[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]




 
                      ENERGY AND WATER DEVELOPMENT
                        APPROPRIATIONS FOR 2004

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED EIGHTH CONGRESS

                              FIRST SESSION

                                ________


              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT

                           DAVID HOBSON, Ohio

RODNEY P. FRELINGHUYSEN, New Jersey   PETER J. VISCLOSKY, Indiana
TOM LATHAM, Iowa                      CHET EDWARDS, Texas
ZACH WAMP, Tennessee                  ED PASTOR, Arizona
JO ANN EMERSON, Missouri              JAMES E. CLYBURN, South Carolina
JOHN T. DOOLITTLE, California         MARION BERRY, Arkansas
JOHN E. PETERSON, Pennsylvania
MICHAEL K. SIMPSON, Idaho
                                     
 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.

   Robert Schmidt, Kevin V. Cook, and Dennis F. Kern, Staff Assistants

                                ________

                                 PART 5
                                                                   Page
 Secretary of Energy..............................................    1
 Science, Renewable Energy, and Nuclear Energy....................  193
 Federal Energy Regulatory Commission.............................  325
 Nuclear Regulatory Commission....................................  423


                                ________

         Printed for the use of the Committee on Appropriations

                                ________


                     U.S. GOVERNMENT PRINTING OFFICE
91-590                      WASHINGTON : 2004


                       COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

RALPH REGULA, Ohio                     DAVID R. OBEY, Wisconsin
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania
HAROLD ROGERS, Kentucky                NORMAN D. DICKS, Washington
FRANK R. WOLF, Virginia                MARTIN OLAV SABO, Minnesota
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland
JAMES T. WALSH, New York               ALAN B. MOLLOHAN, West Virginia
CHARLES H. TAYLOR, North Carolina      MARCY KAPTUR, Ohio
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana
ERNEST J. ISTOOK, Jr., Oklahoma        NITA M. LOWEY, New York
HENRY BONILLA, Texas                   JOSE E. SERRANO, New York
JOE KNOLLENBERG, Michigan              ROSA L. DeLAURO, Connecticut
JACK KINGSTON, Georgia                 JAMES P. MORAN, Virginia
RODNEY P. FRELINGHUYSEN, New Jersey    JOHN W. OLVER, Massachusetts
ROGER F. WICKER, Mississippi           ED PASTOR, Arizona
GEORGE R. NETHERCUTT, Jr.,             DAVID E. PRICE, North Carolina
Washington                             CHET EDWARDS, Texas
RANDY ``DUKE'' CUNNINGHAM,             ROBERT E. ``BUD'' CRAMER, Jr., 
California                             Alabama
TODD TIAHRT, Kansas                    PATRICK J. KENNEDY, Rhode Island
ZACH WAMP, Tennessee                   JAMES E. CLYBURN, South Carolina
TOM LATHAM, Iowa                       MAURICE D. HINCHEY, New York
ANNE M. NORTHUP, Kentucky              LUCILLE ROYBAL-ALLARD, California
ROBERT B. ADERHOLT, Alabama            SAM FARR, California
JO ANN EMERSON, Missouri               JESSE L. JACKSON, Jr., Illinois
KAY GRANGER, Texas                     CAROLYN C. KILPATRICK, Michigan
JOHN E. PETERSON, Pennsylvania         ALLEN BOYD, Florida
VIRGIL H. GOODE, Jr., Virginia         CHAKA FATTAH, Pennsylvania
JOHN T. DOOLITTLE, California          STEVEN R. ROTHMAN, New Jersey
RAY LaHOOD, Illinois                   SANFORD D. BISHOP, Jr., Georgia
JOHN E. SWEENEY, New York              MARION BERRY, Arkansas
DAVID VITTER, Louisiana
DON SHERWOOD, Pennsylvania
DAVE WELDON, Florida
MICHAEL K. SIMPSON, Idaho
JOHN ABNEY CULBERSON, Texas
MARK STEVEN KIRK, Illinois
ANDER CRENSHAW, Florida


                 James W. Dyer, Clerk and Staff Director

                                  (ii)



          ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2004

                              ----------                              

                                          Wednesday, March 5, 2003.

                       U.S. DEPARTMENT OF ENERGY

                                WITNESS

HON. SPENCER ABRAHAM, SECRETARY, U.S. DEPARTMENT OF ENERGY
    Mr. Hobson. The meeting will come to order. Welcome 
everyone.
    The subcommittee meets this morning to hear the testimony 
from the Secretary of Energy on his budget request for the 
Department of Energy for the fiscal year 2004. The Secretary 
and I know each other from our prior lives some years ago back 
in the legislature. I remember him visiting Ohio to our war 
room that we had in those days. I won't say where it was.
    But I welcome you, Mr. Secretary; and, without objection, 
your prepared statement will be entered in the hearing.
    I want to welcome the new Members to the Subcommittee, 
including myself, Mr. Peterson of Pennsylvania, Mr. Simpson of 
Idaho and Mr. Berry of Arkansas.
    This is my first hearing, and it is the first one I have 
ever attended, which is kind of interesting. I have got a 
learning curve that I am trying to come up as I learn all the 
things that go on here, and some of this truly is rocket 
science--in the realm of that, anyway.
    But, frankly, I think--to the new Members and other 
Members--I think we can. While we may not understand all the 
details of particular physics or nuclear weapons design, I 
think there are things that we can come up with and understand 
pretty quickly. And it is the responsibility of the Secretary 
and his staff at the Department of Energy to convince us that 
the work that the Department is doing is worthwhile and that 
the funding request for fiscal year 2004 is necessary. We as 
appropriators have to balance the Department's request against 
the other competing demands of our energy and water bill and 
against the other demands, frankly, of discretionary spending 
to determine the right amount of funding for this fiscal year.
    I previously chaired another subcommittee called Military 
Construction, and there we had kind of a relatively simple 
measure of whether we were doing the right thing. The question 
we constantly asked the military departments and ourselves is, 
will the funding we provide and the projects that the services 
build with that funding actually improve the lives and quality 
of our troops? If some military construction proposal does not 
ultimately yield a tangible improvement in the quality of life 
for our soldiers, sailors, airmen and Marines, I frankly don't 
think it is worth doing.
    Well, here we don't have quite that simple measure of 
success or test in the energy and water bill. But I can tell 
you what success is not. Our bill is not a jobs bill, at least 
in my view. It is not just a jobs bill, which I find rather 
disconcerting. We are not appropriating Federal funds to 
guarantee full employment at all the DOE laboratories and 
sites, nor are we here to ensure the happiness and 
profitability of all the DOE contractors, as much as they may 
want that. We are here to ensure that the taxpayers' hard-
earned dollars are spent wisely.
    Until I learn more about the DOE programs, and probably 
even when I do learn the intricate details, my benchmark 
question will be, are we doing the right thing for America and 
its taxpayers? And that is not the same as asking if we are 
doing the right thing for DOE contractors or for the relatively 
small numbers of DOE facilities scattered around the country.
    From what I know so far, one program that DOE does seem to 
get right is Environmental Management. Oftentimes, all we do is 
talk about the critical ones that we don't like. But I want to 
tell you something that I have become increasingly positive 
about. Under the leadership of Secretary Abraham, Under 
Secretary Bob Card, and Assistant Secretary for Environmental 
Management Jessie Roberson, the Department has dramatically 
reworked its approach to environmental cleanup.
    These public servants woke up one morning and realized that 
the old approach would require us to spend hundreds of billions 
of taxpayer funds and take decades, if not centuries, to clean 
up these contaminated sites. They realized that their business 
was not merely to stay in business as long as possible but to 
get these sites cleaned up, closed, and turned over to local 
communities for other productive uses.
    I want to commend the Secretary and his people for being 
willing to shake up the status quo and figure out how to work 
smarter and to benefit the taxpayers in the process. The 
measure of success at the environmental management sites is no 
longer how much money is spent at each site but what cleanup 
actually gets accomplished. I can tell you this is true in a 
site near my district, and I want to commend everybody not only 
on that site but all the other sites.
    I expect and I hope that the Secretary will apply that same 
kind of fresh thinking to the science, energy supply and 
national security missions at the Department.
    The place we need to start, in my opinion, is with DOE 
contracts, specifically the competition of those contracts. The 
Department has four laboratories--Argonne, Lawrence Berkley, 
Lawrence Livermore, and Los Alamos--that were not competed at 
the time of initial work back in the 1940s and have not been 
competed since. Let me repeat to all of you--these contracts 
have never, ever been competed in their entire history.
    Mr. Secretary, I will tell you frankly right up front that 
there is no way you can convince me that not competing these 
contracts for the past 60 years is a good deal for the 
taxpayers. Extending these contracts without competition may be 
an easy decision for DOE bureaucrats to make and it may 
minimize the disruption of those labs and surrounding 
communities, but it is not in the best interest, in my opinion, 
of the American taxpayers. I have enough experience in the 
private sector and State and Federal levels of Government to 
understand the value of competition, and I am not going to tell 
you my story that I told everybody else before about my truck 
deals on the military side.
    I will work with you, Mr. Secretary, and the other Members 
of this Subcommittee to figure out the best way to try to 
compete these DOE contracts. But understand, Mr. Secretary, I 
hope this change is coming. And in my perspective, it is going 
to be, I hope, more than hope.
    When we have a quorum, and I think we probably do, we are 
going to make a motion--which we will probably do after Mr. 
Visclosky makes his statement--to vote on holding an upcoming 
hearing on the National Nuclear Security Administration in 
executive session. The way I would like to do it on the first 
round of questions, I am going to ask the Members of the 
Subcommittee to limit themselves to 5 minutes on their 
questions so hopefully everybody gets a chance to ask some 
questions. We will do a second round of questions, if you don't 
mind, sir, if there is sufficient member interest.
    One of the things that I think makes a committee work well 
is to have a good Ranking Member that you can work with. And my 
Ranking Member here--or our Ranking Member, I guess is the 
better way to put it--he and I sit on another committee in 
which we work together. He is a fine person, he knows a lot 
more about this committee than I do, but I very much appreciate 
that he is with us as the ranking member.
    We are going to try to work together, this whole Committee, 
as a team, because I believe the Committee needs to, on both 
sides of the aisle, work together. We will try to limit any 
partisanship--not in this room, hopefully--and we will try to 
work things out before we get here.
    Mr. Secretary, with your indulgence, I would like to yield 
to my Ranking Member at this time.
    Mr. Visclosky. Mr. Chairman, thank you very much for those 
kind words; and I, too, would want to welcome you to this 
particular Subcommittee, as I would Mr. Simpson and Mr. 
Peterson, as well as Mr. Berry on our side. It is a terrific 
Subcommittee, and the membership has always worked in a 
bipartisan fashion.
    Mr. Chairman, I also at the very outset want to 
congratulate you on Ohio State's victory--I am trying to get 
off on the right foot here. As a Notre Dame grad, I truly 
appreciate the work that Ohio State did this fall. I would also 
be remiss, however, Mr. Chairman, if I did not note that, 
subsequent to my joining the Subcommittee, I have served with 
Chairman Myers, Chairman McDade, Chairman Packard, Chairman 
Callahan and now Chairman Hobson. I do hope, Mr. Chairman, you 
stay with us.
    Mr. Hobson. I have every intention.
    Mr. Visclosky. I don't know if it is my bad breath or what, 
but we have had a run here. I, too, do look forward to working 
with you in a bipartisan fashion and appreciate that you are 
chairing the subcommittee and look forward to that.
    Mr. Secretary, just a brief comment. In a hearing last 
year, I brought up a number of concerns about the lack of 
discipline in budgeting by weapons systems and also concerns I 
have had over the years about laboratory-directed research and 
development programs. The committee did provide guidance to the 
Department in our report language, and you indicated at the 
time that you would work with us on these issues.
    While, obviously, the reforms have not been fully 
implemented, the Department has made significant progress 
during the past year in improving management of these programs, 
as well as the responsiveness to the committee's needs. I do 
believe you have made a complete, good-faith effort to make 
these significant management improvements and do want you to 
know that it is recognized; and I appreciate your work in these 
two critical areas that were important to me last year very 
much.
    With that, Mr. Chairman, I am fine. Thank you.
    Mr. Hobson. I will now yield to Mr. Wamp, who has a motion.
    Mr. Wamp. Mr. Chairman, since we have a quorum, because the 
Subcommittee on Energy and Water Development will be dealing 
with national security and other sensitive hearings at its 
hearing on atomic energy defense activities, I move that the 
hearing on March 19, 2003, be held in executive session.
    Mr. Hobson. I believe the clerk will call the roll.
    The Clerk. Mr. Hobson.
    Mr. Hobson. Aye.
    The Clerk. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Aye.
    The Clerk. Mr. Latham.
    Mr. Latham. Aye.
    The Clerk. Mr. Wamp.
    Mr. Wamp. Aye.
    The Clerk. Mrs. Emerson.
    Mrs. Emerson. Aye.
    The Clerk. Mr. Doolittle.
    Mr. Doolittle. Aye.
    The Clerk. Mr. Peterson.
    [No response.]
    The Clerk. Mr. Simpson.
    Mr. Simpson. Aye.
    The Clerk. Mr. Young.
    [No response.]
    The Clerk. Mr. Visclosky.
    Mr. Visclosky. Aye.
    The Clerk. Mr. Edwards.
    Mr. Edwards. Aye.
    The Clerk. Mr. Pastor.
    Mr. Pastor. Aye.
    The Clerk. Mr. Clyburn.
    Mr. Clyburn. Aye.
    The Clerk. Mr. Berry.
    Mr. Berry. Aye.
    The Clerk. Mr. Obey.
    [No response.]
    Mr. Hobson. Clerk reports that the vote is 12 to zero. 
Therefore, the meeting will be closed in accordance with the 
motion.
    Before I yield to the Secretary, let me say that normally--
and I don't know if we have got them down this time or not, 
because I am not sure I informed the clerk, we will generally 
call upon people in the manner in which they arrive in the room 
for their 5 minutes. So that means if all people to my right 
show up first, they are going to be called on first. If all the 
people show up on the left, they be will first, or they will be 
called on how they show up in the room. Unless someone has an 
emergency, we will not deviate from that.
    Mr. Secretary, again, thanks for sitting there and 
indulging us in this. We appreciate that. As I said before, 
your written text will be entered into the record, but you may 
make any comments that you would like to make, sir.

                      DOE FY 2004 BUDGET OVERVIEW

    Secretary Abraham. First, Mr. Chairman, let me thank you, 
the Ranking Member, and all the Members for working with our 
office in preparation for the hearing. We have had quite a bit 
of cooperative efforts with almost every member of this 
subcommittee, maybe not the newer Members, but we have 
appreciated the opportunity to work together and try to address 
issues in a fashion that I think has been very constructive.
    What I thought I might do is make a brief overview 
statement about our Department's budget, a shorter statement 
than the one we have submitted for the record.
    As you know, our fiscal year budget request is for 
approximately $23.4 billion for the Department of Energy; and 
it is designed to help make America safer and more secure. Let 
me just give a quick overview of some of the major topical 
areas, beginning with national security. These programs, which 
include maintaining our nuclear stockpile, rebuilding the 
capabilities of our defense complex, preventing the spread of 
nuclear weapons and materials, and continuing our outstanding 
Naval reactors program, are budgeted for $8.8 billion for 
Fiscal Year 2004, which is a $925 million increase over last 
year's submission.

                           NATIONAL SECURITY

    As you all know, one of the most important duties, probably 
the most important duty I have, is the responsibility to 
certify the safety, security and effectiveness of our nuclear 
stockpile. To meet that challenge, our FY 2004 Budget request 
proposes $6.4 billion in spending for stockpile stewardship and 
the rebuilding of our defense complex, which is about a $532 
million increase over the FY 2003 budget submission.
    We will use the additional funding to advance the 
scientific and manufacturing capabilities we need to ensure our 
long-term ability to certify the weapons in the stockpile. We 
will also continue to refurbish aging weapons, dismantle 
warheads and bombs that are retired from the stockpile, 
continue to restore the capability to manufacture and certify 
war reserve plutonium pits for the stockpile, and proceed with 
our work to rebuild and revitalize the physical infrastructure 
of the nuclear weapons complex. At the same time, we must 
expand our already productive efforts to prevent the spread of 
nuclear weapons and materials.
    This budget proposes $1.3 billion for nonproliferation 
work, a 30-percent increase over last year. This additional 
funding will enhance our ability to detect and prevent the 
proliferation of weapons of mass destruction and eliminate 
nuclear weapons and nuclear materials and the infrastructure 
which supports them. In this respect, we are engaged in several 
aggressive cooperative nonproliferation programs, most notably 
with Russia and through the extensive nonproliferation work of 
the International Atomic Energy Agency.
    As we carry out our national security duties, our 
responsibility extends also, as the chairman noted, to cleaning 
up the legacy of half a century of nuclear defense work here at 
home. Our budget submission includes $7.2 billion for 
environmental management, the highest amount ever requested for 
these programs. These funds will allow us to continue with our 
reform cleanup effort, which will accelerate completion of 
environmental clean up programs, if fully implemented, by 35 
years. It will reduce the risk to the public and the 
environment and will save taxpayers more than $50 billion in 
program costs.

                            ENERGY RESEARCH

    Turning to the energy policy area, energy research, our FY 
2004 budget submission of $2.5 billion will allow us to 
continue our wide-ranging energy efforts, including the 
research and development work that will lead to the eventual 
transformation of our energy economy.
    I think two programs illustrate the ways we can more safely 
employ abundant domestic energy resources.
    The first, our $63 million budget request for a new 
Advanced Fuel Cycle Initiative, which will help us devise a 
better fuel cycle for our nuclear power plants that costs less 
overall. It is more environmentally benign, more proliferation 
resistant, and can point to a sustainable long-term future for 
nuclear energy.
    The second, although not within this Subcommittee's 
jurisdiction, that I think is also important, grows out of 
President Bush's Clean Coal Power Initiative. In order to take 
full advantage of this low-cost and abundant domestic energy 
resource, we are requesting a $62 million increase, up 40 
percent from last year.
    As everybody knows, in the State of the Union address 
President Bush spoke of the remarkable potential of hydrogen as 
the transportation fuel of the future. The President's new 
Hydrogen Fuel Initiative together with the FreedomCAR 
Initiative, which we announced one year ago, will intensify our 
research and development effort to promote a personal 
transportation fleet powered by hydrogen fuel cells and the 
infrastructure to support it.
    The administration is following its National Hydrogen 
Energy Roadmap, which is a 12-month-long collaborative effort 
between industry and government to help us really plot the 
pathway forward so that we could, in fact, achieve the 
President's goal: that a child born this year has the 
opportunity, when they buy their first vehicle, to have the 
opportunity to purchase and drive.
    Mr. Hobson. Can I interrupt you for a second? I drove one 
yesterday, and it is fine. And I wasn't born yesterday.
    Secretary Abraham. Even better, sir.
    Over the next 5 years we propose to spend about $1.7 
billion for the FreedomCAR and Hydrogen Fuel Initiatives, which 
is more than double the 2003 spending, with the goal of 
advancing a commercialization decision in 15 years so that a 
decision might be made by the year 2015.
    Mr. Chairman, obviously, the Department's responsibilities 
are very wide ranging, and I don't have an opportunity to 
comment on all of the different items. But among the things I 
haven't had a chance to elaborate on are the programs to 
promote domestic production and international energy trade and 
investment, and programs to further develop renewable energy 
and increase energy efficiency. The work of our Office of 
Science, on which we rely so much; that office is pioneering 
the theoretical and practical advance of scientific knowledge 
through its work on the human genome, on nanoscience and 
nanotechnology, on computer networking and on fusion, which we 
plan to buttress by joining the International Thermal 
Experimental Reactor project. These programs offer the prospect 
of invaluable short- and long-term benefits for people of this 
country and the world.
    Obviously, there are many other programs beyond these on 
which I could comment. Time does not allow that, so I will 
bring my presentation to an end, and I am obviously prepared to 
answer questions. I thank the committee again and all of you 
for working with us as we have moved through a number of 
challenges in recent months and years.
    [The prepared statement of Secretary Abraham follows:]

GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    
    Mr. Hobson. Thank you, Mr. Secretary, for being succinct.
    As I was looking through the questions we had last night, 
my God, what a broad range of areas that you have to have an 
expertise in. I know you have an excellent staff, and I noticed 
that one had been a professor at James Madison. I don't know 
which person that is. My daughter graduated from there, so I am 
going to hold you to real high standards at some point.
    Before I yield, I wanted to do two things, since Pete 
brought it up. You know the Secretary is from Michigan, so I am 
going to give him an Ohio State coin if I might, sir, and see 
how well he catches. As you know, it is a great rivalry. There 
is also a rivalry with Illinois, so I will give you also my 
coin. I don't have a MILCON coin, so we are going to have an 
energy and water coin that we will be giving out. I thought the 
Ohio State coin might be an appropriate thing to give out.
    I just went on a trip this weekend with Ms. Pelosi and Jack 
Murtha to be with our troops, and I gave out the Ohio State 
coin instead of my MILCON coin, since I don't have any MILCON 
left, and the kids had a lot of fun with it.
    With that, we will turn to Mr. Visclosky for the questions. 
He is not subject to the 5-minute rule, so we will let him take 
as much time as he wants.

                        SAFEGUARDS AND SECURITY

    Mr. Visclosky. Mr. Chairman, thank you very much. I 
appreciate the gift. Does that mean we are going to do the 
canal from Lake Michigan to the Ohio River?
    Mr. Secretary, on March 14, 2002, you had a communication 
to the Office of Management and Budget asking for $380 million 
for critical security needs for the Department of Energy that 
were identified, obviously, after the terrorist attack of 
September, 2001. The long and the short of what transpired 
subsequent to that is that, of the $380 million you identified 
last spring, $139 million, about a third of that, has been 
funded so far. Does the President's fiscal year 2004 budget 
request to Congress now fully fund the remaining $241 million 
of the critical homeland security requirements identified in 
that March communication?
    Secretary Abraham. It funds what we have deemed to be 
necessary in the 2004 fiscal year. It doesn't fund all of it 
because when we made that proposal, as I think I referenced in 
that letter, we talked about it as a down payment, in essence, 
some prepayment on things that we would sooner or later add to 
our complex. There are things--and I have some folks here, if 
there are requests for the record for more of those details--
that we would not require in 2004, but would require at some 
point in the future.
    We had suggested that some things might be brought on line 
with a down payment earlier; and in some cases, because we have 
had other needs, we would pay for those programs and put them 
in subsequent budgets as needed.
    But it certainly meets all of our 2004 safety and security 
requirements as we assess them at this time.
    Mr. Visclosky. For the record, if you could enumerate which 
of those items are included in 2004, that would be terrific and 
as well, you alluded to it in your answer, new items that you 
have identified, that would be good.
    Mr. Secretary, in 2002 as well, on October 30, the annual 
report to the President on the status of nuclear weapons, 
domestic safeguards and security was transmitted. The report is 
classified as secret, but I would note that there were seven 
references, at a minimum, that funding is awaited or an issue 
is pending additional funding--issue remains to be determined. 
That communication was sent to the President in October of last 
year. In reference to that report, do you know if in fiscal 
year 2004's budget the deficiencies pointed to have now been 
funded as far as requested?
    Secretary Abraham. I think that the Fiscal Year 2004 Budget 
which we have presented is sufficient to maintain both our 
current protection levels and enable improvements for the 
future. The report to the President identified a number of 
areas to further improve our security posture, and many of 
these are multiyear construction projects. So when there is 
reference to funding not being provided yet, it relates to 
situations where there will be funding later for construction 
needs that will begin either this year or in some subsequent 
year. But where we need investments in FY 2004, I believe they 
are fully addressed in this budget.
    Let me also just make an overriding point. When we submit a 
budget of this sort, it is based on the analysis done during 
the period in which the budget is prepared. And I pledged to 
this Committee, as I have to the others that have oversight, 
that we do not engage in a one-time-only analysis of these 
issues. We engage in an ongoing, very aggressive process of 
reassessing threats and challenges as developments occur. 
Should there be any point where we decide that either things 
that were anticipated in future years are needed sooner, or 
there are other emerging challenges we have in the Fiscal Year 
2004 or the remaining part of this fiscal year--we will bring 
that to your attention.
    [The information follows:]

                       Safeguards and Securities

    The budget requests from the field were reviewed and 
evaluated along with all program and Departmental requirements 
as part of the normal budget development process. The resulting 
FY 2004 budget request funds all essential field safeguards and 
security requirements that were known at the time the budget 
was submitted.
    Our understanding of the requirements necessary to ensure 
the safety and security of our sites has changed since the 
initial estimates made in the days and months after the events 
of September 11. These early estimates were based on our best 
assumptions at the time but we subsequently learned more about 
our threats and refined our security strategies. We now have 
more confidence in our understanding of the requirements 
necessary to protect our sites. Consequently, the specific 
requirements previously identified may not be directly related 
to current funding needs, and many of the safeguards and 
security activities identified since September 11 are no longer 
valid or have been deferred to future years.
    We believe the current FY 2003 appropriations fund 
essential safeguards and security requirements. In addition, 
the FY 2004 budget request fully funds all essential field 
safeguards and security requirements that were known at the 
time the budget was submitted.

    Mr. Visclosky. If we could follow up with you, because it 
was a secret document, and if we could go down some of the 
enumerated items at some point, that would be terrific.
    Mr. Chairman, we do have a lot of members, so I will defer.
    Mr. Hobson. Mr. Wamp was to be next, but he went to vote 
because there is going to be a vote at 10:30. So he is going to 
come back so we can keep this flowing along.
    The next person is Mr. Doolittle.

            INTERNATIONAL THERMONUCLEAR EXPERIMENTAL REACTOR

    Mr. Doolittle. Thank you, Mr. Chairman; and, Mr. Secretary, 
it is always nice to see you here.
    I have a question about the International Thermonuclear 
Experimental Reactor project, and my question pertains to its 
impact on funding for the domestic side of this. When you 
announced earlier this year, I believe it was, the intent of 
the United States to participate in this, you were quoted as 
saying, ``our decision to join in no way means a lesser role 
for the fusion programs we undertake here at home comparatively 
maintained and to enhance our strong domestic research 
program.''
    However, it is my understanding that the fusion programs at 
several of our California institutions and elsewhere were cut 
under the proposed fiscal year 2004 budget. So I guess I have 
two questions, either here or for the record. Could you please 
tell me what is the administration's intent with regard to 
paying for U.S. ITER involvement? And, two, do you plan to add 
the necessary additional money to the budget or do you plan to 
shrink the domestic fusion budget to pay for ITER?
    Secretary Abraham. I will prepare a more elaborate and 
specific response, but let me comment generally on where we 
envision this heading.
    We have always had a very strong domestic fusion research 
commitment in our science program. It is at a level of about 
$257 million, I think, in this submission.
    We were at one time active in the ITER program. We have 
stepped back, and I think at large measure at Congress's 
prompting in about 1998 or so because there was a lack of 
clarity as to how that program was going to develop as well as 
what the commitment levels would have to be. The National 
Academy of Sciences, and our own experts in the Department and 
elsewhere, concluded that the work that had been done and 
continued by the international partners was pretty effective; 
that they had, in our judgment, a program that was clear enough 
for us to be able to make a decision to go forward with clear 
benefits. That means a major commitment to that international 
project.
    But for us to benefit as a country, we have to have a 
strong domestic program that will take advantage of the 
research learned from that international consortium. If we had 
to do that all by ourselves, the costs would be far greater. So 
we will get that in more detail to you, but we view this as 
something that is not inconsistent with a strong domestic 
program.
    [The information follows:]

                                  ITER

    The Administration's support for ITER is expected in 
general to have a positive funding impact for domestic fusion 
energy research. For the near term, FY 2004 and 2005, we do not 
expect major increments in funding, as construction is not 
expected to begin until FY 2006. Over the next 2 years, we 
shall determine what our requirements are to support ITER, now 
that we have joined the negotiations and have access to all the 
project information. During these years, various parts of the 
domestic program will be enhanced in support of our ITER 
requirements, leading to some redirection of existing 
activities.
    Beginning in FY 2006, which is when ITER construction is 
planned to start, we intend to request new funds to support our 
role in the construction. In addition, a robust enhancement of 
the U.S. domestic program will also be required to prepare for 
U.S. participation in the ITER research program and to achieve 
maximum benefit from our investing in ITER construction. The 
net effect is a positive impact on the domestic fusion program.

              MOU WITH THE DEPARTMENT OF HOMELAND SECURITY

    Mr. Doolittle. Thank you, Mr. Chairman.
    Mr. Hobson. Next person is Mr. Simpson, new member. He 
learned early, show up early.
    Mr. Simpson. As a new member you don't want to miss 
anything.
    Thank you, Mr. Chairman; and thank you, Mr. Secretary, for 
being here today. Let me state for the record I appreciate your 
Department's willingness to work with our office on many 
different fronts over the past few years. You have great people 
working for you, and their cooperation has really been helpful 
to our office, and I do appreciate that.
    I want to talk just a little bit if I could--first of all, 
I want to ask you a specific question. As I understand it, you 
are about to sign a memorandum of understanding with the new 
Department of Homeland Security relative to the use of our 
national labs to do science and research technology in the area 
of protecting the homeland. Does that include all of the 
national labs? I understand that INEEL and Argonne have been 
left out of that MOA; and, if so, do you plan to try to pursue 
that further?
    Secretary Abraham. Well, the memorandum hasn't been 
finalized yet. I think we recognize INEEL's important role and 
its multipurpose functions. I think that they play a key part 
in addressing national security and energy security. We want to 
make all of the best skills we have in the labs available to 
the Department of Homeland Security. We haven't made a final 
decision, and based on your question I will make sure that we 
will include all the labs in that effort.

                             NUCLEAR ENERGY

    Mr. Simpson. I appreciate that.
    As you know, much of my interest goes towards nuclear 
energy; and as I look at your budget and some of the new 
initiatives that you are proposing with the hydrogen automobile 
and--what do you call it--the future car program, I applaud you 
on those efforts. It looks to me as I look at the budget that 
we are almost putting more emphasis in those realms rather than 
in the nuclear energy area. If I look at the nuclear energy 
budget, it looks like it is an increase in actual numbers, that 
is based on your request for last year. If you look at the real 
numbers of what was appropriated, in many areas it is actually 
a decrease. Could you tell me about the Department's commitment 
to the nuclear energy program?
    And let me state also that, given your written testimony I 
read last night, I noticed that you said the benefits of 
nuclear power as a clean, reliable and affordable source of 
energy are key to the economic and environmental underpinnings 
of this Nation. I agree with that. So I wonder about the 
commitment of the Department budget-wise to the nuclear energy 
side of the budget.
    Secretary Abraham. Let me, if I could, just give a broader 
look at this. When we put together the energy plan, we made it 
clear that nuclear energy, as my testimony indicates, has to be 
a key part of the diversity of fuel mix that is employed by 
this country if we want to maintain energy security.
    We also sat down and developed a pretty effective plan of 
action as to the steps the federal government needed to take to 
try to strengthen our commitment to nuclear energy being a safe 
part of that mix. The steps included things that are budget 
related and steps that relate to broader policy. Consequently, 
in addition to making a very clear statement of support in the 
energy plan, we moved forward, and Congress supported the 
effort to proceed with the Yucca Mountain nuclear waste 
repository. The commitment we are making on that is gigantic in 
terms of dollars, and the ability to deal with the nuclear 
waste issue will spur the growth and strength of the nuclear 
component in our energy mix.
    We subsequently have launched several very effective 
initiatives that are part of our programs. We had already on 
line what we call the GEN-IV Program, the design, on an 
international collaborative basis, of safer generation for 
reactors and more efficient ones. We added last year Nuclear 
Power 2010. All of these are new missions that I think have 
considerable longevity to them. This year, with the $63 million 
commitment, we launched the Advanced Fuel Cycle Initiative. 
Collectively, these programs reflect an increase in our budget 
commitment for our submissions.
    I realize Members of the House and Senate have raised the 
appropriation level from our submissions, but I think the trend 
in terms of our engagement here is a very clear, positive 
statement of support.
    Mr. Simpson. I appreciate that, and you and I have talked 
about this before and your Department's commitment to nuclear 
energy. I guess one of the concerns I have, looking 
specifically at the budget, is, as an example, in the NERI 
program, it has been funded at the $25 million level for the 
last few years, and that is research and so forth. It is now 
down $13 million, a recommended level of $12 million this year 
and no new research projects anticipated to be granted in this 
coming year. How are we going to continue attracting people 
into nuclear energy and nuclear engineering if we are not doing 
that type of nuclear research?
    Secretary Abraham. Just to compare our request in the 
budget for 2003, the amended request, although this isn't 
comparable because we have moved, as you know, in Idaho various 
programs over to the nuclear energy division which had 
previously been in environmental management, the request was 
about $250 million. The request for nuclear energy is $387 
million. If you exclude those programs that were moved from 
environmental management, it is still a very substantial 
increase.
    We have tried to set priorities. We thought that the 
Advanced Fuel Cycle Initiative should be given a greater 
priority at this time. I don't believe that keeping every 
program moving at higher levels necessarily should be the 
indicator of whether or not we have a strong commitment.
    The other point I would make is this: I happen to think the 
most important thing we can do in terms of trying to attract 
talented people to pursue engineering, or graduate programs 
that deal with nuclear physics and technology, is to show that 
we are enlarging the scope of the work we do with nuclear fuel 
cycle research programs, with the Yucca Mountain project, with 
Nuclear Power 2010. We have programs where we provide 
scholarship assistance and so on to a small number of people. 
But what we really need to send is a broader signal that says, 
if you pursue careers in this area, there are going to be work 
opportunities in the future; and I think we are doing that with 
this budget.
    There are, obviously, some programs that we have higher 
priorities for in our judgment than others, but that is why we 
work together with Congress to sort this out.
    Mr. Simpson. I appreciate that.
    Mr. Wamp [presiding]. Mr. Secretary, welcome again. This 
works out good for me, because I get more time now.
    Secretary Abraham. I sensed when you left early that there 
was an ulterior motive.
    Mr. Wamp. I also get a workout. But I think it helps you 
time wise, so let us keep moving.
    Certainly I want to applaud you for outstanding work. I 
think your team, with Mr. McSlarrow, Mr. Card, Ambassador 
Brooks with the NNSA, Jessie Roberson, has just done a 
remarkable job.
    The accelerated cleanup plan, as Chairman Hobson discussed, 
may be the biggest success so far of this new administration in 
the Department of Energy. There have been many, but it is going 
to be very important for the health and the taxpayer--the 
health of our constituents and the taxpayer, I think, if we can 
actually get it done; and we are off to a great start.
    I think NNSA has changed the paradigm of security and 
weapons and safety and the security issue particularly. I said 
last week, and I think it is true, that if NNSA had not been 
formed and not be running well, the mission of the Department 
of Energy probably would have been shifted over to Homeland 
Security because it was not where it needed to be and now I 
think it is. I think confidence and morale is clearly up. So I 
want to applaud Ambassador Brooks and all the leadership at the 
NNSA because I think those areas of your responsibility are in 
much better shape.

                          FUNDING FOR SCIENCE

    The one thing that concerns me is the Office of Science. I 
think that is the seed corn for future generations. I am afraid 
we are still not putting much money in the seed corn for our 
global competitive position for our country; and that takes 
basic research, it takes scientific investment.
    I am particularly worried about the supercomputing piece. 
We thought that that was going to be a bolder request for 2004 
than it is. I want you to address that. You talked about 
nanoscience, and those centers are excellent. It is a great 
first step. But just in your overall perspective talk to me 
about science. Because we put money in NSF now in a big way and 
put money in NIH in a big way, but the Office of Science at the 
Department of Energy is just as important, if you are talking 
about 20 years from now where our country is. Yet it is not as 
sexy in the national scheme of science and research as those 
others are, and it has to be if we are going to have the 
breakthroughs that our people expect and if we are going to 
maintain our global competiveness.
    Secretary Abraham. First of all, we obviously fund this 
program very substantially. The budget request is for over $3.3 
billion, which in net dollars with the completion work at the 
Spallation Neutron Source, is about a 4.5-percent increase in 
terms of new applications.
    However, the point you raise is a very important one. As a 
Member of the Senate I remember being one of the first people--
one of the early cosponsors of the legislation to double the 
NIH budget, and I was very proud of the work a lot of us did on 
that.
    There are other areas of science research that are likewise 
given a lot of focus. The challenge we have, as you know, is 
that basic research doesn't necessarily--in the minds of 
opinion leaders, the media, decision-makers, grass roots 
citizens groups, and so on--register as clearly because people 
don't necessarily understand the linkage between that work and 
the work it ultimately supports.
    I have always, for instance, thought that the work of our 
Department in the human genome project was exemplary. Almost no 
one--when you say that started in the Department of Energy 
labs, everyone is surprised, because the public in general, I 
think, tends to focus on applications of science to curing of 
diseases or some particular product; and our work isn't 
therefore easy to link up. It is important, as you say; and in 
many respects it has broader application.
    I think the Members of Congress as well as the Department 
have a responsibility. I intend to try to do a better job of 
educating people this year about the role that these labs play. 
I think if that happens, perhaps that will change the views of 
folks in terms of the priorities when we address science 
investments in the future.

                            HYDROGEN ECONOMY

    Mr. Wamp. Mr. Secretary, let me shift over to the 
FreedomCAR. We have made it to the State of the Union now. We 
have made it to a top priority position with alternative 
transportation and addressing this issue of oil.
    Last week, at the Interior Subcommittee, I said something 
to the effect of needing a Manhattan project approach to our 
energy security, particularly with transportation where a lot 
of our oil consumption goes. I was at a bipartisan effort on 
Friday where Thomas Friedman used the exact same words in his 
presentation: We need a Manhattan project style approach to 
energy security.
    What are the biggest obstacles to doing it sooner in terms 
of transitioning into hydrogen? Everybody talks about 
infrastructure. We know some of those macro issues. What would 
you need from the Congress in terms of moving this quicker to 
get ourselves off of this reliance on Middle Eastern oil 
particularly, but oil in general? Oil almost seems to be a 
curse for the countries that have it anymore, and we need to go 
in a new direction as soon as possible.
    Secretary Abraham. Our proposal contemplates the challenge 
of having, on the one hand, the growing dependency on imported 
oil and, on the other hand, a growing challenge in maintaining 
and producing as well as employing energy consistent with a 
clean environment. We have tried in presenting the program the 
President initiated, the Hydrogen Fuel Initiative and the 
FreedomCAR partnership, to provide a realistic road map of how 
fast we can move this to the key point, which is the 
commercialization decisionmaking point where energy companies, 
automotive companies and others decide we are going to mass 
market these products, and we are going to build the 
infrastructure to support it.
    The one confusing thing I think in the analogy in the talk 
about the moon shot or the Manhattan project, of course, is 
that those projects didn't require mass consumer decisions to 
employ the finished product. When we built the Apollo program, 
the federal government ran the entire program essentially; and 
it consisted of a single, very important scientific step 
forward. But that one did not require Americans from coast to 
coast to decide they wanted to have their own rocket ships or 
the need to have a support system for them. The same with the 
Manhattan project. So there is an added problem here that we 
are trying to address.
    What we concluded, after working with the FreedomCAR 
program for the past year, was that even if we built these 
cars, some hydrogen vehicles are already available, they are 
much too expensive. But even if we could perfect the 
technologies to make them competitively priced, we wouldn't 
have the infrastructure to support them. So people might love 
looking at them and even test driving them, but they wouldn't 
be able to get home if they went anywhere beyond a certain 
distance from a fueling center.
    The challenge we have is the old chicken-and-egg challenge. 
Which is going to come first? We concluded that we couldn't do 
this consecutively. We had to have two programs moving at once, 
and we had to bring all sectors to the same table to plot a 
pathway forward that would have us in a position where, instead 
of 2030 or beyond, that by 2015 the technology will be in place 
and the infrastructure--or the basic outline of the 
infrastructure--will be in place so that people could make the 
decision to invest heavily in the move to mass market the 
applications. We think this a realistic course.
    Now we have outlined the first 5 years of this at about a 
$1.7 billion investment. We are certainly prepared if during 
that time frame we see the opportunity exists to move the 
program even faster to respond accordingly, to ask Congress for 
assistance. But right now we hope that there will be both the 
authorization for and the appropriation of the dollars that are 
needed for this first installment on the 5-year plan that we 
have laid out to begin this undertaking of a twin-track 
research.
    Mr. Wamp. I always wanted to introduce the first Member of 
my class to become a cardinal. I will introduce Chairman 
Frelinghuysen.

                      FUSION ENERGY: ITER PROGRAM

    Mr. Frelinghuysen. Good morning, Mr. Secretary. It is great 
to have an ally, Congressman Doolittle, on the committee, an 
ally in support of fusion research. In that regard, let me 
thank you for travelling to New Jersey to join me and 
Congressman Holt at the Princeton Plasma Physics Lab.
    I am not sure I need to reiterate what John was asking in 
terms of the ITER, but I think our point is, if we are going to 
rejoin the international program, which some would say perhaps 
we should have never left, I want to commend you and the 
President for making that decision. The issue is whether the 
domestic programs are going to have a portion of their funds 
taken to put in our commitment to the international program. 
And that is of some concern because, obviously, these types of 
investments, whether it be at Princeton or in California or 
MIT, that the domestic piece is very much tied to the 
international piece.
    So let us say I am certainly very supportive and 
appreciative of your rejoining ITER, but we want to make sure 
that both programs remain whole. They are, for all intents and 
purposes, joined at the hip, because certainly the basic 
research in both of these areas complement one another.
    Secretary Abraham. I would certainly agree with that 
statement.
    I would also say there are really, in some respects, three 
components that will be moving forward. There is the 
participation in the international component, the direct 
participation of the United States. We are in the process of 
negotiating how extensive that role will be, along with other 
issues, such as the site of this project. We expect that 
participation to be very substantial, although as a matter of 
percentage, it is a very reasonable percentage of funding for 
the United States.
    There will be a second category that you just alluded to. 
These two responsibilities are joined at the hip. We will have 
to modify in some respects or align much of our domestic 
program with the work being done in ITER so that we are both 
supporting it well but also benefiting from research that it 
generates.
    Then there is probably--I wouldn't want to get too specific 
here, because it is beyond our technical----
    Mr. Frelinghuysen. You can get specific; and if you can't 
here, certainly through the questions we submit you can follow 
up.
    Secretary Abraham. I envision there is probably other 
fusion research work that we would be doing domestically that 
isn't linked supportively to the international program, but 
that is also important to us. We recognize that the benefits of 
the international program are not necessarily ones that fully 
engage the work we are doing domestically. So there are three 
components here, and we envision that the parts related to ITER 
will be very substantially funded over the next 10 years.

                        ESCALATING ENERGY PRICES

    Mr. Frelinghuysen. When the Chairman redesigns his coin for 
the Energy and Water Committee, we are going to ask him to 
capture a little plasma in there. My daily FreedomCAR, if you 
will pardon the expression, is down in the garage and still 
runs with a combustion engine; and for the foreseeable future, 
I guess I will be using it.
    This question relates to gas prices nationally. Can you 
comment on where we are going? Obviously, prices are 
escalating, certainly in the District. Actually, they are far 
more expensive than my home State, but, for most citizens, it 
is a huge part of their paycheck.
    Secretary Abraham. I am a Michigan native and resident. 
That is obviously a big issue in my state and always is part of 
the economic challenges we face.
    There are obviously a number of factors which have come 
into play to raise energy prices this year at this time to 
levels that are either the same as or even in some cases levels 
that eclipse what we saw 2 years ago. The factors this year I 
think are more obvious and quite substantial.
    We saw the Venezuelan oil sector shut down for weeks, only 
now starting to ramp up production but still not a full supply. 
Venezuela is a major source of supply to the United States 
because of its proximity and existing contracts. This year's 
winter was far colder than it was last year, and that has had 
an impact on prices as they relate to last year. This winter 
has also lasted longer. In comparison to last year, the economy 
is in a stronger position, as a result, demand for energy has 
increased. And there is pretty obviously a lot of speculation 
going on in the international energy markets relating to Iraq.
    This combination of forces is obviously a major issue, and 
collectively, a large part of the explanation for what we are 
dealing with in terms of the high gasoline prices today. What 
it suggests, though, and I have said this before, one of the 
problems we always have when there are high prices and a sense 
of urgency and crisis, we say we should do something. I said 
that 2 years ago when we had high prices. Some people said, 
well, you are just using high prices or this crisis to somehow 
rationalize passing an energy bill. Then, when the prices came 
down, people said, we don't need to do an energy bill because 
things are back to normal.
    Obviously, these are cycles we keep seeing to the degree we 
continue to grow dependent on foreign oil. It means we really 
need not to just pursue the programs I identified in my budget, 
but the broader programs of a comprehensive energy bill, which 
the House took action on the last Congress. While we didn't get 
to the finish line last Congress, I hope we can this time.

                        HYDROGEN FUEL INITIATIVE

    Mr. Frelinghuysen. Thank you.
    Mr. Hobson. Mr. Pastor.
    Mr. Pastor. Good morning. Mr. Chairman, thank you and 
welcome to the subcommittee. We look forward to working with 
you and also the new members that have joined us.
    Good morning, Mr. Secretary. Good to see you again.
    I agree with you. Regardless of the gas prices, we need to 
look for the long-range solutions so that we can have an energy 
system that is integrated and diversified. So I congratulate 
you.
    On the hydrogen fuel, the little I know and the little I 
have seen, and I have seen some of the prototypes, one of the 
issues always deals with the production of the hydrogen and 
then the quality of the hydrogen. Because right now, in 
obtaining the hydrogen, it takes quite a bit of energy and then 
it becomes the issue of maintaining high quality so it will be 
effective. In your initiative, which I agree with you we need 
to continue, how much of your emphasis is going to be on making 
sure that the production of hydrogen is cost efficient?
    Secretary Abraham. The FY 2004 Budget we are discussing 
today, out of about $273 million for the hydrogen and 
FreedomCAR initiatives of that amount, about $38 million is 
slated to be used for research on hydrogen production.
    You have put your finger on one of the challenges that has 
to be addressed to get us to the finish line. One is hydrogen 
storage. This is to make a fuel cell vehicle competitively 
priced by improving the technology. The big question is where 
does the hydrogen come from? Can we produce it in a cost-
efficient way? I think for a commercialization decision to be 
made, the cost has to be the equivalent of $1.50 or so per 
gallon of gas.
    What are the other associated challenges with producing it? 
Our view is we need to pursue a variety of approaches, of 
feedstocks. For instance, of the $38 million, about $17 million 
of that money is going to research on the use of renewable 
energy sources--wind, solar, biomass--as possible hydrogen 
sources. About $12 million is going to be spent on natural gas 
as a possible source. Right now, if you were to suddenly, 
magically, have a system in place, I believe natural gas would 
be the principal fuel source. We don't want a situation where 
we haven't explored a lot of other options. But $5 million of 
the research is going to clean coal as a possible source--later 
I will mention an ideal on those lines which we are very 
excited about--and $4 million is going in the area of nuclear 
energy as a possible source. Ultimately, if the fusion energy 
research produces something that can produce electricity and 
work, that could be a source as well.
    So we are trying to diversify, to figure out what will work 
on the most cost-efficient, safe basis. Also, we think by 
having a diverse set of sources we won't become too dependent 
on any one and we force the kind of competiveness that 
hopefully would bring down the price.
    Mr. Pastor. Natural gas was the kind of energy or at least 
the fuel that people were looking forward to using because of 
its cost and its volume. But now I am told that the volume of 
natural gas is really depleted and its cost is very high.
    Secretary Abraham. Very high in recent weeks.
    Well, the point is well taken. Again, whether it is 
electricity generation or the sole source of fuel for 
transportation, obviously you would shift your emphasis so much 
into one fuel source it would be a challenge. That is why we 
are trying to pursue a variety of approaches, although we 
envision that in the early developmental stages natural gas as 
the most likely source for hydrogen production.
    Mr. Pastor. I commend you for the initiative and the 
implementation, because I think it is a power source that we 
need to invest in.

                       CONCENTRATING SOLAR POWER

    Going through your statement and also some of the material 
that was prepared, I saw that in the solar there is going to be 
emphasis, I guess, on the buildings that are environmentally 
green and also power self-sufficient. Now because probably most 
of those buildings I think would be photovoltaic in terms of 
the source of power, what are we going to be doing in terms of 
solar concentration technology, the solar tower? Are we giving 
those up or are we----
    Secretary Abraham. Well, the concentrating solar power 
program in our budget is not included this year; and its 
exclusion is based on a----
    Mr. Pastor. I didn't hear.
    Secretary Abraham. It is not included. The concentrating 
solar power program is zeroed out. The total solar program was 
about $80 million in last year's submission. It is $80 million 
here. The reason we made that decision about concentrating 
solar power is largely the result of a National Research 
Council report which was very critical and cast doubt, I think, 
on the future potential in that area. Plus the fact, I guess, 
that no concentrating solar power facilities have been built in 
the last 10 years had caused us to start deemphasizing that 
area in the last submission. Given the need to make choices, we 
haven't seen as strong a case for support in that area at this 
time.
    Secretary Abraham. Obviously, there is other research going 
on, and we will monitor it for future submissions, but we just 
felt that the recent evidence was not positive on that as a 
possible source. The overall funding for solar, though, remains 
at the same level as our last submission.
    Mr. Pastor. Well, the reason I ask the question I think--
and I can't find the exact terminology--we will probably be 
more dependent on photovoltaic. Photovoltaic seems to have its 
problems in terms of its long-term endurance, problems with the 
film, et cetera. So one of the things that I was excited about 
is the use of concentrated solar energy to provide power in 
rural areas. Because now they are taking them into, you know, 
generators using that solar energy to produce electricity. I am 
sorry to see that in this budget we have zeroed it out.
    Secretary Abraham. Well, that is the rationale. The total, 
as I said, for solar research is the same, but we had just not 
seen, either, in the National Research Council reports or on 
the marketplace in terms of facilities, the kind of support 
that I would hope to see. We will keep monitoring it.
    Mr. Pastor. Do I have a little bit of time or is my five 
minutes up?
    Mr. Hobson. You are up.
    Mr. Pastor. Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Latham.
    We are going to have a second round.

                            BIOMASS RESEARCH

    Mr. Latham. Thank you, Mr. Chairman; and I look forward to 
your leadership on the Committee. I know it will be a great 
experience on a very bipartisan basis, and I appreciate that 
very much.
    Welcome, Mr. Secretary. I just want to, on a commercial 
note, thank you for the visit out to the Ames lab. Tom Barton 
and everyone at the lab out there really appreciated your 
visit. It means a great deal to them to have your interest and 
make an appearance there. He has talked many times about the 
increase in the morale in the facility there. So thank you 
very, very much.
    Of the $444 million that is requested for renewable energy 
research, I see there is a 19 percent reduction for biomass and 
a reduction for wind energy. As you know, the President's 
national energy policy notes that biomass has the potential to 
make more significant contributions in the coming years, end 
quote. If you know we mean those words in face value and if the 
Agriculture Department and other government entities believe 
this, why would we want to reduce the support for the biomass 
research?
    Secretary Abraham. Well, obviously the commitment we have 
to fund renewable energy remains strong. Indeed, the renewable 
energy section of our budget goes up as a cumulative amount, 
even though within it we have chosen to advocate slightly 
different priorities.
    There are two things really that affect the biomass number, 
which I believe was about $110 million collectively within our 
Department's FY 2003 Budget submission; and this time, as you 
know, it is about $80 million. Number one, under the farm bill, 
about $14 million was made available for biomass research so 
that we could work together with USDA on it. So I view part of 
this as being offset by that inclusion.
    The other major change was that we have not requested money 
this year for the black liquor program, the research and 
development and demonstration with the forest products 
industry. The reason we zero fund this program is because we 
determined that the work had advanced to the point where the 
Federal contribution could end and that industry could, in 
fact, step in and move forward on its own to commercialization. 
This is something we try to do with all of our programs and 
research.
    One of the challenges that we have is that people often 
question why government should pay for something if it is 
something that the private sector might do without government, 
and we try to focus our research on areas where the likelihood 
of commercialization is further down the road, where the 
research is more high risk and less likely to be conducted.
    The USDA number and the black liquor programs are almost 
equal to the reduction in biomass.
    Mr. Latham. Are you getting good cooperation with the USDA? 
Is there coordination and communication?
    Secretary Abraham. Yes, I think we have a good relationship 
with the Department.
    Mr. Latham. That is shocking. That is very good.
    One concern I have, and as you are probably well aware, in 
Iowa we have a real, growing wind energy industry there. Up 
until last year, we had the largest wind farm in the country, 
and we have built actually three more and are in process of 
getting more.
    The one drawback has always been that, you know, you could 
not store the energy produced and still the utilities would 
have to have the capacity--normally, in Iowa at least, the 
hottest day in August where you have the biggest peek demand is 
also the day the wind doesn't blow. So it is, obviously, a 
problem. It goes kind of with biomass again to--as far as a 
backup, renewable backup. But what are we doing as far as 
energy storage?

                              WIND ENERGY

    Secretary Abraham. Well, let me just comment on the wind 
energy commitment first. As you noted, it is reduced but not by 
a large increment. It was about $44 million in the last budget. 
It is about $41.5 million in FY 2004.
    One thing we also monitored, in addition to the state-of-
the-art in terms of the commercialization and private sector 
involvement, is how effective various areas are in terms of 
their growth. Wind energy of all the renewables is probably the 
fastest-growing form of renewable energy application in the 
country because the cost has been going down making it more 
competitive. I am not suggesting that we have a sort of 
straight-line evaluation in terms of the research commitments 
and the percentage of application, but we do take that into 
account.

                             ENERGY STORAGE

    I don't have with me an answer to the percentage or the 
total dollars on energy storage in this budget. I would be glad 
to take that for the record. But it is one of the other 
elements of our focus when we deal with some of these new areas 
in which challenge exists.
    It exists also in the hydrogen area, where clearly we are 
very excited about hydrogen's potential. But being capable of 
storing the energy on a vehicle, for instance, in sufficient 
amounts to allow the range of the driving to take place is a 
challenge. So we are investing a lot in energy storage. I will 
have to get you the specific number for that as it relates to 
this form of energy.
    [The information follows:]

             Energy Storage for Renewable Energy Resources

    The energy generated by wind turbines and solar 
technologies may not coincide with the pattern of electricity 
demand. Energy storage could make this electricity available 
during peak demand period when it is most needed and most 
valuable. DOE has a program dedicated to electricity storage, 
and also supports other technology programs that will offer 
innovative ways to store energy once they make sufficient 
progress. In addition, there are several commercially-available 
technologies that are available to utilities and wind 
developers, including pumped hydro and compressed air that can 
be deployed where the geography or geology is appropriate.
    DOE energy storage R&D activity currently concentrates on 
two main areas: batteries and superconducting flywheels, and is 
supported by a budget request of $5 million for FY 2004. The 
budget also supports an effort on fast-response supercapacitor 
storage that is targeted primarily at improving transmission 
grid stability, rather than at bulk storage of energy. DOE's 
battery work is focused on ``flow'' batteries that use 
circulating electrolytes, such as zinc-bromine batteries, which 
have the potential to reduce the costs of utility electricity 
storage below the current lead-acid battery technology. In FY 
2004, a 12-megawatt, flow-battery system will be tested in 
conjunction with TVA. The flywheel technology also has the 
potential to be more economic than current battery technologies 
and past attempts at flywheel storage because of the 
incorporation of superconducting bearings, which reduce 
frictional losses to nearly zero.
    Any of the storage technologies supported by DOE will be 
able to contribute to making renewables more dispatchable. 
Utilities have an interest in those technologies for peak load 
management, and where they are built they could also be used to 
smooth out peaks and dips in wind or solar electricity 
production.

                 RENEWABLE ENERGY PRODUCTION INCENTIVE

    Mr. Latham. I am going to have to go to another hearing 
here next door, but I want to thank you and the President for 
the commitment with ethanol, obviously, very, very important to 
my part of the country, and I have some more questions to 
submit for the record. But thank you very much. I really 
appreciate all you have done.
    Mr. Hobson. Thank you, Mr. Latham.
    Mrs. Emerson.
    Mrs. Emerson. Thank you, Mr. Chairman. I, too, have to go 
back to another committee after this, so I have questions for 
the record.
    Mr. Secretary, welcome. Thanks for being here. I want to 
ask you about the Renewable Energy Production Incentive, or 
REPI, which was created back in the Energy Policy Act of 1992 
to help communities who are served by municipal electric 
utilities and electric co-ops to invest in renewable energy 
products. You know, I think it was an excellent policy that was 
created because it did, in fact, recognize that those not-for-
profit utilities couldn't utilize production tax credits for 
renewable energy made to the for-profit or the investor-owned 
utilities.
    So I would like to know, from your perspective, what the 
current backlog of projects is that have either been applied 
for or but not received funding from REPI because of funding 
shortfalls. Do you know what that backlog is?
    Secretary Abraham. I don't know that there is a backlog 
specifically, but I will have to take that for the record and 
produce an answer.
    I do know that because of the way it has been funded, the 
Tier 1 projects, I think, have been fully provided for. Those, 
I guess, are the wind and solar programs. I am not sure with 
the Tier 2 projects if the definition of backlog means we are 
doing 100 percent. I believe the level has been about 33 
percent support. So, let us submit those details for the 
record.
    [The information follows:]

   Renewable Energy Production Incentive Current Backlog of Projects

    The Renewable Energy Production Incentive (REPI) was 
established by Congress in 1992 to provide incentives for 
renewable energy production by publicly- and cooperatively-
owned electric utilities, similar to renewable energy tax 
credits available to private electric utilities and other 
private entities. A two-tier system was established by DOE 
under a public rulemaking to allocate available funds in years 
when the demand for payments exceeded funding. The two-tier 
system mirrors the existing renewable energy tax credits 
currently available to private entities. Tier I has 
technologies that have comparable tax credits, such as wind and 
solar. The backlog in payments consists solely of Tier II 
technologies. Tier II has technologies which would not qualify 
for a tax credit if privately owned, such as open loop 
biomass--mostly land fill gas.
    To date, REPI incentive payments for Tier I-based 
technologies have been fully paid at the 100-percent rate. DOE 
has since the beginning of REPI been able to either totally pay 
all Tier II applicants (in FY 1995-96), or since then has every 
year at least partially paid each Tier II applicant on a 
reduced pro-rata basis. For example, the FY 2002 payments to 
Tier II were paid to 7 percent of the qualified electricity 
production. In FY 2003, while the final numbers are still being 
verified, we expect to be able to pay about 27 percent of 
qualified Tier II electricity production. The Tier II qualified 
electricity production that is unpaid in each fiscal year 
contributes to a backlog of unpaid qualified electric 
production. The backlog of unpaid Tier II payments from the 
Renewable Energy Production Incentive program is $42.7 million 
as of September 30, 2002.

                              REPI FUNDING

    Mrs. Emerson. Because it is our understanding, too, that 
the demand for REPI funding has increased significantly, even 
in the past year. That then begs the question as to why the 
administration only requested $4 million for fiscal year 2004, 
given the fact that even Congress recognized in the last budget 
that REPI--I think we allocated 25 percent or so above the 
President's request. I guess my question is why you would only 
allocate $4 million to that program.
    Secretary Abraham. Versus $5 million. The difference has to 
do, I think, with concerns which we have had in a situation 
where we obviously have had to make priorities. The Tier 2 
technologies--which are the landfill gas, the open loop 
biomass--wouldn't qualify for a tax credit, as I understand it, 
if they were privately-owned facilities. We have tried to keep 
some parity between what the tax credit provides and what the 
REPI program supports. This has been the rationale for not 
including some of these in the budget we submitted.
    That is, obviously, an area where there are different 
perspectives which we can appreciate. Believe me, when we try 
to put these budgets together we understand there are a lot of 
strong feelings about this.
    Mrs. Emerson. Particularly when you have a large, 
widespread rural district like mine that is mostly all--either 
run by electricity that is generated through either the 
municipal----
    Secretary Abraham. You have been very effective in making 
this case to our Department.
    Mrs. Emerson. It occurs to me, too, that in the climate 
change initiative there is a 10-year, $7.1 billion commitment 
of tax incentives to spur investment in renewable energy and 
landfill gas conversion. Our municipal utilities are uniquely 
suited to fulfill those types of projects, and I would like to 
ask them for the record if you all would perhaps look at making 
them more eligible for some of these projects.
    Secretary Abraham. Obviously, we will be glad to take that 
question for the record; and we hope we can move ahead this 
year and get an energy bill finished where the incentives in a 
number of areas that we proposed, that you just identified, can 
actually move to the stage of implementation.
    Mrs. Emerson. Appreciate that. Thank you, Mr. Secretary. 
Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Edwards.
    Mr. Edwards. Thank you, Mr. Chairman.
    Let me say, as a person having watched and admired your 
leadership on the MILCON Subcommittee for years, I welcome you 
and your leadership and work ethic to this Committee. You will 
be a great leader on this Committee.

                      NUCLEAR MATERIALS DETECTION

    Mr. Secretary, I believe one of this committee's most vital 
responsibilities is to fund programs that defend our Nation 
from nuclear terrorism. I salute you for your leadership as the 
Secretary of Energy in this arena. We have come a long way from 
2 years ago when the debate was should we cut the Nunn-Luger 
program to the G-8 global partnership, which you and the 
President deserve great credit for working with Russian and 
other foreign leaders.
    It seems to me that one of our greatest threats in homeland 
defense today is our ports. Knowing that, I assume this amount 
of highly enriched uranium built in a bomb, put in a ship 
container as little as this, could literally wipe out Manhattan 
island or any other major city where we have a port. We know 
that terrorists are trying to get their hands on nuclear 
material. We know that we need to stop this, hopefully before 
it gets to any container. But as a second line of defense we 
need to stop this material before it gets into a major American 
port city.
    You have recently initiated a program to use what I 
understand is present technology where we can find out whether 
or not there is nuclear material in a ship container. I 
understand that technology doesn't need further research--it is 
usable today--and you may be actually reprogramming some money 
to put that technology right now in place in Rotterdam.
    As I understand it, there are about 20 megaports, foreign 
megaports that represent about 65 percent of the containers 
that are brought in to U.S. ports on ships. Considering the 
risk involved, it seems that logic would dictate that we ought 
to make it absolutely a top priority immediately to put this 
existing technology in all 20 of those megaports, and then we 
can start working on the others. But, as I understand it, the 
2004 budget request did not request money for that project.
    My questions to you would be, is this technology available, 
in fact; do you think it is a major step forward in 
safeguarding our homeland by putting these kind of sensors in 
these foreign megaports; and, thirdly, do we have a cost 
estimate on the one port that you are already working on? I 
won't ask you to speculate on additional costs into the future, 
but do we have some idea of a ballpark figure?
    Secretary Abraham. At this time, the initial calculations 
are about $15 million for this period. We think the total time 
frame to address the megaports is about 2 years for both 
putting the program in place and for the absorption of the 
program to make it fully effective. We will try to move as fast 
as we think is reasonable; and we are prepared, obviously, to 
make sufficient requests.
    Mr. Edwards. But there is no line item budget request in 
the administration budget to fund that program, as I understand 
it. Is that correct?
    Secretary Abraham. I think I will ask Ambassador Brooks to 
comment on the funding numbers here.
    Ambassador Brooks. Mr. Edwards, there is no line item 
budget because this is quite a new idea that actually arose 
after the preparation of the budget. If it works as well as we 
think, I suspect we will be talking some reallocation within 
our existing totals, but we aren't there yet.
    Mr. Edwards. You multiply $15 million by 20 megaports 
covering 65 percent of the ship containers coming into the 
U.S.; for $300 million we could perhaps have a very effective 
line of defense for our homeland against nuclear terrorism 
through ship containers.
    Secretary Abraham. We think it is a very promising 
opportunity for us to move quickly.
    Mr. Edwards. Thank you for your leadership in this area. I 
hope this committee can work with you to add this money to the 
budget. That should be an urgent and high priority.
    Thank you, Mr. Chairman.
    Mr. Hobson. Thank you.
    Mr. Berry.

                             YUCCA MOUNTAIN

    Mr. Berry. Thank you, Mr. Chairman. I look forward to 
serving on the committee with you.
    Thank you for being here, Mr. Secretary. I just wanted to 
get your thoughts about Yucca Mountain and how that is 
proceeding. I know the budget--we have got budgeting problems 
in any number of issues yet to be resolved, and I was curious 
as to whether or not you think we will be able to meet our 
anticipated time lines.
    Secretary Abraham. Well, what I would say is this. We are 
obviously doing everything we can within the appropriated level 
of funding which we have been provided to try to meet the time 
frames we have set up. Those time frames were to have a 
docketable license application to the Nuclear Regulatory 
Commission by December of 2004. The licensing process is about 
a 3-year period.
    We made progress in addressing the key technical issues 
that have been identified already by the NRC. Of about 293, I 
think 70 have already been resolved, and work on over half of 
the remainder is going on. We submitted a budget request for 
the 2003 budget consistent with that time frame of about $591 
million. The ultimate conference mark as part of the Omnibus 
bill was provided $457 million. We are submitting this year a 
$591 million request.
    All I would say is this. We haven't yet had the time to 
assess the implications of the funding level that came out of 
the final legislation. But they were obviously well under what 
we requested, so we are trying to evaluate that. It may call 
into question our ability to satisfy all of the prelicense 
application work in the time frame we have set. I am not 
suggesting it will today, but it is obviously a pretty 
substantial percentage.

                             ENERGY PRICES

    Mr. Berry. Thank you, Mr. Secretary.
    Mr. Hobson. Mr. Peterson, last of the new members.
    Mr. Peterson. Thank you, Mr. Chairman. I want to tell you 
how delighted I am to have a chance to serve on this committee. 
I apologize for my voice today.
    As I said in the Interior Committee I come from, where it 
all started, I live five miles from Drake's Well where the 
first oil well was and this whole energy issue began to change 
this country and the world.
    When I first came to Congress in 1996, Congressman Walker 
came to me and asked me to sort of take over his efforts with 
hydrogen. But I want to say I felt pretty lonely around here 
for a few years, each year pushing for hydrogen research. It is 
nice to have the President on your side and the Secretary of 
Energy and now lots of Members of Congress that are interested 
in hydrogen. I have to give credit to Bob Walker for selling me 
on it, and I think he was right then, and we look forward to 
working with you.
    But the issue of the day I think is energy prices. No one 
predicted $19 gas, no one predicted the prices we have today 
and the shortages that we have. Can you tell us what your 
people think? What do your people think? How long will these 
prices stay? Are we at the highest? Will they get higher? Where 
are we?
    Secretary Abraham. We had projected last year in the Annual 
Energy Outlook--based on the economic trends, reserve levels, 
and so on--a rising sweep to prices late in the fourth quarter 
of last year, first quarter of this year. Obviously, not to 
this level, because we didn't know that Venezuela would go into 
a strike of such a prolonged nature. We couldn't project the 
weather.
    Some of these factors are, obviously, changing. Venezuela 
is increasing its production, although it is still going to be 
a number of weeks before they are back to the 3 million barrel 
per day level that would constitute full production. The 
weather, obviously, will presumably get warmer here sooner or 
later. As to the issues that relate to the uncertainties and 
the speculation we have had with regard to Iraq, I am not going 
to speculate any further.
    But I think as all of those developments, whether it is on 
Venezuela or speculation about Iraq, resolve themselves, then 
that will affect international prices, and that ultimately has 
an impact at the pump.
    But I don't have an ability to predict today what we will 
see. We just know that we have been projecting higher average 
prices for some time, and it is these factors even that result 
in higher prices than had been projected last year.
    Mr. Peterson. I have a retail background. I was in the food 
business, so I know what energy prices do to consumer spending. 
When people buy less food, you know they will buy less 
clothing, all kind of nonessentials. Almost every dollar that 
goes to energy comes straight out--77 percent of our economy is 
consumer goods.
    I want to read something from the Christian Science 
Monitor: ``Twelve months of rising energy prices are starting 
to threaten the U.S. economy. It could amount to $100 billion 
on an annualized basis. Economists say it is enough to shave 
one full percentage point off of economic growth. The risk of 
another recession is very real. Money spent at the gas pump is 
money that you can't spend at the mall.
    I think it supports what I believe in. I predicted this to 
some people this year. I am not smarter than anybody else. I 
just saw all the science.
    When I saw Venezuela off line and the potential with Iraq 
and the great amount of--and I asked last year if anybody had 
inventoried how many power plants were coming on line that were 
using gas, and nobody seemed to really quite know at that time 
when I asked that question. But I guess the part is I think 
your number one job is to develop an energy policy for the 
country, your Department. But shouldn't you have a strategy to 
minimize spikes?
    I mean, because the spikes are what kills companies. The 
spikes are what kill consumer goods spending. These spikes put, 
you know, undue pressure on a fragile economy. It would seem to 
me there should have been a strategy to minimize--you can't 
control prices. But as you have those--it is the spikes. $19 
gas puts people out of business.
    Secretary Abraham. Let me say a couple of things.
    We do have an energy policy. We do have an energy plan. 
When we came to the Department, we didn't find a plan there. 
When I was a Member of the Senate, we didn't put together an 
energy plan in the Senate. There wasn't a national strategy. We 
spent 5 months and developed what I think is a very balanced 
approach. The purpose of that was not to be able to address the 
problems of the first year but to try to create over a 20-year 
period the sort of circumstances that would prevent these kinds 
of cyclical spike problems that you are addressing.
    It means more domestic production. It means more energy 
efficiency. It means research in areas like the FreedomCAR, the 
hydrogen program, so we can reduce substantially our dependence 
on foreign energy. It means trying to expand the American trade 
opportunities as well as help on an international basis the 
development of new energy sources in places like the Caspian in 
Russia, in Africa and elsewhere, which is something our 
Department has been doing. We are very actively trying to 
address those kinds of issues so that these kinds of crises are 
not afflicting us forever.
    At the same time, the question is, what do you do if 
Venezuela has a problem and so on? We obviously monitor these 
closely. The levers that we have are obviously limited. One 
that people obviously mention is the idea of using oil from the 
Strategic Reserve. We do not believe that that Reserve's 
capacity should be employed to address prices. We believe it 
really has to be maintained to deal with energy emergencies 
where there simply is not supply, not to deal with situations 
to just simply address price concerns. That is our view. The 
severe supply disruptions are the purpose of the Reserve. But 
there aren't short-term solutions.
    The best way to avoid these challenges in the future is to 
diversify our sources, develop new technologies, and develop 
more domestic supply and better energy efficiency.

                             ENERGY POLICY

    Mr. Peterson. But that is still a long term. I don't 
disagree with one word you said. But it seems to me--I am 
speaking as a retailer--if I am short a supplier I go looking 
for suppliers. Did we look to our friends to say could you give 
us a half a million a day, could you give us a million a day, 
to replace our Venezuela so we----
    Secretary Abraham. Well, actually, as you know, the OPEC 
countries made a decision in January to ramp up production to 
try to address the Venezuela problem; and they have been doing 
that, substantially working towards that. I do draw the line as 
to the kinds of requests that we make. We don't discuss these 
negotiations, but I do draw the line. We are not going to beg 
for oil. That isn't, the appropriate position for this country. 
But I think the OPEC countries responded rather quickly when 
the Venezuela challenge was confronting us.
    I would also say this: The market itself is pretty 
effective. Your comments as a retailer are exactly what we saw. 
We saw people, who had typically negotiated and traded with 
Venezuela sources, finding other sources in the world market. 
It takes a little bit of time for people with long-standing 
customer relationships and client relationships to find 
alternatives, but the marketplace reacted at the retail level, 
at the refinery level as well as it could. But, obviously, the 
nature of Venezuela's participation here is a pretty big one, 
and it took a little time to adjust to it.
    Mr. Peterson. I guess I am still not satisfied with your 
answer. I don't consider going out and trying to tell my 
friends to sell me more oil is begging. That is business. You 
know, we are in a tough situation. We have lost this much 
supply in Venezuela. Could we count on you? That is business. 
That is how you do business every day. That is not begging.
    Secretary Abraham. I would be happy to submit for the 
record the exact activities at the OPEC decisionmaking in 
January.
    [The information follows:]

                   January 2003 OPEC Meeting Decision

    Members of the Organization of Petroleum Exporting 
Countries (OPEC) met in Vienna on January 12, 2003, to discuss 
the current oil production levels. They agreed to raise the 
OPEC-10 production ceiling by 1.5 million barrels per day to 
24.5 million barrels per day to ensure adequate supplies of 
crude in response to the oil supply shortfall in Venezuela. The 
OPEC countries vowed to make up for the current loss of 
Venezuelan oil without taking the country's market share.
    Since the beginning of Venezuela's general strike in 
December 2002, the Department of Energy has been in close 
contact with refiners that were impacted by the loss of 
Venezuelan imports, and we have been watching crude and product 
inventory levels very closely.
    In December 2002, the Department of Energy began deferring 
scheduled deliveries to the Strategic Petroleum Reserve (SPR) 
to allow for flexibility in the market. Due to the ongoing 
disruption, we have extended those deferrals through April 
2003. This decision has placed an added 18.6 million barrels on 
the market. The decision by OPEC and other producers to 
increase oil production in response to the protracted 
disruption of Venezuelan oil exports is a welcome step that has 
helped to increase global energy supplies.
    We will continue to monitor the situation closely and 
consult with energy companies and other oil consumers affected 
by the ongoing events in Venezuela. At the same time, we will 
continue to review all of our options as appropriate, keeping 
in mind the statutory circumstances required to authorize a 
release from the SPR.

                           ENERGY LEGISLATION

    Secretary Abraham. But, again, I think, you know, the 
challenge here is what I said earlier. We will have I think not 
just Spence Abraham but my successors here will be before this 
Committee on an ongoing, regular basis whenever there is a 
crisis; and people will say, why didn't you do more, what could 
you have done, and what is wrong here and so on.
    Then we will either move ahead and pass energy legislation 
and support the kinds of research we are talking about and put 
some of this behind us or people will say, well, gee, we 
shouldn't do anything because we shouldn't let a crisis drive 
these policies, so let's put it off, which is what happened 2 
years ago when we came with legislative suggestions.
    Then when the price goes down people will say, see, we 
didn't have to do anything because, after all, you can't 
address a crisis with a bill that is going to take a long time.
    I can only say this. I hope we can work together, pass 
energy security legislation in this Congress, get it signed, 
and start addressing these challenges in the future.
    Mr. Peterson. You know you have my support on that. I look 
forward to working with you.
    Mr. Hobson. Thank you.
    Let me talk a little bit about gas prices. I have written 
letters to organizations who supply gasoline. And you get a 
letter back, if you can figure out what they said it is a great 
art form of using the English language to write nothing about 
nothing and tell but nothing of how they determine their 
gasoline prices.
    It is most frustrating to consumers to buy at one end of 
the town at a price and to buy at another end 10 to 15 percent 
difference in the same little town. We are not talking New York 
City. We are talking Springfield, Ohio.
    If you ask people how they do that, they don't want to tell 
you. They can't tell you why this company has this price and 
why that company has that price. And if there was ever 
somebody--I look at a pricing understanding among people, it is 
an area that somebody ought to look at at some point.
    I would like to also say that I drove this hydrogen-powered 
car yesterday, and they are getting there. They are not there 
yet, but it is coming.
    But there are some things we can do in the interim that 
don't take 10 years to get done or 20 years to get done. For 
example--and, you know, I don't do this very often because I 
have some other troubles with this State which we will get to--
California, I have to applaud them on the legislation they have 
done. I wasn't sure it was right at the time, but I don't 
think, if California hadn't passed the laws that they passed, 
that anybody would be doing what they are doing today on the 
hybrid car.
    So far, a couple of people are doing pretty well so far, 
but not enough people there. There are lots of ways that that 
thing could come on market. I know one company is putting it 
into their SUV. There are other things that go into SUV that 
could go into real fast. There is some clean diesel technology 
out there that would dramatically, overnight, change a lot of 
consumption, lessen a lot of consumption and be clean. Well, it 
won't be totally clean, but it is certainly much cleaner than 
today. You can take this cloth and put it down on the tail pipe 
coming out of that, and it is clean.
    Now I know there are some groups out there that don't like 
that, but I think this is a process we have to go through until 
we get to a better solution. So I would like to suggest to you 
that there ought to be more attention to making sure the 
hybrids get out there in greater usage.
    One of the neat things in Virginia--but I understand the 
law is going to expire in 2004--but I have people that worked 
in my office that were buying the hybrid because they can use 
the HOV lane to get to work, and they also get a tax break. 
Well, now I understand Virginia's law may expire in 2004. I 
don't know if it is going to be extended or not, but I think 
should be. Because we ought to encourage people to buy this 
kind of technology, and young people will buy them if they are 
out there, and these are young people buying one. I went to try 
to buy one, but they are all smaller cars. I wanted to buy a 
bigger car. I used to weigh a little more. I lost 30 pounds.

                    SANDIA NATIONAL LAB PENSION PLAN

    But I want to ask a couple of questions here. These are not 
going to be easy questions. But let me start with the tougher 
one here. I am going to read you a little scenario here. Then I 
will ask you a question.
    2001, the contractor that managed Sandia National 
Laboratories proposed to increase its pension benefits to bring 
them in line with those offered by the University of California 
for the three labs it manages. A study contracted by Sandia 
ranked the existing Sandia plant third among 15 among 
comparable organizations, including IBM, General Electric and 
Xerox. The existing Sandia plant was already 25 percent higher 
than the average for those comparable organizations; and, most 
outstanding, the existing Sandia plant allowed its employees to 
collect more in retirement than they do while actively working.
    Another study commissioned by Sandia itself ranked its 
pension plan first among 30 high-tech organizations, including 
Cisco, Compac and Intel, with an employer-paid pension plan 306 
percent higher than the average and the total benefits package, 
including health benefits, 29 percent above average. Despite 
the recommendations of DOE staff to not change the pension 
plan, apparently the plan was increased in 2002.
    I guess the problem I have got now is everybody else in the 
world is going to ask for the same thing. I understand somebody 
from this committee has already written a letter saying, if you 
can do it there, why can't you do it in mine?
    I think that is a problem, sir. I would like you to explain 
the decision made early last year to increase this benefit plan 
for the Sandia contractor employees. I would like you to 
provide for the record any documentation supporting the 
decision. Because I think it is--my personal opinion is it sets 
a bad pattern within the organizations, and I already have a 
lot of problems with some other places where there are people 
working in the labs that have the pension plans the same as the 
universities and all this other stuff. So I am kicking over the 
can, okay?
    Secretary Abraham. I would be happy to answer for the 
record by providing any kind of background or detail. Although 
I would say that the notion that the recommendations from 
within the Department were against doing this is inconsistent 
with what happened. The recommendation actually from the 
National Nuclear Security Administration was that we should 
move forward with this change; and the rationale for it was, as 
I recall, one that relates to a very serious challenge which we 
have in the weapons labs and perhaps in other parts of the 
complex as well. It is a question that pertains to retention of 
skilled employees.
    As you know, we have three weapons labs. Two of the three 
weapons labs had one form of pension benefit and the third lab, 
the Sandia lab, had a different one. We were struggling with 
and continue to struggle with the challenge of retaining an 
aging workforce in these facilities, a skilled workforce that 
is hard to replace. It was our belief, and the recommendation 
to me, that we should in fact bring into parity the pension 
programs at the three labs.
[The information follows:]

GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    
                            PENSION PROGRAM

    Mr. Hobson. It might have been better to reduce the other 
two, but I don't think you can do that.
    Secretary Abraham. Unfortunately, as you know, the other 
two are linked to the pension programs of the institution.
    Mr. Hobson. And that is a problem with me, sir. I will tell 
you, both of those--all of those are better than what we get as 
public servants. I don't want to be too argumentative, but 
Sandia's job acceptance rate to offering is 83.3, and the 
attrition rate is 4.5, according to what I hear. But I would 
like to you address that. You don't have to address it now, but 
I would like to you talk about that at some point.
    Secretary Abraham. If I just could elaborate for 1 minute. 
I don't want to leave here today in any sense suggesting this 
to this Committee, that we are irresponsible in making 
decisions of this type. This was a decision we thought about 
long and hard.
    One of the principal challenges, which I believe we will 
all work together on in the years ahead, is the challenge of 
attracting sufficient skilled personnel to work on these kinds 
of programs. In our judgment, that was the rationale in this 
case, but it is something that goes beyond one pension plan at 
one lab. It is a broader problem that we will be presenting in 
future discussions as well.
    Mr. Hobson. Well, a lot of agencies have a problem, and the 
Defense Department has the same problem with an aging 
workforce. Senator Voinovich and I worked on a program for the 
Defense Department, especially in the Air Force and--to try to 
handle that. Because one of the things I think we need to look 
at if we were running a business--we have got an aging 
workforce. One of the things we try to do is buy out some of 
that workforce and bring in some younger people on and make 
sure we had people coming along behind them.
    I suspect that if we looked--and I haven't done this--that 
we would find that you are having difficulty bringing younger 
people in behind these people and that you have some aging 
workforce problems that I would like to you work with you on.
    I think, overall--and that doesn't mean I am in the age 
where I understand these problems, but--and I may not be--but I 
think if I were running a business, and I like to look at these 
as a business, that we need to look at this workforce. We need 
to figure out what is the best way to maintain the long-term 
viability of some of these programs. Because they are not going 
to go away. There is basic research and other things that we 
need to do.
    Secretary Abraham. I look forward to doing that.
    Mr. Hobson. If you get pressures from other places on 
making certain things, I want you to know that I feel very 
strongly about this. Senator Voinovich and I have worked 
together on another program to try to help an aging workforce, 
so I will work with you on that.
    Secretary Abraham. We appreciate that.
    Just to comment on one of the challenges that I referenced 
in an answer a moment ago with respect to nuclear energy: there 
have been a number of signals to the marketplace that were not 
encouraging to people pursuing engineering or nuclear physics, 
in the sense that we haven't built a new nuclear facility in 
this country for 30 years, and the decisions have been made 
that we aren't expanding our weapons complex in terms of new 
weapon systems. Those factors have contributed to this, and it 
is something we would appreciate working on together with you.

                         YUCCA MOUNTAIN FUNDING

    Mr. Hobson. My time is up, but I want to ask one question 
about something that I am going to go visit here shortly. The 
Department submitted a request of $591 million and asked for 
the same amount again in 2004. However, the conference report 
for 2003 provided you with only $457 million. So you already 
start out with a shortfall of $134 million. Does the 
Administration plan to submit a supplemental request in fiscal 
year 2003 for additional funding for Yucca Mountain or at least 
amend the fiscal year 2004 request to show what more moneys are 
needed to meet the license application deadline? Without either 
a supplemental appropriation in 2003 or an amendment to the 
2004 request, how do you intend to meet the license application 
milestone?
    Secretary Abraham. As I indicated in the previous answer, 
we have not fully analyzed what we can do in the appropriated 
level that we received. It is certainly below what we felt was 
the ideal level to meet the targeted 2004 docketable license 
application submission. As soon as we have really crunched the 
numbers and analyzed this, I will be happy to provide an 
answer. I am not prepared today to tell you whether we would 
seek either a supplemental or an adjustment, but we will make 
that decision fairly soon.
    Mr. Hobson. I have been looking at the Yucca Mountain 
project. I am going to visit it, one of the first places I will 
go. I am going to invite Members to go, especially the new 
Members, or whoever else wants to go.
    I have been reading a couple things I would like to talk to 
you about, some different approaches to things. What I would 
like to do is send the message that Yucca Mountain is going to 
happen. I want it to be in my lifetime.
    But I am going to yield my time, and we will start a second 
round. Who is first?

              LABORATORY DIRECTED RESEARCH AND DEVELOPMENT

    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Secretary, a couple comments and then several 
questions.
    I referenced in my opening remarks the progress being made 
as far as lab-directed research, and I do appreciate that. I am 
of the opinion, though, that if they don't feel pressure from 
you and your office every day, they will immediately begin to 
backslide.
    I do have a number of questions that will be submitted for 
the record but would note, again, that progress has been made 
as far as accountability and the cross-pollenization of using, 
if you would, dollars from domestic programs to fund defense 
lab-directed research. The differential a year ago was 18 
percent. That differential is down to 5 percent but is still 
going from domestic to defense.
    But as far as making sure people have a program that is 
relevant to the missions of the Department of Energy, and I 
think that still gives them very broad discretion and 
interesting projects to work as far as retention and 
attraction. I would ask, though, that you continue to keep 
pressure on them.
    The second is, I am pleased that have you a task force--and 
we talked about it earlier in the week--about looking at the 
future of the science program as far as where that is going to 
be going and what will be funded.
    The two observations again I would make as you proceed are, 
one, that that again should be focused on the responsibilities 
of the Department; and obviously over the last 2 years those 
responsibilities have significantly increased as far as 
national security so that people again don't think that this 
somehow--if there are improvements and increased funding, 
personally I think we should be spending more on research here, 
it's not a blank check just to kind of go off and do what their 
heart's desire.

                 COMPETITION IN DOE LABORATORY RESEARCH

    The second thing, and I remain very concerned about this, 
is the issue of competition at the labs and as far as some of 
the research being done in the science programs; and I would 
reference the development of the nanoscience centers. We have 
had--and I think a more extended conversation will be held when 
the people from science come in--representations that we are 
going to become more competitive. From my personal observation, 
that has not occurred.
    I think as we proceed with this type of research, one, it 
should pertain to the mission of the Department; and two, I am 
very concerned about the lack of competition coming out of 
these labs. You know there are some broad references and we are 
up to something, and then nothing happens.

                        NUCLEAR NONPROLIFERATION

    On nuclear nonproliferation, the overall nonproliferation 
budget increased by 30 percent this year. But nuclear 
nonproliferation R&D and monies for the Materials Protection 
Control and Accounting Program that provides security equipment 
to secure Russian nuclear materials and weapons are proposed 
for reductions. Could you explain why reductions occurred in 
those two programs, despite the 30 percent increase?
    Secretary Abraham. I would urge Members to look at the 
actual numbers, because I believe the cumulative reduction is 
less. Of those two programs combined, the very substantial 
program is less than $2 million, basically level funded.
    With regard to the R&D, I believe it is because we--I can't 
remember the exact number of the increase, but I think either 
in last year's budget or the previous year's we substantially 
increased the R&D efforts, and now we feel we are at an 
adequate level. I don't think that number has to keep going up. 
We feel we are at a good level at that enhanced level that we 
received a couple of years ago.
    On the Russian programs, I would just say this: We are 
prepared and have developed, as was commented on by several 
Members, a very effective working relationship with the 
Ministry of Atomic Energy in the Russian Federation. These 
programs in many cases are being expanded and accelerated, and 
we believe this budget is on track to accomplish the goal of 
expediting their completion by approximately 2 years.
    I would also as a cautionary note indicate that there are, 
however, absorption challenges that have to be dealt with as 
well on the Russian side. By that I mean issues that relate to 
everything from contracting challenges to access challenges; 
and we believe that the funding level here, which is, as I 
said, relatively speaking I think a level funding, is 
sufficient to meet the capabilities of what we feel we can do 
in this 2004 fiscal year.
    I think that our Department has demonstrated in previous 
testimony we are very committed to moving these programs ahead 
as far as is reasonable. It isn't a budgetary constraint. In 
other words, in our judgment, it was a recommendation based on 
practical feasibility, not financial feasibility or financial 
priority.

                         DOD-DOE COLLABORATION

    Mr. Visclosky. Thank you for that.
    Mr. Hobson and Mr. Frelinghuysen serve on the Defense 
Committee as well as I myself, and the last line of questioning 
I would have is on the nuclear weapons program. Again, we had 
extensive discussions privately about this. Again, I appreciate 
the changes being made on budgeting so we have a better 
opportunity to look at this in detail.
    My sense is, serving on the Defense Subcommittee, it is 
easy for DOD to come to DOE and say, here are our requirements 
as far as the stockpile. I guess I have a number of questions, 
but there are some I think for the record.
    I would really emphasize I am very concerned about this 
issue that DOD comes in and says, here is our requirement. The 
money is coming out of your pocket, despite the representations 
being made by the Commander-in-Chief that we are going to have 
a reduction in the stockpile.
    Secondly, we have an increase under the 2004 budget of $462 
million, which is the largest single increase for any account 
at the Department. Is there any effective dialogue between 
yourself and NNSA and DOD that some decisions have to be made 
as far as numbers here and the dollars?
    Secretary Abraham. Well, I think there is much more 
effective discussion now than when we started. I think that the 
Department of Defense has been working with us--maybe we will 
ask Ambassador Brooks to comment as well--but I think that we 
have had much better collaboration in the submissions of our 
subsequent budgets after the first, the 2002 budget, in terms 
of the analysis that went into the nuclear posture review and 
other similar sorts of guidance. It is now clear for us that 
the outyear projections are consistent with the directives that 
the DOD has enunciated in those kinds of papers.
    Mr. Hobson. Let me say something before you do. This is 
going to be my question in the second round, and that is fine. 
But I am very concerned about who is wagging the dog's tail 
here on the money. You have now got three Members of this 
committee who sit on Defense, so we are going to take a more 
proactive role to try to protect the monies over here, at least 
I am. I think Pete would say the same thing; and I think Rodney 
is there, too. Because I got a feeling if we apply this same 
logic that they are applying to you to their jet fighters, 
there would be a lot of pushback. So I think we need to review 
this.
    We have talked about this earlier, but I think we need to 
get into this at some point much more strongly. If I have to, I 
will take it up at the other committee that I sit on when we 
get these guys before us. Because I think this has to be a 
partnership, and sometimes my feeling is it becomes a 
directorate. So we are going to try to help you in this 
endeavor to make sure that it is fair to your budget. Because 
they have an easier time in getting their budget than you do, 
in my opinion.
    Mr. Visclosky. Mr. Chairman, given the position of the 
Commander-in-Chief of the United States, if you don't force DOD 
to look at this in terms of the budget and the imposition they 
are placing on you, we could go on flat line forever.
    There are a series of questions that I assume the Chairman 
is going to follow up, but one that I find interesting is that 
last year in testimony you indicated that DOE, Department of 
Energy, was at or near its capacity to dismantle weapons so 
that any additional warheads removed from the stockpile, should 
that ultimately be the decision, would have to be placed in 
storage for at least 10 years. Do you have a request in the 
2004 budget that would increase that capacity as far as 
dismantlement of weapons?
    Secretary Abraham. I am going to ask Ambassador Brooks if 
he would comment on that specifically.
    Ambassador Brooks. We don't have a specific request to 
increase capacity. The way we intend to do dismantlement is to 
keep level funding and level workload at the Pantex facility. 
So dismantlement will rise and fall as life extension programs 
rise and fall, only out of phase. We think that that is a more 
efficient way than ramping up and then ramping back down people 
who are skilled workers and who, because of security and 
others, take a long time to bring on and lay off. So our 
approach has been to keep a steady workload at that facility 
and accept the fact that that means that the priority is given 
to service life extension and we fill in with dismantlements. 
Nonetheless, we are dismantling, literally as we speak.
    Mr. Visclosky. I do attach a lot of importance to this. 
There are a lot of dollars, and it is a key issue.
    Mr. Hobson. Mr. Doolittle.

                         STANDARD MARKET DESIGN

    Mr. Doolittle. FERC is acting to provide a much more 
stable, long-term platform for electricity markets; and the 
proposed SMD rule, that is, standard market design rule, would 
require all areas of the country to adopt the standard design 
for electric power markets based on best practices with 
regional differences accommodated as appropriate. I understand 
this will be the primary tool to prevent severe market 
malfunctions and abuse of market power and to respond quickly 
to problems as they arise.
    In the Statement of Managers accompanying the Conference 
Report for Fiscal Year 2003 in the omnibus appropriations bill 
the Secretary of Energy is directed to conduct an independent 
assessment of FERC's proposed rule on standard market design. 
This assessment is due to Congress by April 30th, 2003. So I 
wondered if you could tell us which office in DOE will conduct 
this assessment and will it be Federal employees or DOE 
contractors that do the technical analysis?
    Secretary Abraham. We have assigned that responsibility 
that came out of the recently-passed legislation to Under 
Secretary Card; and we are in the process of determining how we 
will, in an objective and effective fashion, independent 
fashion, provide the independent analysis that has been 
requested. We recognize Congress's desire to have an analysis 
that really is of an independent nature. We intend to fulfill 
that.
    Mr. Doolittle. You have yet to decide whether it will be 
DOE employees?
    Secretary Abraham. I would say I believe we are looking at 
contracting out of that responsibility, but I don't believe we 
have made a final decision yet.
    Under Secretary Card. It will be led by federal employees.
    Mr. Doolittle. Has work on the assessment begun? I guess it 
would be preliminary matters if you have yet to contract out.
    Secretary Abraham. Again, the Under Secretary has been 
designated to be in charge of this report. It obviously only 
came to us as a result of the legislation, so we are not in a 
position to prematurely try to suggest how it might result. But 
I can assure you what we think are appropriate steps to assure 
its independence and to provide the guidance that I think 
Congress asks for.
    Mr. Doolittle. Do you anticipate being able to deliver the 
independent assessment on schedule? In other words, by April 
30, 2003?
    Secretary Abraham. Yes, we do.
    Mr. Doolittle. Could you explain what are the problems in 
the current system that the SMD was designed to resolve?
    Secretary Abraham. Well, I think that, broadly defined, we 
have in our energy plan identified an array of challenges that 
are going to confront us over the next 20 years and beyond with 
respect to energy or electricity, really.
    First is the challenge of a tremendous increase in 
electricity demand. We foresee that increase to be 45 percent 
or more over that period of time.
    Mr. Doolittle. Over what span of years?
    Secretary Abraham. Twenty years. That in turn calls into 
question, one, are we going to be able to meet that demand with 
additional capacity; two, are we going to have sufficient 
investment in that capacity to meet the demand; three, are we 
going to have sufficient transmission capabilities to meet that 
demand?
    We conducted a national grid study after the release of our 
energy plan. It was one of the directives of our Department and 
concluded that there were a lot of challenges. You are well 
familiar with some in California, PATH 15, which we have taken 
action to address, but a lot of similar kinds of issues that 
are arising. As a result, we felt that there needed to be 
legislative action to bring more competition into the 
marketplace, to address these transmission issues, and to have 
sufficient incentives for investment in building the 
infrastructure required. Those are some of the challenges.
    Now, obviously, I am not going to prejudge the results of 
the analysis we do as to the effectiveness of the SMD proposal 
at FERC to meet all of those considerations that reduce costs 
to customers, increase investment, and maintain reliability. I 
mean, those are the goals; and we will try to assess and 
provide you with some guidance.
    The transmission grid, in our judgment, is inadequate to 
meet that demand increase. It is old, and it was not really 
built in a way to handle this long-haul-load approach that now 
is more common. It was built at a time largely when you had a 
single power plant in a region or community that provided 
service with lines directly to its customers. Now we have a 
different kind of environment. So the point you made about 
regional considerations is also an important one.
    We recognize the competitive markets are important, but we 
also recognize that there are distinctions between different 
parts of the country, and our analysis will be aimed to address 
that as well.
    Mr. Doolittle. You mentioned the Path 15. Could you comment 
on what the schedule is or when----
    Secretary Abraham. We believe completion of that will be 
late 2004. The Western Area Power Administration, one of our 
power marketing associations, has taken the lead. I think the 
results are a very positive indication that we can effectively 
deal with some of these bottlenecks, but there are a lot of 
others that will emerge as these demands for electricity 
increase over the next 20 years.
    Mr. Hobson. Time has expired.
    Mr. Pastor.
    Mr. Pastor. Thank you, Mr. Chairman.
    I wasn't going to talk about this particular issue, but 
WAPA, the grid system, as you say, is outdated and has major 
problems, but we had to kind of push WAPA and encourage them to 
begin updating their grid system. So I think, at least in our 
part of the world, we will continue to get WAPA and try to 
appropriate money so they can update the grid system because it 
is outdated and for many years has not been a great priority.

                                  MOAB

    But the question I did have was on Moab, the tailings site. 
There is great concern for those of us who live adjacent to the 
Colorado River about the possible tailings leaching into the 
Colorado and affecting California and Arizona and States that 
border the Colorado River. In several appropriations bills we 
have included bill language and other language to have DOE 
evaluate and come back with recommendations; and I think, at 
least in the past, people who are interested in this have felt 
that probably there has been less than effective 
recommendations.
    Most recently, people have talked about the possibility of 
taking the tailings and relocating them and recycling them 
close to St. George, Utah. I bring that to your attention 
because some of us will be promoting that to DOE as a way of 
dealing with the Moab tailings sites.
    Secretary Abraham. We look forward to getting your 
recommendations.

                        LOS ALAMOS NATIONAL LAB

    Mr. Hobson. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    I have served on the Committee 8 years, and my first 
knowledge of Los Alamos came from the history books. But since 
I served on the Committee the last 3 or 4 years, when I think 
of Los Alamos I think of allegations of espionage, I think bona 
fide lack of security and management failure. We went through 
that process from a laymen's viewpoint. To my mind, it was 
blamed on the culture of that lab and other laboratories, I 
think quite an inexcusable excuse.
    But there have been more recent revelations. Articles in 
the Energy Daily--I am pretty sure you are pretty familiar with 
some of those headlines: FBI investigating theft charges at Los 
Alamos; Lost computers raise security concerns; Los Alamos 
fires fraud investigators; They fire back; Los Alamos operator 
admits lax security practices; Los Alamos laboratory director 
resigns. That is from last week: Los Alamos still riddled with 
theft; Ongoing cover-up.
    These are pretty strong allegations. Literally, what the 
hell is going on out there?
    Mr. Hobson. Gee, and I don't think the Mustang was even 
fuel efficient.
    Mr. Frelinghuysen. I couldn't believe this quote here from 
the Energy Daily, and I quote: ``One of the workers under 
investigation allegedly enlisted help in transporting the goods 
because he could not fit some of them into his Porsche.''
    What is going on out there? And what are we doing about it.
    Secretary Abraham. What is going on is--really I think on 
two tracks--or three.
    Track number one is that there are ongoing investigations 
being conducted by our Inspector General at our request. There 
are investigations going on by the FBI, and I believe the 
Department of Justice as well, to determine whether or not 
actions that have been reported constitute what the facts are 
and whether or not there are issues of criminality involved.
    These are very serious problems, and we don't take them 
lightly. We made it very clear to the contractor from the very 
initial point when we learned of these issues, well before they 
appeared in the press, that we hold this university contractor 
fully responsible for the management of this lab and for its 
operations; and if they can't perform this responsibility, then 
we will substitute with a contractor who can.
    Actually, it was our Inspector General who began a regular 
review of the purchase card programs at this lab and some other 
sites that helped stimulate some of the revelations. We did 
that across the complex really in response when the GAO came 
forward in July 2002 saying there may be purchase card problems 
throughout the federal government. But these issues are being 
taken very seriously by me.
    We have made it clear to the University of California; and 
we did so in a number of personal meetings which I have had 
with the president of the University, with others of the 
University, as well as the lab director before his resignation. 
We have been directly involved since we found out about some of 
these revelations in demanding accountability here, and we will 
continue to do so.
    Now, some specific actions that we have taken I think have 
launched a number of reviews. There has been a change in a 
number of key management positions. The University has brought 
in outside professionals to evaluate the operations systems, 
the audit systems, the purchase order systems and so on.
    But I have separately asked both the Acting Administrator 
of NNSA as well as the Deputy Secretary to make a determination 
and a recommendation to me by April 30, based on the results of 
these reviews, whether or not to take any specific additional 
action with respect to the University's role.
    Mr. Frelinghuysen. Petty theft is one thing; grand larceny 
is another.
    I understand your need to be cautious and thorough. That is 
your nature, and you are doing a good job. But as you make a 
decision, I think we have cause for this contract to be 
terminated; and what is to stop you from doing it sooner rather 
than later?
    Secretary Abraham. I believe that we should evaluate the 
situation fully and determine whether or not some of the 
charges that have been made have been appropriately acted on; 
and if they haven't, I have asked two senior members of my team 
to make that decision. They were out in Los Alamos a week ago 
to determine both what is going on as well as changes that are 
being recommended by the University. I am just not prejudging 
until I get the report, but I am prepared to act.
    Mr. Frelinghuysen. Just from a national security angle, 
which goes back to some of the other allegations, which, quite 
honestly, I think had some substance in terms of espionage, to 
think that things are walking out of the place and there 
appears to be lax control and knowledge about the whereabouts 
of these things is pretty disturbing.
    Secretary Abraham. Right, and I couldn't agree with you 
more.
    There are essentially three functions that go on in a lab 
like this. There is a security function, which overrides all 
other issues; there is the science work; and then there is the 
management of the operation. To this point, the issues that 
have been raised are in the operational management of this lab; 
and we are prepared, as I said, to take appropriate action if 
we conclude that that no longer should be handled by this 
university or be changed in some other fashion. But I take it 
as seriously as you do, and we have been--I have been 
personally, directly engaged with the lab leadership as well as 
the University leadership from the very onset of this to make 
it clear to them that when we hire somebody to be a contractor 
we put responsibilities in their control and expect them to be 
accountable.

                   UNIVERSITY OF CALIFORNIA CONTRACT

    Mr. Hobson. Even if you don't do anything to terminate the 
contract now, at some point you need to get criteria about how 
you look at these things in the future; and someplace along the 
line--I think this expires in 2005, am I right about that--so a 
decision is going to have to be made as to whether to compete 
this or not.
    I am not asking you to say anything about it, but at some 
point, even if you don't terminate in midstream, criteria for 
evaluation and the criteria as to whether to compete this 
contract or any other one needs to be set up.
    Secretary Abraham. If I could just comment, I agree with 
you. Several have mentioned the competitiveness of the 
contracts or competing contracts is a concern. You know, we are 
a department that is somewhat unique in that no other 
departments have federal research facilities like we do. Other 
than the Department of Energy, there is no competing for those 
contracts. They are noncompeted. Our department operates 
differently and has that avenue available to us, and it has 
been used with some of the labs. You noted some for which it 
has not been used.
    The one challenge that I have encountered is that, despite 
having at least the option of competing contracts for these 
research laboratories, it was my conclusion that we do not have 
anything close to a clear set of criteria on which to make that 
decision.
    We had, in my own opinion, a pretty subjective system of 
determination--one that needs to be improved. To that end, I 
have put together a Blue Ribbon Commission of people to quickly 
evaluate and make recommendations based on practices in the 
private sector and other areas where government contracts are 
competed. These recommendations would form the basis of a 
compete/no compete decision, where we would have clear criteria 
for making sure that the standards are well known to everybody; 
not some sort of murky situation in which it appeared that 
somebody got benefits, and also provide for monitoring 
contracts during their pendency.
    So this would not be something that is held in total 
secrecy until the final moments of a contract's existence or to 
the point where it needed to be competed. I expect the results 
of that to be available quite soon, and I will be happy to 
share them.
    Mr. Hobson. I think you are going in the right direction. 
We just want to say that there is--if you can use us--and you 
have some models that work or appear to work that you can draw 
upon.
    Mr. Edwards.

                        NUCLEAR NONPROLIFERATION

    Mr. Edwards. Thank you, Mr. Chairman.
    Mr. Secretary, I would like to return to the issue of 
homeland defense against nuclear terrorism.
    Congressman Hunter, I think rightfully so, had some very 
critical comments in his op ed column in the Washington Post 
yesterday about some wasteful projects; and I am a little bit 
concerned that Members of Congress might and members of the 
public might come to the conclusion that all this money we have 
been spending with Russia has been thrown out the window. I 
don't think that is accurate, and I don't think Mr. Hunter 
suggested that. But I would like to give you a minute or two to 
point out what the successes have been. What have we 
accomplished for the DOE investments and the Nunn-Lugar 
program?
    Secondly, is now a time we need to start focusing more 
attention on the non-Russian former Soviet states? How many of 
those states have nuclear material in them? Do you presently 
have authority under Nunn-Lugar to spend dollars in those 
states? And why--I was always curious, why did it take a 
private group, Ted Turner's group, to spend money, several 
million dollars, to get a serious quantity out of Yugoslavia? 
Why weren't we as a Nation, as a government on top of that, 
too?

                       U.S.-RUSSIAN COLLABORATION

    Secretary Abraham. We were involved in that, too. We didn't 
issue maybe the same press release on it, but that was a 
combined effort, and we appreciate the role they played. I 
think it is a good example of the kind of work that can be done 
outside of the former Soviet Union on serious challenges.
    We are working on similar tracks in places like the Former 
Soviet Union, Czechoslovakia, and the Czech Republic.
    Mr. Edwards. Are your hands kind of tied in terms of 
dollars?
    Secretary Abraham. We are actually trying to clarify some 
legal questions that our own general counsel has raised as to 
what extent we can go beyond the scope of the FSU to employ 
some of our programs in other areas. We will clarify that and 
then indicate if we feel that there needs to be action taken to 
do that.
    I think the success of these programs, broadly defined, is 
very positive. We have, as you know, accelerated and expanded 
the material protection program. So we expect to finish by 
2008, 2 years ahead of schedule, the work we are doing in 
Russia on those programs.
    I am going to be travelling to Vienna next week to be the 
presiding officer at a U.S.-Russian Federation International 
Atomic Energy Agency International Conference on Radiological 
Dispersal Devices. This grows out of a bilateral effort that 
the Russian Federation and we launched last year to look at 
what we could do with orphan sources that might previously have 
not seemed to be a potential source of concern in Russia but 
now have emerged because of concerns about nuclear terrorism. 
We hope now to expand some of the thinking we have done on that 
to educate, enlighten and enlist people in G77 to look at their 
own challenges. I am very optimistic about that conference.
    The program for plutonium disposition is making very good 
progress. The budget we have submitted begins the construction 
on the U.S. side. The Russian Federation has now approved the 
design for a MOX facility that will be employed to dispose of 
34 metric tons of plutonium on the Russian side, and that 
progress is an important achievement. It expedites moving 
forward.
    You mentioned earlier the Global Partnership Initiative 
which President Bush helped to lead and bring about. That 
partnership has now basically recruited $20 billion to be spent 
over the next 10 years by the G77 on various projects related 
principally to the Russian Federation. We have, since I think 
my last appearance here, finalized the terms to extend the 
highly enriched uranium program that we have with the Russian 
Federation where we purchase highly enriched urnaium for our 
domestic consumption and which will slowly move 500 metric tons 
of weapons or highly enriched uranium out of the Russian 
Federation.
    So we got a lot of things going; and we, in fact, are on 
the verge of expanding the HEU program even further. Not a huge 
expansion, but an important step to go beyond the original 
confines. So I think that there is a lot of positive progress 
to report.
    Mr. Edwards. I will finish by saying I don't want you to be 
the next Mike Parker, but if there are areas that we need 
additional funding----
    Mr. Hobson. I know Mike Parker. Nobody wants to be the next 
Mike Parker.
    Mr. Edwards. This is such a critical area to our country--I 
hope we can work together--perhaps we weren't aware of when the 
Administration put together its 2004 budget.
    Thank you, Mr. Chairman.
    Mr. Hobson. I should say I know Mike Parker, and you are 
not Mike Parker.
    By the way, Mr. Secretary, I want to thank you for your 
indulgence with us today and your time. I know you have run a 
little over what we anticipated, but I think the members 
appreciate your willingness to answer very candidly their 
questions.
    What I would ask is if any member has any questions for the 
record that they submit them by today and that the Department 
would attempt to get them back in 2 weeks. I know they never 
meet that, but I certainly would like to get them back as fast 
as you can, sir.
    We appreciate your time. Thank you very much.
    The hearing is adjourned.
    [The question and answers prepared for the record follow:]

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                                          Thursday, March 13, 2003.

                       U.S. DEPARTMENT OF ENERGY

                               WITNESSES

ROBERT G. CARD, UNDER SECRETARY
DR. RAYMOND ORBACH, DIRECTOR, OFFICE OF SCIENCE
DAVID GARMAN, ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND RENEWABLE 
    ENERGY
WILLIAM MAGWOOD, IV, DIRECTOR, OFFICE OF NUCLEAR ENERGY, SCIENCE AND 
    TECHNOLOGY

                           OPENING STATEMENTS

    Mr. Hobson. The hearing will come to order.
    I want to welcome Under Secretary Card today, as well as 
Dr. Orbach, Mr. Magwood, and Mr. Garman.
    The hearing this morning will address the fiscal year 2004 
budget request for Department of Energy research programs in 
science nuclear energy and renewable energy. The Department is 
proposing a number of new major initiatives in this budget from 
an international fusion energy project to more nanotechnology 
centers, advanced nuclear reactor designs to the hydrogen fuel 
initiative. These initiatives are not esoteric research 
projects of interest to only a few scientists. If successful, 
these research programs could have an enormous impact on our 
daily lives.
    For example, I consider that nanotechnology has a potential 
to drive our economy forward in the same way that the 
development of the integrated circuit did several decades ago.
    My enthusiasm is tempered, however, by several concerns. 
While the Department has generously funded these new 
initiatives, it has underfunded several other key technologies. 
Given the importance of advanced computing to so many of our 
scientific endeavors and the fact that the Japanese have 
recently surpassed the United States and the rest of the world 
in developing the most powerful supercomputer, I do not believe 
the Administration has dedicated sufficient funding for this 
important program.
    I am really interested in learning about how the 
Administration decided to increase its support for certain 
initiatives, such as fusion or hydrogen, but not others such as 
the rare isotope accelerator, geothermal energy, or the 
university reactor program, and I am most concerned about the 
long-term funding implications of these new initiatives in the 
future fiscal years. Each of them requires a major multi-year 
commitment of funding. These may be the right long-term 
investments for the country to make, but we need to make them 
with our eyes open. When I was in the State senate, a guy used 
to say, ``Hobson, when you plant all those acorns, remember 
they grow into oak trees down the road and you may not be 
prepared for that when it happens.''
    As I told the Secretary of Energy at our hearing last week, 
I expect the Department to do much better at competing its 
contracts. There is no excuse for not competing some of the 
laboratory contracts that have been held by the same contractor 
for several decades or since the inception of the program.
    I also expect the Department to do a better job in 
involving the Nation's universities in these research 
initiatives. This important research should not be the 
exclusive playground of a handful of national labs and their 
select university partners, but should provide new 
opportunities for the involvement of a broad range of academic 
institutions.
    Remember, gentlemen, we will be all retired when the first 
fusion power plant comes on line. Hopefully, some of us will be 
alive. These initiatives are really for our children and our 
grandchildren, and we need to train the next generation of 
scientists and engineers to follow through on the research that 
we start here.
    As with our other hearings, Mr. Visclosky will have as much 
questioning time as he needs, and our other subcommittee 
members will have five minutes each in order of their arrival 
at the hearing. Time permitting, we will do a second round of 
questions.
    Before we hear the testimony of Under Secretary Card, Mr. 
Visclosky, do you have any opening remarks?
    Mr. Visclosky. No, Mr. Chairman.
    Mr. Hobson. Fine. We will go right to you sir.

          FY 2004 BUDGET SUMMARY OF ENERGY RESOURCES PROGRAMS

    Mr. Card. Mr. Chairman, anticipating you were going to 
bring up the acorn oak tree analogy, that is why Bill and I are 
sitting together, so you can see what that looks like.
    Thank you. It is a pleasure to be back. Mr. Chairman, 
Members of the Committee, it is a pleasure to join you today to 
present details of the President's Fiscal Year 2004 budget 
submission for the Department of Energy. While the focus of 
today's hearing is on the energy research and science programs 
under this Committee's jurisdiction, I will take a minute here 
to describe more broadly the context of our strategy.
    The Department appreciates the support of you and this 
Committee over the years, and I have had the pleasure of 
working with you in many of them. So we are anxious to continue 
our strong working relationship.
    First, in the overview, in a nutshell, DOE's energy 
strategy is the generation of carbon free electricity and 
hydrogen. This is supported by expansions of two important 
initiatives. First is FreedomCAR, which is now paired with the 
Hydrogen Fuel Initiative this year, which involves hydrogen 
programs and nuclear and fossil energy. This is a renewed 
commitment to fusion power, which you spoke of, and continues 
support of other energy sources and basic research supporting 
hydrogen and electricity production; and the strategies and 
expansion of the carbon sequestration initiative.
    While FreedomCAR and hydrogen fuel are focused on 
transportation, implementing this technology at the production 
scale required for vehicles could support breakthroughs in 
solar power systems, distributed generation, and other energy 
programs.
    A second area to highlight in our integrated strategy is 
DOE's most significant internal environmental challenge, which 
I know you will be having a separate hearing on, which is the 
management of spent nuclear fuel and high-level waste; but it 
is relevant to this hearing as well, because at this end, we 
have integrated three continued science key programs to 
maximize our ability to safely, rapidly, and economically 
manage this material. These three programs include: an 
environmental management accelerated clean-up program; the 
nuclear energy fuel cycle program that we will talk about 
today; and, second, the Yucca Mountain repository program. 
Thirdly, I want to draw your attention to a strong basic 
science research program with growing emphasis on 
nanotechnology, computation, and genomics, which underpins both 
the priority programs previously discussed and the remaining 
Departmental initiatives.
    To support these initiatives, the Department has 
aggressively implemented the President's Management Agenda with 
a number of activities, including, for example, organization 
improvements in almost every program and reducing layers of 
management, streamlining requirements that do not add 
commensurate taxpayer value, more intensive project oversight, 
improved program evaluation criteria to guide resource 
allocation decisions, and improving government programs.
    Again, we are grateful for the Committee's support of DOE's 
R and D programs and look forward to your questions and 
comments.
    [The prepared statement of Undersecretary Robert G. Cord 
follows:]

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    Mr. Hobson. Mr. Visclosky, do you have questions that you 
would like to ask at this time?
    Mr. Visclosky. Not at this time.
    Mr. Hobson. Okay. Who is next? Mr. Simpson. He is learning 
fast. He shows up early.

                NUCLEAR ENERGY RESEARCH AND DEVELOPMENT

    Mr. Simpson. I was not born last night.
    Thank you, Mr. Chairman. Thank you, Under Secretary Card 
and Mr. Magwood and Dr. Orbach and Mr. Garman for being here 
today. I appreciate your attendance here at the hearing.
    The first question is for Mr. Magwood. First, let me state 
that I have appreciated the opportunity to work with you and 
the rest of the Department in an effort to transfer the INEEL 
to the Office of Nuclear Energy and to make it the command 
center for our Nation's research and development work on 
nuclear power. You have been helpful to me and my staff, and I 
know you have worked very hard over the last year at this 
effort. In fact, it seems almost every other day we need your 
assistance in some area and you have always been very 
responsive and I want to thank you for that.
    As you know, I believe that expanding our Nation's use of 
nuclear power and coupling that with hydrogen production is one 
of the most promising ways in which we might provide clean, 
affordable, and reliable energy for a growing economy in the 
future. That having been said, achieving our goal will require 
resources and a firm commitment from this Administration.
    Do you believe that the 2004 budget request puts the 
nuclear energy research and development program on the correct 
path, and do you expect growing budget requests in the future 
years on this work?
    Mr. Magwood. Well, first, Mr. Simpson, let me thank you for 
your comments. We have worked hard to bring the Idaho National 
Engineering and Environmental Laboratory back to its nuclear 
technology roots. There is still a long way to go, and I 
appreciate your efforts to work with us to make that a reality.
    This year's budget, I think represents a very, very 
important milestone in development of the program. As you know, 
over the last several years, we have been struggling to 
establish a good solid framework for nuclear technology program 
growth. This year, I think we have accomplished that. We have 
established significant new programs, as you mentioned, in 
nuclear-generated hydrogen technology, in fast fuel cycles, and 
in generation for nuclear energy systems.
    These basic programs will be the platform for growth in the 
future, and Under Secretary Card and I have actually had 
significant discussions about the vision for INEEL and how 
there might possibly be a growth path in future funding. Of 
course, we have to earn that. We have to work hard to plan 
carefully and to convince our bosses, the Department, and the 
Administration, ultimately, this Subcommittee and others that 
we do have a good vision for the future and that the projects 
we are proposing make sense for the future of the country.

        IDAHO NATIONAL ENGINEERING AND ENVIRONMENTAL LABORATORY

    Mr. Simpson. Well, I appreciate that, and the vision for 
future, that is something, obviously, that I am very interested 
in and want to work closely with you on.
    It was announced by the Secretary last year that the Idaho 
lab would now report to your office and would become, as I said 
earlier, the Nation's command center for nuclear energy 
research and development. The DOE's lab tables, however, show 
that the INEEL received $10.9 million for nuclear energy 
research and development funding for 2004. One of our Nation's 
weapons labs, Los Alamos, will actually receive more than 
Idaho, $12.1 million.
    If the INEEL is DOE's center for expertise for nuclear 
energy, can I expect the Department will be doing more of this 
work in Idaho in 2004 and in future years? And also let me 
point out that as I looked at the budget documents and the way 
in which the money is allocated across the Department, it 
occurs to me that the weapons labs have done a great job of 
protecting their funding, but seem to have a relatively easy 
time of accessing money from the Nuclear Energy and Office of 
Science budget.
    Is this appropriate, or does it allow too much of your 
budget to go elsewhere?
    Mr. Card. Can I take the first shot at that?
    Mr. Simpson. Sure. Yes.
    Mr. Card. First of all, this is a transition year. We are 
trying to use the completion of the EM program as part of the 
funding base for the NE growth which we are expecting in Idaho, 
and we are hoping that it is substantial.
    I do not think that the growth of INEEL necessarily needs 
to come at the expense of any other lab that we have. We have 
moved missions there from closing facilities, but what Bill, I 
and the Secretary have been discussing are new initiatives, 
such as hydrogen production and other things that Idaho might 
get. So I would not want to send a signal to the other labs 
that are involved in this program that this move necessarily is 
a problem for them.
    Mr. Simpson. I appreciate that.
    Under Secretary, let me read Section F of the 19195 court-
enforced settlement agreement between the DOE, the Navy, and 
the State of Idaho, which I am sure you have read:
    ``Spent Fuel Program: Establishment of the INEEL as DOE's 
spent nuclear lead laboratory, DOE shall within 30 days of 
entry of this agreement as a court order designate INEEL as the 
Department's lead laboratory for spent fuel. DOE shall direct 
the research, development, and testing of treatment, treatment, 
shipment, and disposal of technologies for all DOE spent fuel, 
and all such DOE activities shall be coordinated and integrated 
under the direction of the Manager, DOE Idaho Operation 
Office.''
    These function have historically been managed by the 
National Spent Nuclear Fuel Program at INEEL. Unfortunately, I 
do not see any funding for this program in the 2004 budget 
request. Is the DOE preparing to break their court-enforced 
agreement with the state of Idaho, and if so, why?
    Mr. Card. Actually, conceptually, we would like to see more 
work like this being done in Idaho. Bearing in mind that on the 
RW program, our overriding focus right now is the preparation 
of a license application, and with funding circumstances there, 
there is not a lot of extra funding to do that.
    But the simple answer to your question is no, we do not 
have any plans to break the court agreement.
    Mr. Simpson. I appreciate that.
    Mr. Hobson. Mr. Frelinghuysen.

                         BASIC SCIENCE FUNDING

    Mr. Frelinghuysen. Yes.
    Good morning, Secretary Card. Dr. Orbach, good to see you 
again. Mr. Garman, Mr. Magwood, welcome.
    It is clear that our Nation is facing some very real and 
immediate emergency needs, and for those who have served on 
this Committee for some time, when there is an energy crisis, 
which is what most people would characterize our present 
national situation, there becomes a focus again on alternative 
fuels, and this is what some would call a softball. I wonder, 
Mr. Card, Secretary Card, whether you could sort of restate 
with vigor why this investment in basic science is so 
absolutely necessary.
    Mr. Card. Just to paraphrase the question again: Why is the 
investment in basic science so necessary for alternate forms of 
energy?
    Mr. Frelinghuysen. Yes.
    Mr. Card. I just wanted to make sure I got that correct.
    Well, obviously we have had--and I am going to let both Dr. 
Orbach and Mr. Garman add on to this as they like, but I think 
we have made tremendous progress over the last several years in 
pricing of alternate energy sources. Wind is a particular 
example, and I think the science and R and D team of Dr. Orbach 
and Mr. Garman have been key in working together to help with 
that, bringing those cost curves down; also for biofuels and 
other renewable forms of energy.
    I might add, though, that it is equally important in 
nuclear energy, and an item of interest to you, the ITER 
program, for example, shares the same technology challenge on 
the power generation side as high-temperature reactors that we 
might use for hydrogen production that being how do we get 
systems that operate at a thousand degrees centigrade.
    So I will see if anybody else would like to comment on 
that.

                 FUSION ENERGY RESEARCH AND DEVELOPMENT

    Mr. Frelinghuysen. You are up. Since we are talking about 
ITER, maybe we can talk about the whole issue of the funds for 
the international program and for the domestic program.
    Dr. Orbach. Thank you, Mr. Congressman. I will be pleased.
    This will basically underpin our energy sources for the 
future, and you referred to fusion energy as one of the 
specific alternatives. I should say that we had a very active 
conference last October, looking for other opportunities for 
energy production, and we are pursuing them together as a 
program with my colleagues to see if there are yet other novel 
ways.
    The issue for ITER is one where we are currently beginning 
the negotiations. We have set out a target for what we would 
like to accomplish, and now the issue is how do we get there. 
And so we are exploring that this year. We will be meeting with 
the other members of the ITER negotiations.
    We are funding this at a very modest level in the 2004 
budget because primarily the large costs associated with ITER 
will not hit until about 2006.
    Mr. Frelinghuysen. The rejoining of ITER to the minds of 
some means that the funding for the domestic program will be 
lessened.
    Dr. Orbach. I hope that we can correct that impression. 
Everyone in the Administration agrees that if we go forward 
with ITER, we must go forward with an enhancement of the 
domestic program. That is part of our plan, and they will be 
roughly equally supported as we go forward.
    So our plans for the future would be an augmentation of the 
domestic program to be able to take advantage of what we will 
learn from ITER so that we can help our own industries prepare 
to construct power reactors using fusion.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Edwards.

    ENERGY EFFICIENCY AND RENEWABLE RESEARCH AND DEVELOPMENT FUNDING

    Mr. Edwards. Thank you, Mr. Chairman.
    Secretary Card, thank you all for being here.
    Let me ask just so I understand where we are in the basic 
numbers, for the Office of Energy Efficiency and Renewable 
Energy, I think, Secretary Card, your statement says the 
Administration budget request is $1.3 billion, and you then go 
on to say that is about the same as the funding for 2003.
    What was the actual appropriated funding level for 2003 for 
that office?
    Mr. Card. I am going to let David answer that specific 
question, but again, the appropriation came in after the 
President released his budget.
    Mr. Edwards. I understand. If I could get the 2003 and the 
2002 numbers, I just want to see what the trend numbers are. We 
all talk a great deal about the importance of lessening our 
dependance upon foreign sources of oil, and for the second time 
in 12 years, we have had been reminded that one mad man in 
southwest Asia can put a knife to the economy of our country 
and drive up oil prices dramatically through his actions. I 
would just like to know whether we are going up or we are down 
in terms of our commitment of funds for energy efficiency.
    Mr. Garman. Yes, sir. The trend line is clearly up. The 
Fiscal Year 2002 net appropriation for my office of Energy 
Efficiency and Renewable Energy which is the total Interior and 
Energy and Water Appropriations combined, was $1.28 billion in 
2002. The 2003 appropriated enacted was $1.31 billion, and the 
2004 request is $1.32 billion. So the trend line is upward, 
although modestly so.
    Mr. Edwards. I think modest is a rather general term to 
use. I assume after you give employees a three or four percent 
pay raise, that in effect what we are doing is we are cutting 
the request for Energy Efficiency and Renewable Energy. Is that 
correct? After inflation, after salary increases, is that 
correct?
    Mr. Garman. Well, it depends. Actually, in the renewable 
energy account, we are seeking a substantial increase in this 
Committee's area of jurisdiction from, I believe, roughly $407 
million in 2003 to $442 million in 2004.
    Mr. Card. Congressman, could I add that we share your 
concern over this issue, but Secretary Garman had really 
launched a very aggressive strategic planning activity within 
his organization, and my feeling is that not only do we have 
more funding, but we are buying a lot more product for the 
taxpayer with it.
    Mr. Edwards. And I respect efficiencies, and I know the 
Department will work very hard on reorganization management 
efforts, and I commend you for that. I look forward to seeing 
what the savings are as a result of that.
    I am always amazed. Whether it is this subcommittee or 
another committee, people come in and say we are going to make 
an incredible commitment to solving these problems, and then 
when you look at the actual numbers and get through the generic 
testimony, you find out that the numbers really are not 
necessarily consistent with the rhetoric that we members of 
Congress and Administration officials use in talking about 
these programs.

                        HYDROGEN FUEL INITIATIVE

    Let me ask you: In the hydrogen fuel research, does that 
come out of the Office of Energy Efficiency and Renewable 
Energy?
    Mr. Garman. My office has the bulk of that funding, but it 
is not exclusively ours.
    Mr. Edwards. And that has been increased dramatically. So 
it is fair to say, then, if you took out that increase for that 
particular program, in effect there might be serious cuts in 
other Energy Efficiency and Renewable Energy Research programs 
under your jurisdiction?
    Mr. Garman. There have been adjustments, yes, sir. We are 
increasing hydrogen funding in this account by about $48 
million, and you see a $40 million or slightly less than a $40 
million plus-up in this account. So there are some adjustments 
in other areas.
    Mr. Edwards. Adjustments in lay terms means cuts; is that 
correct?
    Mr. Garman. Requests for less funding, yes, sir.

                RENEWABLE ENERGY FUNDING; WIND AND SOLAR

    Mr. Edwards. Okay. I understand.
    A final question is do we have line items for wind energy, 
solar energy, and nuclear energy research?
    Mr. Garman. Yes, sir, we do.
    Mr. Edwards. Can you tell me 2003, 2002, 2004, what those 
numbers are?
    Mr. Garman. I can just quickly tell you 2003 and 2004.
    Mr. Edwards. Okay.
    Mr. Garman. Wind is $42.3 million in 2003, $41.6 million in 
2004, for a reduction of $700,000.
    Mr. Edwards. Okay. Before inflation?
    Mr. Garman. This is not inflation. These are real dollars.
    Mr. Edwards. So if you use inflation, it has been reduced 
by three or four percent, possibly more.
    Okay. Solar energy?
    Mr. Garman. Solar, $83.8 million to $79.7 million, a $4.1 
million delta there.
    Mr. Edwards. Okay. Delta, by that, let us be clear.
    Mr. Garman. Change.
    Mr. Edwards. A reduction?
    Mr. Garman. Yes, sir.
    Mr. Edwards. In actual dollars before considering 
inflation?
    Mr. Garman. I will use your language precisely.

                         NUCLEAR ENERGY FUNDING

    Mr. Edwards. Sometimes cuts really are cuts. Many times in 
Congress, cuts are not cuts.
    Okay. Finally, nuclear?
    Mr. Garman. I will have to ask Mr. Magwood on that. We have 
a plus-up in hydro I could talk about.
    Mr. Edwards. I understand, and I salute you for that and 
the Administration for that.
    Mr. Magwood. I can give you the numbers for 2003 and 2004. 
I have them with me.
    Mr. Edwards. Okay.
    Mr. Magwood. For nuclear research and development, the 
funding is $125 million, and in Fiscal Year 2004, it is $127 
million.
    Mr. Edwards. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Berry.
    Mr. Berry. No questions, Mr. Chairman. Thank you.
    Mr. Hobson. Mr. Peterson.

           RENEWABLE ENERGY RESEARCH AND DEVELOPMENT FUNDING

    Mr. Peterson. Thank you very much.
    Good morning and welcome, gentlemen. I really think you are 
dealing with the issue of the day, in my view, or the issue 
facing this country, other than war.
    The card you passed out, if I read it correctly, total 
energy use, that is the United States. Right? And at the bottom 
is the world?
    Mr. Card. Yes.
    Mr. Peterson. Okay. I read it right. I guess I think we 
need to look at the numbers to realize where we are at, because 
we get a lot of numbers thrown around. So we are 85 percent 
fossil fuel. We are eight percent nuclear and seven percent 
renewable, if I added correctly; and then of the seven percent 
renewal, 92 percent of that is hydro, wood, and wood waste.
    Okay. So we are now down to eight percent of the seven 
percent, which is ethanol, geothermal, solar, and wind; and I 
have to think ethanol is the dominant number there, is not it? 
Ethanol, that is a pretty measurable amount of ethanol being 
used in the country, is it?
    Mr. Garman. I do not think so, no, sir.
    Mr. Peterson. Okay.
    Mr. Garman. There is approximately, I think, 3.7 billion 
gallons of ethanol used each year, and on a quadrillion BTU 
basis, off the top of my head, I cannot do the math and compare 
that, but your point is, I believe, that geothermal, wind, and 
solar are tiny percentages of our total overall energy use.
    Mr. Peterson. Yes.
    Mr. Garman. Absolutely.
    Mr. Peterson. So those four, including ethanol, what 
percentage of that figure would be ethanol? Half or less than 
half?
    Mr. Garman. I do not have the card you are referring to. 
You do. I have a different card that looks just at electricity.
    Mr. Peterson. I am talking total, because it is big picture 
where we have got to deal, I think.
    Okay. So anyway, eight percent of seven percent is .56 
percent of one percent, and that, for renewables that we talk 
about all the time, ethanol, geothermal, solar, and wind, that 
is less than a half of percent of the mix.
    Mr. Garman. That is correct.
    Mr. Peterson. But I think that shows us the state we are 
in. I mean, a lot of people tell me if we just do more wind and 
do a little more solar, we will be just fine. I mean, you could 
double and triple it every year, and we are still fractions.
    Mr. Garman. Right.
    Mr. Peterson. All of those combined are a half percent of 
our energy consumption.
    Mr. Garman. You are absolutely right, and the fundamental 
challenge is, of course, bringing down the cost of these 
technologies. As Under Secretary Card said, we have made 
tremendous progress. Wind, for instance, used to cost us around 
25 cents a kilowatt hour in 1980. Today, it is four to six 
cents a kilowatt hour in the very best wind areas of the 
country, with a production tax credit. That is starting to be 
competitive, which is why you have seen the tremendous growth 
in wind very recently.
    But solar still remains around 25 cents a kilowatt hour, 
and when the average delivered price of electricity is seven 
cents a kilowatt hour, you see the progress that we must make 
to make that viable. I think that is the proper role of Federal 
R and D. The reason why we are working on these things is to 
bring down those costs. Those are long-term technologies, and 
we do want to see them successful.

                          HYDROGEN INITIATIVE

    Mr. Peterson. I want to compliment the hydrogen issue. For 
the last years, I have been a member of the hydrogen group, and 
it is had been a has been a little lonely on the Hill. I 
remember coming to this Committee prior to the current 
leadership, and there was not a lot of excitement in putting 
another dollar in hydrogen. So I am delighted to see it double.
    But the point I am getting at is we are kind of each year 
rearranging the chairs a little bit with our research. I mean 
we are moving the money around, trying to figure out where to 
get the best bang for the buck, and that is a tough job; but in 
health, we decided that the health of this country was pretty 
important. So I think it was Gingrich and a few others that 
started this, but we are going to double NIH funding in five 
years. That was like last year, it was over $3 billion of new 
money, just last year in a tight budget year, but that 
commitment was met.
    Every time we have an energy spike, our economy goes in the 
tank, every time, and here we are already in a soft economy and 
we have every kind of energy we have is expensive, and we are 
going to push the economy down further, which is just going 
complicate things. Is not the health of America as an economy 
equally important to health of us as individuals?
    It just seems to me that there needs to be some initiative 
on energy research so we are not just moving chairs around and 
saying we are going to take a little from this and put it here. 
I am not blaming you, because this has been going on for a long 
time. Is not the future energy needs of this country equally 
important to our health?
    Mr. Card. I would say yes, but I actually feel we have 
quite an aggressive program, and so just to respond to you and 
what Congressman Edwards said, for example, in the hydrogen 
initiative, as I said in my oral testimony, if you build 30 
million vehicles a year with batteries and inverters in a 
hybrid context, you have done an enormous thing for solar and 
perhaps wind and other things. So I have to say personally I 
feel pretty good about where we are headed.
    Mr. Peterson. I agree with your hydrogen initiative, but it 
is a little bit like taking one silver bullet, and I hope that 
silver bullet hits the target, but if it does not, I think to 
the economy of this country and the success of the strength of 
America, I think--I guess I am lobbying that somewhere down the 
road here we say energy is something we need to do a lot of 
research about, and wisely, but I am just talking big picture. 
I do not think people realize where we are at.
    Mr. Card. Okay.
    Mr. Hobson. Mr. Wamp.
    Mr. Wamp. Thank you, Mr. Chairman. At the risk of defying 
the laws of physics, I am going to salute the acorn and pick a 
bone with the oak tree here.

                  EXECUTION OF REDUCTIONS AT OAK RIDGE

    Dr. Magwood, as you know and we discussed in my office last 
week, in the omnibus bill, there is two and a half million 
dollars for plutonium 238 production facilities and neptunian 
237 storage at the Oak Ridge National Laboratory and $7 million 
for the upgrade of hot cells at Bethel Valley hot cell complex 
in Oak Ridge in this bill. Now, also in this bill on page 887, 
it says:
    ``When general reductions are necessary. Such reductions 
are to be applied proportionately against each program, 
project, or activity.''
    I need you to ensure the Committee and professional staff 
today that when we look at these programs, such as the ones I 
have mentioned that are identified in the bill and we also know 
that there is a general reduction, that you will execute these 
reductions in the spirit and direction of this Subcommittee in 
the report and it will be across the board and that no projects 
will be disproportionately singled out.
    Mr. Magwood. Yes. I believe that would be appropriate. I 
would like to elaborate a little bit, because what we have to 
examine are, for example the overall programs and projects we 
are pursuing at Oak Ridge National Laboratory. There is a logic 
which I will work with the lab to develop, and hopefully reach 
an agreement on, that even though we are proportionate over the 
overall programs in nuclear energy, with the approval of 
Committee staff, of course, it may make sense to relax some of 
the reductions on one of the Oak Ridge programs at the expense 
of another and still meet the overall target. I think the lab 
will agree with that, because I think there are some very, very 
important initiatives that need to move forward, partially for 
National security purposes.

                 FY 2004 SUPERCOMPUTING BUDGET REQUEST

    Mr. Wamp. Flying above the big oak tree will be a hawk with 
eyes watching.
    Dr. Orbach, two quick questions: I was disappointed, as you 
were disappointed, that the President's budget request was not 
as much as we had hoped for in the area of supercomputing. It 
is victim, I think, of the war effort and other budget 
pressures, and if we are going to be preeminent and if we are 
going to plant the seed corn for future generations, we have 
got to invest heavily in the Office of Science at the 
Department of Energy, and you should be applauded for the bold 
moves that you have made. We do not have enough money.
    Supercomputing, though, can you tell me what we are going 
to with OMB, with the Administration between now and the 2005 
request to get back to a level on supercomputing that we need 
to be at in order to lead the world and not fall behind Japan 
and other countries in this most important area of basic 
research?
    Dr. Orbach. Well, thank you Mr. Congressman. The 2004 
budget does contain $14 million for an initiative that we hope 
will pave the way and show that further progress is warranted 
in the high-end computational area.
    What we have done is to work assiduously last summer and 
fall to identify the opportunities that high-end computation 
could bring across the scientific spectrum. We had eight 
workshops from everywhere, universities, laboratories, and from 
private industry. We now know what we need to accomplish. We 
need to be in the range of 25 to 50 sustained teraflops in 
order to really achieve scientific discovery.
    Now, there is no machine in the United States which is 
capable of that at the present time. So we are working with 
those dollars that I mentioned, with the vendors and the 
private sector to see which configuration, which geometry, 
which balance of machine would be most effective at solving the 
scientific problems.
    We believe that with these funds, we can chart a course 
forward that will be based on firm evidence that these 
particular geometries or balance are the most effective. So we 
are in that process now and we hope that our conclusions will 
be sufficiently robust to generate increased funding in the 
future.
    Mr. Hobson. We are going to take a hard look at this. The 
Committee may have, in my opinion, some assistance that we may 
want to do in this area, because I think this is, as I told 
you, outrageous that this happened. I do not know where the 
policy came from. I know some of the discussions, and I know we 
cannot make it all up in one time, but this is a major, major 
policy problem for this country to allow this to happen and to 
make our reliance upon other technology and just go down one 
road and forget about this road.
    So I hope the Committee will support, when we get to it, 
trying to find a remedy. It will not put you out there in five 
years, but maybe we can get you there in four or less. So I 
want you to think long and hard. Do not be afraid of this 
Committee on this one.
    I want to go back to you, sir.

                       SPALLATION NEUTRON SOURCE

    Mr. Wamp. One follow-up: Spallation Neutron Source is a 
multi-lab consortium. One thing this committee can be very 
proud of, because we have scrubbed it; we worked it. It is on 
time. It is on budget. It is the largest single investment 
inside of the Office of Science right now, but in the general 
reductions, there is a $2.9 million reduction, which is a small 
amount of money in the big scheme of things, but I am told that 
the reduction is going to actually cost us $5 million if we do 
not make it up until the 2005 budget request, which is what 
your office, I think, is planning to do.
    Can you tell me what we do can do to make sure that this 
project which this committee has worked on so passionately over 
the last several years can stay on time and on budget and not 
fall behind even $5 million, because this thing is on its way 
to completion here in just a couple of fiscal years. It is 
going to be something that is going to benefit our country for 
a long, long time in the physical science area and put us back 
in the preeminent position in neutron science in this country, 
and even $3 million, we do not want to fall behind on this 
schedule.
    Dr. Orbach. I appreciate that, Mr. Congressman. Of course, 
it was the rescission that required us to take that action. We 
will maintain our initiative for the SNS. Europe has decided, I 
think because of our success, not to go forward. We will be the 
only site in the world for this kind of research.
    I should add this is not just physical sciences. It will 
enable us through our nanotechnology initiative at Oakridge to 
work with the biological sciences as well, because we will be 
able to measure not only structure, but dynamics. We regard the 
SNS as critical importance within the Office of Science and we 
will support it.
    Mr. Wamp. Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Latham.

                    BIOMASS RESEARCH AND DEVELOPMENT

    Mr. Latham. Thank you, Mr. Chairman.
    It appears your proposal is to reduce biomass funding from 
$90 million in 2003 down to $69.7 million in 2004, in part, I 
guess, because of USDA and or the feeling that they will be 
engaged in more research because of the Farm Bill.
    Have you seen any evidence or have you investigated as far 
as their budget if, in fact, they are picking this up as far as 
the additional research and expenditures?
    Mr. Garman. The Farm Bill dollars are mandatory spending 
dollars, $14 million, so we are assured that those dollars will 
be brought to bear even outside the appropriations process. We 
are working with them through the auspices of the biomass 
Research and Development Board, which was created by the 
Research and Development Biomass Act of 2000, and we are 
working jointly.
    Mr. Latham. You are saying $14 million?
    Mr. Garman. Yes, sir.
    Mr. Latham. So that does not make up the----
    Mr. Garman. Right. There is a $17 million difference. But 
again, because we have coordinated this work in a new way, for 
the first time over the last year we have been working with 
industry on a road map, a comprehensive road map, for biomass. 
We have accomplished specific R and D goals. We are working 
seamlessly with USDA, even going to the point of doing joint 
solicitations and working together.
    We would, for instance, run a competitive solicitation for 
some research, get some excellent, excellent work proposals. 
The ones that we could not fund, the Department of Agriculture 
picked up and vice versa. So we are working that closely 
together in what is really an unprecedented manner, and it is 
our goal, from a standpoint of achieving our R and D goals, 
actually putting more money on the problems that we are solving 
than were put on problems last year.

                                BIOMASS

    Mr. Latham. One of the major things today, I mean everybody 
thinks of Iowa and ethanol and all of that, but I think up 
until a year ago, I had the largest wind farm in the country in 
my district, but as you are well aware, one of the drawbacks 
with wind is that on the hottest day in August, the wind 
probably is not blowing in Iowa, and so you have to have the 
capacity out there.
    I just really believe if we are going to continue to look 
at renewable energy sources, that the biomass could be a 
substitute or a backup as far as that and also some way of 
storing that energy, and we talked a little bit the other day 
with the Secretary here about that. There is the effort at Iowa 
State with the Ames Lab there with the biorenewable resource 
consortium with Ames Lab and Iowa State Sciences Institute.
    I do not know how familiar you are with that or if it is 
working. We just got the first funding for it I believe a year 
ago, and if you can give us any update on that.
    Mr. Garman. They are partners with us on trying to 
integrate what we call the biorefinery. Now when you think 
about biomass only in terms of ethanol, you are missing the 
rest of the picture, and I think that is a story we have to do 
a better job telling, because biomass can serve as a tremendous 
feed stock for the production of all manner of products: 
paints, chemicals, lubricants, adhesives, things that we are 
currently using oil and other very valuable feed stocks for. 
Biomass can, as we all know, make liquid fuels, but it can also 
generate power.
    Now, if you try to do any one of these three things alone, 
the economics generally do not work. But, we believe if you 
bring these three activities together in an integrated fashion 
and get some process synergies going, you can make all three. 
We are trying to do that integration in this vision of an 
integrated biorefinery, which we think will get us beyond 
thinking about ethanol. It has the opportunity to revitalize 
rural economies across the Nation.
    Mr. Latham. Very good. Thank you, Mr. Chairman.
    Mr. Hobson. Thank you.
    Mrs. Emerson.

                   BIODIESEL RESEARCH AND DEVELOPMENT

    Mrs. Emerson. Thank you, Mr. Chairman.
    Welcome, you all, and I apologize if somebody asked this 
question before I got here, but it is still about renewables in 
one way or the other. I was a little disappointed to see at 
least what I believe was a total investment for biodiesel for 
2003 at $750,000 or something like that, and obviously at a 
time when our domestic energy sources are becoming more and 
more critical and our economy is in need of economic stimulus 
from the development of new industries, I guess I am a little 
confused why the department has not made commercialization of 
biodiesel something more important.
    Mr. Garman. Actually, we think that biodiesel has 
tremendous possibilities, and R and D funding is really not the 
problem. Biodiesel has this tremendous advantage, particularly 
as EPA is directing the industry to remove sulfur from diesel 
fuel.
    Mrs. Emerson. Right.
    Mr. Garman. Biodiesel--one of the things you lose from the 
diesel fuel when you do that is the lubricity that is very 
important for engine life. You know, a ten percent blend of 
biodiesel in that fuel will restore the lubricity lost from the 
removal of the sulfur and then some, and it is proven 
technology. So any kind of reduction in R and D should not be 
signaled as a lack of enthusiasm for the promise of biodiesel.
    What we need to figure out and what we are working on is, 
first of all, the Federal Government needs to be a good first 
purchaser of biodiesel in its vehicles, and it is doing that. 
In fact, I think some 50 percent of alternative fuel credits or 
thereabouts were achieved last year through the use of 
biodiesel, which is a tremendous change.
    Second, we have to do a little work with the EPA so 
biodiesel does have a little implication in terms of NOX 
emissions. We have to work with EPA so that they understand the 
total overall benefits, reduction in carbon emissions and the 
tradeoffs.
    And third, we have to do a better job of telling the story 
of biodiesel. It is a tremendous opportunity. We have lots of 
oil in the country that could be used for this, and we are big 
supporters.
    Mrs. Emerson. You know, it is estimated that if just two 
percent of highway diesel was biodiesel, it would generate a 
demand of 800 million gallons of biodiesel. Now, that would 
certainly not only help our soy bean farmers, but it would 
certainly help our dependance on foreign oil.
    Well, with regard to the EPA's low sulfur rule, which you 
brought up--I was going to ask that question, but you answered 
my question before I asked it--and the fact that the diesel 
engines are mandated to meet more stringent emissions 
requirements by 2006, I wonder if you at DOE would be willing 
to form a partnership with the original engine manufacturers 
who do not seem to be incorporating biodiesel into their new 
engine testing. Would you all be willing to work together in a 
partnership to conduct testing in this area? Are you open to 
that idea?
    Mr. Garman. Absolutely.
    Mrs. Emerson. How would you suggest we go about making that 
happen?
    Mr. Garman. I think that what I should do is sit down with 
diesel engine manufacturers, a consortium of them, and find out 
what the R and D requirements are, and understand what kind of 
tools we have. We have a heavy truck test vehicle facility in 
Colorado. We have other facilities across the complex that we 
could bring to bear on this problem.
    I would be very interested in looking at it.
    Mrs. Emerson. That would be terrific, and I would greatly 
appreciate you keeping me up to speed on that, because I think 
it just has great promise for lots of reasons and would 
certainly be a good alternative for the future. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hobson. Just make sure you include International Truck 
in that, Springfield, Ohio.
    Mr. Garman. I would never forget them.

                             CAFE STANDARDS

    Mr. Hobson. And that brings me to a question that I have, 
and CAFE has something to do with this, I think. There is a 
clean diesel out there, and the Europeans are using a clean 
diesel a lot. We are not. CAFE seems to have some effect on 
that. I know long term we would want to get away from the 
diesel, but in the short run, the diesel and the biodiesel and 
the hybrid which Honda and Toyota are already out with, if we 
would have some emphasis on those--thank God California did 
something right, but if they had not have passed that law, 
there would not have be near the demand today that there is to 
get into this technology.
    If we really wanted to stop a spike, and I wish Mr. 
Peterson was still here, we could stop a spike. But what I see 
happening, in my experience and I am a little older than most 
people on this committee, is that every time we hit one of 
these bumps, everybody gets all excited about it. I remember I 
bought a 1978 Oldsmobile diesel, not a particularly good one, 
but the later ones were better. But I bought one and then I 
bought a diesel Rabbit, which was not a particularly good 
engine either, but I wanted to do my part.
    Actually, the diesels today are a lot better, but we are 
not doing them in this country. They are doing them in Europe. 
They are not doing them here. We need it as a transition. Every 
time this happens, we go out and we get all excited about doing 
all this stuff, and then the oil companies come along and OPEC 
and they drop the price, and everybody goes back, and we all 
buy our SUVs, and I have got them. Now, I got an Acura which 
gets pretty good mileage.
    But comparatively, it is a problem to me that we keep on 
this, and we need to keep a focus and it cannot be just this 
Committee. You all in your speeches and everything have to talk 
about this and you have to encourage. GM, I think is two years 
away from coming out with models that are hybrids. I rode in a 
hybrid the other day. I may have told you all this. It was 
fine. I have only ridden in the Honda one, but I thought I was 
in a regular car except when I got to a light. I said, What 
happened? He said, We will be all right. Because it stops. It 
turns off, but it does not turn off with a thud like you think. 
It just stops and then it starts up all over again. Once you 
get used to it, there is no problem.
    But I do not see except in California and a few places 
around here where we have got the HOV lanes--then we all have 
got to talk to Virginia about making sure they extend that HOV 
lane and Maryland and everybody else beyond 2004. But if you 
talk to any dealers around here, they will tell you that the 
HOV lane ability to come in from Woodbridge and places is 
selling a heck of a lot of cars for them.
    I look at any every Civic now to see what it is, and there 
was a lady yesterday out there, and she had one and she was 
just tooling along fine, going right by me because it was not 
in that lane.
    But I think we as the Government need to encourage these 
manufacturers and people to get on with the technology that is 
here. Now, the fuel cell car is still a little off. I drove one 
and it is fine, but it needs some nano stuff in it or it needs 
to be smaller, the tanks and stuff, and they are going get 
there, but that is off; but we are here with clean diesel. We 
can do biodiesel, and I do not know whether the mileage is any 
good on that or not. We can do these hybrid cars, and we ought 
to do them.
    As a government, we ought to encourage all of the 
manufacturers to get into it. I guess Chrysler will maybe do 
something with the Liberty and Ford is going to do something 
with the Escape, but that is not enough. I want to see some 
cars for people like me and Mr. Magwood that we can get in and 
drive with these.

                    OHIO VALLEY ELECTRIC CORPORATION

    I have a couple of questions, and then I will go to Pete 
for questions. I have one parochial question that I do not 
really understand. The Ohio Valley Electric Corporation, is 
there any ability to keep that operating and put that into the 
grid? Because we are short. As I understand it, I talked to one 
of the companies that is a partner in that, we are short 
capacity in Ohio. It is hard to site these isolated peaking 
plans. People get all nervous about those, and if we have 
already got this capability and we are going to clean it up or 
do something with it, is there any way that we can keep that 
plant? Does anybody know the answer to that?
    Mr. Card. Right. If I am wrong here, I will personally call 
you and correct this, but I believe OVEC is private now and is 
able to sell into the grid and will be in the future.
    Mr. Hobson. Okay. That is good. As I understand it, one of 
them may be doing it now. I am not sure the other one is, and I 
just want to be sure that we do not overlook. I used to sit on 
the power siting board when I was in the state legislature, and 
that is not an easy thing to do and I know how difficult that 
is. If you have already got these sited, it is a little easier 
to go and continue the operation even if we have to do some 
other types of things with it. So I would just like to know 
about that.
    I have a couple other questions. I understand the 
Department has incurred a significant financial liability for 
terminating its contract with Ohio Valley Electricity 
Corporation to provide power to the Portsmouth gas diffusion 
plant in Piketon. What is the nature of the amount of the 
Department's liability and when does the Department have to pay 
it and how does the Department propose to fund it, especially 
if these plants are going to continue operating?
    Mr. Card. The Department entered into an agreement with 
OVEC a long time ago.
    Mr. Hobson. Are you going to tell the contract was not 
drawn very well and all that?
    Mr. Card. Well, you said it, not me.
    Mr. Hobson. I know what everybody says in the Government. 
That is why I preach, so the next generation does not look back 
at us and say we do not do that. Chet and I have been in this 
in the privatization of housing in Fort Hood. Hopefully we have 
got a contract there that works, because we had some in the 
past and HUD had stupid stuff, and is this one of those 
contracts that we cannot find anybody who was ever here when it 
was drawn and now we have got a problem?
    Mr. Card. Well, there is a claim in the neighborhood of 
over a hundred million dollars that is due, and the claimant 
would say it would be due on April 30th. So our program and 
legal staff are working with the other party at this point, and 
I do not want to go into too much detail.
    Mr. Hobson. But you know what they always do? They always 
come back and they say, Oh, we compromised this for X, and then 
I say, Well, why did you compromise it? Well, our contract was 
not drawn right, and if we did not go ahead, we would lose it 
all. I mean, I have been through this in the Department of 
Defense before on the other side that I dealt with, and usually 
I call up and I say, Did any one complain about this? They say, 
No, but we knew you were going to call.
    So I am going to call. What is the date?
    Mr. Card. Well, the date in the claim would be April 30, 
2003. So we are working on it as we speak.
    Mr. Hobson. Okay. Well, I would like to know and I am 
assuming some of the other committee may want to know what 
happened and why when it happens. That kind of stuff, I know it 
is frustrating to you all because you inherent this stuff, but 
I just want to make sure that we do not do the same kinds of 
things when we do it or you do it now, so that when people look 
back later, they say, My God, that Card was a pretty smart guy; 
he did not give these dumb contracts out. And I know you would 
not do that. You guys would not do that.
    Mr. Card. You can trust me. The only time I will like that 
contract is if I return to the private sector.
    Mr. Hobson. Yes. Well, that is what we have got to worry 
about, are those contracts.
    I mentioned this scientific thing, Doctor, and we are going 
to work with you on that, because that is something in my 
opinion that has got to be fixed for a number of reasons.

                  YUCCA MOUNTAIN TRANSPORTATION SYSTEM

    The other question I have, I want to talk about Yucca 
Mountain. Mr. Card, what is the status of the Record of 
Decision for the transportation system to support Yucca 
Mountain, and why is the Department taking so long to issue 
that decision?
    Mr. Card. Well, the decision would be needed to build the 
preferred transportation alternative once that is designated to 
get the waste to Yucca Mountain. We are actually working on it 
now. We had hoped to accomplish a way, frankly, to work more 
cohesively with the parties we would normally work with there. 
I know that is code.
    Mr. Hobson. I am going to get into it.
    Mr. Card. Okay. Well, we will look forward to that. We are 
evaluating when that record of decision needs to be made at 
this point in time.
    Mr. Hobson. Regardless of whether the Department chooses 
rail or truck transportation within Nevada, there are two 
primarily alternative routes, one shorter route that cuts 
through the Nellis Range and one more expensive route that 
detours almost completely around a lot of the Nellis Range. It 
would seem that a shorter route across secure Government 
property would be much safer and certainly much cheaper; 
however, I understand that the Air Force continues to resist 
any route that cuts through the Nellis Range, and I want to 
know what discussion you or the Secretary had with the 
Department of Defense to resolve their concerns and gain access 
to the Nellis route.
    Mr. Card. Well, there are five routes discussed in the EIS. 
The Nellis one is I think the third. It is in the middle of the 
pack. So there are at least two routes that are less expensive 
than that one. We have worked extensively with the Air Force on 
the issue, and I think they have some very credible issues that 
need to be dealt with, and we have not arrived at a final 
conclusion there, but we certainly intend to take their 
concerns seriously.
    Mr. Hobson. The Department is presently without a legal 
contract to support the license application to the Nuclear 
Regulatory Commission. I understand that the responsibility for 
that action rests with your general counsel, who is not here, I 
do not think. When will your general counsel make a decision 
for this important contract? And I do not care who it is with. 
I just want a decision.
    Mr. Card. Yes. I think in the very near term.
    Mr. Hobson. What does that mean?
    Mr. Card. Weeks.
    Mr. Hobson. Okay. And I think the sooner we get this 
routing done and so the people out there know that this is not 
going to go into Las Vegas or even near Las Vegas, that 
everybody's life, including the people that oppose it in Las 
Vegas, are going to be put to rest a lot better, and I think 
the sooner that is done, the better it is for the elected 
officials out there and everywhere that we do that. Now, there 
is still going to be some resistance. I understand, but I think 
it is over and we need to move forward. I think you probably 
share that. The question is how we get it done.
    But I want to send a signal, because the very first thing I 
am going to look at after I look at a couple of things in my 
district or near my district in my state is to go out there and 
take a look at Yucca Mountain and make sure that I feel 
comfortable and hopefully that the members of the committee who 
will go with me feel comfortable about where we are in that 
facility and move forward with getting it open, because we have 
got some major responsibilities that we need to take care of.
    Well, do other members here in the order in which they came 
have questions?
    Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman.
    Just to show that I am not completely just a nuclear 
fanatic, I do want to compliment you all on your efforts on 
nanotechnology. As I try to understand this as a layperson, if 
you will, I understand the potentials there are enormous and 
that this is potentially the next quantum leap forward in 
society like the industrial revolution was and like the 
computer age was and that the potentials with nanotechnology 
are enormous. So I want to compliment you on your efforts there 
and what you are doing in that area.

                        HYDROGEN FUEL PRODUCTION

    Now let me get back to nuclear for just a minute. Under 
Secretary, will DOE initiate formal design this year for a 
facility to test and demonstrate hydrogen production using a 
high-temperature nuclear reactor, and can that be completed and 
operated on a schedule consistent with the President's Freedom 
Fuel initiative?
    Mr. Card. If you look at our currently-preferred technical 
strategy, which as you mention would be high temperature 
thermal chemical, I would say it would be technically a very 
difficult thing to begin on the schedule that you are talking 
about. My personal hope is that by the time of the 
commercialization decision in 2015, that we have a technical 
answer to that problem, and then you would have to build out 
infrastructure beyond that.
    We would view, as I think the Secretary said, natural gas 
as the most likely interim fuel of choice for converting 
hydrogen, and that is why we have included both the large 
renewables and natural gas in the R and D budget to bring that 
cost down. So we clearly see nuclear as a major, potential 
contributor, but I think it is more in the middle of the next 
decade out years than the early years.
    Mr. Simpson. Could you explain to me why you would take 
natural gas, which is a pretty high-energy production already 
of energy, and use it to produce hydrogen? I mean, why not just 
burn natural gas?
    Mr. Card. Well, there are a whole bunch of reasons. Dave.
    Mr. Garman. Of course, one of the challenges that we face 
is the infrastructure challenge, how are we going to get 
hydrogen fuel to fueling stations so that folks can refuel 
their cars. They are obviously not going to buy a car they 
cannot refuel conveniently and at numerous locations.
    Natural gas has the advantage in that most of the fueling 
stations in the country are already served by natural gas and 
you can actually convert the natural gas on site at the 
refueling station into hydrogen and fuel the vehicle. That 
means we would not have to build immediately dedicated hydrogen 
pipelines and some of that other infrastructure. You can get 
going a lot quicker if you use natural gas.
    But the benefits of hydrogen are that you can produce it 
from a variety of feed stocks and in a variety of ways, not 
only nuclear, but you can produce it cleanly from coal, if you 
have a way to sequester the carbon dioxide. You can make it 
from biomass. You can make it from just a variety of ways. The 
long-term approach is to have a diversity of methods to make 
hydrogen. You would not want to trade a dependence on oil for a 
dependence on natural gas.
    Mr. Card. And further, we would like to get the carbon out 
of the vehicle and into centralized locations where we can deal 
with it, and the auto industry is very interested in sort of 
leaving the air emissions piece behind them and getting on with 
things from there. So our long-term strategy is to have pure 
molecules of hydrogen going into the vehicle and then being 
able to deal with side effects at centralized locations.
    Mr. Hobson. But their strategy is to drag it out for the 
next 50 years too. I mean, that is what worries me, because you 
are leapfrogging from a bad situation that we are in now to 
completely way out, and in the interim, we have got to do 
something, and that is why I have been talking about this other 
stuff.
    I tried to buy a natural gas car for my district. I thought 
it would be kind of neat, and I was told even a hybrid one I 
could not do, and you cannot fill up except in certain central 
locations, which they never built. Thank God I did not buy it.
    I tried to get the military, when I was on DOD--I had been 
on DOD--to buy natural gas powered vehicles for their vehicles 
inside bases. I tried to get the Navy where the stuff does not 
go off the base a lot, and the Air Force to buy them because 
they had the mass on the base to do it. They will not do it. 
They just will not do it.
    Now, you will get some companies that will go around that 
are affiliated with the natural gas companies to do it, but it 
is very difficult.

                           PROJECT PROMETHEUS

    Mr. Simpson. One last question: Could you talk to me a 
little bit about the Project Prometheus and what that is going 
to include and where that is?
    Mr. Magwood. Project Prometheus is a new NNSA initiative 
from NASA designed to develop an advanced spacecraft powered by 
a nuclear reactor that would have the capability to visit 
several of Jupiter's moons on one launch. Today, if you wanted 
to visit more than one body, you would basically have to launch 
as many different vehicles as you had bodies you wanted to 
visit such as if you wanted to go the moons of Jupiter. This 
vehicle would have the ability to simply accelerate, go to 
Jupiter, and then go from moon to moon and for scientific 
explorations.
    This would be a revolution in NASA's capability, and the 
Department is working with NASA to plan for this program down 
the road. There is still a lot of planning to do, but hopefully 
very soon the very, very first steps of that will get under 
way.
    Mr. Simpson. Well, I appreciate that, and again, in 
conclusion, let me just say that I do appreciate working with 
the Department and Mr. Magwood particularly with the work that 
we have done in the past year or so as we have worked through 
the INEEL initiative and so forth, but you have got a great 
staff there and great people, and I have appreciated working 
with all of you.
    Mr. Hobson. Mr. Frelinghuysen.

                             BASIC RESEARCH

    Mr. Frelinghuysen. Thank you.
    Thank you for the updated info card. I think we need to do 
a little more preaching about some of the information on this 
card.
    Apropos of the Chairman's comments and capturing the sense 
of his frustration, both of us serve on the Defense Committee, 
and one thing that I think we have both noted is that when 
lives depend on it, projects and programs are accelerated. The 
Defense Department does a lot of R and D, science and 
development. Obviously, there is a cross-pollenization, shared 
responsibilities between your department and DOD, but when 
lives depend on it, it is amazing how we can leapfrog ahead.
    I know we have these advanced computers and to some extent 
I guess we have somewhat taken a body blow here, and we do not 
want to be behind the Japanese. We obviously are not behind the 
Japanese militarily, but here we are on the verge of war, and 
we know that things that are being developed at R an D labs 
around the country in my neck of the woods, those, a lot of the 
ingenuity and brain power of these people is being put to use 
right now, gathering intelligence, keeping our soldiers safe.
    I have the same frustration, although I have not had the 
same degree of experimentation as Chairman Hobson. I have gone 
with more conventional vehicles, but the whole issue of 
leapfrogging in some of these basic--I am a huge proponent of 
fusion, and hell, I can ask questions until the cows come home 
that put fusion in the best light, but there too, I am 
frustrated that there has not been much delivered on.
    There is a lot of excitement when certain results come in 
and we have celebrated those. I am happy we have rejoined ITER, 
but I would like some general comments here. I know people say, 
Well, it all comes down to stability of funding, and that 
relates to supercomputers. I just wonder whether from the 
lessons learned category whether we could just do better, and 
we have all these pots of money all over the place that Mr. 
Simpson and others have described, a fraction sometimes in 
certain areas, but how can we do this better as if our lives 
depended on it? I do not want to get into Kyoto. Some might say 
our lives depend on clean air, which it does, but how can we 
jump start what we are doing here? And it is all about money? 
Where is the national resolve?
    Mr. Card. You have obviously asked a very robust question, 
and if I could answer it crisply and expertly, I should be 
something at a lot higher level than I am doing now; but just 
to touch on some of the things, I will just make a pitch for 
our improved, as Congressman Visclosky noted at the Secretary's 
hearing, LDRD program. Interestingly, many of the things that 
were deployed right after September 11th, for sensors and other 
things, were done through that program, and there seems to be 
just a hot bed of creativity that emphasizes to me the value of 
basic research, which is what our Office of Science does, 
because who knows what problem we are going to confront 
tomorrow. But whatever it is, there is the acorn of something 
valuable happening in our labs.
    And so we are trying to help build centers of excellence 
that have a broad scope of activities going on that can launch 
the human genome project, as we did, or develop accelerators 
which treat or diagnose a third of all the patients in 
hospitals today.
    Mr. Frelinghuysen. But the culture here, this is somewhat 
unfair to introduce this because I mentioned this relative to 
one of the laboratories, is that you have so many bright people 
assembled, the best brains of America assembled in your labs, 
and nobody should be comfortable with what is out there. They 
should be indeed energized to go way beyond, and I am just 
wondering what is restraining us from doing the same things 
that we appear to be doing in the defense realm, even though I 
know you have contributed to homeland security and to the DOD.
    I know Dr. Orbach looks like he is ready to leap in here.
    Dr. Orbach. Well, perhaps where fools fear to tread.
    Let me say you gave two excellent examples of how 
initiatives begin, because both of those initiatives came from 
the scientific community. The issue of fusion, for example, has 
been around a long time. Why have we not pursued that before?

              INTERNATIONAL THERMONUCLEAR ENERGY RESEARCH

    There are divisions within the community itself as to 
whether ITER would work, and as you well know, we actually 
stepped out of ITER, and part of that was because the community 
was not convinced. What did convince the community, just last 
summer in July at the Snowmass meeting. That was the work done 
at Princeton, for example, the simulations that showed that 
these tokamaks in fact could have dynamic stability.
    So the reason that we are driving now on fusion--and I must 
say I think it is a rapid motion, because before last July, we 
had a split community. There is now a credibility, and from 
last July until the President made his announcement and the 
Secretary made the announcement--you were there in Princeton. 
That was on the 30th of January--we were able to get a 
community report, an advisory report, a National Academy of 
Science report, and we sent a group to Garsch, Germany to 
examine the cost of ITER. All that happened in the space of six 
months, and I think you are going to see us take a very active 
and aggressive role.

                        ADVANCED SUPERCOMPUTING

    In the area of supercomputing, I have to agree with the 
Chairman. I think we were a bit asleep. We knew of the Japanese 
efforts. It was not a surprise. We were surprised of how well 
it worked and the fact that when they turned it on, they were 
able to get results immediately, and you have to give them 
credit. This is a big machine and they did an extraordinarily 
good job.
    What we have elected to do is to go flat out, but not to 
just copy their machine or to in some way compete with their 
machine. What we are trying to do instead is change the order 
of the way we look at computation; what is it that we want to 
achieve, and then go after it, and we have done that 
aggressively in the last six months. We are now working with 
vendors to try to put together a structure that will work, and 
we are very pleased with your support and we will work very 
hard to pursue this.
    Mr. Card. But your point about urgency is well taken, and 
we certainly take that under advisement.
    Mr. Hobson. Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Gentlemen, I apologize for getting up and down three times. 
Something came up in the district that was time sensitive. It 
is not out of lack of respect or interest. I hope you 
understand that.
    Secondly, Dr. Orbach, let me begin by thanking you very 
much for being so responsive, because the Secretary just a 
moment ago mentioned the issue of lab-directed research that I 
mentioned last week, and I think that you did as much as any 
human being could with the national labs to begin to take 
serious corrective action. You certainly heard my concerns, and 
I thought you acted diligently and substantively. Thank you for 
that.
    I also would associate myself with the Chairman's opening 
remarks as far as the issues of competition and university 
involvement in work that you all do. I feel very, very strongly 
about that and would agree with the Chairman's position.

                  NANOSCIENCE RESEARCH AND DEVELOPMENT

    As far as the line of questions I would have this morning, 
they deal with nanoscience and increasing university 
involvement. Dr. Orbach, the first question I would have is am 
I correct in understanding that the nanoscience centers are 
designed around major DOE research instruments such as light 
sources and are intended to make that research capability 
available to university researchers and other outside 
researchers?
    Dr. Orbach. Yes, Mr. Congressman, and in fact we have 
encouraged their participation in the design of the centers. We 
had on the average 400 researchers from all over the country. 
We have just had a major conference in Washington. The 
university community was a major portion of that.
    The strength of the usage of those machines will come from 
the universities in a competitive environment. Our researchers 
in the laboratory have no advantage over anyone in the 
university when it comes to applying for time on the very 
machines that may be located in their facilities.
    So we believe with you and the Chairman and the Committee 
that competition is critical to the success of this mission.
    Mr. Visclosky. You mention time. If I could ask about that, 
the 2004 budget takes a step in the right direction by funding 
increased operating time at the existing user facilities 
operated by the Office of Science, but a number of those 
facilities still fall short on their maximum number of 
operating hours. Do you know or could you answer what 
additional funding would be needed for 2004, fiscal year, to 
maximize that operating time?
    Dr. Orbach. Yes, I do. We are operating in the 2004 budget 
at times between 83 percent and 100 percent of the efficiency 
of those machines, and we have worked out machine by machine, 
what it would take to get to 100 percent. The precise number, I 
think is $58 million, but I am nervous about my memory.
    [Dr. Orbach confers with colleague.]
    Dr. Orbach. Sorry. It is $66 million. That would enable us 
to bring all our machines up to 100 percent.
    Mr. Visclosky. Okay. And what is the budget request, if I 
could ask? Do you know?
    Dr. Orbach. The total budget request for operations?
    Mr. Visclosky. For the operating time issue, if you would 
need $66 million to get it up to 100 percent.
    Dr. Orbach. My memory is in the $400 million area, but 
could I do that for the record?
    Mr. Visclosky. Sure. Absolutely.
    Dr. Orbach. I am just nervous about it.
    Mr. Visclosky. If I understand the answer, the shortfall 
would be another $66 million.
    Dr. Orbach. That is correct, to bring all of them to 100 
percent.
    Mr. Card. However, let me just clarify that we are 
satisfied with the way we have allocated the dollars that we 
have in science. So we are not asking for that.
    Mr. Visclosky. And I understand and I would also 
acknowledge again that you did ask for an increase in funding.
    Mr. Card. That is right. I think the Administration has 
been very cooperative and actually pushing us to make sure that 
we are maximizing that run time.
    Dr. Orbach. If I could add to my previous comment, because 
I do have a number now for you.
    Mr. Visclosky. Sure.
    Dr. Orbach. And to second what the Under Secretary has just 
said, the Administration has requested for operation $1.25 
billion, and so the shortfall is pretty small. The issue for us 
was in a fixed budget to try to achieve the maximum efficiency, 
and we have prioritized it, exactly as the Under Secretary 
said, to get up to a minimum of 83 percent.
    Mr. Visclosky. Okay. Dr. Orbach, given the fact that 
facilities are being made available and will be made available 
to the university researchers and others outside the systems, 
could you explain why the Center for Integrated 
Nanotechnologies in New Mexico actually consists of three 
different buildings at three different locations, one of which 
is in a restricted area in Sandia. Another building is in the 
restricted area at Los Alamos, and then is there a new core 
facility located in Albuquerque. You have three facilities for 
that particular center, two of which are in restricted areas.
    One, what is the rationale? Secondly, how is that going to 
impact its use by outside researchers?
    Dr. Orbach. Each of those laboratories has very special 
capabilities, which is why we established a nanotechnology 
initiative for both Los Alamos and Sandia, and what we have 
created, those two buildings you were referring to behind the 
fence, are what we call gateway facilities, and they will be 
available to university researchers, to all researchers, as a 
vehicle for accessing the facilities inside the fence that 
normally individuals could not get to.
    Now, it will be a complex operation, because some of those 
facilities are already open. So that is easy. Some of them are 
not. So we will use personnel from the laboratory to assist 
people from the universities and elsewhere to actually take 
advantage of those facilities.
    The third facility in Sandia is outside the fence and will 
be available to everyone.
    Mr. Visclosky. So the one inside the fence at Los Alamos 
will not be available to everybody?
    Mr. Orbach. It is sort of inside-outside. I can be more 
specific for the record, but my memory is that those are 
gateway facilities.
    Mr. Visclosky. What do you mean by that?
    Dr. Orbach. To enable, exactly as you said, outside users 
from universities to gain access to the facilities inside the 
fence. There are specific locations that I cannot remember, but 
they are meant to provide that match that you are referring to. 
We want those facilities available to everyone, and the gateway 
facilities will do that. I will provide for the record 
precisely how they are going to do that.
    [The information follows:]

 Accessibility of the Gateway Facilities for the Center for Integrated 
             Nanotechnologies to All University Researchers

    The Gateway buildings at the Center for Integrated 
Technologies (CINT) will provide access to resources at Sandia 
National Laboratories (SNL) and Los Alamos National 
Laboratories (LANL). Because the CINT is located at two NNSA 
laboratories, there is a need to have the main Core Facility 
located outside the perimeter of these laboratories so as to 
provide ready access to all users, even foreign users. The 
Gateways provide complementary equipment to that found in the 
Core Facility, and they provide access to the special 
facilities inside the perimeters of the two laboratories. 
Access to the Gateway buildings will not require security 
clearance, so these facilities will be available to most users 
of CINT.
    The Gateway at SNL will be located in an existing space 
(the Integrated Materials Research Laboratory); therefore, no 
building modifications are required and no project funds are 
needed. The SNL Gateway will provide access to existing 
research equipment for materials characterization and 
microfabrication.
    The Gateway at LANL will be a new building having 31,000 
gross square feet of office and lab space. It will house 
research equipment unique to bioscience characterization, and 
it will serve as an entry point to other existing LANL 
resources/user facilities (Los Alamos Neutron Scattering Center 
and the National High Magnetic Field Laboratory) key for 
nanoscale research. There is no other suitable space at LANL 
for this purpose. This Gateway at Los Alamos is necessary to 
access the LANL facilities to the Core Facility and provide 
local space for in-house and visiting users.

                           NANOSCALE SCIENCE

    Mr. Visclosky. Thank you very much.
    As far as funding for fiscal year 2004 for nanoscale 
science, the budget includes $3 million for the project 
engineering design at Brookhaven, $20 million for the Center 
for Nanophase Material Science at Oakridge, $35 million for 
Molecular Foundry at Lawrence, and $30 million for the Center 
of Integrated Nanotechnology at Los Alamos and Sandia.
    For the Center for Nanoscale Materials at Argonne in 
Illinois, the state funded the design in fiscal 2002. My 
understanding is it will also be funding the construction of a 
new building adjacent to the Advanced Proton Source in fiscal 
years 2003 and 2004.
    The budget request for DOE is for $10 million for the 
purchase of a major item of equipment in 2004. Is there a 
reason why the request for Argonne is significantly lower than 
the other four centers?
    Dr. Orbach. Yes, sir. The State of Illinois and the 
Department have engaged in a cooperative agreement where they 
will provide $36 million for the construction of the building 
that you have referred to, over three years, and we will 
provide an equivalent amount, $36 million, for the equipment. 
In this way, the Government has been saved $36 million for the 
actual construction.
    The equipment costs right at the front end is not as large 
as the building cost, because it would be inappropriate to 
construct all of the equipment before the building is complete. 
So what you will see in subsequent budgets is an increase in 
our equipment contribution and a decrease in the building as it 
comes to completion.
    Mr. Card. I just wanted to avoid the impression that 
somehow Argonne is not getting as good as deal as everybody 
else.
    Mr. Visclosky. That is what I want to make sure does not 
happen.
    Mr. Card. We had a peer-reviewed competition that ranked 
these centers by attractiveness to our goals, and the funding 
you list was roughly in order of how they finished, and I think 
this is an effort on Argonne's part to accelerate their program 
beyond where it would have been accelerated should we have 
funded it with total DOE dollars.
    Mr. Visclosky. That is, the State of Illinois' construction 
of the building?
    Mr. Card. Right. Yes.
    Mr. Visclosky. Mr. Chairman, if I could have one more 
question on this topic.
    In talking about the buildings being completed and the 
equipment being purchased, as far as the time lines for all 
five centers, under your budget scenario, will they be fully 
equipped, the buildings that is, upon their completion so that 
we do not have empty shells and we are still working on the 
budget request to fill them with the necessary equipment and 
supplies?
    Dr. Orbach. We are working hard to see that that happens. 
It is a little hard because that will take place in the out 
years, in 2006, 2007, and 2008, but we are attempting to have 
the equipment ready when it is needed. It will require 
augmentations in future years in order to achieve that, and we 
hope that the funding will be provided for that.
    Mr. Visclosky. Doctor, for the record and I realize all we 
are talking about are estimates here, but as far as being able 
to provide the Subcommittee with a time line on the completion 
of construction at the five facilities, an estimate as to what 
the equipment cost would be if we would outfit each and where 
we are as far as meeting those goals with the projected 
budgets.
    [The information follows:]

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                       NATIONAL RENEWABLE ENERGY

    Dr. Orbach. I would be pleased to provide that.
    Mr. Visclosky. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Doolittle.
    Mr. Doolittle. Thank you. It is my understanding the 
Nation's premier research center for renewable energy research 
and development is the National Renewable Energy Lab in 
Colorado and, Under Secretary Card, does the President's fiscal 
year 2004 request assure the National Renewable Energy Lab will 
have the needed investment in its research facility in the 
future?
    Mr. Card. I am going to let Dave take a shot at that, but 
our view on balance of the overall program, is that we were 
satisfied with our investment in the National Renewable Energy 
Lab.
    Mr. Garman. I think were you to ask that question of 
Admiral Truly, the director of the lab, if he is satisfied with 
the 2004 budget request, you would receive an enthusiastic yes. 
We have worked together very closely. We are working 
strategically with the lab on how they can participate in the 
President's hydrogen fuel initiative, the role that they will 
play, as well as other labs and universities.
    Mr. Doolittle. All right. Thank you gentlemen.
    Thank you, Mr. Chairman.

                       SPALLATION NEUTRON SOURCE

    Mr. Hobson. The Oak Ridge National Laboratories is in a 
unique and difficult position of trying to orchestrate the 
input from several other DOE labs for the Spallation Neutron 
Source without having authority over those laboratories. I 
understand that this system has been nevertheless working well 
with one exception, the work being performed by Los Alamos. If 
you would please describe the role of Los Alamos in the SNS 
project and the problems with the equipment delivered to date 
from Los Alamos.
    Mr. Card. Yes. As Ray is looking through his notes, let me 
just say that each quarter, and I will be doing this next week, 
I review personally the top projects in the Department of 
Energy, and this is one of them, and we feel comfortable with 
the cost and schedule performance on the project. We have had 
some issues with the supplier you have named, but it is my 
understanding that those are being worked through.
    Dr. Orbach.
    Dr. Orbach. I would concur with the Under Secretary. There 
were some problems. This is a very sophisticated machine, and 
many of these projects are being built for the first time. We 
had problems in two areas. The first one was redesigned by 
Berkeley and now operating well. The second one having to do 
with drift tubes associated with the linear accelerator is 
currently being worked on at Los Alamos, and the acting 
director of the laboratory has made this a very high priority 
and we are comfortable with the direction that they are taking.
    Because of the contingencies that we built into our budget 
and because of the time line contingencies, we think under the 
current circumstances that we will receive delivery of that 
second element in a way so as not to slow down the ultimate 
construction and operation of the machine, but it will be 
tight.
    Mr. Hobson. I do not know if we understood this correctly 
or not. Did you say that Berkeley redesigned the Los Alamos 
element?
    Mr. Card. Berkeley has a separate part, and that was an 
earlier iteration.
    Dr. Orbach. This was the low-level radio frequency 
controls. The actual design itself did not work as well as it 
should have, and what they did was take an older Berkeley 
design and redesign it.
    Mr. Hobson. I just want to know if there is any additional 
cost.
    Dr. Orbach. No, there will not be. So far, that part of it 
will not incur additional cost. The drift tube we also believe 
will fall within our contingencies.
    Mr. Hobson. What kind of contingency rates do you put in? 
Is it like the Air Force or the military, 75 percent or what?
    Dr. Orbach. The contingency depends on the time. We 
currently have a 20 percent contingency from now until 
completion, and we believe this will fall within it. We are 
working very hard to make sure that it does, and to be fair to 
Los Alamos, they are as well.
    Mr. Hobson. Just so people know we are looking at cost, 
because this money, you know we are all fighting here about 
money.
    Unless somebody else has got another question, we are going 
to terminate the hearing.

                    SAFEGUARDS AND SECURITY FUNDING

    Mr. Frelinghuysen. I just wanted to get one question on 
safeguards and security. Costs, I think as you know, the 
Committee over a good number of years has provided funding as a 
separate line item within certain DOE appropriations. So there 
is a line item for safeguards and security within the science 
appropriation, a similar line within the defense environmental 
management appropriation, and so on.
    The approach has served to make DOE managers actually spend 
the necessary funds on safeguards and security and not to 
divert the money to other activities without our approval, the 
Committee's approval. However, it now seems that the approach 
is actually constraining how much each program can spend on 
safeguards and security. So our line item becomes an 
unintentional ceiling rather than a floor for safeguards and 
security spending.
    Mr. Secretary, should we change the approach in how we fund 
these expenses? I know Princeton discussed it with me, and I 
would assume others have discussed it with their members, and 
certainly the staff has shared this concern with us. Where are 
we?
    Mr. Card. Well, let me say that the line, the separation of 
this, which of course you know more of this than me, but my 
understanding is this came from the Weh Ho Lee security 
incidents and was intended to apply to defense facilities, but 
in fact ended up not applying there and applying to the others. 
So it was always confusing to me, being on the receiving end, 
how that happened, but I think you would have an accurate 
statement to say that the structure has significantly 
complicated our ability to deliver the kind of security we 
would like to.
    We have always, by the way, been in a secure situation, but 
we have been faced with numerous reprogramming requirements to 
adequately fund security, and then at the end, for sites that 
are closing, it creates an inertia to maintain status quo 
rather than change the security targets, as we call them, to 
reduce the security cost and risk footprint at the site which 
provides the real long term security benefits.
    Mr. Frelinghuysen. So to this layperson, is there a remedy 
in the offing?
    Mr. Card. We are looking at that as we speak, and it would 
be fair to say that there are policy disagreements on what the 
right answer is. So I have told you what the issue is, and I am 
not prepared yet to tell you our recommendation on what to do 
about it.
    Mr. Frelinghuysen. Thank you.
    Mr. Hobson. Let me challenge you on one thing as you look 
here. One of our friendly adversaries here has a way of 
targeting things and leaping forth in certain areas, and as a 
couple of people have talked about, we have got all these darts 
on the wall we keep throwing things at it, it looks to me.
    I would like to challenge you to think about coming up with 
one or two areas that we are going to take care of. There may 
be another area or two, especially in the energy area where we 
might target something, your area or I do not care where it is, 
but let us do what other people do sometimes and let us see if 
we cannot target something and put some money in it and leap 
forward, do a quantum leap forward in a couple of areas so that 
people look back over here and say, ``Wait a minute, what are 
those guys doing?''
    So think about it. You have got good minds. You are good 
people. You know how to do this stuff, and sometimes we are the 
enemy too because we have these little baskets that we all look 
at. But I think we can all work together. I do not care if it 
is in Illinois. I do not care if it is in Ohio even, but there 
is a couple states that have got too much already, but we all 
know where they are, and those guys will take care of it. But 
if it is the right thing to do, I will do it there and I will 
support them in doing it. I will support that if it is the 
right thing to do and we can make a leap and we can put some 
things on the map early and get us out there in some of these 
science projects.
    Think about that. It is just a challenge to see if we can 
do it, and I think the Committee will work with you, and I am 
sure if it is in one of the other states, the Senate will work 
with you too.
    Mr. Card. We are currently working on an accelerator with 
the source in Indianapolis and the target in Columbus.
    Mr. Visclosky. Will that go over the canal from lake 
Michigan to the Ohio River?
    Mr. Chairman, if I could ask one more.
    Mr. Hobson. Sure.
    Mr. Visclosky. Dr. Orbach, just one follow-up question to 
our earlier exchange, why could you not have one facility in 
New Mexico serve as the gateway for those who want to access 
the functions?
    Dr. Orbach. It is because the concept, as was discussed 
earlier, of the nanotechnology centers is to build them around 
existing equipment and, for example, at Los Alamos, they have 
right now the largest Spallation source in our country at the 
Luhan Center, and at Sandia, they have some other special 
source, and the coherence of the program really requires the 
use of the resource of both laboratories. And so it was a bit 
of a trick to figure out how to bring them together.
    What we have done in each of the nanotechnology centers is 
to focus on some area of opportunity, and at Los Alamos and 
Sandia, it will probably be in the nanoelectronics area because 
they have special equipment and special facilities and also 
people.
    Mr. Visclosky. But you would need separate gateways into 
each?
    Dr. Orbach. Yes.
    Mr. Visclosky. Not one to get into both?
    Dr. Orbach. No, because we want it to be at the lab.
    Mr. Visclosky. Okay. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Hobson. Thank you, gentlemen, for coming today. We 
appreciate it very much.
    Mr. Hobson. We have got a vote on. Thank you.
    [The questions and answers prepared for the record follow:]

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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Abraham, Hon. Spencer............................................     1
Card, R. G.......................................................   193
Garman, David....................................................   193
Magwood, William, IV.............................................   193
Orbach, Dr. Raymond..............................................   193


                               I N D E X

                              ----------                              

                          Secretary of Energy

                                                                   Page
Biomass.........................................................36, 144
Competition in DOE Laboratory Research...........................    74
Contract Competition.............................................    83
DOD-DOE Collaboration............................................    75
DOE Organization.................................................   116
Energy Policy...................................................44, 132
Energy Prices....................................................    33
Energy Prices....................................................    42
Energy Storage...................................................    38
Environmental Cleanup..........................................110, 120
Federal Regulatory Commission....................................   118
General Provisions...............................................   122
Homeland Security.....................................28, 105, 166, 168
Hydrogen....................................................31, 34, 187
International Thermonuclear Experimental Reactor............27, 32, 135
Laboratory Directed Research and Development....................73, 173
Los Alamos National Lab................................79, 96, 119, 184
MOAB.............................................................    78
Nuclear Energy...................................................    28
Nuclear Materials Detection......................................    40
Nuclear Nonproliferation....................................74, 81, 277
Nuclear Weapons.................................................92, 169
Pension Program.............................................72, 99, 102
Power Marketing Administrations................................117, 153
Renewable Energy................................................38, 137
REPI Funding.....................................................    40
Safeguards and Security.........................................25, 115
Sandia National Lab Pension Plan.................................47, 49
Science Programs................................................30, 113
Solar Power......................................................    35
Standard Market Design..........................................76, 155
Statement--Oral--Mr. Hobson......................................     1
Statement--Oral--Secretary Spencer Abraham.......................     5
    Budget Overview..............................................     5
    National Security............................................     5
    Energy Research..............................................     6
Statement--Written--Secretary Spencer Abraham....................     8
    U.S.-Russian Collaboration...................................    82
    University of California Contract............................    80
    Wind Energy.................................................38, 147
    Yucca Mountain......................................42, 73, 89, 138
Gasoline Prices..................................................   131
Northeast Heating Oil Reserve....................................   134
PPPL Security and Safeguards.....................................   136
Environmental Management.......................................139, 182
Cyber Security...................................................   140
North Korea......................................................   141
Iraqi Oil Supply.................................................   142
Facilities' Security.............................................   143
Ethanol..........................................................   145
Crop Genetics....................................................   148
Plant Biotechnology..............................................   149
Strategic Program Review.........................................   151
Ames Lab.........................................................   152
California Market Design 2002....................................   158
Petroleum Markets................................................   160
Idaho National Engineering and Environmental Lab.................   162
Pursuit of Terrorists............................................   171
Supercomputing Technology........................................   191

                      Energy Resources and Science

Advanced Fuel Cycle Initiative...................................   287
Advanced Scientific Computing Research...........................   257
Advanced Supercomputing..........................................   230
Basic Research...................................................   229
Basic Science Funding............................................   213
Bio-Based Products...............................................   305
Biodiesel......................................................222, 307
Biomass...................................................220, 300, 306
CAFE Standards...................................................   223
Contract Competition.............................................   241
Crop Genetics....................................................   302
Energy Efficiency and Renewable Earmarks.........................   292
Energy Efficiency and Renewable Energy Funding.................214, 320
Ethanol Production...............................................   301
External Regulation..............................................   246
Fusion Energy........................................213, 260, 262, 264
General Reductions...............................................   255
Health Physics Education.........................................   290
Hydrogen...................................215, 217, 227, 294, 311, 313
Idaho National Engineering and Environmental Lab...............212, 283
International Thermonuclear Energy Research......................   230
Legacy Management................................................   298
Nanoscience...............................................231, 233, 259
National Climate Change Technology Initiative....................   297
National Renewable Energy Lab..................................236, 308
Nuclear Energy Plant Optimization................................   289
Nuclear Energy.................................................211, 216
Nuclear Engineering..............................................   282
Oak Ridge Reductions.............................................   218
Ohio Valley Electric Corporation...............................224, 240
Plant Biotechnology..............................................   303
Political Appointees Compensation................................   315
Project Prometheus...............................................   228
Radioisotopes Work Relocation....................................   285
Renewable Energy.................................................   215
Safeguards and Security...................................237, 309, 321
Science Education................................................   279
Science Facilities...................................266, 272, 275, 277
Science Major Research Programs..................................   271
Science Portfolio................................................   256
Spallation Neutron Source........................................   220
Spent Nuclear Fuel Reprocessing................................286, 288
Statement--Oral--Mr. Hobson......................................   193
Statement--Oral--Under Secretary Robert Card.....................   194
Statement--Written--Under Secretary Robert Card..................   196
Supercomputing Budget............................................   219
U.S. Dependence on Foreign Energy................................   319
University Involvement....................................265, 270, 296
University Reactor Program.......................................   281
Yucca Mountain...................................225, 243-245, 322, 323

                  Federal Energy Regulatory Commission

FY 2004 Congressional Budget Request and Performance Plan........   325

                   U.S. Nuclear Regulatory Commission

FY 2004 Budget Estimates and Performance Plan....................   423

                                  
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