields.
     Multi Lab/Industry Partnership activities represent an
            industry driven program utilizing a wide range of tools
            developed for the defense programs and adapted to oil and gas
            use to improve seismic, production, drilling, and environmental
            technology.
     Reservoir efficiency processes include research to develop and
            demonstrate tools and methodologies that permit oil operators
            to recover hydrocarbons in mature reservoirs that are not
            producible by current technology. It also supports university
            research in extraction technologies with an objective on the
            development of scientific breakthroughs.
        Reservoir life extension and management work focuses on
    coordinating oil technology activities in research, development, and
    demonstration of advanced technologies to improve recovery of
    hydrocarbons from mature oil reservoirs. Activities in this area
    include revisiting major reservoir groups to address key production
    problems, and increasing production from marginal wells. In FY 2000,
    activities will be initiated in the reservoir life extension and
    management area for a preferred Petroleum Upstream Management Practices
    (PUMP) Program. PUMP is designed to provide a short-term supplement to
    mid- and long-term R&D and will focus on data management and effective
    environmental compliance. PUMP will use known technology transfer
    mechanisms, regional approaches, and integrated solutions to
    technology, regulatory, and data constraints.
        Effective environmental protection research activities focus on
    technologies and practices that reduce the threat to the environment
    and decrease the cost of effective environmental protection and
    compliance involved in exploration, production, and oil processing. In
    FY 2000, the program will focus on detection and control of air
    emissions from gas and oil equipment and facilities, treatment of
    produced water to meet environmental standards, remediation of soils
    contaminated with hydrocarbons or produced water, treatment and
    disposal of wastes containing naturally occurring radioactive
    materials, underground injection of produced water, and other
    approaches to manage oil and gas field wastes. Activities also include
    identification of pollutants present in petroleum and development of
    technologies to prevent their formation and to reduce emissions from
    petroleum fuels. Also, the program will implement, together with states
    and industry, on-line expert systems for environmental permitting and
    reporting that can save both producers and state regulators time and
    money. Through these activities with state governments and industry,
    the gas and oil environmental program can contribute toward decreasing
    cumulative industry compliance costs, between now and 2010, by as much
    as $16 billion, increase gas production by 90 billion cubic feet per
    year, and retain production of up to 140,000 barrels per day of oil
    that would otherwise be abandoned.
        Question 10: The funding for coal and natural gas is down from
    Fiscal Year 1999. Yet Dr. Moniz's statement notes the ``pressing
    environmental challenges of smog and particulate emissions, acid rain
    and global warming''. In light of those challenges, why is the
    Department reducing its efforts on these fossil fuels?
        Answer 10: The current reduction in FY 2000 reflects completion of
    the Low Emission Boiler Systems project in the Coal program ($12
    million) and the use of prior year funds to finance a portion of FY
    2000 requirements. In most areas this does not lead to a lower level of
    effort compared to that for FY 1999.
        Fossil Energy's proposed research program has been developed to
    achieve the twin goals of a cleaner environment and a growing economy.
    The research proposed in the FE program can substantially reduce the
    burden of environmental costs by billions of dollars annually, while
    sustaining environmental progress. This means that the Nation can
    continue to benefit from fossil fuels at the same time that we continue
    to improve the environment, grow the economy and enhance our energy
    security.
        Question 11: According to the Energy Information Administration,
    coal is the source of roughly half of the electricity generated in this
    country. If we start to lose a significant portion of our coal plants
    for air quality reasons, how will we replace that lost generating
    capacity?
        Answer 11: To put the scenario posed in your question in context,
    we note that substantial reduction in emissions from coal-fired power
    plants have been achieved over the past two decades without leading to
    significant shutdowns of coal-fired capacity. EIA analyses suggest that
    further emissions-reductions required over the coming years by the acid
    rain provisions in the 1990 Clean Air Act amendment can also be
    achieved without endangering the economic viability of significant
    amounts of coal-fired capacity.
        Taking the scenario posed in your question as given, three
    variables that would be crucial in understanding whether lost coal
    capacity could be replaced in a manner acceptable to U.S. electricity
    consumers would be:

    (1) Growth in demand for electricity;
    (2) The pace of replacement: how much coal would have to be replaced
            each year? and
    (3) The cost of alternative technologies and fuels.
        If electricity demand growth is high, and your hypothesized
    constraints on coal use are binding, then substantial natural gas
    capacity additions would be expected, along with associated increases
    in natural gas use and pipeline infrastructure requirements. These
    infrastructure and fuel use increases might be stretched to replace
    substantial amounts of coal capacity, without substantial price
    increases.
        Finally, research and development into new technologies for
    electricity generation can also provide direct benefits in holding down
    the cost to America's electricity consumers should the scenario posited
    in your question come to pass.
        Question 12: Can you explain the deferral of Clean Coal Technology
    funding for FY2000? Is the decision to defer these projects largely a
    Department decision, or is it coming from your industry partners?.
        Answer 12: The proposed deferral resulted from schedule delays in
    the Clean Energy Demonstration Project--an Integrated Gasification
    Combined Cycle (IGCC) planned for Illinois and the Clean Power From
    Integrated Coal/Ore Reduction (CPICOR) project--a combined steel making
    and power generation project planned for Utah. These two projects have
    over $300 million in future funding requirements; however, the next
    funding requirements are not until fiscal year 2001.
        Both of the extensions were made at the request of the industrial
    participant. For the Clean Energy project, the delay was necessary due
    to resiting of the project and the inclusion of the host utility as an
    equity partner in the project. The CPICOR delay resulted from a change
    in the technology vendor. Both projects are expected to begin
    construction activities in 2001.
    DOE Asset Sales
        Question 15. Have DOE contractors fulfilled their legal obligations
    to identify and dispose of surplus assets? Provide a legal opinion on
    the duty of DOE contractors to identify and dispose of surplus assets
    under their control. Provide a list of DOE contractors, indicating the
    value of DOE assets under the control of each contractor, whether each
    contractor has disposed of surplus assets over the past five years, and
    the value of any surplus assets disposed of by each contractor over the
    past five years.
        Answer 15: Yes. DOE management and operating contracts contain a
    paragraph within the property clause 48 Code of Federal Regulations CFR
    970.5204-21 Department of Energy Acquisition Regulation (DEAR) which
    requires, among other things, that the contractor disposition personal
    property as directed by the contracting officer. Both the 41 Federal
    Property Management Regulations, Chapter 101-43.101, ``Agency
    utilization reviews,'' and the Department of Energy Property Management
    Regulations (DOEPMR) 41 CFR 109-43. 101, ``Agency utilization
    reviews,'' require that contractors be responsible for continuously
    surveying property under their control to assure maximum use, and to
    promptly identify property that is excess to their needs and make it
    available for use elsewhere. Attachment I provides a list of DOE
    contractors by Operations or Field Office, demonstrates that each
    contractor has identified and disposed of surplus personal property
    over the past 5 years, and shows the value of surplus personal property
    assets disposed of by each contractor over the past five years.
    Attachment 2 provides a list of DOE contractors and indicates the value
    of personal property assets under the control of each contractor.

        Total Value Of Any Surplus Assets Disposed By Each DOE Contractor
    ------------------------------------------------------------------------
                                                             Acquistion Cost
                         Field Office                       FY 1994-MAY 1999
    ------------------------------------------------------------------------
    Albuquerque Operations Office
      Allied Signal.......................................      $152,002,000
      Los Alamos National Lab.............................      $216,452,747
      Mason & Hanger......................................       $79,939,731
      Sandia National Laboratory..........................      $236,494,785
      Westinghouse (WIPP).................................        $8,482,192
        Subtotal..........................................      $693,371,455
    Chicago Operations Office
      Ames Laboratory.....................................          $955,490
      Argonne National Laboratory.........................       $48,696,734
      Brookhaven National Laboratory......................       $21,489,712
      FERMI National Accelerator Lab......................       $38,128,729
      Princeton Plasma Physics Lab........................        $1,871,805
        Subtotal..........................................      $111,142,470
    Idaho Operations Office
      Idaho National Engr & Env Lab.......................      $114,403,219
    Nevada Operations Office
      Nevada Test Site....................................       $21,362,800
    Oak Ridge Operations Office
      Bechtel Jacobs (ETTP)...............................       $25,662,120
      Lockheed Martin Energy Sys..........................        $5,419,470
      Lockheed Martin Energy Res..........................        $9,876,300
      Thomas Jefferson National Accel.....................        $3,646,572
      Oak Ridge Associated Univ...........................        $1,388,418
        Subtotal..........................................       $45,992,880
    Oakland Operations Office
      Lawrence Berkeley National Lab......................       $12,300,000
      Lawrence Livermore National Lab.....................      $150,000,000
      Stanford Linear Accelerator Center..................       $11,900,000
        Subtotal..........................................      $174,200,000
    Richland Operations Office
      Hanford Site-Fluor Daniel Hanford...................      $154,930,246
    Savannah River Operations Office
      Savannah River Site Westinghouse....................      $151,879,000
    Golden Field Office
      National Renewable Energy Lab.......................        $5,879,946
    Ohio Field Office
      Fernald Environmental Mgmt Proj.....................       $23,213,251
      Mound Site..........................................       $78,535,450
      Ashtabula...........................................          $157,243
      West Valley Project Westinghouse....................        $3,747,739
        Subtotal..........................................      $105,653,683
    Rocky Flats Field Office
      Kaiser Hill LLC.....................................      $114,849,460
    Federal Energy Technology Center
      FETC-DOE............................................       $25,783,537
      Amax Research & Development.........................        $1,915,200
      Bartlesville Research Facility......................          $762,078
        Subtotal..........................................       $28,460,815
    Strategic Petroleum Reserve Project Office
      Strategic Petroleum Reserve.........................        $4,175,958
    Pittsburgh Naval Reactors
      Bettis Atomic Power Laboratory......................       $11,754,174
    Schenectady Naval Reactors
      Knolls Atomic Power Laboratory......................       $14,656,545
        GRAND TOTAL.......................................    $1,752,712,651
    ------------------------------------------------------------------------

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        Question 16: Has DOE fulfilled its legal obligations to identify
    and dispose of surplus assets? Provide a legal opinion on the duty of
    Federal agencies to identify and dispose of surplus assets.
        Answer 16: Yes. The Federal Property and Administrative Services
    Act of 1949, as amended, implemented in Title 41 CFR 101-43.101,
    ``Agency utilization reviews,'' Federal Property Management
    Regulations, requires that every agency continuously survey property
    under its control to assure maximum use and to promptly make personal
    property that is excess to its needs available for transfer. All
    personal property that is excess to an agency is then screened by the
    General Services Administration (GSA) for use by other Federal
    agencies. DOE excess personal property is screened for reutilization
    within DOE as described in the DOE Property Management Regulations, 41
    CFR Chapter 109-43.304-1.50, ``DOE reutilization screening.'' After
    such a screening, remaining excess personal property is reported to
    GSA.
        The Federal Property and Administrative Services Act of 1949,
    implemented in 41 CFR Subpart 101-47.2, as amended, ``Utilization of
    Excess Real Property,'' and Subpart 101-47.8, ``Identification of
    Unneeded Federal Real Property,'' Federal Property Management
    Regulations, requires that the Department annually survey its real
    property (land and facilities) to identify property that is
    underutilized or not being put to optimum use, and directs agencies to
    follow certain procedures with respect to any such property.
        Question 19: How much surplus property has DOE donated to nonprofit
    organizations over the past five years?
        Answer 19: DOE has donated over $258,000,000 in surplus property
    over the past five years.
    PEIS Lawsuit Settlement Agreement
        Question 20: The Department recently entered into a settlement
    agreement with the NRDC that requires the Department to establish a
    $6.25 million fund to provide grants to environmental groups monitoring
    DOE cleanup efforts. Where will these funds come from, and what is the
    Department's authority to make such grants? If DOE allows a third party
    to administer this grant program, as is specified in the settlement
    agreement, who in the Department remains accountable for how these
    funds are spent? How does the Department prevent the kind of abuses we
    discovered in the Nevada Project Office, where federal funds were used
    for lobbying rather than for objective analysis?
        Answer 20: The initial funding ($1.25 million) for the Citizen
    Monitoring and Technical Assessment Fired (Fund) is provided from the
    Department's Defense Environmental Restoration and Waste Management
    account. The Department provided the initial $1.25 million for the Fund
    to RESOLVE, Inc. (RESOLVE), which was chosen as the Administering
    Organization of the Fund. After reviewing RESOLVE's financial
    management documentation pursuant to the settlement agreement, DOE
    transferred the initial $1.25 Million to RESOLVE in March 1999. The
    balance of the required funding ($5 million) is included in the
    Department's FY 2000 budget request now before Congress. In addition to
    the Department's usual authorities including the Atomic Energy Act and
    the DOE Organization Act, for payment of funds to public and private
    groups, Federal appropriations guidelines also provide that a court
    ordered settlement confers authority to fund projects such as those to
    be selected by RESOLVE.
        The Department is firmly committed to ensuring strict adherence to
    the requirements of the settlement agreement, which limits use of the
    Fund to technical and scientific studies, and prohibits use of the Fund
    for litigation, lobbying, or fundraising. There are several means of
    Fund oversight. First, RESOLVE must provide an annual report to the
    Department outlining how the Fund is spent, consistent with OMB
    Circulars for the expenditure of public funds. Second, in the event
    that DOE requires an audit, it would be conducted pursuant to the
    normal procedures associated with the federal government grant-making
    process. Third, the Department has prohibited the use of funds for
    litigation, lobbying, and fundraising activities in the settlement
    agreement, as it Specifically states that funds may not be used for
    such activities. As Administering organization of the Fund, RESOLVE is
    responsible for determining that the Fund is used consistent with the
    intent of the settlement agreement. However, the Department will
    oversee RESOLVE's administration of the Fund. A DOE contracting officer
    (yet to be selected) will be responsible for determining that
    appropriated funds are used consistent with the intent of the
    settlement agreement. No money has yet been granted from the Fund by
    RESOLVE, but initial receipt of applications is expected by July.
    External Regulation
        Question 21: For several years now, this Committee has been
    advocating external regulation of DOE facilities and operations by the
    NRC and OSHA. In testimony before this subcommittee last May, then-
    deputy Secretary Moler agreed with us on the benefits of external
    regulation at DOE facilities and promised to work with NRC and OSHA to
    establish the scope, timing, and resource needs to implement external
    regulation. She also promised us that this interagency process would be
    in place by July 1998 and would be reflected in the FY2000 budget
    planning process. However, Secretary Richardson stated in a February
    19, 1999, letter that DOE will complete the ongoing pilot projects and
    then put this concept on the shelf--not conducting any more pilots and
    not submitting any implementing legislation to Congress. Please explain
    the Department's apparent reversal on external regulation?
        Answer: As noted in the Secretary's letter to Congress of February
    19, 1999, a number of significant, unresolved issues were identified in
    the three regulatory pilots completed by DOE and NRC. A number of
    regulatory and cost uncertainties would need to be addressed before
    proceeding to submit any legislative proposal for transition to
    external regulation. As indicated in the Secretary's most recent letter
    of March 31, 1999, accompanying ``working drafts'' of two of the three
    pilot reports (for Lawrence Berkeley National Laboratory and the
    Receiving Basin for Offsite Fuel at Savannah River), the Department
    remains concerned about the ``extent to which existing regulatory
    flexibility or exemptions would be available to effectively address the
    DOE's unique nuclear facilities and operations, and what potential
    impacts such uncertainties carry with them.'' The letter also noted
    that this issue--the degree of flexibility or exemptions that the NRC
    can actually afford in defining how the existing regulatory framework
    is applied to specific DOE facilities through a licensing process--
    ``cannot easily be answered by the reviews contained in the enclosed
    pilot reports.'' In this letter, the Secretary concludes that ``these
    potential impacts cannot be overstated and must be fully addressed
    before any regulatory transition is pursued.''
    Hanford Spent Nuclear Fuel Project
        Question 25: Dr. Moniz testified before the Subcommittee on
    Oversight and Investigations last year regarding the Hanford Spent
    Nuclear Fuel (SNF) project, which, at that time was $600 million over
    budget and four years behind schedule. What progress has been on the
    Hanford SNF project since our hearing last year?
        Answer: The Hanford Spent Nuclear Fuel Project has achieved
    significant progress since the establishment of the high confidence
    level schedule in the Fall of 1998. The current Project life cycle
    cost, based upon this schedule, is $1,720M which includes a
    deactivation cost of $133.5M. The proposed budget of $1.375B for the
    SNF Project reported in last year's testimony, reflected the known
    changes added to the current baseline at the time of the Congressional
    hearing. Subsequently, a re-estimate of the entire SNF Project was
    completed and validated to support the Tri-Party Agreement schedule
    commitments. This re-estimate resulted in the $1.586B baseline approved
    in December 1998. When added to the deactivation costs, the total life
    cycle cost is $1.720B. The validation of the SNF Baseline was
    accomplished over a three month period by a joint team consisting of
    Department employees, Contractors from FDH and DESH, and the EPA. The
    detailed Basis of Estimate and backup for each SNF subproject's
    proposed baseline was verified and validated as appropriate for the
    known workscope. Contingency requirements and identified risks were
    also evaluated during the review. Project expenditures from fiscal year
    1995 to February of fiscal year 1999 have been $593M. Institution of a
    disciplined baseline change control process has resulted in improved
    controls on the use of funds. Expenditures are being tracked against
    the risks identified in the contingency analysis. As a result, the
    project is performing within its cost goals. Several technical issues
    have caused decreased schedule performance to date. However, the
    Department expects to recover the slippages in the project by the
    summer of 1999.
        The status of significant activities are:

    -- The fuel characterization effort has been successfully completed and
            the final report was issued in March 1999. The cask/
            transportation sub-project has also been successfully
            completed.
    -- The K-West Basin Integrated Water Treatment System and the Fuel
            Retrieval System installation activities are on schedule for
            completion this fiscal year. Installation of the K-West Basin
            Cask Load Out System has been put on hold temporarily due to a
            potential technical problem, and plausible mitigative solutions
            are currently being evaluated.
    -- The Canister Storage Building construction is on schedule.
            Additionally, the acceptance testing for the Multi-Canister
            Overpack Handling Machine is also on schedule. The Cold Vacuum
            Drying process equipment skid procurement has been awarded.
            However, the delivery schedules are very tight.
    -- Additional contractor operations staff are being hired and trained
            pro-actively to support various start-up activities. Major
            contractor performance improvements have been noted as
            continued attention is being focused in ensuring that seasoned
            personnel are in place to best serve the project needs.
        The SNF project is on track to meet the Departmental commitment to
    start fuel removal from the basins by November 30, 2000.
        Question 26: The contractors on the project--Fluor Daniel and Duke
    Energy--made a commitment to the Committee and to the DOE to complete
    this project on time and under budget or risk all of their profit. What
    is the status of this commitment?
        Answer: Fluor Daniel Hanford, Inc., (FDH) and DE&S Hanford, Inc.,
    (DESH) have both committed to complete the Spent Nuclear Fuel (SNF)
    Project on time and within budget. The U.S. Department of Energy,
    Richland Operations Office (RL) has modified the FDH prime contract
    (modification No. 062) that places Performance Agreement fee earned by
    FDH in fiscal year 1999 and 2000, at risk upon the successful start of
    fuel removal from the K Basins by November 30, 2000. FDH has also
    modified the DESH subcontract to flow this requirement down. Therefore,
    both organizations have put their respective portions of earned SNF
    Project Performance Agreement fee at risk on fuel movement.
        In fiscal year 1998, the performance fee opportunity that was
    available on the SNF Project was $7.2M. In fiscal year 1998, FDH and
    DESH earned no fee. In addition to not earning fee, both FDH and DESH
    were penalized $351K through penalty clauses that were invoked in the
    performance agreements.
        Question 27: It is the Committee's understanding that the
    subcontractor on this project, Duke Energy, is now trying to get out of
    the contract. What is the status of this situation?
        Answer: On February 4, 1999, Dr. Ernest Moniz (Under Secretary) and
    James Owendoff (Acting Assistant Secretary for Environmental
    Management) met with James Stein (President and Chief Operating Officer
    of Fluor Daniel) and Richard Priory (President and Chief Executive
    Officer of Duke Energy) to discuss the contractors' approach for
    managing this project. Fluor Daniel and Duke stated at this meeting
    that they remain fully committed to the success of this project.
        As a follow up to this meeting, Mr. Stein and Mr. Priory provided
    additional details of their plan. In brief, the contractors proposed a
    change to the contractual relationship of Fluor Daniel as prime
    contractor and Duke as major subcontractor for the spent fuel project,
    to a relationship where Fluor Daniel will be directly responsible for
    project execution and Duke Energy would provide technical support
    through a staff augmentation type subcontract. This change was
    subsequently made.
        Consistent with commitments made by senior management from both
    Fluor and Duke to DOE/HQ and DOE/RL, the DESH transition has been
    completed without any cost or schedule impacts to the SNF Project.
    Specifically, the transition included:

    * The transition of the DESH Subcontract is not a termination.
    * The DESH contract will remain a cost reimbursement, performance fee
            based subcontract.
    * Effective August 1, 1999, DESH transitioned from the major
            subcontractor for SNF to a staff support subcontractor to FDH.
            FDH is now responsible for execution of the SNF project and
            DESH provides human resources to fill work scope tasked by FDH.
            The existing subcontract between DESH and FDH has been modified
            accordingly to accommodate this transition. Notwithstanding any
            changes made in the subcontract, for the staff augmentation
            scope, the continuing rights and obligations of DESH as the
            performing entity prior to August 1, 1999 remains unchanged.
    * Consistent with commitments made to Congress, DOE/HQ, and the DOE/RL
            all fee earned by DESH on the SNF Project will be contingent on
            the movement of fuel in November 2000. As in the past, the fee
            DESH earns will come out of FDH earned fee and will not be
            billed as a separate direct cost back to the DOE/RL. Also,
            consistent with commitments made, DESH's subcontract has been
            extended through September 30, 2001.
    * Currently, DESH supports the SNF Project and the TWRS Project with
            approximately 200 DESH employees. These employees have been
            transferred over to FDH (180) for the SNF work
            scope and LMH (20) for the TWRS work scope. The
            only change in this employee transition is that the employees
            have changed the name tags on their badge (i.e., DESH to FDH or
            LMH). There were no layoffs, involuntary reductions in force,
            or relocation of DESH staff. Therefore, there were no costs
            associated with severance pay, pension costs, retirement,
            relocation, cost of money, and travel.
    * DESH also supports the SNF Project with approximately 30 DE &
            Services, Inc., staff (Home Office Personnel). These are staff
            that are on full time assignment to the SNF Project. There will
            be no change with these staff. They are still being utilized
            through the existing subcontract relationship between DESH and
            FDH at no increased cost to the SNF project.
    * Currently, DESH is also supporting the SNF Project with approximately
            30 DE& Services, Inc., temporary staff who are here on short
            term assignments. These resources will continue to be utilized
            as necessary and will also be accessed through the existing
            subcontract relationship between DESH and FDH at no increased
            cost to the SNF project.
        DOE has made it clear that, regardless of the contractual
    relationship, DOE expects Fluor Daniel to hold Duke and itself to the
    commitments made to the Committee on this project, and to assure that
    the necessary technical experts are made available to achieve a
    successful outcome.
                    questions from the honorable tom coburn
    Strategic Petroleum Reserve
        Question 1: Dr. Moniz, I realize the Department has instituted a 28
    million barrel Strategic Petroleum Reserve increase from the market in
    lieu of payments, but what is the real effect this will have on the oil
    market? Will this move help to bolster falling prices and is it
    believed to help the independent oil producer?
        Answer 1: The reasons that the Administration is acquiring royalty
    oil for the Strategic Petroleum Reserve now are that we want to enhance
    energy security by replacing the oil that was sold from the Reserve in
    fiscal years 1996-97, and that we want to be prudent by doing it while
    prices are low.
        The direct price effect of transferring 28 million barrels of
    royalty oil over the course of a year is expected to be negligible.
        Question 2: By my calculation the 28 million new barrels accepted
    into the Reserve will give us a total of 589 million barrels of oil in
    reserve. What is the future plan of DOE in regards to the Strategic
    Petroleum Reserve? Would it not be wise to try and fill the Reserve
    with oil at this time to a level of 680 million barrels based on a two
    pronged effect: (1) It take more oil off the market and would help
    shore up prices, and (2) we make a wise business decision to get the
    oil at historically low prices.
        Answer 2: The Administration is conducting a study of the
    appropriate size level of the Strategic Petroleum Reserve that we
    expect to complete this summer. Our policy on adding more oil to the
    Reserve will be determined after its completion. However, it is not our
    policy to try to influence oil prices, and the Energy Policy and
    Conservation Act specifically directs the Department to acquire oil in
    a manner to minimize the impact upon supply levels and market forces.
    It is both good policy and our intent to act in a business like fashion
    and acquire oil only at favorable prices.
    Fossil Energy R&D
        Question 3: I noticed a request that actually decreases the Fossil
    Fuel R&D account by about $20 million dollars from 1999. What are the
    specific reasons that the request is lower and would it not be wise to
    actually increase the R&D account given the struggles domestic
    producers are having and the fact that projections indicate a heavy
    dependence on foreign oil? Is this an indication of how the
    administration feels about the fossil fuels industry?
        Answer 3: Although there are several small increases and decreases
    in the Fossil Energy Congressional Request, the two major reasons for
    the overall decrease are completion of the Low Emission Boiler Systems
    project ($12 million), and the use of prior year funds to finance a
    portion of FY 2000 needs ($11 million.)
        The overall Fossil Energy R&D budget request reflects a balancing
    of budget priorities by the Administration, given restrictive budget
    caps.
    Oil Dependence
        Question 4: I am very alarmed by the statistics that indicate
    imported oil will rise to over 16 million imported barrels a day by the
    year 2020 accounting for 66% of oil consumption in the United States.
    While these are bleak projections the amount requested for Energy
    Resources programs only is increased $6 million dollars. It is my
    understanding that the Energy Department's security strategy relies on
    this money to help develop technology to increase energy efficiency and
    reduce energy demand. The projections indicate this plan is a failure.
    Is the meager request for an increase a sign that the DOE believes the
    energy security plan is a failure? If so, why have we not looked at a
    more vigorous avenue to fight foreign oil dependence?
        (Note: The 66 percent dependence on imported oil is for 2010
    according to the Annual Energy Outlook 1999 by EIA. Their estimate for
    2020 is 71 percent reliance on imported oil. In addition, EIA projects
    that imports will be almost 11 million barrels per day in 2010, and
    almost 12 million barrels per day in 2020)
        Answer 4: Two-thirds of the oil used by the U.S. is for the
    transportation sector. The Department is requesting $305.5 million for
    transportation technologies to develop technologies that will reduce
    our dependence on oil. If the current programs of the Office of
    Transportation Technologies (OTT) are successful, it is estimated that
    demand will be reduced by 1.8 million barrels per day off the projected
    2020 oil use for the U.S. But, every barrel of oil reduced in
    transportation does not translate into a barrel of reduced oil imports.
    Therefore, reducing the projected 71 percent dependence on imported oil
    for 2020 will require even greater attention to efficiency
    improvements, substitutions, and enhanced domestic production.
        That is why the budget request also includes $50.2 million for
    research and development on oil production technologies. Fossil
    Energy's Oil Technology Program conducts a broad range of research and
    field demonstration activities designed to enhance the efficiency and
    environmental quality of domestic oil operations. These R&D activities
    are conducted in partnership with universities, State and local
    governments, industry and other organizations. Private sector
    participation is emphasized through industry cost-sharing with
    companies and consortia to ensure relevance and to facilitate the
    transfer of technology to the private sector while leveraging Federal
    R&D investment.
    Climate Change
        Question 5: While Fossil Fuel R&D decreases by $20 million, which
    helps producers find new ways to produce oil more cheaply, the Climate
    Change Technology Initiative (CCTI) is increased $22 million. How can
    we be sure this increase, and for that matter, the rest of this
    funding, is not being used to promote an unratified Kyoto treaty? What
    are some assurances that you can give me for the record that this money
    will not be used to foster implementation of this treaty while it has
    not been ratified?
        Answer 5: Fossil Energy has two related programs contained in the
    CCTI: advanced clean, efficient, fuel flexible, power generation
    technologies (Vision 21) and carbon sequestration research. Neither is
    directly related to the Kyoto Protocol, and none of the funding is used
    to implement the Protocol. Both of these programs are targeted to
    produce a suite of practical technologies for deployment in the 2015
    time frame, with significant expansion in scope and reduction in cost
    for sequestration in the following decade. These technologies will
    provide cost-effective tools for reducing carbon emissions generally,
    without respect to the specific targets in the Kyoto Protocol. The
    Kyoto agreement focuses on binding national commitments, and R&D
    programs such as these are not part of it.
                  questions from representative ralph n. hall
    Emergency Oil Task Force
        Question 1: Mr. Secretary, in November you formed a DOE emergency
    task force to address the price crisis being faced by America's
    independent oil and natural gas producers. Nearly 50,000 U.S. oil and
    gas industry jobs have been lost since November 1997 and almost 200,000
    wells have been permanently shut-in.
        I'm aware of the initiatives DOE has announced to help including
    refilling the 28 million barrels of oil sold from the SPR by initiating
    a royalty-in-kind program and providing technical aid and efficient
    energy programs to domestic producers. I also understand you may
    announce a DOE/SBA effort to publicize a program offering loan
    guarantees for domestic producers and their capital providers.
        I congratulate you on these efforts but I'm afraid that much more
    is necessary. One can argue that America's oil producers are facing the
    same crisis as America's farmers and steel manufacturers. However,
    President Clinton and Vice President Gore haven't uttered a word about
    the serious economic and national security threats posed by this price
    downturn. Why haven't we seen the White House, the Treasury Department
    and other agencies take a stronger and more visible position in support
    of far-reaching initiatives to help this struggling industry? When will
    the rest of the Administration begin publicly discussing ways to avert
    the loss of significant amounts of America's onshore lower 48 states
    domestic oil production and the attendant risk to future natural gas
    development industry?
        Answer 1: We agree with you that the latest round of low oil prices
    presents a severe problem to domestic petroleum production. This is a
    vital industry that is integral to the energy and economic security of
    our country.
        With respect to your question about White House involvement,
    Secretary Richardson chaired a meeting at the White House to address
    these issues on March 16, 1999. John Podesta, the President's chief of
    staff, Gene Sperling, chairman of the National Economic Council, Bob
    Rubin, Secretary of Treasury, and Secretary Richardson met with
    representatives of the petroleum industry to hear their concerns and
    discuss possible actions. One of the first tangible accomplishments
    from that meeting was the establishment of a special energy working
    group within the National Economic Council. This group has brought in
    high level representatives from all agencies within the Administration
    to address important energy issues. We expect this group to make a real
    contribution in terms of creating a forum where important issues
    affecting the petroleum industry and other energy industries, can be
    discussed with all important government officials.
        Question 2: Again, referring to your task force. Do the members of
    the task force have other recommendations that will go further and
    provide substantial relief for the industry? Has DOE been working with
    the Treasury Department on tax relief measures? If so, please
    elaborate.
        Answer 2: Yes, they do. The work of the task force is an ongoing
    process where new ideas or initiatives to aid the industry are being
    considered. For example, since releasing its first report DOE has begun
    working with the U.S. Department of Agriculture to determine if their
    loan guarantee program for businesses in rural areas could be expanded
    to include oil and natural gas businesses.
        With respect to tax relief, DOE and the Treasury Department has
    been closely following the tax proposals currently in Congress. The two
    agencies have discussed the pros and cons of these proposals, and are
    anticipating serious consideration of them in Congress. DOE has offered
    to work with Congress in its efforts to develop the most cost-effective
    and efficient proposals possible.
        Question 3: The Clinton Administration has consistently touted its
    global climate change agenda--an agenda which most in Congress do not
    support. One of the key elements of that agenda is a substantial
    increase in domestic natural gas production. Has anyone in the
    Administration recognized the implications of the current oil price
    crisis on this natural gas agenda?
        Answer 3: Yes, we are concerned with the potential impact of low
    oil prices on future domestic production of natural gas. The Energy
    Information Administration (EIA), in its Annual Energy Outlook for
    1999, presented findings from sensitivity analyses it did on the
    effects of low oil prices that indicate that low prices may not
    significantly impair domestic gas production in the future.

                                    FOR 2020
    ------------------------------------------------------------------------
                                                                      NG
                                          Oil prices   NG prices  production
    ------------------------------------------------------------------------
    EIA Base Case.......................  $22.73/bbl   $2.68/mcf    27.4 TCF
    EIA Low Oil Price Case..............  $14.57/bbl   $2.62/mcf    26.9 TCF
    ------------------------------------------------------------------------

        As can be seen from this data for the year 2020, EIA forecasts that
    domestic gas production will be basically unchanged whether oil prices
    are $22.73/bbl. (all in constant 1997 dollars) or $14.57/bbl.
        Having said this, we are still concerned with this important issue.
    We expect the National Petroleum Council, which is currently conducting
    a study of future gas supplies in the U.S., to give us their assessment
    of the implications of low oil prices. The results of that study should
    be conveyed to DOE in the Fall of 1999.
        Question 4: Some of your predecessors viewed DOE's Fossil Energy
    programs, particularly the oil and gas program, as a source of
    additional funds for other programs. I am pleased to see that you have
    made a slight increase in Fossil Energy's oil research and development
    program. Can we count on DOE to continue fully funding this program?
    Will you fight to maintain this program when congressional
    appropriators attempt to rob this program to fund more popular programs
    such as Energy Efficiency?
        Answer 4: I fully support the Fossil Energy FY 2000 budget request.
    I believe that the oil and gas program budget level is appropriate and
    balanced in light of current budget constraints. I also support the FY
    2000 budget request for Energy Efficiency and believe that it is
    appropriate and balanced, too. I will support maintenance of both
    programs.
                     questions from representative norwood
    Purchase Power and Wheeling
        Question 1: Has the Administration made a policy decision to
    terminate wholesale power contracts with existing preference customers
    by eliminating funding for purchase power and wheeling?
        Answer 1: No. The Administration has made no policy decision to
    terminate existing wholesale power contracts. On the contrary, the
    Administration expects and intends that the PMAs will continue to
    perform critical purchase power and wheeling activities as necessary to
    fulfill their contractual commitments. The sole purpose of the
    Administration's proposal to eliminate appropriations for purchase
    power and wheeling is to correct an anomaly in the appropriations
    process. This anomaly unfairly weakens and jeopardizes the PP&W
    function--a situation which the Administration's proposal would
    correct. The Administration recognizes that the financing methods used
    to firm Federal power and wheel it to users must take into account the
    individual situations found at each PMA power system. The
    Administration is open to other ideas that provide a permanent solution
    for financing this activity without relying on scarce appropriations.
        Question 2: What happens to the contracts for transmission service
    if funds are not provided in the budgets for the PMA's?
        Answer 2: It is the Administration's intention that funding will be
    available, without appropriations, for the continuation of contracts
    for firming energy and transmission services. Currently, more than half
    of the PMA purchase power and wheeling activity is funded without
    appropriations, through existing off-budget, alternative financing
    methods, including net-billing, bill crediting and reimbursable
    authorities. Off-budget financing of the remaining portion of the
    programs is anticipated from customers. We understand that the
    Administration's proposal has generated some concern among current
    suppliers and customers. Adequate funding of firming energy and
    wheeling services is vital to the ability of the PMA's to meet
    contractual firm power delivery requirements. In the event we are
    unable to achieve sufficient alternative financing given the time
    constraints, we plan to work with the Congress prior to the start of FY
    2000 to develop other solutions.
        Question 3: If the PMAs do not have funds for purchase power, can
    they continue to sell firm source power? And if they cannot sell this
    power, will they be able to still generate the same amount of revenues?
        Answer 3: Purchase power is vital to a PMA's ability to market the
    variable hydro generation as a firm energy resource. Without purchase
    power funding, the ability to market firm source power would be greatly
    reduced, possibly to zero for some projects. Non-firm sales on the
    other hand would be greatly increased, raising concern over the ability
    of the PMAs to secure adequate revenue under such a scenario, as the
    burgeoning non-firm products, representing a much higher percentage of
    sales, would be sold at spot-market prices, which are generally less
    than firm power prices. There have been times when surplus
    hydroelectric energy had no monetary value in northern California due
    to market saturation during high flow periods.
        However, the Administration's proposal does not intend to eliminate
    the purchase power function of the PMAs; rather, it is an attempt to
    move the funding responsibility for these vital functions from the
    uncertain appropriations process to those that benefit and pay for the
    services--the PMA power customers.
        Question 4: Did you check on the law when you made this decision?
    Because it is my understanding that there is some question as to
    whether the Department of Energy will be able to comply with the Flood
    Control Act.
        Answer 4: The Flood Control Act requires that the PMAs transmit and
    dispose of the power from Flood Control projects on a widespread basis
    consistent with sound business principles. As a matter of policy, the
    PMAs market their power consistent with this mandate, and the
    Administration's FY 2000 Purchase Power and Wheeling financing proposal
    intends to continue this policy. We do not believe that the FY 2000
    proposal violates any provisions of the Flood Control Act, since the
    proposal is only shifting the responsibility of financing purchase
    power and wheeling from appropriations to customers.
        Question 5: If the General Counsel's office had advised your budget
    personnel that eliminating the funding for purchase power and wheeling
    violated statutes governing the authority of the PMAs, would DOE still
    pursue this proposed change in funding?
        Answer 5: No.
        Question 6: Why has the administration made the apparent policy
    decision to raise electric rates for retail electric customers of
    municipal utilities and rural electric cooperatives that currently buy
    power from the federal government?
        Answer 6: The Administration's proposal shifts the responsibility
    for funding the purchase power and wheeling program from the U.S.
    Treasury to those that benefit from the services--the PMA customers.
    The proposal does not eliminate the ability of the PMAs to perform
    these functions. If successful, we do not anticipate rate impacts to
    existing PMA customers. If funding arrangements cannot be accomplished,
    we plan to work with the Congress to provide other solutions.
                      questions from representative wilson
    Waste Isolation Pilot Plant (WIPP)
        Question 1: What is the current status of opening WIPP? When do you
    anticipate moving the first shipments of waste? What are the remaining
    barriers to opening WIPP and how can the Congress assist in removing
    these barriers?
        Answer 1: The Waste Isolation Pilot Plant (WIPP) is open. The first
    shipment of waste from the Los Alamos National Laboratory arrived at
    WIPP on March 26, 1999. As of June 2, 1999, there have been nine
    shipments of non-mixed waste to WIPP from Los Alamos and one shipment
    of non-mixed from the Idaho National Engineering & Environmental
    Laboratory. Over the next several months, DOE plans to send additional
    shipments to WIPP from Los Alamos, Idaho, and Rocky Flats.
        The Department's Resource Conservation and Recovery Act permit
    application for mixed waste for WIPP is pending before the New Mexico
    Environment Department (NMED). NMED's permit hearing concluded March
    26, 1999. Based on the schedule announced at the close of the hearing,
    it appears that NMED will issue a final permit in November 1999.
    DOE Budget Request for 2000
        Question 2: What are the DOE estimates of annual liability costs
    for failure to accept spent fuel by January 31, 1998? How do you plan
    to accommodate, avoid or budget for these costs?
        Answer 2: It is not possible, at this time, to estimate the
    ``annual liability costs'' for the delay in accepting spent nuclear
    fuel. The United States Court of Federal Claims has found in the cases
    brought by utilities with no operating reactors that the Department's
    delay constitutes a breach of contract. However, the amount of damages
    has not yet been determined.
        We understand that the Department of Justice's Office of Legal
    Counsel is conducting an analysis to determine how to properly treat
    these costs. The Department cannot plan for accommodating and budgeting
    for these costs until the Office of Legal Counsel has completed its
    review.
        Question 3. What is the status of the dispute with the contractor
    for PIT-9? Does DOE plan to litigate this matter, settle it, or
    arbitrate it in some way? If no decision has been made about this
    particular course of action, what is the timeline for a decision on
    what course of action?
        Answer 3. The dispute arising from the decision by the Department's
    management and operating contractor at INEEL, Lockheed Martin Idaho
    Technologies Company, Inc. (LMITCO), to terminate for default its
    subcontract with Lockheed Martin Advanced Environmental Systems, Inc.
    (LMAES) (the Pit 9 Subcontract). The Department was not a party to the
    Pit 9 Subcontract. Accordingly, the dispute is a private one between
    two subsidiaries of the Lockheed Martin Corporation. The Department's
    interest is secondary and, essentially, that of an entity responsible
    for the facility at which the subcontracted work was to be performed
    and for which the Department has reimbursed LMITCO for the $54 million
    paid by LMITCO to LMAES during the course of LMAES's ultimately failed
    performance--funds that LMAES and the Lockheed Martin Corporation are
    now obliged to return to LMITCO.
        The dispute has given rise to two lawsuits. First, LMAES and
    Lockheed Martin Corporation have commenced an action in the United
    States Court of Federal Claims against the United States (but not
    specifically against the Department). Second, LMITCO commenced an
    action against LMAES and the Lockheed Martin Corporation in the United
    States District Court for the District of Idaho, to which the
    Department is not a party.
        In the Court of Federal Claims action, LMAES and the Lockheed
    Martin Corporation has challenged the default termination, contending
    that the termination was effected by the Department and not by LMITCO.
    The United States has filed a motion to dismiss the Court of Federal
    Claims action because (i) there exists no privity of contract between
    the United States and LMAES or the Lockheed Martin Corporation upon
    which to base a direct contract action against the United States, and
    (ii) no action undertaken by the United States Government has effected
    a cognizable taking of property of LMAES or the Lockheed Martin
    Corporation in violation of the Fifth Amendment to the United States
    Constitution. That motion is pending before the Court.
        The Idaho district court litigation is a private law suit between
    LMITCO, LMAES, the Lockheed Martin Corporation, and EG&G, Idaho, Inc.
    (LMITCO's predecessor as the INEEL management and operating
    contractor). LMITCO seeks to recover the $54 million paid by LMITCO to
    LMAES pursuant to the failed Pit 9 Subcontract effort which LMAES and
    the Lockheed Martin Corporation promised to return to LMITCO if LMAES
    failed to perform. LMAES and Lockheed Martin Corporation have
    subsequently challenged in the Idaho Court LMITCO's prior default
    termination of the Pit 9 Subcontract. The Department is not a party to
    that litigation. We understand that there have been discussions between
    LMITCO and LMAES and the Lockheed Martin Corporation. In addition,
    LMITCO has been exploring with the Department various mechanisms that
    might be available and appropriate to address issues raised by the Pit
    9 subcontract dispute. Such an undertaking has been impeded, however,
    by the efforts of LMAES and the Lockheed Martin Corporation to have the
    Idaho litigation stayed (that is, consideration of its merits delayed)
    while they pursue their Washington, D.C. Court of Federal Claims
    action.
        Question 4: Has DOE considered transmutation of spent nuclear fuel
    rather than long-term storage? If so, what were the conclusions of that
    assessment?
        Answer 4: The Department of Energy commissioned the National
    Academy of Sciences in 1991 to conduct a study that evaluated
    transmutation of spent nuclear fuel. The Academy's report, published in
    1996, stated that the current policy to dispose of spent nuclear fuel
    in a geologic repository should continue, and a once-through fuel cycle
    for commercial spent nuclear fuel should be maintained. The report
    found that accelerator-based transmutation may become available some
    decades in the future. But, even then, geologic disposal will be
    necessary to dispose of separation waste and activation isotopes.
                       questions from congressman markey
    External Regulation
        Question 1: A February 19, 1999 letter from Secretary Richardson to
    the Subcommittee Chairman regarding external regulation of DOE
    facilities states that in pilot projects ``many of the potential
    benefits that we expected to see from external regulation have not been
    demonstrated and appear to be outweighed by associated costs and
    difficulties.'' What benefits were expected, and why have they not been
    seen? What are the costs and difficulties that were found?
        Answer: The December 1996 ``Report of the DOE Working Group on
    External Regulation, Chapter 5,'' summarized the expected benefits of
    external regulation. Key expected benefits included allowing DOE to
    focus on its primary missions and ensuring the establishment of a
    single set of standards and requirements appropriate to DOE's nuclear
    activities. The pilots conducted to date have highlighted the
    difficulties in establishing a single set of standards and requirements
    for DOE's nuclear activities--and the need to provide for regulatory
    flexibility and exemptions through any licensing process. These
    benefits have not been fully realized and, in our judgment, are
    outweighed by the potential cost impacts associated with the regulatory
    uncertainties that have been identified in the pilot program to date.
    Copies of two of the three pilot reports (Draft Report on the Pilot
    Project on External Regulation of DOE Facilities at Lawrence Berkeley
    National Laboratory and Draft Report on the Pilot Project on External
    Regulation of DOE Facilities at the Receiving Basin for Offsite Fuels,
    Savannah River Site) were delivered to DOE's committees of record on
    March 31, 1999, These draft reports contain details of both
    implementation issues and costs. Analyses of the results from these
    pilots is continuing. The report on the Radiochemical Engineering
    Development Center was issued and delivered to Congress on July 2,
    1999.
        Question 2: The letter notes difficulties upgrading facilities to
    meet NRC standards. NRC standards are intended to ensure the safety of
    workers and local communities. Is the Department reluctant to provide
    its workers and surrounding communities the same level of safety
    afforded those at private plants?
        Answer: Definitely not. As noted in the draft reports, the issues
    are regulatory in nature. The safety assurances provided by existing
    DOE and NRC standards utilized by the Department provide at least an
    equivalent safety to that of the commercial industry. For those
    facilities where the pilots were performed, NRC confirmed this.
        Question 3: The issues listed in the letter refer only to NRC
    regulation. Has OSHA oversight been easier to implement?
        Answer: DOE continues to work with OSHA as well as with the NRC.
    With regard to the issues in the February 19, 1999, letter, most of the
    uncertainties and issues being addressed were reflective of NRC
    requirements. However, some apply equally well to OSHA oversight. In
    terms of requirements, the Department already implements OSHA's
    regulations pursuant to a memorandum of understanding between the two
    agencies. The Department is pursuing several initiatives with OSHA to
    define the appropriate oversight of occupational safety at privatized
    facilities and on-Atomic Energy Act sites (e.g., fossil energy and
    energy efficiency facilities), as well as cooperative agreements to
    enhance occupational safety and health in DOE operations.
    Renewables and Conservation
        Question 1: According to your Department's excellent information
    source, the EIA, the amount of electricity generated from wind in the
    United States decreased from 11 million kilowatthours in 1995 to 6
    million kilowatthours in 1997, and photo-voltaics similarly decreased
    from 4 to 3 million kilowatt hours. Why has production from these
    emerging renewable energy sources decreased? To what extent are federal
    policies, state policies and competition in the electric industry
    responsible for what I hope is a temporary setback for these clean
    energy sources?
        Answer: The most recent figures for the amount of wind and solar
    electricity generated in the United States can be found Table A17 of
    EIA's Annual Energy Outlook 1999, page 134. The figures for 1995 are in
    the same table in the same publication for 1998, page 122. The relevant
    portions of these tables are reproduced below:

            Table A17. AEO 1998 and 1999 Renewable Energy Generation
                           (in billion kilowatt hours)
    ------------------------------------------------------------------------
                                                            2000      2020
                                          1995     1997   forecast  forecast
    ------------------------------------------------------------------------
    Solar Thermal.....................     0.82     0.90      0.95      1.44
    Solar Photovoltaic................     0.00     0.00      0.09      1.56
    Wind..............................     3.17     3.41      6.11      8.44
    ------------------------------------------------------------------------

        These tables show that wind generation increased almost 10 percent
    from 1995 to 1997. Although photovoltaic electricity is not yet
    generating in quantities large enough to be measured in billions of
    kWh, it continues its rapid growth. Energy Information Administration
    reports an increase of almost 50% in the number of kilowatts of
    photovoltaic cells and modules shipped by U.S. manufacturers from 1995
    to 1997 (Renewable Energy Annual 1998.)
        Question 2: Could you highlight a few recent accomplishments of the
    DOE renewable energy and energy efficiency programs?
        Answer 2: The following list provides a brief summary of
    accomplishments of the renewable energy and efficiency programs.

     Office of Building Technology State and Community Programs:
            Consumer savings totaling more than $33 billion since 1978. A
            recent example is the Department's Energy Star program. In
            1998, more than 50 manufacturing partners signed on to the
            Energy Star program to produce and label Energy Star windows,
            doors, and skylights. Currently, more than 2,000 retail store
            partners (including such giant national chains as Home Depot,
            Circuit City, and Montgomery Ward), 33 utilities, and nine
            major appliance manufacturers nationwide stock and promote
            Energy Star products.
     Office of Industrial Technologies: Over 100 energy saving
            technologies in the market, saving $2.1 billion since 1985. The
            Bethlehem Steel Corporation recently joined with the
            Department's Office of Industrial Technologies to showcase
            energy saving technologies for the steel sector. To remain
            competitive in the global marketplace, U.S. steel producers
            much reduce production costs while improving the quality of
            their products. A critical component of lowering overall
            production costs is reducing energy consumption during
            production. Bethlehem Steel's Bums Harbor, Indiana, steel mill
            will install six advanced steel making technologies and
            processes, that if implemented throughout the steel industry,
            could provide net energy savings by 2005 of over 93 million Btu
            per year, the equivalent of $198 million.
     Office of Transportation Technologies: Over 50 models of cars
            and trucks, using fuel efficiency technologies and alternative
            fuels are saving 2 billion gallons of conventional fuel a year,
            consumer savings since 1978 near $10 billion, oil savings near
            20 billion gallons. The Department's Clean Cities Partnership
            Program is a voluntary, locally based, government/industry
            partnership to expand the use of alternative fuel vehicles
            (AFVs) and by building a local AFV refueling infrastructure.
            Over the past four years, 67 communities have joined the Clean
            Cities effort, enabling deployment of more than 200,000 AFVs in
            both public and private fleets. The vehicles will reduce
            gasoline and diesel fuel use by an estimated 210 million
            gallons per year and emissions by an estimated 54,000 metric
            tons through 2005.
     Federal Energy Management Program: The Program has reduced
            annual Federal energy costs more than $800 million from
            projected 1985 levels. Additional taxpayer savings directly
            from EERE federal programs is nearly $1.5 billion. Award of
            five delivery orders under the Western Region Super ESPC will
            provide private sector investments of over $7 million for
            projects at Coast Guard, FAA, GSA, Forest Service, and VA
            facilities. The projects Will result in $14.4 million in
            savings to the government over the term of the delivery orders.
     Office of Power Technologies: Renewable energy costs are down
            80% since 1980. Over $5 billion in U.S. produced renewable
            sales this decade. World's Largest Wind Power Facility. In
            1998, Enron Wind Corporation began operation of the world's
            largest wind power facility, a project of 143 wind turbines.
            spread across 15 miles of farmlands near Lake Benton,
            Minnesota, for a total generating capacity of 107 MW. Enron has
            publicly credited their research partnerships with the
            Department as essential to the development of the technology
            making this wind plant possible. Enron's turbine manufacturing
            subsidiary, Zond Energy Systems Inc. of Tehachapi, California,
            partnered with the Department under its wind turbine research
            and field verification programs for the development of the Z-
            550, Zond's first commercial wind turbine. The advanced design
            tools, technical assistance, testing capabilities, and utility
            operating experience made possible by the Department's Wind
            Program were critical to the successful development of Zond's
            Z-750 turbine used in the Minnesota project. Enron Wind Corp.
            has several hundred additional megawatts of wind power now
            under development.
    Nuclear Energy Research
        Question 1: Dr. Moniz, if you believe in free markets, as I do,
    then government subsidies should be reserved for emerging industries
    that need initial support or for clear national interests.
        a. Would you consider nuclear power an emerging industry or a
    mature industry?
        b. I see that the DOE budget includes $5 million for a new program
    to extend the life of existing nuclear reactors, presumably beyond
    their 40 year licenses. After 40 years, why can't the industry fund its
    own research?
        Answer: a. The nuclear power industry is a mature industry and we
    do not subsidize it.
        b. Industry is investing over $80 million annually to conduct
    short-term nuclear power plant research and development. This work
    focuses on issues such as plant relicensing. The Nuclear Energy Plant
    Optimization (NEPO) program is focused on longer-term, higher-risk
    research and development aimed at improving the state of nuclear power
    technology in order to realize important strategic benefits for the
    Nation--such as the reduction of greenhouse gas emissions. Despite the
    fact that this program represents a longer-term technology investment
    than is generally funded by industry, the Electric Power Research
    Institute has committed to funding 50 percent of the research cost. We
    believe that achieving strategic benefits such as reducing air
    emissions is an important role for government and our proposed $5
    million program represents a very modest investment for the future.
        Question 2: The budget also increases funding for new reactor
    concepts to $25 million.
        c. Given that no new reactor has been order and built for 25 years,
    what are the chances that any of these reactor will ever get built?
        d. If you were CEO of an electric utility in a competitive
    industry, would you risk bankrupting your company to try to build a new
    nuclear plant?
        Answer: a. The purpose of the Nuclear Energy Research Initiative
    (NERI) program is to maintain nuclear energy as a viable option for the
    future by addressing obstacles to long-term deployment of nuclear
    energy through improving plant economics, providing for proliferation
    resistant technologies, and addressing issues associated with waste.
        b. Nuclear power plants are among the most efficient sources of
    baseload electricity available today, with operating costs averaging
    1.9 cents per kilowatt-hour. True, the construction cost of past plants
    has been a major factor in the fact that no new plants have been built
    for many years, however we believe advances in technology--such as are
    pursued in the NERI program--can lead to plants that are cost
    competitive to build and operate.
                     questions from representative shimkus
    Biodiesel
        Question 1: Last year, the Congress passed legislation (P.L. 105-
    388) to reauthorize the Energy Policy and Conservation Act. Included in
    this bill was language directing the Department of Energy to issue a
    rule on the use of biodiesel in the alternative fuel vehicle program
    under Energy Policy Act. The deadline for rule issuance was January 1,
    1999. What is the status of this rule? When does the Department expect
    to issue a rule, as directed by the Congress?
        Answer: The Energy Conservation Reauthorization Act of 1998 amended
    the Energy Policy Act of 1992 (EPACT) to create a Biodiesel Fuel Use
    Credit. The Biodiesel Fuel Use Credit will allow for the allocation of
    an alternative fuel vehicle (AFV) acquisition credit for a specified
    amount of biodiesel fuel use by a fleet or covered person currently
    required to purchase a certain percentage of AFVs under EPACT's titles
    III and V.
        Although the Energy Conservation Reauthorization Act was signed
    into law on November 13, 1998, it called for a rule to be issued by
    January 1, 1999. DOE regrets that the rule was not issued by the
    statutory date. The Department has issued an interim rule, which took
    effect on May 19, 1999. Although the interim rule would take effect
    fight away, DOE would also establish a comment period during which
    interested parties could comment on the interim rule. Those comments
    would be taken into consideration by the Department before issuing a
    final rule. We would expect to issue a final rule by fall 1999.
        We are enthusiastic about realizing the benefits offered by
    increased use of fuels from renewable sources, and are expecting that
    this legislation is resulting in expanded sales of biodiesel fuel.
        Question 2: As you know, the Department collects data for other
    fuels such as natural gas. Does the Department of Energy plan on
    collecting biodiesel fuel use data? Additionally, does the Department
    plan on holding training sessions, in cooperation with the biodiesel
    industry, for fleet managers who are interested in using biodiesel in
    their fleets? When will these meetings begin?
        Answer: The Department does plan on collecting annual biodiesel
    fuel purchase data from those fleets choosing to utilize the biodiesel
    fuel use credit to meet, in part, their alternative fueled vehicle
    purchase requirements under the Energy Policy Act of 1992. We plan to
    revise the annual reporting form, DOE/OTT/101, Annual Alternative
    Fueled Vehicle Acquisition Report for State Government and Alternative
    Fuel Provider Fleets, so that State and alternative fuel providers can
    report their biodiesel purchases and claim credits. The Department also
    plans to amend the Federal Energy Management Program reporting form to
    allow Federal fleets to report their biodiesel purchases and claim
    credits.
        The Department does not, at this time, plan to hold training
    sessions for fleet managers who are interested in using biodiesel in
    their fleets. We are hopeful that the issuance of the Interim Final
    Rule, be published in the Federal Register on or about May 19, 1999,
    will provide sufficient guidance to fleet managers regarding the
    biodiesel fuel use credit. However, if the biodiesel industry believes
    that some other form of guidance, be it training sessions, guidance
    documents or some other media, is necessary, the Department stands
    ready to work with industry to see that fleet managers have the
    information necessary to make informed decisions regarding the
    biodiesel fuel use credit.
                     questions from congressman strickland
    Worker and Community Transition Office
        Question 4A. Your testimony indicates that the funding request for
    the Worker and Community Transition Office is $30 million. Frankly, I
    am concerned that this funding may be inadequate and I say this because
    I am well-aware of imminent layoffs at the gaseous diffusion plants
    this year. And, beyond July 2000, as I explained in my opening
    statement, there remains no restriction on the number of additional
    reductions in the workforces at the two sites. With that said, it is
    important for me to point out that the Department has a proposal from
    the Southern Ohio Diversification Initiative, the Community Reuse
    Organization in Piketon, Ohio, requesting just under $6 million for
    development of industry ready sites and parks. With that understanding,
    are you confident that $30 million will meet the needs of all of the
    DOE sites throughout the complex? If not, will the Department support a
    reprogramming necessary to meet the needs of sites like Portsmouth and
    Paducah?
        Answer 4A. As you know, a formal agreement was signed between the
    Department of Treasury and United States Enrichment Corporation (USEC)
    limiting work force reductions at the Portsmouth, Ohio and Paducah,
    Kentucky gaseous diffusion plants through July 2000. A parallel
    agreement between the Department of Energy and USEC established a $20
    million fund to cover separation benefits to be provided to separated
    workers. In addition, funds from this account not required for worker
    benefits can be used to provide community assistance at these sites. We
    estimate that approximately $4-6 million will be available from this
    fund for community assistance purposes. Additional funding may be made
    provided from Worker and Community Transition appropriations based on
    established criteria and available funds.
        In the event there are major work force reductions at Portsmouth
    and Paducah after July 2000 and that available funds would not allow
    for consideration of appropriate worker separation assistance, the
    Department would consider whether a reprogramming request was
    necessary.
    P.L. 105-204
        Question 1: P.L. 105-204 specifically calls for the Administration
    to submit with the President's FY 2000 budget request a plan and
    proposed legislation for implementing a depleted uranium hexafluoride
    program that includes the construction of conversion facilities at both
    the Portsmouth, Ohio and Paducah, Kentucky sites. Could you please
    explain why the Budget Request was presented on February 1, 1999 and it
    failed to include a plan or proposed legislation for implementing P.L.
    105-204 when the law was signed by the President in July, 1998?
        Answer: The Initial and Final Plan for the Conversion of Depleted
    Uranium Hexafuoride was submitted to Congress on March 12, 1999 and
    July 6, 1999, respectively. In the case of the initial plan, the
    Department used the extra time to analyze a wide range of possible
    activities and work with the Congressional delegations to ensure the
    plan met the intent of Congress. The final plan, also reviewed by the
    Congressional delegations, reflects the Department's review of the
    Expressions of Interest from the private sector and provides a more
    detailed, final schedule for the depleted uranium hexafluoride
    conversion project. This schedule provides for the construction of
    conversion plants two years earlier than anticipated by P.L. 105-204.
        With respect to legislation, Public Law 105-204 required the
    Secretary of Energy to prepare proposed legislation for consideration
    by Congress. Other than funding legislation, the Department does not
    believe that additional legislation is necessary at this time. The
    Department will continue to consider whether additional legislation is
    advisable in light of future developments in the program.
        Question 3: You state in your written testimony that ``the
    Department expected to publish a formal solicitation for expressions of
    interest in construction of these plants within the next week.'' Could
    you possibly give me a target date when the Department will issue the
    expression of interest?
        Answer: The Department issued the solicitation for Expressions of
    Interest for construction and operation of conversion plants on March
    4, 1999. Expressions of Interest were received from the private sector
    on April 5, 1999. A summary of the Expressions of Interest were
    provided to Congress on May 13, 1999. The Draft Request for Proposal
    was published July 30, 1999, for comment.
        Question 5: I would also hope that before a final plan makes its
    Way to the Hill, interested Members of Congress, such as myself and Mr.
    Whitfield will have the opportunity to review the plan and the
    legislation. Could you assure us that, in fact, we win have the
    opportunity to provide the Department with our input on the plan?
        Answer: Yes. The Final Plan includes input from the affected
    Congressional delegations.
        Question 6: As you may also know, I sent the Secretary a letter,
    dated December 4, 1998 which outline some of my suggestions for
    developing a comprehensive plan to construct and operate depleted
    uranium hexafluoride conversion facilities at Portsmouth and Paducah.
    Could you please tell me when I may expect a response to my
    recommendations included in that letter?
        Answer: The Department has addressed the recommendations contained
    in Representative Strickland's letter of December 4, 1998, as well as
    his letter of May 24, 1999, in the Final Plan for Conversion of
    Depleted Uranium Hexafluoride (July 6, 1999) and in the draft Request
    for Proposal. The Congressman's suggestions were very helpful to the
    Department in completing our final plan and issuing a draft Request for
    Proposal.
        Question 7: More specifically, the December 4, 1998 letter includes
    a recommended approach for transferring the funds under P.L. 105-204.
        c. Has the Department made preliminary decisions regarding the
    transfer of the P.L. 105-204 funds?
        d. If so, could you please share them with us. (The letter urged
    the Department to secure a nondiscretionary funding source by
    identifying an offset. OMB could help identify the offset and this
    would avoid an annual appropriations battle to ensure funding.)
        Answer: The Department is committed to working to find
    opportunities this year to secure acceptable funding sources for the
    depleted uranium hexafluoride conversion project. We expect to work
    closely with the Ohio and Kentucky delegations on this important issue.
        Question 9: One other issue raised in the December 4, 1998 letter
    is the issue of creating a process for public comment on the draft plan
    under P.L. 105-204. Will there be a formal process for interested
    parties to comment on the Plan?
        Answer: The Final Plan for Conversion of Depleted Uranium
    Hexafluoride (July 6, 1999) included review and incorporates the
    comments of interested parties on the plan, including the affected
    Congressional delegations. There will be additional opportunities to
    provide input on the project as the Department proceeds with
    implementation of the milestones contained in the plan. For example,
    formal public review is underway at present on the initial draft
    Request for Proposal.
        Question 10: I am also aware that the Budget Request includes $5
    million to initiate a program to recycle depleted uranium hexafluoride.
    Could you please explain to us the Department's justification for
    recommending only $5 million from the larger P.L. 105-204 funds for the
    upcoming fiscal year?
        Answer: The Department's fiscal year 2000 budget request includes
    $5 million to begin the process of constructing depleted uranium
    hexafluoride conversion plants. These funds are included in the Uranium
    Program Budget and are requested for activities related to site-
    specific National Environmental Policy Act activities and for
    procurement activities. The Department has also committed to use USEC
    MOA funding for this purpose. The Department is committed to working
    closely with the Ohio and Kentucky Congressional delegations to find
    opportunities this year to secure additional funding for the depleted
    uranium hexafluoride project.
    Memoranda of Agreement--$66 Million
        Question 15: On another topic, I mentioned in my opening statement
    two Memoranda of Agreement established between the Department and USEC
    making available $66 million for the maintenance and disposition of the
    depleted uranium hexafluoride stored at the Portsmouth and Paducah
    sites. I am aware of several proposals presented by the Department for
    the best way to spend these funds. I am troubled that the emphasis was
    not placed on job creation. These Agreements stem largely from concerns
    raised about worker displacement as a result of USEC privatization.
    Could you assure me that the $66 million will be spent on activities
    directly related to immediate job creation efforts at Portsmouth and
    Paducah?
        Answer: Of the $66 million in funding the Department received from
    the United States Enrichment Corporation (USEC), $38.7 million of those
    funds are earmarked for management of approximately 11,200 cylinders
    that have or will be received from USEC over the next several years.
    Another $3.3 million is earmarked for conversion plant procurement
    activities and for accelerating activities conducted pursuant to the
    National Environmental Policy Act. We are preserving the remaining $24
    million for use as initial funding for the DUF6 conversion
    project, or, if it is not needed for that activity, to fund near-term
    projects at the gaseous diffusion plant sites. All of these activities
    should. help to increase the number of new jobs created at the Paducah
    and Portsmouth Sites and mitigate the impact of workers displaced by
    USEC privatization.
        Question 18: One last question on the $66 million. The Community
    Reuse Organization in southern Ohio has expressed a strong interest in
    working with the Department to most effectively use these additional
    funds. Will the Department consult with the Community Reuse
    Organizations as decisions are made about the allocation of the $66
    million?
        Answer: We have met with community groups in Ohio and Kentucky and
    will continue to meet with these groups to discuss the best approach to
    implement overall projects including their suggestions regarding best
    use of funds.