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



                    PRIORITIES IN THE DEPARTMENT OF
                   ENERGY BUDGET FOR FISCAL YEAR 2005

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON ENERGY

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 24, 2004

                               __________

                           Serial No. 108-50

                               __________

            Printed for the use of the Committee on Science


     Available via the World Wide Web: http://www.house.gov/science


                                 ______

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                          COMMITTEE ON SCIENCE

             HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas                 BART GORDON, Tennessee
LAMAR S. SMITH, Texas                JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania            EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California         LYNN C. WOOLSEY, California
KEN CALVERT, California              NICK LAMPSON, Texas
NICK SMITH, Michigan                 JOHN B. LARSON, Connecticut
ROSCOE G. BARTLETT, Maryland         MARK UDALL, Colorado
VERNON J. EHLERS, Michigan           DAVID WU, Oregon
GIL GUTKNECHT, Minnesota             MICHAEL M. HONDA, California
GEORGE R. NETHERCUTT, JR.,           BRAD MILLER, North Carolina
    Washington                       LINCOLN DAVIS, Tennessee
FRANK D. LUCAS, Oklahoma             SHEILA JACKSON LEE, Texas
JUDY BIGGERT, Illinois               ZOE LOFGREN, California
WAYNE T. GILCHREST, Maryland         BRAD SHERMAN, California
W. TODD AKIN, Missouri               BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois         DENNIS MOORE, Kansas
MELISSA A. HART, Pennsylvania        ANTHONY D. WEINER, New York
J. RANDY FORBES, Virginia            JIM MATHESON, Utah
PHIL GINGREY, Georgia                DENNIS A. CARDOZA, California
ROB BISHOP, Utah                     VACANCY
MICHAEL C. BURGESS, Texas            VACANCY
JO BONNER, Alabama                   VACANCY
TOM FEENEY, Florida
RANDY NEUGEBAUER, Texas
VACANCY
                                 ------                                

                         Subcommittee on Energy

                     JUDY BIGGERT, Illinois, Chair
RALPH M. HALL, Texas                 JOHN B. LARSON, Connecticut
CURT WELDON, Pennsylvania            NICK LAMPSON, Texas
ROSCOE G. BARTLETT, Maryland         JERRY F. COSTELLO, Illinois
VERNON J. EHLERS, Michigan           LYNN C. WOOLSEY, California
GEORGE R. NETHERCUTT, JR.,           DAVID WU, Oregon
    Washington                       MICHAEL M. HONDA, California
W. TODD AKIN, Missouri               BRAD MILLER, North Carolina
MELISSA A. HART, Pennsylvania        LINCOLN DAVIS, Tennessee
PHIL GINGREY, Georgia                BART GORDON, Tennessee
JO BONNER, Alabama
SHERWOOD L. BOEHLERT, New York
               KEVIN CARROLL Subcommittee Staff Director
         TINA M. KAARSBERG Republican Professional Staff Member
           CHARLES COOKE Democratic Professional Staff Member
                    JENNIFER BARKER Staff Assistant
                    KATHRYN CLAY Chairman's Designee


                            C O N T E N T S

                             March 24, 2004

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Judy Biggert, Chairman, Subcommittee 
  on Energy, Committee on Science, U.S. House of Representatives.    14
    Written Statement............................................    15

Statement by Representative John B. Larson, Ranking Minority 
  Member, Subcommittee on Energy, Committee on Science, U.S. 
  House of Representatives.......................................    16
    Written Statement............................................    17

                               Witnesses:

Dr. James F. Decker, Principal Deputy Director of the Office of 
  Science, U.S. Department of Energy
    Oral Statement...............................................    18
    Written Statement............................................    19
    Biography....................................................    26

Mr. David Garman, Assistant Secretary for Energy Efficiency and 
  Renewable Energy, U.S. Department of Energy
    Oral Statement...............................................    27
    Written Statement............................................    28
    Biography....................................................    34

Mr. Mark R. Maddox, Acting Assistant Secretary for Fossil Energy, 
  U.S. Department of Energy
    Oral Statement...............................................    35
    Written Statement............................................    37
    Biography....................................................    40

Mr. William D. Magwood, IV, Director of the Office of Nuclear 
  Energy, Science, and Technology, U.S. Department of Energy
    Oral Statement...............................................    41
    Written Statement............................................    42
    Biography....................................................    47

Mr. James W. Glotfelty, Director of the Office of Electric 
  Transmission and Distribution, U.S. Department of Energy
    Oral Statement...............................................    47
    Written Statement............................................    49
    Biography....................................................    51

Discussion.......................................................    52

              Appendix: Answers to Post-Hearing Questions

Dr. James F. Decker, Principal Deputy Director of the Office of 
  Science, U.S. Department of Energy.............................    76

Mr. David Garman, Assistant Secretary for Energy Efficiency and 
  Renewable Energy, U.S. Department of Energy....................    78

Mr. Mark R. Maddox, Acting Assistant Secretary for Fossil Energy, 
  U.S. Department of Energy......................................    80

Mr. William D. Magwood, IV, Director of the Office of Nuclear 
  Energy, Science, and Technology, U.S. Department of Energy.....   105

Mr. James W. Glotfelty, Director of the Office of Electric 
  Transmission and Distribution, U.S. Department of Energy.......   108

 
   PRIORITIES IN THE DEPARTMENT OF ENERGY BUDGET FOR FISCAL YEAR 2005

                              ----------                              


                       WEDNESDAY, MARCH 24, 2004

                  House of Representatives,
                            Subcommittee on Energy,
                                      Committee on Science,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Judy 
Biggert [Chairman of the Subcommittee] presiding.


                            hearing charter

                         SUBCOMMITTEE ON ENERGY

                          COMMITTEE ON SCIENCE

                     U.S. HOUSE OF REPRESENTATIVES

                    Priorities in the Department of

                   Energy Budget for Fiscal Year 2005

                       wednesday, march 24, 2004
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

1. Purpose

    On Wednesday, March 24, 2004, the Energy Subcommittee of the House 
Science Committee will hold a hearing on the Department of Energy's 
fiscal year 2005 budget request. Five Department of Energy (DOE) 
witnesses will review the proposed research and development (R&D) 
budgets and clarify the President's energy-related science and 
technology priorities.

2. Witnesses

          Dr. James Decker is the Principal Deputy Director of 
        the Office of Science (SC) at DOE. He has held this position 
        since 1985, and has concurrently served as Acting Director on 
        five separate occasions. Prior to joining DOE in 1973, Dr. 
        Decker was a physicist at Bell Telephone [AT&T Bell] 
        Laboratories.

          Mr. David Garman is the Assistant Secretary for 
        Energy Efficiency and Renewable Energy (EERE) at DOE. 
        Previously, Mr. Garman served as Chief of Staff to former 
        Senator Frank Murkowski and has served on the professional 
        staff of the Senate Energy and Natural Resources Committee and 
        the Senate Select Committee on Intelligence.

          Mr. Mark R. Maddox is the Acting Assistant Secretary 
        for Fossil Energy (FE) at DOE. Prior to joining FE, Mr. Maddox 
        served as senior policy advisor to the Secretary of Energy. 
        Prior to coming to DOE in 2003, Mr. Maddox was director of 
        communications and public affairs for a division of Lockheed 
        Martin, Inc. that is now called Affiliated Computer Services 
        State and Local Solutions, Inc.

          Mr. William D. Magwood, IV is the Director of the 
        Office of Nuclear Energy, Science and Technology (NE) at DOE. 
        Prior to joining DOE in 1994, Mr. Magwood held technology 
        management positions with two energy-related organizations: 
        Edison Electric Institute and Westinghouse Electric 
        Corporation.

          Mr. James W. Glotfelty is the Director of the U.S. 
        Department of Energy's Office of Electric Transmission and 
        Distribution (OETD). Previously, Mr. Glotfelty served as a 
        senior advisor to the Secretary of Energy, where he was a co-
        leader in the Department's contribution to the President's 
        National Energy Policy. Mr. Glotfelty also served as an advisor 
        on electricity to then-Governor Bush.

3. Overarching Questions

          How is the White House guidance to science and 
        technology agencies reflected in the activities funded by the 
        Department of Energy's (DOE) budget? In particular, does the 
        DOE budget reflect the emphasis on long-term, high-risk 
        activities that the Administration has stressed in its guidance 
        to agencies?

          The Office of Management and Budget is applying new 
        evaluation techniques to decide how well agency programs are 
        working. Are programs being evaluated properly and do program 
        budgets reflect the evaluations?

          In addition, there are a series of program-specific 
        concerns that the Committee would like to explore. See the 
        Questions to Witnesses in Section 5.

4. Background and Issues

    (Background and issues are presented for DOE as a whole and then 
for each of the programs on which the hearing will focus.)

A) OVERALL DOE R&D

BACKGROUND:

The Five DOE Civilian R&D Offices: The $5.2 billion DOE R&D request is 
divided among the five offices represented at this hearing: The Office 
of Science (SC) funds basic research at universities and 10 national 
laboratories. The Office of Science contributes over 40 percent of the 
federal funds for civilian physical sciences research. The other four 
offices--Energy Efficiency and Renewable Energy (EERE), Fossil Energy 
(FE), Nuclear Energy Science and Technology (NE) and Electric 
Transmission and Distribution (TD)--run applied R&D programs.

U.S. Energy Context: The applied energy R&D request of $1.9 billion 
represents 3.25 percent of the civilian science and technology 
budget.\1\ The research is designed to affect the energy sector of the 
economy, which constituted 7.2 percent of the gross domestic product 
(GDP) in 2002.\2\ Energy may have an even larger influence on policy 
than its direct economic impact, due to its implications for foreign 
policy, and because virtually every other product or service in the 
economy requires some input of energy for its production and/or 
delivery.
---------------------------------------------------------------------------
    \1\ Not including Department of Homeland Security funding.
    \2\ Numerator (energy expenditure) from the EIA's Annual Energy 
Review 2002 Table 3.4 on page 77. Denominator (GDP) from the year 2002 
data in the President's 2005 Budget: Historical Tables, page 184.

DOE R&D in Budget Context: The President is proposing to spend $55.3 
billion on all civilian research and development (R&D) in the fiscal 
year (FY) 2005 budget, or about 2.3 percent of the total proposed $2.4 
trillion budget.\3\ Of the amount proposed for total civilian R&D, 9.4 
percent would go to DOE. Table 1 on the next page breaks down the 
proposed DOE R&D budget.
---------------------------------------------------------------------------
    \3\ To calculate civilian R&D the Committee begin with the Federal 
Science and Technology (FS&T) budget (Analytical Perspectives, p. 61) 
and subtracted defense basic and applied research. These FS&T tables 
did not include any research in the Department of Homeland Security.



---------------------------------------------------------------------------
ISSUES:

Does the proposed budget strike the appropriate balance between the 
physical sciences and the life sciences?: Life science research at the 
National Institutes of Health (NIH) has more than doubled over the past 
decade, while research in the physical sciences has remained flat (see 
Figure 1). Is this the correct balance between life sciences and 
physical sciences? The largest percentage of federal non-defense 
physical sciences research funds come through DOE.




Will a proposed change in budget scoring endanger funding for R&D? The 
proposed budget would change funding for the Yucca Mountain nuclear 
waste disposal facility from discretionary to mandatory spending. If 
Congress fails to approve this change--and Senate approval is unlikely 
given the controversy about Yucca Mountain--then $750 million will have 
to be cut from proposed discretionary spending in the Energy and Water 
appropriations to make up the difference.

Does the proposed budget over-emphasize demonstration projects at the 
expense of basic and applied research? In its FY05 guidance to federal 
science agencies, the White House indicated that federal R&D programs 
should emphasize high-risk, long-term research. Yet DOE's FY05 budget 
request appears to emphasize demonstration programs, which are 
inherently more expensive than research. For example, within the Office 
of Fossil Energy, funds are shifted from more fundamental research on 
coal to fund a large demonstration project.

How is the Program Assessment and Rating Tool (PART) affecting budget 
decisions? The Office of Management and Budget created the PART to 
better evaluate programs. But programs with poor evaluations do not 
always fare poorly in the budget proposal and programs that score well 
are not always well funded. (See the PART discussion in each of the 
sections below.)

Does the proposed budget reflect a reduced commitment to climate change 
technology? In the past, the Bush Administration has included in its 
budget request a specific funding amount for the Climate Change 
Technology Program, which was being led by DOE. The FY05 proposal does 
not break out the program. Meanwhile, the Committee is still awaiting 
receipt of a strategic plan for the existing Climate Change Technology 
Program, which was due last summer.

Does the proposed budget strike the appropriate balance among applied 
energy programs? The proposed budget reflects a continuing shift in 
emphasis away from energy efficiency R&D. Assuming the budget proposal 
is approved, since FY01, Fossil Energy R&D will have increased by 35 
percent, and Renewable Energy R&D, including much of the Hydrogen fuel 
initiative, by 20 percent. Nuclear Energy, including shifts related to 
new laboratory costs, will have increased by 8.3 percent. Energy 
Efficiency R&D will have declined by 12 percent.




B) OFFICE OF SCIENCE

BACKGROUND:

Budget Highlights: Science at DOE is cut by about $68 million compared 
to the FY04 enacted level, bringing the total down to about $3.4 
billion. The Administration describes this as a two percent increase, 
if one excludes Congressional earmarks. In passing the Energy Bill, 
H.R. 6, the House authorized $4.2 billion for the Office for FY05.
    The largest increase would go to Basic Energy Sciences, up $53 
million (5.2 percent) including $29 million associated with the 
Hydrogen Initiative. The largest decrease would go to Biological and 
Environmental Research, where the Department shaved $140 million in 
earmarks.

PART: Office of Science programs have generally scored well recently on 
evaluations with the PART, receiving ratings of ``moderately 
effective'' and ``effective.'' This has not led, however, to 
significant increases in funding.

Focus On Long-Term, High-Risk: As a source of funds for basic research, 
the activities in the Office of Science are inherently long-term and 
high-risk.
ISSUES:

Would the proposal to initiate several new projects make the Office of 
Science budget unsustainable over the long run? The FY05 budget request 
includes several new starts--for U.S. participation in the 
international fusion experiment known as ITER, for the Linac Coherent 
Light Source, and for a Protein Production and Tags Facility. To 
complete these projects, funding for them will have to increase 
significantly in the out years. Unless the Office of Science receives 
significant budget increases in future years--which does not seem 
likely--these projects will eat into the budgets for ongoing programs. 
DOE has not explained how it will deal with this.

Does the budget deal realistically with the need to update the 
infrastructure of the national laboratories? The budget proposes to cut 
the Science Laboratories Infrastructure line nearly in half (^46.4 
percent). The justification for the cut is that DOE will start leasing 
facilities built by others rather than laying out construction funds. 
But this raises questions about whether such buildings will be built 
for DOE needs rather than those of the contractor. Also, leasing 
arrangements save money up-front, but often cost more over the long 
run.

C) OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

BACKGROUND:

Budget Highlights: While the proposed budget would increase overall 
funding for EERE by 1.4 percent ($17.5 million), R&D funding would 
decline by 4.7 percent (^$45 million). That's because the largest 
increase in the account is for weatherization grants rather than R&D. 
The non-research programs, Weatherization and State Grants, are up $61 
million or 23 percent. The Hydrogen R&D Initiatives, consisting of 
FreedomCAR and the Hydrogen Fuel Initiative, would also increase--by 
$27 million or 12 percent.

PART: EERE programs were among the earliest in the Federal Government 
to be subject to the R&D criteria. All but one of EERE's PART scores 
were ``moderately effective,'' with Building Technologies receiving an 
``adequate'' rating.

Focus On Long-Term, High-Risk: The Science Committee held a hearing on 
March 3, 2004 on two recent reports, which recommended that the 
hydrogen efforts at DOE turn more attention to fundamental science 
questions. One report called the milestones in a key program 
``unrealistically aggressive,'' and the other cautioned against 
premature demonstrations. For details, see the hearing charter and 
testimony: http://www.house.gov/science/hearings/full04/index.htm.




ISSUES:

Does the proposed budget achieve the appropriate balance among EERE 
programs? EERE funds a range of alternative technologies, including 
biomass, wind, solar and geothermal. In recent years, an increasing 
percentage of EERE funds have gone to the President's Hydrogen 
Initiatives, including fuel and vehicle programs. This has limited 
funding for programs other than Hydrogen. In the FY05 proposal, funding 
for EERE R&D programs other than the Hydrogen Initiatives would decline 
by almost 10 percent. However, this figure counts Congressional 
earmarks in the FY04 base. If the earmarks are excluded, those programs 
still decline by about three percent. (See Appendix, Table 4.) Is this 
too great a loss in the base programs? Both the National Academy of 
Sciences and the American Physical Society in recent reports have noted 
that more R&D will be needed in alternative energy sources to help 
enable a hydrogen economy to reduce greenhouse gas emissions.

D) OFFICE OF FOSSIL ENERGY

BACKGROUND:

Budget Highlights: The President's budget and the DOE budget documents 
present significantly different figures for Fossil Energy. The 
Committee has asked DOE to explain the disparities at this hearing. For 
example, the President's budget shows the President's Coal Research 
Initiative budget at $635 million in the table, compared to $287 
million in the narrative description, and $447 million in DOE 
documents.
    The increased funding for the Clean Coal Power Initiative in the 
Fossil Energy budget appears to come at the expense of the stationary 
fuel cell program (Distributed Generation) cut by $49 million (^68 
percent), and other base coal programs. The budget does propose to 
rescind the funds for several Clean Coal projects that never got off 
the ground and to close the Clean Coal Technology account, moving most 
of the money to the base Fossil R&D program. This follows what the 
appropriators have been doing piecemeal for several years. Oil and gas 
programs are also cut by 57 percent (^$20 million) and 39 percent (^$17 
million), but these two programs were among the few rated 
``ineffective'' by the PART.

PART: FE PART scores vary from ``adequate'' for the coal programs to 
``ineffective'' for the oil and gas programs. The oil and gas programs 
are among only a handful (only 0.1 percent of R&D) of all government 
programs rated as ``ineffective'' by the PART.

Focus On Long-Term, High-Risk: The FY05 budget emphasizes FutureGen, a 
large project to demonstrate carbon dioxide sequestration at a coal-
fired power plant. While sequestration is a largely untested 
technology, demonstration projects usually are undertaken after risks 
are reduced. The emphasis on FutureGen raises the question of whether 
the project is a departure from the intention to focus R&D programs on 
``long-term, high risk'' projects or whether FutureGen may be premature 
as a full-scale demonstration of sequestration before the risks are 
fully understood and addressed. (See more below.)
ISSUES:

Does the proposed budget emphasize demonstration projects at the 
expense of core research? The budget request proposes to fund about 
half of the government share of the FutureGen project--$237 million--of 
which just $18 million will be expended in FY05. The FutureGen 
demonstration project would build a new coal gasification power plant 
to experiment with the sequestration of carbon dioxide and the 
production of hydrogen. The Administration is also proposing a change 
from current law that, among other things, currently protect the 
government from cost overruns in clean coal projects.

E) OFFICE OF NUCLEAR ENERGY, SCIENCE AND TECHNOLOGY

BACKGROUND:

Budget Highlights: The budget proposes to increase funding for the 
Office of Nuclear Energy, Science and Technology (NE) by 2.2 percent, 
from $293 million to $300 million. However, the nuclear energy R&D 
budget lines would decline from $130 million to $96 million, with six 
programs being merged into four. The Advanced Fuel Cycle Initiative, a 
centerpiece of last year's budget, is cut from $67 million to $46 
million.

PART: The NE ratings were mixed. The Advanced Fuel Cycle Initiative 
(AFCI) and the Generation IV Nuclear Energy Systems Initiatives each 
received a rating of ``moderately effective,'' while the Nuclear Power 
2010 (Nuclear Energy Technologies) program received a rating of 
``adequate.'' The Nuclear Energy Research Initiative (NERI) was 
determined to have ``results not demonstrated.''

Focus On Long-Term, High-Risk: The budget would reduce funding for one 
long-term program, the Advanced Fuel Cycle Initiative (AFCI), and merge 
another, the Nuclear Energy Research Initiative (NERI), into other 
programs. The AFCI develops technologies that can reduce the volume and 
long-term toxicity of high-level waste. NERI, which funds peer-reviewed 
nuclear research at universities, will reportedly be incorporated into 
existing programs. It is unclear, however, whether the merged effort 
would continue NERI's focus on fundamental research questions.
ISSUES:

Will the Office of Nuclear Energy's new responsibilities as the 
``landlord'' of the Idaho National Laboratory reduce funding for other 
programs? DOE decided in 2003 to change the way it managed what was 
then the Idaho National Engineering and Environmental Laboratory and 
the Argonne-West Laboratory, which was co-located with it. DOE merged 
the R&D programs of the two labs to create the new Idaho National 
Laboratory (INL). DOE made NE the ``landlord'' for INL, meaning the 
Office will have the responsibility of covering infrastructure and 
personnel costs related to the laboratory. Previously, those matters 
were the responsibility of DOE's Environmental Management program. The 
upshot of this change is that NE will have to cover $33 million in 
costs formerly borne by Environmental Management. NE needed funds to 
cover these new costs, and partly as a result, NE's nuclear R&D budget 
lines would get a $34 million, 26 percent cut in the FY05 budget. DOE 
argues that at least some of the new costs related to INL will not 
recur because they will be used to make one-time payments to employees 
who were affected by the merger of the two laboratories.

F) OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION

BACKGROUND:

Budget Highlights: This Office, created in FY04, would receive a $10 
million increase under the proposed budget--half to R&D programs and 
half to program direction for personnel increases. The largest area of 
funding for the Office is the High Temperature Superconductivity (HTS) 
R&D program, which also would receive the largest increase, at +$11 
million (32 percent). Also seeing increases are two new initiatives, 
GridWise and GridWorks. These programs are focused on developing 
communications and control technologies along with advanced cables, 
switches, and monitors to improve the transmission and distribution of 
electricity. Distribution R&D would be reduced, down $9 million (^63 
percent).

PART: HTS R&D was the only Office program evaluated; OMB rated it 
``moderately effective.''

Focus On Long-Term, High-Risk: In response to the blackout of August 
14, 2003, this Office has dedicated additional effort to short-term 
congestion relief technologies.
ISSUES:

Will cuts to energy storage R&D have an adverse effect on other DOE 
programs? The request for Energy Storage, received a large cut of $5 
million (^56 percent). Will this reduction cause a delay in 
commercialization of technologies being funded in other parts of DOE? 
The storage of energy is vital to emerging technologies such as wind, 
fuel cells, and solar-generated electricity. Such sources can only 
generate power intermittently (when the wind is blowing, for example), 
and they would be much more attractive if the energy they generate 
could be stored for later use. Before the Office was created, storage 
programs resided in EERE.

5. Witnesses Questions

    Witnesses have been asked to summarize the budget request for their 
offices focusing on activities identified as part of the Federal 
Science and Technology (FS&T) budget and specifically address the 
following issues:
Questions for Dr. Decker

          The recently released Strategic Plan and the 20-Year 
        Facilities Plan assume that the Office of Science will receive 
        funding at levels in H.R. 6. Given that the fiscal year 2004 
        appropriation did not match that level, and the President's 
        request does not match the proposed authorization level for 
        fiscal year 2005, how does the Office of Science plan to cope 
        with these lower budget numbers?

          It is our understanding that negotiations are 
        continuing on the location for the international fusion 
        experiment. Please provide an update of on negotiations for the 
        International Thermonuclear Experimental Reactor (ITER), and 
        what the budget implications are likely to be if ITER 
        negotiations collapse.

          The President's Management Agenda (PMA) includes 
        government-wide provisions on budget and performance 
        integration that have been implemented through the Program 
        Assessment and Rating Tool (PART) In addition, the PMA also 
        introduced R&D Investment Criteria that were piloted in DOE's 
        applied R&D programs. Please provide examples of how you 
        prepared data under these requirements, how those data were 
        used for budget and management decisions, and how these 
        activities dovetail with the Government Performance and Results 
        Act of 1993.

          Using the definitions in OMB Circular A-11, what is 
        the proposed mix of funding in the fiscal year 2005 budget 
        request between basic research, applied research, development, 
        demonstration, and deployment activities for your office? 
        Please provide the comparable fiscal year 2004 numbers.
Questions for Mr. Garman

          Please provide the fiscal year 2004 enacted level and 
        the President's fiscal year 2005 request for the following 
        programs individually:

                --  Industrial Technologies Program

                --  Biomass Program

                --  Distributed Energy Program

                --  Building Technologies Program

                --  Solar Energy Technologies Program

                --  Hydrogen, Fuel Cells and Infrastructure 
                Technologies Program

                --  Wind and Hydropower Technologies Program

                --  Geothermal Technologies Program

                --  Weatherization and Intergovernmental Program

                --  Federal Energy Management Program

                --  FreedomCAR and Vehicle Technologies Program

          This year's budget makes almost no mention of the 
        Climate Change Technology Initiative. What has happened to this 
        program, and why has the Administration decided to de-emphasize 
        it?

          The President's Management Agenda (PMA) includes 
        government-wide provisions on budget and performance 
        integration, that has been implemented through the Program 
        Assessment and Rating Tool (PART) In addition, the PMA also 
        introduced R&D Investment Criteria that were piloted in DOE's 
        applied R&D programs. Please provide examples of how you 
        prepared data under these requirements, how those data were 
        used for budget and management decisions, and how these 
        activities dovetail with the Government Performance and Results 
        Act of 1993.

          Using the definitions in OMB Circular A-11, what is 
        the proposed mix of funding in the fiscal year 2005 budget 
        request between basic research, applied research, development, 
        demonstration, and deployment activities for your office? 
        Please provide the comparable fiscal year 2004 numbers.
Questions for Mr. Maddox

          Please clarify how the program authorization level 
        totaling $888 million in the President's budget request for 
        fiscal year 2005 squares with a request for new budget 
        authority of only $636 million (p. 395 of the Appendix to 
        Budget of the U.S. Government.) In addition, in the President's 
        budget, the President's Coal Research Initiative shows a new 
        obligation level of $635 million, whereas the DOE fiscal year 
        2005 Budget Request shows the Initiative at the $447 million 
        level. Finally, the President's budget request shows a planned 
        unobligated balance of $602 million for the end of this fiscal 
        year. What is the Department planning to spend on coal 
        activities in fiscal year 2005 and how do unobligated balances 
        factor into the spending plan?

          Given the importance of fuel cells to the hydrogen 
        economy, please address why the department chose to reduce 
        funding for distributed generation systems, including 
        stationary fuel cells, by two thirds ($48 million).

          The President's Management Agenda (PMA) includes 
        government-wide provisions on budget and performance 
        integration that have been implemented through the Program 
        Assessment and Rating Tool (PART). In addition, the PMA also 
        introduced R&D Investment Criteria that were piloted in DOE's 
        applied R&D programs. Please provide examples of how you 
        prepared data under these requirements, how those data were 
        used for budget and management decisions, and how these 
        activities dovetail with the Government Performance and Results 
        Act of 1993.

          Using the definitions in OMB Circular A-11, what is 
        the proposed mix of funding in the fiscal year 2005 budget 
        request between basic research, applied research, development, 
        demonstration, and deployment activities for your office? 
        Please provide the comparable fiscal year 2004 numbers.
Questions for Mr. Magwood

          The Department recently decided to split the Idaho 
        National Engineering and Environmental Laboratory (INEEL) 
        management contract into a clean-up portion (on-site nuclear 
        waste clean-up project) and a research portion (a newly-
        redesignated laboratory for nuclear energy research Idaho 
        National Laboratory (INL) ). Please outline the Department's 
        statutory authority to make this change and the Congressional 
        consultation process that preceded it.

          Please detail Nuclear Energy Science and Technology 
        program costs in fiscal year 2005 and out-years resulting from 
        the transitioning of INEEL and ANL-West to INL. When the 
        decision was made to split the contract at INEEL, did the 
        department realize that some workers would not fit in the new 
        structure? If so, please explain why the Department is 
        responsible for paying transition costs to these workers and 
        why those costs should come at the expense of nuclear energy 
        R&D.

          The Department has proposed reclassification of $750 
        million in funding for Yucca Mountain as offsetting 
        collections, a change that requires statutory authorization. 
        Please describe the consequences to the budget if this change 
        is not enacted. In addition, please describe how any consequent 
        delays in the construction of the Yucca Mountain waste disposal 
        facility would impact plans and priorities in the nuclear 
        energy R&D program.

          The President's Management Agenda (PMA) includes 
        government-wide provisions on budget and performance 
        integration that have been implemented through the Program 
        Assessment and Rating Tool (PART). In addition, the PMA also 
        introduced R&D Investment Criteria that were piloted in DOE's 
        applied R&D programs. Please provide examples of how you 
        prepared data under these requirements, how those data were 
        used for budget and management decisions, and how these 
        activities dovetail with the Government Performance and Results 
        Act of 1993.

          Using the definitions in OMB Circular A-11, what is 
        the proposed mix of funding in the fiscal year 2005 budget 
        request between basic research, applied research, development, 
        demonstration, and deployment activities for your office? 
        Please provide the comparable fiscal year 2004 numbers.
Questions for Mr. Glotfelty

          Please discuss the needs that led to the 
        establishment of GridWise and GridWorks.

          This year's budget shows a reduction in energy 
        storage, down to $4 million from $9 million in fiscal years 
        2002, 2003, and 2004. Are there reasons for this decrease, 
        other than significant earmarking in the account? Has the 
        Department determined that there is a decreased potential for 
        energy storage technologies to contribute to grid stability? 
        How does this reduction interact with the likely contribution 
        of intermittent sources (such as wind--the fastest growing 
        power source on a percentage basis) that are being connected to 
        the grid in response to state renewable portfolio standards?

          The President's Management Agenda (PMA) includes 
        government-wide provisions on budget and performance 
        integration that have been implemented through the Program 
        Assessment and Rating Tool (PART). In addition, the PMA also 
        introduced R&D Investment Criteria that were piloted in DOE's 
        applied R&D programs. Please provide examples of how you 
        prepared data under these requirements, how those data were 
        used for budget and management decisions, and how these 
        activities dovetail with the Government Performance and Results 
        Act of 1993.

          Using the definitions in OMB Circular A-11, what is 
        the proposed mix of funding in the fiscal year 2005 budget 
        request between basic research, applied research, development, 
        demonstration, and deployment activities for your office? 
        Please provide the comparable fiscal year 2004 numbers for 
        comparison.
        
        
        
        
    Chairman Biggert. The hearing on the Energy Subcommittee of 
the Science Committee will come to order.
    Before we begin, I want to welcome Representative Larson as 
the new Ranking Member of the Energy Subcommittee. I am happy 
to have you here. Thank you.
    And I also want to welcome everyone to the hearing of the 
Energy Subcommittee on the Department of Energy's proposed 
investments in research and development for fiscal year 2005. 
Operating in the most constrained budget environment in many 
years, Congress has a duty to choose among competing 
priorities, and this year, the choices are especially 
difficult. Today, we will learn more about how the DOE plans to 
spend its limited resources. While 7.2 percent of the Nation's 
GDP is spent on energy, a number that doesn't account for the 
indirect costs of securing those energy supplies, only 3.25 
percent of the federal civilian R&D budget is spent on energy 
technology.
    As we face high oil prices not seen since before the first 
Gulf War, we must be clear about our priorities. Our energy 
challenges are just too great for us to do otherwise. That is 
why we will hear testimony today from witnesses from five DOE 
offices with responsibility for research and development across 
the board, including science, energy efficiency, and renewable 
energy, fossil energy, nuclear energy, and electric 
transmission and distribution.
    Turning to the Office of Science, I will admit that I was 
disappointed when I saw the President's budget request of $3.4 
billion for fiscal year 2005. We know the long-term economic 
benefits from physical science research, and yet federal 
funding for research in the physical sciences has been flat for 
more than a decade. It remains flat in the proposed budget for 
fiscal year 2005 despite the fact that comprehensive energy 
bills passed by both the House and the Senate include an 
authorization level of about $4 billion for the Office of 
Science in fiscal year 2005. This represents nearly a 20 
percent increase for the Office of Science over current 
levels--funding levels.
    I think Congress has been clear that it supports increased 
funding for the Office of Science to make up for years of 
inadequate budgets. In fiscal year 2004, Congress provided a 
one percent increase over the President's request. The two 
percent cut proposed for fiscal year 2005 seems to ignore that 
Congressional support and the justification for it. That 
justification was clearly delineated last fall, and the Office 
of Science released its 20-year facilities plan, which 
describes the world class scientific facilities we could build 
in this country if we invest at levels included in H.R. 6, the 
Comprehensive Energy package. This plan was the result of 
lengthy deliberations across scientific disciplines and some 
plain old tough choices.
    Ray Orbach, the Director of the Office of Science, has 
performed a tremendous service to our nation's scientific 
research enterprise by leading the effort to develop a ranked 
list of priority facilities. The plan not only outlines the 
benefit of future research, but is a testament to the 
disciplined management approach that can serve as a model for 
other agencies. How the fiscal year 2005 budget will impact 
that plan is one of the issues we will address today.
    As for the Office of Nuclear Energy, Science and 
Technology, I am very concerned about the heavy cuts proposed 
to nuclear energy R&D. The Nuclear Energy Research Initiative 
is eliminated. The Advanced Fuel Cell Initiative is cut by 1/3. 
Even the Nuclear Power 2010 program is cut in half.
    Meanwhile, in the midst of the tightest budget conditions 
in decades, the DOE now has decided to create a brand new 
national laboratory called the Idaho National Laboratory. The 
irony is that at the very time that Congress is struggling to 
find dollars for nuclear R&D, DOE is taking those scarce 
dollars and using them to pay for infrastructure costs 
associated with the new laboratory. While I support the 
Department's designation of a lead laboratory, I have serious 
concerns about how the Department is going about creating this 
lab. I am particularly concerned about the impact of those 
recent actions on existing nuclear R&D programs and facilities, 
including those in Idaho, that have served the Nation well for 
decades.
    That is what I want to explore today. Some of the broader 
issues will be covered more in depth at a later hearing.
    Unfortunately, I have exhausted my time before being able 
to express a concern I know many of my colleagues share. It has 
to do with the shrinking energy efficiency R&D budget and its 
impact on programs designed to help industry operate more 
efficiently and, as a consequence, keep jobs in the U.S.
    On that note, I will conclude by saying I am looking 
forward to the hearing, the testimony of the witnesses here 
today, and to working with them and others to do the best 
what--the best we can to support science and energy-related 
R&D. We are talking today about programs that matter a great 
deal to our nation's economic and energy future. During these 
tight fiscal times, we must set priorities and use scarce 
resources wisely. We are here today to make sure the proposed 
fiscal year 2005 budget meets these standards.
    And I will now recognize the Ranking Member from 
Connecticut, Mr. Larson.
    [The prepared statement of Mrs. Biggert follows:]

              Prepared Statement of Chairman Judy Biggert

    The hearing will come to order. I want to welcome everyone to this 
hearing of the Energy Subcommittee on the Department of Energy's (DOE) 
proposed investments in research and development for fiscal year 2005. 
Operating in the most constrained budget environment in many years, 
Congress has a duty to choose among competing priorities. And this 
year, the choices are especially.
    Today, we will learn more about how the DOE plans to spend its 
limited resources. While 7.2 percent of the Nation's GDP is spent on 
energy--a number that doesn't account for the indirect costs of 
securing those energy supplies--only 3.25 percent of the federal 
civilian R&D budget is spent on energy technology. As we face high oil 
prices not seen since before the first Gulf War, we must be clear about 
our priorities; our energy challenges are just too great for us to do 
otherwise.
    That's why we will hear testimony today from witnesses from five 
DOE offices with responsibility for research and development across the 
board, including science, energy efficiency and renewable energy, 
fossil energy, nuclear energy, and electric transmission and 
distribution.
    Turning to the Office of Science, I'll admit that I was 
disappointed when I saw the President's budget request of $3.4 billion 
for FY05. We know the long-term economic benefits from physical 
sciences research, and yet federal funding for research in the physical 
sciences has been flat for more than a decade.
    It remains flat in the proposed budget for FY05, despite the fact 
that comprehensive energy bills passed by both the House and Senate 
included an authorization level of about $4 billion for the Office of 
Science in FY05. This represents nearly a 20 percent increase for the 
Office of Science over current funding levels. I think Congress has 
been clear that it supports increased funding for the Office of Science 
to make up for years of inadequate budgets. In FY04, Congress provided 
a one percent increase over the President's request. The two percent 
cut proposed for FY05 seems to ignore that Congressional support, and 
the justification for it.
    That justification was clearly delineated last fall when the Office 
of Science released its twenty-year facilities plan, which describes 
the world-class scientific facilities we can build in this country if 
we invest at the levels included in H.R. 6, the comprehensive energy 
package. This plan was the result of lengthy deliberations across 
scientific disciplines, and some plain old tough choices. Ray Orbach, 
the Director of the Office of Science, has performed a tremendous 
service to our nation's scientific research enterprise by leading the 
effort to develop a ranked list of priority facilities. The plan not 
only outlines the benefits of future research, but is a testament to 
the disciplined management approach that can serve as a model for other 
agencies. How the FY05 budget will impact that plan is one of the 
issues we will address today.
    As for the Office of Nuclear Energy, Science, and Technology, I am 
very concerned about the heavy cuts proposed to nuclear energy R&D. The 
Nuclear Energy Research Initiative is eliminated. The Advanced Fuel 
Cycle Initiative is cut by one-third. Even the Nuclear Power 2010 
program is cut in half.
    Meanwhile, in the midst of the tightest budget conditions in 
decades, the DOE now has decided to create a brand new national 
laboratory called the Idaho National Laboratory. The irony is that at 
the very time that Congress is struggling to find dollars for nuclear 
R&D, DOE is taking those scarce dollars and using them to pay for 
infrastructure costs associated with a new laboratory.
    While I support the Department's designation of a lead laboratory, 
I have serious concerns about how the Department is going about 
creating this laboratory. I am particularly concerned about the impact 
of these recent actions on existing nuclear R&D programs and 
facilities, including those in Idaho, that have served the Nation well 
for decades. That's what I want to explore today. Some of the broader 
issues will be covered in more depth at a later hearing.
    Unfortunately, I've exhausted my time before being able to express 
a concern I know many of my colleagues share. It has to do with the 
shrinking energy efficiency R&D budget, and its impact on programs 
designed to help industry operate more efficiently and, as a 
consequence, keep jobs in the U.S.
    On that note, I will conclude by saying that I'm looking forward to 
hearing the testimony of the witnesses here today, and to working with 
them and others to do the best we can to support science and energy 
related R&D. We are talking today about programs that matter a great 
deal to our nation's economic and energy future. During these tight 
fiscal times, we must set priorities and use scarce resources wisely. 
We are here today to make sure the proposed FY05 budget meets these 
standards.
    Thank you very much.

    Mr. Larson. Thank you, Madame Chairman, and let me clear my 
throat.
    Chairman Biggert. I have a cold.
    Mr. Larson. It must be catching.
    Thank you, Madame Chairman, and let me, first and foremost, 
associate myself with the remarks that you have made and thank 
you for recognizing me at this time. I assure you I will be 
brief. I have a written statement that I will submit for the 
record, and I hope I can revise and extend my remarks as we go 
forward.
    To be brief, and blunt, I share your concern and 
disappointment with regard to the President's budget proposal 
and the continued flattening of the science budget. And it is 
deep concern to many of us on this committee. And I, for one, 
want to take the time to focus on an overarching concern that 
we have as it relates to jobs in this country and the role of 
the scientific community in job creation, especially, not only 
in our labs, but also the concern that we have with regard to 
manufacturing and the brain drain that has taken place in my 
state and across this country. In Connecticut alone, we have 
lost more than 40,000 manufacturing jobs and the brain drain 
and the lack of people going into science and engineering and 
the continuing exporting of jobs and outsourcing of jobs and 
technology remains a concern that is utmost on my mind and the 
minds of many Members of Congress.
    I believe our government has yet to fully understand the 
forces that are rewriting the rules of international 
competition. The Internet is opening up avenues of competition 
that were almost unheard of just a few months ago. Many 
scientists and engineers that are trained in this country are 
now able to return to their countries and compete with our 
citizens in this country by means of the broadband and use of 
Internet connections. And more can be expected to avail 
themselves of these opportunities in the months and years 
ahead.
    Science and technology has made that possible. Now we need 
to apply the enormous skills and abilities that we have in DOE 
and the national laboratories conducting research that creates 
jobs and develops technologies that will create new jobs in the 
future, hopefully jobs that will stay in the United States.
    I look forward to your testimony here today, and my line of 
questioning will focus on those specific areas. I hope that the 
one message that you take away from this hearing today is DOE 
is part of the job and employment solution. The Department is a 
major source of jobs, particularly our national laboratories. 
The laboratories are a terrific engine in communities and 
regions where they are located, but DOE can do much more. 
Increasing funding in applied research and ramping up new 
programs at colleges, universities, and businesses that have 
the desire to participate can have a significant economic 
effect in Districts, such as mine, and across this great 
nation.
    So I thank you, Madame Chairman, and I thank the panelists. 
I look forward to your testimony.
    [The prepared statement of Mr. Larson follows:]

          Prepared Statement of Representative John B. Larson

    Madame Chairman, thank you for recognizing me at this time and I 
will be brief.
    To be blunt and brief, I am disappointed in the President's request 
for the funding of the DOE science programs. At a time when this 
country faces economic challenges from many quarters, the 
administration continues to hold the Office of Science essentially 
flat.
    I worry about the jobs that are leaving this country literally by 
the planeload. In my part of Connecticut, job losses have been immense 
and represent a major challenge for the leadership of our communities 
and state. We are trying to attract business and industry into the 
Connecticut River Valley but we have the feeling that we are getting 
precious little help from the federal government.
    Our government has yet to fully understand the forces that are 
rewriting the rules of international competition. The Internet is 
opening up avenues for competition that were almost unheard of just a 
few months ago. Many scientists and engineers that trained in this 
country are now able to return to their countries and compete with our 
citizens in this country by means of these marvelous broadband 
connections. And more can be expected to avail themselves of these 
opportunities in the months and years ahead.
    Science and technology has made that possible. Now we need to apply 
the enormous skills and abilities that we have in the DOE and the 
National Laboratories to conducting research that creates jobs now and 
develops the technologies that will create new jobs in the future--
hopefully jobs that will stay in the United States.
    I don't have a lab. I won't get a lab. But my district and scores 
of others like mine can benefit from increased funding in applied 
research and providing research opportunities in cities and towns were 
the capabilities exist.
    I hope that one of the messages that you take away from this 
hearing today is the DOE is part of the job and employment solution. 
The department is a major source of jobs--particularly the national 
laboratories--and the laboratories are a terrific economic engine in 
the communities and regions where they are located. But DOE can do much 
more. Increasing funding in applied research and ramping up new 
programs at colleges, universities, and businesses that have the desire 
to participate can have a significant economic effect in districts such 
as mine.
    Thank you Madame Chairman.

    Chairman Biggert. Thank you, Mr. Larson.
    All of our witnesses today are from the Department of 
Energy, and I thank all of you for being with us this morning. 
Our witnesses are, to my left, Dr. James Decker, the Principal 
Deputy Director of the Office of Science, Mr. David Garman, the 
Assistant Secretary for Energy Efficiency and Renewable Energy, 
Mr. Mark R. Maddox, the Acting Assistant Secretary for Fossil 
Energy, Mr. William D. Magwood, the Director of the Office of 
Nuclear Energy, Science and Technology, and finally, Mr. James 
Glotfelty, the Director of the U.S. Department of Energy's 
Office of Electric Transmission and Distribution.
    And I know that all of the witnesses know, because you have 
been here before us often, spoken testimony will be limited to 
five minutes each, after which the Members will have five 
minutes each to ask questions. So we will begin with Mr. 
Decker.

STATEMENT OF DR. JAMES F. DECKER, PRINCIPAL DEPUTY DIRECTOR OF 
        THE OFFICE OF SCIENCE, U.S. DEPARTMENT OF ENERGY

    Dr. Decker. Madame Chairman and Members of the 
Subcommittee, I am pleased to be here today to discuss the 
President's fiscal year 2005 budget request for the Office of 
Science. First, however, I would like to thank you and the 
Members of this subcommittee for your support over the years. 
Your support has been essential to ensuring that our nation 
stays at the leading edge of science and technology for energy 
and security.
    The Office of Science funds basic research in support of 
the Department of Energy's missions of national energy and 
economic security, environmental restoration, and science. We 
manage 10 of America's national laboratories, and we also built 
and operate the world's finest suite of scientific facilities 
and instruments that researchers depend upon to extend the 
frontiers of science.
    The Office of Science's research investments have yielded a 
wealth of dividends, including significant technological 
innovations, medical and health advances, new intellectual 
capital, enhanced economic competitiveness, and improved 
quality of life for the American people. The Office of 
Science's 2005 budget request is $3 billion 431 million, which 
will allow the Office to carry forward with the Department's 
and the Administration's priorities in critical areas of 
science. It will allow us to continue a broad program of 
research at national laboratories and universities nationwide 
in advanced scientific computing, basic energy sciences, 
biological and environmental research, fusion energy sciences, 
high-energy physics, and nuclear physics.
    Our budget request will keep our nation on the path to 
harness the promise of fusion energy with important investments 
in ITER and other fusion activities. The President's budget 
request enables us to operate our scientific user facilities, 
which are located primarily at national laboratories around the 
country, and used by more than 19,000 researchers each year. 
Utilization of these facilities would increase to 95 percent of 
optimum use from 92 percent in fiscal year 2004.
    Our budget request provides funding to continue 
construction of the Spallation Neutron Source, and I am pleased 
to report that that $1.4 billion facility is on cost and 
schedule. The request supports project engineering design and 
construction of four nanoscience research centers and a major 
item of equipment for the fifth and final nanoscience research 
center located at the Argonne National Laboratory. The 
President's request also provides funding for the development 
of future opportunities. It will enable investments in 
leadership class machines for high-end computation essential 
for America's open scientific and technological research and 
economic development.
    This year, we are also requesting $29 million as part of 
the President's Hydrogen Initiative to substantially reduce the 
cost of producing, storing, and using hydrogen. This budget 
enables us to begin our planning for the future of science in 
America through important progress on the priorities set out in 
the Facilities for the Future of Science and in the Office of 
Science Strategic Plan. It also includes funding for long-lead 
procurement for the Linac Coherent Light Source, a 
revolutionary x-ray free-electron laser light source. With 
these tools, we will be able to understand how the composition 
of materials affects their properties, watch proteins fold, see 
chemical reactions, and design matter for desired outcomes.
    Finally, this request provides the funding needed to 
initiate project engineering design activities for the GTL 
Facility for the Production and Characterization of Proteins 
and Molecular Tags. This facility promises to accelerate the 
rate and cost-effectiveness with which genomics research 
experiments can be done. The Department, through the Genomics: 
GTL program, will attempt to use genetic techniques to harness 
microbes to produce hydrogen, to absorb carbon dioxide, and aid 
environmental remediation.
    Madame Chairman, the full details of our budget request are 
provided in the written statement that I have submitted. I 
respectfully request that this statement be included in the 
record, and I would be delighted to answer any questions that 
you and the Committee may have
    [The prepared statement of Dr. Decker follows:]

                 Prepared Statement of James F. Decker

    Madam Chairman and Members of the Subcommittee, thank you for the 
opportunity to testify today about the Department of Energy's (DOE) 
Office of Science (SC) Fiscal Year 2005 budget request. The Department 
appreciates the support of the Chairman and the Members of the 
Committee over the past years and I look forward to working with you to 
ensure that our nation stays at the leading edge of science and 
technology.
    The Office of Science FY 2005 budget request is $3.4 billion, a 
$68.5 million decrease from the FY 2004 appropriation levels. When 
$140.8 million for FY 2004 Congressionally-directed projects is set 
aside, there is an increase of $72.3 million in FY 2005. This request 
makes investments in: Advanced Scientific Computing Research (ASCR), 
Basic Energy Sciences (BES), Biological and Environmental Research 
(BER), Fusion Energy Sciences (FES), High Energy Physics (HEP), Nuclear 
Physics (NP), Science Laboratories Infrastructure, Safeguards and 
Security, Workforce Development for Teachers and Scientists and Science 
Program Direction.
    Using the definitions in OMB Circular A-11, 76 percent of the 
Office of Science FY 2005 budget request is for basic research, and 
zero percent is for applied research, development, demonstration and 
deployment activities. Of the remainder, 16 percent is for Capital 
Equipment and Construction; and eight percent is for Science 
Laboratories Infrastructure, Science Program Direction, Workforce 
Development for Teachers and Scientists, and Safeguards and Security.
    This budget allows us to increase support for high priority 
scientific research, increase operations at our key scientific user 
facilities, keep major science construction projects on schedule, and 
support new initiatives. This request, coming at a time of tight 
overall federal budgets, is also a demonstration of the 
Administration's support for basic research and the role that 
fundamental science plays in keeping our nation strong and secure.




    I am proud to tell you that the Department of Energy was ranked the 
most improved cabinet-level agency in the most recent scorecard to 
assess implementation of the President's Management Agenda (PMA). The 
scorecard, which evaluates agency performance in the areas of human 
capital, competitive sourcing, financial management, e-government, and 
budget/performance integration, was issued by the Office of Management 
and Budget (OMB) in January and recognized the Department as one of the 
agencies ``leading the pack with regard to management improvement.''
    Budget and performance integration is implemented using the Program 
Assessment and Rating Tool (PART). PART includes a thorough review of 
program purpose, planning, management, and performance activities. 
Although the Office of Science uses recognized processes such as 
competition and peer review, the PART process raised the question as to 
how we validate that these systems are working for our programs. As a 
result, all six Science programs are instituting a Committee of 
Visitors (COV) process that will bring in outside experts to evaluate 
the effectiveness of our competitive, peer review process in selecting 
excellent research programs. Basic Energy Sciences piloted the COV 
approach and is pleased with the specific actionable recommendations 
that resulted.
    To meet the goals of the PMA, Science has undertaken a re-
engineering effort that will flatten the organization and clarify roles 
and responsibilities. Science is also working toward improved 
electronic management systems and has begun to receive grant 
applications electronically--an important improvement for the research 
administrators in universities and not-for-profit institutions.
    The Department has made a strong commitment to a results-driven, 
performance-based approach to management of itself and its government-
owned, contractor-operated laboratories. Laboratory contracts are being 
renegotiated so that mutually agreed upon performance measures will 
result in increased contractor authority and accountability, while 
lessening the burden of DOE day-to-day oversight of activities. In 
January of this year, the Department announced that it will compete the 
management and operating contracts for seven of the DOE laboratories.
    In September 2003, the Department issued its updated Strategic Plan 
and incorporated this Plan and the Performance Plan into the FY 2005 
budget request. The performance measures included in this budget were 
developed with input from our scientific advisory committees and OMB. A 
website (www.sc.doe.gov/measures) has been developed to more fully 
explain the new measures within the context of each program.

SCIENCE PLANS AND PRIORITIES

    The Office of Science plays four key roles in the U.S. research 
effort. We provide solutions to our nation's energy challenges, 
contributing essential scientific foundations to the energy, national, 
and economic security missions of the DOE. We are the Nation's leading 
supporter of the physical sciences, investing in research at over 280 
universities, 15 national laboratories, and many international research 
institutions. We deliver the premier tools of science to our nation's 
science enterprise, building and operating major research facilities 
for open access by the science community. We help keep the U.S. at the 
forefront of intellectual leadership, supporting the core capabilities, 
theories, experiments, and simulations to advance science.
    This FY 2005 budget request will set us on the path toward 
addressing the challenges that face our nation in the 21st Century. SC 
has recently released Facilities for the Future of Science: A Twenty-
Year Outlook which sets an ambitious agenda for scientific discovery 
over the next two decades. The priorities established in this plan--
which is clearly not a budget document--reflect national priorities set 
by the President and the Congress, our commitment to the DOE missions, 
and the views of the U.S. scientific community. Pursuing these 
priorities will be challenging, but they hold enormous promise for the 
overall well-being of all of our citizens. The FY 2005 request provides 
funding for the top five facility priorities in the plan as follows: 
ITER $7,000,000; Ultrascale Scientific Computing Capability 
$38,212,000; Joint Dark Energy mission $7,580,000; Linac Coherent Light 
Source $54,075,000; and Protein Production and Tags $5,000,000. There 
are multiple factors that will influence the realization of this plan, 
including available budgetary resources and other national priorities; 
nevertheless, it is our intention to proceed according to the plan's 
delineated priorities as circumstances allow.
    We have recently released an updated Office of Science Strategic 
Plan that is fully integrated with the Facilities Plan, the 
Department's Strategic Plan, and the President's Management Agenda--
including the R&D Investment Criteria and OMB's Program Assessment 
Rating Tool. The FY 2005 budget request begins to implement these 
plans.
    I am increasingly mindful that the health and vitality of U.S. 
science and technology depends upon the availability of the most 
advanced research facilities. DOE leads the world in the conception, 
design, construction, and operation of these large-scale devices. These 
machines have enabled U.S. researchers to make some of the most 
important scientific discoveries of the past 70 years, with spin-off 
technological advances leading to entirely new industries. More than 
19,000 researchers and their students from universities, other 
government agencies (including the National Science Foundation and the 
National Institutes of Health), private industry, and those from abroad 
use DOE facilities each year. These users are growing in both number 
and diversity.
    Because of the extraordinarily wide range of scientific disciplines 
required to support facility users at national laboratories, and the 
diversity of mission-driven research supported by the Office of 
Science, we have developed an interdisciplinary capability that is 
extremely valuable to some of the most important scientific initiatives 
of the 21st Century. There is also a symbiotic relationship between 
research and research tools. Research efforts advance the capabilities 
of the facilities and tools that in turn enable new avenues of 
research.
    Excluding funds used to construct or operate our facilities, 
approximately half of our research funding goes to support research at 
universities and institutes. Academic scientists and their students are 
funded through peer-reviewed grants, and SC's funding of university 
research has made it an important source of support for graduate 
students and postdoctoral researchers in the physical sciences during 
their early careers.
    Mindful of the role that the Office of Science plays in supporting 
the physical sciences and other key fields, I would now like to briefly 
outline some specific investments that we are proposing in the FY 2005 
Request.

SCIENCE PROGRAMS

ADVANCED SCIENTIFIC COMPUTING RESEARCH

FY 2004 Comparable Appropriation--$202.3M; FY 2005 Request--$204.3M

    The Advanced Scientific Computing Research (ASCR) program 
significantly advances scientific simulation and computation. It 
applies new approaches, algorithms, and software and hardware 
combinations to address the critical science challenges of the future, 
and provides the Nation's scientific community with access to world-
class, scientific computation and networking facilities. ASCR supports 
advancements in practically every field of science and industry. The 
ASCR budget also supports the Scientific Discovery through Advanced 
Computing (SciDAC) program--a set of coordinated investments across all 
Office of Science mission areas with the goal of achieving breakthrough 
scientific advances via computer simulation that were previously 
impossible using theoretical or laboratory studies alone.
    The FY 2005 budget request includes $204.3 million for ASCR to 
advance U.S. leadership in high performance supercomputing and networks 
for science and to continue to advance the transformation of scientific 
simulation and computation into the third pillar of scientific 
discovery. The request includes $38.2 million for the Next Generation 
Computer Architecture (NGA) research activity, which is part of a 
coordinated interagency effort that supports research, development and 
evaluation of new architectures for scientific computers that could 
help enable continued U.S. leadership in science. Enhancements are 
supported for ASCR facilities--the Energy Sciences Network (ESnet) and 
the National Energy Research Scientific Computing Center (NERSC). The 
request also includes $8.5 million for the new Atomic to Macroscopic 
Mathematics research effort to provide the research support in applied 
mathematics needed to break through the current barriers in our 
understanding of complex physical processes.

BASIC ENERGY SCIENCES

FY 2004 Comparable Appropriation--$1,010.6M; FY 2005 Request--$1,063.5M

    The Basic Energy Sciences (BES) program is a principal sponsor of 
fundamental research for the Nation in the areas of materials sciences 
and engineering, chemistry, geosciences, and bioscience as it relates 
to energy. This research underpins the DOE missions in energy, 
environment, and national security; advances energy-related basic 
science on a broad front; and provides unique user facilities for the 
scientific community and industry.
    For FY 2005, the Department requests $1.1 billion for BES including 
$208.6 million to continue to advance nanoscale science through atomic- 
and molecular-level studies in materials sciences and engineering, 
chemistry, geosciences, and energy biosciences. This supports Project 
Engineering Design (PED) and construction of four Nanoscale Science 
Research Centers (NSRCs) and a Major Item of Equipment for the fifth 
and final NSRC. NSRCs are user facilities for the synthesis, 
processing, fabrication, and analysis of materials at the nanoscale. 
The request also includes $80.5 million for construction and $33.1 
million for other project costs for the Spallation Neutron Source, and 
$54.1 million for research, development, PED, and long lead procurement 
of the Linac Coherent Light Source, a revolutionary x-ray free-electron 
laser light source. With these tools, we will be able to understand how 
the compositions of materials affect their properties, watch proteins 
fold, see chemical reactions, and design matter for desired outcomes.
    The FY 2005 budget request also includes $29.2 million for 
activities that support the President's Hydrogen Fuel Initiative. This 
research program is based on the BES workshop report, Basic Research 
Needs for the Hydrogen Economy, which highlights the enormous gap 
between our present capabilities and those required for a competitive 
hydrogen economy.

BIOLOGICAL AND ENVIRONMENTAL RESEARCH

FY 2004 Comparable Appropriation--$641.5M; FY 2005 Request--$501.6M

    The Biological and Environmental Research (BER) program advances 
energy-related biological and environmental research that has broad 
impacts on our health, our environment, and our energy future. The 
program includes components in genomics and our understanding of 
complete biological systems, such as microbes that produce hydrogen; in 
climate change, including the development of models to predict climate 
over decades to centuries; developing science-based methods for 
cleaning up environmental contaminants; in radiation biology, providing 
regulators with a stronger scientific basis for developing future 
radiation protection standards; and in the medical sciences, by 
developing new diagnostic and therapeutic tools, technology for disease 
diagnosis and treatment, non-invasive medical imaging, and biomedical 
engineering such as an artificial retina that will restore sight to the 
blind. For FY 2005, the Department requests $501.6 million for BER. The 
FY 2004 appropriation includes $140.8 million of one-time 
Congressionally-directed projects, for which no additional funds are 
being requested in FY 2005.
    Research on microbes through the Genomics: GTL program, addressing 
DOE energy and environmental needs, continues to expand from $63.5 
million in FY 2004 to $67.5 million in FY 2005. The request also 
provides $5 million for initiation of PED activities for the GTL 
Facility for the Production and Characterization of Proteins and 
Molecular Tags, a facility that will help move the Genomics: GTL 
systems biology research program to a new level by greatly increasing 
the rate and cost-effectiveness with which experiments can be done. 
DOE, through the Genomics: GTL program, will attempt to use genetic 
techniques to harness microbes to consume pollution, create hydrogen, 
and absorb carbon dioxide.

FUSION ENERGY SCIENCES

FY 2004 Comparable Appropriation--$262.6M; FY 2005 Request--$264.1M

    The Fusion Energy Sciences (FES) program advances the theoretical 
and experimental understanding of plasma and fusion science, including 
a close collaboration with international partners in identifying and 
exploring plasma and fusion physics issues through specialized 
facilities. This includes: 1) exploring basic issues in plasma science; 
2) developing the scientific basis and computational tools to predict 
the behavior of magnetically confined plasmas; 3) using the advances in 
tokomak research to enable the initiation of the burning plasma physics 
phase of the Fusion Energy Sciences program; 4) exploring innovative 
confinement options that offer the potential of more attractive fusion 
energy sources in the long-term; 5) focusing on the scientific issues 
of nonneutral plasma physics and High Energy Density Physics; 6) 
developing the cutting edge technologies that enable fusion facilities 
to achieve their scientific goals; and 7) advancing the science base 
for innovative materials to establish the economic feasibility and 
environmental quality of fusion energy.
    When the President announced that the U.S. would join in the 
International Thermonuclear Experimental Reactor (ITER) project he 
noted that ``the results of ITER will advance the effort to produce 
clean, safe, renewable, and commercially available fusion energy by the 
middle of this century.'' To this end, the Department continues its 
commitment to the future of Fusion Energy Science research with a 
request of $264.1 million, slightly above the FY 2004 enacted level. 
Within that amount, $38 million is requested for preparations for ITER 
in FY 2005, $30 million more than in FY 2004. Of this $38 million, $7 
million is for scientists and engineers who will support the 
International Team and for the qualification of vendors that will 
supply superconducting cable for ITER magnets. The remaining $31 
million will be used to support refocused experiments in our tokamak 
facilities and for component R&D in our laboratories and universities 
that is closely related to our ongoing program but which is focused on 
ITER's specific needs. The researchers and facilities that we support 
will not be doing less work because of ITER, but some of their time and 
effort will be directed to different, ITER-related, work than they were 
doing before.
    Multilateral negotiations are ongoing with respect to the specific 
ITER site, with two sites competing to host the facility. We are 
conducting technical assessments of both sites, and we fully expect to 
conclude this negotiation in a timely manner. ITER construction funds 
are not required until FY 2006 which gives time for contingency 
planning, if necessary.
    Fabrication continues on the National Compact Stellarator 
Experiment (NCSX), an innovative confinement system that is the product 
of advances in physics understanding and computer modeling. In 
addition, work will be initiated on the Fusion Simulation Project that, 
upon completion, will provide an integrated simulation and modeling 
capability for magnetic fusion energy confinement systems over a 15-
year development period. The Inertial Fusion Energy research program 
will be redirected toward high energy density physics research based on 
recommendations that will come from the recently established 
Interagency Task Force on High Energy Density Physics.

HIGH ENERGY PHYSICS

FY 2004 Comparable Appropriation--$733.6M; FY 2005 Request--$737.4M

    The High Energy Physics (HEP) program advances our understanding of 
the basic constituents of matter, including the mysterious dark energy 
and dark matter that make up most of the universe; the striking 
imbalance of matter and antimatter in the universe; and the possible 
existence of other dimensions. Collectively, these investigations will 
reveal the key secrets of the birth, evolution, and final destiny of 
the universe. HEP expands the energy frontier with particle 
accelerators to study fundamental interactions at the highest possible 
energies, which may reveal previously unknown particles, forces or 
undiscovered dimensions of space and time; explain how everything came 
to have mass; and illuminate the pathway to the underlying simplicity 
of the universe.
    For FY 2005, the Department requests $737.4 million for the HEP 
program, an increase from FY 2004. The highest priority in HEP is the 
operation, upgrade and infrastructure for the two major HEP user 
facilities at the Fermi National Accelerator Laboratory (Fermilab) and 
the Stanford Linear Accelerator Center (SLAC), to maximize the 
scientific data generated.
    In 2005, the Neutrinos at the Main Injector (NuMI) facility will be 
complete and the beam line will be commissioned. The FY 2005 budget 
request also supports research and design activities for a new Major 
Item of Equipment, the BTeV (``B Physics at the TeVatron'') experiment 
at Fermilab that will extend current investigations, using modern 
detector technology to harvest a data sample more than 100 times larger 
than current experiments. Research and development work continues in FY 
2005 on the proposed Supernova Acceleration Probe (SNAP) experiment for 
the DOE/NASA Joint Dark Energy Mission (JDEM).

NUCLEAR PHYSICS

FY 2004 Comparable Appropriation--$389.6M; FY 2005 Request--$401M

    The Nuclear Physics (NP) program supports innovative, peer reviewed 
scientific research to advance knowledge and provide insights into the 
nature of energy and matter, and in particular, to investigate the 
fundamental forces which hold the nucleus together, and determine the 
detailed structure and behavior of the atomic nuclei. Nuclear science 
plays a vital role in studies of astrophysical phenomena and conditions 
of the early universe. At stake is a fundamental grasp of how the 
universe has evolved, an understanding of the origin of the elements, 
and the mechanisms of supernovae core collapse. The program builds and 
supports world-leading scientific facilities and state-of-the-art 
instruments necessary to carry out its basic research agenda. 
Scientific discoveries at the frontiers of Nuclear Physics further the 
Nation's energy-related research capacity, which in turn provides for 
the Nation's security, economic growth and opportunities, and improved 
quality of life.
    The FY 2005 budget request of $401 million gives highest priority 
to exploiting the unique discovery potentials of the facilities at the 
Relativistic Heavy ion Collider (RHIC) and Continuous Electron Beam 
Accelerator Facility (CEBAF) by increasing operating time by 26 percent 
compared with FY 2004. R&D funding is provided for the proposed Rare 
Isotope Accelerator (RIA) and 12 GeV upgrade of CEBAF, which is located 
at Thomas Jefferson National Accelerator Facility.
    Operations of the MIT/Bates facility will be terminated as planned, 
following three months of operations in FY 2005 to complete its 
research program. This facility closure follows the transitioning of 
operations of the Lawrence Berkeley National Laboratory 88-Inch 
Cyclotron in FY 2004 from a user facility to a dedicated facility for 
the testing of electronic circuit components for use in space (using 
funds from other agencies) and a small in-house research program. These 
resources have been redirected to better utilize and increase science 
productivity of the remaining user facilities and provide for new 
opportunities in the low-energy subprogram.

SCIENCE LABORATORIES INFRASTRUCTURE

FY 2004 Comparable Appropriation--$54.3M; FY 2005 Request--$29.1M

    The Science Laboratories Infrastructure (SLI) program supports SC 
mission activities at SC laboratories by addressing needs related to 
general purpose infrastructure, excess facilities disposition, Oak 
Ridge landlord, health and safety improvements and payment in lieu of 
taxes (PILT).
    The FY 2005 budget request supports three ongoing line item 
construction projects at Lawrence Berkeley National Laboratory, 
Brookhaven National Laboratory and the Stanford Linear Accelerator 
Center and nine projects to clean-up/remove 84,000 square feet of 
excess space to reduce operating costs, and environment, safety and 
health liabilities, and to free up land for future use. The request 
also supports activities to maintain continuity of operations at the 
Oak Ridge Reservation (ORR), including federal facilities in the town 
of Oak Ridge and PILT for local communities surrounding Oak Ridge. PILT 
is also provided to communities surrounding Brookhaven and Argonne 
East.
    We have continued to work cooperatively with the Occupational 
Safety and Health Administration (OSHA) and the Nuclear Regulatory 
Commission (NRC) teams as they have conducted audits of our 
laboratories. NRC has completed its audits; OSHA is expected to 
complete its audits in mid-March 2004. The laboratories are preparing 
cost estimates to meet the requirements as identified by those 
agencies, and we plan to provide this information to Congress by May 
31, 2004.

SAFEGUARDS AND SECURITY

FY 2004 Comparable Appropriation--$56.7M; FY 2005 Request--$67.7M

    Safeguards and Security activities reflects the Office of Science's 
commitment to maintain adequate protection of cutting edge scientific 
resources and assets. The FY 2005 budget request includes $9.8 million 
for Pacific Northwest Site Office safeguards and security activities, 
which were transferred from the Office of Environmental Management. In 
FY 2005, Safeguards and Security will enable the Office of Science 
laboratories to meet the requirements of Security Condition 3 level 
mandates for the protection of assets. The request also provides the 
laboratories with the ability to maintain requirements of increased 
Security Condition 2 level for 60 days. The funding includes the 
increase needed to meet expectations of the revised Design Basis Threat 
approved by the Secretary in May 2003. In addition, critical cyber 
security investments will be made to respond to the ever changing cyber 
threat.

WORKFORCE DEVELOPMENT FOR TEACHERS AND SCIENTISTS

FY 2004 Comparable Appropriation--$6.4M; FY 2005 Request--$7.7M

    The mission of the Workforce Development for Teachers and 
Scientists program is to continue the Office of Science's long-standing 
role of training young scientists, engineers, and technicians in the 
scientifically and technically advanced environments of our national 
laboratories.
    The FY 2005 budget request of $7.7 million provides $1.5 million 
for a Laboratory Science Teacher Professional Development activity. 
About 90 participating teachers will gain experience and enhance their 
skills at five or more DOE laboratories in response to the national 
need for science teachers who have strong content knowledge in the 
classes they teach. A new $500,000 Faculty Sabbatical Fellowship 
activity will provide sabbatical opportunities for 12 faculty members 
from minority serving institutions (MSIs). This proposed activity is an 
extension of the successful Faculty and Student Teams (FaST) program 
where teams of faculty members and two or three undergraduate students, 
from colleges and universities with limited prior research 
capabilities, work with mentor scientists at a National Laboratory to 
complete a research project that is formally documented in a paper or 
presentation.

SCIENCE PROGRAM DIRECTION

FY 2004 Comparable Appropriation--$152.6M; FY 2005 Request--$155.3M

    The mission of Science Program Direction is to provide a federal 
workforce, skilled and highly motivated, to manage and support basic 
energy and science-related research disciplines, diversely supported 
through research programs, projects, and facilities under the Office of 
Science's leadership.
    Science Program Direction consists of two subprograms: Program 
Direction and Field Operations. The Program Direction subprogram is the 
single funding source for the SC federal staff in Headquarters 
responsible for directing, administering, and supporting the broad 
spectrum of scientific disciplines. This subprogram also includes 
program planning and analysis activities which provide the capabilities 
needed to evaluate and communicate the scientific excellence, 
relevance, and performance of SC basic research programs.
    The Field Operations subprogram is the centralized funding source 
for the SC federal workforce in the field who are responsible for 
providing business, administrative, and specialized technical support 
to SC and other DOE programs. Our service centers in Chicago and Oak 
Ridge provide primary support to SC laboratories and facilities, 
including Ames, Argonne National Laboratory, Brookhaven National 
Laboratory, Lawrence Berkeley National Laboratories, Oak Ridge National 
Laboratory, Pacific Northwest National Laboratory, Fermilab, Princeton 
Plasma Physics Laboratory, Thomas Jefferson National Accelerator 
Facility, and Stanford Linear Accelerator Center.
    Secretary Abraham approved the Office of Science Restructuring 
(OneSC) on January 5, 2004. OneSC was initiated in July 2002 to embrace 
the changes envisioned by the President's Management Agenda (PMA) to 
accomplish government programs more economically and effectively by 
creating a new, more efficient, and productive SC organization. It will 
also provide a management environment in which the success and high 
performance of SC employees can continue in the face of changing 
resources, requirements, and societal needs.
    The FY 2005 budget request of $155.3 million represents a 1.8 
percent increase over the FY 2004 enacted level. This increase is 
reflected in salaries and benefits to support a total SC workforce of 
1,014 full-time equivalents (FTEs). Compared to FY 2004, the FY 2005 
request is flat or lower in our other major budget categories, such as 
travel, training, support services, and other related expenses. We will 
continue to leverage resources and rely on building good business 
practices by streamlining operations, improving financial controls, and 
re-engineering business processes in support of the PMA and the OneSC 
structure.

CONCLUSION

    The Office of Science occupies a unique and critical role within 
the U.S. scientific enterprise. We fund research projects in key areas 
of science that our nation depends upon. We construct and operate major 
scientific user facilities that scientists from virtually every 
discipline are using on a daily basis, and we manage civilian national 
laboratories that are home to some of the best scientific minds in the 
world.
    Our researchers are working on many of the most daunting scientific 
challenges of the 21st Century. These include pushing the frontiers of 
the physical sciences through nanotechnology and exploring the key 
questions at the intersection of physics and astronomy. We are also 
pursuing opportunities at the intersection of the physical sciences, 
the life sciences, and scientific computation to understand how the 
instructions embedded in genomes control the development of organisms, 
with the goal of harnessing the capabilities of microbes and microbial 
communities to help us to produce energy, clean up waste, and sequester 
carbon from the atmosphere. The Office of Science is also pushing the 
state-of-the-art in scientific computation, accelerator R&D, plasma 
confinement options and a wide array of other technologies that advance 
research capabilities and strengthen our ability to respond to the 
rapidly changing challenges ahead.
    I want to thank you, Madam Chairman, for providing this opportunity 
to discuss the Office of Science's research programs and our 
contributions to the Nation's scientific enterprise. This concludes my 
testimony. I would be pleased to answer any questions you might have.

                     Biography for James F. Decker

    James F. Decker is the Principal Deputy Director of the Office of 
Science (SC) in the Department of Energy (DOE). He has held this 
position since 1985, and has concurrently served as Acting Director for 
approximately six years on five separate occasions between April 1987 
and March 2002. As Principal Deputy Director, Dr. Decker is the senior 
career executive who directs the day-to-day technical and management 
activities of an organization that is the third largest federal sponsor 
of basic research in the United States and is viewed as one of the 
premier science organizations in the world. The SC fiscal year 2002 
budget of $3.3 billion funds programs in high energy and nuclear 
physics, basic energy sciences, magnetic fusion energy, biological and 
environmental research, and computational science. SC, formerly the 
Office of Energy Research, also provides management oversight of the 
Chicago and Oak Ridge Operations Offices, the Berkeley and Stanford 
Site Offices, and the ten DOE non-weapons laboratories. Dr. Decker has 
held several other positions within DOE. In 1973 he joined the Office 
of Fusion Energy, Office of Energy Research, as a plasma physicist. He 
subsequently became the Director of the Division of Applied Physics, 
where he was responsible for all theoretical fusion and basic 
experimental plasma physics research, the magnetic fusion energy 
computer network, and evaluation of novel fusion concepts. Dr. Decker 
later served as a Special Assistant to the Director of the Office of 
Energy Research, and as the Director of the Scientific Computing Staff. 
Before joining DOE, Dr. Decker was a physicist at Bell Telephone 
Laboratories where he conducted research in plasma physics and worked 
on ion implantation for integrated circuit development. He received a 
B.S. degree from Union College in 1962, a M.S. degree from Yale 
University in 1963, and a Ph.D. in physics, also from Yale University, 
in 1967. Dr. Decker has received several awards from DOE as well as two 
Presidential Meritorious Rank Awards. He also is a member of several 
high-level domestic and international science policy advisory 
committees. Dr. Decker was born near Albany, New York. He is married 
and has two children.

    Chairman Biggert. Thank you.
    Dr. Decker. Thank you.
    Chairman Biggert. And without objection, it will be 
included in the record.
    Mr. Garman, you may proceed.

 STATEMENT OF MR. DAVID GARMAN, ASSISTANT SECRETARY FOR ENERGY 
   EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Garman. Thank you, Madame Chairman, Members of the 
Subcommittee.
    Knowing that my entire statement and specific answers to 
the questions posted by the Committee have been submitted and 
are available for the record, I will be brief.
    The Department allocates more funding for the Office of 
Energy Efficiency and Renewable Energy than it does for any 
other energy program office. The overall EERE budget request 
for fiscal year 2005 is $1.25 billion, $15.3 million more than 
the fiscal year 2004 appropriation. And while overall spending 
is up, our spending for R&D is down slightly, and that is 
because we have again proposed to increase spending to help 
deploy some of the technologies that we have successfully 
developed.
    It is important to appreciate the fact that we do a good 
deal more than R&D, and indeed, we must if we expect science 
and technology to make a difference in the lives of everyday 
Americans. And we have to make sure that it gets outside of the 
laboratory. My office's largest deployment activity is the low-
income weatherization program, a Presidential priority, for 
which we have sought a $64 million increase. If Congress 
provides the $291.2 million we are seeking for this program, we 
will be able to help approximately 119,000 low-income 
homeowners lower their energy use, lower their energy bill, and 
thus allow them to use their limited incomes for other 
productive purposes. And this is particularly important since 
low-income Americans spend a disproportionately large share of 
their income on energy. Even with this unprecedented level of 
funding, we will only reach about half of the eligible families 
that have applied for assistance.
    With that in mind, let me turn to that larger question of 
R&D versus deployment of technology. We have a variety of 
technologies that we have developed in the laboratories that is 
fair to say are still underutilized in the marketplace. Let us 
face it, many homebuilders build homes without the latest 
energy-saving technologies. Many car makers build cars without 
the most efficient powertrain designs. Many industries choose 
not to use the most efficient process technology, and many 
consumers choose not to buy renewable electricity or the most 
efficient washing machines or refrigerators that they can buy. 
So spending more on R&D to develop technology does not, in and 
of itself, necessarily change this equation; we also have to 
look at the things we do through regulation, through 
incentives, and through outreach to get these technologies into 
more widespread use.
    We are sometimes criticized for paying too much attention 
to R&D and not enough to the deployment activities. And I 
expect, frankly, that I will get a little heat today for doing 
too much in deployment and not enough in R&D. And frankly, the 
fact that we often get a hard time from both sides may be a 
sign that the portfolio of activities that we are engaged in is 
fairly balanced.
    With that said, let me echo what Dr. Decker said, that if 
we greatly appreciate and value the efforts of this committee 
and this subcommittee to support our R&D efforts in national 
labs, universities, and industry, and we look forward to 
working with you to achieve and maintain an optimal balance 
between research, development, and deployment.
    And I will be pleased to answer any questions the Committee 
has either today or in the future. Thank you.
    [The prepared statement of Mr. Garman follows:]

                   Prepared Statement of David Garman

    Chairman Biggert, Members of the Subcommittee, I appreciate the 
opportunity to testify on the FY 2005 President's Budget request for 
the Office of Energy Efficiency and Renewable Energy (EERE).
    The Department allocates more funding for the Office of Energy 
Efficiency and Renewable Energy than it does for any other energy 
program office. The overall EERE budget request for FY 2005 is $1.25 
billion, $15.3 million more than the FY 2004 appropriation.
    My testimony today will specifically address each of the 
Subcommittee's questions.

1.  Please provide the fiscal year 2004 enacted level and the 
President's fiscal year 2005 request for the following programs 
individually.

Industrial Technologies. The FY 2005 request for Industrial 
Technologies is $58.1 million, $35.0 million less than the FY 2004 
appropriation. Our budget requests for this program have been 
consistent over the past several years as we have shifted some of this 
funding to the weatherization assistance program. We believe this is a 
proper and justifiable reprioritization. The industrial sector is 
already the most energy-efficient of our economy. Moreover, in contrast 
with low income Americans helped by the Weatherization Assistance 
Program, our energy intensive industrial partners are not only capable 
of implementing energy savings measures, they have ``bottom-line'' 
incentives to do so.
    Beginning in FY 2005, the Department proposes to shift a portion of 
its R&D portfolio to focus on multi-industry Grand Challenges for next 
generation manufacturing and energy systems technologies. These Grand 
Challenges typically require high-risk investment for high-return gains 
to achieve much lower energy use than current processes. Grand 
Challenges examples include cokeless iron-making (steel industry); an 
alternative reduction technology to produce aluminum with less energy 
and emissions (aluminum industry); advanced melting technology (glass 
and metal casting industry); and distillation technologies (chemical 
industry).

Biomass and Biorefinery Systems R&D. Biomass and Biorefinery Systems 
R&D focuses on advanced technologies to transform the Nation's domestic 
biomass resources into high value chemicals, fuels, and power. In FY 
2005, the Department is requesting $81.3 million for biomass program 
activities, which is $12.6 million less than the FY 2004 
appropriation.. However, it is important to note that the FY 2004 
appropriation required the use of $13 million in prior year balances, 
and most available balances were in the Biomass program. After 
accounting for the use of prior year balances, the actual new budget 
authority provided to the Biomass program in FY 2004 was $75.0 million, 
just slightly more than our FY 2005 request. Moreover, the FY 2004 
appropriation included nearly $41.0 million, or nearly half of the 
biomass budget, targeted to specific projects not identified in program 
plans. Congressional earmarking has delayed progress toward the program 
goals and diminished core research capabilities at the National 
Laboratories.
    Our planned biomass activities are focused on advanced biorefinery 
technologies to produce low cost sugars, syngas and pyrolysis oils. In 
FY 2005, the thermochemical program will test the continuous 
production, cleanup and conditioning of biomass syngas and pyrolysis 
oils suitable for conversion to fuels, chemicals or hydrogen, and 
examine the production of hydrogen from biomass via synthesis gas. Work 
will continue with industry on improved process integration 
capabilities for industrial biorefineries, and the program will 
evaluate existing partnerships for more productive and lower-cost 
cellulase enzyme systems. Projects to test and evaluate the performance 
and costs of converting corn fiber to fuels and products will also 
continue. The program also supports ongoing R&D on processes for the 
production of chemicals and materials that can be integrated into 
biorefineries. Additional work with industry, universities and the 
national laboratories will focus on improvements to increase the 
efficiency of individual process steps.

Distributed Energy Resources. The Distributed Energy Resources Program 
leads a national effort to develop a flexible, smart, and secure energy 
system by integrating clean and efficient distributed energy 
technologies that complement the existing grid infrastructure. By 
producing electricity where it is used, distributed energy technologies 
can increase grid asset utilization and reduce the need for upgrading 
some transmission and distribution lines. Also, because distributed 
generators are located near the point of use, they allow for the 
capture of the waste heat produced by fuel combustion through combined 
heat and power systems.
    In FY 2005, we are requesting $53.1 million, a $7.9 million 
reduction from the FY 2004 appropriation. This is consistent with our 
FY 2004 request. We are reallocating funding within the Distributed 
Energy Program's programmatic areas given advances made in previous 
years and changes within our overall energy R&D portfolio. 
Specifically, in the area of industrial gas turbines, we have chosen to 
curtail funding support for research involving hydrogen applications to 
avoid duplication of research. In the area of reciprocating engines, we 
are reducing the scope of our activities in areas that are perceived to 
be within private industry's capabilities. We are requesting less 
funding amount in the area of thermally-activated technologies, as the 
program is completing existing efforts on heat pumps and refrigeration 
in FY 2004.

Building Technologies. The FY 2005 request for the Building 
Technologies program is $58.3 million, a $1.6 million reduction from 
the current appropriation. Our solid state lighting research will 
create the technical foundation to revolutionize the energy efficiency, 
appearance, visual comfort, and quality of lighting products. Our FY 
2005 request for solid state lighting is $10.2 million, a $5.0 million 
increase compared to FY 2004 appropriations.
    Our request continues efforts to integrate renewable energy 
technologies into highly energy-efficient buildings that produce as 
much or nearly as much energy as they consume on an annual basis (zero 
energy buildings). We believe that a systems approach is necessary to 
better advance zero energy building technologies into the marketplace.
    In FY 2005, the Department anticipates issuing rules regarding: 
minimum efficiency standards for electric distribution transformers; 
minimum efficiency standards for commercial central air conditioners; 
minimum efficiency standards for residential furnaces and boilers; and 
test procedures for electric distribution transformers.

Solar Energy Technology. The FY 2005 budget request for Solar 
Technology is $80.3 million. This is a slight increase over the 
unencumbered FY 2004 appropriation of $79.7 million, but slightly less 
than the total appropriation of $83.4 million, which included $3.6 
million earmarked to specific recipients.
    The photovoltaic program is focused on next-generation technologies 
such as thin-film photovoltaic cells and leap-frog technologies such as 
polymers and nanostructures. The FY 2005 request of $75.4 million for 
photovoltaic includes: $30 million for critical fundamental research, 
including $2.1 million to equip the new Science and Technology Facility 
at the National Renewable Energy Laboratory; $29 million for advanced 
materials; and $16.4 million for technology development efforts to 
improve reliability. The FY 2005 $2.9 million request for Solar Heating 
and Lighting will support efforts on hot water and space heating for 
residential and commercial buildings in collaboration with industry 
partners.
    Last year, we did not request funding for Concentrating Solar 
Power. In light of recent studies we sought from an independent 
engineering firm, a draft of which was reviewed by the National 
Research Council, the Department proposes $2 million for Concentrating 
Solar Power in FY 2005 to support a more thorough investigation of the 
appropriate R&D course needed to realize its potential. The FY 2005 
budget request will maintain essential facilities and support work with 
several States while allowing us to develop a longer-term R&D plan.

Hydrogen, Fuel Cells and Infrastructure Technologies. The FY 2005 
budget request for Hydrogen Technology is $95.3 million, a $13.3 
million increase over the FY 2004 appropriation. Much of the proposed 
increase is for hydrogen safety research. This includes safety testing 
and analysis on bulk storage systems, fuel dispensing equipment, and 
piping to support new codes and standards specific to hydrogen. The 
Department has worked with the Department of Transportation and other 
agencies to coordinate efforts on hydrogen codes and standards. Under 
this activity, we will also develop system safety requirements for 
producing hydrogen and sensors to detect hydrogen leaks.
    Research undertaken in the Hydrogen Technology Program is also 
targeted to reduce the cost of distributed hydrogen production from 
electrolysis and natural gas reformation. An enhanced focus on 
electrolysis, as recommended by the National Research Council, may lead 
to cost competitive production of hydrogen from renewable energy at 
$2.30 per gallon of gasoline equivalent by 2015.
    One of the major technical obstacles we face is developing the 
means to store sufficient amounts of hydrogen aboard the vehicle to 
provide a driving range of greater than 300 miles. The FY 2005 budget 
provides funding for innovative storage technologies to be pursued 
under our ``Grand Challenge'' to leading universities and national 
laboratories so that we get the best minds at our universities and 
national labs to tackle this challenging problem.
    The Hydrogen program is also stepping up its efforts on education 
at all levels, so Americans know what the hydrogen economy will mean 
for them, their businesses, and the environment, and understand how to 
handle hydrogen safely in their communities.
    Our hydrogen work is well integrated with work in the Fuel Cell and 
Vehicle Technologies programs. Together, these programs represent the 
majority of the federal efforts comprising the Hydrogen Fuel 
Initiative, and we have published very specific, measurable technical 
goals against which to measure our progress. If we achieve our 
technical objectives, the automotive and energy industries will be in a 
position to consider commercialization by 2015, with mass market 
availability of both vehicles and refueling infrastructure by 2020.
    However, while the FY 2004 EERE appropriation for hydrogen 
technology was approximately $82 million, roughly half of those funds 
were earmarked for specific projects that are not wholly consistent 
with our research plan or the recommendations of the National Research 
Council. As a consequence, we must delay some very important work in 
areas such as hydrogen storage and production. Thus our ability to meet 
our established research targets in the specified timeframes may be in 
jeopardy.
    The FY 2005 request for Fuel Cell Technologies is $77.5 million, an 
increase of $12.3 million from the FY 2004 comparable appropriation. 
Fuel Cell technology plays an important role in both the FreedomCAR 
Partnership and the Hydrogen Fuel Initiative that seek to effect an 
industry decision by 2015 to commercialize hydrogen-powered fuel cell 
vehicles.
    The major focus of the Fuel Cell Technology program continues to be 
high risk research and development to overcome technical barriers, 
centered on core research of key fuel cell components, with industry 
focused on engineering development of complete systems. The DOE effort 
funds major fuel cell suppliers, universities and national laboratories 
to develop materials and component technology aimed at lowering cost 
and improving durability, two major barriers to commercialization. Fuel 
cell research funded in this program is targeted to reduce the cost of 
transportation fuel cell systems by a factor of 10 from a 2003 
baseline.
    The FY 2005 Fuel Cell technology budget also continues support of 
our Vehicle Validation effort, a ``learning'' demonstration program 
that integrates real-world operation of real-world vehicles with the 
required refueling infrastructure provided by major energy suppliers 
(the refueling portion of this effort is funded through the Hydrogen 
Program). This effort will play a significant role in integrating fuel 
cell vehicle and hydrogen activities while helping us measure progress 
and determine remaining challenges.

Wind and Hydropower Technologies. The FY 2005 budget request for Wind 
Energy is $41.6 million, $290,000 more than the FY 2004 appropriation, 
which included $1.4 million in funds that were earmarked to specific 
recipients. The $12 million request for Low Wind Speed Technology 
research and development will support multiple large wind system 
technology pathways to achieve the goal of three cents per kilowatt-
hour for onshore systems. It also supports new work in off-shore 
systems to help achieve a cost goal of five cents or less per kilowatt-
hour. FY 2005 activities will include field testing of the first full-
scale low wind speed technology prototype turbine and fabrication and 
testing of advanced drivetrains, power converter and blades for future 
low wind speed turbines. The $17 million request for supporting 
research and testing will engage the capabilities of the national labs, 
universities and private sector for technical support including both 
facility and field tests of newly developed components and systems to 
ensure design and performance compliance.
    The FY 2005 budget request for Hydropower Technologies is $6.0 
million, a $1.1 million or 22 percent increase over the FY 2004 
appropriation. The Department's research approach involves a unique 
combination of computer modeling, instrumentation, lab testing and 
field-testing that is improving the design and operation of the next 
generation of hydropower technology. The request will support 
development of technologies that will enable hydropower operators at 
existing plants to generate more electricity with less environmental 
impact. This will be done through environmentally enhanced, improved 
efficiency turbines, as well as with new methods for optimizing unit, 
plant, and reservoir systems to increase energy production per unit 
water. Supporting research and testing will improve understanding of 
fish response to the physical stresses experienced in passage through 
turbine systems. The program will also explore ways to harness 
undeveloped hydropower capacity without constructing new dams.

Geothermal Technology. The FY 2005 budget request for Geothermal 
Technologies is $25.8 million, a $300,000 increase from the FY 2004 
appropriation of $25.5 million, which included almost $2.0 million in 
funds that were earmarked to specific recipients. The program focuses 
on developing technology that optimizes the use of geothermal energy 
through improved exploration, drilling, reservoir engineering, and 
energy conversion. These technology improvements lead to cost-effective 
energy production at new geothermal fields and expanded production at 
existing fields.
    FY 2005 resource development activities will characterize and 
assess the geothermal resource by understanding the formation and 
evolution of geothermal systems, including a collaborative effort with 
the U.S. Geological Survey on a national geothermal resource 
assessment. Activities in the Enhanced Geothermal Systems program seek 
to increase the productivity and lifetime of reservoirs, potentially 
more than doubling the amount of viable geothermal resources in the 
West. FY 2005 activities will include Enhanced Geothermal System field 
tests in California and Nevada, and tests of the Diagnostics-While-
Drilling advanced drilling system in a high temperature geothermal 
well.

Weatherization & Intergovernmental Programs. In FY 2005, we are 
requesting $291.2 million for the Weatherization Assistance Program, 
$64.0 million more than the FY 2004 appropriation. This request 
supports the President's commitment to increase funding for the 
Weatherization Assistance Program by $1.4 billion over ten years. The 
FY 2005 request will support weatherization of approximately 119,000 
low-income homes, saving $1.30 in energy costs for every dollar 
invested over the life of the homes. With this level of funding we 
reach about half of the eligible families that applied for assistance.
    Intergovernmental activities promote rapid deployment of clean 
energy technologies and energy efficient products. The FY 2005 budget 
requests $40.8 million for State Energy Program grants. These grants 
and the funds they leverage allow State governments to target their own 
high priority energy needs and expand clean energy choices for their 
citizens and businesses.
    The request for Gateway Deployment activities is $29.7 million, 
$5.4 million less than last year's appropriation. The 2002 
reorganization brought these programs together under one umbrella with 
the hope that we would achieve synergies among the various programs, 
all aimed at delivering the full menu of efficiency and renewable 
resources with a clear community and customer focus. By shifting the 
emphasis from the program to the needs of the end user, we provide a 
``gateway'' to a variety of specialized technical and financial 
assistance.
    The International Renewable Energy Program provides technical 
assistance to support sustainable development and emerging market 
economies. In FY 2005, we request $6.5 million for international 
activities, a $612,000 increase from the FY 2004 appropriation, which 
included nearly $2.7 million in funds that were earmarked to specific 
recipients.
    In FY 2005, we request $5.5 million for Tribal Energy Activities, 
an increase of $594,000 over the FY 2004 appropriation. The program 
provides assistance to Native American Tribes and Tribal entities in 
assessing energy resources, comprehensive energy plan development, 
energy technology training, and project development. Again, this is an 
area where Congressionally directed spending totaling $3.2 million, or 
more than half of our funding, inhibits our ability to provide 
competitive funding opportunities for tribes.
    We are also requesting $4.0 million dollars for the Renewable 
Energy Production Incentive, which will create an incentive similar to 
the renewable production tax credits available to investor-owned 
utilities for public power providers.

Federal Energy Management Program. In FY 2005, we are requesting $19.9 
million for the Federal Energy Management Program (FEMP), $1.8 million 
less than the FY 2004 appropriation. FEMP alternative financing 
programs have become a leading source of funds for agencies that need 
to meet their energy efficiency goals. Federal agencies access private 
sector financing to fund energy improvements through Energy Savings 
Performance Contracts (ESPC) and Utility Energy Service Contracts at no 
net cost to taxpayers.
    As the Subcommittee knows, statutory authority for ESPCs expired on 
September 30, 2003. Without this valuable tool, it's highly unlikely 
that the Federal Government will be able to meet its energy efficiency 
and renewable energy goals without a substantial funding increase to 
support direct financing of energy efficiency and renewable energy 
projects. A permanent reauthorization of ESPCs was included in the 
comprehensive energy legislation passed by the House last year and we 
encourage Congress to reinstate this authority as soon as possible. In 
the absence of comprehensive legislation, we would support a stand-
alone provision for the reauthorization of ESPCs.
    The Departmental Energy Management Program specifically focuses on 
DOE facilities and operations. The FY 2005 request for Department 
Energy Management Program activities is $2.0 million, about the same as 
the FY 2004 appropriation.

FreedomCAR and Vehicle Technologies. In FY 2005, the Department is 
requesting $156.7 million for the Vehicle Technologies program, $21.3 
million less than the FY 2004 comparable appropriation but comparable 
to our prior year request. Last year we were provided with additional 
funding for combustion engine and fuels research we did not seek.
    Activities in this program contribute to two cooperative 
government/industry initiatives: the FreedomCAR Partnership and the 
21st Century Truck Partnership. The FY 2005 request of $91.4 million 
for the vehicle technologies portion of the FreedomCAR Partnership 
focuses on advanced high-efficiency combustion engines and hybrid 
vehicle technologies such as high-powered batteries, materials and 
power electronics. This important work in engine and hybrid components 
can lead to short- and mid-term reductions in petroleum dependency and 
is also compatible with our long-term vision of affordable and widely 
available hydrogen fuel cell vehicles.
    The 21st Century Truck Partnership has similar objectives but is 
focused on heavy vehicles. The partnership involves key members of the 
heavy vehicle industry, truck equipment manufacturers, hybrid 
propulsion developers, and engine manufacturers along with other 
federal agencies. The effort centers on improving and developing engine 
systems, heavy-duty hybrids, parasitic losses, truck safety, and idling 
reduction. The FY 2005 request for 21st Century Truck activities is 
$56.1 million.

2.  This year's budget makes almost no mention of the Climate Change 
Technology Initiative. What has happened to the program, and why has 
the Administration decided to de-emphasize it?

    The Administration remains committed to a comprehensive, innovative 
program of domestic and international initiatives to reduce greenhouse 
gas emissions. The Administration will spend more than $4 billion 
during this fiscal year on climate change science and technology R&D, 
about half of which is focused on climate change technology. For FY 
2005, the Bush Administration has requested increases in a number of 
key investments, including the Hydrogen Fuel Initiative, Carbon 
Sequestration, Generation IV Nuclear Systems, and the International 
Thermonuclear Experimental Reactor. President Bush also supports an 
additional $4 billion in tax incentives to spur the use of clean, 
renewable energy and energy-efficient technologies.
    The Fiscal Year 2005 EERE budget request includes $3 million to 
support a modest but important aspect of the President's National 
Climate Change Technology Initiative (NCCTI). This funding would be 
used to explore novel concepts, technologies or technical approaches, 
not elsewhere considered that could, if successful, contribute in 
significant ways to the reduction, avoidance or permanent sequestration 
of greenhouse gas emissions. This funding would be used for competitive 
solicitations of research grant proposals and supporting analysis. In 
addition, the Administration's Climate Change Technology Program 
(CCTP), which helps implement the President's NCCTI, is developing a 
government-wide inventory of climate change technology research, 
development, and deployment so that NCCTI priorities can be identified. 
The new inventory will be based on a broad set of criteria and will be 
more comprehensive than previous crosscuts. To support the work of the 
CCTP (e.g., developing strategic planning documents, modeling, etc.), 
the Department requests $3 million within Renewable Energy Program 
Direction.

3.  The President's Management Agenda (PMA) includes government-wide 
provisions on budget and performance integration that has [sic] been 
implemented through the Program Assessment and Rating Tool (PART). In 
addition, the PMA also introduced R&D Investment Criteria that were 
piloted in DOE's applied R&D programs. Please provide examples of how 
you prepared data under these requirements, how those data were used 
for budget and management decisions, and how these activities dovetail 
with the Government Performance and Results Act of 1993.

    The principles of the R&D investment criteria, both the general 
criteria and the additional criteria for industry-relevant programs, 
have largely been incorporated into the R&D PART, implicitly and 
explicitly. For example, one PART question asks whether a program 
assesses and compares the potential benefits of efforts within the 
program and to efforts of other programs. In order to do so, the 
Department must develop a consistent framework for estimating public 
benefits, which we have been working on as part of the R&D investment 
criteria initiative for several years. Thus, to support the PART and 
the R&D investment criteria, the applied R&D programs continue to 
prepare benefits estimates, and to work on improving the comparability 
of these estimates through the use of common modeling techniques, 
assumptions, and scenarios.
    Both the PART and the R&D investment criteria initiatives have been 
used to improve budget planning, development, and prioritization. For 
example, the PART and the R&D investment criteria highlight the 
importance of planning and prioritization. (An entire section of the 
PART is devoted to planning, and one of the R&D criteria is: ``Programs 
must have complete plans, with clear goals and priorities.'') In 
response, EERE enhanced its efforts to develop multi-year technology 
plans and roadmaps that chart a clear course for achieving program 
goals. The plans incorporate input from industry to ensure relevance 
and include off-ramps to ensure that we don't continue R&D pathways 
that are not promising. Most EERE programs are also now using 
independent peer reviews to ensure the quality and performance of their 
R&D projects and to help identify priorities. Clearly, the PART and the 
R&D investment criteria have furthered the Department's efforts to 
pursue sound management practices and improve program performance.
    Application of the criteria has also played an important part in 
our funding decisions. For example, we reduced support for activities 
in programs that help certain industries that have the ability and 
incentive to conduct energy-efficiency research on their own (e.g., 
Industrial Technology Program). We have also emphasized areas not as 
inclined to attract private investment without federal leadership 
(e.g., fuel cell activities). Also, our Buildings Technology program 
was refocused to support longer-term, breakthrough technologies that 
can have a dramatic impact, such as solid state lighting, and reduce 
support for energy-efficient technologies available on the shelf today 
for builder and consumer use.
    The Government Performance and Results Act and PART requirements 
are alike in many ways, perhaps most importantly in that they both 
require articulation of measures and targets and an assessment of 
performance against those targets. The PART goes beyond GPRA by 
standardizing an evaluation process for programs based on purpose, 
planning, and management as well as results. The PART enhances and 
complements GPRA.

4.  Using the definitions in OMB Circular A-11, what is the proposed 
mix of funding in the fiscal year 2005 budget request between basic 
research, applied research, development, demonstration, and deployment 
activities for your office? Please provide the comparable fiscal year 
2004 numbers for comparison.

    The table below presents the information that was submitted to 
OMB's MAX database for the A-11 R&D ``character classifications.'' It 
should be noted that A-11 only includes definitions for basic research, 
applied research, and development, and those are the only three R&D 
character classes for which OMB collects data.



    EERE's has also estimated deployment expenditures for Fiscal Years 
2003-2005 as shown below.\1\ Because demonstrations can support both 
development and deployment, we do not identify ``demonstration'' as a 
separate category.
---------------------------------------------------------------------------
    \1\ These numbers include the full budget for the Weatherization 
and Intergovernmental Program (WIP), including activities that are not 
authorized by the Science Committee, such as Weatherization Assistance, 
the State Energy Program, Cooperative Programs with States (FY03), and 
others. The WIP share of the deployment funding shown here is $310 
million in FY 2003, $304 million in FY 2004, and $362 million in FY 
2005.



    In conclusion, we believe the Administration's FY 2005 budget 
request for energy efficiency and renewable energy technologies 
reflects a robust, balanced and consistent approach toward meeting the 
Nation's energy goals of increased energy security through utilization 
of diverse domestic supplies, greater freedom of choice of technology, 
and reduced financial costs and environmental impacts of energy 
utilization.
    Through the use of research and development investment criteria, we 
are not only mindful of how much we spend on these programs, but also 
the manner in which we operate and the results we are achieving. We are 
increasingly successful in linking our expenditures with performance 
and results. We are striving to achieve more work in the laboratory 
with every research and development dollar entrusted to our 
stewardship.
    This completes my prepared statement, and I am happy to answer any 
questions the Subcommittee may have.

                       Biography for David Garman

    David Garman was nominated by President George W. Bush to serve as 
Assistant Secretary on April 30, 2001 and was confirmed unanimously by 
the United States Senate on May 25, 2001.
    Assistant Secretary Garman leads the Office of Energy Efficiency 
and Renewable Energy (EERE) comprised of over 500 federal employees in 
Washington, DC and six regional offices, supported by thousands of 
federal contractors both in and outside the National Laboratories. 
EERE's $1.2 billion technology portfolio is the largest energy 
research, development, demonstration and deployment portfolio at the 
Department of Energy.
    Assistant Secretary Garman was instrumental in the development of 
the FreedomCAR cooperative automotive research partnership and the 
President's Hydrogen Fuel Initiative. In recognition of his role, he 
was awarded the National Hydrogen Association's 2002 Meritorious 
Service Award, and the Electric Drive Vehicle Association's 2003 ``E-
Visionary'' Award. Concurrent with his duties as Assistant Secretary, 
Garman also serves as Chairman of the FreedomCAR Executive Steering 
Committee and as Chairman of the Steering Committee for the 15-nation 
International Partnership for a Hydrogen Economy.
    During his tenure at the Department, Mr. Garman has reorganized the 
Office of Energy Efficiency and Renewable Energy, replacing an outdated 
and fragmented organization with what is arguably the most innovative 
business model ever employed in the Federal Government. The new EERE 
organization is comprised of fewer management layers, is more agile, 
and is focused on results rather than process. The new organization has 
been recognized as a success by the White House and the National 
Association of Public Administration. In fully implementing the new 
business model in accordance with the President's Management Agenda, 
Assistant Secretary Garman is continuing his emphasis on increasing 
program manager accountability, reducing administrative overhead, and 
getting more work performed with each taxpayer dollar.
    Prior to joining the Department of Energy, Mr. Garman served in a 
variety of positions on the staff of two U.S. Senators and two Senate 
Committees during a career spanning nearly 21 years, including service 
on the Professional Staff of the Senate Select Committee on 
Intelligence and the Senate Committee on Energy and Natural Resources. 
Immediately prior to his current position, Mr. Garman was Chief of 
Staff to Frank Murkowski, then Chairman of the Energy and Natural 
Resources Committee, now Governor of Alaska. In addition to his normal 
Senate duties, Mr. Garman represented the Senate leadership at 
virtually all of the major negotiations under the United Nations 
Framework Convention on Climate Change from 1995-2000.
    Assistant Secretary Garman has testified before Congress as an 
Administration witness on more than twenty-five occasions; and been 
featured as a key Administration spokesman on future energy 
technologies in print, television and radio. He holds a Bachelor of 
Arts in Public Policy from Duke University, and a Master of Science in 
Environmental Sciences from the Johns Hopkins University.

    Chairman Biggert. Thank you.
    Now Mr. Maddox is recognized.

STATEMENT OF MR. MARK R. MADDOX, ACTING ASSISTANT SECRETARY FOR 
            FOSSIL ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Maddox. Madame Chairman, Members of the Subcommittee, 
it is a pleasure to join you today to present the Office of 
Fossil Energy's fiscal year 2005 budget submission. The 
Department appreciates the support of the Chairman and the 
Members of the Subcommittee over the past years, and I look 
forward to working with you in the future.
    With your permission, I propose to submit a detailed 
discussion of the budget request, including my remarks to an 
overview of our programs and projects being--before answering 
your questions.
    Our 2005 budget request demonstrates continued progress in 
the realignment of our program to achieve the President's goal 
of a cleaner environment and a secure energy future. We are 
committed to supporting the development of efficient, cost-
effective, pollution-control technologies as part of the 
President's Clean Coal Research Initiative and to meeting 
rapidly increasing demand for clean-burning natural gas by 
diversifying the Nation's future sources of natural gas. We are 
committed to developing technological solutions that will 
reduce greenhouse gas emissions by increasing power plant 
efficiencies, capture and permanently store emissions from 
energy production, and produce new greenhouse gas-free fuel, 
such as hydrogen, and means of energy production, such as fuel 
cells. And we are committed, under energy security, to getting 
the maximum benefit from our domestic resources of coal, 
natural gas, and oil to ensuring an effective, short-term 
emergency response to our energy needs with the strategic 
petroleum reserve and other emergency reserves and to 
developing the amazing, long-term potential of hydrogen and 
methane hydrates as alternatives to our current reliance on 
imported oil.
    Success in achieving these goals will help to ensure the 
clean energy our nation needs to fuel continued economic growth 
and job creation. We have reconfigured the fossil energy budget 
to focus on the future of coal, our most abundant domestic 
energy resource. The President's $2 billion, 10-year coal 
research initiative is proof of the importance of coal to our 
energy in the future. In fact, President Bush's leadership coal 
R&D budget requests are more than double past requests in 
appropriations.
    Fossil Energy's 2005 Clean Coal Research budget request 
increases to $447 million, 40 percent more than last year's 
$320 million request. Within the President's Coal Research 
Initiative, Clean Coal Power Initiative, designed to address 
the reliability and affordability of the Nation's electric--
electricity supply, particularly from coal-based generation. 
The budget includes $287 million for CCPI, of which $237 
million is for FutureGen. We plan, with strong private sector 
partnership, to build and operate a high-efficiency, 275-
megawatt plant using combined cycle, carbon sequestration, fuel 
cell, and other advanced technologies to produce both 
electricity and hydrogen with virtually no polluting or 
greenhouse gas emissions. Our budget request includes funding 
to begin site selection and secure environmental permits for 
the plant by proving the feasibility of producing electricity 
and hydrogen from coal with zero emissions.
    Early last year, we announced the first round results of 
the Clean Coal Power Initiative, eight projects for innovative 
power plant technologies with a total value of more than $1.3 
billion with more than $1 billion coming from private sector. 
Our 2005 budget includes requests for a second round of 
funding. The 2005 request includes $49 million for research 
into carbon sequestration, one of Fossil Energy's top research 
priorities, $16 million for research into new methods for 
making hydrogen from coal, and $23 million for continued 
development of lower-cost fuel cells.
    The Administration has been working on several fronts to 
increase domestic natural gas production, promote more 
efficient consumption, and attract new supply to international 
energy trading partners. Fossil Energy's Natural Gas Technology 
Program, budgeted at $26 million for 2005, is concentrated on 
creating economic technologies that will allow access with 
minimal environmental effects to new domestic reserves of 
natural gas.
    Natural gas storage will assume increasing significance in 
the United States as more and more power plants require 
consistent year-round supplies of natural gas. This, then, will 
initiate a nationwide, industry-led consortium that will 
examine ways to improve the reliability and efficiency of our 
nation's gas storage system and explore opportunities for LNG 
siting.
    Over the long-term, the production of natural gas from 
hydrates could have major energy security implications. 
Hydrates are natural gas-bearing, ice-like formations in Alaska 
and offshore, as well as many other parts of the world.
    Fossil fuels have been the dominant--have a role in 
America's energy story today, and they will continue to 
dominate for decades to come. Our job, at Fossil Energy, is to 
help ensure dependable, affordable, and environmentally sound 
supply of the coal, oil, and natural gas we need to meet 
increasing energy demands.
    Thank you.
    [The prepared statement of Mr. Maddox follows:]

                  Prepared Statement of Mark R. Maddox

Introduction

    Mr. Chairman, Members of the Subcommittee, it is a pleasure to join 
you today to present the Office of Fossil Energy's FY 2005 budget 
submission and to focus on the details that fall under the purview of 
this subcommittee. The Department appreciates the support of the 
Chairman and the Members of the Subcommittee over the past years and I 
look forward to working with you on budget issues related to the Fossil 
Energy Program.

The Office of Fossil Energy

    Mr. Chairman, as the Nation strives to break its continued reliance 
on imported energy sources, Fossil Energy is leading the way by seeking 
new energy technologies and methodologies that promote the efficient 
and environmentally sound production and use of fossil fuels.
    The United States relies on fossil fuels for about 85 percent of 
the energy it consumes and forecasts indicate U.S. reliance on these 
fuels could exceed 87 percent in 2025.
    Accordingly, a key goal of DOE's fossil energy activities is to 
ensure that economic benefits from moderately priced fossil fuels and a 
strong domestic industry that creates jobs are compatible with the 
public's expectation for exceptional environmental quality and reduced 
energy security risks. This includes promoting the development of 
energy systems and practices that will provide current and future 
generations with energy that is clean, efficient, reasonably priced, 
and reliable.
    Fossil Energy's programs focus on supporting the President's top 
initiatives for energy security, clean air, climate change, and coal 
research. FY 2005 Fossil Energy programs:

          Support the development of lower cost, more effective 
        pollution control technologies embodied in the President's Coal 
        Research Initiative or help diversify the Nation's future 
        sources of clean-burning natural gas to meet the goals of the 
        President's Clear Skies Initiative;

          Expand the Nation's technological options for 
        reducing greenhouse gases either by increasing power plant 
        efficiencies or by capturing and isolating these gases from the 
        atmosphere as called for by the President's Global Climate 
        Change Initiative;

          Or measurably add to the Nation's energy security by 
        providing a short-term emergency response, such as the 
        Strategic Petroleum Reserve, or a longer-term alternative to 
        imported oil, such as hydrogen and methane hydrates.

The President's Coal Research Initiative

    Fossil Energy's FY 2005 Budget continues to meet the President's 
clean coal commitment by providing $447 million for the President's 
Coal Research Initiative, an increase of 40 percent or $126.5 million 
over last year's request.
    Under President Bush's leadership, budget requests for coal R&D 
have more than doubled over historical amounts and appropriations.

Clean Coal Power Initiative and FutureGen--Within the President's Coal 
Research Initiative, the Clean Coal Power Initiative (CCPI) is a key 
component of the National Energy Policy to address the reliability and 
affordability of the Nation's electricity supply, particularly from its 
coal-based generation. The FY 2005 Budget includes $287 million for 
CCPI, of which $237 million is for FutureGen, the world's first zero-
emissions hydrogen and electricity producing power plant. FutureGen 
will establish the technical feasibility and economic viability of co-
producing electricity and hydrogen from coal with near zero emissions, 
including carbon sequestration and gasification combined cycle, both 
integral components of the zero emissions plant of the future.
    The CCPI is a cooperative, cost-shared program between the 
government and industry to rapidly demonstrate emerging technologies in 
coal-based power generation and to accelerate their commercialization. 
The Nation's power generators, equipment manufacturers, and coal 
producers help identify the most critical barriers to coal's use in the 
power sector. Technologies are selected with the goal of accelerating 
development and deployment of coal technologies that will economically 
meet environmental standards, while increasing the efficiency and 
reliability of coal power plants.
    CCPI is especially significant because it directly supports the 
President's Clear Skies Initiative. The first projects included an 
array of new cleaner and cheaper concepts for reducing sulfur dioxide, 
nitrogen oxides, and mercury--the three air pollutants targeted by the 
Clear Skies Initiative.
    Since last year, the Department has made significant progress on a 
new generation of environmentally-clean coal technologies.
    The ``first round'' in the Clean Coal Power Initiative--the 
centerpiece of the President's clean coal commitment--attracted three 
dozen proposals for projects totaling more than $5 billion. In early 
2003, we announced the first winners of the competition--eight projects 
with a total value of more than $1.3 billion, more than one billion 
dollars of which would be provided by the private sector. These 
projects are expected to help pioneer a new generation of innovative 
power plant technologies that could help meet the President's Clear 
Skies and climate change objectives.
    A competitive solicitation for the ``second round'' was be made in 
early 2004 and is open to coal-based technologies capable of producing 
any combination of heat, fuels, chemicals, or other useful by-products 
in conjunction with electricity generation. Interested proposers have 
until June 15, 2004 to submit their proposals.
    To contribute to the success of FutureGen, the President's Coal 
Research Initiative also includes supporting research programs in FY 
2005 at a proposed level of $160 million. It will be focused on all the 
key technologies needed--such as carbon sequestration membrane 
technologies for oxygen and hydrogen separation, advanced turbines, 
fuel cells, coal to hydrogen conversion, gasifier related technologies, 
and other technologies.

Carbon Management--Several Clean Coal projects also help expand the 
menu of options for meeting the President's climate change goal of an 
18 percent reduction in greenhouse gas intensity (carbon equivalent per 
GDP) by 2012, primarily by boosting the efficiencies of power plants 
(meaning that less fuel is needed to generate electricity with a 
corresponding reduction in greenhouse gases).
    Carbon management has become an increasingly important element of 
our coal research program. Carbon sequestration--the capture and 
permanent storage of carbon dioxide--has emerged as one of our highest 
priorities in the Fossil Energy research program--a priority reflected 
in the proposed budget of $49 million in FY 2005.
    Continuing in FY 2005, one of the cornerstones of our carbon 
sequestration program will be a national network of regional 
partnerships. This Secretarial initiative, announced last year, is 
bringing together the Federal Government, state agencies, universities, 
and private industry to begin determining which options for capturing 
and storing greenhouse gases are most practicable for specific areas of 
the country.

Hydrogen--Another aspect of the President's Clean Coal Research 
Initiative is the production of clean fuels from coal. Hydrogen has 
emerged as a major priority within the Administration and the 
Department of Energy as a clean fuel for tomorrow's advanced power 
technologies (such as fuel cells) and for future transportation 
systems. Within the Fossil Energy program, we have allocated $16 
million for research into new methods for making hydrogen from coal.

Advanced Research--To provide fundamental scientific knowledge that 
benefits all of our coal technology efforts, our FY 2005 Budget 
includes $30.5 million for advanced research in such areas as 
materials, coal utilization science, analytical efforts, and support 
for coal research at universities (including historically black and 
other minority institutions).

Other Power Systems Research and Development--We are also proposing $23 
million for continued development of fuel cells with an emphasis on 
lower-cost technologies that can contribute to both Clear Skies 
emission reductions, particularly in distributed generation 
applications, and Climate Change goals by providing an ultra-high 
efficiency electricity-generating component for tomorrow's power 
plants. Distributed power systems, such as fuel cells, also can 
contribute to the overall reliability of electricity supplies in the 
United States and help strengthen the security of our energy 
infrastructure.

Natural Gas Research--The President's Clear Skies Initiative also 
provides the rationale for much of the Department's $26.0 million 
budget request for natural gas research. Even in the absence of new 
environmental requirements, natural gas use in the United States is 
likely to increase by 50 percent by 2020.
    Our natural gas research program, therefore, is directed primarily 
at providing new tools and technologies that producers can use to 
diversify future supplies of gas. Assessment of the natural gas program 
under the Program Assessment Rating Tool (PART) found that the program 
often duplicated private sector R&D, and that the program lacks a 
rigorous peer review process. As a result the program is being re-
focused on areas where there is little private sector effort, or that 
are long-term, high risk. Emphasis will be increased on research that 
can improve access to onshore public lands, especially in the Rocky 
Mountain region where much of our undiscovered gas resource is located. 
A particularly important aspect of this research will be to develop 
innovative ways to recover this resource while continuing to protect 
the environmental quality of these areas.
    Natural gas storage will also assume increasing significance in the 
United States as more and more power plants require consistent, year-
round supplies of natural gas. Toward this end, we will initiate a 
nationwide, industry-led consortium that will examine ways to improve 
the reliability and efficiency of our nation's gas storage system and 
explore opportunities for LNG facility siting.
    Over the long-term, the production of natural gas from hydrates 
could have major energy security implications. Hydrates are natural 
gas-bearing, ice-like formations in Alaska and offshore.
    U.S. Geological Survey estimates indicate U.S. gas hydrates 
resources are larger by several orders of magnitude than previously 
thought and dwarf the estimated 1,400 trillion cubic feet of 
conventional recovered gas resources and reserves in the United States.
    This huge resource warrants a new look at advanced technologies 
that might one day reliably and cost-effectively detect and produce 
natural gas from methane hydrates.
    Hydrate production, if it can be proved technically and 
economically feasible, has the potential to shift the world energy 
balance away from the Middle East. Understanding hydrates can also 
improve our knowledge of the science of greenhouse gases and possibly 
offer future mechanisms for sequestering carbon dioxide. For these 
reasons, we are continuing a research program to study gas hydrates 
with a proposed funding level of $6.0 million.

Oil Technology Development

    The President's National Energy Policy (NEP) calls attention to the 
continued need to strengthen our nation's energy security by promoting 
enhanced oil (and gas) recovery and improving oil (and gas) exploration 
technology through continued partnerships with public and private 
entities.
    At the same time, however, we recognize, as supported by evaluation 
under the Program Assessment Rating Tool (PART), that if the federal 
oil technology R&D program is to produce beneficial results and not 
duplicate private sector efforts, it must be more tightly focused than 
in prior years. Consequently, our FY 2005 Budget request of $15.0 
million reflects a re-orientation of the program toward those areas 
where there is clearly a national benefit.
    One example is the use of carbon dioxide (CO2) injection 
to enhance the recovery of oil from existing fields. CO2 
injection is a proven enhanced oil recovery practice that prolongs the 
life of some mature fields, but the private sector has not applied this 
technique to its fullest potential due to insufficient supplies of 
economical CO2. A key federal role to be carried out in our 
proposed FY 2005 program will be to facilitate the greater use of this 
oil recovery process by integrating it with CO2 captured and 
delivered from fossil fuel power plants.
    We will also refocus much of our Oil Technology program on a new 
Domestic Resource Conservation effort that will target partnerships 
with industry and universities to sustain access to marginal wells and 
reservoirs. These aging fields account for 40 percent of our domestic 
production and contain billions of barrels of oil that might still be 
recovered with ever-improving technology.
    A high priority effort in FY 2005 will be to develop ``micro-hole'' 
technology. Rather than developing just another new drilling tool, the 
federal program will integrate ``smart'' drilling systems, advanced 
imaging, and enhanced recovery technologies into a complete exploration 
and production system. Micro-hole systems may offer one of our best 
opportunities for keeping marginal fields active because the smaller-
diameter wells can significantly reduce exploration costs and make new 
drilling between existing wells (``infill'' drilling) more affordable.
    Using breakthrough technology like this to keep marginal fields in 
production preserves the opportunity to eventually apply even more 
advanced innovations that could recover even larger quantities of 
domestic crude that traditional oil recovery methods currently leave 
behind.

Other Fossil Energy Activities

    Our budget also includes $124.8 million for other activities in our 
Fossil Energy program, including $106.0 million for headquarters and 
field office salaries, $6.0 million for environmental restoration, $3.0 
million for federal matching funds for cooperative research and 
development projects at the University of North Dakota and the Western 
Research Institute, $1.8 million for natural gas import/export 
responsibilities, and $8 million for advanced metallurgical research at 
our Albany Research Center.

Petroleum Reserves

    The Office of Fossil Energy is also responsible for our nation's 
petroleum reserves. Our FY 2005 Budget includes $172.1 million for the 
Strategic Petroleum Reserve, $5 million for the Northeast Home Heating 
Oil Reserve, and $20 million for the Naval Petroleum and Oil shale 
Reserves.

Closing

    Mr. Chairman, as I stated at the outset, Fossil Energy's programs 
are structured to promote the development of energy systems and 
practices that will provide current and future generations with energy 
that is clean, efficient, reasonably priced, and reliable. And our 
focus is on supporting the President's top initiatives for energy 
security, clean air, climate change, and coal research. Accordingly, I 
believe our FY 2005 budget submission meets these critical needs for 
energy, environmental and national security at a difficult time in our 
history.
    Mr. Chairman, and Members of the Subcommittee, this completes my 
prepared statement. I would be happy to answer any questions you may 
have at this time.

                      Biography for Mark R. Maddox
    Mark R. Maddox currently serves as Acting Assistant Secretary in 
the Office of Fossil Energy for the U.S. Department of Energy, a 
position he was named to on March 1. 2004.
    As Acting Assistant Secretary, Maddox is involved in several high-
priority Presidential initiatives including implementation of the 
Administration's $2 billion, 10-year initiative to develop a new 
generation of environmentally sound clean coal technologies, the $1 
billion FutureGen project to develop a pollution-free plant to co-
produce electricity and hydrogen, and the Nation's Strategic Petroleum 
Reserve and Northeast Home Heating Oil Reserve, both key emergency 
response tools available to the President to protect Americans from 
energy supply disruptions.
    The Energy Department's Office of Fossil Energy is made up of about 
1,000 scientists, engineers, technicians and administrative staff with 
headquarters offices in Washington, DC, and in Germantown, Maryland. 
Fossil Energy also has field offices in Morgantown, West Virginia; 
Pittsburgh, Pennsylvania; Tulsa, Oklahoma; New Orleans, Louisiana; 
Casper, Wyoming; and Albany, Oregon.
    Maddox joined the Office of Fossil Energy in September 2003 when he 
was named Principal Deputy Assistant Secretary. Previously, Maddox 
served as a Senior Policy Advisor to U.S. Secretary of Energy Spencer 
Abraham where he was responsible for advising on fossil energy and 
environmental management program issues, as well as on communications 
strategy.
    Maddox was Deputy Director of Public Affairs at the Department of 
Energy during the George H.W. Bush Administration, where he helped 
design and implement the strategic communication plan for the Persian 
Gulf War, directed the Department's crisis communications planning, and 
supervised the public affairs activities of its field sites.
    Prior to returning to public service in 2002, Maddox was Director 
of Communications and Public Affairs for the IMS division of Lockheed 
Martin, Inc., now Affiliated Computer Services State and Local 
Solutions, Inc. In these roles he participated in developing the 
division's political and legislative strategies, served as spokesman, 
and developed the division's communications strategies.
    Before joining Lockheed Martin, Maddox was a Vice President for a 
mid-size Washington, D.C., lobbying firm where he represented clients 
on a variety of issues.
    He has served as the Chief of Staff to a member of the U.S. House 
Commerce Committee where he was active on telecommunications, 
electricity deregulation and other issues under committee jurisdiction. 
He has also worked as a Press Secretary in Congress and local 
government.
    Maddox holds an MBA from George Washington University and a 
Bachelor of Science in Journalism from Bowling Green State University 
in Ohio. An Ohio native, he resides in Alexandria, VA, with his wife 
and two children.

    Chairman Biggert. Thank you very much.
    And now, Mr. Magwood.

STATEMENT OF MR. WILLIAM D. MAGWOOD, IV, DIRECTOR OF THE OFFICE 
 OF NUCLEAR ENERGY, SCIENCE AND TECHNOLOGY, U.S. DEPARTMENT OF 
                             ENERGY

    Mr. Magwood. Thank you, Madame Chairman.
    Excuse me. It is a pleasure to be here this morning to 
discuss the President's 2005 budget request for the Office of 
Nuclear Energy, Science and Technology. I have provided a 
written statement for the record, but would like to make a few 
opening remarks.
    In fiscal year 1998, the Nation's Nuclear Energy Research 
Program had come to a virtual standstill. In that year, federal 
funding for nuclear energy research and development fell 
essentially to zero. It was also a year when the number of 
students entering nuclear engineering disciplines in this 
country plummeted from around 1,500 only five years earlier to 
an all-time low of only about 500. It was a year when the 
international community began to turn away from the U.S. as the 
source of leadership in nuclear technology issues.
    Since that time, the Department, with the help and support 
and counsel of many Members of Congress, particularly this 
subcommittee and its Chairman, has worked hard to refocus and 
reinvent our efforts to create a better, stronger program. I 
believe we have been effective. Not only is our nuclear energy 
research budget higher than it has been since the early 1990's, 
but nuclear engineering education is resurging in the U.S. with 
nearly 1,400 students now studying in schools across the 
country. We have reasserted U.S. leadership in the 
international community. In way of example, I note that, as a 
representative of the United States, I have been elected to--by 
my international colleagues, to share--to serve as chair of two 
international bodies, the OECD's Steering Committee on Nuclear 
Energy, and the Generation IV International Forum. The U.S. is, 
once again, setting the pace for international cooperation 
partnership.
    The Department's fiscal year 2005 request for the nuclear 
energy program proposes a $410 million investment to continue 
this progress. Our request supports development of new nuclear 
generation technologies and advanced energy products that 
provide significant improvements in sustainability, economics, 
safety, reliability, and proliferation resistance.
    A good example is our Generation IV program. This effort 
continues to make significant progress. Since the Generation IV 
International Forum and the Nuclear Energy Research Advisory 
Committee issued their joint report, ``A Technology Roadmap for 
Generation IV Nuclear Energy Systems,'' the members of the 
Forum have expanded to include Switzerland and the European 
Union. The members of the Forum have organized into interest 
groups associated with each of the six selected Generation IV 
systems and are, at this very time--very moment, negotiating 
groundbreaking, international, multi-lateral agreements that 
will enable advanced nuclear research to be conducted jointly 
by multiple countries.
    The Generation IV technologies emerging from this work will 
not only be safe, economic, and secure, but will also include 
energy conversion systems that produce valuable commodities, 
such as hydrogen, fresh water, and process heat. These features 
make Generation IV reactors ideal for meeting the President's 
energy and environmental objectives.
    With that in mind, we have focused the bulk of our $30.5 
million request for Generation IV on the development of the 
Next Generation Nuclear Plant, an advanced facility that would 
produce both hydrogen and electricity with great efficiency. We 
are exploring the potential of an international public/private 
project to build and operate a pilot NGNP at the Department's 
Idaho site.
    While the Department has not, at this time, made a final 
decision to proceed with this effort, such a project would be 
valuable to validate the potential of technology to meet the 
goals highlighted in the President's National Hydrogen Fuel 
Initiative. If successful, this technology could produce 
hydrogen at a cost that is competitive with gasoline and 
electricity at a cost that is competitive with advanced natural 
gas powered systems.
    Moreover, a pilot project would energize our efforts to 
build the Idaho National Laboratory into a world-class nuclear 
research center. While this research and development project 
would involve several of our national laboratories, most of the 
work would be conducted in Idaho and serve to attract the 
talent and capabilities necessary for the long-term success of 
the laboratory.
    We have released a draft RFP to search for a contractor to 
help us develop this new lab into one of the world's premier 
nuclear engineering research and development centers within 10 
years. A final RFP will be issued in early April.
    I believe it is important to highlight, however, that if 
the INL is to become the essential lab in our nuclear research 
endeavors, it will not be the only lab. We believe that the 
talent of scientists and engineers at labs, such as Argonne 
National Lab, Oak Ridge, Los Alamos, and others, will remain 
essential and irreplaceable contributors to our nuclear 
research efforts now and into the future.
    We have designed a program that ensures both the 
preservation of nuclear power in the near-term in the United 
States and its long-term growth as a major source of economic 
and environmentally smart energy.
    I look forward to your questions today about our 2005 
request and to working with you to implement these programs to 
the benefit of the Nation.
    Thank you.
    [The prepared statement of Mr. Magwood follows:]

              Prepared Statement of William D. Magwood, IV

    Chairman Biggert, Mr. Larson, and Members of the Subcommittee, it 
is a pleasure to be here to discuss the Fiscal Year (FY) 2005 budget 
submission for DOE's Office of Nuclear Energy, Science and Technology.
    The program has made a great deal of progress over the past several 
years. From the time, not so many years ago, when it appeared that the 
United States might abandon advanced nuclear research and development, 
we have been successful in reasserting U.S. leadership in the world. 
Representing the United States, I have been elected by my international 
colleagues to serve as the Chair of two important international 
bodies--the OECD Steering Committee on Nuclear Energy and the 
Generation IV International Forum. When it appeared that nuclear 
power's era had ended in the United States, nuclear utilities have 
turned their programs around, making more energy last year than at any 
time in history and launching into very serious discussions to explore 
the construction of new plants for the first time in decades.
    Recent developments have been encouraging. The Department has 
launched the process of establishing a central laboratory for nuclear 
research and development--the Idaho National Laboratory. We are also 
exploring the possible construction of a pilot Generation IV nuclear 
plant at our new lab that will demonstrate highly efficient electricity 
production and pave the way to realize the President's vision of a 
future hydrogen economy.
    The Department's FY 2005 request for the nuclear energy program 
proposes a $410 million investment in nuclear research, development and 
infrastructure for the Nation's future that is designed to continue 
this progress. This budget request moves forward the Department's 
commitment to support the President's priorities to enhance the 
Nation's energy independence and security while enabling significant 
improvements in environmental quality. Our request supports development 
of new nuclear generation technologies and advanced energy products 
that provide significant improvements in sustainability, economics, 
safety and reliability, and proliferation and terrorism resistance.
    We are committed to efficiently managing the funds we are given. We 
have abandoned outdated paradigms to integrate the Idaho Operations 
Office with our headquarters organization, enabling us to manage our 
responsibilities in the field to achieve greater quality and efficiency 
than would otherwise be possible. We are enhancing our expertise in 
critical areas such as project management through training and 
certification of existing staff and the acquisition of experienced, 
proven managers. We continue to implement the President's Management 
Agenda (PMA) by further integrating budget and performance, improving 
Program Assessment Rating Tool (PART) scores for our research and 
development programs, and linking major program goals in the 
performance plans for our Senior Executives and technical staff. These 
improvements are challenging and time-consuming, but we feel they must 
be done to assure our program's ability to make the best use of the 
taxpayer dollars.
    While we have made great progress in all these areas, much remains 
to be done. Our FY 2005 request moves us in the right direction and I 
will now provide you a full report of our activities and explain the 
President's request for nuclear energy in detail.

GENERATION IV NUCLEAR ENERGY SYSTEMS

    Our Generation IV effort continues to make significant progress. 
Since the Generation IV International Forum and the Nuclear Energy 
Research Advisory Committee (NERAC) issued their joint report, A 
Technology Roadmap for Generation IV Nuclear Energy Systems, the 
members of the Forum have expanded to include Switzerland and the 
European Union. The now eleven members (Argentina, Brazil, Canada, the 
European Union, France, Japan, the Republic of Korea, the Republic of 
South Africa, Switzerland, the United Kingdom and the United States) 
have organized into interest groups associated with each of the six 
selected Generation IV systems and are negotiating international legal 
agreements to enable advanced nuclear research to be conducted on a 
multilateral basis.
    We hope to complete these negotiations later this year and move 
forward with these countries to develop advanced reactor technologies 
for commercial deployment in the 2015 to 2030 timeframe. Generation IV 
concepts offer significant improvements in sustainability, 
proliferation resistance, physical protection, safety and economics. 
These advanced systems will not only be safe, economic and secure, but 
will also include energy conversion systems that produce valuable 
commodities such as hydrogen, desalinated water and process heat. These 
features make Generation IV reactors ideal for meeting the President's 
energy and environmental objectives.
    As indicated in our recent report to Congress on our implementation 
strategy for the Generation IV program, while the Department is 
involved in research on several reactor concepts, our efforts and this 
budget proposal place priority on development of the Next Generation 
Nuclear Plant (NGNP). The NGNP is based on the union of the Very-High-
Temperature Reactor concept in the Generation IV Roadmap with advanced 
electricity and hydrogen production technologies. We are exploring the 
potential of an international, public-private project to build and 
operate a pilot NGNP at the Department's Idaho site. While the 
Department has not made a decision to proceed with this effort, such a 
project could validate the potential of this technology to contribute 
to meeting to goals of the President's Hydrogen Fuel Initiative. If 
successful, this technology could produce hydrogen at a cost that is 
competitive with gasoline and electricity and with advanced natural 
gas-fired systems.
    The Idaho National Laboratory and several other labs will also 
explore a range of other Generation IV concepts principally the 
Supercritical Water-Cooled Reactor, the Gas-Cooled Fast Reactor and the 
Lead-Cooled Fast Reactor. Our efforts will focus on establishing 
technical and economic viability, and developing core and fuel designs, 
and advanced materials for these concepts. We are also working with our 
colleagues in the Office of Science to assemble a joint Future Energy 
Advanced Materials Initiative aimed at the development of new materials 
for advanced fission and fusion energy systems. The FY 2005 request 
enables progress on this broad front. With your support, and the 
leveraging of our resources with those of our international partners, 
we expect to make continued progress toward developing world-changing 
technologies.

NUCLEAR HYDROGEN INITIATIVE

    Hydrogen offers significant promise as a future energy technology, 
particularly for the transportation sector. The use of hydrogen in 
transportation will reduce U.S. dependence on foreign sources of 
petroleum, enhancing national security. Significant progress in 
hydrogen combustion engines and fuel cells is making transportation 
using hydrogen a reality. Today, through electrolysis, we can convert 
water to hydrogen using electricity. We believe that for the future, 
Very-High-Temperature Reactors coupled with thermochemical or high 
temperature electrolytic water splitting processes offer a more 
efficient technology for production of large quantities of hydrogen 
without release of greenhouse gases. The goal of the Nuclear Hydrogen 
Initiative is to develop economic, commercial-scale production of 
hydrogen using nuclear energy.
    With funding of $9 million in FY 2005, the Nuclear Hydrogen 
Initiative will progress toward the development and demonstration of 
closed, sulfur-based cycles, such as the sulfur-iodine process. These 
processes have been demonstrated on a bench scale at somewhat lower 
temperatures and pressures than would be required for economic hydrogen 
production, but they show considerable promise, especially when they 
are considered for mating to Very-High-Temperature Reactor systems. We 
will also explore high temperature electrolysis, which uses electricity 
to split high temperature steam into hydrogen and oxygen, similar to a 
fuel cell operating in reverse (specifically a solid-oxide fuel cell, 
SOFC). High temperature electrolysis requires much less fundamental 
R&D, but the ability of the process to scale economically must be 
demonstrated.
    Finally, a major effort will be pursued in FY 2005 to explore 
materials for hydrogen production processes which must endure high 
temperatures and very corrosive environments while maintaining 
structural integrity at low costs. Included in this effort will be our 
work to explore new membranes that can increase the efficiencies of the 
hydrogen production processes.

ADVANCED FUEL CYCLE INITIATIVE

    Of the issues affecting future expansion of nuclear energy in the 
U.S. and worldwide, none is more important or more difficult than that 
of dealing effectively with spent nuclear fuel. After a long and 
difficult process, the U.S. is moving forward with a geologic 
repository, and the Department is on schedule to submit a license 
application to the Nuclear Regulatory Commission by the end of 2004.
    Research on improving ways to treat and utilize materials from 
spent nuclear fuel will allow the Department to optimize the first 
repository, and delay--and perhaps even eliminate--the need for future 
repositories. The Advanced Fuel Cycle Initiative, with an investment of 
$46 million for FY 2005, will continue the progress made in the 
development of proliferation-resistant treatment and transmutation 
technologies that can reduce both the volume and toxicity of spent 
nuclear fuel. These technologies would support both national security 
and energy independence by reducing inventories of commercially-
generated plutonium while recovering residual energy value from spent 
nuclear fuel. If successful, these same technologies offer benefits of 
enhancing national security by reducing inventories of commercially-
generated plutonium and enhancing energy independence by recovering the 
energy value contained in spent nuclear fuel.
    The program has already enjoyed considerable success. We have 
proven the ability of our UREX technology to separate uranium from 
spent fuel at a very high level of purity and also shown that a 
derivative, UREX+, can separate a combined mixture of plutonium and 
neptunium that can serve as the basis for a proliferation-resistant 
fuel for light water reactors.
    The Department's research efforts are leading to the demonstration 
of proliferation-resistant fuel treatment technologies to reduce the 
volume and radioactivity of high level waste, and the development of 
advanced fuels that would enable consumption of plutonium using 
existing light water reactors or advanced reactors. We have tested 
proliferation-resistant nitride and metal transmutation fuels in the 
Advanced Test Reactor and are currently testing mixed-oxide fuels such 
as would be derived from the UREX+ process.
    For the Advanced Fuel Cycle Initiative to be successful, advanced 
fuel treatment and transmutation research and development must be 
integrated with the development of Generation IV nuclear energy 
systems, particularly with those reactor technologies that can produce 
very high energy neutrons that would be needed to transmute a wide 
variety of toxic radioactive species. We have organized our national 
labs, universities, and international collaborations in a manner that 
will enable this work to proceed in a coordinated manner.

NUCLEAR POWER 2010

    The President's Budget supports continuation of Nuclear Power 2010 
in FY 2005 to demonstrate, in cost-shared cooperation with industry, 
key regulatory processes associated with licensing and building new 
nuclear plants in the U.S. by the end of the decade. The requested 
funds of $10 million would support the activities associated with 
achieving NRC approval of early site permits and the development of 
Combined Construction and Operating License applications.
    It is also critical that the Department identify the business 
conditions under which power generation companies would add new nuclear 
capacity and determine appropriate strategies to enhance such 
investment. In FY 2005, the Department will continue to evaluate and 
develop strategies to mitigate specific financial risks associated with 
the deployment of new nuclear power plants.
    In December, the Department issued a solicitation inviting 
proposals from teams led by power generation companies to initiate New 
Nuclear Plant Licensing Demonstration Projects. Under these cost-shared 
projects, power companies will conduct studies, analyses, and other 
activities necessary to select an advanced reactor technology and 
prepare a site-specific, technology-specific Combined Operating License 
application. These projects will provide for NRC design certification 
and other activities to license a standardized nuclear power plant 
design. The Department expects to award at least one project in this 
fiscal year. The focus of activities in FY 2005 for these projects will 
be on development of the Combined Operating License application.

UNIVERSITY REACTOR FUEL ASSISTANCE AND SUPPORT

    The Department is very pleased with the progress we have made in 
reversing the decline in nuclear engineering in the United States. With 
significant support and encouragement from this body and your 
colleagues in the House of Representatives, we have played a large role 
in completely reversing the decline in undergraduate enrollments in 
this area of study that began in 1993 and continued through 1998. In 
1998, the U.S. saw only around 500 students enroll as nuclear 
engineers--down from almost 1,500 in 1992. After several years of 
focused effort, the United States now has over 1,300 students studying 
nuclear engineering. That number is set to increase further, as strong 
programs--such as at Purdue and Texas A&M--continue to grow and we see 
new programs start at schools such as South Carolina State University, 
the University of South Carolina, and the University of Nevada-Las 
Vegas.
    The growth of nuclear energy in the United States is dependent on 
the preservation of the education and training infrastructure at 
universities. The research conducted using these reactors is critical 
to many national priorities. Currently, there are 27 operating 
university research reactors at 26 campuses in 20 states. These 
reactors are providing support for research in such diverse areas as 
medical isotopes, human health, life sciences, environmental 
protection, advanced materials, lasers, energy conversion and food 
irradiation.
    The most exciting development in University Reactor Infrastructure 
and Education Assistance is the Innovations in Nuclear Infrastructure 
and Education (INIE) Program established in FY 2002. In FY 2003, two 
additional university consortia were awarded, bringing the total to six 
INIE grants, providing support to 24 universities in 19 states across 
the Nation. The consortia have demonstrated remarkable collaborative 
efforts and strong formation of strategic partnerships between 
universities, national laboratories, and industry. These partnerships 
have resulted in increased use of the university nuclear reactor 
research and training facilities, upgrading of facilities, increased 
support for students, and additional research opportunities for 
students, faculty and other interested researchers. We are very pleased 
that the President's Budget includes $21 million for the University 
Reactor Infrastructure and Education Assistance program for 
fellowships, scholarships, nuclear engineering research, and for 
critical support to university research reactors, all of which will 
help address this shortage of well-trained nuclear scientists.
    We have modified the structure of this program for FY 2005. I am 
pleased to report that the President's request includes a small but 
important element to provide scholarships and graduate fellowships to 
students studying the vital and too-often overlooked discipline of 
health physics. The Department is concerned that the Nation may soon 
not have the trained health physicists who are needed to assure the 
safety of all nuclear and radiological activities. With this budget, we 
begin building a program to reverse the negative trends in this field 
as we have already done in nuclear engineering. In another change, we 
will transfer responsibility for the shipment of spent research reactor 
fuel to the Office of Civilian Radioactive Waste Management, which is 
to become the Department's central expertise in the management of spent 
fuel.
    One final note in this regard, Madam Chairman. I am sure that you 
have noticed that no funding is requested for the Nuclear Energy 
Research Initiative (NERI) in FY 2005. While this program has 
successfully spurred U.S. nuclear energy R&D, we believe that the time 
has now come to integrate the program into our main-stream R&D 
programs. We will continue to make peer-reviewed NERI awards to 
university-based researchers who work in areas relevant to our 
Generation IV, Nuclear Hydrogen, and Advanced Fuel Cycle Initiative 
programs. With this step, we will engage NERI researchers at 
universities in the exciting, first-class research we are pursuing in 
cooperation with countries all over the world.

RADIOLOGICAL FACILITIES MANAGEMENT

    This budget request also includes $69.1 million to maintain 
critical research, isotope and space and national security power 
systems facilities at Oak Ridge National Laboratory, Los Alamos 
National Laboratory, Sandia National Laboratory, and Brookhaven 
National Laboratory in a safe, secure, and cost effective manner to 
support national priorities.
    The FY 2005 budget request also includes $20.6 million to continue 
baseline operations and begin construction of the Uranium-233 project 
at Oak Ridge National Laboratory. This project is aimed at stabilizing 
materials left over from the Cold War to address a Defense Nuclear 
Facilities Safety Board recommendation, while extracting isotopes from 
the uranium that are needed for very promising medical research.

INL--DOE'S COMMAND CENTER FOR NUCLEAR R&D

    This budget supports the Secretary's realignment of the mission of 
the Idaho National Engineering and Environmental Laboratory to focus 
the future of the site on nuclear research and development. The 
Department is in the process of establishing the Idaho National 
Laboratory, which will combine the resources of the INEEL and the 
Argonne-West site. As the Department's leading center of nuclear 
research and development, a core mission of this laboratory is advanced 
nuclear reactor and fuel cycle technologies, including the development 
of space nuclear power and propulsion technologies. The new Idaho 
National Laboratory will play a vital role in the research and 
development of enabling technologies for the Next Generation Nuclear 
Plant, which will support the Department's long-term vision of a zero-
emissions future free of reliance on imported energy.
    The Department issued a request for proposals in February to find a 
management team to reduce costs and build expertise at the INL. The 
Department's nuclear energy program involves the collective talents of 
universities, the private sector, international partners and many of 
our other national laboratories--Argonne, Los Alamos, Sandia and Oak 
Ridge among them. However, the rebuilding of the Department's nuclear 
power research and development program will be centered at INL. While 
environmental cleanup remains an important focus at the Idaho site, 
real progress is being made that will aid in the expansion of nuclear 
research and development.
    Developing a central research laboratory is a major step forward 
for the nuclear energy program. We will join the other key energy 
programs at the Department by having a central, dedicated research site 
at which we can centralize our infrastructure investments and build the 
expertise needed to accomplish our program goals. A central lab also 
helps us minimize the shipment of nuclear materials across the country 
and allows us to bring our nuclear materials together in a single, 
secure location. We also expect that our new lab will become a major 
player in the education of the next generation of nuclear energy 
technologists that this Nation will need to assure our energy security 
in the future.

CONCLUSION

    This concludes my prepared statement. Your leadership and guidance 
has been essential to the progress the program has achieved thus far 
and your support is needed as we engage the tasks ahead.
    I would be pleased to answer any questions you may have.

                  Biography for William D. Magwood, IV

    William D. Magwood, IV is the Director of the Office of Nuclear 
Energy, Science and Technology in the U.S. Department of Energy. He was 
appointed to this position on November 8, 1998.
    As the Director of Nuclear Energy, Science and Technology, Mr. 
Magwood is the senior nuclear technology official in the United States 
Government and the senior manager for all of the Office's programs. 
Under Mr. Magwood's leadership, the Office of Nuclear Energy, Science 
and Technology has led the Nation in a new consideration of nuclear 
technology as a means to address difficult problems facing the Nation 
in the 21st Century.
    Mr. Magwood is leading the Department's Nuclear Power 2010 
initiative, aimed at building new nuclear plants in the U.S. by 2010 as 
a key to long-term energy security. He is also leading the Generation 
IV initiative, working closely with the Generation ITS International 
Forum--an international collective of 10 leading nations and the 
European Union's Euratom--dedicated to development of next generation 
advanced nuclear energy technologies.
    Under the direction of Mr. Magwood, the office has reasserted a 
leading role for the United States in the international discussion 
regarding the future use of nuclear power technology to generate secure 
supplies of energy without emitting air pollutants that can damage the 
environment, both regionally and globally. His contributions to the 
advancement of nuclear technology have been recognized internationally; 
in 2003, he was elected Chairman of both the Generation IV 
International Forum and the Paris-based OECD Steering Committee on 
Nuclear Energy.
    Prior to assuming his current position, Mr. Magwood served as the 
Associate Director for Technology and Program Planning in the Office of 
Nuclear Energy, Science and Technology for four years. He also served 
as the Executive Secretary of the interagency Highly Enriched Uranium 
Oversight Committee.
    From 1984-1994, Mr. Magwood held technology management positions 
with two energy-related organizations. He managed electric utility 
research and nuclear policy programs at the Edison Electric Institute, 
Washington, DC; and he was a scientist at Westinghouse Electric 
Corporation, Pittsburgh, Pennsylvania, where he analyzed radiological 
and hazardous waste disposal, treatment, and handling systems, and 
provided technical support to nuclear fuel marketing efforts.
    Mr. Magwood holds a B.S. degree in Physics, and a B.A. degree in 
English from Carnegie-Mellon University. He also holds an M.F.A. degree 
from the University of Pittsburgh.

    Chairman Biggert. Thank you very much, Mr. Magwood.
    And now, Mr. Glotfelty.

STATEMENT OF MR. JAMES W. GLOTFELTY, DIRECTOR OF THE OFFICE OF 
  ELECTRIC TRANSMISSION AND DISTRIBUTION, U.S. DEPARTMENT OF 
                             ENERGY

    Mr. Glotfelty. Thank you. Thank you, Madame Chairman, 
Members of the Subcommittee. I appreciate the opportunity to 
testify today on our research and development priorities for 
fiscal year 2005. My name is Jimmy Glotfelty. I am Director of 
the Office of Electric Transmission and Distribution. The 
mission of this newly created office is to lead a national and 
international effort to modernize and expand America's electric 
delivery system to one that is more reliable and robust and can 
help ensure economic and national security.
    Neither government nor industry alone can provide the 
Nation's electric infrastructure needs. Our National Electric 
Delivery Technology Roadmap provides a framework for all of the 
electric industry stakeholders to work together to achieve a 
common goal. The call for grid modernization is coming from all 
levels of leadership. Many in Congress, including this 
subcommittee, have called for it. And in the President's 2004 
State of the Union Address, he asked Congress for energy 
legislation necessary to modernize our electric delivery 
system. In fiscal year 2005, the Administration has requested 
$90.9 million for the Transmission and Distribution Office, a 
12.5 percent increase over the fiscal year 2004 appropriation. 
This effort includes research, development, demonstration, 
technology transfer, and education and outreach activities and 
partnership with businesses, utilities, states, and many other 
stakeholders.
    On September 25, 2003, I testified before this subcommittee 
on the role of new technologies in developing a more robust 
electric system. I identified a portfolio of technologies that 
have the capabilities to enhance the reliability and efficiency 
of the electric grid. They include: advanced conductors and new 
materials, high temperature superconductors, electricity 
storage, communications, controls, and information 
technologies, advanced power electronics, and distributed 
energy technologies. Our priorities in fiscal year 2005 build 
upon those that I highlighted last year.
    The research and development program with the Office of 
Electric Transmission and Distribution consists of four main 
program activities. They are continuing from 2004: High 
Temperature Superconductivity, Transmission Reliability, 
Electric Distribution Transformation, and Energy Storage. In 
2005, these will be supplemented by two new research and 
development initiatives: GridWise and GridWorks.
    The 2005 High Temperature Superconductivity budget request 
of $45 million reflects our drive to develop second-generation 
wire usable in cables, generators, transformers, and motors, 
equipment that crosscuts the electric power system value chain. 
Budgets for other program activities, such as transmission 
reliability and energy storage, also reflect increases in 2005.
    The appearance of reduction in funding is due to the 
omitted--omitting of Congressionally directed activities from 
the 2005 request, which amounted to $7.2 million in 
transmission reliability and $6.8 million for energy storage. 
The biggest challenge for these programs is consistent funding, 
and the threat that Congressionally directed activities will 
reduce the program directed funding below key threshold levels. 
In fact, I might note that our Transmission Reliability program 
was zeroed out three times in the 1990's, and that has set us 
back tremendously in this decade to ensuring a more reliable 
transmission system.
    The 2005 budget request also includes $10.5 million for our 
GridWorks and GridWise Initiatives, which are aimed at reducing 
the likelihood and impact of blackouts. The GridWise and 
GridWorks Initiatives evolved from our vision and roadmap 
process, which included stakeholders from--over 300 
stakeholders from the industry, academia, state, and local 
governments. There was an identified need for a portfolio of 
technologies that crosscut the transmission and distribution 
system. There was a recognition that efforts to develop 
distributed intelligence, smart controls, and power electronics 
needed to be accelerated and expanded.
    The GridWise program comprises the intelligence, or brains, 
behind the modern electric grid. GridWise is focused on 
communication and information technologies. GridWorks fosters 
the development of many of the technologies that I highlighted 
last September. It uses DOE's facilities at our national 
laboratories, as well as partners in the industry, to 
accelerate the development and testing of advanced conductors 
and other tools that will make our system more reliable. 
GridWorks also pursues advanced power electronic breakthroughs 
to provide faster means of limiting transmission problems 
before they propagate throughout the electric system.
    I would like to conclude by talking about budget 
performance integration within OETD. The President's Management 
Agenda identifies the need to tie research and development 
investment to performance and well-defined practical outcomes. 
Last year, we completed a PART evaluation of the High 
Temperature Superconductivity program. This exercise revealed 
that this program is well-managed, uses near-term and long-term 
tracking systems to measure progress, uses independent peer 
reviews, spend plans, and site visits to ensure quality program 
management. However, PART also concluded that the HTS program 
has demonstrated only a small extent of results in achieving 
its long-term performance goals.
    We are addressing this issue and look forward to working 
with you all to address this issue as we move forward. We 
commit to devote more time and resources to ensure we achieve 
our long-term performance goals.
    I thank you for this opportunity to testify today. I look 
forward to working together with you to make a more reliable 
and efficient electricity system, and I would be happy to 
answer any questions.
    Thank you.
    [The prepared statement of Mr. Glotfelty follows:]

                 Prepared Statement of Jimmy Glotfelty

THE OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION

OVERVIEW

    Chairman Biggert and Members of the Subcommittee, thank you for the 
opportunity to testify today on the science and technology priorities 
for Fiscal Year 2005 within the Office of Electric Transmission and 
Distribution.
    The mission of the newly created Office of Electric Transmission 
and Distribution (OETD) is to lead a national effort to modernize and 
expand America's electricity delivery system to ensure a more reliable 
and robust electricity supply, as well as economic and national 
security. This is vital to the Department's strategic goal to protect 
our national and economic security by promoting a diverse supply and 
delivery of reliable, affordable, and environmentally sound energy.
    The August 14, 2003 blackout demonstrated the vulnerability of the 
electric grid and thus its strategic importance to our nation. 
President George Bush stated in September 2003: ``. . .it's clear that 
the power grid needs an overhaul. It needs to be modernized. As we go 
into an exciting new period of American history, we want the most 
modern electricity grid for our people. . .we need more investment; we 
need research and development.. . .''
    The Administration has requested $90.9 million for OETD in FY 2005, 
a 12.5 percent increase over the FY 2004 comparable appropriation. This 
effort includes research, development, demonstration, technology 
transfer, and education and outreach activities in partnership with 
industry, businesses, utilities, states, other federal programs and 
agencies, universities, national laboratories, and other stakeholders.
    On September 25, 2003, I testified before this subcommittee on the 
role of new technologies in developing a more robust electric system. I 
identified a portfolio of technologies that have the capabilities to 
enhance the reliability and efficiency of the electric grid. They 
include Advanced Conductors and New Materials ( a component of the new 
GridWorks initiative); High Temperature Superconductors; Electricity 
Storage; Communications, Controls, and Information Technologies 
(emphasis of the GridWise initiative); Advanced Power Electronics 
(supported by both the Energy Storage Program Activity and the 
GridWorks Initiative); and Distributed Energy Technologies. Our 
priorities in Fiscal Year 2005 build upon those that I had highlighted 
in September.
    Neither government nor industry alone can satisfy the Nation's 
electric infrastructure needs. The National Delivery Technologies 
Roadmap provides a framework for all of the electric industry 
stakeholders to work together to achieve common aims. The call for grid 
modernization is coming from all levels of leadership. The President's 
2004 State of the Union Address asking Congress to ``modernize our 
electricity system'' reiterated the Administration's objectives first 
outlined in the National Energy Policy [May 2001] and reinforced, in 
more detail, in the National Transmission Grid Study (NTGS) [May 2002].
    Modernizing the grid will involve time, resources, and 
unprecedented levels of cooperation. The Nation's aging electric 
infrastructure, and the increasing requirements placed on it, have 
contributed to market inefficiencies and electricity congestion in 
several regions. These conditions could lead to more outages, more 
power quality disturbances, higher prices, and the less efficient use 
of resources. We must act now or risk even greater problems in the 
future.

RESEARCH AND DEVELOPMENT

    The Research and Development (R&D) Program within OETD, which will 
contribute to the modernization of the electricity system, consists of 
four main Program Activities that are continuing from FY 2004: High 
Temperature Superconductivity; Transmission Reliability; Electric 
Distribution Transformation; and Energy Storage. In FY 2005, these will 
be supplemented by the new GridWorks R&D initiative and the GridWise 
Initiative, and the Electricity Restructuring Program Activity.
    The Transmission Reliability R&D Program Activity supports 
modernization of the Nation's transmission infrastructure through 
technologies that provide enhanced grid reliability and efficient 
electricity markets under competition. In FY 2005, the Transmission 
Reliability Program is focused on developing real-time monitoring and 
control software tools and system operating models for grid operators, 
and market design research, including demand response integration, to 
support restructured markets development.
    The Electric Distribution R&D Program Activity supports R&D that 
will enable ``plug-and-play'' of distributed resources, including load, 
through the development and testing of advanced interconnection 
technologies and standards. This ``plug-and-play'' technology will 
allow the full integration of distributed resources into distribution 
operations, and lead to increased asset utilization and enhanced system 
reliability for the entire national electrical system.
    The Energy Storage R&D Program Activity includes research in 
advanced energy storage devices for applications ranging from power 
quality for digital facilities to voltage support for transmission 
lines. In FY 2005, the Energy Storage Program will accelerate 
development of advanced storage technologies to mitigate grid 
congestion and increase grid stability, reducing the incidence of power 
quality disturbances.
    Finally, the Electricity Restructuring Program Activity provides 
technical assistance and analytical support to States and regions for 
policies, market mechanisms, and activities that facilitate 
competitive, reliable, environmentally sensitive, and customer-friendly 
wholesale and retail electric markets. In FY 2005, the Electricity 
Restructuring Program will use education and outreach to help States, 
regional electric grid operators, and federal agencies develop 
policies, market mechanisms, and programs that facilitate the effort to 
modernize and expand America's electric grid to ensure a more reliable 
and robust electric supply. Also to be undertaken is analysis and 
implementation of policy-related recommendations that would improve 
reliability and enhance the electric transmission system contained in 
the NTGS, identified in the August 2003 Blackout Investigation Final 
Report, or in pending energy legislation when enacted.

THE GRIDWISE AND GRIDWORKS INITIATIVES

    OETD's FY 2005 budget request, reflecting the Administration's 
efforts to modernize and expand the electric grid, includes $10.5 
million for the new GridWorks Initiative and the existing GridWise 
Initiative, which are aimed at reducing the likelihood and impact of 
reliability events, such as blackouts.
    The GridWise and GridWorks Initiatives evolved from OETD's vision 
and roadmap process, documented in the National Delivery Technologies 
Roadmap. There was an identified need for a portfolio of technologies 
that crosscut the electric transmission and distribution system. 
Although continuing research in high temperature superconducting 
materials and electric storage devices was considered critical, there 
was also recognition that efforts to develop distributed intelligence, 
smart controls, advanced conductors, and power electronics needed to be 
accelerated and expanded.
    GridWise denotes a modernized electric infrastructure framework 
where open, but secure, communication and information technologies, and 
associated standards, are used throughout the electric grid to enhance 
reliability and robustness, promote economic efficiencies, and provide 
value and choices to electricity consumers. The GridWise program 
activity (software-centric) comprises the intelligence--or brains --
behind a modern electric grid that incorporates GridWorks (hardware-
centric) technology.
    GridWorks is focused on advanced equipment applications, taking an 
integrated approach to the entire electric system. It bridges the gap 
between the laboratory prototypes of the base programs and the 
application needs of the electric industry. GridWorks uses the 
facilities at DOE's national laboratories to accelerate the development 
and testing of advanced conductors, which can increase much needed 
transmission line capacity. It complements GridWise's architectural 
software development by developing and demonstrating associated 
hardware, such as sensors. GridWorks pursues advanced power electronic 
breakthroughs to provide faster means of limiting transmission problems 
before they propagate through the electric system.

HIGH TEMPERATURE SUPERCONDUCTIVITY

    OETD's FY 2005 High Temperature Superconductivity budget request of 
$45 million reflects a $10.9 million increase to develop second 
generation wire usable in cables, generators, transformers, and 
motors--equipment that crosscuts the entire electric power value chain.
    High temperature superconductors are a good example of advanced 
materials that have the potential to revolutionize electric power 
delivery in America. The prospect of transmitting large amounts of 
power through compact underground corridors, with minimal electrical 
losses over long distances, could significantly enhance the overall 
energy efficiency and reliability of the electric system, while 
reducing fuel use, air emissions, and any physical footprint. Also, 
breakthroughs in basic science are rapidly applied in the area of high 
temperature superconductivity. For instance, benefits from nanoscience 
research are accelerating progress in superconductivity wire 
development.

BUDGET AND PERFORMANCE INTEGRATION

    The President's Management Agenda identified the need to tie R&D 
investment to performance and well-defined practical outcomes. 
Evaluation of the High Temperature Superconductivity (HTS) R&D Program 
through application of the FY 2005 Program Assessment Rating Tool 
(PART), revealed that the program was well managed including use of 
near-term and long-term tracking systems to measure progress toward 
annual targets and long-term performance goals, use of independent peer 
reviews, spend plans, and site visit reviews. However, the HTS program 
has demonstrated only a ``small extent'' of results in achieving its 
long-term performance goal. OETD is addressing this finding by devoting 
more of its resources to its long-term performance goal: ``by 2012, 
develop to the 100 percent operational capability level, wire and four 
types of HTS electric power prototypes with typically half the energy 
losses and half the size compared to conventional power equipment of 
the same rating.''
    The initiatives, GridWorks and GridWise, are aimed directly at 
improving reliability of the electricity delivery system by 
implementing advanced technologies and integrated-information 
management tools to overcome today's system limitations and to reduce 
the incidence of reliability events such as blackouts. As these 
initiatives move forward, DOE will ensure that the R&D investment is 
tied to performance and outcome. GridWorks and GridWise are essential 
elements in helping OETD to achieve its mission to lead the 
modernization effort of the Nation's electricity delivery system to 
ensure a more reliable and robust electricity supply, as well as 
economic and national security.
    I thank you for the opportunity to testify today. I look forward to 
working together with you to make the reliable, efficient electricity 
system of the future a reality.

                     Biography for Jimmy Glotfelty

    Jimmy Glotfelty is currently Director of the Office of Electric 
Transmission and Distribution at the Department of Energy. This new 
office was established by Secretary Spencer Abraham to focus attention 
on the policy and research and development needs of the Transmission 
and Distribution systems. Prior to this position, he served as Senior 
Policy Advisor to Secretary Abraham. He is senior leader in the 
implementation of President Bush's National Energy Policy. He advises 
the Secretary on policy concerning electricity, transmission, 
interconnection, siting, and other areas within the DOE. He works 
closely with members of Congress and members of the FERC in order to 
ensure that we continue to move toward competitive wholesale electric 
markets. He is also responsible for the development of the national 
grid study to identify major bottlenecks across the U.S.
    Prior to joining the DOE, Jimmy served as Director of Government 
and Regulatory Affairs for Calpine Corporation's Central Region. He 
actively pursued restructured markets and new wholesale and retail 
markets for new power generation companies in Texas, Louisiana, 
Alabama, and Mexico. In addition to government affairs, Jimmy oversaw 
Calpine's Central Region public affairs efforts.
    From 1994 to 1998, Jimmy served as Director of General Government 
Policy and Senior Energy Advisor to Governor George W. Bush. He 
spearheaded many oil and gas initiatives, served as the Governor's 
office point staff member on both wholesale and retail electric 
restructuring in Texas, and oversaw the Texas State Energy Office. In 
addition to energy issues, Jimmy founded and managed the Governors High 
Technology Council, and was responsible for policy initiatives in the 
telecommunications, banking, housing, and pension arenas.
    During his career, Jimmy was Legislative Director for Congressman 
San Johnson (R-TX) where he was responsible for all legislative 
operations as well as energy, banking, and telecommunications issues. 
Jimmy has also served as Finance Director for the Republican Party of 
Texas and as research director for the lobby and public affairs firm 
Dutko and Associates.
    Jimmy resides in Arlington, VA with his wife, Molly, and their 
three sons.

                               Discussion

    Chairman Biggert. Thank you.
    And some questions we do have for all of you, I am sure. 
Let me start and yield myself five minutes.
    A question for Mr. Magwood. The Department has proposed 
reclassification of $750 million in funding for Yucca Mountain 
as offsetting collections, a change that requires statutory 
authorization. Could you describe the consequences to the 
budget if this change is not enacted? And then in addition, 
describe how any consequence--consequential delays in the 
construction of the Yucca Mountain waste disposal facility 
would impact the plans and priorities in the nuclear energy R&D 
program.
    Mr. Magwood. Madame Chairman, I would like to provide a 
very brief response to that. It--let me say that I think it is 
very important that we plan for success in this initiative. If 
we are successful in achieving an off-budget approach to 
funding the Yucca Mountain project, I think that puts the 
project on a much healthier financial footing for the future. I 
think it is the right thing to do. And I think that there is 
very wide support for taking it off budget. We recognize there 
are some challenges that face us as we go forward with 
implementing this approach, but we are all unified in the 
belief that success is possible, and we intend to go in that 
direction.
    I will say, also, that the success of the Yucca Mountain 
project is absolutely essential to the future of nuclear power 
in this country. If we are not successful in keeping the 
schedule, industry and others will lose faith that we are able 
to meet our obligations as the government, and I think that 
would be very detrimental. So let us plan on success and let us 
be successful.
    Chairman Biggert. So you would say that the chances that 
the change will be approved in election year are good?
    Mr. Magwood. We remain hopeful.
    Chairman Biggert. Good. Okay. Then going further, Dr. 
Decker and Mr. Garman, and again, Mr. Magwood, and Mr. 
Glotfelty, our worst case scenario for your portion, then, of 
the energy and water appropriations bill is that the $750 
million for Yucca Mountain that was to have come out of the 
nuclear waste fund, instead of coming out of your--instead of 
what might be coming out of your discretionary funding and if 
that cut were spread across your budgets according to their 
proportion of funding in the fiscal year 2005 request, then 
Science would be faced with a $60 million cut--$600 million 
cut, Renewable Energy with a $70 million cut, and Nuclear would 
see a $50 million cut, and the new Transmission and 
Distribution Office would be cut by $20 million. And if each of 
you were, of course, to make those cuts, where would you cut? 
Let us start with Dr. Decker, since you have the $600 million 
cut.
    Dr. Decker. Madame Chairman, that is something we certainly 
have not addressed, you know. In going through our budget 
preparation, we have prioritized all of the activities in our 
budget. I think we would have to go back to our prioritized 
list and start with the--obviously with the lowest priority 
activities on down. But I don't know exactly how we would 
propose to do that.
    Chairman Biggert. Okay.
    Mr. Garman.
    Mr. Garman. I would offer that were that situation to 
unfold, Congress would make those allocations. The 
appropriators would have to spread those across our budgets. 
They might ask us for capability statements to help them make 
those choices, and then again, they might not. Sometimes they 
do; sometimes they don't.
    Chairman Biggert. Well, you know appropriators. They are a 
different breed.
    Mr. Garman. I wasn't going to go there, Madame Chair.
    But you know, if that unfortunate circumstance came to 
pass, we would, obviously, try to work very closely with the 
appropriators to make sure that they understood how our 
priority-based budget was put together. I would suggest to them 
that the first place that they would dispense with, dare I say 
it, would be directed spending and earmarks, because in my 
program, we have well over $70 million in directed spending and 
earmarks. And that would be the first place I would urge them 
to look, but to what degree of success I would have would 
remain to be seen.
    Chairman Biggert. All right. Thank you.
    And Mr. Magwood, I know you are remaining positive, but 
just in case, as we hope everyone is.
    Mr. Magwood. In my job, Madame Chairman, being positive is 
a necessity.
    I would--let me answer the question this way. I think that 
we have three layers of priority within the program. Assuring 
the nuclear safety of our facilities is the very highest 
priority, maintain their security is--it is part of that, so 
that would be, in my opinion, untouchable in any type of cut. 
My next highest priority would be protecting the students that 
we support in our program. We have a very ambitious and 
aggressive university program. I would recommend that that also 
be maintained. And then with what little is left, we would 
prioritize appropriately.
    Chairman Biggert. Okay. Thank you.
    And Mr. Glotfelty, the $20 million you----
    Mr. Glotfelty. I think I would have to go down the same 
avenue that Mr. Garman did. Throughout the last two years, we 
have had $26 million worth of earmarks in each of the last two 
years. And I would suggest that our first opportunity would be 
to work with the Appropriations Committee to see if there are 
areas within those earmarks that we could cut.
    Chairman Biggert. Thank you.
    And I see that my time is up, so I will yield five minutes 
to Mr. Larson.
    Mr. Larson. Thank you, Madame Chairman.
    I have two areas that I want to pursue. One deals with 
accessibility, and the other deals with some--deals with 
legislation and the practicality of legislation.
    First, with regard to accessibility, demystify for me, if 
you will, for industry and manufacturers and universities, the 
accessibility to your various agencies. And I want to focus 
with Mr. Decker and Mr. Garman, but walk me through, if you 
will, the process, you know, the generation of an idea that 
needs research and development dollars, or research and 
development that needs to be incubated, or incubation that 
needs to be brought to the mezzanine level before it goes out 
and is actually marketed. It just seems to me--and both of you 
in your remarks, focus generally on these areas what do we need 
to do in terms of addressing my concern with regard to job 
creation in these areas and the leading role, I think, that DOE 
can play.
    Dr. Decker. Mr. Larson, as you know, the Office of Science 
supports, primarily, basic research. Our method of looking at 
new ideas usually is through unsolicited research proposals 
that come to us, which are then sent out for peer review, and a 
decision is made on the basis of the quality of the science and 
the relevance to the Department of Energy's missions. That is 
certainly one way, and a major way, in which new ideas are 
considered by the Office of Science.
    But I would also say that there are other avenues into the 
DOE system through the laboratories. Often companies that wish 
to utilize the capabilities in the DOE national laboratories 
come in and sponsor work in those laboratories where they can 
get, you know, experts in various areas to work on their 
problems. And also, there is----
    Mr. Larson. You mentioned in your testimony the GTL 
program, et cetera.
    Dr. Decker. Yes.
    Mr. Larson. How does one go about accessing that?
    Dr. Decker. Again, through unsolicited proposals. 
Generally, we put out a broad area announcement that indicates 
the interests that we have in various research areas. We do 
that at the beginning of the year. And then industry, 
universities respond with proposals.
    Mr. Larson. Is there a lab anywhere in the country that is 
specifically focused on hydrogen and the, how shall I phrase 
this, harnessing of hydrogen as a potential energy source, or 
are we spread over a variety of areas?
    Dr. Decker. There is certainly work going on in a number of 
DOE laboratories, but I would say at Dave Garman's laboratory, 
the National Renewable Energy Laboratory out in Colorado, there 
is certainly a strong focus on hydrogen, but Dave should talk 
to that.
    Mr. Garman. With that lead-in, our systems integration--all 
the systems work related to hydrogen, all of the disparate 
pieces of a very complex change in infrastructure that has to 
occur if as we move toward the hydrogen energy economy--is 
something that we do manage and are managing, pursuant to a 
National Academy of Sciences National Research Council report, 
at the National Renewable Energy Lab. We have that system 
integration effort underway.
    But let me respond to your first question, and it is a good 
contrast between the Office of Science and some of the other 
applied sciences offices. Pursuant to the President's 
Management Agenda where one of the initiatives is to make 
government more accessible to people, we have, through, we call 
it E-Gov, the E-Gov program, we are doing a much better job, I 
think, of putting our funding solicitations, competitive 
solicitations, on the Internet so that they are more accessible 
to anybody with a computer and access to the Internet. We like 
to publicize. We say to the world, ``We are interested in doing 
work in, say, reducing platinum loads on membranes in fuel 
cells. What can you bring to the table?'' And we put that on 
the Internet. We do competitive solicitations, and we help 
generate ideas, and then we go through a process very much like 
that that Dr. Decker described, where we evaluate those, rank 
those, and we form partnerships with the private sector. I 
would say that in the context of the FreedomCar program, which 
is a public/private partnership, yes, some money goes to 
national labs, some money goes to universities, but a good 
amount of money goes to those Tier One and Tier Two automotive 
supply companies. Some of them are quite small. Some of them 
have an innovative idea that they want to, you know, push up to 
the big leagues for incorporation in the next generation of 
vehicles. And they get a good amount of our funding in that 
area.
    Mr. Larson. Well, keeping that in mind and seeing that 
the--my red light is going on, but in the next round, which I 
am sure there will be, the--if you would keep--my second 
question was going to be, from a practicality standpoint, it 
just seems to me that we are never going to be able to tackle 
this problem of harnessing hydrogen unless we put out there for 
the public the opportunity to access and then practically put 
it to work. By that I mean by the Federal Government stepping 
in and saying, with all due respect to the FreedomCar, I think 
there is probably a likelihood that we will be able to do this 
on buses in a more dynamic way before automobiles. But also, in 
terms of providing municipalities and states, all who have to 
transport kids back and forth to school on buses, who have to 
heat and cool school buildings and office buildings, that if we 
are going to look at alternative energies, and specifically, if 
we are going to focus on the harnessing of hydrogen, if you 
could respond, in the next round, to how an incentive program--
how you might envision an incentive program like that that 
would provide those planning agencies who are looking at fleets 
of automobiles, buses, and buildings, what might be helpful in 
the form of legislation.
    Chairman Biggert. Thank you.
    And the gentleman from Michigan, Dr. Ehlers, is recognized.
    Mr. Ehlers. Thank you.
    Careful, even a physicist can make a mistake, but this 
audience might appreciate that.
    Mr. Garman. I have been waiting for years to see that.
    Mr. Ehlers. Yeah.
    The--Mr. Garman, first of all, I just want to continue a 
discussion that we had, I believe it was exactly three weeks 
ago, where I expressed to--you started out by making the 
comment that you were going to do all of these wonderful things 
without ``goring the ox'' of Energy Efficiency R&D, and I 
questioned that, and you gave me a number of figures of what 
was increasing. But I have since looked at that, and it looks 
to me like the EERE R&D budget, even though your overall budget 
has gone up 1.4 percent, the EERE R&D budget is going down 4.7 
percent. And if you take off the Hydrogen FreedomCar, you are 
going down 9.9 percent. And I just wanted to get that on the 
record.
    Mr. Garman. Well, may I, Mr. Ehlers? I believe I was 
specifically asked about the renewable energy program, and I 
think a review of the record will point that out. And several 
Members were saying, ``You are cutting renewable energy to pay 
for hydrogen.'' And I believe I responded with those numbers, 
pointing out that that was not the case. I did, in my oral 
testimony, concede the fact that overall R&D, on both sides of 
the funding fence, between the Energy Conservation 
Appropriations bill and the Energy and Water Development 
Appropriations bill, from which EERE draws its funding, is 
down. And I do concede that point. I believe the question I was 
asked at that hearing three weeks ago pertained to renewable 
energy funding.
    But overall, you are correct; for renewable energy, which 
is what I believe I was asked about at that hearing, we did not 
sacrifice renewable energy funding to pay for hydrogen.
    Mr. Ehlers. Well, I want to make it clear, we are here to 
help you. We think the budget is too low, and we would like to 
boost it. I am not sure we will be able to this year, but I 
just wanted to make clear--make certain that everyone 
understands just what the cuts are and where the cuts are and 
the damage that is being done so that we can help try to 
improve that situation.
    The----
    Mr. Garman. Thank you.
    Mr. Ehlers. I--in connection with that, Mr. Decker--Dr. 
Decker, since you have your nameplate there, I just wanted to 
comment and ask a question about RIA, Rare Isotope Accelerator, 
something I am very interested in. In fact, the State of 
Michigan is very interested in it. And I--a number of others 
are. Where is that, at this point? How far--what is the next 
step? What do you see happening soon? And what sorts of funds 
are required this year? We may seek to supplement those in the 
legislature, but I would just appreciate your comments on that.
    Dr. Decker. Mr. Ehlers, where we are with that facility at 
the present time is that the Department has made the critical 
decision zero, and that is a mission needs statement by the 
Department. The Department has decided that yes, it needs this 
facility. It has not made the decision yet to move forward with 
the construction. The acquisition executive for the RIA project 
is the Deputy Secretary. Because of the size of this project, 
it goes up to his level. We have requested $4 million in R&D 
funding in the fiscal year 2005 budget. We believe that that 
amount of funding will allow us to continue the R&D that is 
necessary and perhaps a little pre-conceptual design activity 
that will be necessary for the next step, which is to develop a 
conceptual design for this facility.
    Mr. Ehlers. All right. We will continue to pursue that. And 
as I say, we have a great interest. We will seek to obtain 
greater funding, if we can.
    Mr. Garman, just back to you a minute. I just wanted to 
point out for the record, again, assuming the budget proposal 
numbers follow, Fossil Energy R&D has increased 35 percent 
since fiscal year 2001, Renewable Energy R&D, including much of 
the hydrogen fuel, by 20 percent since fiscal year 2001, 
Nuclear Energy up 8.3 percent, but Energy Efficiency R&D will 
decline by 12 percent. Now is it--do you----
    Mr. Garman. That sounds correct.
    Mr. Ehlers. And is that the Administration policy that 
energy efficiency research is the least important of these 
program areas?
    Mr. Garman. No, sir, and again, I touched on this in the 
oral testimony. That is a tradeoff, and a deliberate tradeoff 
that has been made to fund more money for the Low-Income 
Weatherization Program.
    Mr. Ehlers. And I have no objection to low-income 
weatherization, although I do have some questions about the 
operation of the program, but we can't eat our seed corn. We 
may get more out of the energy efficiency R&D. And I--both 
through conservation and through greater efficiency of 
equipment, particularly lighting and what Oak Ridge is doing in 
lighting. That, I think, holds a great deal of promise, and we 
ought to pursue that very diligently. But I just want to put my 
plug in for that.
    Mr. Decker--Dr. Decker, again, just one other question. I 
heard, through the rumor mill, and I want to see if it is 
correct or not, that Mr. Orbach was not included in the high-
level budget discussions. Is--he, of course, did not tell me 
that. He is very--totally proper, and I don't--I want to make 
clear that he has not discussed this with me at all, but I want 
to find out if that is true. Is it customary for the Director 
of the Office of Science to be part of the budget discussion? 
It seems to me that that is a very important area of research 
and that that person should be there when the final budget 
decisions are being made.
    Dr. Decker. Mr. Ehlers, certainly Dr. Orbach was involved 
in budget discussions as the budget was formulated. At some 
point in the process, I think it is always true that there is a 
very high level discussion, and certainly, the Office of 
Science, or I would say, other equivalent offices are not 
involved in some of the final budget discussions. I think that 
is pretty typical.
    Mr. Ehlers. But you recognize that is a very esoteric 
field, and I suspect most of the people in the room did not 
understand the issues that Mr. Orbach is heading. Is that a 
safe assumption?
    Dr. Decker. Well, if it was--if it were a detailed 
discussion on some of our elements of our program, I would 
agree with you. If it was sort of the--you know, the higher 
level discussions, which I think occur more at the end of the 
process, I am not so sure that that is a problem.
    Mr. Ehlers. Okay. I appreciate your opinion, but I think it 
is a problem, and I would hope that there be a mechanism for--
particularly in fields that are esoteric and very important 
that his counsel be available.
    Thank you, Madame Chair.
    Chairman Biggert. I thank you, Dr. Ehlers. And I am sure 
you realize that the Members from Illinois are very interested 
in the RIA project, also.
    Mr. Ehlers. I am aware of that, but I am very puzzled by 
that.
    Chairman Biggert. I don't think you will have any reason to 
be.
    And next, we will call on the gentlewoman from California, 
Ms. Woolsey.
    Ms. Woolsey. Thank you, Madame Chairman.
    Mr. Garman, it appears that the Administration's major 
focus is on hydrogen and fuel cells, but we know that any real 
results will be decades away. I mean, it is important we do 
this, but we have got a long way to go. And in the meantime, 
shouldn't we be putting more of our efforts into renewable 
energies and solar, wind, hybrid vehicles that are proven 
efficient and effective? I mean, can't we do both at the same 
time, and if not, why not?
    Mr. Garman. Thank you for that question.
    We are seeking more money for hybrid vehicles and energy 
storage on vehicles, because we think that that is a very 
important area. It will pay benefits in the shorter-term with 
hybrid vehicles, since most of these same components, power 
electronics, electric motors, energy storage, will also be 
employed in the fuel cell vehicles. So it is a win-win in the 
sense that we can invest and we have sought, for two years 
running, I believe, increases in the vehicle technologies 
applicable to hybrid vehicles and those fuel-efficient 
vehicles.
    We have sought less funding in vehicle technologies in 
combustion engines and fuels, diesel, if you will. We have 
sought less funding for those activities, which also could 
provide an efficiency boost in the interim, so I will concede 
that point.
    In terms of wind, we have a small and modest increase in 
that. This is a very successful technology that is beginning to 
compete with natural gas fired generation in many parts of the 
country, and we are happy to see that. It is a great success. 
Basically, there is flat funding for solar--it is actually up a 
little when you take out the earmarks. Geothermal is up a 
little. Biomass is down, but again, when you take out the 
earmarks, it is up. I think the important thing for the 
Committee to appreciate, and this committee does appreciate it, 
is the fact that we are now, I think all of us at this table, 
becoming more and more disciplined at laying out our program 
plans so that Congress can see, in our budget submission, what 
it is that we expect to achieve, when we expect to achieve it, 
and you can judge, and we can judge, the progress we are making 
against those goals.
    Ms. Woolsey. Well, thank you very much, because there is--
our goal is to be energy efficient, and--for our national 
security and have our environment cleaner, and that is going to 
get us there. And the sooner, the better.
    Dr. Decker, I would like to ask you if you think we have an 
adequate supply of research and development engineers, and Mr. 
Garman, you may want to answer this, too, available as students 
in our universities, as educators, and--so that we can meet our 
future needs. I mean, this is national security getting there.
    Dr. Decker. Ms. Woolsey, I am not sure that I am--I 
wouldn't claim to be an expert on that topic. I can give you my 
impressions.
    Ms. Woolsey. Quickly.
    Dr. Decker. I think the Department does have a problem with 
regard to U.S. citizens--enough U.S. citizens with degrees and 
training in science and engineering. That continues to be a 
significant issue. One of the things that I heard recently, I 
was up at MIT a couple of weeks ago, and I was surprised to 
learn that the number of students in physics has actually 
increased for the first time. There was a bit--a decline in 
physics for a number of years, and apparently that has turned 
around, not just at MIT, but, I was told, nationwide. So that 
is an encouraging sign. But it continues to be an issue, I 
think, particularly for organizations like ours that have 
national security work.
    Ms. Woolsey. Mr. Garman, do you want to add anything to 
that?
    Mr. Garman. I do. And this is an area that we feel pretty 
strongly about. We have some very modest efforts, and one that 
comes to mind is one that is underway at this very moment. We 
have a project we call Future Truck where we go to 15 colleges 
and universities, selected out of 100 that apply, and in 
partnership with a major automobile company, give engineering 
students, young, budding, engineering students, a vehicle. In 
this case, it is a Ford Explorer. And we say, ``Rebuild this 
vehicle. You have three years to rebuild this vehicle to be 
more fuel efficient, to have lower emissions without 
sacrificing the performance that consumers will want in the 
vehicle.'' And seven of those teams have brought their vehicles 
to Washington, DC today. And I believe some Members are driving 
them around right now. And the most important part of this 
program is not the fact that we are trying out new technologies 
in vehicles. The most important part of this program is that we 
are helping to train that next generation of future engineers 
who will be building those future vehicles that we will be 
buying and driving. And I can assure you that nearly every one 
of those engineers, young engineering students that go through 
this program, are snapped up almost immediately upon graduation 
by major auto companies the moment they graduate. And it is a 
great--it is a modest effort, but you are absolutely right with 
the point of the question and the concern that we have about 
that next generation of engineers and scientists.
    Ms. Woolsey. Thank you.
    Madame Chairman, can I ask one more question? I have got--
because I have got to go, and I can't wait for all of these 
long-winded men.
    I have a question for Mr. Glotfelty.
    I had office hours this weekend, and a scientist engineer 
came into my office and told me that he has a technology to 
make transmission of electricity more efficient. And they used 
his technology in Brazil, but we--he can't get any interest in 
the United States of America on how to be more efficient with 
electricity transmission for long distances. Where does he go?
    Mr. Glotfelty. I--he should come to us, and we will put him 
in touch with the--our scientists at our national laboratories, 
our industry partners to see if his technology works on our 
system, and----
    Ms. Woolsey. Right, because----
    Mr. Glotfelty [continuing]. We would be happy to do that.
    Ms. Woolsey [continuing]. I, you know, I am sitting there, 
I can't tell him.
    Mr. Glotfelty. We would be happy to help.
    Ms. Woolsey. I mean, he is from my District; he has to be 
brilliant, but I can't judge it, so okay. We will get your 
card, and----
    Mr. Glotfelty. Yes, ma'am.
    Ms. Woolsey [continuing]. You are going to be----
    Mr. Glotfelty. Yes, ma'am. Thank you.
    Ms. Woolsey. Thank you.
    Chairman Biggert. Thank you.
    Problem solved. That is fast work.
    Let me come back to Mr. Magwood. The Department, you know, 
decided to split the Idaho National Engineering and 
Environmental Laboratory, INEEL, management contract into a 
clean up portion and a research portion of the designated 
laboratory for nuclear energy research, INL. Can you outline 
the Department's statutory authority to make this change and 
the Congressional consultation process that was used?
    Mr. Magwood. Principally, the authority to restructure the 
laboratories flows directly out of the Department of Energy 
Reorganization Act. The Secretary has the authority to start 
laboratories, terminate laboratories, change laboratories. It 
is very broad and very flexible. As we considered the possible 
approaches to this, we generally maintained our discussions 
within the Administration because of the fact that there were 
commercial contractual issues at stake. As you know, Madame 
Chairman, we did, before officially announcing that this was 
coming out, try to contact as many Members as we could that we 
thought would be interested, including you, and recognize that 
whenever you are dealing with these kinds of contractual 
marriages, there is always a balance between what you say 
publicly and--with the Congress, and what you wait until after 
you are able to make a procurement announcement. So we did the 
kind of consultation we felt was appropriate, given the 
contractual issues at stake, but I think--you know, I think one 
thing I would like to do is try to find a way to give Congress 
a little bit better advanced warning when these things are 
coming in the future.
    Chairman Biggert. Thank you. I think that would have been 
helpful. We didn't know it until the day before the press 
release came out or so, so we would have appreciated a little 
bit more knowledge of that.
    The budget, then, shows a reduction in the research and 
development activities of $34 million and an increase in the 
infrastructure costs of $33 million, so that is almost the same 
amount, so these--and these infrastructure costs were described 
as personnel transition costs associated with the contract 
changes to create the new lab. When the decision was made to 
split the contract at INEEL, did the Department know that some 
of these workers weren't going to fit into the new structure? 
And why does the Department have to take the responsibility for 
paying these transition costs to these workers, and at the 
expense, really, of the nuclear energy R&D?
    Mr. Magwood. The--as--I discussed with the Committee staff, 
I guess a week or so ago, that the numbers are an unfortunate 
coincidence. There is a reduction, overall, in nuclear 
research, which is primarily due to restructuring of some of 
the key programs. Advanced Fuel Cycle Initiative, for example, 
is requesting less, principally because we had made the 
determination not to pursue a commercial scale demonstration of 
one of the separations technologies. And there are other 
issues, as well, the restructuring of the NERI program from an 
independent program to one that is--that derives from our 
mainline research activities.
    The increase in the infrastructure account that you spoke 
of is not related to those decreases, but is related to a 
direct transfer that was made to my office from the Office of 
Environmental Management. And the purpose of those resources is 
to, as you put it, to manage the transition of employees. We 
don't know, yet, how many employees will be employed by the 
Idaho National Laboratory contractor and the Idaho clean up 
project contractor, which is going to be working for the 
Environmental Management Office. And what this money does is it 
provides us an opportunity to maintain those people in place 
until those contractors have the full opportunity to talk with 
them and decide which of the employees they would like to have 
in their contracts. So this, in our view, was an appropriate 
way to manage a very, very difficult and complicated transition 
of contracts. And I think to be fair to the employees, it made 
sense to make sure they have an opportunity to look for jobs.
    Chairman Biggert. Well, obviously, you know, they would 
have--there would have to be the costs, but why did the 
Department choose to saddle your office with the costs and not 
the environmental program?
    Mr. Magwood. Well, again, the money originally came from 
the environmental program. We did transfer the money. The 
reason that we are managing it is because we are now landlord 
for the site. It is our responsibility to make sure that the 
right people are in the right place to manage the various 
nuclear facilities to conduct the research at the laboratory, 
so it makes sense that we would have that responsibility. The 
Environmental Management organization is going to be focusing 
on the clean up of the site, and we are effectively abandoning 
certain areas to them so they can work quickly and efficiently 
and get their job done, and, quite frankly, get out of my way 
so I can build this laboratory.
    Chairman Biggert. Okay. Thank you.
    Just a question for Mr. Maddox. You haven't had the 
opportunity yet to answer anything. Given the importance of 
fuel cells to the hydrogen economy, could you address why the 
Department chose to reduce funding for distributed generation 
systems, including the stationary fuel cells, by 2/3 or $48 
million?
    Mr. Maddox. Yeah, just briefly, part of it is a combination 
of work being--reaching the maturity level where it should be 
picked up appropriately by the private sector to bring it to 
market. Some of it is that it is low-priority work, and I would 
say another portion of it is driven by the fact that we are 
starting up FutureGen, and work is being slowed down somewhat 
to define what work will be done in support of FutureGen going 
forward.
    Chairman Biggert. But I think that, you know, Ms. Woolsey 
was just asking about if we were going to have the hydrogen 
become a, you know, hydrogen economy that we really need to 
start for things like the stationary fuel cells and the buses 
and things and it being slashed. This isn't going to happen 
then or----
    Mr. Maddox. No, stationary fuel cells, actually, are part 
of the FutureGen project, and it entails a large fuel cell 
component as part of that process. That is----
    Chairman Biggert. But you still cut it by 2/3, though.
    Mr. Maddox. Well, for example, the fuel cells development 
program was cut, because it was ready from, I think, last year 
it was--$10 million was cut, because that project is now ready 
to be moved into another phase and be brought forward by 
industry. Tubular solid oxide fuel cells, again, same 
situation, a $12 million program. And so a lot of these cuts 
are being driven as much due to the maturity of research rather 
than cutting, per se.
    Chairman Biggert. Thank you.
    Mr. Larson is recognized.
    Mr. Larson. Thank you, Madame Chairman.
    And following along that same line of questioning with 
respect to fuel cells, and without being too myopic and before 
I get further down the fuel cell line, I would be remiss if I 
didn't go back to the question I elaborated on before, but it 
ties directly to this in terms of the----
    Mr. Garman. Yes, it does.
    Mr. Larson [continuing]. Practicality of introducing 
legislation that mandates municipalities and states, as they 
are looking at heating and cooling their buildings and 
providing fleets of vehicles and transporting students back and 
forth to school, that we provide the incentive here. Without a 
governmental incentive, because of the cost that Mr. Maddox 
just referred to in the R&D and how that is going to play out 
in Wall Street in terms of attracting dollars, the likelihood 
of attracting capital here is probably what will push this out, 
as Ms. Woolsey said, for decades. On the other hand, if we have 
the same kind of focus that we had on placing a man on the 
moon, we could probably embrace this thing in less than a 
decade, because the technology hurdles aren't as great as 
placing--in scientific hurdles, aren't as great as placing a 
man on the moon. Would you respond to that? And I will let all 
of the panelists----
    Mr. Garman. Let me try to take a cut at weaving it 
together, because you are right, again, on point to this issue 
of R&D and deployment and when it is appropriate to take the 
technology out of the lab and get it in the marketplace through 
regulation, through incentives, through information, outreach, 
and other means. There are stationary fuel cells in the 
marketplace today that are being bought by customers that need 
high degrees of reliability and that do not want to--you know, 
they need, what folks in Jimmy's line of work call 5-9--or 6-9 
reliability, 99.999 percent reliability. And fuel cells are 
being bought by those sorts of people today. They are in the 
marketplace, and yes, they are more expensive, today. More 
experience in the marketplace with these will bring down costs, 
as unit costs go up.
    With respect to buses, if--when--and municipalities ask us 
this question today: ``I want to buy a clean fuel bus. What do 
I buy? Do I buy a fuel cell bus? Do I buy a natural gas bus?'' 
And I will tell you candidly that my answer is usually--I think 
it is not quite--fuel cell buses aren't quite ready for the 
kind of performance and durability and reliability that you 
need. A natural gas bus is your answer today. A fuel cell bus 
will be your answer tomorrow. There is a lot of groundwork that 
has to be laid to prepare for the coming of this hydrogen 
energy economy. And let me give you just one example, because 
it is one of the areas that we have sought an increase for in 
our budget, and that is to work on safety, codes, and 
standards. There are 44,000 fire marshals in this country, each 
and every one of them with a different view of how hydrogen 
should be handled safely. And in each of these different--I 
mean, we are not going to reach large scale deployment of these 
technologies until we get a certain area of agreement and 
common--and--among all of these 44,000 different code 
jurisdictions about what is a safe way of handling hydrogen. 
How many sensors do you need in a vehicle to detect a hydrogen 
leak? And if we over-engineer this thing, and if we require, 
for instance, too many--and I think this point was made last 
week at this very panel at this very table. If you require too 
many sensors and controls in the code, in the standard that you 
promulgate, you will never get it out. And that drives the cost 
up.
    So this is the kind of groundwork that we are working on to 
prepare for a greater market acceptance. It has to be done with 
some finesse and not necessarily with brute force. And so that 
is our approach; it is a very prescribed program plan. So I 
will say, I think it is early for mandates to tell, you know, 
let us push this--I think we need to work on the technology 
before we start to employ policy instruments to push that into 
the market.
    Mr. Larson. But doesn't that present the conundrum, then, 
that we have to work these things through, but the principle 
investors are saying, ``Well, it is an untried and untrue 
industry, so why are we going to invest capital in this area?'' 
And would it be that our major corporations were saying, ``You 
know what, we are going to postpone those quarterly returns 
that we have been focusing on and go into the in-depth research 
and development so that we can long-term develop the product 
that is going to come.'' And if government doesn't step in and 
provide this opportunity, it is not going to happen, and we 
will be the proverbial dog chasing its tail, and it will. You 
know. It will be a self-fulfilling prophecy; we won't bring 
this to market or to fruition unless we come in and say, ``You 
know what, we are going to provide the incentives for 
municipalities, minimally buses, that have to--are--you know, 
where you can store the hydrogen in one place, where they come 
back to a barn in the evening themselves, or a garage, so that 
there is the capability, minimally through pilots, that we 
ought to be exploring.'' And it seems to me, in many respects, 
the military is outpacing the scientific community in terms of 
looking at fuel cells as a resource, and that is disturbing to 
me.
    Mr. Garman. Let me just agree with you, in this respect, 
and you have identified municipalities, the military, the 
government itself, the Federal Government----
    Mr. Larson. Right.
    Mr. Garman [continuing]. Will be very, very important first 
customers of this technology. And we are committed to that and 
that is part of our program plan. We envision that the 
government will be an important first customer of the 
technology. We may disagree on----
    Mr. Larson. Right.
    Mr. Garman [continuing]. Precisely when that happens.
    Mr. Larson. Just a--as a follow-up to the next round of 
questions, the thing that I wanted to ask all of you, as 
panelists, and this is something, I think, that is near and 
dear to a lot of our hearts here, but--and it was discussed 
earlier about the brain drain and the need and I love the 
Future Truck concept. Is there any in Connecticut? And--but 
along those lines, and again focusing on the need for 
government to focus in these areas, how would the panel think 
about embracing, much in the--along the same line of the Civil 
Conservation Corps, an Energy Corps that--from, we will say, 
the middle school on up through college where we are starting, 
really, to focus on getting people's interest, but more than 
their interest, their direct involvement: summer employment 
opportunities; when they are in college or within their 
technical school, the opportunity to work with Department of 
Energy on specific programs and projected areas where expertise 
is going to be needed. I love to sit down with people that 
have--are of a like mind in dealing with your shortage in the 
nuclear area, the electrical, the fossil fuel area, and all of 
the other areas that are so vitally important to us and see if 
there isn't a way that we can, nationally, focus on this from 
top to bottom with incentives or funding from the government 
level, and even partnerships with the private sector.
    That will be my next question.
    Chairman Biggert. We will look forward to the answer to 
that question.
    Dr. Ehlers is recognized.
    Mr. Ehlers. Thank you, Madame Chair.
    First, a question for Mr. Glotfelty. The Energy Policy 
bill, which passed the House and is currently stalled in the 
Senate, I felt, did not do an adequate job of dealing with the 
problem of electrical transmission and particularly the problem 
of controlling the Grid and making sure that we wouldn't have 
any further breakdowns of the Grid. What are you doing in the 
Department that is better than what we have in the Energy 
Policy bill? How are you--what programs do you have that you 
think are really going to insure against future blackouts of 
the extent that we have experienced twice on the East Coast and 
occasionally elsewhere?
    Mr. Glotfelty. That really is the core focus of our program 
and why we became a stand-alone program. Our Transmission 
Reliability program, and the two new programs that we proposed 
for this year, GridWorks and GridWise, are specifically 
designed to focus research efforts on those technologies that 
increase the capacity of the Grid as well as increase the 
reliability of the Grid. Technologies, advanced conductors, 
advanced power electronics, which allow us to control the Grid 
much more than we ever have been able to, are really the core 
of our Transmission Reliability program. We have spent a 
tremendous amount of time working with industry to figure out 
how we take the next step, as Mr. Garman has said, to get these 
technologies from the laboratory to actually tested on the 
transmission grid. It is a tremendous challenge in this area, 
because, as you know, if you have a problem on one part of the 
Grid, it can spread throughout the entire Eastern Interconnect 
or the Western Interconnect. So we have to be perfect in terms 
of ensuring the technology.
    Mr. Ehlers. Actually, I am less concerned about the 
technical parts, because I think they are more easily solved. I 
am more concerned about the control parts where there is a 
control agency or entity or mechanism that prevents them from 
spreading. And as I understand in the last situation, the 
situation in Ohio was that the individual power plants or power 
companies controlled it, and therefore, they didn't take 
action, and it spread. What are you doing about the governments 
of the Grid as well as the technical aspects?
    Mr. Glotfelty. Part of our program is a market analysis 
function, and that is to work with states and regions to help 
them better understand initiatives that are working either at 
the Federal Energy Regulatory Commission or through Congress, 
help them understand the need for regional planning, and how 
their neighbor really affects the operation of the Grid within 
their state and for their consumers.
    You know, we have been in a--we have been kind of 
straddling the fence since about 1992 on wholesale power 
markets. Are we going to get there----
    Mr. Ehlers. Yeah.
    Mr. Glotfelty [continuing]. Or are we not? And as we 
continue to straddle the fence, state regulators are put in a 
position that they don't know which way to move. And we would 
encourage Congress to pass the energy bill. It does give quite 
a bit of certainty. It is--we need certainty for regulators; we 
need certainty for markets as well.
    Mr. Ehlers. But not enough certainty, and that is why I am 
looking for the Department to advocate that. It is a matter of 
control, literally. And I recall back in the '50's, and 
actually in the '60's, when I was a pilot at that time, and was 
sure that, at some point, two jet airplanes were going collide 
in the air and we would have a horrible catastrophe. And the 
Air Traffic Control System could not set up to do that, because 
the companies didn't want that and every--et cetera, et cetera. 
And low and behold, two airliners crashed over the Grand 
Canyon, and then suddenly, we developed an Air Traffic Control 
System. And we have to do this. I mean, we have had our Grand 
Canyon a couple of times in the electric area, and it is time 
to say, ``Look, we need a national control system that is 
independent of any individual power company, any individual 
state PUC or PSE, whichever they have, and that simply watches 
this and makes the decisions that have to be made to prevent 
it.'' And I would appreciate it if the Department could work in 
that direction as well.
    Mr. Glotfelty. We will. I--one thing I might add is our 
final report on the blackout of last August 14 will be coming 
out this coming Monday, the 29th. And included in there are a 
number of recommendations that move in that direction.
    Mr. Ehlers. All right.
    Mr. Glotfelty. I would be interested in your opinion.
    Mr. Ehlers. I look forward to seeing that.
    Mr. Glotfelty. Thank you.
    Mr. Ehlers. Mr. Maddox, the request for FutureGen calls for 
$237 million this year, yet the FutureGen project plan says 
that just $18 million will be expended in fiscal year 2005. Now 
several other problems--programs in your Fossil Energy are 
being cut, for example, fuel cells are cut by $45 million, or 
65 percent. Why should we set aside this money for FutureGen 
and not fund other priorities that are currently ongoing?
    [No response.]
    Mr. Ehlers. Microphone, please.
    Mr. Maddox. I am sorry.
    Just briefly, the FutureGen line and the CCPI line reflect 
our priority of funding and building the FutureGen project, 
which, as we have mentioned, is a hydrogen, zero-emissions 
generation project. All of our programs and resources come in 
alignment with reaching this goal, and a number of these 
projects are likely to be funded and supported through the 
FutureGen research line. However, we think it is important, if 
we are going to attract the coalition and consortium partners 
and ask them to invest money, that they have some stability and 
confidence in our funding profile on FutureGen. I think we 
acknowledge that some of these projects may pause, but again, a 
lot of them will fall under future projects.
    Mr. Ehlers. Okay. Thank you.
    And I apologize for dashing in and out, but I have two 
other meetings going on simultaneously, so thank you.
    Chairman Biggert. Thank you, Mr.--Dr. Ehlers. Well, we will 
start another round, so I will start with Dr. Decker. Some 
analysts say that the best budget that you can hope for is the 
$38 million, or one percent increase, recently passed in the 
Senate budget resolution. If you got such an increase, how 
would you spend it? This is supposed to be a positive question.
    Dr. Decker. I appreciate those. What--our highest 
priorities are to operate our scientific facilities at their 
full capacity. I am pleased to say that, as I mentioned in my 
oral remarks, that we, in our 2005 request, plan to operate our 
facilities at 95 percent of optimum, but we certainly would 
like to get to 100 percent of optimum. Our other high 
priorities are certainly ITER and high-end computation.
    Chairman Biggert. Okay. Thank you.
    Mr. Garman, in February of 2003, a central theme of Under 
Secretary Card's testimony was the Climate Change Technology 
Program. And he stated that DOE energy supply programs, 
primarily your office, accounted for 90 percent of the CCTP 
funding. And then in our February 2004 budget hearings, the 
CCTP wasn't even mentioned by our DOE witness. And this year, 
the DOE budget makes almost no mention of the National Climate 
Change Technology Initiative (NCCTI), but in your testimony, 
for the first time, DOE mentions that CCTP is about half of the 
$4 million in federal climate change spending. So--did I say 
what? $4 billion. Do you have more specific numbers? And how 
come we haven't heard anything about this program before?
    Mr. Garman. All right. Let me take a shot at that.
    Frankly, a great deal of what we all do, the first point 
that needs to be made, relates to climate. When you add the $4 
billion worth of R&D activities that is spread among Nuclear 
and my office and a little bit in Science and in Fossil, that 
is R&D directly targeted at reducing, or avoiding, emissions of 
greenhouse gases. In addition to that, the President, in his 
National Energy Plan, has advocated another $4 billion worth of 
tax incentives for hybrid vehicles, for combined heat and 
power, and other efficiency measures to help reduce emissions 
of greenhouse gases. So in that sense, we do a great deal of 
climate work.
    Several years ago, we proposed a special fund under the 
rubric NCCTI and that morphed into Climate Change Technology 
Program, or CCTP, to do some strategic planning to make sure 
that the R&D activities were strategically targeted and to be 
able to prioritize among those activities to see which could 
generate the greatest reductions in greenhouse gases. And in 
addition to that, we had proposed a $40 million unbounded 
solicitation, to be awarded competitively, to people who were 
bringing new and novel ideas to the table that might not be 
covered in any of our programs. Congress decided, quite 
explicitly, not to fund that activity last year. Page 142 of 
the conference report of the Energy and Water Development bill 
last year states, ``The conferees provide no funds for the 
National Climate Change Technology Initiative (NCCTI), 
consistent with the rationale provided in the House and Senate 
reports.'' So we have, for several years, asked Congress for 
funding to do this overarching activity. Each year, Congress 
has said no, so we will continue the best we can working on the 
fundamental, underlying technology programs that we have. We 
have asked for $6 million this year: $3 million for the 
unbounded solicitation, and $3 million for analysis, program 
direction, management, and other things.
    Chairman Biggert. Thank you.
    Dr. Decker, my colleagues in the Energy and Water 
Appropriations Committee have made their support for the Office 
of Science's Advanced Scientific Computing Program abundantly 
clear by stating that it is one of the most important programs 
that account for economic growth. Can you provide examples of 
how a leadership class computation facility the number two 
priority in--on your facilities list might contribute to a 
competitive edge for American businesses?
    Dr. Decker. Madame Chairman, I think that high-end 
computation has enormous potential to pay off in a number of 
ways for the country, first, in the way it can advance 
scientific discovery. Leadership class machine means that we 
can get into a whole new realm of simulation on very important 
scientific problems from, you know, fusion research to climate 
change to nanoscience and technology.
    We--I think, as far as economic competitiveness is 
concerned, probably the biggest near-term payoff will be in 
virtual prototyping where companies will be able to simulate 
the behavior of very complex items that they wish to produce 
and really reduce the cycle time from product idea to 
production. We have an activity going now with the Council on 
Competitiveness where we are working with industry to see what 
payoffs industry really sees in the high-end computation for 
them through leadership class machines. They are going through 
a study that is probably to be completed by the middle of this 
summer.
    Chairman Biggert. Okay. Thank you.
    Mr. Larson.
    Mr. Larson. Following along on the question that I 
proposed, then, my intention is--it is like, I know, in many 
respects, it is asking you to comment on the meaning of life, 
but I intend to set up meetings with your respective offices 
and pursue that in this context that I believe, and I am sure 
you do, as well, that the defense of the Nation, its continue 
economic and energy and educational productivity are 
inextricably tied and linked, how can we address that in the 
context of a proposal, such as some kind of energy tech corps 
that we could start? And that is what I will be pursuing with.
    In a more general area, and getting back to this issue of 
manufacturing, can you highlight ways in which, in your 
respective agencies, that R&D activities impact local 
economies, jobs, and manufacturing?
    And then I have a specific question for Mr. Glotfelty that 
I want to ask about superconductors. So----
    Mr. Garman. I will take the first crack.
    I look at the automotive industry, which, in the aggregate, 
is responsible for a huge number of jobs in the U.S. economy. 
And I look at the maturity of the U.S. market. And what is 
really happening is fratricide, as companies fight against one 
another for market share. And if you really want to grow this 
manufacturing business, one of the things that you will need to 
do is look for new markets in emerging economies, like Brazil 
and India and China, and we think that is precisely on point 
and is one of the things that the FreedomCAR program does. I 
think when General Motors realized that we are in a fight here, 
in this very mature automotive market, for decreasing amounts 
of market share, we need to, over the long-term, develop a 
different kind of vehicle that can be marketable around the 
world and can achieve sustainability objectives and cost 
objectives that can make them affordable around the world. And 
that is when they developed this autonomy concept, which is a 
fuel cell vehicle, meant to be simpler, easier to manufacture, 
and over the long-term, lower in cost. So that is one example.
    Mr. Larson. Aren't the Germans and the Japanese way ahead 
of us in those areas?
    Mr. Garman. I don't believe that they are. I was in Japan 
two months ago, and I think the competition is underway, but I 
believe the United States is ahead, at this moment, in fuel 
cell technology. And the important thing is for us to be able 
to maintain that lead.
    Mr. Larson. How would some of the other panelists respond?
    Mr. Glotfelty. In the electric sector, creating jobs at the 
local level is key. The problem that we face in Transmission 
and Distribution, is the long life cycles of the equipment that 
are on the transmission grid, most of them are--have a 40-year 
life cycle. So we hope that there will be renewed focus on 
producing equipment here in the United States. The majority of 
transformers built for the U.S. market are built overseas. It 
is a huge national security issue. We need to refocus our 
efforts here, as the life cycle of these components on our 
transmission grid reach their life cycle. Many of them were put 
on 35 or 40 years ago.
    Mr. Larson. How is your HTS program proceeding? And is 
that--does that present itself a great opportunity for us for 
economic growth?
    Mr. Glotfelty. A great opportunity, absolutely. It is the 
largest component of our office. It--I think, in 2004, it got 
78 percent of our discretionary funding. It has the 
opportunity, over the next decade or so, to revolutionize the 
electric industry, with the majority of the components, the 
wires, being built here in the U.S. That is why it is so 
important to our program.
    Mr. Larson. Mr. Magwood.
    Mr. Magwood. It would be easy to talk about the huge 
economic impacts nuclear--new nuclear power plant constructions 
can--could have on local communities. There are communities in 
this country that exist because somebody put a nuclear power 
plant there. But what I have seen, that is really quite 
interesting over the last couple of years, is that the interest 
that people have had in nuclear power is not just because it is 
a great way of making electricity, but because they find that 
there are other energy resources, for natural gas primarily, 
that are being used for other purposes--that need to be used 
for other purposes, such as in the chemical industry, that are 
now finding that they can't find the gas to fulfill their needs 
at the prices they need. And so nuclear power's real potential, 
it seems to me, is as a part of a larger economy in terms of 
supplying heat to industry, making hydrogen for a wide range of 
purposes. And in the Southwest, making clean water for local 
communities. So I think that as we start to think about nuclear 
power in the next few decades, it won't just be in the 
electricity story; it is going to be a much broader story, and 
that is a big part of it.
    Mr. Larson. Mr. Maddox.
    Mr. Maddox. Thank you.
    I think Fossil's role is pretty straightforward in that if 
you look at the pressures right now, natural gas prices, oil 
prices, we serve two functions. The first is to try to extract 
our domestic resources more efficiently, through better 
drilling techniques, through more sounder exploration 
activities. Also, on the user end, we are pretty involved in 
creating more efficiencies in the burning of fossil fuels, and, 
obviously, have a major commitment to burning coal more 
efficiently, anything we can do to expand the use and lifetime 
of our resources. One of our major challenges right now is our 
depletion rate is extremely high in the oil and gas fields due 
to better technology. We find gas quicker and oil quicker, and 
we also drain the fields quicker, so we need to try to find 
ways to get every drop out of these reservoirs. A good example 
is our CO2 enhanced oil recovery benefits, which 
also has environmental side effects.
    But essentially, our goal is to try to increase efficiency 
and keep fuel affordable so we can keep creating jobs. As we 
all know, that is--as a child of the '70's, coming out of Ohio, 
I know, you know--grew up where we saw the impacts of energy 
uncertainty on the economy.
    Mr. Larson. Dr. Decker, I didn't know if you wanted to 
respond to that.
    Dr. Decker. Mr. Larson, the impacts of basic research on 
the economy and jobs is often very difficult to predict in 
advance, as you know. But if we look back historically, there 
are--the Office of Science Programs have had some major impacts 
on jobs and the economy. The whole nuclear medicine industry 
grew out of research that was funded by our office. We----
    Mr. Larson. Has anyone ever calculated all of that in terms 
of--with all of the monies that have been placed in R&D, et 
cetera, because oftentimes the community gets blind, because 
they say, well, this is----
    Dr. Decker. There have been some studies. There have been 
some general studies of the effect of Federal R&D on the 
economy. There have certainly been a lot of anecdotal kinds of 
stories that have been developed about specific contributions 
that have come out of programs like ours, but I don't think we 
really have a comprehensive study, the type that we--that would 
be very nice to have. Of course, these studies get somewhat 
difficult to put together in terms of the source.
    Mr. Larson. But it would be nice to prove that the 
scientific community is a value-added community in that 
respect, because we are--and, you know, to Mr. Garman's point, 
if the--if we are looking for the ability to export new 
technologies abroad, hopefully, we have got the proof that 
shows the correlation between the funding, the research and 
development, and then the birthing of these new industries or 
offspring of or offshoots of----
    Dr. Decker. I agree with you. We need to develop that story 
better, and we will try to do that.
    Chairman Biggert. There must be some sound science way that 
we can do that. I am sure that somebody will come up with it.
    Thank you.
    Dr. Decker, you recently released your Strategic Plan and 
the 20-Year Facilities Plan. And that plan assumes that the 
Office of Science will receive funding at levels in--
commensurate with H.R. 6. The fiscal year 2004 appropriation 
did not match that level, and the President's budget does not 
match the proposed authorization level for fiscal year 2005. 
But in your testimony, you state that it is our intention to 
proceed according to the plan's delineated priorities, as 
circumstances will allow. So what, specifically, does that 
mean, and how will you balance the need for new facilities to 
remain at the cutting edge of scientific research with the need 
to maintain runtime and research, including support for 
graduate students at the existing facilities?
    Dr. Decker. Madame Chairman, I--the 2005 budget request 
does allow us to get a start on five of the facilities that 
were identified as high priority in the facilities outlook. 
There is R&D funding for the Rare Isotope Accelerator. There is 
funding for the Linac Coherent Light Source, the Ultra Scale 
Computing Initiative, which in some sense, is not a--you know, 
sort of a typical scientific facility of a type that we 
normally build. The joint dark energy mission is also funded 
with R&D. And then there is preliminary engineering design 
request for the first of the Genomes to Life facilities for 
Production and Characterization of Proteins and Molecular Tags.
    So I think that in this budget request, we are getting a 
good start on these facilities. The question you raise about 
balance between starting new facilities and continuing 
operations of our current facilities and also balancing against 
research, which has nothing to do with facilities or research--
researchers that use the facilities, is a continuing problem 
that we have every year in the budget. And I--on the one hand, 
we certainly want to operate our current facilities and get 
maximum utilization of the taxpayers' investment in those 
facilities, but science and technology doesn't stand still, and 
we need to move on to the future and provide our scientific 
community with new capabilities that keep this country at the 
leading edge in science and technology.
    So it is a difficult balancing act. We think that we have 
done it appropriately at this budget, and we will try to 
continue to do so.
    Chairman Biggert. Now with--of the five new facilities that 
are scheduled for fiscal year 2005, which of the five has the 
largest out-year commitments, and which would suffer the least 
from a delay in funding?
    Dr. Decker. Well, the Rare Isotope Accelerator is the 
largest of the facilities. That is a billion-dollar class 
facility. The others are--well, I would say the next largest 
facilities, and several on this list are sort of in the $250 
million to $300 million range, so that is--RIA is, by far, the 
largest.
    Chairman Biggert. Would that be the one that would suffer 
the least from a delay in funding or is----
    Dr. Decker. Well, if we have real budget problems, then--
real budget constraints, and the--we would probably have to 
delay construction on RIA. That would be my guess.
    Chairman Biggert. I think that the Committee staff met with 
NASA science officials yesterday, and they indicated that NASA 
is part of the joint Dark Energy Mission project, it is not in 
NASA's fiscal year 2005 budget request, nor is it in the five 
year budget planning horizon, so it seems that NASA might have 
a lack of enthusiasm for that project, so do you intend to 
reconsider your request for the $7.5 million for that program?
    Dr. Decker. Madame Chairman, we do have ongoing discussions 
with NASA on that issue, and clearly, we hope that it will be 
put back into their plans. If it is not, then we are going to 
have to come up with another course of action. I mean, that is 
a very exciting experiment, so--and I think NASA actually--
their scientific folks have been very excited about that 
possibility. We are still addressing it.
    Chairman Biggert. All right. Thank you.
    Mr. Larson, do you have any questions?
    Mr. Larson. Yeah, I just have one final, and this is pretty 
much one of curiosity as anything, but, for Mr. Magwood, with 
respect to your--I share your concerns about nuclear energy. It 
seems to me that we have never recovered from the China 
syndrome (nuclear meltdown), and--but going forward, how do you 
put in context an industry where there is deep concern, on one 
hand. How many facilities are being decommissioned across the 
country currently? What sort of security threat does that 
present to the United States in terms of both the 
decommissioning and containment issues? And is there a way in 
which we can reengage this argument from a security perspective 
and not the sense of global dependency on nuclear that, I 
think, ultimately with Three Mile Island, and all of the other 
stuff, force people to think differently?
    Mr. Magwood. I appreciate that question. It is really the 
question that I deal with on a daily basis, because the fact is 
that nuclear power is alive and well in the United States of 
America. We operate 103 nuclear power plants today that provide 
about 1/5 of all of the electricity that is generated in this 
country. Most people don't realize that. We are not turning 
nuclear power plants off in this country; the number has 
actually been stable for quite some time. And in my 
conversations with the chairman of the Nuclear Regulatory 
Commission, it is pretty clear that virtually all of the plants 
that are in operation, they are going to be relicensed or, at 
least, will seek new licenses. So nuclear--these 103 nuclear 
power plants will operate well into the middle of this century.
    So nuclear is not going anywhere for quite some time. The 
real--the question, I think, and I think this gets to the 
thrust of what you were saying, is what about new plants. How 
do we turn the psychology around? And I think, from what I have 
seen, that the psychology already has turned around quite a bit 
in this country. When we talk to college students and others, 
there really aren't the kinds of fears about nuclear power that 
I think popularly the media would report. As a matter of fact, 
along the lines of your other question, I--you know, I and my 
colleagues have been traveling around to different high 
schools, talking about hydrogen, in particular, but in my case, 
hydrogen and nuclear power. And I was actually in Idaho last 
week visiting with high school students about that and was 
really amazed to see how well informed these students were 
about nuclear, and they asked all of the right questions. But 
they were not afraid of it. They really felt that their 
questions needed to be answered, but they were confident that 
the questions could be answered. There was not a knee-jerk 
reaction against nuclear.
    And I think that when you go to plant sites around the 
country and talk to the communities around those plant sites, 
you find communities that are well informed about nuclear 
power, the pluses and minuses, like there are pluses and 
minuses in everything. And you see people who are not afraid of 
nuclear power and don't have these reactions. And the fact that 
we have not had serious operational issues in this country, 
have changed the poll numbers. You know, as we have looked at 
the poll numbers, they trend upwards over the last decade. So I 
actually think that the environment is right for research on 
nuclear power. The only thing that is keeping utilities from 
building the plants today are--is that the business case has 
not appeared for them. They--the economic case hasn't risen 
yet. And that is really what we are working on. We, with the 
industry, are trying to find a way of going forward with these 
plants that is a good business decision for CEOs of electric 
utilities. And I think that the business case is a lot closer 
than a lot of people think it is.
    Mr. Larson. You know, I--just to comment, Madame Chairman, 
I really enjoy serving on this committee because of its 
bipartisan nature and the shared concern and work that we all 
have. I meet with students frequently, and one of the most 
disappointing things for me, in talking to students, is their 
total lack of faith in politicians and government, not 
government, but oftentimes--because they understand it is 
power, but politicians and people that are in government 
service. And in a number of our institutions, especially 
financial institutions, et cetera, their great hope lies in 
health and science, because they believe in their heart that 
you are in pursuit of the truth. It is a precious thing. And it 
is a great inspiration. And to the extent that your agencies, 
collective agencies, can continue to instill that this is an 
endeavor that we must instill in our children and hopefully it 
will spill over to other institutions and other areas as well. 
And I thank Madame Chairman.
    Chairman Biggert. Thank you.
    I was going to end it there, but I just have just one more 
question based on that, because we are talking about the 
students, and I was pleased to learn, too, that enrollments are 
increasing in the nuclear science and engineering departments 
at the--at universities nationwide, and I think that is so 
important. And I, too, go into schools, starting at 
kindergarten through high school, and--to really encourage 
students to look at the sciences and engineering, and 
particularly women, because I think that this is a real 
opportunity that they have and haven't taken advantage of.
    But given the recent increases in enrollment in the 
university nuclear programs, is there still a need to 
strengthen programs at DOE to--designed to support the 
university programs and facilities?
    Mr. Magwood. I think so. The demand for the growth in these 
programs is actually still not--the demand for new people in 
the nuclear field still isn't quite being met. There has been a 
huge amount of progress, you know. Don't mistake me. I am very 
happy with what we have been able to accomplish working with 
the universities. But for the--we are looking at a situation in 
this country, over the next 10 years or so, that a huge number 
of the nuclear experts who are out there today are operating 
our nuclear power plants, working in our national laboratories, 
working in government, are going to retire. Most of the people 
on my staff, for example, are within five years of retirement. 
And the people coming from universities aren't coming out fast 
enough to fill what is going to be a cliff in the Federal 
Government in nuclear sciences and technology. Actually, I 
think that is not just true for nuclear; it is true for almost 
all of the physical sciences, because we are--as this committee 
pointed out in the material you provided, we are actually 
losing the hearts and minds to our friends in the life 
sciences. They are eating our lunch, quite frankly. And that is 
where the kids are going; they are going into life sciences.
    So you know, 10 years from now, you may not see a 
Department of Energy that is as strong as the one we have now, 
because the expertise base is beginning to erode, and unless we 
are able to turn the situation around in the schools, even more 
than what we have done already, both in the nuclear and other 
fields, the--we are going to have a very, very serious 
situation in this country.
    Chairman Biggert. And with that, I will just put in a plug 
for the bill that I recently introduced, 3828, which is the 
DOE-University Nuclear Science Engineering and Health Physics 
Act that further strengthens your office university program, so 
I look forward to working with you on that.
    But the time is 12 o'clock, so before bring this hearing to 
a close, I want to thank our panelists for testifying before 
the Subcommittee today. If there is no objection, the record 
will remain open for additional statements from the Members and 
for answers to any follow-up questions the Subcommittee may ask 
the panelists. Without objection, so ordered.
    The hearing is now adjourned.
    [Whereupon, at 12 p.m., the Subcommittee was adjourned.]
                               Appendix:

                              ----------                              


                   Answers to Post-Hearing Questions



                   Answers to Post-Hearing Questions
Responses by James F. Decker, Principal Deputy Director of the Office 
        of Science, U.S. Department of Energy

Questions submitted by Chairman Judy Biggert

Coordination with Other Federal Agencies on Fundamental Computer 
        Science

Q1.  How are you coordinating with other agencies on fundamental 
computer science research that will lay the groundwork for the future 
generations of supercomputers? Are the funding or programmatic requests 
in your budget in any way contingent on other agencies' contributions? 
What specific hardware or software, if any, are being acquired with 
other agencies? Please describe the specific steps DOE is taking to 
ensure that investments are of maximum utility across scientific 
disciplines and not redundant with other agency purchases or research 
efforts.

A1. There are several mechanisms that we use to accomplish effective 
interagency computer science research coordination. Examples of the 
coordination efforts are:

        a)  A Memorandum of Understanding (MOU) is in place among the 
        Office of Science (SC), the National Nuclear Security 
        Administration, and the Department of Defense (Defense 
        Development Research and Engineering, the Defense Advanced 
        Research Projects Agency (DARPA), and the National Security 
        Agency (NSA) ) for the coordination of high-end computing 
        activities. The MOU specifies several areas of coordination, 
        including research, and requires an annual high end computing 
        plan.

        b)  SC played a major role in the development of the High-End 
        Computing Revitalization Task Force (HECRTF) research plan.

        c)  As a part of the agency activities following development of 
        the HECRTF plan, SC, DARPA, and the National Science Foundation 
        (NSF) have established a high end computing university research 
        activity focused on improved coordination of university-based 
        research in high end computing. In FY 2004, SC and NSF 
        coordinated computer science research announcements in 
        operating systems (SC) and system tools (NSF). DARPA provided 
        additional funding to augment these research activities.

        d)  SC is a mission agency partner of the DARPA High 
        Productivity Computer Systems program and coordinates/co-funds 
        research activities in development and execution metrics with 
        this program.

        e)  SC coordinates and co-funds research activities in 
        programming languages and benchmark metrics with NSA.

        f)  SC also participates in the High-End Computing and 
        Computation Coordinating Group of the National Coordinating 
        Office for Information Technology Research and Development.

    Generally, requests in the budget are not contingent on other 
agencies' contributions. However in certain areas, such as hardware 
testbeds for computer science, researchers funded by SC will have 
access to systems funded by other agencies for testing purposes.
    No hardware or software acquisitions are currently underway, or 
planned, with computer science research funding.
    The coordination efforts a) through f), described above, all 
contribute to assuring that our research activities are not redundant 
with other agency purchases or research efforts. An important 
characteristic of SC computer science research is an ongoing focus on 
end-user (scientific discipline) requirements. An example of this is 
the DOE Scientific Discovery though Advanced Computing (SciDAC) 
activity, in which four computer science Integrated Software 
Infrastructure Centers are funded to deliver improved performance, data 
analysis, language inter-operability, and resource management to SciDAC 
applications. An integrated program management process within SC 
ensures that these activities remain responsive to end-user 
requirements.

Joint Dark Energy Mission (JDEM)

Q2.  During the hearing you stated that you would continue to work with 
NASA on the Joint Dark Energy Mission (JDEM) despite its absence from 
NASA's FY05 request. Given that NASA may not be able to fund the JDEM, 
what alternatives is DOE pursuing? Would a ground based experiment be 
possible? If so, how much would that cost? What would be the 
disadvantages of doing so?

A2. The National Aeronautics and Space Administration (NASA) Office of 
Space Science has stated publicly that it is fully committed to 
realizing a dark energy mission jointly with the Department of Energy 
(DOE). The JDEM is part of their Beyond Einstein program (it is the 
Dark Energy Einstein Probe), even though funding is absent from NASA's 
FY 2005 budget submission. NASA officials have stated that they will 
proceed with JDEM by funding mission concept studies and by laying out 
the mission's goals and organization jointly with DOE. DOE is 
continuing its JDEM R&D activities at a level which we believe should 
demonstrate a viable mission concept by FY 2006.
    There are a number of ground-based telescopes being developed to 
measure Dark Energy using complementary techniques. These experiments 
will be able to measure the effects of Dark Energy on the universe. One 
such experiment, the Large Synoptic Survey Telescope (LSST) is 
estimated to cost approximately $280,000,000, but DOE has not yet 
reviewed this estimate and the National Science Foundation is expected 
to be the lead federal agency for this proposal. To fully determine the 
underlying nature of Dark Energy, however, a space-based mission to 
measure the acceleration and deceleration history of the universe over 
time is needed. There are two reasons why this is the case. From the 
ground, one cannot (1) see back far enough in time (10 billion years 
ago) because of the effect of the Earth's atmosphere, or (2) make 
measurements of sufficient precision to make the necessary 
determinations. This issue was addressed in much greater detail by a 
2003 report of the National Academy of Sciences, Connecting Quarks with 
the Cosmos: Eleven Science Questions for the New Century (see pages 
144-148; available on-line at books.nap.edu/catalog/10079.html).

Question submitted by Representative Lincoln Davis

ITER

Q1.  I understand the ITER project is a top priority for the 
Administration but I am concerned that the Fusion Energy Sciences 
budget supports this international program at the expense of research 
being conducted in the United States. Can you assure me that domestic 
research is not being delayed?

A1. The Fiscal Year 2005 budget request does not reduce the overall 
level of domestic fusion research to any significant extent as a result 
of ITER preparations. Experimental, theoretical, and enabling 
technology domestic fusion research, where appropriate, is re-oriented 
more toward the needs of ITER, but is still performed by our current 
fusion scientists and engineers. Only a small amount, on the order of 
$1,000,000, of the FY 2005 ITER preparations request of $38,000,000 is 
for industrial preparations. This reorientation of fusion research has 
resulted in some shifts in priorities, such as reducing facility 
operating time and focusing technology more on the near-term, but 
overall domestic fusion research is essentially level. These shifts 
will create some dislocations and staff reductions in the program, some 
of which may be mitigated when we have completed the distribution of 
funds associated with competitive solicitations. However, as the 
National Research Council report on Burning Plasma Physics concluded, 
we no longer have a domestic program and an ITER program. We have a 
single integrated fusion program that includes ITER.
                   Answers to Post-Hearing Questions
Responses by David Garman, Assistant Secretary for Energy Efficiency 
        and Renewable Energy, U.S. Department of Energy

Questions submitted by Chairman Judy Biggert

Q1.  The FY04 Energy and Water appropriations directed the Department 
to use $13 million in prior year balances to fund renewable energy 
programs at the Department. According to your testimony, most of these 
balances were located in the Biomass program. Please explain how the 
use of prior year balances caused program authority to be reduced to 
$75 million, from $94 million reported in the budget.

A1. The Biomass program is funded through both the Energy Supply 
account within Energy and Water Development Appropriations bill ($86.5 
million) and the Energy Conservation account of the Interior and 
Related Agencies bill ($7.5 million) for a total of $94 million. 
Because the Biomass program ended FY 2003 with $15.6 million of 
unobligated balances within the Energy Supply account, the program was 
allocated $11.4 million of the Committee's directed reduction to $13 
million in Renewable Energy prior year balances in FY 2004. Of the 
$86.5 million of FY 2004 budget authority shown in the FY 2005 request, 
$75.1 million is derived from new budget authority and $11.4 million is 
derived from prior year balances.

Q1a.  How did this use of prior year balances affect R&D progress in 
the Biomass program?

A1a. The use of prior year balances did not affect our R&D progress. 
However, earmarks in the program have affected progress. For example, 
available funding for four multi-year biomass research solicitation 
awards announced in September 2003 totaling $7.2 million was reduced to 
$1.2 million. The four projects were announced in September 2003 after 
a rigorous competitive process that included 400 submissions. The 
funding reduction also impacted the research and development target for 
our Sugar Platform from $0.07 per pound for mixed sugars in 2010 to 
$0.10 per pound in 2012.

Q1b.  Why is this program prone to unspent funds?

A1b. The program is susceptible to having unspent funds for several 
reasons. One reason is the large number of congressionally directed 
projects. Often the intended recipients have not received federal funds 
previously and need assistance in understanding federal procurement 
requirements as well as learning how to develop a statement of work and 
a project management plan. Helping them through the process takes time 
and results in these projects being awarded late in the fiscal year 
budget cycle with little time to responsibly spend their first year 
awards. Another reason is that the continuing budget resolution lasted 
until nearly mid-year, thereby reducing the administrative time 
available to establish formal cooperative agreements and project 
management plans.

Q1c.  You also noted that, due to the $41 million in earmarks, progress 
was delayed toward the goals of the program, and core capabilities at 
the National Labs were diminished. What goals were delayed, and by how 
long?

A1c. The funding reduction impacted the research and development target 
for our Sugar Platform from $0.07 per pound for mixed sugars in 2010 to 
$0.10 per pound in 2012. The syngas target was adjusted from $6.00/
mmbtu in 2010 to $7.58/mmbtu in 2012 in light of what we thought was 
achievable given the earmarks.

Q1d.  How has the lab capability been diminished, and how can it be 
restored?

A1d. The effective reduction of funds as a result of earmarks has 
negatively affected our core capability at the National Bioenergy 
Center (NBC), the main Laboratory group that supports the Office of 
Biomass Program. The NBC is comprised of the National Renewable Energy 
Laboratory (NREL), the Oak Ridge National Laboratory (ORNL), the 
Pacific Northwest National Laboratory (PNNL), the Idaho National 
Engineering and Environmental Laboratory (INEEL) and Argonne National 
Laboratory (ANL). As a result of earmarks, FY 2004 funds to the NBC 
were reduced by $7 million in core research and resulted in the 
reduction of 11 Full Time Equivalent (FTE) employees. The 11 FTE 
reduction resulted in the layoff of five staff (INEEL and NREL) and the 
internal transfer of another six (INEEL, ORNL, PNNL and NREL).
    Our research and development planning is done in advance which 
allows the laboratories to identify the appropriate number and type of 
technical staff needed to carry out the research agenda. The staff 
members are hired by scientific discipline and are not necessarily able 
to work on other projects outside their expertise. When funding is 
effectively reduced through earmarks, the Laboratory cannot support 
staff whose research skills are no longer needed; as a result, 
intellectual capital is lost. It takes time to restore core 
competencies.

Q2.  In your testimony, you provided the fiscal year 2005 funding 
breakout for basic research, applied research, and development 
activities for your office. Please provide the comparable fiscal year 
2004 numbers, and the cost-sharing ratios for each category in each 
year.

A2. My written testimony actually included a table covering fiscal 
years 2003 through 2005; it is reproduced here for convenience:



    Those figures are calculated based on estimates of the percentage 
of basic research, applied research, etc., in major areas of our 
programs--DOE does not have a financial system that can tie specific 
funding lines to a specific amount of cost-sharing. The new financial 
planning system that EERE is currently developing will have that 
capability, and in the next budget cycle we will be able to provide 
much more precise information about both cost-sharing and funds 
allocated to different stages of R&D.
    At present, without manually reviewing every current R&D contract 
and agreement, I can tell you the basic principles that we use in 
establishing cost-sharing requirements. Basic research is usually 
performed at universities and national laboratories, which do not 
provide cost-sharing, but even if it were performed by a private 
company, we generally would not seek cost-sharing at that early stage. 
For the portions of applied research and of development that are 
performed by industry through cooperative agreements, CRADAs, and other 
mechanisms, we generally seek a minimum of 20 percent cost-sharing, 
which can escalate to as much as 50 percent or more in the later stages 
of development. If a technology progresses to the demonstration phase, 
we generally require a minimum of 50 percent cost-sharing.
                   Answers to Post-Hearing Questions
Responses by Mark R. Maddox, Acting Assistant Secretary for Fossil 
        Energy, U.S. Department of Energy

Questions submitted by Chairman Judy Biggert

Q1.  The President's Management Agenda (PMA) includes government-wide 
provisions on budget and performance integration that have been 
implemented through the Program Assessment and Rating Tool (PART). In 
addition, the PMA also introduced R&D Investment Criteria that were 
piloted in DOE's applied R&D programs.

Q1a.  How do these activities dovetail with the reporting requirements 
of the Government Performance and Results Act of 1993?

Q1b.  What specific steps is the program taking to avoid duplication of 
effort for these data collection efforts?''

A1a,b. OMB developed two tools for evaluating how well federal programs 
were being planned and managed, and delivered results. The R&D 
Investment Criteria (RDIC) scorecard, which was further developed and 
piloted by DOE's applied R&D programs. The second was the PART. OMB's 
guidance this year on the PART clarified that agencies should use the 
PART as the instrument to periodically evaluate compliance with the 
Criteria at the program level. The PART was modified to clarify its 
alignment with the Criteria.
    The Government Performance and Results Act of 1993 (GPRA) requires 
federal agencies to develop plans through which performance can be 
measured on a periodic basis. PART strengthens GPRA by requiring 
managers to report on results (one-half of the total PART score is 
based on demonstrated results) and mandating that performance data is 
included in budget justifications. This helps improve the quality of 
performance measures by ensuring alignment between program activities 
and agency mission. The performance information in agency GPRA plans 
should be revised to include any new performance measures used in the 
PART, and unnecessary measures deleted from the GPRA plans.
    Performance information is included in several places because it is 
used for different purposes. For example, performance measures included 
as a component of a program's PART assessment are often included in the 
Department's performance budget. Performance measures included in the 
Department's performance budget are tracked within Joule, the 
Department's performance measurement system. The results of performance 
measures tracked in Joule are reported annually in the Department's 
Performance and Accountability Report (PAR), which is mandated by GPRA 
and implemented through requirements articulated in OMB Circular A-11, 
Part 6.

Fossil Energy R&D/Cost-Sharing

Q2.  Using the definitions in OMB Circular A-11, what is the proposed 
mix of funding in the FY 2005 budget request between basic research, 
applied research, development, demonstration, and deployment activities 
for your office? Please provide the comparable FY 2004 numbers, and 
include the cost-sharing ratio for each category.

A2. Please see the table that follows:




    Attached is a recent cost-shared analysis (pp. 85-104) which 
details those programs where cost-sharing is used as a financing tool. 
The report covers FY 2002 and FY 2003, however, Fossil Energy R&D 
activities continuing into FY 2004 and FY 2005 will be cost-shared on a 
similar basis. The exception will be the Clean Coal Power Initiative 
which will require cost-sharing participation based on the Clean Coal 
Technology statutory language which brings with it mandatory 50 percent 
cost-sharing, repayment, and a few other tags specific to the Clean 
Coal Technology Program.

Carbon Sequestration Program

Q3.  The Office of Fossil Energy's Carbon Sequestration Roadmap shows a 
goal on page 6 of ``By 2012, develop to the point of commercial 
deployment systems for direct capture and sequestration of greenhouse 
gas emissions from fossil fuel conversion processes that protect human 
and ecosystem health and result in less than a 10 percent increase in 
the cost of energy services, net of any value-added benefits.'' Page 21 
of the same document shows a planned funding stream of around $50 
million per year ``with slightly more for 2006 to 2010.'' However, the 
FutureGen project plan shows over $86 million in funding from the base 
sequestration program from 2009 to 2012. Will the goals of the base 
sequestration research program still be met, even though funds will be 
used for FutureGen?

A3. Yes, the goals of the base carbon sequestration research program 
will still be met. In fact, the FutureGen project is very important to 
the attainment of the sequestration goals.
    Carbon sequestration will be one of the primary features that will 
set the FutureGen plant apart from the other electric power projects. 
Engineers will design into the plant advanced capabilities to capture 
the carbon dioxide. No other electricity power plant in the world has 
been built with this capability.
    Once captured, carbon dioxide will be injected deep underground, 
into brackish reservoirs that lay thousands of feet below the surface 
of much of the United States, or into oil or gas reservoirs, or into 
unmineable coal seams or volcanic basalt formations. Once entrapped in 
these formations, the greenhouse gas would be permanently isolated from 
the atmosphere.
    The project will seek to sequester carbon dioxide emissions at an 
operating rate of one million metric tons or more of carbon dioxide 
sequestered per year. We will work with the appropriate domestic and 
international communities to establish standardized technologies and 
protocols for carbon dioxide measuring, monitoring, and verification.
    The FutureGen plant will pioneer carbon sequestration technologies 
tied to power plants on a scale that will help determine whether this 
approach to 21st century management is viable and affordable.

Q4.  The FutureGen project plan shows $480 million for the procurement 
and construction of the coal gasification power plant. At 270 megawatts 
(Mw), that works out to over $1750 per installed kilowatt. The PART for 
Clean Coal Research states ``Optimized designs [for advanced clean coal 
power plants] are about $1250-1300/kW.'' Why is the power plant 
component of FutureGen 37 percent more expensive?

A4. The $1250-1300/kW IGCC cost is for mature commercial plants. The 
FutureGen plant will employ first-of-a-kind technologies. It will be 
configured to co-produce electricity and hydrogen, and be integrated 
with carbon sequestration. The coal gasification unit will be 
integrated with both a hydrogen production module and a hydrogen 
combustion turbine. Additionally, FutureGen will likely have much more 
instrumentation than a conventional power plant, which will also 
increase the overall cost. As a result of these requirements, the cost 
of the ``power block'' per kilowatt of the FutureGen plant will exceed 
that of a conventional power plant design.

Q5.  Previous clean coal projects that built power plants had cost-
sharing from industry as high as 67 percent. Your budget documentation 
says that demonstration portions of FutureGen will be cost-shared at a 
minimum of 50 percent from industry, yet in years when the base plant 
is the bulk of the budget (e.g., 2008), DOE's share is at 69 percent. 
Will DOE cost-share the power plant demonstration portion at 50 percent 
as outlined in the budget or at the higher rates outlined in the plan?

A5. The planned cost-share profile will follow the proportion as 
outlined in the FutureGen plan to Congress. Direct funding from the 
existing industry consortium is expected to be $250 million and 
represents 26 percent of the overall $950 million project cost 
projection (in FY 2004 dollars); DOE will use its best efforts to 
achieve or exceed a minimum 80/20 industry cost share for the $120 
million in sequestration R&D.



                   Answers to Post-Hearing Questions
Responses by William D. Magwood, IV, Director of the Office of Nuclear 
        Energy, Science, and Technology, U.S. Department of Energy

Questions submitted by Chairman Judy Biggert

Q1.  What portion of your budget goes to R&D activities? What is the 
mix of basic research, applied research, development activities, and 
demonstration within Nuclear Energy's budget in fiscal year 2004 and 
2005? What are the other activities that NE is engaged in, and how do 
they match with the Research and Development Investment Criteria? 
Please provide the level of industry cost-sharing in each category of 
program. For the activities that are not research, development or 
demonstration, please outline the relative roles of the Federal 
Government and that of the industry.

A1. The portion of the total Nuclear Energy budget that is research and 
development is 32 percent in FY 2004 and 23 percent in FY 2005.
    The following table provides the mix of research and development 
funding for FY 2004 and FY 2005. At this time, the Office of Nuclear 
Energy, Science and Technology does not have any funding which falls 
into the categories of basic research or demonstration.




    The remainder of the NE budget is dedicated to university 
assistance and to managing the planning, acquisition, operation, 
maintenance, and disposition of nuclear facilities and infrastructure 
to meet the growing demand for isotopes used in medicine, scientific 
research and homeland security; provide radioisotope power systems for 
space exploration and national security; and assure the long-term 
future of the domestic nuclear fuel supply. These infrastructure 
activities are conducted in accordance with DOE Order 430.1B, Real 
Property Asset Management. Although many of these activities support 
our nuclear energy research and development programs, they are not 
evaluated against the Research and Development Investment Criteria, 
since there is no such requirement.
    The U.S. Generation IV Nuclear Energy Systems Initiative is 
conducted in cooperation with the international community. Through this 
collaboration, we are sharing in the results of the R&D conducted by 
our Generation IV International Forum (GIF) partners, effectively 
leveraging our R&D investment. The Department of Energy (DOE) is 
supporting the research, development, and design work for a Generation 
IV nuclear power plant that represents a significant advance over 
existing energy production technologies in terms of sustainability, 
safety and reliability, economics, proliferation resistance and 
physical protection. The Department is working with its international 
partners in the Generation IV International Forum to identify research 
and development activities that could enable such a technology to be 
demonstrated in pilot form before 2020. The details of the cost share 
are yet to be worked out. An Expression of Interest for this initiative 
is being prepared for release this spring.
    On the Nuclear Power 2010 program, industry is contributing $18.6 
million in FY 2004. In FY 2005, the industry contribution is expected 
to exceed $8 million.
    In FY 2004, industry is contributing $1.7 million for Nuclear 
Energy Plant Optimization program activities. No federal funding is 
requested for this program in FY 2005.
    In the University Reactor Infrastructure and Education Assistance 
program, the joint DOE/Industry Matching Grants Program provides funds 
to universities for scholarships, improving nuclear engineering and 
science curricula, and modernizing experimental and instructional 
facilities. In FY 2004, industry is contributing $800,000 for this 
program, and in FY 2005, industry is expected to contribute $1 million. 
The Department matches the funding provided by industry for this 
program.
    With the exception of the DOE/Industry Matching Grants program, the 
nuclear energy activities that are not research, development or 
demonstration are managed and funded by the Federal Government. 
Industry has no active role in these programs.

Q2.  The President's Management Agenda (PMA) includes government-wide 
provisions on budget and performance integration that have been 
implemented through the Program Assessment and Rating Tool (PART). How 
do these activities dovetail with the reporting requirements of the 
Government Performance and Results Act of 1993? What specific steps is 
the program taking to avoid duplication of effort for these data 
collection efforts?

A2. To avoid duplication of effort, the data developed and/or collected 
to meet Government Performance and Results Act (GPRA) planning, program 
execution, reporting and accountability requirements is also used to 
respond to President's Management Agenda (PMA) achievement and 
accountability requirements. Duplication is further avoided by using 
the identical management chain for both taskings. The GPRA unit multi-
year program plans explain in more detail how the program activities 
over the next 10-15 years will support the Department's Strategic Plan. 
Each Departmental program defines a major activity or group of 
activities that support the core mission of the Department and thus 
provide a means of establishing a concrete link between the Strategic 
Plan's goals and the Department's annual budget, performance metrics, 
and performance reporting. The content of the program plans is used to 
both populate the annual budget and substantiate the PART document--
both of which inform the budget and decision-making processes, by 
focusing management on planning and priority setting, prior to the 
review of the budget. The performance data collected for the 
Department's annual Performance and Accountability Report is used to 
substantiate the PART document as well.

Q3.  Your testimony stated that the Nuclear Energy Research Initiative 
(NERI), which has funded peer-reviewed nuclear research at 
universities, will be integrated into your mainstream R&D programs, 
including Generation IV, Nuclear Hydrogen, and the Advanced Fuel Cycle 
Institutive. What fraction of the funds allocated to each of these 
programs will be set aside for peer-reviewed, university-based 
research?

A3. The total funding set aside for FY 2005 peer-reviewed, university-
based research is $7 million. The set-aside for the Generation IV 
Nuclear Energy Systems Initiative is $3.5 million, 11 percent of the 
requested funding for the program. The set-aside for the Nuclear 
Hydrogen Initiative is $900,000, 10 percent of the requested funding. 
The set-aside for the Advanced Fuel Cycle Initiative is $2.6 million, 6 
percent of the requested funding.

Q4.  The Idaho National Environmental and Engineering Laboratory 
(INEEL) has made significant investments in research and development 
programs in environmental science, biomass and biorefinery systems, 
energy conservation, fossil energy, and vehicle technologies. Will the 
new Idaho National Laboratory retain a similar level of commitment to 
these programs? If no, please explain, for each of these areas, why the 
Department has decided to de-emphasize the area in the laboratory's 
future work.

A4. The Idaho National Laboratory will be a multi-program laboratory. 
The statement of work in the draft Idaho National Laboratory (INL) 
Request for Proposals (RFP) is broadly worded and will allow for 
virtually any scientific or technological endeavor. For example, one 
subparagraph in the statement of work specifically includes biological 
sciences, earth sciences, physics, chemical sciences, material 
sciences, fusion science, modeling and simulation, and computational 
sciences as areas of work to be supported and improved upon by the 
contractor. The extent to which any particular area of research is 
pursued will depend upon the availability of funding, the importance of 
the work, and the availability of qualified people and facilities 
suitable to safely perform the work.
                   Answers to Post-Hearing Questions
Responses by James W. Glotfelty, Director of the Office of Electric 
        Transmission and Distribution, U.S. Department of Energy

Questions submitted by Chairman Judy Biggert

Q1.  What impacts do you expect the reduction in the energy storage 
account to have on the likely contribution of intermittent sources 
(such as wind--the fastest growing power source on a percentage basis) 
that are being connected to the grid in response to state renewable 
portfolio standards?

A1. Energy storage technologies can improve the quality, reliability, 
flexibility and cost effectiveness of the existing electric system, and 
will continue to play an integral part in the research and development 
portfolio of the Office of Electric Transmission and Distribution 
(OETD). Uncontrollably dumping large amounts of power onto the grid can 
impose power quality issues that utilities must address. Storage is a 
solution that supports the growing contribution from intermittent, 
undispatchable sources, and the lack of storage technologies could 
delay extensive, cost-effective deployment of renewables. The reduction 
from FY 2004 to FY 2005 is due to $6.9 million of Congressionally 
directed projects that are not being requested in FY 2005. Without the 
Congressionally directed projects, the FY 2005 program directed request 
of $4.0 million represents an increase of $1.9 million over the $2.1 
million allocated in FY 2004. Most of the current storage projects 
focus on addressing critical issues with grid reliability; an expanded 
storage program could include more projects that emphasize the positive 
impact of storage on the contribution of intermittent sources to the 
generation portfolio.

Q2.  Using the definitions in OMB Circular A-11, what is the proposed 
mix of funding in the fiscal year 2005 budget request between basic 
research, applied research, development, demonstration, and deployment 
activities for your office? Please provide the comparable fiscal year 
2004 numbers for comparison.

A2. For applied research, we funded $25.497 million in FY 2004 and have 
requested $28.362 million in FY 2005 (primarily for High Temperature 
Superconductivity R&D). For development, we funded $39.428 million in 
FY 2004 and have requested $57.518 million FY 2005 (which includes the 
Transmission Reliability, Electric Distribution Transformation and 
Storage Activities). For demonstrations, we funded $3.671 in FY 2004 
(which was entirely Congressionally Directed Activities, although some 
earmarks also fell into the ``Applied Research,'' ``Development,'' and 
``Deployment'' categories) and have not requested any money in FY 2005. 
For deployment, we funded $12.222 million in FY 2004 and have requested 
$5 million in FY 2005 ($5 million in FY 2004 funded DOE's work in 
connection with the investigation of the August 14, 2003, blackout; 
both years include funding for the Electricity Restructuring Activity).

Questions submitted by Representative Lincoln Davis

Q1.  The FY05 request states, ``EREL will help the Office of 
Electricity Transmission and Distribution develop an electric grid that 
is secure from physical and cyber terrorism, has the flexibility to 
incorporate both central and distributed generation, has the embedded 
intelligence to manage power flows under normal and emergency 
circumstances, and that meets the Nation's growing needs for increased 
transmission capacity and power quality, at an affordable cost.'' But 
two pages later, ``Project engineering and design is delayed in FY 2005 
to allow OETD to focus on higher level priority activities. PED will 
resume in FY 2006.'' It seems to me that EREL will address high level 
priorities and the sooner it is completed the better. Can you comment?

A1. OETD has postponed the design and construction of the Energy 
Reliability and Efficiency Laboratory (EREL) from FY 2005 to FY 2006 in 
order to focus its resources on more immediate and critical R&D work 
related to transmission reliability. As reflected in the President's FY 
2005 Budget, EREL is currently on schedule for completion in FY 2009.

Q2.  It has also come to my attention that none of the funds 
appropriated for PED in FY 2004 have been received at ORNL. Can you 
comment on the delays in funding of this facility?

A2. Funding in the amount of $736 thousand for the entire Project 
Engineering and Design (PED) was sent to Oak Ridge National Laboratory 
(ORNL) in the May 2004 Approved Funding Program (AFP).
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