[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.
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