[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR 2000
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
________
SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES
RALPH REGULA, Ohio, Chairman
JIM KOLBE, Arizona NORMAN D. DICKS, Washington
JOE SKEEN, New Mexico JOHN P. MURTHA, Pennsylvania
CHARLES H. TAYLOR, North Carolina JAMES P. MORAN, Virginia
GEORGE R. NETHERCUTT, Jr., ROBERT E. ``BUD'' CRAMER, Jr.,
Washington Alabama
ZACH WAMP, Tennessee MAURICE D. HINCHEY, New York
JACK KINGSTON, Georgia
JOHN E. PETERSON, Pennsylvania
NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full
Committee, and Mr. Obey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
Deborah Weatherly, Loretta Beaumont, Joel Kaplan, and Christopher
Topik,
Staff Assistants
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PART 9
Page
Secretary of Agriculture......................................... 1
U.S. Forest Service.............................................. 65
Secretary of Energy.............................................. 201
Office of Fossil Energy.......................................... 277
Energy Conservation.............................................. 403
Energy Information Administration................................ 535
________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
57-173 WASHINGTON : 1999
COMMITTEE ON APPROPRIATIONS
C. W. BILL YOUNG, Florida, Chairman
RALPH REGULA, Ohio DAVID R. OBEY, Wisconsin
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico JULIAN C. DIXON, California
FRANK R. WOLF, Virginia STENY H. HOYER, Maryland
TOM DeLAY, Texas ALAN B. MOLLOHAN, West Virginia
JIM KOLBE, Arizona MARCY KAPTUR, Ohio
RON PACKARD, California NANCY PELOSI, California
SONNY CALLAHAN, Alabama PETER J. VISCLOSKY, Indiana
JAMES T. WALSH, New York NITA M. LOWEY, New York
CHARLES H. TAYLOR, North Carolina JOSE E. SERRANO, New York
DAVID L. HOBSON, Ohio ROSA L. DeLAURO, Connecticut
ERNEST J. ISTOOK, Jr., Oklahoma JAMES P. MORAN, Virginia
HENRY BONILLA, Texas JOHN W. OLVER, Massachusetts
JOE KNOLLENBERG, Michigan ED PASTOR, Arizona
DAN MILLER, Florida CARRIE P. MEEK, Florida
JAY DICKEY, Arkansas DAVID E. PRICE, North Carolina
JACK KINGSTON, Georgia CHET EDWARDS, Texas
RODNEY P. FRELINGHUYSEN, New Jersey ROBERT E. ``BUD'' CRAMER, Jr.,
ROGER F. WICKER, Mississippi Alabama
MICHAEL P. FORBES, New York JAMES E. CLYBURN, South Carolina
GEORGE R. NETHERCUTT, Jr., MAURICE D. HINCHEY, New York
Washington LUCILLE ROYBAL-ALLARD, California
RANDY ``DUKE'' CUNNINGHAM, SAM FARR, California
California JESSE L. JACKSON, Jr., Illinois
TODD TIAHRT, Kansas CAROLYN C. KILPATRICK, Michigan
ZACH WAMP, Tennessee ALLEN BOYD, Florida
TOM LATHAM, Iowa
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
JO ANN EMERSON, Missouri
JOHN E. SUNUNU, New Hampshire
KAY GRANGER, Texas
JOHN E. PETERSON, Pennsylvania
James W. Dyer, Clerk and Staff Director
(ii)
DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR 2000
----------
Wednesday, March 10, 1999.
U.S. DEPARTMENT OF AGRICULTURE
WITNESSES
HON. DAN GLICKMAN, SECRETARY OF THE DEPARTMENT OF AGRICULTURE
HON. JIM LYONS, UNDER SECRETARY OF AGRICULTURE FOR NATURAL RESOURCES
AND THE ENVIRONMENT
Opening Remarks
Mr. Regula. We will get the committee started. We are happy
to welcome you, Mr. Secretary, and your team from the Forest
Service.
I just have a few comments. I hope that in the course of
this hearing you will address the problem of backlog
maintenance. I think the matter of campgrounds, bridges and
many other facilities is perhaps somewhat neglected.
And the second concern I have is forest health. I believe
that we need to focus more on that. Thirdly, the wildfire
prevention and suppression program is of concern. You are down
to 67 percent of the most efficient level. I would be
interested in an explanation. And you slashed the Forest
Management Program which goes to the question of forest health.
Lastly, recreation. Obviously, recreation is a much
expanding activity in the Forest Service; it does not appear
that you have addressed that. Also, I have some concerns about
the state purchases of easements. It seems to me that before we
get into buying more land or in another form, in easements, we
need to take care of the existing challenges that I just
mentioned.
As you know we have a National Academy of Public
Administration study on your budget structures and procedures
so we will wait until we get that to get into it more
seriously. Mr. Dicks, would you like to make any comments here?
Mr. Dicks. No, Mr. Chairman. I would just like to welcome
the Secretary and say how much we want to work with them on
these Forest Service issues.
Hopefully the roads problem that we have had over the last
couple of years is now behind us and we can focus in on the
backlog on roads. Secretary Lyons and I tried to do something
in ISTEA or TEA-21 to see if that funding could not help us
address that backlog and I want to continue those efforts.
I understand that Fish and Wildlife Service and some of the
Interior Department Agencies, did not get some transportation
help. I thing our committee needs to work with the
Transportation Committee on backlog road issues which I still
think is one of the most serious ones that we face.
And out in our area, roads are a major contributing factor
to the salmon problem. If they wash out the sediment gets down
into the rivers and streams, and has a negative impact on fish.
Even the money that we secured on watershed restoration issues
and habitat improvements is mostly spent dealing with road
issues, because it is the most serious environmental problem we
face out there.
So trying to help the Forest Service deal with this road
issue and do a better job on maintenance is hopefully something
that we will be unified on rather than having the kind of
conflict that we have had over the last several years regarding
subsidy and other issues. I just want to welcome both
Secretarys and Mike Dombeck, who are all trying to do a good
job and we appreciate what has happened out in the northwest.
And I also wish to thank them for the fact that we are able
to sustain the assistance to the northwest through the Year
2000.
Mr. Regula. Thank you. I am struck by the fact that they
have over 400,000 miles of roads and of course that means
probably thousands of bridges. So that is an enormous challenge
to begin a maintenance program.
Mr. Dicks. The other thing, Mr. Chairman, culverts--the way
the river goes underneath the road--and the maintenance of
those culverts are absolutely crucial. The backlog there is
also significant.
Mr. Regula. Well, Mr. Secretary, now that we have outlined
the problem, we will turn to you for the answers. Your full
statement will be made a part of the record and you can
summarize as you choose.
[The statement of Mr. Glickman follows:]
[GRAPHIS(S) NOT AVAILABLE IN TIFF FORMAT
Statement Summary
Mr. Glickman. Thank you. Well, first of all, Mr. Chairman,
Mr. Dicks, thank you for your leadership. We also appreciate
your participation in the honor to Mr. Yates that we had. I
thought that was one of the nicest events we have had in the
Department for some time. Mr. Dombeck is here. I think that he
has done an outstanding job as Chief, and he will be here to
answer a lot of the specific questions you have on Forest
Service management.
I think that we have a natural resources agenda that is
multi-functional, multi-use, and related to all the different
purposes of the forest from recreation to habitat protection to
sustainable timbering. We do have some money problems, and over
the past several years I think that we have not had the
financial accountability that we needed to have. I think that
that is now changing under Mr. Dombeck's leadership.
Without repeating my statement, I would say there are five
major priorities that we have for the Forest Service which are
reflected in this budget and are also reflected in our
operations. One is watershed health. In terms of the resources
that we are putting into money, we have an increase of $50
million for watershed health. Many if not most of the rivers in
this country begin in our national forest lands so the health
of the Nation's watersheds is a number one priority.
Mr. Regula. Do you see that as connected with forest
health?
Mr. Glickman. Yes, it is. Forest health is somewhat related
to that issue. The second priority issue is roads and road
maintenance. You talked about the fact that we have more miles
of roads than we have in the interstate highway system. We have
put some additional funds in the budget for road maintenance.
That also relates to the fact that the Chief has announced a
policy on roadless areas as well.
The truth of the matter is, that we have a huge quantity of
roads under serious repair problems and the question is how
many new roads should we be building under those circumstances?
What existing roads ought to be closed? It does relate to
forest management as well, but it is a much bigger issue than
that. A lot of folks use our roads. Some of these roads should
not be used. There is a safety problem associated with that as
well. Road construction, road reconstruction and road
maintenance are clearly a big part of this issue.
The third priority is Lands Legacy. In this budget, we are
talking about, $268 million that is being proposed for pass
through programs to the states. This includes for example, the
Forest Legacy Program and Urban and Community Forestry and
national forest land acquisition. As you know, the President
feels that states, municipalities and many small communities
are in real jeopardy of losing much of their open space to
suburban sprawl. We need to provide options for dealing with
the problems tailored to the specific needs of local areas.
In some cases conservation easements on private lands or
better management of urban forests are called for. In other
areas where federal ownership patterns are a factor in the
preservation of open space, we need the flexibility to take
advantage of these opportunities. Lands Legacy is a priority.
The fourth priority is research. We especially need to get
the proper science foundation for management of our forests and
working with you I think we have made some improvements in this
area. But this remains a big issue.
The fifth priority is accountability, particularly
financial accountability which I mentioned before. It goes part
and parcel with managing public land. The Chief has kept his
promise to me to bring on an experienced financial management
team. We have a new Chief Financial Officer who previously was
Chief Financial Officer of the Customs Service.
The Chief has a strategy for implementing this financial
management improvement plan. I know that the 2000 budget could
have been more generous in providing money to fund it, but with
some priority setting I think we can make significant progress.
We look forward to working with you in all of these areas. Jim
is going to not give a statement so we can answer some of the
questions.
You have posed some questions that I think need to be
responded to and perhaps Jim might want to talk about some of
these, including wildfire preparedness and infrastructure. Some
of the other questions that you raised I think we need to
respond to.
[The statement of Mr. Lyons follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
infrastructure
Mr. Lyons. Thank you, Mr. Chairman, and Mr. Dicks. I will
be brief because I know the time that we have with you this
morning is short. As you know, we agree completely on the
infrastructure issue. You and I have talked about this many
times. And we are trying to tackle that issue. It is a huge
issue for us. This includes not only the infrastructure as we
traditionally think of it, such as buildings and facilities
associated with the National Forests, but it also includes road
maintenance issues which you have already mentioned.
Infrastructure is the investment in the roads, buildings,
and facilities that provide access to the public for recreation
opportunities and which support the entire range of Forest
Service activities. We have a tremendous backlog, and that has
been well recognized. In roads alone, it is eight billion
dollars. In facilities, we also have a mult-billion dollar
backlog. In fact, we only have enough money in our budget, and
this budget only requests a slight increase, to maintain about
25 percent of the road system that is the most heavily used
road system.
There are 80,000 miles of roads which provide primary
access routes. So this is a tremendous problem for us. It is
one of the reasons Mike initiated the roads policy. As he likes
to say, when you are in a hole, the first thing you ought to do
is stop digging. We have stopped building new roads in roadless
areas to reassess the inventory. In the case of forest health
and fuel treatment which are issues we have discussed over the
years, we are attempting to make investments to deal with the
needs that you mentioned.
watersheds
I think these do fall under the larger umbrella of
watershed health concerns. Most of the watersheds in the major
metropolitan areas in the western United States are on National
Forests. And their health and the quality of that water, which
impacts everything from potable water to salmon habitat, are
critically linked to how well we invest in thinning and salvage
work.
Mr. Regula. I have a question on the watershed. What
percentage of it is forested and what percentage would be open
land?
Mr. Lyons. Well, I think generally the way the watersheds
are set up, and maybe Mike can amplify this, is that most of
the headwaters, the upper reaches, are on National Forest
System land. Often those waterways flow through private land, a
portion of which we are involved in helping to manage through
the State and Private Forestry Programs and working
cooperatively with the State Foresters.
My other side, Mr. Skeen's area of jurisdiction, the
National Resources Conservation Service is involved in working
on farms and ranches that usually are lower down in those
watersheds. But forested lands are a substantial part of those
areas as well. I do not know if you want to amplify that Mike.
Mr. Dombeck. Yes, out of the 192 million acres of National
Forest System Lands, less than 40 million are rangelands and
the rest of it is forested lands. And in fact it is interesting
that about 80 percent of the streams in the United States begin
on National Forests, even here in the east with the Potomac and
the watersheds.
So water is an issue that is incredibly important in both
the east and the west. In addition to managing the forest,
foresters deserve a lot of credit for what they do for
maintaining water quality and watersheds.
The fact is the cleanest water in the United States is
coming off of forested lands. And we need to keep it that way.
Mr. Lyons. But let me just say, with regard to that
investment, we are attempting to put more money into programs
like timber stand improvement, brush disposal and the like. We
appreciated the flexibility you have provided us with to shift
some resources around so as to make additional investments.
This is particularly important for reducing fuels so as to
prevent devastating wildfires in the long run.
Roads are a key to improving watershed health, as I
mentioned. As Congressman Dicks indicated, we had an
unfortunately failed attempt to secure funds in TEA-21 to help
begin to address that backlog, and I am afraid, Mr. Chairman,
that an infusion of funds of that nature is going to be
necessary to really start to get on top of this critical issue.
recreation
But I think we are moving in a direction that is consistent
with a lot of the dialogue we have had. You mentioned
recreation. That too is a priority. I would express
disappointment in the marks we got for recreation and a lot of
other priorities. We were not able to make the investment
there, though you have been most helpful in providing
authorization for recreation fee demonstration, which is a
program that is going to help us in the recreation area.
We have also proposed some concession reforms. Did you know
the Park Service got concession reform legislation last year?
We think we can help ourselves there, but again, I think in
recreation we are going to need some additional resources to
get the job done.
wildfire
Mr. Glickman. Do you want to address wildfire issues? I
think we need to address that very quickly for you because of
the money.
Mr. Lyons. Why do you not let Mike run down the details.
Mr. Dombeck. From the standpoint of hazardous fuel
reduction we have ratcheted up that program significantly from
the mid-1990's. This is really part of watershed restoration
because of the damage from catastrophic fires or stand
replacing fires rather than a cool burn as the forests would
have had in a historical regime.
We were doing about 750,000 acres of fuel treatment per
year. The 2000 budget proposes to do 1.3 million acres through
a hazardous fuels reduction program. Then if we look at some of
the other programs that contribute to that effort, we will be
treating about 2.2 million acres. The track that we are on is
to have the backlog of high-risk lands dealt with by about
2015, so we have ratcheted that program up significantly as
well.
funding state programs
Mr. Regula. Let me tell the committee members the Secretary
has to leave by 11:00, so we will have our questions for him
first and then we will go to Mr. Dombeck at about 11:00. First
of all, Mr. Secretary, you talk about state and private
forestry programs, and I see you have an $80 million increase
there.
I find that questionable given the fact that we have all
these backlog maintenance needs that are unmet; given the fact
that we are not doing nearly as much as we should in recreation
programs, to say nothing of wildfire and so on. And yet I read
in the Wall Street Journal this morning that the states'
revenues are up. I just had a chart, I do not have it with me,
but every state, with the exception of one, has surpluses.
Alaska could shut down their revenues for three years and
still function. They have three years' worth of revenues in the
kitty. So I think we are talking about a pass-through to the
states. They should be passing through to us, because in terms
of financial situations, they are better off than we are. Do
you want to comment on that?
Mr. Glickman. Well, I would say that largely this is part
of the Lands Legacy Initiative.
Mr. Regula. Well, I understand that.
Mr. Glickman. But I am just explaining it from,
conceptually where it comes from. It is money that is proposed
to keep land from going into suburban sprawl, and a lot of
other conservation related measures where we are finding more
and more that we need to cooperate with states and work jointly
on these programs.
About $40 million has been budgeted in this particular
area. I understand the point that you are raising. It also
relates to the fact that more and more we are finding that the
efficacy of these programs is based upon whether local
conservation districts and states go along with this and work
with this.
Mr. Regula. Well they can cooperate, but they can just use
their own money to cooperate. We have a community of about
30,000 people near where I live, and they built a golf course.
They built it with their own money. It is so successful, they
are adding another nine or 18 holes, and they have not gotten a
penny of Federal money. And yet some of your pass-through
funding would go for that kind of thing.
Mr. Glickman. Well, I would hope that we would not be
building golf courses.
Mr. Regula. Well, you do not have control once it gets out
of your hands.
Mr. Glickman. One consideration is that a lot of these
watersheds are multi-state and so we are working with many
different units of government, and in many cases, they do put
money into these projects as well.
Mr. Lyons. Mr. Chairman, I am aware of your concerns with
programs like UPAR in the past and this is not a UPAR Program.
But for example in Forest Legacy, we have been able to use
conservation easements to protect millions of acres of land,
both in the northeast and in the west.
And I think what is important----
Mr. Regula. Federal lands? They are now Federal?
Mr. Lyons. No, the lands are administered either by the
states or the states can transfer management responsibility to
non-profits who can assume responsibility for those lands. For
example, we have done projects in New England. I know there has
been a lot of attention paid to New England lately because of
the large amount of private forestland that suddenly is coming
up for sale.
Working with the Governors of New Hampshire, Vermont, New
York and Maine, we have used the Legacy Program to protect many
millions of acres that would face development. The key is that
for the minimal investment we make, the states do put in
additional resources, and often leverage private resources, so
it really multiplies our investment manyfold. That is the
benefit of those investments.
Mr. Regula. Does your program propose that anything that
comes by way of Federal money has to be matched at least fifty-
fifty?
Mr. Lyons. Yes. We have a match. I am not sure what the
exact match is, but we do have a matching requirement for
Forest Legacy.
uncontrollable expenses
Mr. Regula. Another dimension of this proposal, in addition
to not doing backlog, is the fact that your uncontrollables are
$72 million. Yet you eat up the growth for these other
programs. Are you going to put a freeze on your
uncontrollables?
Mr. Lyons. Well, do you want to address that?
Mr. Regula. Operations and some funds for pay raises, that
type of thing?
Mr. Dombeck. Obviously we do not have control over the pay
raises. In fact for 2000 we are looking at something in the
neighborhood of $50 million----
Mr. Regula. But it adds money to your budget, and yet you
do not have the money budgeted for that. It adds cost.
Mr. Dombeck. Yes, it does add the cost.
Mr. Regula. How are you going to pay these, if you are
going to spend all this money on all these other things?
Mr. Dombeck. Well, again, it is a matter of balancing
priorities----
Mr. Regula. I understand that, but you have not done that.
You have balanced in favor of buying more land and doing a
whole host of things, but not in favor of something that looks
to me like it is almost a must. And that is your operations.
Mr. Dombeck. Well, managing the operations and balancing
the needs are incredible jobs. But another point is with the
State and Private Forestry programs, we have got about 9.9
million private woodland owners. The quality of management, the
technical expertise available to those landowners, is important
to all the aspects of what forests do for us.
Mr. Regula. No, I am not quarreling with that. But when I
look at your numbers here, you do not have the money, you have
not budgeted the money to fully cover fixed costs. Now
something has got to give. You cannot have all these programs
and still meet your fixed costs. Then I hear this morning that
we are going to not raise the budget caps. That seems to be a
bipartisan agreement which is going to affect your budget in
many different ways.
So we are going to be faced with some pretty tough priority
choices in this committee.
Mr. Glickman. The fact is that this is not just true of the
Forest Service; our USDA budgets do not absorb COLA increases
as well. And so unless we find the money someplace else, those
dollars will have to be absorbed within the operations of the
Department as a whole.
Mr. Regula. I know. So we may have to come back to you to
reassess your priorities when we get down to doing our markup,
recognizing that we have got to do the fixed costs.
Mr. Glickman. I agree with that.
Mr. Regula. Where do you think it should come from?
Mr. Glickman. Well, I do not know.
Mr. Regula. Not at this juncture, but I am talking about
prospectively.
Mr. Glickman. I think we have to generally reflect our
priorities in whatever decisions that we make. That is the best
I can tell you. But we have to pay our people as well.
recreation
Mr. Regula. Yes, I think that is number one, at least the
audience would agree. Mr. Lyons, your budget request calls for
level funding, effectively a decrease to the recreation
management activity and yet I hear you saying that recreation
has a high priority. How do you square that?
Mr. Lyons. Well the honest answer, Mr. Chairman, is that in
the priority setting debate, recreation did not come out as
well as some other programs. We initially made a request for a
significant increase in recreation, knowing that recreation use
is skyrocketing. But in the order of priorities, we were not
able to sustain that request.
Mr. Regula. It is OMB's priorities that are reflected here?
Mr. Lyons. Well, let us just say higher authorities thought
that priorities ought to be set in a little different way. Now
let me say this, that I think part of their philosophy is that
we are developing new tools to help cover the funds for
investment in infrastructure, et cetera, and to some degree
that is true.
I would candidly say that I think an additional investment
in recreation programs is important because of the recreation
impacts on the National Forest System and on wilderness areas.
These impacts are becoming a significant concern. Mike and I
are constantly challenged with trying to deal with those
issues.
Mr. Regula. It seems to me too, that you are using the rec
fee money to replace appropriations. And we have made a
commitment not to do that.
Mr. Lyons. That would be illegal, Mr. Chairman.
Mr. Regula. So you are saying that you are not going to
use----
Mr. Lyons. We are not going to do that.
Mr. Regula [continuing]. Rec fees for what we should be
doing by standard appropriations.
Mr. Glickman. That is correct that we will not do that.
Mr. Regula. All right. Mr. Dicks.
Mr. Dicks. I thought that you were close to $50 million
below last year, is not that the number? Where was that number
on trails? It's my understanding that the trail construction
budget is down 50 percent. That looks to me like you are going
to then take the rec demo money and use it for that purpose. Is
that not a way of using this money to replace appropriated
funds? Use of the ten-percent timber receipts?
Mr. Lyons. Well as you just heard, what happened was we had
to shift some funds around from the ten-percent fund to cover
some additional costs in the recreation area. So trail
construction maintenance, for example, is down and that is an
area where we would have liked to have maintained an
investment.
It is not an offset to rec fee demo, I want to be clear
about that. And we have fought that, whenever that issue has
come up in other circles, I want to assure you. But in fact, we
have had to commit the ten-percent funds to another area and
not invest it in trails, which is what accounts for the trail
funding being below what it was last year.
deferred maintenance
Mr. Dicks. Is it true that on this one, deferred
maintenance on roads and bridges, is $4,000,020,000? And what
you need for annual maintenance is $442 million, but you only
have $100 million in the budget. Is that basically right?
Mr. Dombeck. Yes, I believe so.
Mr. Dicks. Are we basically going to fall further and
further behind?
Mr. Dombeck. That is right. What we have to do is to really
face the problem that we have had with roads. Now we need to
work to move forward by looking for funding, and adjusting our
priorities and we are doing that. In fact, the request for the
roads budget would bring us up from having the funding to
maintain 18 percent of our roads to the environmental and
safety standards for which they were designed, to about 22 or
23 percent. We just need to continue to keep on ratcheting that
up.
Mr. Dicks. Now at the same time you are doing some road
decommissioning or road deconstruction, is that correct?
Mr. Dombeck. Yes.
Mr. Dicks. But I am told that is very expensive. Is that
also correct?
Mr. Dombeck. It can be depending upon the situation. When
we asked the question about what do we do with the roads that
perhaps we do not need, some of them are turned into hunter
trails, hiking trails, or biking trails. Some may be gated.
Mr. Dicks. Is that less expensive than decommissioning
roads? Is that a better investment?
Mr. Dombeck. Yes.
Mr. Dicks. How much is that roughly per mile, say in the
northwest?
Mr. Dombeck. Let me see if we can get you the breakdown of
the costs in the various parts of the country.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Dicks. I would just like to know what the difference is
in cost. I've been told there is a desire on the
Administration's part to decommission some of these roads, but
it is very expensive. Could we take that money and use it to
more properly maintain a greater percentage than 23 percent of
these roads? Is that a better investment?
transportation funding
But obviously we need to, you know, we need to take another
look at TEA-21. And Mr. Secretary, I think that is going to
require your help here, you know, with the Department of
Transportation and with the Congressional people up here.
Because somehow we have got to get this into the TEA-21 thing
or we are never going to get this under control.
Mr. Glickman. We made an attempt before.
Mr. Dicks. A little late though.
Mr. Glickman. Yes, that is correct. Obviously there were a
lot of other priorities competing in that process. I have
talked to Secretary Slater about this and this issue just has
to have higher priority.
Mr. Dicks. Apparently there is a technical corrections Bill
coming up right now.
Mr. Glickman. For that?
Mr. Dicks. For TEA-21. And I am told that this Bill may be
expanded beyond just technical corrections.
Mr. Glickman. If anybody knows, you would know. [Laughter.]
Mr. Dicks. I have heard rumors to that effect. So I just
wanted to alert you that you might want to look there. Because
I do not see how we are ever going to get this straightened out
unless we get some help from the Highway Trust Fund.
Mr. Dombeck. In fact, I think 1999 was the first year that
we have received $750,000 from the Federal Highway
Administration for planning and inventory work to prioritize
and begin to move forward. We expect some help from the Federal
Highway Administration in future years as well.
Mr. Regula. I think you mentioned paved roads. I do not
think of forest roads as paved roads. Is the implication of
that that you have roads going through the forest that serve
more than just forest purposes? This would fit in with what Mr.
Dicks is saying ought to be in TEA-21.
Mr. Lyons. Well that is precisely the case, Mr. Chairman.
We have an extensive road system, but about 75,000 or almost
80,000 acres are for primary access, so they are paved or
gravel roads. They really are the primary transportation routes
in many rural parts of America.
Mr. Glickman. He means miles, not acres.
Mr. Lyons. Oh, did I say acres?
Mr. Glickman. Yes.
Mr. Lyons. Oh, miles, 78,000 miles of road. And we can
provide the committee with a breakdown of those and it may be
even better to give you some examples of what they look like.
For example, if you were to travel to ski at Vail, Colorado in
the White River National Forest, some of those paved roads are
National Forest System roads maintained either by the National
Forest or in cooperation with the counties. Those are obviously
expensive to maintain. They get millions of visitors every year
and that is where our costs start to escalate.
[The information follows:]
There are 61,000 miles of Forest Service primary access
roads we call arterial and collector roads. The arterial roads
provide access to large land areas and are operated for long-
term land and resource management purposes. The arterial roads
usually are integrated with State and county roads to link
rural and urban communities with the national forests and often
provide through access from one community to another. The
collector road system serves a somewhat smaller land area and
``collect'' traffic from the local roads and feed the traffic
into the arterial road system.
The standards of the arterial and collector roads range
from single-lane with gravel surfacing to double-lane with
paved surfacing, depending on the types of traffic and the
traffic volume.
The Forest Service has approximately 9,000 miles of paved
roads as part of its arterial and collector road system.
Mr. Dombeck. I want to just add that I grew up on Forest
Road 164 in Sawyer County on the Chequamegon in Wisconsin and
today that road serves as a bus route and it also is a mail
route. It is paved and gets all sorts of tourist traffic and a
few logging trucks still roll down that road as well. But with
the arterial and collector roads that Jim spoke of we are
actually reducing the miles of those roads on which a family on
vacation could travel in their station wagon because of our
inability to maintain those roads. An investment in the roads
infrastructure is also an investment in the recreation and
access as well.
timber user fees
Mr. Dicks. I need a little bit more explanation about how
charging a timber sale purchaser a user fee will result in more
money for the Treasury. How is that going to work?
Mr. Lyons. Everyone looked at me. Well, Mr. Chairman, and
Mr. Dicks, as you know the budget includes some offsets that
assume some revenue generated from various sources. Well, user
fees for timber purchasers is one of the ideas that has been
floated. I would say that we would love to work with the
committee to figure out a way to generate revenues, and I must
be candid and tell you that we have not quite figured out the
particulars on how we might actually charge a fee.
Mr. Dicks. I think they would have to take that fee into
account when they bid for the timber.
Mr. Lyons. Yes, and I think ultimately that is going to
mean that you will get a reduced offer. That is an issue which
we discussed as the Congress dealt with the purchaser credit
issue last year. We anticipated that reductions would occur. My
straightforward answer is that this is something we need to
work on.
county payments
Mr. Dicks. And then finally, county payments stabilization.
You want to decouple from receipts. What do you think the
prospects for that are?
Mr. Lyons. Well, you may know better than I do. But we
think it is a critical component in the program. And as you
know, roads and schools in rural counties across the United
States are dependent upon timber sale receipts. Receipts have
declined and it creates an atmosphere where counties have no
certainty and do not know how to budget in future years for
critical things like education.
We believe a stabilization of payments based on a
historical average would be more beneficial to the counties,
would provide greater stabilization and would allow us to put
together a Forest Management Program that is responsive to
resource conditions and not driven by a desire to generate
additional receipts.
Receipts are important, but it really makes the children in
these school systems pawns in this debate over Timber Sale
Program levels year in and year out. I think it is an
inappropriate way to put together the program. So we would like
to see this decoupling and a stabilization of payments so that
the counties know what they are going to get year in and year
out for schools and roads.
Mr. Dicks. Would that become an entitlement? We have done
that actually in the northwest, I believe under the northwest
forest plan.
Mr. Lyons. Yes, this was similar to, in fact this was
modeled after, the program that you helped us to put in place
in the northwest. I think it has been very successful.
Mr. Dicks. I do too. But money has to come from somewhere.
In that case, there was something in the tax code that we gave
up that allowed corporations certain deductions which we
eliminated. It saved us enough money to fund the program for
ten years.
Mr. Lyons. And we have built into the budget sufficient
funds to cover this new proposal as well.
Mr. Dicks. So you have the resources to do this?
Mr. Lyons. Yes. Now we are dealing with some technical
issues related to the potential for absorbing inflation costs,
et cetera, which may result in some minor increase in cost and
we are looking at that issue right now.
Mr. Dicks. Well, for the record, if you can show us where
this is, we would love to hear from you?
[The information follows:]
The 1999 budget for the Department of Agriculture proposes
a number of changes in programs that are considered ``direct
spending'' under current budget legislation. For the most part,
these proposals would require changes in permanent statute and
would be under the jurisdiction of the Congressional
legislative authorizing committees rather than the
Appropriations Committees. This is the case with the proposed
change in the Forest Service Payments to States program.
Changes that result in increased direct spending require
offsetting reductions in other direct spending programs or,
alternatively, increased revenues such as user fees. This is
generally referred to as the PAY-AS-YOU-GO or PAYGO
requirement. The requirement applies to direct spending as a
whole. Offsets do not have to come from programs within the
same agency or even the same cabinet department. In other
words, to stay within the limits for direct spending, the
Administration's proposed spending increases, taken as a whole,
are offset by the proposed decreases and increased user fees,
again taken as a whole.
The PAYGO proposals in the President's 2000 budget are
identified on pages 369-371 of the BUDGET OF THE UNITED STATES
GOVERNMENT: Fiscal Year 2000. While, the estimated increase in
direct spending resulting from the Administration's Payments to
States stabilization proposal ($27 million in 2000) is offset
within the overall budget, only $17 million in reductions or
increased receipts are shown for the Forest Service in the
entry for ``Change fair market value for timber/Forest
Service.'' This does not mean that the remaining $10 million is
not offset. It merely means that it is not possible to relate
to any one specific increase in receipts or reduction in other
direct spending activities among the many shown for the entire
government.
Mr. Lyons. Thank you.
Mr. Glickman. I would also say that many people would think
that we would end the Timber Program without the 25-percent
fund. We are not going to do that.
Mr. Dicks. Okay.
Mr. Glickman. I want to make that clear.
Mr. Regula. Mr. Peterson.
rural priorities
Mr. Peterson. Yes, good morning. I appreciate the
opportunity to visit with you this morning. I have been
listening to the conversation and I guess I want to preface my
questions with a few comments. I come from the most rural
district east of the Mississippi so I am rural. About 20
percent of Pennsylvania is rural.
I spent 19 years in state government and the issues are the
same. I was one of a handful that was concerned about the state
forest budget and the state parks budget. And most urban
members did not really worry about whether they got cut or flat
funded year after year and so forth.
But I guess as I listen here this morning, it seems to me,
in the 21 years I have been in government, 22nd year now, rural
America, and you are a vital part of rural America. You are a
huge player in rural America. There is never the money to do
the things that are going to help the economy and the overall
quality of life in rural America.
And here we are today talking about an $80 million program
that deals with urban sprawl. Now this is my personal reaction.
Urban sprawl is a problem. But it is caused by the richest of
America. It is the richest part of America that is creating
urban sprawl. It is the most wealthy people that are moving out
of the cities into the suburbs and then continue to sprawl out
as they want to live in more open spaces than they currently
have.
And some people have moved a couple times in a lifetime to
get back out. I struggle a little bit that that should come out
of the neck of rural America's budget. And here we have flat
funding for recreational management. Underfunded, and you know
that, I mean you know to really utilize the land we own in
America, to allow people to really go out there and enjoy, and
it is urban people too, it is all kinds of folks, but it is
part of our rural economy.
It was the same with the state, it was always next year.
There was never money for our backlog of roads and bridges on
Forest Service land this year. It was always next year. But
there was always an urban issue that seemed to take up the
money. And here we are, I guess I would like to have you
respond to that. How do we prioritize $80 million, to help deal
where the richest live and flat funding for where the poor,
rural people live?
Mr. Glickman. Well, I appreciate your question, since we
are Rural Department, we not only have the Forest Service but
also the programs that deal with rural American farm
communities. I would like to say that local communities in
rural America also want to keep their open spaces in order to
avoid becoming overpopulated. It goes both ways.
As you may know we are seeing this particularly in the
south. I think you raised a good point. The only thing I can
tell you is, that we have seen a lot of urban spread. As people
want to move out of urban areas, we have a growing urban/
wildland interface that is causing real watershed degradation
and fire problems.
We particularly see this in the Rocky Mountain area around
Denver and all of the areas along the Front Range. So you can
see, there are legitimate problems we must deal with in
protecting forestlands. The other thing that you probably faced
in the State Legislature, and one of our challenges as always,
is how do we get an increasingly urban America and an
increasingly urban electorate to support funds for rural
America. This is a problem for the forests as well as the
farms.
We have tried to develop a series of programs that all
people can support because they can see the relevance to their
lives. You know, I think you have to look at the Lands Legacy
Initiative in that context. It does reinforce the fact that
everybody has a stake in our forests.
I have thought about this many times before. How do I
convince people in the country that do not live anywhere near
our national forests and our national wilderness areas that
these are critically important for their future? The watersheds
of most of our rivers are located on our forestlands. Fire is
an international type of problem. The forests are the most
visited area in the United States. All those kinds of things
need to be considered.
More people visit our forests than visit our parks. I
understand your question and I hope that you understand that we
have a funding crisis in the protection of your forests.
Mr. Peterson. But we expect you to be our advocate. We
expect you to be fighting for rural America. I mean, you know,
here we are veering off on urban problems.
Mr. Glickman. No, no, no, no. First of all, most of the
budget that we have got here is the operational budget.
Mr. Peterson. But the new money goes to where your
priorities are.
Mr. Glickman. Let me just say again, those programs protect
the rural areas as well. In addition to the wildfire problems
in the urban/wildland interface, they also help to support an
overall coalition of Americans who support our forests. Nothing
gets done without that.
Mr. Regula. Let us suspend, and what we will do is go to
vote. Then when Mr. Kingston gets back, he can ask his
questions. Then we will come back to you.
Mr. Peterson. Okay.
Mr. Regula. So we can get you out by 11:00, Mr. Secretary.
[Recess.]
lands legacy initiative
Mr. Kingston [presiding]. The committee will come to order.
And let me reiterate the words of my colleagues welcoming Mr.
Secretary, you and your panel and Mr. Lyons and Miss Kennedy.
She is here? Okay. All right. A question about the land and
water conservation fund. The budget requests $62 million from
the land and water conservation funds that are in unauthorized
projects in the Forest Service State and Private Forestry
Program.
And it also includes a $10 million transfer to the USDA
Rural Business Cooperative Service to support loans. And that
last part, Mr. Secretary, I certainly have some curiosity in
serving on that committee and wonder if it should not be in
another committee, in the Ag Approps Committee. But generally
my question is, with unauthorized activities as you know, we
always get accused of things. And so just what is your view on
that?
Mr. Glickman. I would ask Mr. Dombeck to respond because he
can answer your question more specifically.
Mr. Dombeck. Well our proposed budget includes the language
that would be required for anything that is new. The fact is
that we are very, very firm about staying within the
authorities that we have and we will continue to do that.
Mr. Glickman. Okay, but can you get more specific as to his
question, the $10 million issue.
Mr. Lyons. I think I might be able to address that,
Congressman. We are looking at how those funds would be
transferred to the field and be used by rural residents. So we
are evaluating possible disbursement mechanisms. And it may be
that instead of going through rural development, we could just
develop a cooperative arrangement through the states and have
that money dispersed directly to the field.
Mr. Kingston. What kind of loans are those? What is
included in rural development?
Mr. Lyons. I will let Anne address that, she has been
working on this issue.
Ms. Kennedy. I always get the really tough issues. We are
working with OMB to evaluate various administrative processes.
For example, we are considering a mechanism for providing the
stewardship money to landowners. We are looking at the
possibility of changing the proposal to just provide the funds
through the state foresters for stewardship activities.
The idea would be to have a revolving loan program with
loans to be repaid over a 30-year period for certain
stewardship practices such as replanting of trees and that kind
of thing. We are developing the idea now and we can get back to
you on that.
Mr. Kingston. Okay.
Mr. Glickman. Let me just ask. Would this require a
legislative change in language to do this or appropriations
language?
Mr. Kingston. Or a budget amendment?
Ms. Kennedy. We do not think so at this point. But we are
still looking at that matter and we will get back to you and
the committee.
program priorities
Mr. Kingston. Okay. Now you have, and this question may
have been asked. In terms of the backlog for roads and
restoring habitat because of insect and disease and because of
recreational demand, there is a great need to increase forest
management to reduce fire danger. Now given the shortage, how
would you prioritize your request for rural planning loans and
purchasing private land easements compared to the fundamental
responsibilities of taking care of the public lands
administered by the Forest Service?
Mr. Dombeck. Well, from the standpoint of priorities, we
have a risk map. Let me ask State and Private Forestry people
if they have a copy of it, that I could show you. This
identifies for the first time where the high-risk areas are on
a nationwide basis. It projects within those high-risk areas
what activities would be prioritized. We are working with State
Foresters, private landowners, as appropriate, as well as the
National Forest System lands.
Mr. Lyons. If I could add to that, Congressman, let me just
make one point because you commented about the primary focus on
public lands. I just want to emphasize that the Forest Service
has multi-dimensional roles, not solely focused on management
of the 191 million acres of public land. We play a huge role in
working with the Sstate Foresters on private lands through the
State and Private Forestry program. That involves everything
from insect and disease control to wildfire prevention.
Our budget really attempts to provide additional investment
in that element of the program as well. We want to work
cooperatively with the state agencies. As you know from your
district, private lands are really the key to commodity
production, recreation access, and watershed health.
We are trying to make an investment as a partner to work
with the State Foresters to try to improve the private
landowners, ability to manage their lands as they would like.
That is really where those funds are headed.
Mr. Dombeck. We talked about the Stewardship Incentives
Program just briefly on an earlier question. We have 9.9
million private woodland owners in the United States and yet
less than 20 percent of those landowners have professional,
scientifically-based plans for their activities. We view
providing that technical assistance, such as the information on
this map, as very important to helping private landowners.
Mr. Kingston. But you are not forcing your agenda on them.
If they have a specific agenda that might not be politically
correct in terms of somebody somewhere, they----
Mr. Glickman. It is totally voluntary.
asian longhorned beetle
Mr. Kingston. Okay. Let me ask you this. The Asian
Longhorned Beetle, which I know APHIS is doing things on and
the Department of the Interior is also. Does that attack living
trees?
Mr. Glickman. Yes.
Mr. Kingston. It does? And in this area, are you
aggressively looking at that? Because I know there has been a
change in the way that fumigation has been done. A question
came up on the Asian Longhorned Beetle. I believe there was a
regulatory change in December. Is it mostly lumber that is
being imported from China that is being fumigated now in China
rather than state-side because we did not want to have the
methyl bromide used? Are they still using it?
I am just wondering if it ties into----
Mr. Glickman. As you know, that regulatory change
restricted shipments from China using wood packing materials
unless they are treated or the shipments are packed in some
alternative material. We told the Chinese that we would no
longer allow untreated packing materials to come into this
country. There have been two outbreaks of Asian Longhorned
Beetle that have required our attention. One in the Chicago
area and one in the New York/Long Island area.
Both of these infestations are somewhat related in their
proximity to airports. I thought this was going to become a
major problem in getting the Chinese to comply. But there seems
to be reasonable compliance so far. We have limited ability to
monitor because of the numbers of people required to do the
oversight, but we are finding reasonable compliance.
Now I am not exactly sure how they are treating this wood.
I do not recall specifically whether methyl bromide or other
insecticides were used to actually treat the wood.
Mr. Kingston. I am just wondering if they are as thorough
as American pest control people would be on it. If that might
be leading to the problems in Chicago and New York.
Mr. Glickman. There is no question that untreated Chinese
wood packaging material led to the problems. That is the
uniform view of APHIS and the Forest Service.
Mr. Kingston. It makes me wonder, you know, a Communist
country certifying wood, how reliable it really is, as opposed
to our own inspection. I have the same fear when we import food
from Mexico and some of our NAFTA and GATT partners when we
bring in food, do they have the same food safety standards in
their Inspectors that we do in America.
Mr. Glickman. The only thing I can tell you is we have
stopped some products from entering this country through the
inspection process. As you know, these are our rules, not
theirs. It is up to us to enforce them, and I hope we have the
resources to do that.
Mr. Lyons. And the Secretary did provide additional
resources to increase inspections in China. We are in a trust-
but-verify mode I would say, Congressman, in that we have
stepped up inspections. And where we have outbreaks, because
the Asian Longhorned Beetle does attack live trees,
particularly Maple trees as one of its preferred hosts, we have
been aggressive in eliminating those trees. This requires us to
basically burn them, because there is no other way to go.
Mr. Kingston. Yes, I remember, did you not say you cut down
1,300 trees or something like that? I do not know why that
stuck in----
Mr. Lyons. I believe the first outbreak in New York
involved an effort of that magnitude. We have had additional
removals now in Chicago.
Invasive Specieis
Mr. Dombeck. If I could, Mr. Chairman I would like to add
to that. We are making additional investments in research in
this area. Exotics, both plant and animal, are one of the most
significant natural resource issues we face in the country
today. Whether it is weeds out west or the Gypsy Moth or Asian
Longhorned Beetle, we are requesting increases for investments
in research.
This is another example where the investments we make in
research are important both to private lands as well as
national forests. Another area that I have to mention is the
importance of an international program. When we are looking for
biological controls to deal with some of these exotics, it is
better that we learn as much as we can about them before they
are on our shores.
Mr. Kingston. What about inter-domestic migration, things
like the armadillo and living on I-95, all RV's go down to
Florida and bring all the love bugs back north. Is that a
problem?
Mr. Dombeck. Transport of exotics by vehicles is a problem.
For example, out west we require outfitters and guides to use
certified weed-free hay for horses. We certainly encourage
inspection of vehicles, cleaning, and that kind of thing. That
is important.
Road Maintenance
Mr. Kingston. All right, in January of '98, there was a
moratorium on building new roads. And I do not think it was
implemented until recently. How long is that going to be, what
is going to be the status of that?
Mr. Dombeck. The rule appeared in the Federal Register on
the 15th of February and it will be in place for 18 months.
During that timeframe we are developing a long-term roads
policy. The situation that we faced which we discussed somewhat
earlier, before you arrived, is that we have 380,000 miles of
roads in the National Forest System.
We have a backlog of over $8 billion in reconstruction and
maintenance for the road system. This has been a tough problem
for the Forest Service for at least 20 years, and the objective
of a long-term policy, which is that we use the most up-to-date
science and technology to underpin our roads programs.
A lot of the roads that are in the National Forest were
built in the '20's, '30's, '40's and '50's for logging
purposes. Today we have about 1.7 million vehicles a day on
National Forest System roads associated with tourism and
recreation. We also have a tremendous backlog in the
maintenance of 7,700 bridges.
Mr. Kingston. We get complaints that there was not enough
local input and public input in general before a decision is
made on closing a road. What is the process? Is it, is it
opened enough? And also, the 18 months, when does that start
and when does that stop?
Mr. Dombeck. I believe it started about March 1st.
Mr. Kingston. This year?
Mr. Dombeck. Yes. So it has just been in effect now for one
or two weeks. In the process we used in developing the
temporary suspension of road-building, we received well over
50,000 comments. In fact, we had hoped to have the rule
completed earlier than we did.
Mr. Kingston. Do you get input from local, say a Chamber of
Commerce, a Trade Union, how it is affecting their jobs and the
ability to get work?
Mr. Dombeck. In each Region we hold a variety of sessions,
hearings, and focus groups to encourage individuals to
understand the issue and to help us gather input. In fact, I
view the rule-making process as one of the more fair processes
in this democracy, because it puts everyone on an equal footing
whether you are a local logger, an industry or whether you live
in an urban area. Everybody had an equal opportunity to
comment.
Mr. Kingston. Okay, but the moratorium was announced
January, '98, but it did not go into affect until March of this
year. Were roads built during that period? Because, you know,
are we, even though it is for 18 months, did we really back it
into a longer period of time?
Mr. Dombeck. The proposal was made in January 1998 and put
out on the street. The rule did not go into affect until quite
recently.
Mr. Kingston. So roads were being built, there was not----
Mr. Dombeck. There was not a formal halt, that is correct.
Mr. Glickman. I think it is, however, in order to be
completely clear with you, I think that there was not an active
road-building campaign during that time period. Those roadless
areas, we are talking about a moratorium in roadless areas.
Mr. Dombeck. The fact is in many of our National Forests,
the Forest Supervisors on their own had not been building roads
in roadless areas for a number of years. This is because of the
level of controversy associated with building roads and
roadless areas.
Mr. Glickman. And this again affects a very small part of
the forest. These are roadless areas. So we are not talking,
Jim says less than one percent of the total forest. There was
other road construction going on in the forest.
Revenue Generation
Mr. Kingston. Okay. All right, now, I think you touched on
this and I think you were talking to Mr. Dicks when I walked
into the room about the activities which you may be able to
charge for recreational cabins and telecommunications sites,
hydroelectricity facilities, ski areas. There are a number of
areas where the Forest Service is, you know, has the ability to
charge for things but is lagging in terms of making a defined
program.
And this is how we are going to get our fair market value
and so forth. Are you working right now on that and are you
willing to continue to work with Congress to see that we can
help you?
Mr. Dombeck. Yes, we are actively working on updating the
fees for homeowner permits, communication sites, rights-of-ways
and those kinds of things. In fact we are working cooperatively
with other agencies like the Bureau of Land Management, so that
we have a consistent policy. One customer may have to deal with
two different agencies and we think it is important that
customer service and consistency be there.
I believe we are on track to do the reappraisals as
required for our recreational residences. We are now about
halfway through in the five-year process.
Mr. Kingston. And you are willing to work with this
committee and this committee's staff and make sure that we are
walking down this road together and everybody understands where
everybody is?
Mr. Dombeck. What we can do is promise to keep the staff
informed on a regular basis as to our progress on revenue
generation.
Mr. Kingston. All right, let us see. I guess this is my
last question. In terms of your budget, the importance of
recreation, the request for recreation funding is level and yet
there is a lot of discussion about having more recreation. What
are we doing here, why is that?
Mr. Glickman. Jim? [Laughter.]
Mr. Lyons. I guess the short answer on that----
Mr. Kingston. You are the one who is talking about it, as a
matter of fact.
Mr. Lyons. We will take whatever you can give us for
recreation. We requested additional resources and in the
balancing of priorities we did not secure them. We think
recreation is having a larger impact on forest resources and is
increasingly more valuable for rural communities. It is a
critical component of the agenda that Forest Service is
following.
We certainly see the need for additional investment in
recreation. We did not secure the additional resources.
Mr. Kingston. Well let me ask you this and you might not
want to answer it immediately. But is it, you wanted it plussed
up, but in order to plus it up with the knowledge that we will
have to reduce funding in another department. And then when we
reduced funding in one department, often some of the folks in
the Administration criticize this Congress for lots of things
and that might be an area wherever we get the money to increase
it in recreation, where you know we mutually want it higher,
but then we are going to get, take the PR hit for this other
area.
Is that what is going on, or not? I do not know what really
happens in a budget meeting.
Mr. Lyons. Well, I cannot speak to all that myself, either.
But I will be so bold as to say that any more money you want to
give USDA we are fine with. [Laughter.]
Mr. Glickman. When I opened my statement I talked about our
budget priorities this year. Recreation happens to be one of
our priorities. However, there were other priorities competing
for resources. Watershed health was a priority. Road
maintenance was a priority. Land Legacy, research, and
accountability were priorities as well. I talked about them
all.
We have done the best that we could within a total
aggregate limited budget. I understand the caps are going to be
even more difficult and onerous than we ever believed they
would be. We will just have to work with you. It is clear that
more and more people are using our forests. They are the most
popular place for personal recreation in the country. We need
more resources for them, but we also have a lot of other
problems.
Mr. Kingston. Well, I know a trend, for example, with the
National Park Service it is always more fun to buy new land
than it is to take care of what you have already. And you know,
you do have to maintain but then you talk about watershed
health and okay, we pull a little money out of that and
suddenly we are accused of putting salmonella in water that
children swim in.
Mr. Lyons. Well, I am not going to touch that, but I think
the point is, Congressman----
Mr. Kingston. To take a swim or you mean topically.
[Laughter.]
Mr. Lyons. Salmonella is another story. But you know, as
the Secretary said, we are seeking to establish a balance here.
I think the reason that we received less in base funding for
recreation is that we are developing new tools to provide
alternative sources of recreation funding. You know, as a
result of the commitment we have made as a nation to a balanced
budget and the tough spending caps that go with it, we have had
to be creative in coming up with new sources of revenue. We
certainly appreciate the rec fee demo that this committee has
been very helpful with.
We are looking at concession reform. We have even proposed
some unique ideas, like charging timber purchasers for timber
sale preparation costs. I do not know if the ideas are
realistic or not. So we have been forced to be creative because
our costs are escalating. And I think that probably was the
rationale for not increasing funding in recreation. There may
be some other ways.
Mr. Kingston. I think that is why it is important that as
we look at our structure for charging for telecommunication
sites and hydroelectricity and ski resorts and so forth, that
we keep in mind that we want that money to go back into
recreational things. Well, those are all the questions that I
have. Mr. Peterson, if you have more questions, you can----
Mr. Peterson. I have a couple dozen.
Mr. Kingston. Do you want to take the Chair?
Mr. Peterson. Do you have to vote?
Mr. Kingston. I have to vote, but I had one other question
for the Secretary, off the record. No, it has to do with
another committee and it is something totally unrelated to this
committee. So if we could recess for one minute and then maybe
you could take the Chair? Did you have something to say?
Mr. Glickman. No, I was just going to respond further to
his question.
Mr. Kingston. Okay.
Mr. Peterson. I will pretend that there is somebody there,
I can just sit here. Ralph is on his way back.
Mr. Kingston. Okay, on his way, like on the tram right now?
Mr. Peterson. Well, he was on the elevator with me and
suddenly thought of something he forgot to do and he said he
would be right back.
Mr. Kingston. Okay, why do not we adjourn for two minutes
or until Mr. Regula comes back, whichever is first.
Mr. Peterson. Okay.
[Recess.]
protecting open spaces
Mr. Regula [presiding]. Okay. You are back on, Mr.
Peterson, as soon as the Secretary gets ready.
Mr. Peterson. Okay. You were going to respond further.
Mr. Glickman. I think you raised a very good question but
let me tell you, one of the biggest issues that I find in rural
America is the desire to protect open spaces, farmland and
natural resource areas from encroachment. For example, I was at
the Farm Bureau annual meeting and one of their biggest issues
was farmland protection. We can provide ways to protect
farmland by putting easements on the land or taking other
actions to protect it against development.
And a lot of the work in the Lands Legacy program is, for
example, buying easements along stream banks for watershed
protection. This can ensure that people will not have to sell
their land due to increased urbanization. What I am saying is
that it works both ways. Lands Legacy is not only an urban
initiative, but also a rural initiative to keep the areas
pristine, clean and in many cases, undeveloped.
That is why we are trying to get more money in farmland
protection.
Mr. Peterson. But you are reaching into suburban areas to
do that. Let me just give you another reaction to that,
something we do not talk about. I shared it with the Director
of the Fish and Wildlife Service yesterday. Something that is
happening in my district, I think it is happening over rural
America. We are not farming nearly as much land as we used to.
I hunted this fall on a piece of land I hunted on when I was a
youngster and it was open meadows.
And now it is a six- to eight- to nine-inch pole woods, it
is timber. And what I find happening in rural America is an
awful lot of farmland that was cleared when people came here to
farm, is going back, and I call it the rural habitat expansion.
Nobody talks about that. But in rural America, there is a whole
lot more wildlife habitat than there was a few years ago.
Millions of acres. In Pennsylvania alone, I have been
working on these issues for 20 years. We had 14 million acres
of commercial forest in Pennsylvania 20 years ago, today we
have 16 million. So in rural America, much of our farmland,
much more than is going into urban sprawl, is going back to
brush and to woods, eventually. You know it starts with brush
and in time, it becomes a very good forest. In other areas, it
is not as good. You know, it depends on what species seeded
there, what is locally grown and somewhat on the soils too.
So we have a lot of our farmland that is, 10 or 12 years of
no activity, nobody going in and cutting, it starts to return
to woods. And so I do not think anybody is talking about that.
The statement that prompted me to say that yesterday was we are
not gaining any habitat. We are gaining a lot of habitat in
America for wildlife, because a lot of our farmland, when you
are farming land extensively, wildlife can use it but they do
not really live there, you know what I mean?
But it is going back to wildlife habitat. And so there is a
huge change out there of farmland going back to timber that I
do not think anybody is talking about, and to brushland.
Mr. Glickman. Well, as you know, we have a very large
program called the Conservation Reserve Program where we have
up to 36 million acres in this country on which we let farmers
retire land. The program is funded by Mr. Skeen's subcommittee.
We do have an extensive increase in habitat, so I think what
you are talking about is true.
We must also be mindful, however, that there are many areas
in this country where, because of the changing nature of the
population patterns, there is interface between urban and rural
America. Often in such situations we find that the forests are
directly threatened. One of our goals is to try to preserve the
integrity of these forested areas so we do not get massive
fires and so the watersheds are protected.
local fire departments
Mr. Peterson. Yeah, but I think you also ought to inventory
the acres of commercial forests in America today and I think
you will see it increasing every year. And nobody is talking
about that. The issue I want to talk to you about, again, is
very important to rural. I find that my, oh, I cannot think of
the name of, the lands owned by the Fish and Wildlife Service,
the refuge areas, yeah.
They have contracts with the local Fire Departments to
provide service. I met last fall with the eight or ten Fire
Departments that service the Allegheny National Forest and they
have serious concerns that they can continue to provide
emergency services. They not only provide for fire, but they
also provide emergency services to all our visitors and our
recreational people.
And sometimes, way back in, sometimes in the winter on the
reservoir when somebody gets hurt or lost, they are out there
searching for a day or two to find people that are lost. I do
not think, personally, we are appropriately helping them for
the services they are providing. I see you have a million
dollars in the budget for Fire Departments. But that is not
very much when you look at the size of the property that you
have to manage.
Mr. Glickman. Maybe Mr. Dombeck would comment on that.
Mr. Dombeck. Well, this is like the other areas that we
have been talking about such as recreation. There is not any
program area that I feel is adequately funded. I think most
organizations are like that. The programs to provide surplus
equipment to Volunteer Fire Departments, training and those
kinds of things are important. There are also a lot of
jurisdictions where we have reciprocal agreements.
One of the most important concerns we have is ensuring that
everybody is adequately trained because structural firefighting
is very, very different from wildland firefighting and requires
special training.
Mr. Glickman. This budget does provide more money in state
fire assistance, an increase from $21 million to $31 million.
Mr. Peterson. That would be for states to fight forest
fires?
Mr. Glickman. That is correct.
Mr. Peterson. But I am talking about the Fire Departments
that provide fire service and emergency services on our land.
And I think we are very inadequate there.
Mr. Lyons. As a former Volunteer Fireman, I would say that
critical additional investments are warranted. We do have
mutual agreements with many of the rural fire companies. We do
have a Rural Fire Assistance Program. We support providing
additional resources in that program, so we are continuing to
work to improve the situation.
Mr. Peterson. How about EMS?
Mr. Lyons. Well, we do not directly fund Emergency Medical
Servcies. In many respects we provide mutual support. In fact,
the rural fire companies do work with us on emergencies on
National Forest System lands.
Mr. Peterson. But my Fire Departments feel very inadequate.
In fact, some of them have huge acreages and have a township
population base of 200 people and they are maintaining this
Fire Department. Basically they are maintaining it for us, I
mean for the forest.
Mr. Lyons. You are correct. In many respects they are an
initial attack force on wildland fires, and that is why we
provide training and equipment and such. We are trying to help.
Mr. Peterson. I think we need to ask if we are adequately
helping them. I do not think we are, personally. Is my five
minutes up or do I have another shot here?
Mr. Skeen. If you have got something else then shoot.
Mr. Peterson. One more issue, okay. I have one more good
one for you.
Mr. Glickman. The only thing I have to tell you is that I
was supposed to leave at 11:00 and I know Mr. Skeen has a
question and Mr. Dombeck is going to stay here.
Mr. Peterson. Okay. Well, then I will let Mr. Skeen go
ahead. I will always bow to the senior member.
endangered species
Mr. Skeen [presiding]. That is the first time you have ever
said that and I do appreciate that. And Mr. Secretary I
appreciate you being here. Really, I dropped in to make sure
that they treated you fairly well because they are not
accustomed to giving you the kind of money that we offer you
over there. [Laughter.]
So I do not want you leaving us and using this as a----
Mr. Glickman. You do not have to worry about that.
Mr. Skeen. I would like to ask you a question on an
endangered species issue. And that is the proposed listing of
the mountain plover. It is a small bird that winters in
southern California and spends the rest of the year on the east
side of the Rocky Mountains and the high plains states. And
according to the information that I received that the
Conservation Reserve Program appears to work to the detriment
of this bird. Is this----
Mr. Lyons. I know, we will have to check this out for you.
What is it, the mountain?
[The information follows:]
The western great plains--found in western Kansas, western
Nebraska, eastern New Mexico, eastern Montana, eastern
Colorado, the Texas panhandle, eastern Wyoming, and western
Oklahoma--historically supported shortgrass prairies. The
mountain plover nests primarly in shortgrass prairie, in
particular that which has been grazed even shorter by bison,
prairie dogs or cattle. As it is currently being implemented,
the Conservation Reserve Program (CRP) involves the planting of
non-native species such as alfalfa, sweet clover, and other
tall-statured grasses and forbs which are much taller than the
native shortgrass prairie species. This, combined with the
grazing restrictions associated with the CRP, does have
negative effects on the suitability of these lands as habitat
for the mountain plover. Tall vegetation is a barrier to this
plover, which depends upon vision to detect predators.
baca acquisition
Mr. Skeen. Mountain plover. One other question. Is anything
happening on the proposed acquisition of the Baca location
ranch in northern New Mexico?
Mr. Glickman. Do you want to talk about the Baca?
Mr. Skeen. I understand that the owner said no to the
purchase.
Mr. Lyons. That is correct, Mr. Chairman. And we are still
talking to the family about this issue. We certainly would like
to be able to acquire that property. We think it is a national
treasure. But we have not made any recent progress on that to
my knowledge.
Mr. Skeen. So it is sort of suspended?
Mr. Lyons. Yes, sir.
Mr. Skeen. I do not have anything further. Well sir, they
say that we have done all the damage we can do for one day.
Mr. Glickman. Mr.--if you have one more----
Mr. Peterson. Just one, okay.
Mr. Skeen. If my colleague has another question, he is
certainly----
[Laughter.]
county payments
Mr. Peterson. Thank you, Mr. Secretary. The decoupling
issue, 25 percent. I guess, I am going to say prove to me that
we will get it. I was amazed when I came here. At the state
level I was one who got our local payment in lieu of tax
doubled from 60 cents to a $1.20 an acre, which I think is
appropriate. Just a flat fee per acre, game commission land,
Forest Service land in Pennsylvania, we pay $1.20.
PILT, Payment In Lieu of Taxes for rural America, it never
goes up in authorization and we never even 50-percent fund it.
Now how do we justify not funding the pittance of PILT. I call
it pittance. How do we justify that we take all this out of the
tax base locally and we do not even fund the authorized amount?
I am going to share with you that in the military side we have
a very handsome payment.
I think military bases bring a much bigger bang to the buck
to the local economy, in fact, I am not so sure they would need
a PILT payment. But it is more urban/suburban. Out in rural
America, we cannot get a couple pennies an acre. It has been
about 40 percent funded and it is not your fault, it has been
prior to you. It has gone on forever.
I was amazed. They have never fully funded PILT and it does
not have any escalation clause. So if you give us 25 percent
for timber now, are we going to get it, or are we going to get
40 percent of it like we do for PILT? Is there ever going to be
inflation increases, probably not. I mean it is like accepting
the beginning of the end.
Mr. Glickman. I think it is a fair question. I would say
there is a history of making the payments and when the
northwest forest plan was put together, we went down this road
and we have honored our full commitment under that plan to make
those payments. I believe that is correct.
Mr. Lyons. That is correct and in fact this proposal for
decoupling is based on the experience with the northwest forest
plan where we worked with the delegations to try to come up
with a formula that assured a sustainable level of funding. We
have based this proposal on that experience. And I think we
have a very good track record in making 25-percent payments
throughout the history of the organization.
Mr. Peterson. But see my experience is PILT. And it is
pretty bad. I think that is a legitimate concern.
Mr. Lyons. I know you brought that up with the Department
of Interior when they appeared before you because that is their
legacy, not ours.
Mr. Glickman. We hear you. As I said, it is our intention
to fulfill our commitment as we have done in the northwest
forest plan.
Mr. Peterson. Okay.
Mr. Skeen. Mr. Secretary, we are going to adjourn so you
can take your leave.
Mr. Glickman. Thank you very much.
Mr. Skeen. And we appreciate you being here and thank you
once again, the check is in the mail.
[Additional questions for the record follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Wednesday, March 10, 1999.
FOREST SERVICE
WITNESS
MIKE DOMECK, CHIEF, FOREST SERVICE
Mr. Skeen. We now have Mike Dombeck, Chief of the Forest
Service.
Chief's Opening Remarks
Mr. Dombeck. That is correct, Mr. Chairman. Thank you. In
fact, I have the Deputy Chiefs here with me. And if need be, we
can have people come up to the chairs, because what we want to
do is provide----
Mr. Skeen. Do you have your statement?
Mr. Dombeck. Yes, what I would like to do, Mr. Chairman, is
ask that my full statement be entered in the record and I would
just like to make a couple of points. I have been in this job
now about two years and it is a real experience being part of
the evolution and the controversies of public land management
and the national forest system.
Mr. Skeen. You do not look like you are worn out.
Mr. Dombeck. Well, I have got a few more gray hairs.
Mr. Skeen. You have been holding yourself together pretty
well.
Mr. Dombeck. I am hanging in there.
Mr. Skeen. We are glad to have you this morning.
Mr. Dombeck. Well, thank you.
In fact, the Secretary mentioned the elements of the
Natural Resource Agenda deal with roads, recreation,
sustainable forest and grassland ecosystem management, and
watersheds.
So I will save that dialogue for the questions and answers,
but the issue I would like to mention is accountability. As you
know, I think I have probably been subjected to more hearings
on the issue of financial management accountability and so on
than probably any other Chief of the Forest Service and we have
got the message.
What we are doing is we are working very, very hard to put
the infrastructure in place to move forward on this. In fact,
Vincette Goerl is here with me as our Chief Financial Officer.
She was successful in getting the Customs Service a clean
financial audit. In my years at the Bureau of Land Management--
in fact, in 1995--we got our first clean financial audit at
BLM. Of course, the Forest Service is a significantly more
complex organization, a much larger organization.
I have made management of our fiscal resources
accountability a top priority within the agency. We ask your
continued support and interest of this Committee in doing that.
With that said my hope is that we can deal with natural
resource issues; that there is a significant debate around some
of these issues; and that we not lose sight of the importance
of the business side and the financial management of the Forest
Service. Because it does not matter what our philosophy is on
resource management--I think everybody wants to see a smooth
running operation of the Forest Service that is efficient,
effective and that can respond quickly. We intend to do that
and place a very high priority on that.
In fact, we have signed a contract with the National
Academy of Public Administrators at the request of the
subcommittee; they will be assisting us to make sure that our
budget structure, the infrastructure that we put in place, the
accounting procedures are what they are and we look forward to
continuing to work with the Committee on this respect. With
that, I would say that, as has been said before, the National
Forests' 191 million acres are the lands that are of increasing
value to the American public from the standpoint of the forest,
the recreation opportunities, the water, the fish and wildlife
habitats, the forage, all those kinds of things.
We have a world-class research organization. Probably the
premiere research and development organization in the world,
plus the state and private forestry program that provides
assistance to private landowners, transfer technology, things
like the fire programs that we talked about earlier are very,
very important.
As I work through the controversies, I continually remind
myself that we have got the best wildland firefighters. We have
got some of the best foresters, the best resource managers,
biologists in this agency and in this country and we really
need to be proud of that. We appreciate your continued support
and good morning, Mr. Nethercutt. We would be happy to answer
any questions you have.
As I said for the sake of efficiency to get the most
accurate information down quickly, we have got the Deputy
Chiefs here and some of them may be rotating, depending on the
interest of the Committee.
[The statements of Mr. Regula and Mr. Dombeck follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Skeen. Your choice, any time you want to have those
persons come forward, would be fine.
fire season preparations
Could you tell us about how the Forest Service is doing the
preparation for this fire season that we keep talking about,
particularly in the southwest? We are very interested because
we have had a sustained drought going on and it is a very--to
use a euphemism, a combustible situation.
Mr. Dombeck. Well, in fact, one of our executives, Phil
Janik, our Chief Operating Officer, stayed back from this
hearing so he could participate in the Drought Commission
Meeting for me this afternoon and that----
Mr. Skeen. Where is he?
Mr. Dombeck. Pardon me?
Mr. Skeen. Where is he holding that?
Mr. Dombeck. I believe the meeting is in the Department of
Agriculture. But a Commission has been set up to deal with the
issue, to take a look at what opportunities there are for us to
increase efficiency, provide information and deal with the
whole issue of drought. But I have got to say that the
southwest, particularly right now, is a literal tinderbox and
all of the safety meetings, all of the pre-fire season efforts
are going on right now, so we will be fully ready to respond as
needed.
hispanic employees
Mr. Skeen. I appreciate that. One other question that I
would like to broach with you. Hispanic groups in my district,
we have a large Hispanic population, continue to complain about
the treatment of Hispanic employees by the Forest Service in
the Southwest Region. First, can you explain what the
complaints are and what you are doing about them and then could
you provide for the record some statistics, say back to 1990,
as to the number of Hispanic employees in the different Regions
and by grade?
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Dombeck. Yes. We would be happy to provide the
information that we have. In response to that I want to add,
though, at the direction of the Secretary, civil rights issues
have been very high on the radar screen of all of USDA and in
fact, in the Forest Service we have moved forward in
implementing procedures to--in fact, we set up five centers in
the Agency to deal with the issues of complaints.
All of the senior executives in the Forest Service have
been part of negotiations, resolution of cases to move forward,
but the thing we are dealing with is, I think, we are dealing
with some of the problems and now we have got to turn and deal
with, not the symptoms, but the real problems. We are making
significant investments in civil rights. In training, we have
got a continuous improvement process, and an employee survey
has been done now for several years to become aware of
specifically what the problems are and then what we need to do
to address those problems.
Mr. Skeen. It sounds like you have got a very large program
or very good initiative going.
Mr. Dombeck. Well, we are, again, we are very much aware of
the problem. I do want to let you know though that we have got
a ways to go in resolving it. It is not something that----
Mr. Skeen. We appreciate the effort. That is what we really
want to get at.
Mr. Nethercutt.
Mr. Nethercutt. I would defer to my colleagues who came in
ahead of me.
Mr. Skeen. I am sorry. Whoever is up next. Mr. Cramer.
Mr. Cramer. I am next?
Mr. Skeen. You won the doily.
Mr. Cramer. All right. I will reach and grab it.
Mr. Skeen. Yes sir.
Mr. Cramer. I want to say on behalf of my district, and I
did not get the chance to say this to Secretary Glickman as he
left here, we appreciate our working relationship, especially
on my farmers' behalf that we have with DOA.
AGREEMENTS WITH STATES
On the Forest Service side, I want to talk to you. I have
got a close working relationship with Alabama's cooperative
extensive system. They are in Alabama and on forestry issues, I
have heard them express some frustration at the way that they
move through the system. The State Cooperative Extensive
System, the State Forestry Commission, the U.S. Forest Service,
representatives in my state, they all have a close working
relationship and they come to agreements and as they move up
the ladder though, it seems that things sit still for an awful
long period of time and that in fact we get feedback that there
are turf battles within USDA over some of their recommendations
and they do not get passed on.
Are you aware of any problems like that? Is my state unique
or would you know? And if you do not know, could you get back
with me?
Mr. Dombeck. I would say your state is not unique and one
of the things that we have made significant progress on, but
need to continue to make more progress, is interagency
coordination. For example, in parts of the country, we are
focusing on customer service and one-stop shopping. I think
specifically in Alabama, in fact, Deputy Chief Clyde Thompson,
who is here, was part of a workshop, I believe, that was held
in--it was Alabama, was not it, Clyde?
That was to provide landowners, particularly small farmers,
with information, and just knowing where to go to get the
information you need is very important.
Mr. Cramer. When was that conference? I assume it was a
success. December? So this past December.
Mr. Dombeck. In fact, we are real proud of that. I am proud
of the work of the state and private forestry staff of the
Forest Service who have developed the model for the agreements
for this to move forward. We will be expanding this kind of
effort in other parts of the country to make sure that the
needs of under-served individuals are met--and this would apply
to the Hispanic community in the Southwest as well, Mr. Skeen,
because program delivery is an important aspect of what we do.
Making those programs available to all sectors of our
constituencies in the communities is very important.
Mr. Skeen. I appreciate that.
recreation fee demonstration program
Mr. Cramer. I have one other question. You are proud of the
success that you have made with the recreation fee
demonstration program and what, if any, changes would you
recommend about the program in future legislation?
Mr. Dombeck. What I would do is--we are pleased with it--
one of the things with the demonstration pilot is, having now
more experience under our belt, we are learning about what
works where and why it works and what things we need to change.
I think what I would do is I would ask Ron Stewart to give you
some more details on that.
Mr. Stewart. One of the proposals the Administration has
brought forward is to make it permanent. That is one of the
issues now, since it does have a sunset on it and it really
allows only up to 100 projects. It is difficult to do long-
range planning, particularly since one of the big benefits that
we are seeing is the money goes back to the local unit to
improve facilities.
And some projects require significant investment. And so
the thought that they may have the project in before they have
accumulated sufficient resources to make the final completion
of whatever the improvements are going to be has been an issue.
So permanent authority and expansion of it would be very
helpful.
As part of the demonstration though, we have identified a
number of issues and they really--some of them did not become
evident until the agencies involved in it, Interior and Forest
Service, began expanding the program towards the hundred max
that each has. That is, where you have units close to each
other from different agencies, we have different fees, a
different fee structure, and charge for different kinds of
things. It has been very confusing to the public.
Again, having permanent authority and expansion of
authority will help lead to some solutions of those kinds of
problems. So I think the biggest thing is, we would like to see
that authority become permanent and expanded, and to continue
to learn from it. As I said, we have made some mistakes when we
first started. It was intended to be a demonstration and as it
expands we discover new things. And one of the big issues is
this idea of the potential for proliferating fees and for fees
charged by different agencies. We really do need to work
together on that.
It was not an issue when there were only a few units
because so few of them were close together. Now that we have
got more of them in the program, they are oftentimes right next
to each other.
Mr. Cramer. Well, thank you for that information. It would
seem to me as a new Member of the Committee that the
demonstration programs were intended to allow you a certain
degree of trial and error with what works and what does not
work and would encourage you to be flexible to see that, if you
continue to improve and make yourself more user friendly, that
you in fact do so.
Mr. Dombeck. In fact, one of the important things is
customer service, because particularly, in parts of the country
where you have BLM, National Parks, National Forests, to make
it simple and convenient for users to--so they do not have to
be dealing with a bunch of different agencies--I think is very,
very important. The people just want good service.
Mr. Cramer. Thank you, Mr. Chairman.
Mr. Skeen. Thank you, and I apologize for not recognizing
you right off the bat.
Mr. Nethercutt.
roads moratorium
Mr. Nethercutt. Thank you, Mr. Chairman. Welcome, Mr.
Dombeck, ladies and gentlemen. I want to talk with you, if I
may, briefly about the roads moratorium that has been placed. I
am sorry I missed your testimony earlier, Mike, to the extent
you may have commented on that today.
I am aware of the facts that comprise the roads moratorium
decision, March 1, moratorium went into effect, February 11th
was the proposed rule or the interim rule was announced. You
got an 18-month time period where you want to do some analysis
as I understand it.
When you testified before the House Resources Subcommittee
on Forests and Forest Health in March, just a week or so ago, I
am informed that you stated three key steps that outline the
Administration's policy on road-building.
The current rule to temporarily suspend road-building is
designed to allow you to develop a permanent policy to develop
a road analysis procedure and then look to revise current
regulations.
I am wondering if you could, for the Committee, elaborate
on what type of road analysis procedure you intend to develop,
what current regulations do you intend to revise?
Mr. Dombeck. The team has been working for some time now on
the long-term policy, because that is what is really important,
and with the premise that we base our decisions on the best
science and technologies because many of the roads have greater
recreation use. They are used for different things than they
were. But we hope to have the proposed long-term rule on the
street for public review by early summer. We will at that time
be very judicious about public involvement, the opportunity for
people to know exactly what we are proposing and so on and we
will--now, there was another couple of parts to your question.
road analysis procedures
Mr. Nethercutt. Yes. I am wondering what the road analysis
procedure will be. In other words, what are you going to look
for in terms of standards for whether to allow or not allow
road construction or maintenance of existing roads? What
factors are you looking at?
Mr. Dombeck. What I will do is, I will--and it should be
available in a couple of weeks, the science analysis of that--
look at things from the geology, the soil stability, all the
factors. And another important point that I want to make is
that the decisions for roads will be made by local managers
working with local communities and interest groups in this
area. This is not an issue that is going to be dealt with at
the national level. I know there has been some concern about
that. But the important thing is that the transportation
infrastructure of the national forests meshes with the needs of
the local communities, the adjacent landowners and stuff.
Ron, in fact, just participated in the House Roads Hearing.
Mr. Stewart. Yes, in fact, with Mr. Peterson.What I was
going to offer is, the analysis procedure is being field-tested
on six national forests and undergoing scientific review, so my
guess is there will be some changes. But there is a handbook
associated with that that describes the procedure. We would be
glad to provide that to the Committee or to anyone who would
like to have it. It is a process, as I said, that is undergoing
some reviews so it could have some changes in it, but it does
reflect what is being tried right now.
Mr. Nethercutt. That would be helpful and I would
appreciate that and request it.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
economic impacts analysis
You have commented about local managers, Mr. Dombeck. I
agree with you that that is advisable and I am wondering if you
will be looking as you look at the local decision-making
capability, looking at the economic impacts on these
communities. Is that a factor in determination of providing
this kind of road analysis that you are going to be doing?
Mr. Dombeck. Yes. In fact, again, if you look at the
backlog of our construction and our backlog of reconstruction
and maintenance and replacement of bridges and this sort of
thing, with an over $8 billion backlog--these are tremendous
opportunities for contractors on local jobs. The way that the
work is done varies from forest to forest where, you know, in
some cases we have our own work force, but in most cases we
have cooperative agreements with the townships, with counties
or contract out to local contractors. But part of the problem
we have is, we have more roads than we can afford to maintain.
So then what do we do with those roads, the ones that we cannot
afford? That again is the decision at the local level. Do you
turn them into hunter/walking trails, hiking trails, biking
trails? Do you gate them? Are they causing enough environmental
problems, sedimentation, that they need to be decommissioned,
obliterated? Those decisions need to be made at the local
level. But then the commitment that we need from the local
communities is, we need a support base to maintain the roads
that everybody wants.
Mr. Nethercutt. No, I understand that and that is part of
the economic analysis that probably will have to be undertaken
as well and at least out my way in eastern Washington there, a
lot of people say to me, I would be willing as a citizen, they
say, to try to go in and assist the Forest Service in the
maintenance efforts. But what they do not want to do is have a
gate be put up and say well, geez, I have been walking this
trail forever and ever and now suddenly I cannot. I do not
perceive that I am doing any harm to the process. I am not in
logging or whatever else I might use the forest to do. So I
think you will find support, at least in my part of the
country, community support for the effort that needs to be
taken, under the management practices that you have.
regulatory flexibility analysis
I just ask one final question, Mr. Chairman. Along that
line with regard to small communities, there is federal law, my
staff informs me and thank goodness for them, that requires a
final regulatory flexibility analysis to be done when a final
rule is published. They cite 5 U.S.C. Section 604. And it
requires that this regulatory flexibility analysis must include
a statement of the need and objective for the rule, a summary
of the significant issues that are involved, record-keeping
requirements and what steps the Agency, Forest Service in this
case, has taken to minimize the impact on small communities.
And I am wondering if you are planning to do that
regulatory flexibility, final regulatory flexibility analysis
as required by law, at least as our staff sees it?
Mr. Dombeck. Well, if it is required by the law, we are
going to do it.
Mr. Nethercutt. I understand. Just maybe you could respond
for the record what steps you intend to undertake to comply
with that requirement?
Mr. Dombeck. We will do that. Unlike you, I have several
attorneys that are looking at that and that keep me advised and
we will provide that information for you.
[The information follows:]
The Forest Service considered the direction of Executive
Order 12866, the Unfunded Mandates Reform Act of 1995, and the
Regulatory Flexibility Act in determining the appropriate
economic analysis. Executive Order 12866 provides guidance on
the requirements for undertaking an economic analysis to inform
policy decisions. The Unfunded Mandates Reform Act includes
direction to assess regulatory impacts if annual expenditures
are $100 million or more. The Regulatory Flexibility Act
required federal agencies to give special consideration to the
impact of regulation on small businesses. Although the annual
effects of the proposed interim roads policy are estimated to
be less than $100 million, an economic analysis was undertaken
and is included in the Environmental Assessment as Appendix H.
Mr. Nethercutt. Thank you. I will stop for a moment and
then come back with another round, if I may, Mr. Chairman.
Mr. Regula. Okay. You have some more questions you would
like to ask and Mr. Peterson. Okay. We will go forward with
you, Mr. Peterson.
Mr. Peterson. Thank you, Mr. Chairman. I was kind of
perusing the budget here and listening as we have been
answering questions.
program budget priorities
As you look at the $172 million request of additional money
for your budget this year over last, and then I look at the
facility maintenance budget where you claim you need $255
million per year, since you asked for $55 million, on the road
maintenance budget you claim you need $431 million a year and
you ask for $122 million; 50-percent cut in the trail
construction budget; a $6 million cut in the reconstruction of
facilities. I guess those who oppose the resource use on our
public land whether it is timber, oil or gas, or other
resources are saying we are going to make it back in
recreation, we are going to get this, but everything that will
fuel recreation has not been adequately funded.
How do we get to where recreation becomes the aid to rural
America when all of the things that will equal additional
recreation, more access to the forest, more use of the forest
are being so under-funded?
Why are those not getting on the priority list, yet we have
$172 million of new dollars in the budget.
Mr. Dombeck. Well, as Jim Lyons mentioned in his earlier
answer, there is never enough money for the needs. One area is
road maintenance, which is important. We will, with the
proposed budget, increase maintenance from being able to
maintain 18 percent of our roads to standard, up to 22 to 24
percent. What we are doing on our arterial and collector roads
is, over the course of the last four or five years, we have
lost in excess of 10,000 miles of those roads that somebody
could drive down in a station wagon with a family because of
washouts, bridge load limit problems, because of safety
standards and that kind of thing. But just from a philosophical
standpoint, I think a good discussion for us to have, and to
continue in the future--and I know the Chairman is very
interested in this--is the Forest Service is in transition from
the standpoint of how do we deal with this tremendously growing
recreational work load. I mean, it affects law enforcement. It
affects our ability to maintain our infrastructure. More people
mean more wear and tear, more cars, more wear and tear on the
roads and this sort of thing. And I believe the agency has been
in this transition for some years, but you know, we are trying
different things and appreciate things like the fee demo
program. It is very, very important that that not be a
replacement for other programs and those dollars go
specifically into those sites where they were generated. But
that is that, as a community of people responsible for the
national forests, we need to continue to work very diligently.
Mr. Peterson. I would caution you because when I dealt with
budget secretaries at the state level under two
Administrations, under both parties, they both gave me the same
answer. We gave Pennsylvania their fees and that is to take
care of their maintenance, but they flat-funded them
thereafter. It was like, oh, they get fees now. We do not have
to fund them. Do not let that happen to you because you will
lose in the end. They did.
forest road system debate
The road issue. How many miles of roads do we have in the
Forest Service?
Mr. Dombeck. About 383,000 miles.
Mr. Peterson. People talk like this is an immense amount of
roads, but you know I have counties in my district that have
3,000 to 4,000 miles of road in them and they are rural farm
counties. So when you take the 200 million acres we have, it is
a pretty sparse road system really. What I would like to ask
you is do you have it prioritized? It seems to me a portion of
your road system is providing local service. Do you know how
many miles do that?
Mr. Dombeck. Of the road, the breakdown of the road system
and if someone has, I am not sure staff has the breakdown of
the miles, but we have somewhat of--about in the neighborhood
of about 90,000 miles that are arterial and collector roads and
these would be, some of them could be hard-surfaced. You know,
as I mentioned earlier, one of the roads that I grew up on is
now hard-surfaced. It is blacktopped and a school route and a
mail route. And also, then, a large portion of the roads, the
largest portion, would have been for timber access and forest
management and those kinds of things.
Mr. Peterson. Some of the next level would also be for
recreational access too, would it not?
Mr. Dombeck. Yes.
Mr. Peterson. It seems to me it is vital to you to break
that down and get past this argument, because we have those who
do not want resources taken off of the forest but also seem to
oppose roads because they equate that to resources. If a fourth
or a third of your road system is actually part of the local
community, we ought to identify that and we ought to do our
best to get it into the highway funding scheme that funds the
rest of the roads in America. And I would be one glad to help
you do that.
But we need those figures and then we can argue about the
rest of the roads. But personally, I think we are just losing
the road argument on and on and on because everybody is tagging
it to resource use and saying well, the way to stop resource
use is to not fund the roads. But then they also argue that we
are going to expand recreation. Well, you are not going to
expand recreational opportunities without roads. Some roads
should be for very limited use, for four-wheel-drive vehicles
and so forth that are not for regular vehicles. Other ones
maybe should become trails, but you can still get in in
emergencies. Because I think we also have to think as people go
deep into the forest, we have to have the ability to get them
out when they have a heart attack or a stroke or have an
accident. We have to think about that. And you have to have a
road and there will be some kind of vehicle that can get in
there and so some of our roads need to be very basic. Then some
need to be a little bit improved and some need to be part of
our local community system because they are mail routes and bus
routes. I think we need to get much more sophisticated in how
we deal with that and then we have got to get roads on the
priority issue or recreation is just not going to grow.
Mr. Dombeck. I would like to respond on three or four of
your points and first, thank you for your offer to support us
in the Highway Trust Fund. In fact, this year, in 1999 was the
first year that we received $750,000 for inventory and planning
to prioritize those needs.
The second point I want to make is that about 90 percent of
the roads are used for recreation purposes and that will only
continue to increase because we have got 10 times the
recreation use of forest roads today than we had in 1950. And
the other thing I want to mention is: We were all part of a
fairly tough debate last year with the roads proposal, but I
want to point out that this past fiscal year was really the
first year in probably 20 years where there was not an
acrimonious debate on either the floor or the House or the
Senate over the Forest Service roads program. We had a time
period where we were within one vote in the Senate of losing
the program and just within a handful of votes in the House. I
think what we did was, we were beginning to redefine the
program to where it was viewed as the program that was totally
associated with timber harvest and therefore I am against it,
if that is your philosophy. The fact is, understand that these
roads are important for recreation, for local uses, school
buses that drive down some of them. And we need to look at the
road situation more broadly and move the debate out of this
narrow spectrum of road-building and roadless areas which is
where the bulk of the organizational energy was spent. And
really, the reason that I made the decision I did knowing that
it would be a challenging debate--but I think we are making
progress in redefining it. Now if we can take it to the next
step of getting the funds to deal with the arterial and
collector roads, the bridges and so on, from the appropriate
sources, I think we are on the right track.
Mr. Peterson. The timber-ton-mile tax that loggers pay,
where does that go? Does that stay on that forest or does that
go into a national fund? They pay a per-mile tax if they haul
logs on your route or something?
Mr. Dombeck. It stays within the state that it is
collected.
Mr. Peterson. The state.
Mr. Dombeck. Yes.
Mr. Peterson. So it stays on the forest?
Mr. Dombeck. Yes. It is generated in the state, and in the
case of Pennsylvania, it would stay within the Allegheny.
Mr. Peterson. So then it is used for what?
Mr. Stewart. I think the tax you are talking about would be
used by the state to maintain their portions of the roads. We
are able to collect fees from the timber sale in order to do
road maintenance and road reconstruction and so forth. We pay
for it through a different way, now through appropriated funds.
It used to be through purchaser credits which we, of course, do
not use now. But basically, the road system was maintained
through collections from the timber sale.
Mr. Peterson. Okay, thank you.
Mr. Stewart. And that does stay locally.
Mr. Peterson. The Chairman has a question and I think
George has another question. I will suspend.
Mr. Regula. Well, Mr. Nethercutt.
timber salvage sales
Mr. Nethercutt. Thank you, Chairman and thanks, John. Mr.
Dombeck, my understanding is there is some proposed forest
health salvage sales for the Colville Forest and also the
Panhandle of Idaho. I am wondering if you are committed to
going forward with those sales?
Mr. Dombeck. Yes. In fact, in the case of the Panhandle,
Dave Wright, the forest supervisor, has been in and briefed
interested members of the delegations as well as our staff, and
we will move forward with those.
I am not familiar with the details of the Colville.
Mr. Nethercutt. I understand.
Mr. Dombeck. But if there is any information you would
like, we would be happy to provide that.
Mr. Nethercutt. That is great and I will have some other
questions for the record if I may, Mr. Chairman, I will submit
to you for answers as fast as possible and I thank you.
Mr. Regula. Thank you. Well, I have a statement, more than
a question, and that is as I have looked at your budget, you
are proposing a lot of money pass-throughs, while at the same
time you do not have money for your fixed costs. You do not
have adequate funding for accounting, for the accounting
programs that you know are absolutely important and that is one
of the reasons we have asked for the NAPA study.
You do not have adequate money for recreation, and it seems
to me that you have to rethink your priorities. In all of this,
you have requested $172 million in new funds and just this
morning, there seems to be an agreement that we are not going
to break the caps which, of course, means that we are going to
be restricted on what is available.
budget allocation priorities
I guess the sum and substance of what I am saying is that
you need to rethink some of your priorities. As we get an
allocation and we know what we will have to work with, we want
to come back to you to say in light of all this, do you have
some additional priorities or changes that you might make,
recognizing I think, that fixed costs have to be done. I think
recreation is extremely important. Obviously, the fee program
is designed to enhance the visitors' experience and should be
used for that. We had some indication that those rec fees may
get moved into other priorities that the Department might have
and I would not want that to happen. Certainly I want the fees
to stay where they are collected.
That is the contract we have with the American public which
is paying for these things. So we will be back in touch with
you once we know what we are going to have and we are
interested in working with you in terms of what your priorities
are, but I think some of what you have requested probably
reflects OMB priorities. Fire is another problem. And we will
have to have some additional discussion in an effort to get a
bill that is good policy for our national forests. I do not
know if you want to comment.
financial accountability
Mr. Dombeck. Well, I would like to say while you had to go
vote I did reaffirm our commitment to the study by the National
Academy of Public Administrators to assist us in both the
budget structure issues and the various things that have been
said with regard to accountability. The one thing that we want
to be very judicious about is the efficiency of the
organization. The fact is no matter what our resource
philosophy is, everyone wants a smoothly running, efficient
organization where our books balance and we get a clean
financial audit. That is very, very important to me. I am
pleased to have somebody of Vincette's stature here. In fact,
Vincette is president-elect of the D.C. Chapter of the
Association of Government Accountants. We have a pro here and
she has a good staff working with her. We hope you continue to
encourage us to achieve a goal of accountability.
Mr. Regula. Looking at your budget, I hope she knows the
secret of that fishes and loaves story from the Bible.
Ms. McDougle. Mr. Chair, I would like to add something on
this very quickly. Thank you for the opportunity. We in state
and private forestry believe that it is not either/or. It is
both. We cannot get forest health conditions improved by
looking at the green lines alone. We have to look inwardly. We
have to look outside. And an example is in the South. Forest
removals now exceed the growth for the first time in 30 years.
Also in the South, the Forest Service owns the red-cockaded
woodpecker because of that. As fragmentation and other things
occur on private lands, the critters come to us. We are the
corner. And so what that does, in turn, is reduce our decision
space.
So we think that there are opportunities outside the green
lines that the Forest Service should also pay attention to for
sustainable forestry.
Mr. Regula. You are talking in terms of the pass-through to
the states and our local communities. That is appealing, except
the states are flush, and we are not. I have a hard time
reconciling that when 30 percent of the United States is
presently public lands, and we have many deficiencies in this
budget in recreation, et cetera, et cetera, that we should be
passing through to buy more lands.
I understand it would be nice. It is like farmers. All they
want to own is the land they have and what is next to it. But
you reach a point where you have to make priority judgments,
and I think we need to encourage the states to cooperate with
the national forests. But they have to take some
responsibility.
Ms. McDougle. And they do. They do. We leverage our dollars
with theirs, half and half. And so they do.
Mr. Regula. Well, if we have to choose and we may very well
have to do that between doing the primary responsibilities of
the Forest Service and passing through money. That is when it
gets tough, and that could be the decision depending on what we
have available.
Ms. McDougle. These programs are wildly popular with our
line officers in the field and the communities.
Mr. Regula. I understand. We are going to be back to you.
forest health map
Mr. Dombeck. Well, I would just like to give you--while you
were voting, I passed out the forestland risk map that actually
includes red dots in all of your districts and that pertains to
all lands.
Mr. Regula. This is probably a forest health issue and one
that we need to emphasize in the assignment of our resources.
Well, thank you. I have to leave, but Mr. Peterson is going
to have some more questions. Then he will adjourn the hearing,
but we will be back in additional conversations.
rainbow family gathering
Mr. Peterson [presiding]. Thank you. I will not keep you
long. I can tell you are getting hungry. This is sort of an
individual question. I try to stay in the broader perspective,
but on the ANF I see that the Rainbow group is coming back this
year. They come back periodically, the 1960s group. I know it
takes a lot of police work because they bring a lot of problems
with them. And does that come out of the ANF budget or is that
a special allocation? How do you handle that?
Mr. Dombeck. We have--just starting a couple of years ago,
in fact, how many years has it been, Ron?
Mr. Stewart. Last year was the first year.
Mr. Dombeck. Since then we set up nationally, basically, an
incident command team-type structure with law enforcement so
the appropriate services are there. I personally toured the
Rainbow gathering in Arizona last year and it is an amazing
thing to see.
Mr. Peterson. That is what I am told.
Mr. Dombeck. But we do have a strategy that Ron is much
more familiar with, the details of it, if you would like to
discuss it. I do know that our--I have asked our staffs to keep
your office informed because this is--there is potential for
issues. I am not very comfortable with it with in the Forest
Service because I think a lot of risk is associated with
safety, those kinds of things. Over the long haul, we need to
get a better handle on it than we have now.
Mr. Peterson. Yes. Someone you may want to talk to, in that
county, Warren County, there was a state trooper who was
barracks commander for almost a decade or two decades and he
reminded me of the day of the efforts that it cost the local
state police and the efforts and what goes on there. It is
interesting.
Mr. Dombeck. In fact, I would say it takes a large
proportion of the energy of the National Forest or the District
that it is on for a month or more.
Mr. Peterson. Yes. But I just wondered, is there a national
pot of money that can help a forest deal with that?
Mr. Dombeck. Yes.
Mr. Peterson. Because it is not a normal situation.
Mr. Stewart. Just because of the way these events have been
going, and they often draw 30,000 or more people, there is no
way that a local forest or a local Region could handle that. So
a decision of several years ago was made jointly by the
regional foresters and the Washington Office to pool the money
for large group gatherings, those defined to be 10,000 or more.
And so there is, as the Chief said, an incident command team
that is put together that moves with these large groups so they
have the experience built from dealing with them. They know
what to expect. They know how to work with the local
communities. They use the local resources who usually have the
local cooperators like the Sheriff's Department and so forth.
And then the money is available for the management, for the
additional resources, and for cooperative law enforcement for
clean-up afterwards. That has always been an issue. We always
try to get them to do the best we can.
There have been attempts in the past. Often communities
would rather they not have them. The courts have ruled that
they have a right to assemble and we have to honor that right.
So our general philosophy is, if you will, to contain and
control. It would be difficult to go in, no matter how many law
enforcement officers you have, to control 30,000 people, if you
decide to go in and try to arrest a lot of people. But they do
make arrests, when appropriate. They do work very closely with
local communities.
I do not know whether, in the briefing of your staff, they
have provided the internal document to sort of lay out some of
the background and the role of the incident command team, but I
would be glad to leave this with you.
Mr. Peterson. I had a staff person attend Monday, but I do
not know what she received.
Mr. Stewart. Why do not I just leave this with you and give
you a chance to look at it in advance of that meeting.
Mr. Peterson. You can set it right there. I appreciate
that. I know the law enforcement people have a difficulty too
because in warm weather they do not wear clothes. They do not
have identification. When they try to arrest, it is hard to
figure out who they are because they are from all over the
country and some of them are very prominent citizens, heads of
corporations and leadership in cities, but they come without
identification.
Mr. Stewart. One characteristic of the Rainbow Family is
there are no leaders.
forest health map
Mr. Peterson. That is right. As I was looking at this
Forest Health Map now, the red I take it is lands at risk from
insect and disease. Is there a figure put to this of what it is
going to take to deal with this?
Mr. Dombeck. Let me ask state and private forestry to give
us some details on that. Janice? Janice McDougle is from state
and private forestry.
Ms. McDougle. What we have done for the field is to
identify those areas that probably will need further analysis
on the ground as to what treatments would be the most
effective.
I think that represents about 38 million acres and--58
million acres. And all of those acres will not be treated.
Sometimes you just have to do different things to reduce the
risk.
Mr. Peterson. Are we focusing our resources to the really
red areas? I mean there are some areas that are almost solid.
Ms. McDougle. Yes.
Mr. Peterson. Is that where we are focusing our attention?
Ms. McDougle. Yes.
Mr. Peterson. Is most of this disease or insect related?
Ms. McDougle. Both.
Mr. Peterson. But there is no actual budget figure to deal
with this?
Ms. McDougle. Yes, it is. It is in our forest health
protection budget to deal with that. Some is in our timber
budget to deal with that. So it is in a number of different
places to do that. This is just another tool for the field to
look at their priorities and what needs to be dealt with to
affect forest conditions.
below-cost timber sales
Mr. Peterson. Another issue I just want to mention is, I do
not think it has been discussed here today. There is a lot of
publicity every year of you losing money on your timber sales,
but is not a fairly large portion of your timber sales really
not timber sales as far as going out and selling timber? It is
where you are removing dead and waste and diseased trees and
fire? It seems to me you have got everything categorized as a
timber sale when it should not be. I just think when you are
treating forestland to remove diseased timber, to remove the
dead wood that causes your fire hazards and so forth and so on,
to categorize that as a timber sale and then allow people to
say that you are losing all this money on selling timber, when
you are really selling something that is of very low value, but
you need to get it out of there if you are going to preserve
the rest. Should there not be some change in how you do
business?
Mr. Dombeck. Yes, in fact--the accounting procedures
associated with that--my personal philosophy is that we should
not even be talking about below-cost timber sales. We ought to
be talking about the condition that we want the forest in, the
condition we want the watershed in, and how do we get there.
Because there has been a significant transition. For example, I
believe about 80 percent of the timber sales provide ecological
watershed treatments that are beyond the objective of getting
the commercial timber out. And all those things need to be
taken into consideration. The TSPIRS issue and so on are things
that we need to take a close look at.
Mr. Peterson. But should not you name them something
different? I mean should you be calling them timber sales when
you are----
Mr. Dombeck. Well, my view is that in a lot of the debate
with regard to timber harvest, we need to change the lexicon.
We need to talk about the condition we want the forest in. How
do we get it there? How do we apply the science, technology,
and management treatments to get it there? The lexicon we are
moving away from is the fact that if you look at a watershed
and you say well, I can get X million board feet out of there,
there is going to be a debate. There are going to be issues
associated with it.
If we look at it from the standpoint of applying the
science and technology; getting the resources out that we can;
accruing the economic benefits from those resources--it is
important because the common ground that I think we all have is
that if we take care of the land, we can produce fiber, we can
take care of our water quality, our wildlife and fish habitats,
and those kinds of things. By the way, I was going to ask you
how you did on your hunting on the tract of land that you were
at this past year versus when you were a kid.
Forest Succession
Mr. Peterson. Well, it is not as good as deer hunting.
Well, I hunted on it when it was open fields. I hunted on it
when it was brush. And that is when I shot some bucks there.
But it was little open spots and part of it grown up. And now
it is pole woods and there is deer around, but it is not he
same kind of hunting. It is a woods now. The deer are on the
edges and in the thickets. That used to be a thicket. I
remember when it turned from a field into a thicket you could
not walk through. It has been interesting to watch it happen,
but I do not think we are aware of how much that is happening.
Mr. Dombeck. You know, that story points out an important
fact about long-term objectives. Species require, certain
species require early seral stages--rough grouse, you need edge
effect and all these kinds of things. If you think about
emulating what goes on in nature, you have got blowdown. You
have fires. The evolution of land, habitats, plants and animals
has been a constant over time. If the objective is to focus on
the mosaic of different ecological seral stages, different
habitats that you need out there, that is the place the
dialogue needs to go, I believe.
Storm Damage, 1985
Mr. Peterson. Well, as far as hunting and wildlife, when
there has been forestry practiced, two or three years later it
is much better hunting. Blackberries and some of the spots have
been opened more. But something I might suggest and I had not
thought of this when I had discussions with you is in 1985, we
had the blowdowns with the series of tornados and some of them
went through the ANF. I do not know whether your research
people there at the lab, but it seems to me, it may be a little
late, but I do not think it is still too late. We are just 14
years in. But what has happened is there were areas a mile wide
where every tree was torn down. Everything with any size at all
was twisted to the ground. I mean it was one of the most
powerful storms I have ever seen. It has been interesting to
watch what has come back there, the kind of wildlife that has
come back there. The thickness of the habitat and how fast and
how tall it is today. It is 25 to 30 feet tall today. And I do
not know whether you have done any research on that, but it
would be interesting to me what has happened, what kind of
critters came there, what kind of species are there today. It
would be interesting.
Mr. Dombeck. Dr. Robert Lewis is head of our research and
development program. He is the Deputy Chief for that area.
Mr. Lewis. Right, and I know that area extremely well. And
good morning, by the way.
Mr. Peterson. Good morning.
Mr. Lewis. I was former director at the Northeastern
Experiment Station and I flew over those spots, those sites in
1986, and I remember when it happened in 1985. And Susan Stout,
the project leader up there, and David Marquis, who was in the
position before she came, implemented studies on disturbance
ecology. They were right on the site, right on the spot,
actually, right after the storm occurred. And so we have good
research data on that.
Mr. Peterson. Has anybody determined what kind of habitat?
I know I have been told that songbirds that were not normally
seen were prevalent, because it was really a thick wilderness
that came back in many areas where there was a lot of seed
stock. It just exploded into life and it is so thick a few
years ago you could not walk through it. I have not tried
recently, but for a while you could not walk through it.
Mr. Lewis. They have been working on the regeneration of
those sites. As you know, oak regeneration is a major problem
up there.
Mr. Peterson. Cherry does better.
Mr. Lewis. And cherry as well. Big problem with hyacinth
fern which was very thick as well. They have collected data,
but we still have a major problem with a large deer population.
And I know some of the hunters do not think that we have too
many.
Mr. Peterson. See, that is the problem back to the road
issue. If you do not have roads, hunters are not going in
there. The average hunter today is not the average hunter of 20
years ago. They will not go more than a mile or two from the
car. So if you want the hunters to shoot the deer, you have got
to have a trail for them to get in and not walk too far.
Mr. Lewis. Right. They are not willing to walk a long way.
Mr. Peterson. Well, I want to thank you very much and I
guess we appreciate your willingness. I would love any
information you have on those blowdown areas because it is an
interesting forest coming there. With that, I guess this
hearing is adjourned.
[Additional committee questions follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Wednesday, February 24, 1999.
DEPARTMENT OF ENERGY
WITNESSES
HON. BILL RICHARDSON, SECRETARY, U.S. DEPARTMENT OF ENERGY
HON. DAN REICHER, ASSISTANT SECRETARY
JAY HAKES, ADMINISTRATOR, ENERGY INFORMATION ADMINISTRATION
ROBERT KRIPOWICZ, PRINCIPAL DEPUTY ASSISTANT SECRETARY, FOSSIL ENERGY
Mr. Regula. Good morning. The subcommittee will come to
order.
This morning we will receive testimony from the Honorable
Bill Richardson, Secretary of Energy. We're delighted to
welcome you, Mr. Secretary. This is your maiden voyage in front
of this committee in your role as Secretary. Your entire
statement will be made a part of the record, and we would
appreciate it if you could summarize.
Opening Remarks
Secretary Richardson. Mr. Chairman, thank you very much.
First, let me say that it's an honor to return to this room. I
used to as a member of this body be a supplicant to this
committee, as I am here today, mainly for my New Mexico
district and my Native American programs, and I will always
remember the very generous ways that this committee treated me.
Mr. Chairman and Mr. Ranking Member, let me just try to
explain how the Department of Energy is working for America
today. When I took over the Department I knew I was facing a
challenge. What I would like to discuss with you is some of the
decisions that I have made, some tough decisions on tritium
productions, on assessing the viability of Yucca Mountain,
contracting procedures on energy issues. Let me give you an
example of how we are dealing with some of the problems that
are facing us that are in our budget.
First, the oil and gas situation, the dire situation of our
industry. Last December I appointed an internal oil emergency
task force to deal with this problem. I asked the task force to
go into the oil patch to feel out the industry. We've already
done several initiatives that I would like to briefly mention
to you.
To enhance the nation's energy security, we will shortly be
putting 28 million barrels of federal royalty oil in the
Strategic Petroleum Reserve. In a related move, we are offering
unutilized space in the Reserve for commercial storage with
storage fees to be paid in oil. For the first time in recent
memory we have mechanisms to refill the reserve during
peacetime. These first of a kind efforts are designed to make
the most of today's low prices. By putting oil in the reserve
today, we will receive a higher rate of return tomorrow;
specifically, energy security, more strategic assets, and a
great buy for the taxpayer. I especially appreciate the
positive words of support that you and Mr. Dicks offered
following my announcement.
The Administration has also altered its requirements for
federal leaseholders to diminish the threat that near-term low
prices hold for long-term production. This change would allow
stripper well operators to temporarily suspend production
without losing their leases or having to plug their wells. To
help see small operators through tough times, the
Administration is also offering various types of federal
royalty relief and is actively considering additional
categories of relief.
To help lower the cost of production, we have just
committed $18 million for a technology-driven industry cost-
share 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, which have
specific production problems ranging from reservoir
characterization to environmental complaints. We have launched
a large-scale pilot program in six States--California, Texas,
Ohio, Utah, Wyoming, Colorado--to decrease production costs
through the use of new energy efficient technologies. A similar
small scale pilot in Kansas has shown promising results,
lowering the cost of production by 77 cents per barrel.
Just last Friday we announced another innovative pilot
program in Texas that could be the first towards paperless
regulation. This new on-line permitting system could save the
industry millions of dollars in administrative costs and
countless hours of labor.
Let me just deal, Mr. Chairman, briefly with the fiscal
year 2000 budget request. The Department of Energy is
requesting a total of $1.229 billion for fiscal year 2000 from
the Interior Subcommittee. This is nearly 2 percent below the
fiscal year 1999 appropriation.
Let me deal with energy efficiency. On transportation, the
Department builds on a record of strong accomplishments. Back
in 1992, America had trailed Japan in car production for 13
consecutive years. The last five years, America's auto builders
have led the world in auto and light truck production. This
turnaround was made possible, in part, by technology
breakthroughs by our nation's scientists and engineers and by
programs which the subcommittee funded, such as the Partnership
for a New Generation of Vehicles (PNGV) which has the goal of
developing an 80 mile per gallon automobile.
We have made progress this past year when we shared costs
with industry to develop a smarter, smaller, less expensive
electric powered system for the cars of the future. Working
together, we have already shrunk the system from the size of a
large suitcase to smaller than a shoebox, and now we are
working to cut the $10,000 cost to less than $500.
For fiscal year 2000, we are requesting $143 million to
focus on key component technologies, including fuel cells,
advanced direct-injection engines, exhaust control, advanced
batteries, and electronic power controllers. A Clean Cities
request of a little over $10 million will advance
infrastructure development to deploy alternative fuels to over
65 communities.
Let me turn to industries. The Energy Department is working
with nine industries that account for 75 percent of the energy
used in manufacturing, working to remake them as industries of
the future. I know, Mr. Chairman, this is an important program
for you. These include forest products, steel, aluminum, metal-
casting, chemicals, petroleum refining, agriculture, mining,
and glass. These industries also account for most of the
emissions and waste produced by U.S. manufacturing. So we have
developed new efficiency methods. We have developed innovative
technologies to help these industries boost efficiency and
competitiveness with less pollution. To realize these efforts,
our budget requests $171 million for the Industries of the
Future program.
Buildings. America's homes and offices represent
significant opportunities for boosting efficiency and cutting
environmental risk. Heating and lighting our homes and
workplaces account for over one-third of American carbon
dioxide emissions. We need to do better there, and our new
buildings need new energy-saving technologies to help us do so.
Therefore, we are requesting $145 million to bring our R&D
resources to bear on this challenge.
I ask for your support, Mr. Chairman, for the Department's
request for the Appliance Standards Program. The appliance
standards rulemaking is now underway will result in billions of
dollars in savings for consumers. It represents my highest
priority in the Department's Office of Buildings. We are also
requesting $154 million for the Weatherization Assistance
Program, where we're weatherizing nearly 80,000 low-income
houses for warmer winters, cooler summers, lower utility bills,
and we're requesting $37 million for State Energy Programs.
The Energy Smart Schools Project is supplying schools with
the information they need to cut energy costs and save money.
Federal Energy Management Program. Buildings like this one
offer considerable opportunities for efficiency and saving of
taxpayer dollars. The Federal Government spends $8 billion a
year on energy. That's too much. We are requesting about $32
million to help accelerate the Federal Energy Management
Program which helps Federal agencies identify, finance, and
implement energy efficiency improvements for their facilities.
Management. Mr. Chairman, in response to your request, the
Department of Energy is working with the National Academy of
Public Administration (NAPA) to undertake an independent review
of our financial management and procurement practices. This
review will address concerns expressed by you and other members
of the subcommittee, including the extent of carry-over
balances, cost-sharing, and competition in our acquisition and
financial assistance processes. We're working with NAPA to
develop an appropriate statement of work and are now completing
the steps required to award a contract. NAPA has proposed
completing review by the end of August and will document its
findings including any recommendations for reforms to the
business practices of our agency in these programs. We look
forward to working with NAPA and expect its contributions will
help us.
Mr. Chairman, with me today is the Assistant Secretary for
these programs, a very able individual who in the course of
some of the questions I may want to turn to, Assistant
Secretary Dan Reicher.
Mr. Chairman, let me turn to fossil energy research and
development. Our fiscal year 2000 request for fossil energy
research and development is $364 million, a slight reduction
from the $384 million appropriated for fiscal year 1999. In
this portion of the budget we continue to address three primary
challenges. One, developing new technologies that can provide
the nation with cleaner air at lower cost; secondly, research
into affordable options for greenhouse gas controls; and
thirdly, ways to enhance our energy security.
Bob Kripowicz from our program is also here, Mr. Chairman,
and Jay Hakes from the Energy Information Agency, who has every
statistic you will ever want to know about.
Let me turn to coal. Mr. Chairman, our request for advanced
coal technologies is $122 million, about the same as was
appropriated in fiscal year 1999. At the core of this program
is our research on the Vision 21 energy concept, our goal of a
virtually pollution-free powerplant in the post 2010 timeframe.
This is an energy facility that could be twice as efficient as
today's nuclear power plants, reduce greenhouse gases by more
than 40 percent, and co-produce fuels and chemicals in addition
to electricity.
In our coal program, we also include exploratory research
in carbon sequestration. This is an extremely important
research priority. We've increased our budget request from
$5.89 million in fiscal year 1999 to $9.1 million in fiscal
year 2000. If we can develop low cost ways to capture and
permanently dispose of carbon dioxide, we could make future
climate change policies much easier to implement here and
abroad.
Natural gas. Our natural gas budget request is $105
million. I should point out that there is another $114 million
of gas-related R&D conducted by other offices in the
Department. A significant portion of this budget is to assure
that we have affordable gas supplies in the future. This is
particularly important given projections that gas demand could
increase by a third in the next decade, perhaps more if gas is
used to meet climate change strategies.
Our gas R&D budget also includes funding for two high
priority power generation technologies--advanced gas turbines
and fuel cells. We are within a year of running the first test
of a revolutionary new gas turbine that will far surpass any
other utility turbine in the world both in efficiency and in
environmental performance. Our fiscal year 2000 budget
continues to fund the final phase of this effort.
On oil, we have increased our funding slightly for the Oil
Technology Program. Within our $50 million request, we will
continue to fund several high priority initiatives that I
announced in the last couple of weeks. First, I plan to return
to the nation's most endangered oil reservoirs with cost-shared
projects to keep these fields from being abandoned, and second,
work with independent producers to solve specific oil field
problems by applying new technologies.
Clean coal technology. In the clean coal technology budget,
I know this is a big interest of yours, we are requesting that
$246 million of prior budget authority be deferred until fiscal
year 2001 and later. This program continues to produce results.
For example, fully one half of all coal-fired plants in America
are today equipped with low polluting combustors that resulted
from our Clean Coal and R&D programs. Within the next year or
so, the figure will be 75 percent. Of the 40 projects in the
program, only 2 will not be fully funded by fiscal year 2000.
These two are still in the pre-construction phases and have
sufficient funds to carry them through the year 2000. Because
of this, we can defer the funding without impacting the pace of
the program.
Global climate change. I know this is of great interest to
you and especially Mr. Dicks. Global climate change poses major
environmental challenges for the entire world. We are going to
continue to dialogue on the Kyoto Protocol to help improve the
framework that it provides. At the same time, we will continue
research and development and push for accelerated use of energy
efficient and clean energy technologies, all components of the
President's Climate Change Technology Initiative. Even without
the Kyoto Protocol, we believe these investments are wise
national policy--boosting national security, improving air
quality, strengthening our national economic competitiveness
while protecting American jobs.
Our budget is looking to increase support for CCTI programs
by about 13 percent. Included among this broad and balanced
energy R&D portfolio are clean, advanced fossil energy
technologies, carbon sequestration, and energy efficiency
applications in the building, industry, and transportation
sectors. These programs are part of the Administration's larger
Climate Change budget which include activities at four other
agencies and $3.6 billion in tax incentives over five years for
energy efficient homes, fuel efficient cars, and renewable
energy.
Finally, Mr. Chairman, management changes back our work at
home, specifically within the Department and among our
management. Today, the Department is functioning smarter and
leaner, working with the Congress and with you, we have reduced
our Federal employee workforce by 25 percent--I repeat, 25
percent--in less than four years, beating our goal by almost
two years. We've also reduced our contractor employment by 29
percent since its peak in 1992. But this streamlining has left
gaps in departmental skill areas. To resolve this, Mr.
Chairman, I initiated Workforce 21, a targeted effort to bring
specialized skills into the Department as part of our Workforce
21 initiative. These efforts will bolster the strength of our
skills and our comprehensive expertise department-wide. We are
going to improve diversity, making sure women and minorities
are better represented within the Department. I would ask for
your support in this undertaking.
Management study. We are taking a comprehensive look at the
structure of the Department looking for ways to improve
efficiency, strengthen management, ensure accountability, and
improve reporting requirements. We're looking at the
relationship between our field offices and headquarters to
enhance communications and capability. Mr. Chairman, I know you
have heard this before, but I am really going to make an effort
to improve the management of this Department, and I can tell
you, it needs it.
In summary, I would like to state for the record that our
Department's proposed budget for fiscal year 2000 will provide
our scientists and engineers with the tools, facilities, and
talented personnel necessary to help lead this country into the
new millennium. The technological breakthroughs which lie ahead
will provide improvements to the quality of life of everyone.
And with this subcommittee's continued support, the Department
of Energy will produce the science, security, and energy to
power this nation into the 21st century.
Written Statement
[The statement of Mr. Richardson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Secretary Richardson. I see my good friend from New Mexico
and would say good morning to him.
Mr. Skeen. Good to have you back, Kotter. [Laughter.]
It's an inside joke. From New York to New Mexico is a big
span. We're glad to have you back.
Mr. Regula. Thank you very much.
How would you describe in a brief sentence what the
Nation's energy policy is, or do we have one?
National Energy Strategy
Secretary Richardson. Increase our energy security, reduce
our dependence on foreign oil, maintain our lead in science and
technology, preserve and maintain our nuclear weapons, and
develop alternative sources of energy, at the same time, Mr.
Chairman, recognizing the importance of coal, of nuclear, or
our basic energy industries. I think one of the main objectives
of our energy policy is to help our domestic energy producers
across the board.
Mr. Regula. Have you done an estimate of what the energy
needs of this nation will be in let's say 20 years down the
road and how we meet those?
Secretary Richardson. My Energy Information Administration
Director has, Mr. Chairman. Could I call him up?
Mr. Regula. Yes, certainly.
Secretary Richardson. Jay Hakes.
Mr. Regula. State your name for the record, please.
Mr. Hakes. Jay Hakes, Administrator of the Energy
Information Administration. Assuming that current laws stay in
effect, we would see the biggest growth in natural gas, there
would be a strong coal component as coal continues to be burned
more at the existing plants, and we would be projecting that
under current laws nuclear would decline over this period. Gas
would be the major fuel substituting for nuclear. Of course,
changes in economics, changes in environmental regulation, and
other things could change that outlook.
Mr. Regula. Do you see a growing consumption of energy in
this country? Obviously, appliances have proliferated a lot in
the last 25-30 years and industry is using more.
Mr. Hakes. Basically, energy consumption has been rising at
about the rate of population growth, which is a little over 1
percent a year. In some ways, given the size of our economic
growth, that's an impressive achievement. Again, if current
laws continue and current strong economy continues, that will
be an engine to drive up energy consumption in the future. It
won't be as high as it was in the 1970s and 1980s because of
more technologies that are very efficient. But economic growth
does cause people to drive more, build bigger houses, and do
things that do drive up energy consumption.
Mr. Regula. I notice when you look at the numbers that at
one time the fossil budget was about equal to energy
conservation, but each year energy conservation becomes
dominant in relation to fossil. Do you see that as a continued
pattern, and what is the rationale for it?
Secretary Richardson. Well, Mr. Chairman, let me say that
on the fossil budget it's a little bit lower than last year. I
must tell you, we undertook quite a battle within the Executive
branch to move it back almost as close as last year's number.
What I want to stress to you, Mr. Chairman, is I don't want
you to look at a flat fossil energy budget, but I would like
you to consider the other steps that we've taken that deal with
the oil initiatives I announced last week as part of our fossil
energy package--the SPR initiative, the initiatives to help the
oil and gas industry with commercial spacing, with paperless
regulations, and the ways to help them within the interior and
Federal lands so that they can drill with less red tape. What I
would like to say to you, Mr. Chairman, is that I would like to
do a lot more for fossil energy but we have budget caps.
When I look at the energy efficiency and renewables budget,
I don't see it as just climate change. I think this is
important to our energy security. What they do in terms of our
budget is the clean fuels, the energy conservation programs,
they promote our energy security by reducing energy consumption
in the country, they create jobs by encouraging new
technologies, they help address our air quality standards by
reducing emissions, they help address some of the climate
change concerns by reducing CO2 emissions. We've
improved the management of these programs, as I think Mr.
Reicher can point to, in terms of contracting, in terms of
streamlining. I think he runs this department very well. I have
seen the management changes that you have proposed and that
have helped us. We have to do a better job of selling these
programs.
Mr. Chairman, I'm not trying to de-emphasize the fossil.
This is big for me. I come from New Mexico where we have
uranium and coal and natural gas. In fact, I had more in my
district than Mr. Skeen did. So I understand.
Mr. Skeen. We're down the stream from you, though.
[Laughter.]
Secretary Richardson. So I understand the importance of
these programs.
Mr. Regula. You mentioned management. Do you have a policy
of reevaluating programs to determine if they have outlived
their usefulness? I think there is a tendency to start a
program, and it just goes on and on and on.
Secretary Richardson. I've been there five months and I
want to do that, Mr. Chairman. We do have some programs that
maybe have outlived their usefulness. And I commit to you, I
have put forth a serious management review that looks at what
programs are duplicative, which ones we don't need anymore. I
kind of came in a little late for this budget to do that as
effectively as I could. But I would be prepared to review them
with you in terms of which ones you think may have outlived
their usefulness.
Mr. Regula. I commend you for the program on the filling of
SPR. I think this is an imaginative way to deal with two
problems.
What are we doing to reduce imports of foreign oil,
anything? We're now still over 50 percent, and, obviously, many
of our military policies are driven by the need to depend on
foreign imports of oil.
vision 21
Secretary Richardson. Well, I think a key is helping our
domestic production, Mr. Chairman. In coal, as I mentioned to
you, I've got the Vision 21 program, the coal-fired plants.
We're promoting alternative sources of energy, as I mentioned.
I think there is enormous potential still for solar, wind,
biomass. I think we need to do more in those areas. Nuclear,
the budget is up a little bit in terms of research. Natural
gas. I want to shift that balance. It is, as you said, at about
50 percent.
Mr. Chairman, I have gone to Saudi Arabia and to Mexico and
Venezuela, these are allies, these are friends, so we want to
secure their energy independence and relationships with us. But
at the same time, we are promoting our own domestic production.
I know the oil and gas industry is going through some hard
times. What we don't want to do, Mr. Chairman, is do anything
that effects oil prices in the marketplace, that goes in and
tampers with markets that doesn't push the free market
philosophy that we have and the view that the market is the one
that dictates prices.
Mr. Regula. One more question and then we'll move on. I
have a lot and most of them I'll put in the record.
Do you agree with the statement that fossil energy, coal,
oil, and natural gas, will continue to provide the vast
majority of worldwide energy requirements for the foreseeable
future?
Secretary Richardson. Yes, I do.
Mr. Regula. Mr. Dicks.
Mr. Dicks. Mr. Richardson, we're very glad to have you up
here in your new capacity as Secretary of Energy. I want to
compliment you on the job you're doing. I think in every area
that I have seen you are providing very real leadership and the
Department of Energy needs that, as you mentioned before, in
terms of management, and I commend you on your initiatives.
Secretary Richardson. Thank you.
climate change
Mr. Dicks. You mentioned this briefly, but I would like to
address an area where the Department of Energy's effective
leadership has been making a real difference. The issue is
reducing carbon emissions. Before we talk specifics, I want to
establish on the record that the Department is complying fully
with last year's congressional direction not to take any action
required solely by the Kyoto Protocol on Global Climate Change
before Senate ratification of the treaty, which has not been
submitted yet to the Congress. Is that the case?
Secretary Richardson. Yes, Mr. Dicks. Let me just answer
your question also by saying we are not trying to implement the
Kyoto Protocol through back door channels with funding for the
President's Climate Change Technology Initiative. The answer is
we are complying. Climate Change goals are one of many policy
goals addressed by these investments. But the Congress has to
enact any tax legislation and appropriate any funds to help the
United States begin to move its greenhouse gas emissions rate
off its business-as-usual path.
I do think that the energy R&D investments in the budget
are important for increasing our energy security, decreasing
oil import dependence, maintaining our lead in science and
technology, maintaining abundant supplies of affordable energy,
and maintaining a strong national economy.
hanford
Mr. Dicks. Well, I want to commend you on that. I think
those are all very appropriate initiatives.
A couple of issues that affect Washington State. I'm sure
you are aware of the urgency of the reprogramming request of
$56.3 million at the Hanford site for the Tank Waste Program.
The lay-off notices could be sent to nearly 1,000 employees as
early as March 15. Can you tell me the status of that
reprogramming request?
Secretary Richardson. Yes, Mr. Dicks. Because of your very
strenuous efforts, I am proud to tell you that today we are
submitting the reprogramming request.
Mr. Dicks. From OMB? Or just the Energy Department?
Secretary Richardson. No, no, no. I took care of the whole
thing.
Mr. Dicks. The whole thing?
Secretary Richardson. Yes.
Mr. Dicks. It's going to be up here?
Secretary Richardson. It will be up here today.
Mr. Dicks. That's what I like to hear.
Secretary Richardson. And we won't have any disruptions.
Hanford is very important in our priorities.
Mr. Dicks. I appreciate that. I just would also mention
that I understand John Wagner, who has been the long-time
manager out at Hanford, is retiring and that James Hall, the
manager of DOE's Oak Ridge Operations Office, would serve as
acting manager until a permanent replacement can be found. Can
you tell me what you think the timeline is on the Department's
selection of a new site manager at Hanford?
Secretary Richardson. Thirty days. I want to select
somebody very soon. We have a wide core of applicants. I want
the strongest person there. Hanford is one of our priorities.
We have not met our standards there. We need to improve our
performance.
Mr. Dicks. I want to compliment you, though. You met with
the governor and the attorney general and they were very
pleased with the meeting you had. They felt that you are
keeping the commitments the Federal Government has made on this
cleanup effort.
Secretary Richardson. We signed a consent decree recently
with the State of Washington that commits us to a new tank
cleanup performance, and we're going to meet it.
Mr. Dicks. It's a tough problem and we will be supporting
you on this.
I wanted to mention one other thing. There is a start-up
company in my district that has built a prototype engine
demonstrating the application of ram-jet technology to
electrical generation. This ram-gen engine offers tremendous
advantages over combustion, turbines, and all other operations
including lower capital and maintenance costs and substantially
higher efficiencies. In addition, it can use a wide range of
fuels including methane from coal mines and other currently
wasted gases and thereby eliminate these greenhouse gases.
Representatives of the company have briefed your staff
about the new technology and the company is currently preparing
a request for assistance from the Department. I would
appreciate it if you would review the potential of this
technology and consider sending technical staff from the
Department to evaluate the data that is now being collected
from the prototype testing. I actually went out and took a look
at this a few weeks ago and I think this could be a tremendous
breakthrough.
Secretary Richardson. Well, as you mentioned, our energy
staff met with company representatives yesterday. We're going
to make sure they're eligible for solicitation bids to compete.
We will send people to evaluate them, and my staff tells me
they were very impressed with these people.
Mr. Dicks. Thank you, Mr. Chairman.
Mr. Regula. Will you yield?
Mr. Dicks. Yes.
Mr. Regula. Can you describe how one of these works, I'm
just curious.
Mr. Dicks. This is remarkable technology, you have this
great round turbine engine in which fuel and air are
compressed. We tried to create this ram-jet technology for the
aerospace plane and this thing is very close. It minimizes the
emission of nitrogen oxides and greenhouse gases.
Mr. Regula. Does it use gas?
Mr. Dicks. Yes, it uses several different energy sources
including gas.
Mr. Dicks. I can give you more background, bring in some
more detail. Actually, if you want to get a briefing on it,
these guys are tremendous. I've seen this thing work and they
think they can be very competitive and use these gases that
today create part of the greenhouse problem.
Mr. Regula. They still need some research money.
Mr. Dicks. Yes. They are still trying to develop this
thing. But they've actually demonstrated it, so they may be
able to do it all in the private sector. We're testing that.
Mr. Regula. Thank you.
Mr. Peterson.
Mr. Peterson. Yes. Thank you, Mr. Chairman.
Good morning, Mr. Secretary. I wanted to commend you also
for your efforts at filling the reserve. That's a step in the
right direction. Is there a game plan of when we would have it
full?
Secretary Richardson. Yes, 60 days. We would complete the
28 million barrels that we announced last week. It would take
60 days to finalize the plan. Then there is still a remainder,
as you know, Mr. Peterson. My goal is eventually to fill the
entire SPR.
Mr. Peterson. How long would that take?
Secretary Richardson. Well, I've got----
Mr. Peterson. How many days supply does that give us?
Secretary Richardson. With our new initiative, we would
have 64 days.
Mr. Peterson. If that's full, how much would we have?
Secretary Richardson. Probably about 75 days.
Mr. Peterson. Okay. About two and a half months.
Secretary Richardson. So with the help of many of you here,
we were able to make that announcement.
Mr. Peterson. I was also pleased to hear you talking a lot
about helping independents. I guess you are more optimistic
than I am. In Pennsylvania, New York, Ohio, and West Virginia,
which primarily have stripper wells, in a few more years it's
over. We're just out of the business, period. And I'm told by
people in Louisiana, Texas, and other states that we're just
going to lose--I don't know how long it takes to crank up an
oil business, but it takes quite a while. If we have people
with wells out of production, wells capped, wells plugged--I'm
not sure we're really thinking about what happens down the
road.
I think we're drunk on cheap oil in this country. I don't
we realize what will happen. The next issue down the road is
how can we help an industry that cannot make it on $9 oil? I
don't think you could subsidize them enough to make it. There
is no way to make $9 oil profitable. So how long we have $9 oil
dictates whether or not we have a future oil business in many
parts of this country.
refining capacity
And the issue I want to raise from that is, if all things
remain the same at EPA, we won't have much refining capacity in
this country in a decade. We're quickly losing our refining
capacity and I don't think anybody is even talking about that.
But if we lose our refining capacity, you will never regenerate
an oil business because you can't generate here and haul it
someplace else to refine it, the costs prohibit it.
Is there anybody monitoring the refinery capacity in this
country?
Secretary Richardson. Well, we're working with EPA on this
and we're sensitive to what you just said. Let me also mention
that we want to come out with more initiatives to help our
stripper wells and our small independents. We're working on
that. It's a global problem.
Mr. Peterson. Work fast.
Secretary Richardson. I understand. It is a global problem.
In fact, we're looking at some emergency loans that we might
consider for some of those that are not in good shape. We're
also within the Administration discussing tax relief, although
it is not Administration policy yet. Let me also mention to you
that we have tried in terms of regulations to reduce the number
of regulations that independents have to go through. We are
also looking at ways that on federal land we can make the
process of drilling and development easier. We're working on
that.
But I understand the urgency. I represented many of these
oil and gas producers in my State and I know that they're
hurting. The only consolation that I would offer is that oil
prices over the years have been cyclical and things will
hopefully get better, and we're working on that.
Mr. Peterson. I don't think we ever face the glut of cheap
oil that appears to be coming from all parts of the world.
Countries have built their economies on oil and as the price
goes down they have to sell more to maintain their economies.
So they've lost their ability to squeeze us like they used to.
But aren't we close to 60 percent foreign import now?
Secretary Richardson. No, we're at about 50-51 percent.
Mr. Peterson. We're still producing almost half of our oil
in the U.S.?
Secretary Richardson. Yes.
Mr. Peterson. Now that's in the United States?
Secretary Richardson. Yes.
Mr. Hinchey. And Alaska.
Secretary Richardson. Alaska.
Mr. Dicks. That's part of the United States. [Laughter.]
Secretary Richardson. Well, I know that. But I heard it and
thought it was a very helpful comment, so I repeated it.
[Laughter.]
Mr. Dicks. Senator Stevens will appreciate that.
[Laughter.]
Mr. Peterson. Is there a goal of how far we can go?
Secretary Richardson. We want to reduce it--I don't want to
get into a fixed percentage, but we are constantly investing in
new energy technologies, in our traditional technologies. My
hope is during my tenure to go under 50 percent as much as we
can.
Mr. Peterson. Thank you.
Mr. Regula. I would just like to follow up. I can remember,
and I think some of you at this table may also, when we were in
late night sessions trying to figure out what to do about oil
when it was $40 a barrel. Today, it's $9. What would you say
has made that difference? Is it that more is being produced, or
less consumption? Why suddenly has there been that enormous
price drop?
Secretary Richardson. I think, Mr. Chairman, it is
international economic conditions of global marketplace. The
financial situation in Asia is a contributing factor, in Latin
America. I think our strong economy also is an engine that
internationally has allowed us to survive this. At the same
time, our consumers, and we also represent consumers, I think
we have to have a balance between continuing our policies of
ensuring our domestic production is there and giving the
consumers the best options that they have and that they need.
Mr. Regula. Mr. Hinchey.
Mr. Hinchey. Thank you very much, Mr. Chairman.
Mr. Secretary, we still miss you up here but we very much
appreciate the jobs you're doing for the Administration and for
the country. It's great to see you again, Bill.
Secretary Richardson. Thank you, Maurice.
strategic petroleum reserve
Mr. Hinchey. The issue of the Strategic Petroleum Reserve
and our dependence on foreign oil is I think a critical
question. And so I would just like to follow up a little bit on
what Mr. Peterson was talking about. Is that reserve adequate
do you think, two and a half months?
We're in a situation now where oil is very, very cheap and
from the country's point of view, not from the oil producers'
point of view but from the general economy's point of view,
that's a good thing. But it is going to change at some point
and one of the questions is will it change precipitously or
will it change gradually so that we will have an opportunity to
make some adjustment. If it changes precipitously, we may be
caught off guard and it may create some very serious
disruptions in the economy. So I would appreciate your thoughts
on that.
Secretary Richardson. Well, I think this is why--and before
you came in I thanked everybody on the subcommittee that was
instrumental in helping us make this decision--we were able
with the 28 million barrels to get the SPR filled at a time
when prices are low, so we're saving for a rainy day. So I
think that's good energy policy, good energy security. My hope
is that in the course of the next year through other measures
we can refill the SPR. We have also said that we are willing to
lease commercial space and have it paid through oil. I think
that will allow more barrels in SPR. We have also said to some
of our friends that we are willing for them to store some of
their oil, like Venezuela, like Mexico, in the SPR, provided
they pay, and maybe they can use that oil as collateral for
some of their loans in this country.
Our goal in the end is to fill it. We were able to fill it
by transferring so it didn't cost the taxpayer a cent. So we
were very pleased with how we were able to do this within 60
days. This sends a signal that we have an energy policy and
we're saving for a rainy day. You're right, things can change.
Although Mr. Hakes, who heads our Energy Information
Administration, makes these projections and, as I understand
it, we are looking at slight increases for the price of oil in
the next year. Do you want to hear from him on this?
economic estimates
Mr. Regula. We might hear his comment. I'm sure some oil
companies here would like to know about that. [Laughter.]
Mr. Hakes. The price decrease that we're seeing now is more
sustained than the price drop in 1986 which, as you remember,
was a pretty major bang in and of itself, and also deeper than
the 1993 drop which was a milder drop. There is a lot of excess
supply around the world that is slowing the return of prices to
a more normal level.
However, U.S. production at the end of last year was
500,000 barrels a day less than it was 12 months earlier.
That's a pretty substantial drop.
Mr. Regula. Is that from lack of demand or lack of wells?
Mr. Hakes. Shutting down wells and not being able to
produce at the low price. And we have less precise data on the
North Sea, but one would accept a similar reaction there
because it is high priced production compared to places like
the Middle East where it is cheaper to produce.
That will over time readjust the world market and quite a
bit of equilibrium between supply and demand. We certainly see
prices going up during 1999 and further in 2000. But we
wouldn't see them getting back into the normal range until
probably at least 2001. The reason being that you've got these
excess supplies out there that have built up over several years
with the mild winters. And, of course, Asia, which the
Secretary mentioned earlier, was growing at about 800,000
barrels a day each year and that was soaking up a lot of the
supply. Last year, Asian demand actually went down slightly. So
there is this imbalance, but it is cyclical. This is just the
deepest down cycle that we've seen probably since we've been
keeping statistics.
Mr. Regula. I purchased gasoline last week back in Ohio for
79 cents a gallon, and 43 cents of that is tax.
Mr. Hakes. The national average as of Monday was 91 cents,
and in the Midwest and Lower Atlantic States, the average is
below 90 cents in some states.
Mr. Hinchey. You mentioned prices getting back up to normal
range in two or three years. What do you regard as normal
range?
Mr. Hakes. Well, for West Texas Intermediate, which is a
very good class of oil, the normal range would be in the $17 to
$21 a barrel range. A lot of the oil that is produced on shore
in the U.S. is a heavier grade of oil that could sell for $3 or
$4 less than that. We've seen heavy oil being sold recently for
$6 a barrel, which, as one person pointed out, you can now buy
42 barrels of crude oil for what you would spend for one cup of
coffee in a ritzy restaurant. So, for our producers, the normal
range in many cases, unless they're producing West Texas
Intermediate, would be somewhat lower than that, maybe in the
$15 range. But most people can produce and make money at that
range.
But there's a lot of potential around the world and, of
course, the Middle East is a big unknown with their potential.
Some of those countries could be producing double what they
produce now.
Mr. Hinchey. Also, you can pay more for bottled water today
than you're probably paying for refined petroleum products.
energy conservation
I would like to talk for a few minutes about the
Department's initiatives on energy conservation, which in the
present climate might seem almost unnecessary to people. But we
know that this is going to change and I think the energy
conservation initiatives that you're taking are very important.
I know that is one of the major increases that you are
requesting in the budget. I wonder if you could talk to us a
little bit specifically about some of the things you're
proposing with regard to improving efficiency of buildings,
community weatherization programs, and also the industrial
sector--such as how you are approaching improving industrial
efficiency.
Secretary Richardson. If I could have our Assistant
Secretary answer that. He can get into some of the specifics. I
am very proud of this program. We got an increase in it and
we're going to push it very hard. We hope this committee is
generous on it.
Dan, just briefly highlight what the Congressman asked.
Mr. Reicher. Congressman Hinchey, in the industries area,
we're very proud of the work we're now doing, for example, and
have asked for new money, with the oil refining industry, with
the agriculture industry, the mining industry. Those are
industries that use a great deal of energy and where there is a
great deal of energy to be saved which could go directly to the
bottom line for those industries in terms of their
productivity. And I think also it addresses some of the oil
challenges we face. That program has improved greatly in terms
of the return on the dollars invested and the amount of energy
saved per home. Also we are becoming more effective in working
with states directly on energy conservation.
In the buildings, in terms of R&D and demonstrations, we
have asked for increases to accelerate our development of
standards for various kinds of appliances. There's several
billion dollars of savings for consumers represented by
improving the energy efficiency of appliances. And also we are
demonstrating with industry a whole host of new technologies in
commercial buildings and in residential buildings, ways to save
energy and lower the cost of operating buildings, lower the
price of buying a building. So there's a broad range of things
and they all show very good returns on investment.
Mr. Hinchey. Can you give us some idea of what we would
save in terms of BTUs or barrels or however you would like to
put it if your objectives are realized.
Mr. Reicher. There is a variety of ways you can measure
this. We project individual homeowners can save hundreds of
dollars a year in their energy bills to operate a home. We
estimate that commercial building owners can save tens of
thousands, hundreds of thousands of dollars a year. There is a
brand new building being built in New York City where we're
able to demonstrate savings of on the order of $500,000 a year
in operating an office building in New York with a very small
incremental cost up front, a return of about three to five
years in terms of the incremental cost. That goes directly to
the users of those buildings.
In terms of the work on actual replacements for oil, there
are a whole host of alternative fuels from natural gas to
ethanol where we can show direct correlation between the use of
those fuels and reduction in imported oil. And so bringing the
prices of those down, improving the technologies for developing
them goes directly to energy security.
Mr. Regula. Mr. Skeen.
Mr. Skeen. Thank you, Mr. Chairman.
Mr. Secretary, it is good to have you back.
Secretary Richardson. Thank you.
waste isolation pilot project
Mr. Skeen. And, as usual, I appreciate your knowledgeable
background in energy production from our perspective in New
Mexico and so forth. Let me ask you a question. I know that
you've already made some pronouncement about the Waste
Isolation Pilot Project. I am hopeful that we can get this
thing going. The highways networking has come a long ways and
so forth. I think that we're in a position now that we can get
over the hump and get this material down in the facility. I
just wanted you to know I appreciate the stand that you took.
Secretary Richardson. Thank you. Congressman Skeen, let me
say that I'm going to need your help and your intervention in
the next few months because this is a critical period for WIPP.
As you know, the court has set March 12 as the date for the
oral arguments in the WIPP case. It is our hope that the first
shipment of transuranic waste would occur shortly thereafter,
this is the one from Los Alamos to WIPP. We also have another
commitment and that is to the State of Idaho.
Mr. Skeen. And to Colorado.
Secretary Richardson. And Colorado. The Idaho one is more
imminent because it is the end of April. I have to tell you
that we are frustrated with the State of New Mexico's delay and
with statements that they've made about when we can move this
waste. The RCRA permit is eluding us; the State is not
providing it. They are giving us different timeframes and I am
faced with having, by a settlement decree, to abide by the
agreement I made with Idaho to have it before April of 1999.
We had some meetings with the State officials from New
Mexico yesterday. We hope to get some better answers than we've
had. But I have to tell you that the Department is becoming
increasingly frustrated with the New Mexico Environment
Department's constant changing of the goal posts, and I want to
work with you to try to deal with these problems.
Mr. Skeen. But it also involves a concerted effort not only
from the executive branch in New Mexico, but you've had the
folks like Mr. Hancock and some of the rest that have made a
career out of this thing.
Secretary Richardson. Right.
Mr. Skeen. But I think it is really abused, because the
technology has proven to be wise. I think we've gone through
all the careful planning and appropriations process to get this
thing done.
Secretary Richardson. I agree with you. WIPP is ready to
open now, that's our view. It is certified through the EPA. You
and I worked on this over the years. I know you weren't totally
happy with every initiative I made when I was here.
Mr. Skeen. Oh, Bill, I've always appreciated every one,
particularly today. [Laughter.]
Secretary Richardson. But we're together today and we want
to open this.
Mr. Skeen. Together again. [Laughter.]
Mr. Skeen. We've had a good liaison with this situation,
and you're well aware of what it is. I think we can overcome
this situation. As I've said in jest, some of the detractors
were going to lay down in front of the trucks that are moving
the stuff and so forth, I said, no, don't let them do that,
just use them as a hood ornament. [Laughter.]
Mr. Skeen. You can at least move it.
On the oil and gas, you've got a good background in this
area. You know that our production in New Mexico is largely
stripper wells, and we're also leading in technology and
development of underground resources with deep penetration
radar systems and other technology. So the picture is kind of
bad now from the standpoint of the price on oil, but there's
not much we can do about that. I might even suggest that since
we have disaster payments for agriculture and so forth, we
might do that for the oil business. But I can see right now
that would be a tough nut to crack.
Secretary Richardson. Well, we're working, as I told Mr.
Peterson, on ways that we can support them in terms of some of
the problems that they've had. We hope to announce something
soon, not like the payment in agriculture, but of other ways
that they can get some help.
Mr. Skeen. Well, we always appreciate it. And once again,
welcome back.
Secretary Richardson. Thank you.
black liquor gasification
Mr. Regula. Mr. Cramer.
Mr. Cramer. Thank you.
Mr. Secretary, welcome to the committee. Good to see you
again as well. I want to turn your attention to the issue of
black liquor gasification. The ultimate question I want to get
to is how much do you anticipate spending on black liquor
gasification in fiscal year 2000. And as a way of maybe telling
you the way I see this, it appears to me that in your fiscal
year 2000 budget you've got $21 million for research related to
forest and paper products industry under your Energy Efficiency
Program. And of that amount, $11.5 million is set aside for
``research targeted to increase the industry's fuel
flexibility, improve process, energy efficiency, and ultimately
allow the industry to become essentially independent of fossil
fuels.''
I just wondered, we've got a black liquor gasification
project proposed by Champion International which is to be
carried out at a significant plant of theirs that happens to be
in my district, and I think that fits into that definition. But
how much do you anticipate of the $11.5 million that I assume
would be available would be spent on black liquor gasification?
Will there be one project, more than one project, or do you
know?
Secretary Richardson. I'm going to have Dan get specific.
Let me just say that we have separated this proposal and
another one into an engineering and cost study, as you know,
for fiscal year 1999, and a follow-on construction and
demonstration phase for fiscal year 2000 and beyond. Right now
that engineering study is being reviewed by a panel of experts
consistent with our procurement process. We should finish this
review process by the end of this April, to be followed by an
award or awards shortly thereafter.
But, Dan, can you answer the Congressman?
Mr. Cramer. Excuse me, Mr. Secretary, did you say ``award
or awards''?
Secretary Richardson. Award or awards shortly after.
Mr. Cramer. Okay.
Secretary Richardson. Can you get more specific?
Mr. Cramer. Or, if you can't now, I would follow up.
Mr. Reicher. Yes. Let me just say Champion is one of the
companies that we are talking with right now about some money
in fiscal year 1999.
Mr. Cramer. Exactly.
Mr. Reicher. We're working towards that and we hope to be
able to, as the Secretary said, announce the initial conceptual
study phase of this with real money in April and we're hopeful
that Champion will----
Mr. Cramer. This April, of course.
Mr. Reicher. Correct. And then in the fiscal year 2000
budget, as you said, there's on the order of, depending on how
you count, somewhere between $9 and $11 million that we've
requested for gasification work, including black liquor
gasification. That would allow companies like Champion through
a competitive process to go forward and actually do large scale
gasification projects in actual plants to demonstrate this
technology, which has the prospect of dramatically reducing
energy use in the forest products industry, literally turning
forest products companies into net exporters of electricity to
the grid. Under a deregulated grid, you could actually see this
industry sending electricity and getting paid for it. And it
would also reduce pollution very substantially. So we're very
excited about gasification technology overall, black liquor
gasification particularly with the forest products industry.
Mr. Cramer. And I would hope you wouldn't spread your
limited resources over too many projects. [Laughter.]
Mr. Reicher. No, we will not spread it over too many,
because we want to actually demonstrate two or three
technologies very quickly in real, live, large-scale plants.
And so if we get this funding request met on the order of $9 to
$11 million, we're going to be able to go forward with a small
number of very focused projects in large-scale plants and
really demonstrate this technology quickly and get it into
common use.
doe and research labs
Mr. Cramer. Thank you.
Mr. Secretary, on another issue that you and I have had
some dialogue over, Lawrence Livermore Labs and the
relationship between DOE and the labs. I've been very concerned
about the relationship between DOE and the labs for a number of
years dating back to when I was on the Science Committee and we
examined it and targeted hearings to the management
relationship between DOE and the labs and basically on efforts
to change the institutional behaviors of some of the labs.
I've gotten a lot more interested in it since a constituent
company of ours, Time Domain, has been engaged in protracted,
litigation with Lawrence Livermore Labs. I sat down with George
Brown a couple of weeks ago and we reviewed and unraveled
information about the labs in this particular kind of
technology. And I just want to warn you that issue is not going
to go away and it doesn't seem to me that DOE really has a
handle, especially in this case, on Lawrence Livermore and
holding them accountable and seeing that they come to the table
and try to negotiate through a very difficult situation. So I
hope you can help us deal with that.
Secretary Richardson. I know how you care about this. The
U.S. Patent Office, as you know, is reviewing this. We have
asked Livermore to contact Time Domain to see if they can
jointly market these proposals. But also I've asked my Under
Secretary Ernest Moniz, who is the chief scientist, and he's
around here testifying somewhere, to see how we can deal with
our transferred technology activities and see if we need to
correct some things, because I know how much you care about
this. I promise you from our standpoint it won't go away either
and we need to resolve this.
Mr. Cramer. Thank you, Mr. Secretary.
Thank you, Mr. Chairman.
Mr. Regula. Mr. Wamp.
Mr. Wamp. Thank you, Mr. Chairman.
Welcome, Mr. Secretary. First, I want to thank you, Mr.
Secretary, for the great way in which you deal with the
Congress. Having been here and certainly your service
throughout the years on a variety of fronts, you're my third
Secretary of Energy after O'Leary and Pena, each of you had
different styles and I enjoyed working with each of you, but,
clearly, you've got the best relationship with us and I thank
you for that. I also want to make the point, you said Ernie
Moniz is testifying somewhere around here, I think everybody
from downtown is testifying somewhere around here today because
I'm just hopping from one committee to another and seeing all
the important people. So, welcome.
Assistant Secretary Reicher will tell you I continue to be
concerned about this climate change/global warming issue in
that we must continue to study climate change and try to get to
the bottom of it. But it seems like recently even former
Secretary O'Leary has kind of taken issue with some of the
Administration's approaches to global warming.
The concern that I have coming from the TVA region, and I
appreciate your cooperation in the TVA region, but we have a
high dependency on coal-fired plants. If these policies do, in
fact, as the estimates indicate, lead to an increase in
electric rates of 20 to 80 percent, we need to throw a big
gauntlet down here and say make sure the hurdles are high
enough that we don't go rushing in. At some point, this economy
is going to turn down. When it does, if we are in the middle of
raising energy costs in this country severely through an
implementation of, in many cases in my opinion, unproven
results, we are at risk of really weakening our economy. I
think there's got to be a balance as we approach this issue.
And my question to you is, do you think Ms. O'Leary is right,
or where do you come down as the Secretary of Energy on these
issues of going forward with any of the Kyoto Protocol
requirements until which time that the Senate embraces them?
Secretary Richardson. Well, thank you for your very nice
words. Let me say, Congressman, I, personally, and this
Department has a very positive view of coal's future, I can
assure you of that. We're developing more clean, more efficient
technology. Our request of $122 million is similar to last
year's. We foresee in the next 20 years or more that coal is
going to supply half of the nation's electricity; it is 55
percent today. Low cost coal is why we have the cheapest
electricity of any free market economy.
Let me turn to climate change. I don't know where Secretary
O'Leary made that statement. If she did, I would differ with
her. I would simply say that the major challenge that we have
in the next 10 years is to reduce the cost of pollution
controls. We have some new air quality controls. We believe
that we are able in the year 2010, I said this earlier speaking
about the Vision 21, the possibility of developing a pollution-
free powerplant that would have no harmful air emissions of any
type. It is a Vision 21 concept that we have.
Mr. Wamp. Is that a coal-fired plant you're talking about?
Secretary Richardson. Yes. Yes. Maybe in 2010 I'll be back
to talk to you about it. I doubt it.
Mr. Regula. You may be here, but----
Secretary Richardson. But we have to find ways to capture
and dispose of these greenhouse gases. Let me just say to Mr.
Wamp that in terms of this Department, what we want to do is,
we realize we have to, bridge the gap between the developing
countries and the developed countries. We know that we don't
have too many supporters within the developing countries. In
fact, in the last meeting in Argentina, Khazakhstan and
Argentina were the only two developing countries that were
basically with us that had the goal of reducing emissions by a
certain target.
What we want to do is use technology--turbines, coal-
generated technology--with these developing countries so we can
have a win-win situation. They reduce their greenhouse gas
emissions, we create jobs, we work together. That's got to be a
major task. But I can assure you we are not trying to back-door
the Kyoto Protocol by asking you to fund certain projects.
These projects that Dan Reicher has in his shop are to promote
our own energy security, our own conservation. They are good
projects. They are in your area--in coal, in oil, in natural
gas, in many areas that I think in the end improve our energy
security.
Mr. Wamp. I think it is appropriate for this subcommittee
to keep a short leash on your activities, so to speak, because
China, for instance, you mentioned some of the smaller
countries, but China really is the big question with the coal
reserves that they have. What Ms. O'Leary actually said is the
Administration's support of the Kyoto Protocol is ``wrong-
headed,'' her words, because she said it did not invest enough
in R&D for coal combustion, and that is really the issue. If we
invest in R&D on coal, you don't have to wipe it out, you can
through the technology, as you say.
So I think it's going to take constant monitoring of your
working with us throughout this process. Let's not kill the
goose that laid the golden egg. Let's just shape that goose up
to make sure it lives. In that way we're not giving countries
like China that are not even required to participate in this
Protocol a huge advantage in the global marketplace and putting
our country at a disadvantage. This should not be about pulling
down the developed nations so that the undeveloped nations can
rise. This should be about bringing them all up to our level.
And that's an important big, broad policy issue that we cannot
take lightly in the Congress.
Secretary Richardson. I understand and I respect everything
you said.
Mr. Wamp. Thank you.
Mr. Regula. Well, I think we have time for another round of
questions.
China, as I understand it, will be 90 percent dependent on
coal for energy in the foreseeable future; is that correct?
Secretary Richardson. That is close. I believe your
statistic is correct.
Mr. Regula. And I think I read that they will be producing
more emissions of greenhouse gases in about 10 or 12 years than
we are even though they're not as developed industrially.
Secretary Richardson. That's right. Mr. Chairman, this
presents us with a great opportunity of American investment in
technology in China, them using our technology to reduce their
greenhouse gas emissions. I think there's a great opportunity
with China. I hope to make China, India, Brazil, Mexico,
Pakistan as five countries that we need to target in the Kyoto
Protocol and getting them to work with us to reduce their
greenhouse gas emissions. I think Mr. Wamp and you are
absolutely right. We can do this through our technology. We are
developing technologies in climate change that China would find
very attractive. This creates jobs for us.
Dan, do you--do you want to hear from Dan or not really?
[Laughter.]
Mr. Regula. We're always happy to hear from Dan.
Mr. Reicher. I just wanted to say that with respect to
developing countries, as the Secretary said, there are a whole
host of technologies on the fossil side, the efficiency side,
renewables that are big, big markets for us. And we are, in
fact, working with the Chinese on their use of advanced fossil
fuel generation, they are very interested in our wind
technologies because they have big wind resources, they are
very interested in our industrial efficiency technologies
because as they grow they don't want to use per unit of output,
the kind of energy they might otherwise use. As they develop
and own their own homes and businesses progress, we want to be
sure that U.S. companies are represented there in building
those homes and in supplying efficient appliances. So there's
big, big opportunities in those countries.
I also wanted to mention in the context of coal and TVA,
one of the interesting projects that we're working on directly
with TVA, and that they are very supportive of, is mixing coal
with biomass and burning it in traditional powerplants. It is
great for farmers, it is great for the forest products people,
it is great for the coal industry, it reduces pollution, you
can use traditional plants. So as we bring down the pollution
in those plants and provide alternative fuels to those plants,
we can kind of have a win-win situation.
Mr. Wamp. Would the gentleman yield?
Mr. Regula. Yes.
Mr. Wamp. I would just like to ask Assistant Secretary
Reicher, on the exportation of these technologies to China on
these new frontiers, do you work with the Department of
Commerce? How do we encourage private sector investment in
China? I think that is our best link to China because I'm not
going to trust them as far as the government, frankly. But if
more and more of our private interests are allowed into that
country to do business, to export our technologies, sooner or
later we'll get to the point where we can trust them. I think
the free enterprise system is the best thing we have to offer
them, and if you can work with Commerce, I'm actually meeting
Secretary Daley for lunch today, that's a great way I think of
helping our national security interests abroad.
Secretary Richardson. I just wanted to mention we are
participating in Secretary Daley's trip to China next month
where we're going to do precisely what you mentioned. We have
two representatives from the Department of Energy on his trip.
Mr. Reicher. I would just add one thing. I also wanted to
mention that in the nuclear area we have worked on behalf of
U.S. nuclear companies to open markets in China for U.S.
nuclear technologies as well as for power generation. So we
span the spectrum from renewables to efficiency to coal, gas,
and then end-use efficiency, the industrial, transportation,
and building efficiency as well.
FUNDING OFFSETS
Mr. Regula. Two questions. Mr. Secretary, GAO testified
here recently that you have a substantial carry-over balance,
as much as $319 million, and at least $74 million is available
for fiscal year 2000. Could we not take that into account in
establishing our appropriation number?
Secretary Richardson. Well, I think we dispute that amount
from GAO.
Mr. Reicher. Mr. Chairman, our view is that virtually all
of that $74 million is what is called uncosted balances, money
that is already under contract, already has been obligated, and
that its use to offset the budget in fiscal year 2000 would
have impacts on existing programs. It could slow contracts,
could force us to break contracts, and it could have a whole
host of consequences that we really need to avoid.
Mr. Regula. But I notice [in fossil] you offset in the NPR,
Naval Petroleum Reserve account, but not in conservation. If
offsets are good in fossil, they ought to be good in
conservation.
Mr. Reicher. This is the clean coal offset which is a
different situation.
Bob, do you want to speak to that?
Secretary Richardson. This is Bob Kripowicz, my coal man.
Mr. Dicks. A former staffer on this subcommittee.
Mr. Regula. Very familiar. Highly regarded up here.
Mr. Kripowicz. The uncosted obligations in the Naval
Petroleum Reserves came about because of the sale of the Elk
Hills oil fields. Those balances cannot be applied to any other
programs and they don't apply to existing contracts, so they
can be used for the work in fiscal year 2000. I think that's a
different situation than Dan has, where there are uncosted
balances on existing contracts.
Mr. Regula. I think GAO may dispute with Dan as to whether
or not these are obligated.
fuel efficient cars
One last question and then I'll go to Mr. Dicks. PNGV. We
are spending a lot of money to develop fuel efficient cars. But
here's Ford producing the Excursion which is a monster as far
as gas consumption and impact on the use of fuel. It weighs 3
tons. We're giving money to the industry to get fuel efficient,
but because of profits they're producing these huge guzzlers.
There's a little inconsistency here.
Secretary Richardson. Mr. Chairman, I was in Detroit about
a month ago and Ford and the Big Three are producing efficient
vehicles, too. I saw some hybrids, fuel cell, natural gas. Yes,
there are some vehicles that based on their demand they are
producing. I have to tell you I was very attracted, Ford is
bringing back the Thunderbird. I don't know if you've seen
that.
Mr. Regula. I have and I like it.
Secretary Richardson. I do, too. I don't think I probably
could buy one.
Mr. Regula. What does it get per mile?
Secretary Richardson. I'm not going to answer that. But
this partnership with natural gas vehicles, Mr. Chairman, is
working well. The Big Three chairmen like it. We're investing
together. We have some targets. It's the right thing to do. I
think we're pushing a little bit to put some of these vehicles
into the market. They are developing the technology. They said
to me they wanted to see some of the tax credits moved more
into the technology area rather than the performance area. That
is being addressed right now. The Administration will probably
submit some kind of tax incentive package soon on this. But I
think it is a very good program. I would urge you if you get a
chance to talk to the Big Three and also to Honda and Toyota.
They actually have some very, very interesting vehicles,
they're hybrid--is that right, Dan?
Mr. Regula. Toyota and Honda both have hybrid vehicles on
the market, but I don't think they participate in this research
effort.
Secretary Richardson. Well, we're working on a way to make
it more inclusive but there is some sensitivity on the part of
our guys which we're respecting.
Mr. Reicher. Just on the issue of the large sport utility
vehicles and light trucks, another part of the work that you're
funding this year is work with the diesel engine manufacturers
to put those kinds of engines which are far more fuel efficient
into sport utility vehicles and light trucks. The challenge
there is to bring the emissions down to a level where they will
meet upcoming standards. There is very good progress being made
in that area and we expect that you could cut fuel use in sport
utility vehicles and light trucks by 35 percent.
Mr. Regula. With diesel engines?
Mr. Reicher. With diesels that can also meet stringent air
emissions if we continue to make the progress we think we can
make. And you could see those in vehicles in the next three
years being actually used. So that's another part of this
technology development program.
Mr. Regula. Mr. Dicks?
Mr. Dicks. I would just like to say on this subject the
Administration's fiscal year 2000 budget has a significant
commitment to global climate change technology programs. One of
the elements of this program is a partnership for the new
generation of vehicles we were just talking about, which is a
significant part of the Department of Energy's portfolio. I
would just like to mention the State of Washington has
developed the Northwest Alliance for Transportation Technology,
which is part of the PNGV program, developing light weight
vehicles for automobiles and, increasingly important, sport
utility vehicles and light truck programs.
I think this has got the potential to reduce emissions,
increase mileage. In our area, we see aluminum as a potential
here to get the weight of these cars down and hopefully that
would help on the efficiency side, too. So I kind of think we
need to stay with this thing.
Secretary Richardson. This is a very good coalition. I
think in my last trip I met with some of their representatives
informally. These are the kinds of coalitions we're trying to
promote around the country, and I think the Northwest region is
far ahead of others.
Mr. Dicks. The staff says that maybe we should do more in
this area and less in other areas, Mr. Secretary. I will leave
that to your consideration. We might even help you in that
area.
nuclear reactors
Let me ask you, you not only have served as Secretary of
Energy but as our Ambassador to the United Nations, and one of
the issues that we're concerned about still is the question of
the Russian nuclear reactors and the ones in the Ukraine
particularly. I visited Chernobyl several years ago and have
taken some interest in this. I'm concerned about what the
Administration's overall policy is regarding these reactors,
and what can or what should the United States be doing with
them in trying to deal with this problem, especially the
Chernobyl reactors which I understand they are now going to
keep operating.
Secretary Richardson. Right. We think this is a key
priority and for fiscal year 2000 we're asking for $34 million.
We think it is an important program that continues some of the
safety improvements we've done. There's a total of 65 reactors
if you take the whole Soviet Union in Central and Eastern
Europe. We think this is a very important program. It's about
$30 million more than we requested last year.
Mr. Dicks, you've been to Russia and you know that this is
a problem. This is an issue that is important to our national
security, making sure that Russian scientists don't defect to
the Iraqs, Irans, North Koreas, making sure that these nuclear
weapons are safe, making sure that these nuclear reactors are
safe, are operating effectively and efficiently.
And in that connection, let me just mention, I cannot
resist, Mr. Chairman, we have asked your committee, and I have
called the Chairman, to reprogram about $14 million for Y2K
improvements in Soviet reactors, in Russian reactors and we
hope you will favorably consider this. We have not reprogrammed
yet because we want to hear from the committee. I know there
may be some division here. But Mr. Dicks, maybe you can help us
with this. This is very important. Y2K is something that is not
just our problem. You can imagine in Russia just how serious it
is. We are asking on an emergency basis to see if we can
transfer this $14 million to deal with these Y2K problems in
Soviet reactors. That is pending before your committee right
now.
Mr. Dicks. Okay. I yield.
Mr. Regula. Mr. Peterson?
Accounting Problems
Mr. Peterson. I want to just go back for a moment to the
conservation program balances that the Chairman brought up. Two
weeks ago in testimony here the evidence that was given to us
was the following--I think you have some accounting problems in
the Department that are hiding money. The statement was given
that if you have a new lease on a property for five years, you
had to reserve five years' worth of money. If you had a three
or four year contract with me for doing some sort of research,
that you had to reserve three or four years' money. Well,
that's not how government works in many other areas. You would
reserve one year at a time for that year's budget. I understand
if you have a little slush, but not multi-year leases and not
multi-year contracts for research where money is held in
abeyance. If that's really true, that's money that could be
spent and not harm you.
Secretary Richardson. Let me just say, because a lot of
these issues are in some of the conservation programs that Dan
Reicher has, I can say to you that the uncosted balances in
Dan's department, which is called EE, maybe in my seventh month
I will find out what EE and all these abbreviations at DOE are,
have decreased by 38 percent from fiscal year 1996 until now.
The reason for this, Mr. Peterson, is that when you have
uncosted balances you have a very heavy reliance on R&D
contracts, subcontracts with industry, with universities, other
entities, competitive ways to award these funds. This is sort
of a normal way you do business. So I don't think we are trying
to hide this money. But Dan I know told me when I came in this
was one of the main concerns of this committee. He has a plan
to deal with it, and I think based on that review by that NAPA
that you've made some progress.
Mr. Peterson. If you have appropriate accounting
procedures, we could all understand the need for the money, I
don't think you have that today.
The second issue, back to helping independent producers. I
would just like to make a suggestion. I was in State government
for 19 years and came from the oil patch personally, I never
was in the oil business but came from the area where it all
started, where the first well was drilled, and I would like to
suggest that you need to bring the oil patch States together
with their regulatory agencies, the Federal Government trying
to reach out and help them individually really won't work, but
if you could bring the States in conjunction with the
regulators, because they need to get involved, too, that's the
only way we can reach out to help this industry.
Secretary Richardson. Congressman, I think that's a very
good idea. Let me tell you what was very useful to me when I
became Energy Secretary. The governor of Oklahoma, Governor
Keating had a summit of all the energy and gas States and they
came out with recommendations. We've adopted three out of the
five. I agree with you. One of the things that I've said to my
Department, with all due respect to the Congress, is that we
have not had the kind of relationship we need to have with
States, with governors, with county commissioners, with State
regulatory agencies. I've beefed up my operation, not too much,
to deal with that problem. But I can assure you that that's a
suggestion we will take.
Like Congressman Skeen, we think of perhaps oil and gas
mainly in the Southwest and other parts of the country. I'd
like to familiarize myself more with the energy situation in
your part of the country.
Mr. Peterson. We'd love to help you do that because we're
also where coal started.
Secretary Richardson. I know.
Refining Capacity
Mr. Peterson. Refining capacity, do we have numbers of
where we're headed? Could that be furnished to us?
Secretary Richardson. I think for the record.
Mr. Regula. Let's put that in the record.
Mr. Peterson. Yes. I'd like some history and what's
happening and what you project.
[The information follows:]
Percent of Petroleum Productions Refined in the United States--1993-
2003
Please see attached chart.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Kyoto Protocol
Mr. Peterson. Back to the Kyoto protocol and greenhouse
gases, you've mentioned that a number of times. Which of the
greenhouse gases are you referring to? Which ones are you most
concerned about?
Secretary Richardson. Dan, do you want to respond?
Mr. Reicher. The primary gas is carbon dioxide. That
represents the bulk of the emissions that we worry about. But
there are other gases, methane and some of the others as well.
Mr. Peterson. But CO2 is the one that you'd like
to regulate?
Mr. Reicher. CO2 is the gas that we are
analyzing in terms of its significance in terms of climate
change.
Mr. Peterson. Have you looked at the numbers that have been
brought together by some of the scientists on what percentage
of the current greenhouse gases come from manmade efforts?
Mr. Reicher. There has been work done. I don't know those
numbers.
Mr. Peterson. Well, it's interesting to look at them when
you look at the percentage factor. Of course, CO2 is
a life-producing gas for all plant life. Has there been any
studies done on the capacity of a young growing forest, or
agricultural land to absorb CO2?
Mr. Reicher. Yes. A great deal of work has been done and a
lot more is being done. I would say with respect to the natural
versus manmade there is no issue that anybody has with the fact
that there is a large base level of CO2 produced by
nature and that is, in fact, what gives us the warmth on this
planet that we have today. The issue is the increased
CO2, the manmade CO2 over that base level
and what it will do to temperatures around the globe.
Mr. Peterson. I guess Russia right now would say it hasn't
had much positive impact on them. I think we ought to be
monitoring the potential of warming. But I personally have
studied this issue a lot and I think we're really reaching to
say that it has happened. I guess I have a feeling this
Administration is working as if global warming has been proven,
it's a fact, and you're working from that premise. I want to
tell you that it is not a fact.
Mr. Regula. Thank you. Let me say to the members that if
you have questions for the record, try to get them in today
because they only have five days to respond. We're under a real
tight timetable in getting our bill out.
Mr. Peterson. Can I ask one quick question of Bill?
Mr. Regula. Okay.
Mr. Peterson. Where are we headed on the Nuclear Waste
Policy Act implementation?
Mr. Regula. That's a quick answer, too.
Secretary Richardson. Congressman, I'm going to testify on
that tomorrow.
Mr. Peterson. Send me a copy.
Secretary Richardson. I will.
Mr. Regula. Fair enough.
Mr. Nethercutt.
Medical Isotopes
Mr. Nethercutt. Welcome, Mr. Secretary. Nice to see you
again. I'm sorry I missed your testimony but I've had
conflicting hearings, as all of us do, this morning.
I want to focus your attention if I may on the fast flux
test facility on which you need to make a decision by I believe
April 1 relative to whether the civilian use of that facility
would be allowed for production of medical isotopes. I don't
know if you've touched on that today.
Secretary Richardson. No, I haven't.
Mr. Nethercutt. Do you believe your Department will be
making a decision on this by April 1, as expected?
Secretary Richardson. Yes, I am.
Mr. Nethercutt. I notice in the budget request for FFTF it
is $30 million for fiscal year 2000, yet I understand the costs
for a decision either way are estimated at $40 million to do
the Environmental Impact Statement and $60 million to shut the
facility down. I really think there is value in this medical
isotope potential with this facility. Bill Magwood has done a
good job of communicating with those of us who care about it,
and I want to compliment you for him and his effort.
Have you looked at where the shortfall would come from if
you go ahead and authorize it, approve it? You know, $30
million doesn't add up to $40 million or $60 million to shut it
down. I am just wondering what your thinking might be as to
where it might come from.
Secretary Richardson. As you know, Congressman, Magwood and
his team were just out there at Hanford and they have an
advisory committee that is supposed to report to me very soon.
I told Magwood, I saw some statements in the press, I said that
I will make the decision. I also recognize those cost factors.
I visited the facility, I think you may have been there in my
earlier meetings, but I visited the facility when I was making
the decision on tritium. I said then that we would look at
April at seeing if there was further use for the facility. I
have a very technical team that is looking at this. Your view
is that we should continue the medical isotopes, is that right?
Mr. Nethercutt. Right. At least the evidence that I have
been provided is that it has high opportunities in the medical
side, the medical isotope use, with a lack of material and
ability to deal with the medical side of nuclear involvement. I
think it has some potential based on what a lot of people have
talked to me about.
Secretary Richardson. I agree with you. I have tried to
deal with the medical isotope issue in another context. At
Savannah River they were pressing me. I think as a nation we
have to develop the right mix of commercial-public-private
partnership in this and we need to do that as a country. But I
will take your comments very much under consideration. I am
going to stick to that deadline. I hate to put things off. It's
the worst thing you can do I have found, especially in this
Department where it seems that every decision was put off for
me to make. [Laughter.]
Electricity Deregulation
Mr. Nethercutt. Lucky you, Mr. Secretary.
I know we have a vote, and I don't know if I'm edging up on
my time, but I will be very brief. With regard to the issue of
electricity deregulation, that's not a prominent item at this
moment. But being from the Northwest, we have a special
circumstance there relative to electricity deregulation,
especially as it relates to Bonneville. I am wondering if you
are planning to re-introduce the proposal that your Department
had previously. I am involved as co-chairman of the Energy
Caucus in the House and am very concerned about the future and
the impact of deregulation as it relates to our part of the
region, hydropower and the low cost of hydropower. So I am
wondering what you can advise the subcommittee about that.
Secretary Richardson. Well, Congressman, the answer is,
yes. We hope to have an Administration bill for you within four
to six weeks. We think it is a priority. We are going to work
with the Congress to pass a bill. We are fine tuning it policy-
wise, improving it, making it a little more acceptable to get a
few more votes. At the same time, we're trying to ensure that
we have looked at BPA and some of the other public entities. We
want to work with you. We hope your Energy Caucus puts this at
the top of your list because it will be a big priority of ours.
Congressman Wamp and TVA, all of these issues, we are dealing
right now on an interagency basis to come out with a bill that
is slightly changed from last year making it policy-wise more
competitive, giving the States the option that they deserve to
opt-in or opt-out, dealing with public entities, making sure
that rural customers and Indian tribes are properly taken care
of, the whole transmission reliability. This will be a big
priority.
Mr. Nethercutt. And I hope there is some credit for hydro-
electric power since cost-wise we are way below others. Thank
you.
Mr. Regula. Mr. Hinchey.
Climate Change
Mr. Hinchey. Thank you very much, Mr. Chairman.
I just want to return to this issue of greenhouse gases for
a moment. The fact of the matter is that we are, that is, all
of us living on this planet, are conducting a planet-wide
chemistry experiment which in its most basic form could be
described as how much more of these gases can we pump into the
atmosphere on top of those that are ordinarily produced by
nature without disrupting weather and climate patterns around
the world. There is some evidence that we are already seeing
the effects of the disruption of those climate and weather
patterns. And if it continues, indications are that they are
going to get only worse and the cost of that is incalculable.
So it is important that this problem be faced up to
honestly. And if it is going to be addressed honestly, and if
it is going to be solved without global catastrophe, it is
important that we have American leadership. I think that
includes leadership in international treaties such as Kyoto. I
think it also includes technological leadership. I know that
your Department, Mr. Secretary, is doing some breakthrough work
on technologies relating to environmental protection, control,
remediation, things of that nature in this area. I congratulate
you for that and I would like very much to be informed of
technical aspects of this work.
Secretary Richardson. We will do that. And you are right,
this is our strength, the technology side of climate change. It
creates jobs, cleans up pollution. We will work with you and we
will have a major initiative with developing nations in this
area to convince them in Africa, in Latin America, the five
countries I mentioned, the Island States that this is in their
interest to reduce greenhouse gas emissions and, at the same
time, with our technology.
Mr. Hinchey. I think you are absolutely right. Those five
countries that you mentioned will be the predominant markets
for an entirely new industry that is being created as a result
of this phenomenon. We can be on the ground floor of that
industry and that industry can produce an enormous amount of
jobs and be very, very important to our economy as well. So I
thank you for that.
I would just like, if I may, Mr. Chairman, to ask if you
could also tell us a little bit about some of the breakthrough
work you are doing in the transportation sector with regard to
energy efficiency. I know that you are working on things like
fuel cells and hybrids.
Secretary Richardson. Hybrids, fuel cell, natural gas
vehicles.
Mr. Hinchey. Yes.
Mr. Regula. Make this brief. I know Mr. Wamp has one quick
question and we've got the vote on.
Mr. Reicher. Yes, very brief. We are basically working to
put on the road by the middle of the next decade hybrid
vehicles, electric-gas, electric-diesel, fuel cell-powered
vehicles, advanced natural gas vehicles, all electric vehicles.
There's a whole host of opportunities with passenger cars. And
then we are also trying to get at what is the real emerging
fuel challenge, which is the sport utility vehicles and light
trucks. We think we are making good progress. It is a very
strong partnership with the industry and we are doing well.
Mr. Regula. Mr. Wamp, last question.
Mr. Wamp. Really a word of encouragement. If I had been
asleep for the last 20 years and woke up to find out that we
are being asked to put $14 million to basically keep the lights
on in the Soviet Union and make sure that those reactors are
safe at Y2K and that we are promoting the development of
nuclear reactors in China, I would ask what in the world
happened in the last 20 years? But when we went on the Kyoto
Conference 15 months ago, one of the top four ways to reduce
CO2 emissions in the atmosphere was nuclear power. We don't
have a single nuclear reactor construction permit underway in
this country, yet we are promoting it in China. Something is
wrong here. Isn't nuclear still a safe and efficient, if it is
not over-regulated and we are efficient as a Government, isn't
it a great alternative to safe, clean power so that we can
reduce the dependence on coal-fired plants?
Secretary Richardson. Congressman, we did at the Buenos
Aires Conference on Climate Change acknowledge the role of
nuclear, the United States delegate did do that. We recognize
that and we are working on that. Now the reactors that I was
talking about were in Russia.
Mr. Wamp. I understand that.
Mr. Regula. The committee will be in recess until 1:00.
[Additional Committee questions follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Thursday, March 18, 1999.
U.S. DEPARTMENT OF ENERGY
WITNESSES
ROBERT W. GEE, ACTING ASSISTANT SECRETARY FOR FOSSIL ENERGY
ROBERT S. KRIPOWICZ, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR FOSSIL
ENERGY
Mr. Regula. We will get the Committee started. I think the
other members will be here shortly. We are pleased to welcome
you, Mr. Gee and also, of course, our old friend, Bob
Kripowicz. You feel right at home, here, I assume?
Mr. Kripowicz. Yes, sir, I hope so.
Mr. Regula. Your full statement will be made a part of the
record, and we will appreciate your summarization of the
highlights.
Opening Remarks
Mr. Gee. Thank you, Mr. Chairman.
I am pleased to be here today and very pleased to have Mr.
Bob Kripowicz, who is also well-known to this subcommittee, as
you know, seated beside me.
I am going to rely on Mr. Kripowicz to fill in many details
during our discussion this morning.
My formal statement describes the content of our fiscal
year 2000 proposal. Let me take just a few minutes to describe
the reasons behind our budget request.
Mr. Chairman, some of your colleagues often ask, why
support fossil fuel research and development? The coal, oil and
natural gas industries are mature industries and should not
need Federal support. Let me answer that question in two ways.
First, much of the research we are proposing is research to
achieve two national benefits: a cleaner environment and a
growing economy. Americans are being asked to pay more for
cleaner air, safer drinking water, and healthier living
conditions.
The research proposed in this budget, however, can
substantially reduce the burden of future environmental costs
by literally billions of dollars each year while sustaining
environmental progress. That is good for consumers, good for
the economy and good for the environment.
For example, we have research in this budget that will
significantly reduce the costs of meeting new smog and ozone
controls that 22 eastern and midwestern states must implement
in the coming years under the Clean Air Act amendments.
We have research that will help tell us where microscopic
airborne particles, called PM 2.5, are being emitted and how to
control them. We have research that will give us new ways to
remove mercury and other air toxics from the exhaust of power
plants if that becomes necessary in the future.
These are programs that can benefit our environment and our
economy over the next 10 years. But a major portion of our
budget looks beyond that time frame to the next wave of
powerplants that will be built in 2015, 2020 and beyond. We
believe technology----
Mr. Regula. Excuse me, what will those plants be fueled
with?
Mr. Gee. They would be fueled with a variety of feedstocks:
coal, natural gas.
Mr. Regula. The same mix we have now?
Mr. Gee. Yes. The same mix of fossil fuels.
Mr. Regula. They would be additional capacity with perhaps
more energy efficient boilers?
Mr. Gee. They would be much more energy efficient. We are
targeting in our research efforts to significantly reduce or
even potentially eliminate the traditional pollutants that we
control today.
Mr. Regula. So, a lot of your research is designed to make
sure that the new generation of power plants are more
environmentally friendly?
Mr. Gee. Correct. And fuel efficient.
Mr. Regula. Yes.
Mr. Gee. To make them competitive.
Mr. Regula. Thank you.
Mr. Gee. As I said, the next wave of power plants will be
built to meet the challenges of 2015, 2020 and beyond. We
believe technologies are in sight that can make those plants
nearly pollution free, as I have just indicated. That means not
just reducing the release of airborne pollutants but virtually
eliminating them.
vision 21
This is our Vision 21 Power Plant Program. It is perhaps
the best example of research that is too long range and too
high risk for industry to do on its own, yet, the payoffs could
be tremendous. The Vision 21 concept is applicable to a wide
variety of fuels, as I have indicated, Mr. Chairman, but is
perhaps most relevant to coal.
Coal is one of the true measures of this nation's energy
and economic strength. It generates 56 percent of our
electricity. It is our lowest cost fuel. And one of the primary
reasons why the United States has the lowest cost of
electricity of any free market economy.
Mr. Regula. Would you anticipate that that percentage would
remain fairly constant in the foreseeable future?
Mr. Gee. Our estimates show, and I think the estimates of
our Energy Information Administration show that coal will
continue to have a significant share as a fuel feed stock for
electric power generation. It will still range at or near 55
percent by our calculation.
Mr. Regula. In the foreseeable future?
Mr. Gee. For up through 2020 at least, yes, over the next
two decades.
Mr. Regula. Thank you.
Mr. Gee. There is no reason why with the right technology
we cannot continue to rely on coal and at the same time improve
the quality of our environment. We have solid evidence on our
side that demonstrates what research and development can do.
Let me give you two examples.
Twenty years ago, there was basically only one way to
remove large amounts of air pollutants from coal. That is by
installing expensive, sometimes unreliable, scrubbers. Today,
because of public and private research and development,
scrubber costs are way down and reliability is way up.
The government helped move these advancements forward and
they have saved consumers more than $40 billion in the last 20
years. Or consider that 10 years ago devices to control
nitrogen oxide (NOX) pollutants cost nearly $3,000
per ton of NOX to install and operate.
Today, because of government and industry research and
development and the Clean Coal Technology Program, low
NOX burners cost only $200 per ton, a savings of
more than tenfold. As a result, nearly three-quarters of U.S.
power plants will have them installed in the next few years.
The track record is good, Mr. Chairman, and you can see
evidence of it in the hundreds of fluidized bed combusters
operating throughout the world; in the state-of-the-art coal
gasification power plants, like the Tampa Project, all of which
can trace their roots to the Fossil Fuel Federal Energy
Program.
So, what about the truly long range, the next 30 or 50
years? What if the world community ultimately decides that it
must address another major environmental issue, climate change?
Plants like Vision 21 will help. They will be more efficient.
In fact, nearly twice as efficient as today's powerplants and
that will reduce the release of greenhouse gases. But if we
have to go beyond that, we will need other options. We are
exploring one of those options in this budget.
We are asking for a slight increase in funding for research
into carbon sequestration. This is potentially revolutionary
research, Mr. Chairman. Theoretically, it may be possible to
recapture and permanently dispose of all the carbon dioxide
released by energy systems. Sequestration could not only become
a major tool for reducing carbon emissions, it may be essential
for continued large-scale use of fossil fuels.
We also recognize that when we talk about the environment
we must also talk about natural gas. It is the cleanest of our
fossil fuels. Demand for gas could increase by a third over the
next 10 years. To meet this demand at reasonable prices it is
important to diversify our domestic gas supplies. There are
projects in this budget to develop tools that will find and
produce gas in formations that are deeper, denser and more
difficult to produce than those being tapped today.
There is also an effort to look again beyond the near term
to gas supplies that may be needed 20 or 30 years into the
future. One of those future gas supplies may be methane
hydrates. We have asked for a moderate increase in hydrates
funding because, among other reasons, it is a resource that
could be 5,000 times larger than all of the world's current gas
reserves.
I said there were two reasons why the federal government is
involved in fossil fuel programs. One is to produce national
benefits, such as a cleaner environment and a vigorous economy;
the other is because there is clearly a strategic interest. The
strategic value of crude oil is one of the main reasons we are
requesting funding for oil technology research.
We import more than half of our oil today. If prices stay
low, that figure could be 65 or possibly 70 percent in the next
20 years. The key reason why much of our domestic industry is
in difficulty today is because our largest oil reservoirs have
been producing for 40 or 50 years or more.
That does not mean we are running out of oil. In fact, for
every barrel we produce in this country there are still two
barrels in the ground. It does mean, however, that producing
domestic oil is becoming more expensive. It often costs more to
pump it from the ground than the oil brings on the market.
Mr. Regula. Can those two barrels be recovered with proper
technology?
Mr. Gee. We believe that a significant share of those two
barrels is still recoverable through advances in technology.
Yes, Mr. Chairman.
Research and development can help lower those costs, but
the companies that can most afford research and development are
no longer concentrating here, in the United States. They have
moved to more lucrative prospects overseas.
Smaller, independent producers now drill 85 percent of the
wells in our country. Most of them have less than 20 employees
and for many of these companies and the oil they produce it is
the Federal Fossil Energy Research and Development Program that
will make the difference between continued production or
shutting-in those wells.
Finally, the strategic value of oil is the reason why we
maintain support for the Strategic Petroleum Reserve in this
budget. As members are aware, we have announced initiatives in
the last few weeks to add oil to the reserve without having to
ask this Committee for additional appropriations.
In summary, we are recommending continued support for our
fossil energy budget because fossil fuels supply 85 percent of
our nation's energy and that percentage is likely to grow in
the coming years. A commitment to fossil fuel technology and a
commitment to maintaining our Strategic Petroleum Reserve mean
that this nation can continue to benefit from fossil fuels at
the same time we continue to improve the environment, grow the
economy and enhance our energy security.
Thank you for giving me the opportunity to present the
reasoning behind our budget request, Mr. Chairman. With Mr.
Kripowicz's assistance I will be pleased to answer any
questions you may have.
[The statement of Robert W. Gee follows:]
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Mr. Regula. Thank you.
I have several and I am sure Mr. Moran does.
First of all, you mentioned the Tampa project. I visited
that site. Is that working out well?
Mr. Gee. It is going very well.
Mr. Regula. It looked like the state-of-the-art to me.
Mr. Gee. It definitely is state-of-the-art in terms of the
integrated gasification combined-cycle process using the
particular type of coal, known as Ohio-type. It has been very
successful.
Mr. Regula. I am just curious, is it more efficient? In
other words, does it transfer more of the BTUs in the coal into
power than conventional systems?
Mr. Gee. What is the efficiency rate at this time?
Mr. Kripowicz. Mr. Chairman, the rate is around 40 percent
efficiency. Replications of that plant would be in the mid-40
percent range.
Mr. Regula. Which is pretty high?
Mr. Kripowicz. The current fleet average is about 33
percent The best state-of-the-art facility that you can put on
now is probably about 37 or 38 percent. So, it is very
efficient.
Mr. Regula. It was very impressive. I wonder what their
costs are per KWH? Is it higher than the rest of their plants?
Mr. Kripowicz. Yes, sir. On an overall basis the cost is
probably $200 to $300 a kilowatt more than the cost of the
pulverized coal plant.
Mr. Regula. There is a downside, and that is the cost of a
plant of that kind.
Mr. Kripowicz. That is one of the reasons that we are
continuing the research in that area to drive down the costs
and also increase that efficiency. We hope to get it in the
neighborhood of 60 percent which then gets you a considerable
fuel savings in addition to the capital cost reduction.
Mr. Gee. That is our target number that we are looking for
right now, 60 percent.
Mr. Regula. That would be pretty efficient.
Mr. Gee. Right.
Mr. Regula. You mentioned climate change and carbon
sequestration. Can you describe some innovative things you are
contemplating in the sequestration program?
Mr. Gee. Sequestration focuses on two areas. One is trying
to capture the carbon at the point of use of the fossil fuel or
even at the point of developing the fuel resource in the case,
for instance, of natural gas or in the case of oil development,
reinjecting that carbon dioxide (CO2) back into the
ground.
Mr. Regula. Would that be reinjected after the burning
process?
Mr. Gee. That, too. It would be capturing the carbon at the
point of burning and finding ways to use that carbon. You can
actually use it in an industrial process. Oil and gas
development capturing the CO2 at that time,
reinjecting it into the ground for lifting purposes. And then,
thirdly, another way we are looking at sequestration is through
biological means, perhaps genetic research that would lead to
creating what are known as sinks that would simply absorb the
excess CO2.
methane hydrates
Mr. Regula. You mentioned that there is an enormous supply
of methane hydrates. Tell me about it. What is it? How do you
get it? Where do you get it?
Mr. Gee. Methane hydrates as I understand it, and I am not
a geologist or a chemist, are methane molecules that are
trapped in ice formations located generally in deep sea beds.
It is estimated that if those methane sources could be tapped,
in both an economically rational as well as a safe means, so as
not to disturb the sea bed, it could yield potentially 5,000
times the volume of proven known reserves that we have of all
natural gas.
We are beginning the process of trying to characterize the
reservoirs that are generally within our domain to see what is
the potential. Ultimately, obviously, it would require more
intensive analytical research into how best to get that methane
out of those sea beds.
Mr. Regula. So, no one is doing it at the moment?
Mr. Gee. That research is already being conducted in part.
Mr. Regula. You mean there is no production.
Mr. Gee. No, that is correct. It is not a commercially
viable method being used by industry today, correct.
Mr. Regula. Is it in deep water? Or is it too deep to drill
with today's technology?
Mr. Gee. I believe it is located in--if we turn to our
geologist--it is located offshore generally in some of the
deeper sea beds. Now, whether that would be a certain distance
from the Outer Continental Shelf I probably would have to defer
on that to some of our experts.
Mr. Regula. I wonder if any other countries like the UK or
Norway, are researching the same thing?
Mr. Gee. It is my understanding that this is of keen
interest internationally. Australia, I know, has already sensed
the potential in developing their methane hydrates.
Mr. Regula. Would they come out of the reservoir in a
gaseous form?
Mr. Gee. I believe they are locked in ice crystals that are
in the sea bed. So, the method is to try to find a way to get
it out without it migrating to the surface without being
captured, so that you can capture sufficient volumes and also
so that you do not lose a lot of that methane in the production
process because that could have a destabilizing effect on ocean
craft, who would be in the process of trying to develop it.
Mr. Regula. The experimentation you would be doing is going
to be pretty much fully government funded. Could you get a
match? Is the private sector interested enough to match on this
kind of a program?
Mr. Gee. I think as the program begins to develop--and as I
understand right now we are proposing a modest increase in our
budget at this time--as it progresses closer to a fuller
research effort, I do believe that there will probably be
significant interest from the private sector to cost share.
Mr. Regula. You are in a pioneering stage?
Mr. Gee. Correct. Right now, we are just in the process of
spending a little money to characterize some of our reservoirs
on the Outer Continental Shelf and elsewhere both in the Arctic
as well as off our lower 48 coastline to see what is out there.
Mr. Regula. It sounds fascinating.
Mr. Gee. I think it has tremendous potential if it can be
done in a commercially feasible way and also so as not to
disturb the sea bed.
Mr. Regula. Do the Norwegians and/or the British share with
you or are they on their own? It seems you should not both be
reinventing the wheel.
Mr. Gee. I do not know if there has been any discussion
thus far of any consortium.
Mr. Regula. Is there any sharing of research?
Mr. Gee. Bob, do you know if----
Mr. Kripowicz. We actually are in a program with the
Japanese. They are extremely interested because they have no
indigenous resources of their own. So, they have a healthy R&D
program and we have actually been involved with them and the
Geological Survey in a well in Canada in the permafrost looking
at hydrates.
The Indians are also interested in it and we have had
discussions with the Government of India that have been
disturbed somewhat by the hiatus in our relations for a while
but they also are interested in methane hydrates.
We have not had much work at all with the Europeans because
evidently the North Sea has plenty of gas resources right now
and, so, they are not concentrating on that.
clean coal
Mr. Regula. Two additional questions. I notice you want to
defer an additional $256 million from the Clean Coal Program.
We deferred $40 million last year. And, yet, you say coal is
the fuel of choice, will be for the foreseeable future, at 50-
plus percent, and that your goal is to reduce emissions.
Now, there seems to be an inconsistency. How do you explain
that?
Mr. Gee. The $246 million that we have asked deferral for
relates to two projects out of the 40 projects that were
originally authorized and appropriated. The other 38 have
already been fully funded and, in fact, 23 of those 40 are now
complete and final reports are being written for the final
three. Nine of those 23 are in operation. I think seven are in
the construction stage and one is under construction.
The two projects, for which the costs are being deferred,
do not need the appropriations for this coming budget year
because they are in a situation where they are setting up teams
right now in a very early stage.
Mr. Regula. You can defer them without prejudice?
Mr. Gee. Correct.
Mr. Regula. And the two of those total $256 million?
Mr. Gee. Correct. $246 or $256, whatever that number is,
yes.
Mr. Regula. We have some additional questions on that for
the record.
oil recovery
Mr. Regula. The last question at the moment is that you
were talking about enhancing the recovery of oil. You mentioned
that for every barrel we have extracted there are two in the
ground. And that you would hope that this process would help
the smaller companies because they obviously do not have the
capital to do the technological development. Do you feel
optimistic about being able to get some of those additional
barrels and recover them?
Mr. Gee. Yes, we do, because based upon the experience we
have had thus far where we have engaged in research on 3-D and
4-D seismic research to help characterize reservoirs more
cheaply and more effectively, finding ways to lower the lifting
costs through advances in modern technology and bringing that
to the field and informing those small operators that with
those continued efforts we can do two things.
One is keeping our domestic oil industry financially afloat
during these lean times; secondly, finding ways to characterize
the outstanding reservoirs that are before them and do it in a
way which is more time efficient finding them, and developing
those fields and reservoirs more quickly and getting them on-
stream. Through all of these efforts, we think that we are
optimistic that we can continue to maintain our domestic
production capacity.
Mr. Regula. I notice that there is a decrease in funding
for the reservoir class revisit program in fiscal year 2000 and
that does not quite reconcile with what you just told me.
Mr. Gee. I think our reservoir class visit program began
when was it, back in 1992, 1993? The overall class program. And
what we are doing now, I believe, is we are reopening a number
of the classes that had--the program had already expired as I
understand it, and they did a first cut of a number of
reservoirs.
They are going back now to see what other additional wells
and reservoirs should be included in the original program. So,
that the amount of funding, while it may be smaller than the
historic levels, is simply an effort to try to go back.
Mr. Regula. If you had additional funding there, the
program could utilize it effectively. Would that be a fair
statement?
Mr. Gee. I would have to be honest, I certainly would not
turn away additional funding, Mr. Chairman.
Mr. Regula. The honest man.
Mr. Gee. Right. We would find a way to use it, Mr.
Chairman.
Mr. Regula. Thank you.
Mr. Moran.
methane hydrates
Mr. Moran. Thank you, Mr. Chairman.
Our phenomenally astute minority staff here, Mr. Del Davis,
tells us that one major limiting factor to methane hydrates is
that to get the product to market it would probably be gasified
in Alaska's North Slope and would require construction of a gas
pipeline to Valdez at an estimated cost of around $15 billion.
That probably means that it is cost prohibitive right now.
Do you want to address that? I assume this is completely
accurate information?
Mr. Kripowicz. It is accurate in what it says but it does
not give you the context and that is the fact that most of the
methane hydrate resource is not in Alaska but it is in the
offshore areas of the United States. Secondly, there is
considerable effort going on in the Department on gas to
liquids technology that would convert gas, such as the gas that
is already on the North Slope that is not transportable, to an
economic fuel that could be put in the existing Trans-Alaskan
Pipeline.
And that technology is also underway and would be completed
well before we actually had commercial production of methane
hydrates.
electric restructuring
Mr. Moran. That is interesting.
Mr. Chairman, there are three things that come to mind in
this subject area. One of them is that with electric
restructuring there is less incentive for any single power
company to really make the investment in research and
development. So, increasingly, it is going to fall to the
Federal Government to be making that kind of investment because
we are not going to have the resources concentrated in as many
firms that would have the financial luxury of making R&D
investments.
You can comment on this issue if you would like, but I
gather the answer is, yes. That is a concern with deregulation
and restructuring of the electricial industry.
The second thing is that there is a fascinating process
that we came into contact with that involves biological agents
being used to convert coal to methane. Basically termites are
used to change the coal into methane gas through a process that
obviously is environmentally benign and is very low cost. Have
you ever heard about this process?
I have actually seen it on a small scale.
Mr. Gee. Let me address Congressman Moran's question first
the point on electric restructuring, and then I am going to
turn to Mr. Kripowicz, our expert, to see what he knows about
using termites to convert coal.
Mr. Moran. Well, let us just say biological agents because
some people may think it is goofy to talk about termites. But,
you know, I do not think we are close to using this process on
a commercial scale yet.
Mr. Gee. In terms of the effect of electric restructuring
on the private sector's willingness to continue long-term
research and development you are absolutely correct. What we
found in our discussions with the industry is that the industry
members are now less willing to commit to long-term research
because of the competitive pressures of keeping their rates
competitive against their neighbors. So, this is something that
we know will grow and continue to be of concern to have
sufficient research for long-term purposes.
Short-term, obviously, if it is to their commercial
advantage they will do what they need to do to survive as a
competitive business. Long-term is a problem. That is the role
that the government can play.
Let me turn to Mr. Kripowicz and see what he knows about
the other subject.
bioprocessing
Mr. Kripowicz. In bioprocessing of coal we have a small
program, roughly a million dollars in 1999, increasing somewhat
to $1.4 million in fiscal year 2000. And it has looked at a
variety of concepts on a small scale including both our
national laboratories and some industrial firms.
And the technology is basically in its infancy and, you
know, we continue to look at it but we have not found anything
that we consider, at this point, a breakthrough that would push
us to a larger scale. But we continue to look at it.
caspian oil reserves
Mr. Moran. Thank you.
There is one last thing, if I could, Mr. Chairman.
If I am not mistaken, Mr. Gee worked extensively on the
Caspian oil pipelines and he has quite a bit of knowledge on
the Caspian oil reserves. I would just like to get your
comments, since you are an expert. It seems to me that largely
because of internal political considerations we have made
Azberbaijan a political pariah in terms of foreign policy in
order to, show our support for Armenia.
But in the process we have cut ourselves out of being a
major role player in the development of the Caspian Sea
reserves, despite the fact that it may be one of the largest
reservoirs of oil and could have a profound influence upon the
distribution of wealth and influence in that part of the world.
Where the pipeline goes, who has control over it, who
benefits primarily from it, these are all major issues that
will affect the long-term use of fossil supplies and their
affordability.
Could you address what is happening with the Caspian Sea
oil reserves and our role in the development and distribution
of it?
Mr. Gee. Congressman Moran, our position in the Caspian has
been that we think that there is a significant potential for
those reserves to play a role in contributing to the worldwide
supply of crude oil that is going to be necessary over the next
20 to 30 years. It is estimated that those reserves could be
roughly equivalent to the volume that is found in the North
Sea. And it would be important, certainly, to stabilizing the
worldwide price of oil.
The reasons why the United States is interested in
developing those reserves along with our companies is three-
fold. The first is obviously energy security. Diversification
of additional sources of supply. Not to the detriment, I may
add, to our own domestic industry which is important, but to
the extent that we need to find more oil abroad just to
maintain a more stable source of supply for worldwide price
stability purposes.
The second reason we are involved is geostrategic. And that
is because Azerbaijan as a newly independent State, along with
some of the other former members of the Soviet Union, needs the
hard currency that the oil sales could provide to stabilize
their economies and bring about further democratization of
their regimes.
And then, finally, and no less important, obviously, is
commercial and that is to see that U.S. companies have a piece
of the business opportunities in Azerbaijan and elsewhere, both
to develop those reserves and to build infrastructure
particularly the pipelines, as well as the wells that are being
spotted to develop those reserves.
We continue to press forward to meet those three
objectives, and we continue to support a Trans-Caspian Oil
Pipeline that would connect Kazakhstan with Azerbaijan and go
all the way down to the Southern port of Turkey in Ceyhan. We
also support a Trans-Caspian Gas Pipeline that would connect
the Kazaki gas reserves to Azerbaijan and also provide gas to
Turkey as the ultimate end-use market. We are hopeful that
those infrastructure projects will move forward in a
constructive way eventually.
Obviously, right now, with the worldwide price of petroleum
you have to factor that into the economic equation. The timing
of the building of the pipelines may be moved back from what I
understand. I am not visiting this issue on a day-to-day basis
any more. That was in my prior job but I am keeping abreast of
what is going on.
I understand that the thinking now is that there could very
well be an announcement on the site of the pipeline, the oil
pipeline, some time by the end of the year.
With respect to our relationship with Azerbaijan, as you
know, our assistance to Azerbaijan is restricted by, I believe,
it is Section 305 of the Freedom Support Act which basically
prohibits U.S. assistance in various forms. Our Administration
is supportive of the repeal of that so that we can remove
shackles and help us provide greater assistance to Azerbaijan
because we do believe that they are a significant player and of
vital strategic importance to the United States.
Mr. Moran. It is a very informed answer.
Thank you, Mr. Gee.
Thank you, Mr. Chairman.
Mr. Regula. Mr. Cramer.
university coal research program
Mr. Cramer. Thank you, Mr. Chairman.
Would you comment further on your university research
programs, the initiatives. How many participated in those and
what you hope to accomplish?
Mr. Gee. Let me turn to Mr. Kripowicz, who knows the
details of your answer, Congressman.
Mr. Kripowicz. The specific dollars for our University Coal
Research Program which is not the only area in which our
universities participate, but the University Coal Research
Program is about a $3-million-a-year program, which is very
highly competitive. I cannot give it to you now, but I can
provide you some more detail for the record. But there are a
considerable number of universities that participate in this.
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Mr. Cramer. Participate or compete or both?
Mr. Kripowicz. They compete. Both. We do multiple awards,
usually for a two or three year period. So, we probably at any
one time have 20 or 25 universities participating in the
program.
Mr. Cramer. What have you accomplished through that
program?
Mr. Kripowicz. We have done some research in the gas to
liquids area that I know started in the university program. We
have also done some catalyst research that has been applicable
to the coal program and some gas cleanup research. I can
provide you with some specific examples of projects that have
gone forward and then been picked up by the main program and
moved into the commercial arena.
historically black colleges and universities
Mr. Cramer. I would appreciate that. And if you would,
either now or later, also, talk to me about your growing
emphasis on increasing research activities at HBCUs.
Mr. Kripowicz. We have a very active program with
Historically Black Colleges and Universities (HBCUs), which are
funded at approximately $1 million a year. It has not really
increased. It has been about at that level.
Mr. Cramer. It has not increased?
Mr. Kripowicz. No, sir. It has been at about that level
give or take $100,000 for quite some time. What we have been
trying to do is work with the HBCUs and other minority
institutions--it has been expanded to more than just HBCUs--to
establish an expertise and program so that we can develop
trainees in those areas that can work for both government and
industry.
In addition to the research that they do, we have an
internship program also where they come and work for the
government for summers and we have also started a program with
industry so that the students work with industry in the summers
in order to allow them to get the experience to move into the
private sector.
Mr. Cramer. Approximately how many colleges and
universities participate in those programs?
Mr. Kripowicz. There are over 100. And, again, I can get
you the exact number. They are all eligible to participate.
There are some, obviously, that have better programs than
others, but probably at any one time in the program we would
have a dozen or so active participants.
Mr. Cramer. I would like more information on that.
Thank you, Mr. Chairman.
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Mr. Regula. Mr. Hinchey.
Mr. Hinchey. Thank you, Mr. Chairman.
I can recall back in the 1970s thinking that the Clean Coal
Technology Project, both from a strategic point of view as well
as an environmental point of view made a great deal of sense.
And it may be that at some point in the future it makes a great
deal of sense again. But at this particular moment, one is hard
pressed to see that. I see that the Department has asked for, I
believe, it is $247 million in deferred spending on clean coal.
Is that the entire amount that is deferred in that category
or is it a larger number?
clean coal
Mr. Gee. Congressman, that is the entire remaining amount
that we need to complete two of the remaining 40 projects that
already have been fully funded and we are committed to
completing those two projects. We do not need the money for
this coming budget year, for fiscal year 2000 because as I
understand it, those two projects, one of which is an
integrated gasified combined cycle plant, I believe in
Illinois, and another one is a combined electric steel making
plant in Utah, neither of them require appropriations for the
forthcoming year because they are in a very preliminary stage
of planning and trying to get assembled teams to work on the
project.
We do anticipate, because of our commitment to see the
fruition and completion of those two projects, coming back in
subsequent budget years for the remaining balance of the
funding of our original Clean Coal Technology Program.
Mr. Hinchey. Now, a number of those projects have been
deferred for some period of time. I know there is a Lakeland
Project, does that fit into that category?
Mr. Gee. That may be another project.
Mr. Hinchey. Lakeland 4-A and Lakeland 4-B?
Mr. Gee. Bob, do you know which----
Mr. Kripowicz. Yes, sir. Both of those projects are at one
site in Lakeland, Florida, at the municipal utility there and
they are doing the environmental impact statements right now
and then they have a final agreement with Foster Wheeler, the
technology vendor to construct the plant. And all they have to
do is finish the environmental work and they will be started.
All of that money is obligated to the project, however.
Mr. Hinchey. I know those projects have been around for a
long time; one about a decade, the other six years or so, is
that correct, something like that.
Mr. Kripowicz. They have been around for a while; I do not
know the exact number of years, but, yes.
Mr. Regula. Will you yield?
Mr. Hinchey. Yes.
Mr. Regula. We have rescinded about $400 million where
projects were proposed and for whatever reason did not go
forward. So, that has been rescinded over the past several
years.
Mr. Hinchey. Thank you, Mr. Chairman.
There is a project in Utah, could you describe that
project, the Utah Project?
CPICOR
Mr. Kripowicz. Yes, sir. That is the CPICOR project, so-
called. It is a----
Mr. Hinchey. What is it called.
Mr. Kripowicz. CPICOR. That is Geneva Steel is the company
that is using a technology called Hismelt which will
essentially allow the direct use of coal in the steel-making
process without having to go through the coke-making process,
which can be very polluting and also it is not very energy
efficient. And it would produce the raw steel as well as
producing significant quantities of gases that will be used to
generate electricity.
This has not been done on a large scale; it has been done
on a pilot scale in other countries. And that is what this
particular project would do.
Mr. Hinchey. What is the energy source for that project?
Mr. Kripowicz. Coal.
You mix coal with the iron ore and rather than having to go
through the coke making and blast furnace process, it is a
direct reduction of the iron ore to make raw steel. It is not a
finished steel at that point but then it can be refined.
Mr. Hinchey. I understand it now, thank you, very much.
The discussion you had a few moments ago with Mr. Moran on
the Caspian Sea is a very interesting one. Although I think it
does not specifically come under our jurisdiction. To some
extent----
Mr. Regula. Oil is oil.
Mr. Hinchey. I love that attitude, Mr. Chairman, thank you.
[Laughter.]
Mr. Regula. So, go ahead.
CASPIAN Oil Reserves
Mr. Hinchey. Information that I have seen indicates that
the quantity of known reserves in the Caspian Sea is greater
than that in Saudi Arabia, in the Arabian Peninsula.
Could you comment on that?
Mr. Gee. I am not aware of that particular estimate. It
depends on--there are a number of experts who are trying to
evaluate what they think could be in the ground and all of it
is really just, if I may say, somewhat conjectural. Wells are
being drilled, exploratory wells are being drilled as we speak
today to try to characterize the reservoirs in that entire
area. And more will be known over the next few months about
what the total magnitude of those reserves could be.
The number I have heard is roughly equivalent to the North
Sea. Saudi Arabia is in a universe of its own. It has so much
potential and it is also significantly lower in cost to
produce, which makes it somewhat unique.
With the Caspian Sea, as I understand it, there are costs
associated with lifting that production out of the ground. They
are probably not as high as you would find here, in the United
States, because of the fact that we are now going through a
secondary and tertiary recovery process. But I do not believe
that the costs associated with the Caspian Sea are as cheap as
we know they are in Saudi Arabia, which puts Saudi Arabia sort
of into a class of its own, both because of the magnitude of
the reserves as well as the cost of production.
Mr. Hinchey. What is the best source of information on
potential reserves in the Caspian Sea?
Mr. Gee. I would like to say probably our Energy
Information Administration. Their numbers are largely taken,
however, from industry estimates but they take in all the
totality of what is known in the community, certainly. They
talk to the experts and we will be happy to provide you with
sort of the numbers that they have come up with based on their
discussions with the various private sector experts.
Mr. Hinchey. I would appreciate that very much.
Mr. Gee. Okay.
[The information follows:]
Caspian Sea Oil and Gas Reserves
The latest data is contained in the report, ``Caspian Sea
Region,'' published in December 1998 by the Energy Information
Administration (EIA), the independent statistical and
analytical agency within the U.S. Department of Energy.
EIA reports that: ``Most of the oil and gas reserves in the
Caspian region have not been developed, and many areas of the
Caspian region remain unexplored. Most of Azerbaijan's oil
resources (proven as well as possible reserves) are located
offshore, and perhaps 30%-40% of the total oil resources of
Kazakhstan and Turkmenistan are offshore as well. Proven oil
reserves for the entire Caspian Sea region are estimated at 16-
32 billion barrels, comparable to those in the United States
(22 billion barrels) and the North Sea (17 billion barrels).''
EIA's report also states that: ``The prospect of
potentially enormous hydrocarbon reserves is part of the allure
of the Caspian region. Besides the 16-32 billion barrels
currently proven, the region's possible oil reserves could
yield another 163 billion barrels of oil if they become proven.
This is roughly equivalent to a quarter of the Middle East's
total proven reserves (however, the Middle East also has it own
vast possible reserves).''
The December report is not based on an independent
engineering review by EIA, but depicts a range of reserve
estimates based on published and commercial sources. The range
of reserve estimates are large due to the uncertainty over the
economics of oil development in the region and discrepancies in
the reserve estimation methodology between those methods
accepted by Western experts and the system that was employed
during the Soviet era.
Mr. Hinchey. Thank you.
Mr. Gee. Thank you.
Mr. Regula. Thank you.
Mr. Peterson?
Mr. Peterson. Good morning.
Domestic Oil Market
I come from Pennsylvania where the energy issue started. In
my district, five miles from my home, was Drake Well, where the
first oil well was discovered at 68 feet, dug by hand. A lot of
people do not know that but oil was oozing out of the ground
all the time and they started digging and hit oil, which has
changed the world.
But I guess as we talk I am sure there has been an oil
producer in Pennsylvania that has closed up shop. Where do you
see the market place? You know, I am from the Penn Grade Crude,
which is really Ohio, New York, Pennsylvania, West Virginia.
And then, of course, you get over into the other States,
Oklahoma, Louisiana, Missouri, where we know that they are
shutting up shop by the thousands.
Where do you see the market price over the next year or
two?
Mr. Gee. Right now, I think that West Texas Intermediate
and I think Brent is somewhere hovering between $14 and $15 per
barrel. And it is coming up. I think it just went up about 60
cents just yesterday. There were some recent discussions
between some of the OPEC countries on an agreement on output
cuts. I think that, if I recall, our Energy Information
Administration, which usually does these projections of where
they think the price is going to go, I think their projections
show that it still is going to remain at or around that level
for the next couple of years.
What that means for our domestic industry is that they
still will not have sufficient cash flow in order to preserve
some of the marginal wells that are now being shut in as we
speak, with a significant loss not only to our productive
capacity but also the human resource impact; people that are
simply leaving the oil sector and moving on to other
occupations, which in the long-term is not good for us because
you simply cannot get those people back, even if you could
reopen some of the shut-in wells and try to get some of that
production out.
We are working intensively within the Department of Energy
to try to find ways to do a number of things to help our
domestic industry, including trying to find ways to lower their
production costs. We are working with the Department of
Interior to try to find ways to ameliorate some of the royalty
burdens that they now face.
We are working with Treasury talking about the tax burdens.
We had an excellent meeting that some of you may know about
between the industry and the White House staff earlier this
week with Secretary Richardson and Secretary Rubin and Chief of
Staff John Podesta, and the Chairman of the National Economic
Council, Gene Sperling, to talk with the industry about the
problems they have been having. Secretary Richardson was happy
to announce just yesterday, I believe, that there will be the
formation of an interagency task force to look at the problems
of the industry to see what this administration can do.
It is of deep concern to us because of the impact on our
domestic national energy security.
Mr. Kripowicz. We have for you the United States security
demand in a global context.
Mr. Peterson. We also have, in Pennsylvania, I know that
the hundreds of thousands of orphan wells, where they have just
been abandoned because people went broke, so there is nobody to
go back on. And they are just abandoned.
But I had an interesting contact two weeks ago at a major
university, research university came in with a couple of their
people and they have a new concept. They tried to get a grant
last year through Energy Department but were unsuccessful,
where they use ultrasonic sounds and they feel they have it
down to where all they need is a field demonstration to prove
this, that the high ultrasonic sounds would clean the bore and
get rid of all that often keeps oil from coming out and how
they corrode up and would clean the bore. Then the low
ultrasonic sounds would release the oil from the sands and they
feel it will be far more effective than if we went to hydro-
facking, which again, got another part of the oil that we did
not get when we just originally shot a well.
Mr. Gee. Right.
Mr. Peterson. So, how can we help them in the Energy
Department get funded because they said it would work in all
the fields, not just the paring field.
Mr. Gee. Bob, would you like to answer that? Mr. Kripowicz,
is our technology man. So, rather than my trying to stumble
through an answer, I think he can probably give you a sharper
answer.
Mr. Kripowicz. We have two procurements that have just been
released currently. One is on revisiting our class program to
which this technology might be applicable. We also have a small
program to help independent producers, which this may also fit
under. I would also suggest that they could contact us and talk
to our people, and also our office to see if there are any
other procurement mechanisms available and talk to them about
the technology.
I can give you the specific information about the
procurements.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Peterson. We thought there were some weaknesses in
their original submission. They did not make the cut last year,
but they are reworking it and I should have it in a week or
two. Shall I get a copy over to you to see if they are doing it
right? I am not sure they knew how to do it to get into the
stream. But it really did sound exciting, and I mean this is
something that they have been tinkering with for a long time,
and they feel pretty confident that it would help stripper
wells all over to release more oil than has been released by
any other process. And also it had another factor of releasing
contaminants from soil. Where you have contaminated soil and
chemicals you could get those to separate from the soil so this
technology could also be utilized in waste cleanup.
So, I mean I just thought it was an exciting thing that we
ought to be taking a look at.
Mr. Gee. If it is a novel technology that has multiple uses
and can be done cost efficiently, then I think it is something
we ought to take a look at, certainly.
Mr. Peterson. We will share that with you.
Mr. Regula. There are a lot of stripper wells out there.
Mr. Peterson. Oh, there sure are, both in your State and
mine.
Mr. Regula. Right.
Mr. Nethercutt.
Mr. Nethercutt. Thank you, Mr. Chairman.
Welcome, gentlemen.
Mr. Secretary, I took an interest in your comments about
Central Asia and the political situation that exists there
relative to allowing our country to deal more forcefully and
forthrightly and beneficially with Azerbaijan. I hope that the
administration will continue to push that policy position
relative to changing the law. I think it makes sense.
fuel cell research
I have an interest in fuel cells and I noticed that in your
budget request you go down roughly $4.5 million in fiscal year
2000 on fuel cell research. And I see the benefit of fuel cell
research and the implementation of fuel cell technology in the
West, in rural areas like my own. And I am wondering why the
reduction? To what extent is this going to interrupt an
existing partnerships that I think have great potential for
energy production in my part of the world, as well as around
the country.
Mr. Gee. Let me state first, that although the number shows
a slight reduction, it does not signal any lessening of our
commitment to plumb that technology as a future fuel resource
to make it commercially feasible and fully deployed in multiple
uses. In particular, a lot of our research, I believe the
predominant focus of our research is on utility size fuel cell
research that can be used for utility generation purposes.
It is a highly efficient environmentally benign technology
that merits the full commitment on our part. And
notwithstanding the slight reduction in funding that we are
seeking for this fiscal year, we hope that it does not signal
any lessening of our commitment to explore that.
Let me turn to Mr. Kripowicz and he can give you a little
more detail about how we got the numbers.
Mr. Kripowicz. In actuality there is $5 million in fuel
cell-related research that has been moved to the coal program
under the gasification program because one of our fuel cell
contractors is working on hybrid gas turbine fuel cell
technology that would be applicable to coal gases. And, so, we
have identified a portion of that research in the coal-related
budget rather than in the gas-related budget in fuel cells.
If you take that $5 million it essentially means that we
are funding the three major contractors that we have at the
same levels as last year.
Mr. Nethercutt. In a restructured electricity market, would
you say that fuel cells would be competitive? How would you
rank the competitiveness as an alternative or as a consequence,
shall we say, of restructuring the electricity?
Mr. Gee. I would say as of today, as a stand-alone
technology, it is probably not competitive just because it is
at the point where it is not at what I would consider a
commercially feasible stage to be competitive one-on-one with
other fuel sources. Over time, obviously, as the technology
becomes more widely deployed and the economies of scale are
realized and the costs of manufacturing come down, it can be
made to become competitive as the market begins to absorb it
more and more.
In terms of how the electric sector is being restructured,
I think it has significant potential because of its ability to
provide for distributed generation. So, that you can meet
electric power demands in outlying areas without having to
build large 345-KV transmission lines and without having to
build a large central station power plant to serve particular
communities, particularly in rural communities or areas where
it just does not make sense to build new capacity.
And I think that it has some significant potential to meet
the challenges because we know that customers are ultimately
going to want to choose their source of supply. And I think
distributed generation is going to play a significant role in
that and fuel cells as part of the distributed generation
market, I anticipate would play a significant share of that.
turbine research
Mr. Nethercutt. Are you doing any research on hydro-power
turbine generation? In other words, I know you are doing some
advanced turbine research.
Mr. Gee. Right.
Mr. Nethercutt. But does it apply at all to hydro power?
Mr. Gee. The hydro research is being done by our Office of
Energy Efficiency and Renewable Energy and I believe they are
doing some hydro-turbine research to try to make it what they
call a fish-friendly turbine. So that it does not chew up as
many fish.
Mr. Nethercutt. Right. We need it desperately out West.
Mr. Gee. We want to be able to help you save the fish stock
so that you can use it for other purposes, obviously.
Mr. Nethercutt. It will generate power and not tear down
dams.
Mr. Gee. Right. I think that is the core of their research
effort in the hydro sector from what I understand.
carbon sequestration
Mr. Nethercutt. Let me ask one quick, final question. I sit
on the Agricultural Appropriations Subcommittee and there is a
substantial amount of research that is going to carbon
sequestration. And I see it is in your budget request as well.
And as one who advocates a production oriented research rather
than necessarily a global warming type of research, how are you
coordinating with USDA, if you are, or other agencies that
might be doing the same thing that are comprising a substantial
amount of the budget numbers through the administration?
Mr. Gee. I believe, and I am going to turn it over to Mr.
Kripowicz to give you more details, we are very closely
coordinating our efforts with USDA, particularly, I believe, in
terms of the research that relates to development of
sequestration opportunities in the form of what we call, sinks,
or particular soils that can be cultivated so that they would
absorb greater volume of carbon dioxide.
Now, let me turn to Mr. Kripowicz, to see if he can give
you some more details.
Mr. Kripowicz. We are in the process of putting a
comprehensive document together that assesses all of the things
that you need to do for carbon sequestration. And we are doing
that with our Office of Science. And in that process we have
talked to all of the other agencies and had workshops with all
of the other agencies. Once we get this document put together
we are going to put it out for review, not only by the other
agencies, but also by the total scientific community. And the
idea is to put this thing together on a coordinated basis so
that we do not do the same things that the Department of
Agriculture does or the Geological Survey does.
Mr. Nethercutt. When will that be forthcoming and when it
is forthcoming, would you provide a copy to this subcommittee?
Mr. Kripowicz. Yes, sir. We expect to be able to have that
working document released within the next week or so. When we
first started talking about carbon sequestration, a year or so
ago, we had very little detailed information about what we were
really after. Now, we have a very comprehensive look at it
which includes all of the other government agencies.
Mr. Nethercutt. Thank you very much.
Thank you, Mr. Chairman.
Mr. Regula. Will there be an executive summary on that? I
would like to put it in the record if it is not too copious.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Kripowicz. I believe there is. You know, there are
executive summaries and then executive summaries. But I believe
that----
Mr. Regula. Would you coordinate and let us know if it is
practical to put it in the record.
Mr. Kripowicz. Yes, we will get it to you.
Mr. Regula. Mr. Dicks.
Mr. Dicks. Well, I want to welcome our witnesses. I regret
I was unable to be here earlier. I have some questions for the
record from Mr. Mollohan that I would like to have inserted.
Mr. Regula. Without objection, these will be submitted.
[The questions of Mr. Mollohan follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
research and development
Mr. Dicks. Thank you very much, Mr. Chairman.
Let me ask you, I hope you did not get into this too
heavily, but I would like to ask you: The President's Committee
of Advisors on Science and Technology in the past report on
Federal Energy Research and Development for Challenges in the
21st Century include the following observations: While the
challenges looming in the energy future of the United States
and the world have been growing in recent years, expenditures
on R&D have been declining. The most recent systematic study of
energy industry R&D trends found that the industry spending for
R&D fell 40 percent in real terms between 1985 and 1994. The
R&D spending of the 112 largest U.S. operating electric
utilities fell 38 percent between 1993 and 1996 alone, and the
R&D of the four U.S. oil firms with the largest research
efforts, approximately, halved between 1990 and 1996. Japan
however, increased its public sector energy R&D spending from
about $1.5 billion in 1974 to $4.2 billion in 1980, by 1995,
the figure was $4.9 billion, about twice as high as DOE's
energy R&D spending.
The PCAST paints a bleak picture. How long can these trends
continue without a calamity or major energy restructuring? Or
do you think there is a problem?
Mr. Gee. I think that you have highlighted a very
significant challenge for our government and for our private
sector, Congressman Dicks. In particular, in Japan, there is a
much larger commitment on the part of their government,
frankly, to work in a unique way with their private sector to
provide them with the backbone for R&D which would make their
energy private sector competitive, particularly in exporting
technologies, energy technologies that would be deployed in the
developing world.
We believe the reason why we are here today is to support a
research budget within our budget limitations that would make a
contribution to the efforts that our industry needs. I cannot
represent to you that that is going to fill the gap though.
Obviously we are at a crossroads where our private sector,
particularly in the electricity utility industry, is shaving
back as we have indicated on their commitment for long-term
R&D.
Mr. Regula. Will the gentleman yield?
Mr. Dicks. Yes, I will yield.
Mr. Regula. I think you are touching on an extremely
important subject that affects the future, since energy is key
to everything. You mentioned the Japanese numbers. Now, many of
our projects have a private match which would--and I wonder if
those numbers that you are using, Mr. Dicks, reflect that and
those cases is 100 percent of their research Government funded?
Because that would change the relationships.
Mr. Dicks. Most of what we are talking about is done by the
private sector, right? Yes, the Japanese number is all
Government funded. But our number was Government and private
sector.
Mr. Gee. Was that a combined number?
Mr. Dicks. Well, I guess we mentioned here, energy industry
spending for R&D fell 40 percent in real terms. I do not think
we have the Government spending in our figures. These are all
industry numbers.
Mr. Regula. I was just trying to get apples and apples in
terms of the effort.
Mr. Dicks. Yes. Because I am sure they have some private
sector numbers that we do not include here. But the question
I'm asking is this because of low oil prices, energy prices?
Does the R&D effort kind of fall off when energy is so
plentiful?
Mr. Gee. Well, one reason is market pressure. In an
environment when you have low crude oil prices, in the private
sector or in any business, for that matter, the first place you
cut is your long-term R&D just as a matter of strategic
business survival. So, it is true that our oil firms are
lessening their effort in R&D simply because they do not have
the money.
The same holds true, obviously, for the electric sector
where they are moving towards a more competitive market both
for now in the wholesale markets and ultimately in the wider
retail markets. And they are not able to carry those R&D
budgets that were financed in a monopoly arrangement they used
to have with their customer base.
And, so, that is where that pressure is coming from. And
that means that the challenge is to find and sharpen and
justify government as hopefully an entity through which a lot
of these long-term R&D efforts can be maintained.
Mr. Dicks. Thank you very much.
I regret that I cannot stay but I have a meeting with the
Democratic leader.
Mr. Regula. Thank you.
domestic oil market
I have a couple of questions and then I will go back to
either of you before we adjourn. And this fits with your
interest, Mr. Peterson. The question: You have proposed a
preferred petroleum upstream management program for $500,000.
And you have had the discussion with Mr. Peterson on the
decline in domestic oil production. I note that you asked for
$5 million in your initial request, and I presume OMB cut you
back to $500,000.
Well, it does not make sense if we are going to have a
program to deal with domestic oil production because I heard
you using the numbers of 60 and 70 percent of our oil petroleum
consumption would be from offshore sources, and it seems that
creates an enormous dependency in the event of world turmoil. I
would like your comments.
Mr. Gee. Obviously, as you have indicated, we could have
used more and we have had to tailor our request within a
smaller budget number. From our Departmental standpoint, that
does not signal any lessening of the commitment, as you know,
about the importance of this program. What it does is it
provides for the transfer of known technology to a lot of the
small operators so that they can find ways to incorporate these
better practices in their operations to reduce their costs and
to keep them operating through this difficult period.
It is a very successful program that we already have
underway in terms of talking with our independent industry and
we are going to use the money as best we can.
Mr. Regula. $500,000, though. You are going to have to
downsize that program, are you not?
Mr. Gee. Well, we are going to have to make more with less.
Mr. Regula. Does the domestic industry (and they have oil
and gas associations in Ohio and I assume in Pennsylvania,
where there are a lot of the stripper wells) offer to
participate in research, or is it pretty much 100 percent
Federal money?
Mr. Gee. I believe it is 100 percent federal in this
regard. We have worked with and we have a network of different
organizations that we work very closely with so that they act
as the information conduit. The trade associations and the
regional associations work very closely with us to spread the
word on how to get these technologies deployed out into the
field. Let me turn to Mr. Kripowicz for a moment and he can
tell you a little bit more.
Mr. Kripowicz. Yes. Our R&D program is very highly cost-
shared. Our work with the oil associations we do not actually
do any of our funding through the oil associations but a lot of
our information gets spread through those associations and
through the Petroleum Technology Transfer Council. And even the
Petroleum Technology Transfer Council is partly cost-shared by
the industry.
There is no direct contribution from the associations but
the individual companies do end up putting money into the
programs.
Mr. Regula. Mr. Hinchey, any further questions?
Mr. Hinchey. Thank you, Mr. Chairman.
Just a couple of things. I know that we are increasingly
dependent upon foreign sources for our energy supplies,
particularly petroleum. And I think that is now around
somewhere in the neighborhood of 50 percent of our petroleum is
imported from other places in the world.
long-term energy outlook
And I was reading in your testimony that natural gas which
is in abundant supply begins tapering off by the year 2015. And
if we were talking about Social Security or Medicare that would
be cause for great alarm. I am wondering what your view is of
our long-term energy situation? I am saying, you know, let us
say, by into the middle of the next century, where our energy
is going to be coming from, how much energy are we going to be
using? Those questions, I think, are questions that are on
people's minds vaguely, but not clearly enough.
Mr. Gee. Let me offer a comment. Every time we have done a
projection on how we are consuming, what volume we are going to
consume over the next 20 to 30 years and at what price, we are
almost always wrong. But, notwithstanding that, let me try to
jump in and be responsive to your question, Congressman.
The number that you have noted in terms of the volume of
contribution of natural gas is what we have also heard. What
that means though is that we need to find ways to characterize
a larger number of our existing reservoirs to get the gas out
of the ground more effectively, to go after those reserves that
we think have not yet been found and get them out of the
ground.
Also, as we have indicated, methane hydrates is a potential
for new gas reserves and we have just scratched the surface
there. So, the use of natural gas as a fuel source could change
over time, over the next 15 to 20 to 30 years, depending upon
how successful we are in moving forward on those technologies.
But you are quite correct, there is only a finite amount of
natural gas in the ground, proven and known and discoverable in
reserves at the moment. So, our projections can only
incorporate that to find out exactly what role that plays.
It also means that we are going to have to diversify our
fuel resources over the long-term going into the middle of the
next century. There is no question about that. As we have
indicated, coal will continue to play a significant role. We
want to find a way to make it more cost effective through
higher rates of efficiency; to make it more environmentally
benign so that it can continue to be used as a vital fuel
resource. It means we need to continue our R&D efforts on
natural gas. It means we also need to continue our R&D on other
sources of generation, such as renewables.
I think that what I can say is that we look to having a
diversified portfolio of fuel resources sometime around the
middle of the next century. That is most expert projections,
sort of arm-chair thoughts of where this market is going. But
it does not mean we are going to exclude any particular
resource or that there is going to be a diminution of the role
that fossil fuels are playing.
We anticipate that fossil fuels will continue to probably
have the lion's share under most reasonably foreseeable
economic scenarios.
Mr. Hinchey. I appreciate how difficult these projections
are. I can recall back in the 1970s, Government agencies,
including the Central Intelligence Agency, suggesting that the
price of oil today would be about $100 a barrel, when we know
it is quite different from that.
Mr. Gee. In 1978, when Congress passed the Natural Gas
Policy Act, again, using numbers provided by the experts, I
think they anticipated that in 1985 natural gas was going to be
sold at a price equivalent to about $100 for a barrel of oil
and that was a number from 12 years ago or 13 years ago.
Mr. Regula. We both can remember when they said nuclear
will be almost free.
Mr. Gee. Right. Too cheap to meter.
Mr. Regula. Too cheap to meter.
Mr. Hinchey. Nuclear power, too cheap to meter.
Mr. Gee. Yes, right.
Mr. Hinchey. Yes, I remember that, Mr. Chairman.
Mr. Regula. I have not found that meter, yet. [Laughter.]
stripper wells
Mr. Regula. Mr. Peterson?
Mr. Peterson. Yes. I am meeting with the Pennsylvania Oil
and Gas Independent Producers at 3 o'clock and could we kind of
click down through. You talked about efforts you want to do to
help the immediate industry, especially the stripper wells. But
what all are we doing to assist them? What can I tell them?
Mr. Gee. Let me see if I can tell you off the top of my
head some of the things we are doing and then I can turn to Mr.
Kripowicz who has got something he can read from, as well.
One of our objectives is to lower the cost of production.
And what we are doing is we are working with the industry to
try to find ways, as we indicated, to bring about and to make
known existing technology that they can now deploy out in the
field that would reduce their lifting costs, simply through
better management practices using new technology or existing
technology rather.
Secondly, we have a program with the National Association
of State Energy Officials to try to find ways to work with the
electric utilities to lower the electric utility bills. The
lifting costs that a lot of our operators experience,
electricity makes up 30 to 40 percent or so of the lifting
costs. If we can find a way to just cut that in half that would
make a tremendous difference in improving the economic survival
of these operators who have these stripper wells.
We are also working with our sister agencies to try to find
a way to help ameliorate some of the regulatory burdens that
they face both in terms of royalty levels, perhaps trying to
postpone the imposition of them, particularly royalties on
certain categories of production. We are trying to find a way
to ameliorate that. I believe Interior already has the
authority to grant royalty holidays on a case-by-case basis in
hardship cases. So, we are working with Interior to try to find
ways to ameliorate that.
We are also working to try to find ways to bring about
better and more streamlined regulatory procedures. We are
working with our sister agencies, such as Interior, to try to
find ways to simplify some of their regulatory burdens so that
it could lower the costs of compliance. We have an on-line
permitting project with some state agencies, such as the Texas
Railroad Commission, to try to find ways to have permits
granted for production now on an on-line electronic system,
rather than through paper.
And we anticipate that that could yield a tremendous volume
of cost savings to our industry just by filing for permits
electronically.
Let me turn to Mr. Kripowicz and see if there are other
things he might want to add.
Mr. Kripowicz. Well, I think those items, plus our R&D
program which we had previously discussed. We also did sign a
memorandum of understanding with the SBA for them to promote
their loan program for small businesses in the oil industry.
They have not been active in doing that before. So, now we are
working with them.
Plus, setting up the interagency group to continue to look
at ways that we can assist the industry that the Secretary just
announced, I think, is very important. And part of that will be
looking at the possibility of some sort of tax relief and in
that area we will also be working very closely with Congress, I
assume.
interstate oil and gas compact commission
Mr. Peterson. May I make a suggestion?
I, coming from an oil State, would seem to me if you--I
think I made the same suggestion to Interior when they were
here, to bring together the oil producing States, you know, and
have someone represent the administration or Governor and maybe
who runs the oil regulatory part. And see if collectively,
because we are kind of, you know, the Federal Government is
pretty far removed from the little producer that is down in the
woods. And you cannot really reach out and touch them like the
State can. The State people are out there and if we could work
something out rather quickly with the oil regulators at the
State level where you developed a common approach of how to
help.
Because I want to tell you, they are rolling over and dying
as we talk. I mean it is just--and they are going to go broke,
they are broke. And we are just going to have these hundreds of
thousands or millions of orphan wells and that is going to be
another whole problem if we let this industry collapse.
Mr. Regula. Go ahead.
Mr. Gee. Congressman, we appreciate your concern and your
suggestions. We have a very vigorous dialogue with the state
officials through the Interstate Oil and Gas Compact Commission
which is comprised of the oil and gas producing states, both at
the governor level as well as the Secretary of Energy level,
with the various states. They are very active. We have
communication with them virtually on a day-to-day basis now to
try to assess what the conditions are and things that we can do
to help them out. And those efforts will continue.
Mr. Peterson. Thank you.
Mr. Regula. I think it is a good idea and I am glad to hear
you are doing it. I was just going to suggest we try to put it
together, but apparently you are ahead of us on this one.
Mr. Peterson. Could you keep us posted though?
Mr. Gee. Yes, we will.
Mr. Regula. We have the same problem in Ohio, just
identical.
One last question. You are deferring $256 million in Clean
Coal Program, $21 million in NPR previous funds, $35 million in
two other programs. That is about $300 million in deferred
programs. How are you going to restore that into the base
budget in the future? In effect, you are using these programs
as a bank for your other programs. And that is an interesting
concept, but you have to put money back in the bank.
Mr. Kripowicz. Yes, sir, you do have to put money back in
the bank. [Laughter.]
And we will request that. [Laughter.]
naval petroleum reserve
Mr. Kripowicz. The $256 million is an actual deferral. I
think that what we are doing in the Naval Petroleum Reserve is
using prior year obligations because we had extra funding.
Mr. Regula. Do you have any unobligated balances? Are you
using that here?
Mr. Kripowicz. That is what we are using to offset the
funds in the Naval Petroleum Reserve, for example, and to some
extent the fossil energy budget, yes, sir.
But it is only one deferral. The others have the same
effect.
Mr. Regula. But you do understand that it has got to be
replaced----
Mr. Kripowicz. Yes, sir.
Mr. Regula [continuing]. At some future time.
I had another question, but I will save it.
Okay.
Mr. Gee. We fully appreciate the money is going to have to
come from somewhere. That message is not lost on us.
Mr. Regula. Thank you, very much.
It has been a good hearing. I think that we do not pay
enough attention to energy because we have plenty. And as Jim
Wright said, he was advised by one of his constituents when we
had the big energy shortage, that well, there is no problem,
you just use more electricity because all you need is a switch
to get that.
I think that for the foreseeable future fossil is going to
be a key player. And you are it, and I am glad that you are
sensitive to that.
Thank you for coming.
Mr. Gee. Thank you.
Mr. Regula. The Committee is adjourned.
[Additional Committee questions follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Thursday March 25, 1999.
DEPARTMENT OF ENERGY
WITNESS
DAN W. REICHER, ASSISTANT SECRETARY OF ENERGY FOR ENERGY EFFICIENCY AND
RENEWABLE ENERGY
Mr. Regula. Good morning. We'll get this hearing started.
We're pleased to have the Department of Energy represented here
this morning. Mr. Reicher, I see you have your team with you,
so if we have any tough questions, you'll have backups, kind of
like solar energy, a good backup.
Mr. Reicher. It's a bright team, too. [Laughter.]
Mr. Regula. Your full statement will be put in the record,
and if you'll summarize for us.
Opening Statement
Mr. Reicher. Thank you, Mr. Chairman.
A year ago I first testified before the subcommittee, and I
told you my goals and plans for the Office of Energy Efficiency
and Renewable Energy. I also committed to put our financial
house in better order.
Mr. Chairman, one year later, I believe we've made a great
deal of progress. In the next few minutes, I want to do three
things. First, briefly describe our management improvements,
highlight some of the results we've achieved and explain the
important benefits of our fiscal year 2000 budget.
At the outset, I want to dispel the notion that our work on
energy efficiency is just some green alternative to the real
business of energy. Given that over 90 percent of the energy we
use in this country comes from fossil and nuclear fuel, we must
use these sources as efficiently as possible as we develop new
clean power options.
I also need to stress that despite a lot of current
rhetoric, our work is driven by much more than climate change.
In fact, if there had never been concern about greenhouse gas
emissions, or if Kyoto had never entered the environmental
lexicon, we would still be advocating the budget we do today,
to cut our nation's energy bill, to fight air pollution, to
enhance national security, and to improve U.S. competitiveness.
A year ago, I committed to improve the way we manage our
office, particularly the way we spend precious taxpayer
dollars. We've met that commitment, although I'm the first to
admit that we can do even better. We've increased competition
for our funds and broadened the range of entities receiving
support. For example, there were more than 400 competitors for
a recent solicitation for funding of information dissemination
and public outreach, much of which was previously awarded on a
sole source basis.
Today, I'm pleased to announce 15 awards selected from 38
proposals in one transportation area. These awards will
support, for example, work related to natural gas vehicles,
alternative fuel vehicles for airports, and medium and heavy
duty trucks.
Mr. Regula. Do most of these projects have a public or
private match?
Mr. Reicher. Many of them have a cost share, yes. That's
what we strongly encourage.
Mr. Chairman, we've also cut our uncosted balances
substantially, office-wide by more than 58 percent since the
beginning of fiscal year 1996, and we're continuing to bring
them down. We are making better use of the Government
Performance and Results Act and peer reviewed measures of our
progress.
We have developed, at your urging, closer working
relationships with state and tribal organizations, including
the Association of State Energy Research and Technology
Transfer Institutions, the California Energy Commission, the
New York State Energy Research and Development Agency, and the
Council of Energy Resource Tribes.
With encouragement from the subcommittee, we are also
working with the National Academy of Public Administration on
our financial management practices. I've also established a
management improvement team to insure that our management
reforms take root. Of course, Mr. Chairman, better management
does not mean much if we're not also delivering results, real
results, for the American taxpayer. I'm proud to say we're
doing just that in all of our sectors.
In our buildings program, we've made terrific progress
toward developing new energy efficiency standards for key
appliances, standards that are technologically feasible,
economically justified, and good for consumers. We're showing
through our Building America program that developers across the
country can build homes that are 30 to 50 percent more
efficient at no extra cost. And I really emphasize that last
point.
Through our Rebuild America program, we're helping cities,
towns, school districts, Indian reservations, and small
business owners renovate hundreds of millions of square feet of
existing buildings in an energy efficient manner. This year we
will cut the annual energy bill of another 60,000 low-income
American homes by about $200 through our weatherization
program.
In our transportation program, the Partnership for a New
Generation of Vehicles is producing solid results that gives us
confidence that an 80-mile-per-gallon family sedan will be on
the road in the middle of the next decade that will be
affordable, safe, and environmentally friendly, and that will
be built by U.S. workers. I need to stress that despite recent
breakthroughs highlighted intensely by the press, we still have
a good distance to go in developing technologies and driving
down costs so we can put these 21st century vehicles, lots of
them, on the road.
In the meantime, we're helping to put hundreds of thousands
of alternative fuel vehicles, cars, trucks, and buses on the
road in scores of cities across the nation, operating on clean
natural gas, ethanol, and electricity.
In our industry program, we are helping to slash energy
bills, cut pollution, and increase productivity in our nation's
most energy-intensive industries: from steel, aluminum,
chemicals, mining, and agriculture to glass, forest products,
metal casting, and most recently, oil. Across these industries,
we advance technological development and deployment in
efficient electric motor systems, steam, compressed air,
sensors, controls, combustion, materials, and many other vital
areas.
I'm proud to say that in our advanced turbine work we've
delivered what we promised, high efficiency economic natural
gas-fired turbines for energy; work we are now ramping down in
our budget to make room for other high priority activities.
Mr. Chairman, our efforts to reduce the federal
government's own $8 billion energy bill are also bearing fruit
on behalf of U.S. taxpayers. As of this month, we now have in
place a stable of pre-selected energy service companies and $5
billion in contracting authority. This will allow federal
building managers to simply access billions of private sector
dollars to pay for energy retrofits of our 500,000 federal
buildings, and share the resulting savings between the agency
and the energy service company.
To date, we have close to 200 delivery orders in the works
under these contracts on behalf of agencies ranging from NASA,
the National Park Service, and the Navy to the Coast Guard, the
National Gallery, and GSA. One recent delivery order for NASA
buildings in Texas will involve tens of millions of dollars of
investment by Johnson Controls, one of our pre-selected
companies, and save NASA almost $2 million annually at this
particular facility.
Mr. Chairman, we've accomplished a great deal in the past
year, but the opportunities and the challenges of the next
decade loom large. Our fiscal year 2000 budget, including our
requested increases, are carefully designed to seize these
opportunities and confront these challenges: by helping the
U.S. steel industry compete against foreign imports by
radically reducing energy costs; by helping the U.S. oil
industry confront historically low oil prices by cutting energy
use and costs in oil production and refining; by helping U.S.
agriculture, which is in crisis in many parts of the nation, to
find new outlets for its crops and waste, to produce power,
fuels, and chemicals; by helping the U.S. forest products
industry, which is facing crippling foreign competition, to
turn its wastes into clean energy to power its mills and sell
the excess to the electricity grid; by helping the U.S.
automobile industry and its workers lead the world in the
production of high efficiency, low emissions cars, trucks,
mini-vans, and sport utility vehicles; by helping the natural
gas industry find new uses for this clean and abundant energy
source in buildings, industry and transportation; by helping
U.S. appliance and equipment makers build more efficient,
consumer-friendly products; by helping the construction
industry, which is facing boom times in parts of our country,
build and renovate tens of thousands of energy-smart schools
and millions of energy efficient homes and businesses that cost
no more up front and save big dollars to operate; and finally,
by helping American taxpayers save billions of dollars in
operating federal buildings.
All of these benefits we can deliver. Cost savings,
pollution reduction, productivity gains, and energy security
require significant investment from both government and
industry in research, development, and deployment. We realize
we make our request for a budget increase in the face of tight
caps in the Federal budget.
We commit to working with you, Mr. Chairman, Mr. Dicks and
members of the subcommittee, to outline our top priorities. At
the same time, we will continue to press the case for the
importance of our programs and the budget which supports them
to the American people.
In conclusion, Mr. Chairman, I believe we've done what we
said we would do. We have put our financial house in order and
delivered real results. Now we look to the subcommittee to help
us help American industry deliver even more benefits to the
nation.
Thank you.
[The statement of Mr. Reicher follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
budget consolidation and increases
Mr. Regula. Thank you.
I wonder why you mentioned consolidating and streamlining
your operations, but your budget request has a $148 million
increase. It would seem to me that efficiency should result in
a decrease.
Mr. Reicher. Mr. Chairman, we have consolidated, we have
streamlined, but we are also facing new challenges and new
opportunities. We have eliminated various projects and
programs. But there are a lot of new issues, a lot of new
opportunities, and a lot of new challenges in a host of areas.
So I think that is in fact why we've made this budget increase.
We're working with a new set of industries; for example,
oil, mining, and agriculture. We're trying to accelerate our
development of appliance standards and to accelerate our work
in developing the next generation of automobiles. All of those
programs do in fact cost more to do.
Mr. Regula. Last week we had the fossil energy program
people here. They have requested decreases, and yet you have
increases. Why in your judgment is funding for research in your
area more important than in fossil energy? Even you mention the
fact that you have developed different techniques for burning
fossil fuels more efficiently.
Mr. Reicher. The work in fossil energy is extremely
important, and we work closely in a variety of areas. We work
in natural gas, we work in turbines, and we work in fuel cells.
There's a lot of crossover between the two programs.
I think our increase is justified for a number of reasons,
one of which is that ultimately the best way to improve energy
security in this country, the best way to cut air pollution,
and one of the best ways to improve competitiveness is actually
to use energy more efficiently, to use fossil and nuclear
energy more efficiently. It's often the cheapest investment one
can make to improve the outlook for the environment and
economics in this country.
So that is in fact why we think that working closely with
the Fossil Energy Office, taking advantage of what they're able
to do to produce more natural gas and to develop clean coal
technologies, we can take that the next step and take the
energy that's produced by fossil energy and use it in the most
highly efficient way possible, in transportation, in buildings,
and in industry.
Mr. Regula. It would seem to me that at a minimum, they
should be equally important, but the budget numbers submitted
by the Department do not reflect that.
Mr. Reicher. One thing I do want to stress is that a large
component of our budget is actually very much fossil fuel
oriented. We have, for example, on the order of $100 million of
our budget that is for natural gas work. We have parts of our
budget that directly support work on coal; for example, coal
firing, coal and biomass, and mixing them together.
As I've also mentioned, we're doing new, and I think very
important and exciting, work with the oil industry. So I think
if you disaggregate our budget, look at the fossil parts of
that, combine it with what's going on in fossil, and indeed,
even combine it with some of the work going on in the Office of
Science, I think you'll see that there's actually quite healthy
support for both the production side of fossil and the end-use
side of fossil-derived energy.
Mr. Regula. You try to make sure you don't duplicate each
other's work?
Mr. Reicher. Very important question. Each year that goes
by, I think we're doing a better and better job of avoiding
duplication. For example, they work on larger turbines, power
generation turbines. We work on smaller, industrial and micro-
turbines. They work on larger fuel cells; we work on smaller
fuel cells.
We really are dividing this work up in, I think, a pretty
smart way. And equally important, the relations are very good
between the two offices.
Mr. Regula. I notice there are many offsets from prior year
funds in the Fossil budget. Would this not also work in yours?
Mr. Reicher. We did take a $25 million offset from the
biomass energy account in our budget. The offsets there, I
think, were in the clean coal area.
Mr. Regula. They were in petroleum and oil shale reserves,
too.
Mr. Reicher. There were some deferred dollars there.
Mr. Regula. Of course, the biomass offset is not from
unobligated balances. I don't think you took any offsets from
your unobligated balances.
Mr. Reicher. We did not take them from those balances, but
we did take them from the bioenergy account.
As I said in my opening statement, we've come down very
substantially in these uncosted balances. We're continuing to
bring them down. There will be disruption to our programs if we
were to take those uncosted balances.
global warming
Mr. Regula. Global warming, I have some questions on that.
A report in the March 11 issue of ``Nature'' magazine states
that carbon dioxide levels did not remain constant up to the
onset of the Industrial Revolution as previously thought.
Instead, while average global temperatures stayed stable,
carbon dioxide levels fluctuated considerably.
How will this finding be factored into the climate change
work you are doing?
Mr. Reicher. I don't know that specific study. I can supply
some information about it for the record. What I can say is
that, in recent times in the history of man, what is
inescapable is the fact that carbon dioxide levels in the
atmosphere have gone up substantially. There is pretty
widespread agreement that that increase or much of that
increase is the result of man-induced activities, particularly
the use of fossil fuels.
Mr. Regula. I don't think the article in Science quite
agrees with that. Also the paper in the March 12 issue of
Science contradicts the belief that atmospheric carbon dioxide
levels increase before global temperatures increase. Instead,
the study found that temperature rise comes first, followed by
a carbon dioxide increase 400 to 1,000 years later. So the
correlation is called into question by this scientific paper.
Mr. Reicher. Yes. I wasn't making that case. I was simply
making the case that carbon dioxide emissions have gone up in
the last few hundred years quite substantially. The reason that
the Administration is spending literally hundreds of millions
of dollars each year on the science of climate change is to get
at that very question that you are asking, and that has been
raised about the relationship between the inescapable fact that
we're putting a lot of carbon dioxide into the atmosphere, and
the impacts of that on temperature.
The bulk of the scientific opinion is that temperatures
will rise. The question is by how much. Then the question is
what the impacts will be to the globe with those temperature
rises. I am the first to admit that there is still a lot more
work to be done on the science of climate change. Our point
today is that separate from that issue, what we are doing and
what we propose to have supported in the fiscal year 2000
budget, is very good for traditional air pollution, for energy
security, for U.S. competitiveness, separate from the impact,
the very positive impact, it can have on reducing carbon
emissions.
Mr. Regula. According to Jean Lynch Stieglitz of Columbia
University, one can conclude from the findings published in the
journal, ``Nature,'' that we can expect that as the climate
warms, the terrestrial biosphere will probably be capable of
holding more carbon than it can today. How do you respond to
that?
Mr. Reicher. Again, that's exactly the issue that this
scientific work we're very heavily supporting looks at. NOAA is
doing work, DOE is doing work, and EPA is doing work. At
Interior and Agriculture, there's a very carefully put together
integrated program to look exactly at that question. For
example, what will forests do to pull carbon dioxide out of the
atmosphere? What will be the impacts of agriculture on that?
What will the impacts of this increasing temperature be on the
cycling of carbon?
Lots of open questions. I think the key though is that the
bulk of the scientific community believes that these increases
in carbon dioxide will have some impact on global temperatures.
Mr. Regula. Well, you've asked for a 23 percent increase in
funding for the climate change technology initiative. That
translates into $121 million of the $146 million increase in
your budget. Yet in your testimony you said you're not focusing
on climate change as such, but to put $121 million out of $146
million on climate change, it would seem to me that there is a
disconnect here.
Mr. Reicher. Mr. Chairman, let me first say, we in fact are
focusing in part on climate change. One of the reasons is that
it's an important element, it's an important driver for our
budget.
I think there's something that's too often not recognized,
and that is virtually all of our budget, with the exception of
weatherization, is accounted for as under the Climate Change
Technology Initiative. Because all of what we do in efficiency
and clean power technologies can reduce, will reduce, carbon
emissions. So all of it is accounted for, except the
weatherization program.
So the increase that we've requested is simply an increase
that reflects the fact that most of that budget is climate
related. What's not accounted for are the weatherization
dollars.
But to go back to the point, well beyond what this can do
down the road to deal with climate, it can have major impacts
today on key challenges that we face in this country. I'll just
stress one, which is traditional air pollution, sulfur
emissions, nitrogen emissions, particulates, and ozone. One of
the cheapest, most effective ways to cut air pollution is to
increase the efficiency of the use of fossil fuels and to
develop clean power technologies.
Mr. Regula. Isn't that Fossil Energy's primary mission?
Mr. Reicher. No, we focus in many regards on the end-use
technologies. We're developing the advanced turbines, we're
developing fuel cells, and we're developing renewables, a whole
host of things, both fossil and non-fossil related.
The fossil program, as I explained earlier, is also working
on some of those end-use technologies. For example, the large
power generating turbines. So we've split up the territory in a
way that makes a lot of sense, and we're working well together.
partnership for a new generation of vehicles (pngv)
Mr. Regula. One last question, PNGV. It sounds good, and
you've been at it for five years. Yet the statistics clearly
indicate that Americans like the big cars. The Ford Excursion
is a classic example, and obviously market research indicates
there is a market for the larger vehicles. I see that SUVs,
including pickups, are better than half, 50 percent of the
market. If you get this 80 mile per gallon vehicle, how are you
going to make the public use something that they don't want to
use?
Mr. Reicher. First of all, let me say that we're very
cognizant of the dilemma you've just pointed out. That's in
fact why our budget is directed at developing this 80-mile-per-
gallon sedan which will seat five or six passengers. Also,
we're very focused on greatly increasing the fuel efficiency of
light trucks, mini-vans, and sport utility vehicles. That's why
we're working with the diesel manufacturers on improved diesel
engines that can improve the fuel efficiency of sport utility
vehicles.
We're actually taking a lot of what we learned in PNGV in
terms of engine technology, lightweight materials, and control
systems. We're going to be able to transfer that knowledge, and
are transferring that, into the work on sport utility vehicles
and light trucks. So there's a lot of interplay, and we really
are addressing this dilemma.
Mr. Regula. You're saying the technology you gain from PNGV
can be translated into better efficiency on the heavier units?
Mr. Reicher. Correct. In fact, you can both move up from
the sedans to the heavier units; you can also move down from
the very heavy trucks and some of the things you learned there
to the lighter trucks.
The other thing I wanted to say, Mr. Chairman, is that
there is no doubt that gas is quite cheap today. But if gas
were to become more expensive, $3 and $4 a gallon as in Europe
and other parts of the world today, buying habits will change
here. They have changed in the past, and if gas goes up, they
will change again.
What we want to be able to do is have those vehicles in
place, first, to meet the market that exists today. It still is
a very large percentage of the market that is oriented towards
sedans.
Secondly, if fuel prices go up, we want to make sure
American companies and American workers are building fuel
efficient vehicles.
Mr. Regula. Are you factoring in affordability in this
study?
Mr. Reicher. Absolutely. In fact, if there is one hallmark
of this government-industry partnership, which in many ways
perhaps distinguishes it from other government industry
partnerships, it is that affordability is at the top of the
list. We know how to produce an 80-mile-per-gallon car. In
fact, I was at the American Museum of History this past
weekend, and I saw a 300-mile-per-gallon vehicle.
Mr. Regula. Do you push it?
Mr. Reicher. Pretty close. So 80 miles per gallon,
technically, we can build those vehicles. The issue is, can we
build it affordably, will people want to buy it, will it be
comfortable, and will it have the performance characteristics.
Essentially, will they walk into a showroom and not know any
difference between that and what they would otherwise have
bought, except for the fact that it will get 80 miles per
gallon and put out radically less pollution. That is the
hallmark of this program.
That's in fact why it's a lengthy program to get there. It
took 5 years into a 10-year program. We've met every major
milestone we've set for the program. I have every reason to
believe that if we push on, we will get there. The American
public and the American workers in the automobile industry and
other industries will be the beneficiaries.
Mr. Regula. Mr. Dicks.
Mr. Dicks. Thank you, Mr. Chairman.
Mr. Secretary, nice to have you here again.
Mr. Reicher. Thank you.
northwest alliance for transportaiton technologies
Mr. Dicks. For the past 2 years, the Department of Energy
has been supporting the Northwest Alliance for Transportation
Technologies, which is a partnership among lightweight
materials industries, universities, and the Pacific Northwest
National Laboratory, to sustain efforts within the partnership
for a new generation vehicles program, to develop an automobile
for the 21st century that will triple its fuel efficiency
without compromising safety or comfort. This program, which I
am very excited about, is already showing tremendous benefit.
Unfortunately, I note in your budget for the fiscal year
2000 that the materials technologies program was reduced from
the enacted level last year. Can you tell me why the agency
sought a reduction to this program?
Mr. Reicher. Mr. Dicks, one of the judgments we have to
make across all of our programs, particularly in the vehicle
program, is where to put our dollars. Part of that decision
depends on the research and development requirements in a given
area. One of the things that we've looked at is that in
materials technology, we've made a great deal of progress. For
example, in the use of aluminum in automobiles, to the extent
there are now commercial vehicles out there that use aluminum
in significant ways.
With limited dollars, we made a judgment that that area of
the budget could be reduced in order to put those dollars into
higher risk technologies and challenges, for example, hybrid
vehicles. So we have decided in our request to reduce the
materials budget. But it is still a healthy budget, and in
fact, we are still very supportive of the Northwest Alliance
for Transportation Technologies and doing a substantial amount
of work with them in aluminum, in plastic sheet composites, in
automotive glazing, for example, window glass, a whole host of
things that bring together the industries in your region to
support these big advances in automobile technology.
fuel cells
Mr. Dicks. I think it's a good program and I'm pleased to
hear that you're still supporting it. Let me go on here.
Fuel cells, as you know, could offer the automobile
industry near zero emission vehicles with long range, good
performance and rapid refueling. Because fuel cells do not have
a combustion process, they do not generate airborne pollutants.
I understand that neither market drivers nor financial
returns attributable to transportation cells exist yet, and
that collaboration will be needed to provide a primary path for
commercialization of this technology.
Can you tell me what the Department is doing to further the
collaboration with private industry and move the technology
forward?
Mr. Reicher. Absolutely. The Partnership for a New
Generation of vehicles, both the industry side and the
government side, are very committed to the development of fuel
cell powered vehicles. The big challenge with fuel cells is to
develop a technology and to radically bring down the cost of
putting fuel cells on board a car. We are working with fuel
cell makers, we are working with automobile manufacturers, and
we are working with various suppliers to get us to a point
where fuel cells can be a cost effective power source on board
an automobile.
A couple of weeks ago, as you know, Daimler-Chrysler made
an announcement of a fuel cell powered vehicle, a concept
vehicle, which has shown some good advances with respect to
fuel cells. What, of course, was pointed out and what they
clearly admitted was that the price of the fuel cell on board
that car, which was in the $30,000 range, was simply for the
fuel cell system. We need to make some great progress in
bringing down those prices if we're going to make this sort of
affordable 80-mile-per-gallon car that we are striving for in
the PNGV.
So we've come a long distance, but we have a long distance
to go in fuel cells.
Mr. Dicks. In terms of the economics?
Mr. Reicher. In terms of both the technology and the
economics, correct.
Mr. Dicks. I would also be curious if your agency has any
information on research about foreign auto makers developing
and using fuel cell technology and how close they are to
bringing this to market versus where we are in the United
States.
Mr. Reicher. There is a race going on across the globe for
the technologies of the vehicles of the next decade. There is a
race with respect to fuel cells and there is a race with
respect to the so-called hybrid vehicles that link electric
motors and either gas or diesel engines. So we are doing well
in this country. There are also foreign manufacturers that are
investing heavily. We hope that our program, in collaboration
with the automobile manufacturers and the major suppliers, will
put those vehicles on the road in the middle of the next decade
in a cost effective way, and we will have a big share of the
world market.
weatherization assistance program
Mr. Dicks. Weatherization assistance program again this
year has a large increase requested in the budget. How much
funding is devoted to weatherization in the low income home
energy assistance program funds through the Department of
Health and Human Services?
Mr. Reicher. Mr. Dicks, I don't know the LIHEAP numbers. I
know they are larger than the weatherization dollars. They
support fuel assistance to low income people, among other
things.
What the weatherization program does is directly improve
the energy efficiency of 60,000 to 70,000 American homes every
year. There is a backlog of 24 million homes of low income
Americans that have not been weatherized. We've shown great
gains in the success of this program, to the extent that we're
saving annually for low income homeowners about $200 in energy
bills. For a low income individual, that's a lot of money to be
saved annually.
So we're very proud of this program. We want to do more
with it, and we're going to continue to push up its cost
effectiveness.
Mr. Dicks. How do you decide who gets the benefit of this
program?
Mr. Reicher. There are a variety of criteria that the local
agencies which do the weatherization work use: income, elderly,
and disabilities. There's a whole host of factors that are
used, but these tend to be very poor people, the elderly and
disabled.
federal energy management program
Mr. Dicks. You mentioned the program to reduce energy
consumption in the federal government buildings, etc. Tell us
again, how is that doing?
Mr. Reicher. It's doing well. We put in place a much more
simplified mechanism, beginning about 2 years ago, that made it
very simple for a federal building manager to find a private
energy service company willing to invest its own dollars in
retrofitting the federal building. It made it quite simple.
I can provide this for the record, Mr. Chairman.
Mr. Regula. Without objection, it will be made a part of
the record.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Reicher. We were virtually doing no performance
contracting with federal buildings around the country up until
a couple of years ago. As you can see, we are close to 200
projects now in the works.
Mr. Dicks. That's a tremendous accomplishment and I'm very
supportive of your efforts. The committee put some language in
I think that helped you in getting this off the ground.
Mr. Reicher. Not only did the committee put in language,
but we actually got some increased funding. What we do is
actually help these other agencies, from the Navy to the Park
Service to the Coast Guard, get up the learning curve, so they
know how to contract with these pre-selected companies and get
them in and do the work and begin to benefit from the savings.
Mr. Dicks. Do you have any estimates about how much we're
saving because of this program?
Mr. Reicher. Well, let me give you what we project through
improved performance contracting. We project we can be saving
in excess of $1 billion a year in powering the federal
government through the implementation of performance contracts.
We're also seeing savings as a result of the work of individual
utilities in their own regions, going into federal buildings,
which is another approach that we're also very supportive of.
What we've essentially been able to do, Mr. Dicks, is
replace the federal taxpayers dollars which used to be used to
retrofit federal buildings; those dollars have gone down and
they're close to zero now. What we've been able to replace them
with is private sector investment, where these companies share
in the savings to pay themselves back and make a profit. I
think it's a great example of privatization.
Mr. Dicks. Well, I commend you on that, keep that one
going. Also, anything we can do to encourage other agencies to
do the same, because I think it's a tremendous way to save a
lot of money all over the country in all these federal
facilities.
Mr. Reicher. Well, I would say there are some impediments.
We are going to be sending up some suggestions in the near
future about how we can get over some impediments.
For example, I'll just give you one. Where there's a
contract in excess of $750,000 to do this kind of work, there
actually has to be Congressional notification given, often
having to go through the cabinet secretary's office in a
particular agency before the work can begin. We'd like to raise
that level to about $10 million.
Mr. Dicks. Even though the private sector is spending the
money?
Mr. Reicher. Correct.
Mr. Dicks. Maybe we can help you on that, too. Thank you,
Mr. Chairman.
weatherization assistance program
Mr. Regula. Following up, what do you think of requiring
the States to cost share in weatherization and in these
projects such as you've outlined?
Mr. Reicher. In weatherization, various states do provide
various weatherization dollars. It depends.
Mr. Regula. Not as a cost share though. They do it on their
own, is what you're saying?
Mr. Reicher. As part of the total weatherization dollars in
a state. In my recent visit to Ohio, when I was there with you
a couple of weeks ago, I visited a home. Actually within this
specific home, different parts of the weatherization were paid
for out of different accounts, some federal, some state, and
some local. So these are put together in different fashions in
different states.
But we coordinate very closely with the state and local
weatherization providers. In the next month or two, we are
going to send you some ideas about how we could make further
improvements in the weatherization program to improve the
coordination, to reduce some of the barriers, and to increase
flexibility in weatherization, so we can get even more for the
dollars that you appropriate.
Mr. Regula. I don't think States appropriate money. They
may get money in by various means but I don't believe there's
any requirement that the States appropriate money to match the
Federal money.
Mr. Reicher. Oh, no, I'm in no way suggesting that. What
I'm saying is that individual states, particularly cold weather
states and some of the high air conditioning usage states,
provide their own weatherization dollars. What the
weatherization providers do, working with us and working with
the state energy offices, is coordinate the use of those
dollars to maximize them.
funding priorities
Mr. Regula. As you know, if you've been reading the news,
we may have cuts in our allocation, so I hope you'll be
prepared to tell us if requested as to what priority-wise you
would most like to see cut. That's a poor way of phrasing it,
perhaps. [Laughter.]
Mr. Reicher. I can definitely tell you what we'd least like
to see cut. But seriously, we worked with members and staff
last year to outline priorities. We know what you're facing. At
the same time, as I said in my opening statement, we will be
vigorous proponents of the importance of these programs. But we
also very much will cooperate.
Mr. Regula. We'll communicate with you, because we want to
be sensitive to your priorities. We also want to be sensitive
to the best use of the perhaps limited resources.
Mr. Wamp?
Mr. Wamp. Thank you, Mr. Chairman.
Four quick points, Mr. Assistant Secretary. Welcome back.
First, progress on uncosted balances. I want to acknowledge
that you're making progress and encourage you to continue
making progress. From GAO to your reports, we see progress
being made. But you're still not down there yet where you need
to be. You can't really take it to zero without disrupting
existing contracts. We understand that.
But keep making progress. I want to encourage you to work
with the committee closely in the coming months, so that we all
are aware of which contracts may be placed in jeopardy as you
keep declining your uncosted balances down to something that's
more normal. Obviously when we started this analysis, you were
abnormal, and you're heading toward normalcy, so keep going.
Secondly, this climate change-global warming issue
continues to be discussed here. At times, I see it like the old
Texas two-step, and you have to do a lot of dancing. Climate
change research was ongoing prior to the Kyoto talks, but the
Kyoto talks have caused committees in both the House and the
Senate to be concerned with how much of this is Kyoto-driven.
I want to say, even though climate change research is
carried out in my district, I want to make sure we do not get
in a position of heading towards Kyoto protocol enactment in a
roundabout way. That is, I think, the major concern, that we
are sensitive to how climate change research must continue, but
that there's not any kind of concerted effort to head in the
direction of global warming regulations or initiatives, when
the science, as you said a few minutes ago, is not conclusive
on some of this climate change research, which I think we all
agree should continue.
You said earlier there's a carefully put together
integrated plan to pull together Ag, Interior, NOAA, etc. I
also serve on Commerce, Justice, State and Judiciary where NOAA
is funded. All of a sudden you show up at several of these
committees and you see initiatives that are supposedly well put
together and integrated taking place, and they're all asking
for money, and you just wonder, well, where do they meet, when
do they meet and who's in charge of those meetings, and where
are they going.
Sometimes I think an agency or an administration might say,
well, the best way to do this is everybody split up, we all
know what we're doing but they won't know what we're doing
because we're all split up. I just say all that because I think
it's important that we continue to separate the Kyoto protocol
from the issue of climate change research.
Do you want to comment on that before I keep going?
Mr. Reicher. No, go ahead. I'll respond to your points.
Mr. Wamp. Number three, on PNGV. I want to encourage the
committee, Democrats and Republicans, to recognize, as you said
earlier, that oil prices certainly seem to be now going back up
and could continue to go up. It's kind of like investing in
military technology when you're at peace. That's the time to do
it, so that when you're at war, you're ready for whatever. Same
thing applies here, frankly. We must continue to make progress.
Then on the flip side, I want to encourage DOE to recognize
that we shouldn't be funding applied technology initiatives
once they are ready for the marketplace. So you all have got to
keep the pressure on the private sector. I think there's going
to be a public debate, Detroit versus DOE or however it shakes
up.
I think reason needs to set in, but please again recognize
the difference between our basic research investment in
emission-less, more efficient vehicles, and the applied
technology of the marketplace which says it's got to be market
driven and the marketplace needs to be brought along. I think
both sides at times have a tendency to try to stretch the truth
or make their case. We just need to find reason, as a
committee, in the middle of all that.
The fourth issue is kind of a new issue. The GAO report
says this. About 90 percent of DOE's training, according to a
departmental estimate, is not mandated by laws and/or
regulation. The DOE has not developed criteria on the type of
non-mandatory training that is appropriate.
As a result, DOE offers a wide range of non-mandatory
training courses such as a course on determining social styles
in the work place, and one on employees facing mid-life
questions. From Secretary O'Leary--as you know, I'm involved in
DOE daily; with Secretary O'Leary, there's a lot of diversity
stuff. I think a lot of that is very good. She was big on
diversity and it led to some good things.
However, I mentioned to Secretary Richardson when he was
first confirmed some of the followup to that might not be
considered by average citizens. I had quite a few complaints in
Oak Ridge about the use of Government space, Government time
for alternative lifestyles, etc. I would just say that your
training budget is actually higher than the average Federal
agency as well, according to the GAO study. Some of it is not
mandated.
I would just encourage you to take a look at that and be
careful. Because what people do in their private life is
absolutely their business. But what they do on Government time
with Government resources and where some of this training may
end up day to day without careful oversight might not be
acceptable.
I would just say that carefully, but just throw that out
there as a recommendation that you all internally take a look
at this on a day to day basis. Those are my four points.
Mr. Reicher. Thank you, Mr. Wamp.
On uncosted balances, let me just say I appreciate your
support for the direction that we're headed. I would say that
in a sense, there are no contracts in jeopardy, per se, as we
bring the uncosted balances down. The situation we would face
is if these uncosted balances were applied to next year's
budget. It would be at that point that we could see some
jeopardy in terms of existing contracts, either slowing them
down or terminating them.
But we will work with you and we will work with the
subcommittee to bring those balances down and keep you
informed.
climate change
On Kyoto, the Administration has said on many occasions,
and I will reiterate it here, we are not in the business of
implementing the Kyoto treaty. What we are doing is both
advancing the science of climate change, figuring out these
interactions between carbon dioxide and temperature and all
those very complex things, and advancing the technologies that
could address climate change.
But as I stressed to the chairman, these very technologies
are the same technologies that can well address issues like
traditional air pollution, U.S. national security, economic
competitiveness, take advantage of restructuring of the
electricity industry, and a whole host of reasons, as I said in
my opening statement, that we would be doing the very same work
we are doing today if there was no climate issue, if there was
no Kyoto discussion. We would be doing it, we would be
advocating the very same budget. Because it makes sense for
lots of other reasons.
How is climate change science coordinated? There actually
is a coordinating mechanism through the Office of Science and
Technology Policy. There is a regular research plan that's put
out on an annual basis. There are regular meetings. I am not
part of that, because my office does not work on the science of
climate change, we work on the technologies that could help us
address it.
But I will give you some confidence; I can't tell you that
it's a perfect coordinating system, but there is a coordinating
system in place.
partnership for a new generation of vehicles (PNGV)
On PNGV, I thank you for your support. We are very mindful
of the issue of when technologies develop to a point where they
are no longer high-risk, where commercialization is eminent,
and where private industry can take over the work. That's what
we need to do. In fact, Mr. Chairman, if I could show you one
device here. This is an example of a technology that if we're
going to get anywhere with these next generation of vehicles,
for example, diesel-electric hybrids, gas-electric hybrids,
this is where we have to go.
This is what the so-called electronic brain of one of these
cars is going to have to look like if we're going to put them
on the road in substantial numbers and in a cost effective way.
Today, in the concept vehicles that you read about in the paper
that are being built one at a time, you're looking at something
that's much larger, that's extremely expensive, and is simply
not ready for commercialization.
What we're doing, working with a variety of companies,
large and small, working with the national laboratories, is to
move to a point where this electronic brain that will tell the
electric motor, allow the electric motor and the gas or diesel
engine essentially to talk to each other, this is where we've
got to get to. We know we're close to this in terms of the
technology, in terms of size. Even getting rid of the heat of
something this dense, which all this electronics, generates.
We've got to figure out an efficient way of getting rid of the
heat so the thing doesn't melt.
So there's a long distance to go. And it's work like this
that is really where government, industry and labs can work
together very effectively.
Mr. Regula. What does Honda do? They have this vehicle
that's good back and forth.
Mr. Reicher. Yes.
Mr. Regula. Have they accomplished already what you're
talking about in the future?
Mr. Reicher. Let me tell you about the Honda and indeed the
Toyota vehicles. They are vehicles that, in the case of the
Honda, it's a two passenger vehicle getting probably 50 miles
per gallon, not 80 miles per gallon. It has a pretty serious
cost penalty associated with it, or a subsidy provided for its
sale. We think it's a great step forward, I'm the very first to
admit that what Honda and Toyota have done is a big step
forward.
But they are not to a point where they need to be, and
nobody is, in terms of the electronic module bringing down the
cost of this, shrinking the size so you don't take up a good
part of the trunk with the electronic brain of these cars.
So again, there are vehicles that are coming out which are
part of the way there toward the PNGV goal. But it's that next
push, the 80 miles per gallon, and true affordability and true
equivalence of performance, safety and emissions, where we've
got to get. We have a good distance to go.
I know it's confusing to people, because when you read that
Honda is putting a vehicle on the road or Toyota is putting a
vehicle on the road, or Daimler-Chrysler is announcing its fuel
cell vehicle, there is this tendency to think that we're
already there. But if you look carefully at the numbers, the
passengers, the milage, the costs, the performance, we've got a
long way to go.
Mr. Wamp. Thank you, Mr. Chairman.
Mr. Reicher. I'm sorry, I didn't answer your question on
training. I apologize.
Could I take one moment?
Mr. Regula. Sure.
Mr. Reicher. I also wanted to say that on training, I am
mindful of training and I actually recently looked at the
training numbers in my office. The real guts of training is to
train people in management, to train them in finance, to train
them in the incredible complexities of procurement and all the
things that it takes to run a complicated government office or
government agency.
Mr. Wamp, I'm very mindful of what you say about being
careful how we spend this money and we will look even more
carefully at our dollars.
climate change
Mr. Peterson. Good morning. I wanted to go back just for a
moment to the climate change issue. I just wanted to share with
you an observation and let you react to it. You were talking
about the science of it. I think we're all very comfortable
that we have our scientists continuing to monitor and determine
where we're at, to work with climate change if it's a fact.
But many of us have the opinion that this Administration
has jumped beyond the science some time ago. It amazes me how
many departments have a budget to deal with climate change. I
guess we've looked at it as a mass marketing tool, number one,
convince the American public that the climate has changed and
that we must do many things to deal with that.
So I guess my comment is that I don't think any of us are
uncomfortable with the scientific assessment of where we're at.
If the scientists and the science is really where we're at. But
I think we're in the PR business, of selling climate change. I
notice it's been very quiet in March, a colder month than
normal. I haven't heard anybody talking about climate change.
But last fall, when we had some extremely warm months, we
had many of our national leaders talking about the tremendous
climate change, even though other parts of the world were
having cold summers. The climate issue is a world issue, not
just an American issue. So I'd like to have you react, is in
fact a lot being done on this issue that's more or less selling
it than it is a fact, rather than the science side?
Mr. Reicher. I don't believe so, actually. I think there is
very good work being done on the science of the issue by
government agencies, by national labs, and by the private
sector. It is admittedly a complex subject. There's a great
deal of data, there is increasing scientific consensus. But we
do need to go further in those terms.
I don't think that we're engaged in a PR campaign when it
comes to the climate budget. In fact, the budget of the office
I run is actually a substantial part of the climate change
technology initiative. Our budget is designed to get at very
practical things in terms of our economy, such as lowering the
cost of energy use in industry, which by the way can help
reduce carbon emissions. Lowering energy use in automobiles,
which by the way can reduce carbon emissions. Increasing the
energy efficiency of federal buildings, which also, by the way,
can reduce carbon emissions.
So we're focused on work that we would be doing even if
there was no climate issue, even if there was no Kyoto
discussion. In fact, so much of our work precedes those
discussions and is a continuation of work begun in previous
Administrations, and in fact, well back into the late 1970s and
early 1980s.
So I'm very comfortable with our approach to these
technology issues. Ultimately what we're doing with respect to
climate is putting in place those technologies that if in fact
the science establishes what increasing number of scientists
believe, and that is that the globe is warming and it will have
deleterious impacts, we will be ready to respond, we won't be
playing catch-up. I think that's important. It is in a sense an
insurance policy against that eventuality.
But the wonderful thing is, even if you don't believe in
the insurance policy as a basis for funding these technologies,
we would want to be funding them anyway to reduce our reliance
on foreign oil, to cut traditional air pollution, and to help
U.S. companies compete globally.
Mr. Peterson. I guess I would just urge you to check the
numbers of scientists. You said a growing majority. I have not
seen that evidence. I think a majority of scientists do not
agree that the climate has changed measurably, or that there is
evidence that it really has changed to the point of where it's
a problem.
Mr. Reicher. I'm sorry, I didn't----
Mr. Peterson. A majority is not the right word.
Mr. Reicher. I didn't, I talked about, there is a growing
scientific view, a growing scientific consensus on a number of
subjects, one of which is that we have increased carbon
emissions in the atmosphere, and that there may well be impacts
to the globe.
Mr. Peterson. You changed what you said. But that's all
right. Let's move on.
weatherization assistance program
The chairman had brought up the weatherization issue. Have
you seriously thought of requiring States to be partners? I'm
from State government, and I think we serve best when we work
as partners. Have you seriously thought of requiring States to,
what would be your reaction if we would require States to have
a match?
Mr. Reicher. I'm going to need some help from my
colleagues. As I explained earlier, states are providing
weatherization funds.
Mr. Peterson. Sure, some are. But we don't require it. Do
we? I wasn't aware we did?
Mr. Regula. If you will yield.
Mr. Peterson. Sure.
Mr. Regula. Staff advises me that the funds that states do
use are other Federal funds in other programs, they're not
really State tax money. There are no appropriations on the
state level at this point to match or cost share on
weatherization. So I think that's an important element.
Mr. Peterson [assuming chair]. What Pennsylvania used was
the Exxon settlement for 10 years, or one of the other oil
company settlements that they used, but it was not their money.
I don't remember State tax dollars. We may have, but I don't
remember it.
Mr. Reicher. Mr. Chairman, let me introduce Mark Ginsberg,
who is our Deputy Assistant Secretary for our Buildings
program, which is where the weatherization program resides.
Mr. Ginsberg. As a former state official who ran a
weatherization program in addition to other energy efficiency
programs, I know that there have been efforts in the past to
try to require a match for the weatherization program. I think
states have the same difficulty the federal government has of
how do we allocate funds for these needs.
There are a few states that are providing some funds. Now,
with utility restructuring, some of the states are providing
some of their utility restructuring funds for weatherization.
There are 35 million eligible households, so the needs are
still very great.
I think if you were to require a match, you would see some
very difficult realities on the state side that they would not
have, typically, funds to provide that match. It sounds
tempting, but states are facing the same constraints you are.
One of the sources I think we need to continue to push is
in the utility restructuring, that these programs be allowed to
fund the low income weatherization program. That may be a
better alternative than requiring a match.
Mr. Peterson. I might disagree with you on one point, I
think States are financially pretty strong right now. I know of
many States carrying huge surpluses. But I guess if a State
matches it, it shows they have a commitment, they feel the
need, the pressure is there. And I just think we serve well.
I guess I would urge you to toy with that idea.
hydrogen research
Where are we with hydrogen research? What do you see as its
potential?
Mr. Reicher. We are doing a substantial amount of hydrogen
research. It is funded primarily over in the energy and water
account within our office. We are very bullish about the
potential for hydrogen. First of all, our research looks at
lowering the cost of producing hydrogen and figuring out better
ways to store it. For example, turning it into a hydride, more
of a solid, as a more effective means of storing it, so we can
use it in a larger variety of circumstances.
Hydrogen is obviously at the core of a fuel cell. What a
fuel cell automobile or a fuel cell powered building needs in
that fuel cell is hydrogen. So it has great relevance to where
we head with fuel cell technology.
Ultimately, people talk about a hydrogen economy in which
we've been able to lower the cost of producing hydrogen, for
example, from renewable energy, by splitting water into
hydrogen and oxygen, and using that to fuel fuel cells, using
that to burn directly, essentially creating a situation where
we have an inexhaustible supply of energy.
We're a long way away from that. But there are some near-
term successes, fuel cells, fuel cell vehicles, are an example
of where hydrogen is extremely important and where we're making
lots of progress.
Mr. Peterson. How much are we spending on hydrogen now?
Mr. Reicher. I think we're in the $30 million a year range.
The 1999 appropriations, $22,250,000, fiscal year 2000 request,
$28 million.
Mr. Peterson. Okay. That will get the job done, for making
progress?
Mr. Reicher. It will allow us to continue to make progress.
There's huge research needs out there, and with more dollars,
obviously, we could satisfy more of those. But we can continue
to make good progress on both hydrogen production, hydrogen
storage, creating hydrogen infrastructure, and experimenting
with its use in a whole host of ways.
Mr. Peterson. Is it really one of the long term bright
spots, you might say?
Mr. Reicher. It has great long term potential, it truly
does. Given that, if we could bring the costs down, that you
could actually pull it out of water and use it as a fuel
source, either to burn it directly or use in a fuel cell, it's
quite interesting.
I heard an idea several months ago where hydropower dams
where we create a lot of electricity, instead of sending that
electricity through the grid, you could literally take the
water behind that dam, use the electricity from the dam,
electrolyze the water, that is, cut it into its hydrogen and
oxygen molecules, and literally be creating hydrogen at these
hydropower dams, which could then be used in transportation and
buildings in an overall energy system.
Again, we're a long way away from a hydrogen based energy
system. But it's definitely worth the investment, and it is
quite a bright spot.
Mr. Peterson. Thank you. I think I've more than utilized my
time. Mr. Hinchey.
Mr. Hinchey. Thank you, Mr. Chairman.
Mr. Reicher, good to see you.
Mr. Reicher. Nice to see you.
appliance standards
Mr. Hinchey. You've requested in your budget some
additional money for energy efficiency standards. I know that
over the course of the last 20 years, the Department has made a
substantial amount of progress in that regard, and the savings
that have accrued to the Nation as a result of these energy
efficiency standards have been quite substantial.
Can you tell us what you plan to use the additional funding
that you're requesting for specifically, and give us some idea
about how the progress in energy efficiency standards has
benefitted the country over the last couple of decades or so?
Mr. Reicher. The energy efficiency standards give us an
opportunity for real savings in terms of energy use in this
country. I think we've made a commitment to set good standards
that are technologically feasible, that are economically
justified, that do good things for consumers. We're moving in
that direction.
Let me give you one statistic. By the year 2010, the
cumulative national effect of standards for five appliances,
refrigerators, dishwashers, clothes washers, clothes dryers and
room air conditioners, will be 5.9 quads of primary energy
savings. One quad is the amount of energy that 5.1 million
homes use in one year. So this is, just these alone is about 30
million homes worth of energy. And $24 billion in savings to
consumers, that's in 1997 dollars.
So you get extraordinary savings to consumers, you have
extraordinary impacts in terms of environmental protection.
Because you're reducing that much energy that otherwise would
have to be produced or you're having to use it more
efficiently.
Mr. Hinchey. Could you translate that into energy power
plants that would not have to be built?
Mr. Reicher. A large number. I would have to get you those
statistics. I will supply those for the record. It's one of the
very biggest elements of energy savings.
[The information follows:]
Savings From Appliance Standards
The current rate of electricity savings from appliance
standards implemented to date is roughly equal to the output of
fourteen 600-megawatt coal plants. The rate of savings and
associated number of avoided power plants. Continue to increase
as more and more new appliances are purchased by consumers.
These values do not include additional savings pertaining to
gas appliances, which are currently about 25 percent of the
total savings.
Mr. Reicher. You asked me a second question, which is, what
would we do with these additional dollars that we've requested.
We are embarked on a very important set of new appliance
standards for clothes washers, water heaters, central air
conditioners, and the ballast for electronic lighting. We are
pushing to get three of them in the year 2000 and the fourth in
2001. They will also have extraordinary savings.
So the first thing we would use these extra dollars for is
to move towards setting those standards.
Secondly, also under statute we are required to develop
standards for commercial kinds of equipment, boilers and
furnaces and those sorts of things in the commercial setting.
One of the standard setting organizations called ASHRAE is
about to set a new set of standards and again by statute, we
have to update our standards to reflect what this standard
setting body has done.
So the second thing we would spend these dollars on would
be to update those equipment standards on the equipment side as
well.
Mr. Hinchey. Some of these savings can be translated into
savings of tax dollars, for example, because the savings will
accrue to public buildings, such as schools, things of that
nature. Give us an idea about what the benefits would be in
that arena.
Mr. Reicher. Absolutely. Both the typical home appliances,
which have use in public housing, in schools, in a whole host
of public settings, those can mean real savings to taxpayers
who otherwise would have to fund those energy bills for those
public institutions. Then over on the commercial side, the
commercial equipment I talked about, obviously powers lots of
activities in publicly-funded buildings. So again, there's a
big taxpayer savings there as well.
transportation technologies
Mr. Hinchey. Most of the energy we consume in the United
States goes for transportation. I know you've spoken a little
bit about that already. Is there anything else you would like
to say about ways in which we can save in the areas of
transportation, as well as in that context addressing some of
the hybrid vehicles that are being developed?
Mr. Reicher. Transportation is a big use of energy. I think
there are really two focuses in our work. One is to increase
the fuel efficiency of vehicles. That's what the Partnership
for a New Generation of Vehicles is about, that's what our work
with the diesel engine makers is about.
The second thing we're doing that I would really want to
stress, is looking to make greater use of alternative fuels;
natural gas, ethanol, electricity, methanol, and propane.
There's a whole host of alternative fuels out there. We
literally have about 400,000 vehicles on the road today in the
United States that are alternatively fueled.
What we're trying to do is, with support from this
subcommittee, increase the infrastructure that's available to
fuel them, to improve the cost effectiveness of the fuels
themselves. For example, in the area of ethanol, both on the
energy and water account and this account, we're trying to
improve our production of ethanol. In fact, making it from
waste, from the forest industry, from agriculture, and from
municipal solid waste, which would dramatically reduce the cost
of a gallon of ethanol.
We are also working with the corn ethanol makers, to allow
them to use the rest of the corn plant, the stalk, the cob, the
leaves, and make that into ethanol as well as the starch in the
small corn kernels. We've got some major technological
breakthroughs now behind us. We've got a major plant being
constructed in Louisiana that will demonstrate this. More
plants we hope to go on-line in New York and California and
other States, which will show how you can take waste and make
it directly into ethanol. That would be a big step forward.
Mr. Hinchey. You're also doing some work, aren't you, on
hybrid energy sources for buses? I know there is a major
manufacturer in New York that is engaged in some activity on
that.
Mr. Reicher. Yes. There is a whole host of opportunities in
larger vehicles, buses in particular: natural gas powered
vehicles, fuel cell powered buses, and diesel electric hybrids.
There are a variety of ways you can power buses and reduce the
costs to the bus company and often to taxpayers who subsidize
that, and actually cut pollution as well.
Buses actually are often great platforms for these advanced
technologies, like the hybrid technologies, because they are
big. You don't have to make all the progress you make putting
it into a small automobile, in terms of some of the power
systems that I was talking about before. You have a lot of room
to work with, and you can do a lot of good.
And we've asked for, I'm told by one of my colleagues, $8
million for hybrid heavy vehicle work in our budget, to support
that very work.
energy savings to states
Mr. Hinchey. Good. Finally, I would ask about information
you might have with regard to energy savings that have accrued
to the various states and your ability to compile information
in that way. I know I would be interested in that, I think some
of the other members might be interested in having information
as to the success or any savings that come about as a result of
your activities in the various states.
Mr. Reicher. We would be happy to provide that kind of
information, both the savings and also, I think it's
interesting to look at what individual states spend on energy,
and how much they produce in state versus how much they import
from out of state, and what that means essentially to the state
gross domestic product (GDP). It can have big, big impacts, the
more states can produce in state, the more those dollars
circulate with all the multipliers and the more it can do for
the state GDP. We are looking at those numbers as well.
Mr. Hinchey. And you'll be able to give that to me for New
York and for the Chairman for Ohio and the others?
Mr. Reicher. Yes. They are complicated calculations, but
we'll do our best to get you those, yes.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Hinchey. Thank you.
Mr. Peterson. Mr. Cramer.
Mr. Cramer. Thank you.
black liquor gasification
Mr. Reicher, welcome back to the committee. I'm sorry I
missed some of your testimony. I think you might recall that
I've asked you before, under the industries of the future,
forest products section of your budget, the black liquor
gasification project, where do we stand with that?
Mr. Reicher. Mr. Cramer, I'm actually pleased to announce
that today we have made a decision to take a first step with
respect to two of those projects, the Champion project in your
State, where we've decided, subject to some further work on the
actual agreements, to provide $1 million toward the first step
in black liquor gasification.
In the case of the Georgia Pacific, we are going to
undertake further negotiations with that company looking at
their proposal. So we're making most of those announcements
today with respect to black liquor gasification. We think it's
a technology with great, great promise in the forest products
industry, a way to deal with the black liquor waste that comes
from kraft paper making, a much more efficient way to do it.
In an amazing way, we could turn paper mills from net users
of energy to actual exporters of electricity to the grid. I was
looking at numbers that go up into the tens of thousands of
megawatts of power that these paper companies could be sending
into the grid, particularly with electricity restructuring.
Actually, that would flow right to the bottom line for these
companies.
Mr. Cramer. I'm pleased to hear that. As you know, I think
that program and the demonstration projects that are carried on
have amazing potential. I know you realize that as well.
federal energy management program
Hearing the bells go off, I think you've already been asked
by Mr. Dicks about the Federal Energy Management Program. How
is your work going with NASA on that initiative?
Mr. Reicher. Very well. NASA is one of the major agencies
taking advantage of these simple contracting vehicles that
we've now put in place to get private sector investments. One
example is in Texas. Recently, a major NASA agreement was
negotiated under our standing contracts, to do energy retrofits
to Johnson Controls, which is one of our preselected companies.
They're going to invest tens of millions of their own dollars
in a NASA facility in Texas that will result in savings of
almost $2 million a year.
We're also doing work in your State with NASA on a whole
host of projects, bringing this performance contracting
mechanism to these facilities and basically being able to take
the taxpayer and the appropriations subcommittees out of the
business of having to pay for these up front.
Mr. Cramer. I'm also glad to hear that. I want to thank you
for the information that you've been able to give my office on
the issues that we've expressed interest in.
Back to the Federal Energy Management Program, I hope the
subcommittee will be able to support it at the requested
funding level. Again, I think that's exactly what we need to be
doing.
Considering the time, Mr. Chairman, I will forego further
questioning.
Mr. Peterson. I think we have a few minutes.
One quick question. What's the status of the financial and
contract management study being conducted by the National
Academy of Public Administrators?
Mr. Reicher. The work is underway. We've reached agreement
on the scope of work and that's underway. I think we're
expecting results from that in October. So we appreciate the
subcommittee's encouragement of us to enter into this
agreement. They are a good organization and we're going to
learn a lot from them and further improve the operation of our
office.
alternative-fueled transit system
Mr. Peterson. In the east, I have one of the first
communities that their transit system is going to be all
natural gas, Penn State University and the town of State
College, PA. Are there any, do you have any incentives for mass
transit systems? Also once they prepare their fuel station,
making it available to local industry and business, because it
would seem to me there's a great opportunity with delivery
trucks, with the service vehicles that are working in limited
distances, that if there was a refueling station that was
convenient.
Mr. Reicher. Mr. Peterson, that's exactly what we're trying
to do in our program through what we call Clean Cities, where
we're working with now almost 70 cities around the country to
help them put the infrastructure in place for fleets like that,
and to make that infrastructure available as widely as
possible.
We do provide limited dollars for infrastructure support,
for analysis, for essentially putting together a network that's
big enough to actually support a natural gas infrastructure,
for example, in a region. Then what's very exciting is we're
getting to a point where there's enough of these we can
actually begin to link them as corridors. One could actually
travel in an alternative fuel vehicle from one area to another
and have enough stations along the way to ensure the
availability of fuel, whether it's natural gas or ethanol or
one of the other sources.
So these are great projects, and it's a great way to move
this along. Obviously, the more money we have to support this
kind of infrastructure, the more we can do in these projects.
Mr. Peterson. I want to commend you on that, because I
think it has great potential. It's interesting, the manager of
this unit was in to see me last week. For the last few months,
natural gas was not the cheapest fuel he could buy, but I think
we're back to maybe where that will equalize.
Mr. Hinchey has a quick question.
Mr. Hinchey. Just one last thing. I was very interested,
Mr. Reicher, in what you were saying before about the paper
mills, how they could be net producers of electricity to the
grid. I would like to see that information, if you would be
kind enough to send it to me.
Mr. Reicher. Absolutely. As a former resident of upstate
New York, I know about the paper mills. There is great promise
in this technology.
I mentioned becoming net exporters of electricity. This
will also have some major impacts in terms of cutting pollution
and increasing the efficiency of those paper mills. Obviously
with a forest products industry that's pretty challenged these
days internationally, every way we can help is important.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Hinchey. Thank you.
climate change
Mr. Reicher. Mr. Peterson, just one last thing. You asked
me about climate science, and I wanted to be clear about that.
First of all, I am not a scientist, it is not my day to day
work, climate science. I am the advocate for the technological
solutions.
But let me tell you what I think we know in terms of
scientific consensus. That is that the CO2 levels are rising in
the atmosphere, in the last couple hundred years. Warming will
likely happen. The warming would likely have net negative
impacts.
Where there is not consensus is the timing of the impacts,
and the level of the impacts. I just wanted to give you our
view.
Mr. Peterson. Thank you. The March 11 issue of Nature and
the March 12 issue of Science, we urge you to read those. I
recently participated in a conference and heard the other side
of the story.
It's an interesting issue. I personally think we've jumped
over the discussion that CO2 is automatically going
to increase temperatures. I think we've jumped over the
science, that's my opinion. Or some people have, I haven't. And
that we're already moving toward a solution, and we're selling
the concept that it has happened, it's going to be detrimental.
If you look back in the 1400s, there was a period of time when,
for numbers of years, the temperature had risen seven degrees,
and it was beneficial, actually, the agricultural belt
increased. There was not a lot of detriment.
And I'm not saying that it's all conclusive on any side. I
personally think this Administration has jumped over science
and is trying to sell global warming as a fact, and that it's
going to be catastrophic. I think that's a mistake, because I
think we should be having a meaningful discussion with the
scientists, because they are not in agreement.
Mr. Reicher. As I say, it's the timing of the impacts and
the level of the impacts where we clearly do need greater work
done. That's what's underway. I will close by saying,
independent of science, what we're here today to ask you to
support are things that would be good, even if there wasn't a
climate issue.
Mr. Peterson. We appreciate that. Thank you for your
candor.
Mr. Reicher. Thank you.
Mr. Peterson. The hearing is completed.
[Additional Committee questions follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
I N D E X
----------
U.S. Department of Agriculture
Page
Asian longhorned beetle.......................................... 32
Baca location.................................................... 40
County payments..................................................27, 44
Deferred maintenance............................................. 24
Endangered species............................................... 40
Funding State programs........................................... 21
Infrastructure................................................... 19
Invasive species................................................. 33
Lands legacy initiative.......................................... 30
Local fire departments........................................... 39
Opening remarks.................................................. 1
Program priorities............................................... 31
Protecting open spaces........................................... 37
Questions from the Committee..................................... 43
Recreation.......................................................20, 23
Revenue generation............................................... 35
Road maintenance................................................. 34
Rural priorities................................................. 29
Statement summary................................................ 12
Timber user fees................................................. 27
Transportation funding........................................... 26
Uncontrolled expenses............................................ 22
Watersheds....................................................... 19
Wildfires........................................................ 20
Forest Service
Agreements with States........................................... 84
Below-cost timber sales.......................................... 100
Budget allocation priorities..................................... 97
Chief's opening remarks.......................................... 65
Economic impacts................................................. 92
Financial accountability......................................... 97
Fire season preparations......................................... 80
Forest health map...............................................98, 100
Forest road system debate........................................ 94
Forest succession................................................ 101
Hispanic employees............................................... 80
Program budget priorities........................................ 93
Questions from Mr. Hinchey....................................... 176
Mr. Kolbe.................................................... 183
Mr. Kingston................................................. 195
Mr. Nethercutt............................................... 168
Mr. Obey..................................................... 173
Mr. Skeen.................................................... 185
Mr. Taylor................................................... 197
The Committee................................................ 103
Rainbow family gathering......................................... 98
Recreation fee demonstration program............................. 85
Regulatory flexibility analysis.................................. 92
Road analysis procedures......................................... 87
Roads moratorium................................................. 86
Storm damage, 1985............................................... 101
Timber salvage sales............................................. 96
DoE Secretary Hearing
Accounting Problems.............................................. 237
Additional Committee Questions................................... 245
Black Liquor Gasification........................................ 229
Climate Change.................................................221, 242
DoE Research Labs................................................ 231
Economic Estimates............................................... 226
Electricity Deregulation......................................... 242
Energy Conservation.............................................. 227
Fuel Efficient Cars.............................................. 235
Funding Offsets.................................................. 234
Hanford.......................................................... 222
Kyoto Protocol................................................... 240
Medical Isotopes................................................. 241
National Energy Strategy......................................... 219
Nuclear Reactors................................................. 236
Opening Remarks.................................................. 201
Questions Submitted by Congressman Charles Taylor................ 271
Questions Submitted by Congressman George Nethercutt............. 272
Questions Submitted by Congressman Jack Kingston................. 274
Questions Submitted by Congressman Joe Skeen..................... 265
Questions Submitted by Congressman Norman Dicks.................. 261
Refining Capacity..............................................224, 238
Strategic Petroleum Reserve...................................... 225
Vision 21........................................................ 220
Waste Isolation Pilot Project.................................... 228
Written Statement................................................ 207
Department of Energy--Fossil Energy
Bioprocessing.................................................... 307
Carbon Sequestration............................................. 324
Caspian Oil Reserves...........................................307, 314
Caspian Sea Oil and Gas Reserves................................. 315
Clean Coal.....................................................304, 313
CPICOR........................................................... 314
Domestic Oil Market............................................315, 342
Electric Restructuring........................................... 306
Fuel Cell Research............................................... 322
Historically Black Colleges and Universities..................... 311
Interstate Oil and Gas Compact Commission........................ 345
Long-Term Energy Outlook......................................... 343
Methane Hydrates...............................................303, 305
Naval Petroleum Reserve.......................................... 346
Oil Recovery..................................................... 305
Opening Remarks of Robert W. Gee, Acting Assistant Secretary..... 277
Prepared Statement of Robert W. Gee, Acting Assistant Secretary.. 281
Research and Development......................................... 341
Reservoir Class Revisit Program.................................. 318
Stripper Wells................................................... 344
Technology Development with Independents Program................. 320
Turbine Research................................................. 323
University Coal Research Program................................. 308
Vision 21........................................................ 278
Additional Committee Questions:
Administrative Provision..................................... 357
Advanced Research and Environmental Technologies............. 357
Advanced Turbines Programs................................... 373
Clean Coal Technology........................................ 348
Cooperative Research and Development......................... 389
Cost Sharing for Fossil Research............................. 354
Effective Environmental Protection/National Laboratory
Partnership................................................ 385
Fossil Fuels................................................. 391
Fuel Cells................................................... 362
Gas Upgrading/Coal Mine Methane.............................. 386
Gas to Liquids............................................... 384
High Efficiency Gasification Combined Cycle.................. 372
High Performance Power Systems............................... 370
Life Extension............................................... 357
Natural Gas Research/Methane Hydrates........................ 381
Naval Petroleum and Oil Shale Reserve........................ 349
Offsets for Fossil Energy Research........................... 353
Oil Technology............................................... 386
Petroleum Account............................................ 356
PM 2.5 Monitoring and Control................................ 378
Program Direction............................................ 388
Strategic Petroleum Reserve.................................. 354
SynGas Program............................................... 389
Vision 21.................................................... 367
Questions Submitted by Congressman Mollohan:
Clean Coal Technology Program................................ 338
Critical Infrastructure Protection (Natural Gas and
Electricity)............................................... 340
Fossil Energy's Budget....................................... 336
Fossil Fuel Usage............................................ 338
Fuel Cells................................................... 337
Methane Hydrates............................................. 336
Questions Submitted by Congressman Moran:
Clean Coal Technology........................................ 401
CO2 Emissions................................................ 400
The Green Scissors Report.................................... 399
Questions Submitted by Congressman Wamp:
University of Tennessee Space Institute...................... 392
Vision 21.................................................... 392
Department of Energy--Energy Conversation
Alternative-Fueled Transit System................................ 451
Appliance Standards.............................................. 435
Black Liquor Gasification........................................ 450
Budget Consolidation and Increases............................... 419
Climate Change............................................430, 432, 455
Energy Savings to States......................................... 438
Federal Energy Management Program..............................425, 450
Forest Products Industry......................................... 453
Fuel Cells....................................................... 424
Funding Priorities............................................... 428
Global Warming................................................... 420
Hydrogen Research................................................ 434
Northwest Alliance for Transportation Technologies............... 423
Opening Statement of Dan Reicher, Assistant Secretary............ 403
Partnership for a New Generation of Vehicles...................422, 431
Prepared Statement of Dan Reicher, Assistant Secretary........... 407
Savings from Appliance Standards................................. 436
Transportation Technologies...................................... 437
Weatherization Assistance Program.........................425, 427, 433
Additional Committee Questions:
Advanced Gas Turbines........................................ 481
Alternatively Fueled Vehicles................................ 462
Building Programs............................................ 488
Clean Diesel Program......................................... 480
Cooperative Efforts with Fossil Energy and the States........ 506
Exemplary Buildings Program.................................. 494
Federal Energy Management Program............................ 499
Federal Energy Technology Center............................. 504
Fuel Cells for Transportation................................ 479
Global Warming............................................... 456
Hybrid Lighting.............................................. 489
Industries of the Future..................................... 484
Industry Research Programs................................... 481
Lighting Research............................................ 489
Measuring Energy Consumption--Source versus Site............. 501
Microturbines................................................ 487
Motor Challenge.............................................. 483
National Laboratory Funding.................................. 525
Natural Gas Research and Development......................... 501
Natural Gas Vehicle Research and Development................. 477
Overview of the Budget Request............................... 456
Partnership for a New Generation of Vehicles................. 464
Policy and Management........................................ 516
Priorities within the Buildings Program...................... 496
Priorities within the Industry Program....................... 486
Priorities within the Transportation Program................. 481
State Grant Funding within Program Elements.................. 516
Training..................................................... 514
Transportation Program Increase.............................. 462
Weatherization and State Grants.............................. 496
Questions Submitted by Congressman Moran:
Building Technology, State and Community Sector Program...... 530
Federal Energy Management Program............................ 528
Uncosted Balances............................................ 530
Workforce.................................................... 529
Questions Submitted by Congressman Nethercutt:
Hydropower................................................... 533
Industries of the Future..................................... 534
Materials Technology......................................... 532
Energy Information Administration
Additional Committee Questions................................... 542
Budget Increase.............................................. 542
Customer Satisfaction........................................ 547
In-House vs. Contract Analysis............................... 547
Reimbursable Work............................................ 545
Staffing..................................................... 548
Statement of Jay E. Hakes........................................ 537
W I T N E S S E S
----------
Page
Domeck, Mike..................................................... 65
Gee, R. W........................................................ 277
Glickman, Hon. Dan............................................... 1
Hakes, J. E...................................................... 537
Hakes, Jay....................................................... 201
Kripowicz, R. S.................................................. 277
Kripoqicz, Robert................................................ 201
Lyons, Hon. Jim.................................................. 1
Reicher, D. W.................................................... 201
Reicher, D. W.................................................... 403
Richardson, Hon. Bill............................................ 201